Gangadharaiah C. and Others vs Krishnappa L.A. and Others

N. Kumar, J—These two appeals are preferred by defendants in the suit challenging the judgment and decree of the Trial Court, which has decreed the suit of the plaintiff for specific performance of 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. 9 measuring 3 acres 18 guntas situated at Herohalli, Yeshavanthapura Hobli, Bangalore North Taluk, which is more particularly described in the schedule to the plaint and hereinafter referred to as ''the schedule property''.

The case of the plaintiffs is the defendants are the absolute owners of the schedule property. The 2nd defendant Sri. C. Honnaiah had purchased the schedule property from Smt. Jayamma and Honnappa, under two sale deeds dated 22.04.1983 and 23.02.1984 respectively. On 16.08.1984 there was a family partition. All the properties of the family were divided including the schedule property. The schedule property was allotted to the share of the 1st defendant under the partition subject to several conditions. The 1st defendant complied with the conditions stated in the partition deed dated 16.08.1984. Therefore, he became the absolute owner of the schedule property. However, the katha of the schedule property continued to remain in the name of the 2nd defendant. Therefore, he was also made a party to the suit. The plaintiffs entered into an agreement of sale with the defendants on 03.01.1991 to purchase the suit schedule property for a consideration of Rs. 7,59,000/-. A sum of Rs. 1,00,000/- was paid under the agreement by the plaintiffs to the defendants. The case of the plaintiffs is, the plaintiffs have put the defendants in possession of the schedule property. The payment of Rs. 1,00,000/- was acknowledged by the defendants. Therefore, the plaintiffs are in possession and enjoyment of the suit schedule property. The plaintiff virtually almost formed a layout and they have formed several sites on it. The defendants after executing the agreement in favour of the plaintiffs have started hostile attitude towards plaintiffs and enjoyment of the suit property. On 25.01.1991 defendants 1 and 2 obstructed the plaintiffs from forming the layout saying that they do not want to sell the suit property in favour of the plaintiffs. They declared that they are prepared to return the amount. The plaintiffs with great difficulty resisted their illegal act. Further, the defendants are bent upon creating problems with the plaintiffs'' peaceful possession and enjoyment of the schedule property. The plaintiffs were forced to approach the Court for the relief of permanent injunction. Subsequently, the plaint was amended to include the prayer for specific performance. Though defendants have agreed to execute the sale deed within eleven months from the date of the agreement, even to this day, they neither cared nor bothered to execute the sale deed. The plaintiffs are ready and willing to perform their part of the obligation as contemplated under the agreement dated 03.01.1991. In fact they are ready with the balance sale consideration amount and also they are ready with the money, which is required for purchase of stamp paper and registration charges. The plaintiffs time and again requested the defendants to come and execute the sale deed. They have not evinced any interest in completing the sale transaction. Therefore, the plaintiff sought for a decree of specific performance directing the defendants to execute the sale deed and also for injunction and for possession of the schedule property.

After service of summons, the defendants entered appearance and filed their written statement. They admitted the ownership of the property and the partition deed dated 16.08.1984. They admitted the execution of the sale agreement dated 03.01.1991. Earlier there was an agreement in Kannada on 26.07.1990. The plaintiffs, who had no sufficient funds paid the advance of Rs. 1,00,000/- in two installments through cheques. When the plaintiffs could settle the balance amount, once again approached the defendants requesting for extending the time to sign the new agreement. Purely on humanitarian grounds, since they had no money to pay to the defendants towards purchase of the suit schedule land, the defendants executed the second agreement. It is not correct that the possession of the suit schedule lands were handed over to the plaintiffs and that the same is even now in possession of the defendants. They denied all other allegations in the plaint. They further contended that the suit schedule property is an agricultural land and the plaintiffs and not the defendants have obtained sanction for conversion from the competent authority. The plaintiffs cannot think of forming a layout illegally, which is totally prohibited in law. The plaintiffs were incapable of purchasing the land from the defendants. They have otherwise planned to harass the defendants by resorting to filing of the original suit and to some how knock of the suit property for a cheap price. The plaintiffs have no locus standi to pursue the case since they have no manner of right title and interest over the property. If the plaintiffs had a valid sale agreement, they would have filed a suit for specific performance of the contract within the stipulated period in the agreement. They have not done so. Therefore, the suit is barred by law of limitation. Further there are two more cases pending in Civil Judge''s Court (CCH 22) at Mayohall in O.S. No. 10160/1991 and Miscellaneous Petition No. 411/95 in the City Civil Judge''s Court in CCH 18 in which the suit schedule property is involved. The plaintiff is also a party in these cases. This fact has been suppressed by him in the plaint. On this ground also, the suit is to be dismissed.

