Basavarajegowda vs N. Vasanthi

N. Kumar, J—This is a plaintiffs regular first appeal challenging the judgment and decree of the Trial Court dismissing the suit of the plaintiff for specific performance and decreeing the suit for refund of the earnest money paid under the agreement of sale.

For the purpose of convenience, the parties are referred to as they are referred to in the original suit.

The subject matter of the suit is land bearing Sy. No. 95/P1, Mallinathapura village, Bilekere Hobli, Hunsur Taluk, Mysore District, measuring 5 acres consisting of Brick Factory Sheds, Kilan, Borewells, Office Room etc., which are more particularly described in the schedule to the plaint and hereinafter referred to as the ''schedule property''. The case of the plaintiff is defendant entered into an agreement of sale with the plaintiff on 11.08.2006, agreeing to sell the schedule property for valuable consideration of Rs. 47,05,000/- in favour of the plaintiff. On the date of the agreement, the defendant collected a sum of Rs. 7,50,000/- as advance amount towards the sale consideration. It was agreed that the plaintiff would pay the balance of sale consideration at the time of registration of sale deed. Ever since, the date of the agreement, the plaintiff was ready and willing to perform his part of the contract and he is ready with the balance sale consideration. It was specifically agreed that the sale transaction shall be completed within 90 days from the date of agreement of sale. However, before expiry of 90 days, the plaintiff approached the defendant requesting the defendant to perform his part of the contract by receiving the balance sale consideration. The defendant has postponed the matter on one or the other pretext stating her ill-health problem. The plaintiff believing her words waited all these days. In the meanwhile he learnt that the defendant has not arranged for all the documents pertaining to the schedule property. It is also learnt that there was outstanding due amount of Rs. 6,50,000/- to the KSFC, Mysore, which has got a charge over the property in question. In the absence of discharging the same and without up to date tax paid receipts, the property cannot be registered. It is the bounden duty of the defendant to make available all the documents pertaining to the schedule property and to convey the same in favour of the plaintiff. Though plaintiff was always ready and willing to perform his part of the contract, the defendant was not ready. Therefore, the plaintiff got issued a legal notice dated 10.04.2007, calling upon the defendant to perform her part of the contract and convey the plaint schedule property in favour of the plaintiff. The said notice has been duly served. The defendant did not comply, but she sent an untenable reply to the legal notice and thereby she refused to perform her part of the contract. However, in the reply, the defendant has agreed the fact of execution of the agreement of sale on receipt of the advance amount and that balance sale consideration is payable at the time of the registration of the sale deed. Further, the defendant refused to execute the sale deed by clearing the liabilities for the schedule property. Therefore, it is not open to the defendant to contend that the plaintiff has not chosen to pay the balance sale consideration and failed to get the sale deed executed. Without discharging the liabilities over the property and charge created in favour of K.S.F.C, there is no question of the plaintiff taking the sale deed. That itself shows that the plaintiff is always ready and willing to perform his part of the contract and therefore, the plaintiff filed a suit for the relief of specific performance on 18.06.2007.

After service of summons, the defendant entered appearance and filed a detailed written statement traversing the allegations made in the plaint. The defendant has denied the execution of the agreement of sale. The defendant has denied the allegations made in para 3 of the plaint that ever since from the date of the agreement, the plaintiff was ready and wiling to perform his part of the contract and was ready with the balance sale consideration. She admitted that the sale transaction shall be completed within 90 days. She further contends that when in the agreement itself it is mentioned that in case the transaction is not completed within 90 days, the agreement automatically stands cancelled and the advance sale consideration is also forfeited, the suit of the plaintiff is not maintainable. In substance, the defendant has denied all the allegations in the plaint. Thereafter, in para 12 she has set out her defence. It is her specific case that she had a legal necessity i.e., to transplant a kidney of her husband and so entered into a written agreement with the plaintiff in order to sell 2 acres of alienated land in Sy. No. 95/P1 comprising in it a Brick industry, Kilon, Borewell, Office Room etc. The said Sy. No. 95/P1 in toto measures an extent of 5 acres, out of which 2 acres of land was converted for non-agricultural purpose and the remaining 3 acres still remains as agricultural land. The agreement entered into was only in respect of 2 acres of land in the said survey number, as she was in urgent need of money. Therefore, 90 days is the time stipulated for completing the sale transaction. The defendant was always ready and willing to perform her part of the contractual obligation. It is the plaintiff, who did not come forward to perform his part of the contract as he was in search of other buyers for higher price. The plaintiff was not in a position to arrange the balance sale consideration within 90 days from the date of the agreement. The defendant has made financial commitments with other persons believing that she would get the balance sale consideration mentioned in the agreement of sale. As the plaintiff did not turn up and perform his part of the contract, the defendant is put into loss and her reputation was damaged and she was unable to meet the expenses towards the kidney transplantation of her husband. Therefore, the very purpose of selling 2 acres of land in Sy. No. 95/P1 of the defendant became futile. The husband of the defendant was suffering from kidney failure and he needed regular dialysis. As he lost his precious opportunity of having the transplantation, the plaintiff has to pay damages. The defendant has got 2 children who have no job. The defendant is mainly depending upon the earnings of the Brick Industry. Out of the earnings of the said factory her husband has to undergo dialysis on alternative days. For each dialysis, the defendant has to spend Rs. 2,000/- to Rs. 3,000/-. If the defendant is called upon to execute the sale deed, she will loose the property and great hardship will result to her, which cannot be compensated in any other terms. The written statement was also amended raising pleas under Section 132 of the Karnataka Land Reforms Act.

