Nanjamma and Others vs Lakshmana and Others

Anand Byrareddy, J—Heard the learned counsel for the appellants and the learned counsel for respondent No. 1.

The appellants were the defendants before the trial court. It was the case of the plaintiffs that on 22.12.2005, the defendants had executed an agreement of sale in favour of the plaintiff agreeing to sell land bearing survey No. 84 of Billanakote village, Sompura Hobli, Nelamangala taluk, Bangalore Rural District, measuring 17 1/2 guntas, which was morefully described in the schedule to the plaint, for a total sale consideration of Rs. 4,81,250/-. Under the agreement of sale, the defendants are said to have received an advance amount of Rs. 10,000/- and the balance amount of Rs. 4,71,250/- was to be paid at the time of the sale transaction. The plaintiff claimed that he was ready and willing to complete the sale transaction on the defendants furnishing the original documents.

It however transpires that the defendants had approached the plaintiff on 3.1.2006 seeking further advances towards the sale consideration and had received a sum of Rs. 1,00,000/- on 3.1.2006. It is stated that again on 16.1.2006, the defendants had approached the plaintiff and received a further sum of Rs. 2.00 lakh on the pretext that they had to gather original documents including the ''akarbandh'' in respect of the property, in order to complete the sale transaction by the registration of the same. And again on 28.4.2006, a further sum of Rs. 50,000/- was received by way of cash by the defendants and since a substantial portion of the sale price was already paid, the plaintiff had sought to compel the defendants to execute the sale deed. And even thereafter, the defendants had received a further sum of Rs. 15,000/- on 14.7.2006 and ultimately, a draft sale deed was prepared, but the defendants failed to come forward to execute the sale transaction. The defendants thus had received a total sale consideration of Rs. 3,75,000/- and had failed to complete the transaction. The plaintiff was thus constrained to issue a legal notice calling upon the defendants to complete the transaction. However, the defendants thereafter sought to terminate the agreement of sale to defeat the rights of the plaintiff, who had parted with substantial amounts of money. It is in that background that the suit was filed seeking specific performance of contract.

The defendants having entered appearance had filed written statement, to contend that there is no valid and enforceable agreement between the plaintiff and defendants and the agreement of sale relied upon by the plaintiff was a got up document. The defendants had not received any amount as on 22.12.2005 and it was also false that they had received substantial amounts. Therefore, the defendants sought to negate the claim of the plaintiff and sought dismissal of the suit. It was also hinted that defendant No. 1 was given to alcohol and that the plaintiff was seeking to take advantage of the same and therefore denied the plaint averments.

On the basis of the pleadings of the parties, the court below had framed the following issues:

"1. Whether plaintiff proves that the defendants have executed an Agreement of Sale dated 22.12.2005 agreeing to sell the suit schedule property in his favour for a total sale consideration of Rs. 4,81,250/-?

Whether plaintiff proves that in pursuance of the Agreement of Sale, he has paid a sum of "Rs. 10,000/- on 22.12.05, Rs. 1 lakh on 03.01.06, Rs. 2 lakh on 16.01.06, Rs. 50,000/- on 28.04.06 and Rs. 15,000/- on 14.07.06 towards advance sale consideration?

Whether plaintiff proves that he was ever ready and willing to perform his part of the contract?

Whether the plaintiff proves that the defendants are trying to alienate the suit schedule property in favour of 3rd party?

Whether plaintiff is entitled for the relief of Specific Performance of Contract?

In the alternative, whether plaintiff is entitled for refund of sum of Rs. 4,81,250/- with interest @ 18% p.a.?

Whether plaintiff is entitled for the relief of Permanent Injunction as prayed for?"

The court below has answered all the issues in the affirmative, while holding that issue No. 6 did not survive for consideration and decreed the suit. It is that which is under challenge in the present appeal.