The 3rd defendant was impleaded. Subsequently, he has filed a separate statement. The 3rd defendant has pleaded ignorance about the agreement dated 03.01.1991 and payment of Rs. 1,00,000/- under the agreement. He emphatically denied that the plaintiffs were put in possession of the suit schedule property and that any layout is formed in the schedule property. The suit schedule property has been in possession of the Joint Family members of the defendants and other members of the family, who are entitled to share in the suit schedule property. The plaintiffs have no right to enter upon the suit schedule property and claim any reliefs in respect of the said property as the same belonged to the 4th defendant, his mother and other two brothers namely Sri. Gangadhar and C. Nagaraj. Even defendants 1 and 2 have no share in the suit schedule property and also they have no right. There is no cause of action for the suit as per the amended plaint and hence, sought for dismissal of the suit. In addition to that, they have set out their defence. The 3rd defendant contended that though the suit schedule property was left to the 1st defendant subject to the fulfillment of certain conditions as per the partition deed dated 16.08.1984 entered into between the parties, the 1st defendant having failed to fulfill the conditions enumerated in the said partition deed in respect of the suit schedule properties, thereby the 1st defendant has lost lien over the schedule property. The 3rd defendant and others namely, the mother of this defendant Sri. C. Gangadharappa and C. Nagaraj having exhausted all the avenues to make the 1st defendant to fulfill the terms and conditions of the partition deed, the 3rd defendant and his mother filed a suit for partition of the suit schedule property making defendants 1, 2, 4 and Sri. C. Nagaraj and another for partition of the suit schedule property in O.S. No. 2726/1992 on the file of the City Civil Court, (CCH 18). The suit has been decreed. As per the said judgment and decree, the 1st and 2nd defendants are not entitled to any share in the suit schedule property and they have no interest and right over the schedule property. Defendants 1 and 2 have, with an intention to knock away the suit schedule property created the said agreement in favour of the plaintiff and forced them to file this case.

The 4th defendant also has filed written statement reiterating what 3rd defendant has stated in the written statement and submits that the suit is to be dismissed.

On the basis of the aforesaid pleadings, the Trial Court has framed the following issues:

Whether the plaintiffs prove that the defendant No. 1 has become the absolute owner of the suit schedule property under the partition deed dated 16.08.1984?

Whether the plaintiffs prove that the 1st defendant has agreed to sell the suit schedule property for a sum of Rs. 7,59,000/-?

Whether the plaintiffs prove that the defendant No. 1 has received an advance amount of Rs. 1,00,000/- under the agreement of sale dated 03.01.1991 and put the plaintiffs in possession of the suit property?

Whether the defendant No. 1 proves that the plaintiffs has no money to pay the consideration amount?

Whether the suit of the plaintiffs is barred by limitation?

Whether the plaintiffs prove that they are always ready and willing to perform their part of the contract and 1st defendant has refused to perform his part of the contract?

Whether the plaintiffs are entitled to the relief''s sought for?

The plaintiff, in order to substantiate his claim examined the 1st plaintiff as P.W. 1 and examined two attesting witnesses to the agreement of sale namely Pradeep and R. Krishna Shetty as P.W. 2 and P.W. 3 and produced 21 documents, which are marked as Ex. P1 to Ex. P21. On behalf of the defendants, the 3rd defendant C. Gangadharaiah was examined as D.W. 1, the 2nd defendant C. Honnaiah was examined as D.W. 2 and they have produced three documents, which are marked as Ex. D1 to Ex. D3. They also marked the written statement of D.W. 2 and his signature as Ex. C1 and Ex. C1(a) respectively.