The Trial Court on the basis of the aforesaid pleadings framed the following issues and other additional issues as under:

Whether the plaintiff proves that the defendant has agreed to sell the suit schedule property in his favour on 11.08.2006 for a sum of Rs. 47,05,000/- after receiving an earnest money of Rs. 7,50,000/- from him?

Whether the defendant proves that she has agreed to sell only 2 acres of alienated land in Sy. No. 95/P1 consisting of brick Industry, Kilon, Borewell, office room etc.?

Whether the plaintiff proves that he has been ever ready and willing to perform his part of contract from the date of agreement of sale till filing of the suit?

Whether the plaintiff is entitled for the relief of specific performance?

What order or decree?

Additional Issues:

Whether there is non-compliance of Section 132 of Karnataka Land Revenue Act?

Whether there is non-compliance of Form No. 13 and 16 of the 1st Schedule Appendix ''A'' CPC?

The plaintiff in order to substantiate his claim examined himself as P.W.1 and examined 2 witnesses C.D. Mahadevappa as P.W.2 and Ningappa as P.W.3 and produced 15 documents, which are marked as Ex.P1 to Ex.P15. On behalf of the defendant, she examined herself as D.W.1 and she also examined a witness by name Srinivasa Kumar and she produced 95 documents, which are marked as Ex. D1 to Ex.D95.

The Trial Court, on appreciation of the oral and documentary evidence on record held that the plaintiff has proved that the defendant has agreed to sell the suit schedule property in his favour on 11.08.2006 for a sum of Rs. 47,05,000/- after receiving an earnest money of Rs. 7,50,000/- from him. The defendant has failed to prove that she has agreed to sell only 2 acres of land in Sy. No. 95/P1 consisting of Brick Industry, Kilon, Borewell, office room etc. The plaintiff has failed to prove that he was ever ready and willing to perform his part of the contract from the date of agreement of sale till filing of the suit. The suit is not bad for noncompliance of Section 132 of Karnataka Land Revenue Act and for non-compliance of Form No. 13 and 16 of the 1st schedule Appendix ''A'' of CPC. However, the Trial Court held that the defendant cannot forfeit the advance amount received and therefore, directed refund of the advance amount received under the agreement of sale.

Aggrieved by the said judgment and decree of the Trial Court refusing to grant the decree for specific performance, the plaintiff has preferred this appeal.

The learned counsel for the appellant assailing the impugned judgment and decree contended that the evidence of the plaintiff discloses that the plaintiff was ready with the balance sale consideration from the date of the agreement of sale till the date of filing of the suit. The Trial Court has not properly appreciated this legal evidence and committed a serious error in recording the finding that the plaintiff has failed to prove his readiness and willingness to perform his part of the contract. He further submitted that in the first instance, the defendant has denied the very agreement itself. She further suppressed the fact that the property was offered as a security to KSFC for a loan borrowed by the defendant in a sum of Rs. 6,50,000/-. A charge had been created and the original title deeds had been given to the KSFC and therefore, when the defendant was not in a position to perform his part of the contract, no fault could be found with the plaintiff. In fact the plaintiff approached the defendant even before the expiry of the agreement with the balance sale consideration. It is the defendant, who went on postponing the execution of the sale agreement. Therefore, he submitted that the Trial Court has not property appreciated the evidence on record and committed a serious error in refusing to pass a decree for specific performance.

Per contra, the learned counsel for the respondent supported the impugned judgment and decree.

