Annapurnamma vs U. Krishnamurthy Adiga

H.G. Ramesh, J.—This second appeal is by the plaintiffs to set aside the judgment and decree dated 3.3.2010 passed in R.A. No. 235/2004 by the Additional Sessions Judge (FTC) at Chitradurga and for such other relief.

On the matter being contested and having raised relevant issues, the trial Court held that the plaintiffs have proved that Janakiram has borrowed a sum of Rs. 40,000/- from the defendant and executed a registered sale deed by mortgaging the suit schedule property and also that Janakiram was ready and willing to perform his part of the contract. With regard to nonpayment of Rs. 40,000/- taken by the defendant it is held in favour of the plaintiffs. The stand of the defendants before the trial Court is that the sale agreement was unjust and inequitable, however the same has been answered in favour of the plaintiffs holding that they are entitled for specific performance. Ultimately, the trial Court decreed the suit. As against which, the defendants preferred an appeal before the Additional Sessions Judge, Fast Track Court, Chitradurga. The lower Appellate Court, after hearing the parties and on perusal of the documents, reversed the finding of the trial Court. Being aggrieved by the same, the appellants/plaintiffs are before this Court.

The substantial questions of law framed by this Court on 25.9.2012 are as under:

"i) Whether Exs.P.2 to P4 can be validated by levying duty penalty at the appellate stage?

ii) Whether the First Appellate Court was not justified in ignoring the said documents for insufficiency of stamps?"

So far as ready and willingness to perform contract, nature of transaction and validity of Exs.P2 to P4 are concerned, it appears, towards the security of loan, initially Janakiram has mortgaged the suit schedule property in favour of the defendant and later the same has been reconveyed by the defendant to the plaintiff on payment of the principal amount of Rs. 40,000/- together with interest at the rate of 2% p.m. It appears that insofar as readiness and willingness to perform his part of the contract is concerned the plaintiff has deposited a sum of Rs. 50,000/- in favour of the defendants and hence, they are seeking for reconveyance of the suit schedule property. Apart from that, they are also entitled for rental which amounts to Rs. 50,000/- by the defendants. According to the appellants herein, they have deposited the borrowed amount in favour of the defendants and that they are ready and willing to perform their part of the contract. At the same time, the learned counsel for the appellants relied upon the judgment of this Court in RSA No. 327/2005 disposed of on 16.9.2006 where it is held that Section 16(c) of the Specific Relief Act, 1963 does not require any specific phraseology but only that the plaintiff must aver that he has performed or has always been and is willing to perform his part of the contract. So the compliance of "readiness and willingness" has to be in spirit and substance and not in letter and form. The learned counsel appearing for the appellants has submitted that the amount of Rs. 50,000/- paid to the defendants shows their capacity and readiness and willingness to perform their part of the contract. Insofar as the aspect of time is essence of the contract is concerned, the learned counsel for the appellants relied upon the decision of the Apex Court in the case of P. Purushottam Reddy and Another v. M/s. Pratap Steels Limited reported in 2002 (2) KCCR where it is held that it is a well-settled principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. Under the law of equity which governs the rights of the parties in the case of specific performance of the contract to sell real estate, law looks not at the letter but at the substance of the agreement.

The learned counsel for the appellants further submitted with respect to Exs.P.2 to P4-agreement is concerned, the trial Court has rightly held that the plaintiffs are ready and wiling to perform their part of the contract and that depositing a sum of Rs. 50,000/-shows their capacity.

On the other hand, the learned counsel for the respondents submitted that the plaintiffs were unable to demonstrate their readiness and willing to perform their part of the contract and the amount of Rs. 50,000/-deposited in the bank is insufficient and another Rs. 20,000/- was required to be paid at the time of execution of reconveyance deed. As such, the plaintiffs are not ready and willing to perform their part of the contract, for which, the learned counsel for the appellants submitted that payment of Rs. 20,000/- is a different transaction and the defendants are required to pay rental amount of Rs. 50,000/- and the said amount has not been paid yet.

It appears with regard to non-joinder of necessary party is concerned, the mother of the defendants was not living with them. The lower Appellate Court relied upon the decision of this Court reported in ILR 2003 Karnataka page 879 where referring to Sections 34 and 35 of the Karnataka Stamp Act, with regard to an agreement to sell, not duly stamped it is held that the document in question is an agreement to sell not duly stamped as per the relevant provisions of Karnataka Stamp Act 1957 and therefore court has power to refuse injunction.

It is to be noted that a document was executed earlier by way of registered sale deed in favour of the defendant. By way of re-conveyance, a separate agreement was entered into. However, the documents could be validated by imposing penalty. As such, there may not be any impediment on the plaintiffs to get the things done. As per the findings of the trial Court with regard to various document and transactions is concerned, it is seen that as per Ex.D1, one Janakiram borrowed the amount from the defendant and for security purpose mortgaged the property in his favour on 10.2.1978. At the same time, the defendant has agreed to reconvey the suit schedule property once the amount is paid. As regard, the arrears of rental which has to be paid by the defendants to the plaintiffs, the suit is pending before the Munsiff Court. In the circumstances, it is to be noted that the plaintiff was ready and willing to perform his part of the contract, and also time is not essence of the contract in view of the fact that there was an embargo in reconveying the property as there was a suit for injunction before the Civil Court. However, the lower Appellate Court without taking into consideration the impediment on the defendant, reversed the finding of the trial Court.

In the light of the above, the appeal is allowed. Order of the lower appellate court is set aside. Parties to bear their own costs.

Stamp duty if any, is hereby ordered to be paid by the plaintiffs on Ex.P2 to 4 without penalty as per the Stamp Duty, in accordance with law.