The Trial Court, on appreciation of the oral and documentary evidence on record held that the plaintiffs have proved that defendant No. 1 has become the absolute owner of the suit schedule property under the partition deed dated 16.08.1984. Further, the plaintiffs have proved that the 1st defendant has agreed to sell the suit schedule property for a sum of Rs. 7,59,000/-. The plaintiff has also proved that a sum of Rs. 1,00,000/- was paid as advance to defendant No. 1 under the agreement of sale and the plaintiffs were put in possession of the schedule property under the agreement. The defendant has failed to prove that the plaintiffs had no money to pay for the consideration amount. It also held that the suit is not barred by law of limitation. The plaintiff has also proved that they are always ready and willing to perform their part of the contract and the 1st defendant has refused to perform his part of the contract. Therefore, they decreed the suit of the plaintiff as prayed for.

Aggrieved by the said judgment and decree of the Trial Court, defendants 1 and 2 have preferred R.F.A. No. 2151/2006 and the 3rd defendant has preferred R.F.A. No. 2271/2006 challenging the correctness and legality of the judgment and decree passed by the Trial Court.

Sri. S. Shastry, learned counsel appearing for defendants 1 and 2 contended that the suit of the plaintiffs is barred by law of limitation. The suit was filed on 21.02.1991 and the averments in para 4 of the plaint shows that on 25.01.1991 trouble started and defendants 1 and 2 refused to execute the sale deed. Therefore, instead of filing a suit for bare injunction on 20.02.1991, the plaintiffs ought to have filed a suit for specific performance. However the suit for bare injunction was filed and subsequently, the application is filed for amendment of the plaint to include the prayer for specific performance and the said application was allowed on 11.08.1994. Therefore, when the cause of action for the suit for specific performance arose on 25.01.1991, the suit for specific performance was filed on 11.08.1994 is clearly barred by law of limitation and the Trial Court committed an error in not dismissing the suit.

Further, he contended that the plaintiff was not ready and willing to pay the balance sale consideration. In the written statement, defendants have specifically pleaded that the plaintiffs were not ready and willing to pay the balance sale consideration. In fact the Trial Court has framed an issue on the same, casting the burden on the defendants to prove that the plaintiffs were not ready and willing to pay the balance sale consideration. In order to discharge the burden of showing readiness and willingness to perform their part of the contract, the plaintiffs relies on Ex. P17, Ex. P18 and Ex. P19 the accounts statements for the period from 01.01.2001 and subsequently. The dispute arose on 25.01.1991. Suit for injunction was filed on 21.02.1991. The suit for specific performance was filed on 11.08.1994. Therefore, the plaintiff ought to have produced evidence to show it is during that period, he was ready with the balance sale consideration. If he produced the evidence 10 years after the agreement of sale, to show that he was ready with the balance consideration, it follows that earlier he was not ready with the consideration. Therefore, he submits that the finding recorded by the Trial Court is erroneous and calls for interference.

Sri B.V. Puttegowda, the learned counsel appearing for the third defendant submitted that, defendants 1 and 2 have no manner of right, title or interest over the property. The execution of an agreement in favour of the plaintiffs is of no consequence. The Civil Court in a decree for partition has clearly held defendants 1 and 2 have no manner of right, title or interest over the property. Ignoring this fact, the trial Court committed a serious error in decreeing the suit of the plaintiffs against defendants 1 and 2 who have no right in the property and, therefore, he submits that a case for interference is made out. He also submits that the third defendant is in possession of the property and the finding recorded contrary to the same is illegal.

Per contra, Sri Papi Reddy, the learned counsel for the plaintiff submits the schedule property was purchased in the name of the second defendant. The sale deeds Exs. P1 and P2 produced in the case amply demonstrates the said fact. There was a family partition on 16.8.1984 in which the schedule property fell to the share of the first defendant. First defendant has performed his obligations under the partition deed and, therefore, he is the absolute owner of the schedule property. The execution of the agreement dated 3.1.1991, Ex. P16, is admitted. Payment of Rs. 1,00,000/- under the agreement is also admitted. The plaintiff was ready and willing to perform his part of the contract. His oral evidence is not challenged in cross-examination. Therefore, the trial Court acting on Exs. P17, P18 and P19 held that the plaintiff is ready and willing to perform his part of the contract and accordingly decreed the suit. The suit is also in time and, therefore, he submits no case for interference is made out.

In the light of the aforesaid facts and the rival contentions, the points that arise for our consideration in this appeal are as under:-

(a) Whether the finding of the trial Court that the plaintiff was ready and willing to perform his part of the contract is supported by the legal evidence?