In the light of the aforesaid facts and rival contentions, the only point that arises for our consideration in this regular first appeal is as under:

Whether the finding of the Trial Court that the plaintiff was not ready and willing to perform his part of the contract and therefore, not entitled to decree for specific performance is based on legal evidence and calls for interference?

The Trial Court on appreciation of the oral and documentary evidence on record has categorically held that the defendant has agreed to sell the suit schedule property in favour of the plaintiff, which is evidenced by an agreement dated 11.08.2006 for a sum of Rs. 47,05,000/- which is marked as Ex.P1. It is also not in dispute that a sum of Rs. 7,50,000/- was paid on the date of the agreement of sale. The agreement of sale contains a stipulation that the sale transaction should be completed within 90 days from the date of the agreement of sale. The said balance amount is payable before the Sub-Registrar at the time of registration. The balance sale consideration, so payable was Rs. 39,50,000/-. It is also stipulated that if the balance amount is not paid within 90 days, the defendant is at liberty to forfeit the advance amount paid and to sell the property to any person of their choice. The agreement is dated 11.08.2006. 90 days period expires on 11.11.2006. When the defendant has categorically stated in the written statement that the plaintiff did not approach her and pay the balance sale consideration and requested her to execute the sale deed as plaintiff was not ready with the balance sale consideration, the burden of proving the fact that the plaintiff was ready with the balance sale consideration of Rs. 39,55,000/- was squarely on the plaintiff. Being fully conscious of this obligation, the plaintiff has adduced evidence. The plaintiff has produced Ex.P6, an account extract of the State Bank of India, Savings Bank account for the period from 01.09.2006 to 31.12.2006. The plaintiff had a sum of Rs. 14,477/- in his account. Ex.P7 is yet another page of the account extract of Syndicate Bank Savings Account, which shows that on 06.12.2006, the plaintiff had a sum of Rs. 32,033/- in the Bank account.

Ex.P8 is the statement of accounts of the plaintiff in the State Bank of Mysore, Vijayanagar Branch and as on 31.02.2006, a sum of Rs. 1,355-00 was shown as balance. Ex.P9 is the Sale Deed executed by the plaintiff in favour of one Puneeth, conveying the site for a consideration of Rs. 1,75,000-00. Exs.P11 to P15 are the letters dated 15.05.2006 given by the L.I.C., which discloses that they have settled the loan and have issued crossed cheques for Rs. 21,249-00, Rs. 52,999-00, Rs. 14,999-00, Rs. 11,688-00 and Rs. 19,499-00 respectively, drawn in favour of the Dena Bank, in payment of loan amount. All these letters are with regard to the payments prior to the Agreement. If we tally all these amounts irrespective of the dates, the total amount shown in possession of the plaintiff would be hardly Rs. 3,43,299-00 as against the sum of Rs. 39,55,000-00. The oral evidence adduced by the plaintiff shows that he had Rs. 40,00,000-00 in his house on the day when he has issued the legal notice, but no evidence is adduced to show that from where he has raised the sum of Rs. 40,00,000-00 and after the defendant refused to execute the Sale Deed, what has happened to Rs. 40,00,000-00, which was in his house is also not forthcoming. It is on appreciation of these documentary and oral evidence, the trial Court has recorded the findings that the plaintiff has miserably failed to prove the balance sale consideration being with him.

It is settled law that Section 16(c) of the Specific Relief Act mandates the plaintiff, who approached the Court for the relief of specific performance has to plead and prove his readiness and willingness to perform his part of the contract. He must produce such evidence which is acceptable to the Court and demonstrate that he was ready with the balance sale consideration. Unless the plaintiff has proved his readiness and thereafter willingness to pay the balance sale consideration agreed upon, the Court got no jurisdiction to grant a decree for specific performance. The plaintiff proving his readiness and willingness to perform his part of the contract is a condition precedent for the Court to exercise its discretionary power in granting the relief of specific performance. Therefore, the trial Court has rightly held that the plaintiff has miserably failed to prove his readiness and willingness to perform his part of the contract. Therefore, when the trial Court has rightly held that the plaintiff has miserably failed to prove his readiness and willingness to perform his part of the contract, the question of exercising the discretionary power by the Court and granting the relief of specific performance is not permissible. The said finding is based on legal evidence and is in conformity with the evidence recorded by the trial Court on this particular issue. Therefore, there is no merit in this appeal. Hence, the appeal is dismissed.

As we have dismissed the appeal on merits at the stage of admission itself, I.A. Nos. I/14 and 1/13 filed for condoning the delay in filing the appeal and for granting temporary injunction do not survive for consideration and they are accordingly rejected.