(b) Whether the suit of the plaintiff is barred by time?

(c) Whether defendants 1 and 2 have any right in the property which they have conveyed under the agreement of sale?

The undisputed facts are, the second defendant purchased the schedule property under two registered sale deeds from its previous owner for valuable consideration as per Exs. P1 and P2. Subsequently, there was a family partition and the schedule property was the subject matter of the family partition. In the said family partition which is dated 16.8.1984, the schedule property fell to the share of the first defendant. Certain obligations were imposed on the first defendant before he could claim absolute title. It is the case of the plaintiff that he discharged the obligation. But, it is the case of the third defendant that he did not discharge those obligations. The first defendant lost his lien over the property. Subsequently, the suit came to be filed in O.S. No. 2726/1992 by the third defendant and others for partition and separate possession of the legitimate share in a competent Civil Court. The Civil Court has passed a decree in which the schedule property has been allotted to others and no part of it was allotted to the first or second defendant. Therefore, the contention is that the defendant No. 1 is not the owner, he could not have entered into an agreement of sale.

The material on record discloses that the plaintiff entered into an agreement of sale as per Ex. P16 on 3.1.1991. The trouble broke out on 25.1.1991 when defendants 1 and 2 obstructed the entry of the plaintiff to the schedule property. Though in the agreement of sale it is stated that the possession is delivered, defendant Nos. 1 and 2 did not allow the plaintiff to enter the property, form a layout. Therefore, the plaintiff was constrained to file the suit on 21.2.1991 for a bare injunction. The averments in the plaint discloses that on 25.1.1991 both the defendants obstructed the plaintiff from forming the layout saying that they do not want to sell the suit property in favour of the plaintiff and they also declared that they are prepared to return the amount. Therefore, defendant Nos. 1 and 2 declined to honour the commitment, refuse to execute the sale deed. Though 11 months is the period prescribed for execution of the sale deed, when on 25.1.1991 defendant refused to execute the sale deed which forced the plaintiff to file the suit on 21.2.1991, the plaintiff ought to have filed the suit for specific performance and not for a decree of permanent injunction. Admittedly, no order of temporary injunction was granted. The matter was contested. Ultimately, in the year 1994, the plaintiff filed an application seeking the relief of specific performance. That application came to be allowed on 11.8.1994. In the meanwhile, O.S. No. 2726/1992 is filed and a collusive decree of partition is obtained where the schedule property was allotted to the share of other brothers except defendants 1 and 2 to contend in this suit that defendants 1 and 2 have no right. It is submitted that, there was an appeal against the said order to this Court, the appeal was allowed and the decree of the trial Court was set aside, matter was remanded, even after remand the decree is passed and again the matter is in appeal before this Court. Suffice it to say that is a suit filed subsequent to the filing of the suit. Plaintiff is not a party in those proceedings. Therefore, rightly the trial Court held that the decree passed therein is of no consequence in deciding the suit for specific performance.

Now, in order to succeed in a suit for specific performance it is settled law that, as statutorily provided under Section 16(C) of the Specific Act, the plaintiff has to plead and prove his readiness and willingness to perform his part of the contract. It is only when both readiness and willingness is proved, the Court gets the jurisdiction to pass a decree for specific performance. In the instant case, the plea of readiness and willingness is there. Mere plea is not sufficient. Defendants have denied those allegations. As stated earlier, an issue is framed casting a burden on the defendants. Therefore, the plaintiff is conscious that in order to succeed in the suit he has to produce the evidence regarding the readiness and willingness to perform his part of the obligation, i.e., payment of the balance sale consideration of a sum of Rs. 6,59,000/-. Having understood the case, the plaintiff has produced Exs. P17, 18 and 19 to show that he was ready with the balance sale consideration and he was willing to pay the same to the defendant. Ex. P17 on which reliance is placed is a bank statement of Vijaya Bank from 1.1.2001 to 8.2.2002 standing in the name of the first plaintiff-Krishnappa. It shows from 4.1.2001 to 8.2.2002 a sum of Rs. 4,99,597.63 to Rs. 4,48,884.63 is available in his account. Ex. P18 is the account of Shubha B. Nakshatri which shows between the period 8.2.2002 to 8.2.2002 a sum of Rs. 76,096/- is standing to her credit in Vijaya Bank, Rajajinagar Branch. Ex. P19 is the account statement of Centurion Bank Limited in the name of B.T. Purushotham-third plaintiff which shows a sum of Rs. 10,000/- was the opening balance on 5.2.2001 and as on 2.2.2002 the amount is about Rs. 2,01,514/-. The aforesaid three documents show the plaintiffs were in possession of about Rs. 5,00,000/- in the year 2001-2002. What the plaintiffs have to prove in order to get a decree for specific performance is that they were ready with the balance sale consideration of Rs. 6,59,000/- on the date of the agreement dated 3.1.1991 and in the span of 11 months which is the period prescribed for completing the sale transaction, on 21.2.1991 when the suit was filed or at least on 11.8.1994 when the amendment allowing the relief of specific performance was granted. Exs. P17, P18 and P19 only shows that he was ready with Rs. 5,00,000/- in 2001-02 and there is no evidence to show he was ready with the amount from 1991 till 2001 which is the crucial date for deciding whether the plaintiff was ready and willing to pay the balance sale consideration. It was submitted that, the defendant did not seriously challenge in cross-examination the evidence of P.W. 1. The aforesaid evidence is sufficient to hold the plaintiff''s readiness and willingness to pay the balance sale consideration. In this context, in examination in chief what P.W. 1 has stated is to be looked into. At para 3 of the examination in chief he has stated that, they requested the defendant to receive the balance sale consideration and execute the sale deed. It is on 25.1.1995 and subsequently they made a request. They were prepared to pay the balance sale consideration and take the sale deed. If the plaintiff was ready with the balance sale consideration on 25.1.1995 or if that is the day on which they made an offer and requested them to execute the sale deed, even in the absence of any cross-examination the plaintiff has to fail because it only shows no offer was made prior to 25.1.1995 nor were they ready with the balance sale consideration prior to that date. Therefore, the oral and documentary evidence clearly establishes that the plaintiff was not ready and willing to pay the balance sale consideration and take the sale deed at the relevant point of time, i.e., the date of agreement or 11 months from the said date, date of the suit or the date on which amendment application was allowed. Unfortunately, the trial Court though referred to Exs. P17, P18 and P19, has not applied its mind to the contents of the same and has not looked into the account extracts and thus mislead itself that the plaintiff was ready with the balance sale consideration. This documentary evidence on which the plaintiff relies clearly establishes that the plaintiff was not ready and willing to perform his part of the contract as stipulated in the terms of the contract. When the plaintiff is not ready and willing to perform his part of the contract, the Court had no jurisdiction to decree the suit for specific performance. To that extent, the trial Court committed a serious error and, therefore, the finding recorded that the plaintiff was ready and willing to perform his part of the contract requires to be set aside and consequently the suit of the plaintiff for specific performance is to be dismissed.

Learned counsel for the defendant relied on a judgment of the Apex Court in the case of Tarlok Singh Vs. Vijay Kumar Sabharwal, (1996) 3 AD 725 : (1996) 1 CTC 738 : (1996) 4 JT 245 : (1996) 113 PLR 649 : (1996) 3 SCALE 558 : (1996) 8 SCC 367 : (1996) 3 SCR 879 where in the facts of that case the Apex Court has held that the period of limitation for a suit for specific performance runs from the day the amendment is allowed. If that judgment is applied to the facts of the case, as the application for amendment was allowed on 11.8.1994 and even then as 11 months period is prescribed for completing the sale transaction, the suit would be in time as rightly held by the trial Court.

In the light of what we have stated above, we do not go into the question whether the defendants 1 and 2 have any right in the property in view of the judgment passed in O.S. No. 2726/1992 which is now pending before this Court in a Regular First Appeal. Accordingly, we pass the following order:-

(a) Both the appeals are allowed.

(b) The judgment and decree of the trial Court is hereby set aside.

(c) The suit of the plaintiffs for specific performance is dismissed.

(d) However, the defendant No. 1 shall refund a sum of Rs. 1,00,000/- received on 3.1.1991 with interest at 18% p.a. which is the agreed rate of interest agreed in the agreement, from the date of agreement till the date of payment. The said amount shall be a charge on the schedule property.