The learned counsel for the appellants would point out that the court below in arriving at a finding that it was not wholly correct that the defendants had entered into an agreement with the plaintiff and that they had acknowledged the payments received under the agreement from time to time, as found in the endorsements made in the agreement, would seek to point out that even if it is accepted that all the defendants had signed the agreement, the endorsement dated 3.1.2006 is found to have been signed not by all the defendants, but only by defendant No. 1 and therefore would not bind other defendants. The subsequent endorsement dated 6.1.2006 is found to have been signed by defendant No. 1 and defendant No. 3. While it is also noticed that of the two witnesses, one has signed as Nanjamma, who is said to be defendant No. 2 This is an area of doubt since Nanjamma is shown as a witness and not as the vendor. The third endorsement dated 28.4.2006 is signed by Ramachandraiah, defendant No. 1. It is therefore contended that it is not demonstrated by the plaintiff that the several advances said to have been paid pursuant to the agreement dated 22.12.2005 has been received by all the defendants and hence to conclude that the defendants, who had joined the agreement of sale, had received the consideration of the advances to the extent of Rs. 3,75,000/- cannot be conclusively held against them and therefore, it cannot be said that the consideration had passed in favour of the defendants. It is not the case of the plaintiff that defendant No. 1, on all occasions, had received the amount for and on behalf of himself and other defendants and when all the defendants are not found to be signatories to the endorsement on all occasions, it cannot be said that it is a concluded transaction binding all the defendants. It is further contended that from the record, it is evident that the defendants did not have an opportunity of contesting the case of the plaintiff by cross-examining the plaintiff or by tendering evidence and hence to proceed on the basis that by virtue of the agreement of sale, the title to the property of the defendants was established, resulted in a miscarriage of justice.

It is also contended that even if the agreement is held to be proved, it was at best in the nature of security for the monies borrowed at the behest of defendant No. 1, who was given to drinking and therefore was constantly in need of money and the fact that he has received several advances, according to the plaintiff and is sought to be demonstrated with reference to the endorsements on the sale deed, would clearly render the contract unconscionable agreement and cannot be enforced as against other defendants, who have not willfully joined the defendant No. 1 together on all occasions when such advances are said to have been paid.

It is also pointed out that apart from a small bit of land which is the subject matter of the suit, the defendants are not possessed of any other property and it is their only source of livelihood and in the event the judgment and decree of the court below is not set aside it would result in the defendants being left without any source of livelihood.

It is also contended that mere plea of the plaintiff that he was ready and willing to complete his part of the transaction is made only with reference to the endorsements in the agreement of sale and when this is not established to be endorsed by all the defendants, it cannot be said that the plaintiff had proved his readiness and willingness to perform his part of the contract, as no consideration has flown to the other defendants, who were not signatories to the several endorsements and therefore the learned counsel seeks that the appeal be allowed on equitable grounds.

The learned counsel for the respondents, on the other hand, wound contend that there is no substance in the case of the appellants. They had ample opportunity to meet the case of the plaintiff to tender evidence. They had willfully chosen not to do so. Hence, the plea that they were not given ample opportunity is false and misleading. Insofar as the agreement of sale, not being a genuine document is a halfhearted contention taken by the appellants. On the other hand, it is sought to be contended that they had all signed the agreement, but they had not signed the endorsement on all occasions, while also seeking to contend that the agreement was executed as a loan transaction and not as an agreement of sale and further defendant No. 1 may have received the sale consideration and not other defendants. Therefore the nebulous stand sought to be set up by the defendants is itself indication of want of bona fides on their part. The fact that there are endorsements evidencing receipt of payments by defendant No. 1, would demonstrate that he has received it on behalf of the family and the agreement having been executed by defendant No. 1 to 4 was only by way of abundant caution in ensuring that there was no objection to the sale deed. The fact that defendant No. 1 has not denied the receipt of the amounts would clearly preclude the appellants from contending otherwise.

Insofar as the readiness and willingness is concerned, if the defendant No. 1 is not in a position to deny the receipt of the substantial amount of sale consideration as indicated in the endorsements, the question of want of readiness and willingness does not arise. Therefore, he would submit that the law is well settled insofar as addressing the said agreement of sale and the specific performance of contract. The learned counsel for the appellant has relied upon the following decisions, to support the contention that the readiness and willingness to perform the contract is demonstrable with reference to the principles laid down therein.

Biswanath Ghosh (Dead) by L.Rs. and Others Vs. Gobinda Ghosh Alias Gobindha Chandra Ghosh and Others, AIR 2014 SC 1582 : (2014) AIRSCW 1771 : (2014) 4 JT 132 : (2014) 3 SCALE 630

Motilal Jain Vs. Smt. Ramdasi Devi and Others, AIR 2000 SC 2408 : (2000) 8 JT 59 : (2000) 5 SCALE 232 : (2000) 6 SCC 420 : (2000) 1 SCR 615 Supp : (2000) 2 UJ 1192 : (2000) AIRSCW 2554 : (2000) 5 Supreme 165

M.G. Manjunath vs. B.H. Sridhara, (2010) 4 KLJ 89

In the above facts and circumstances, the contention that the defendants were bound to execute the sale deed in the light of the agreement of sale, is also with reference to the endorsement on the agreement of sale whereby several advances are said to have been received by the defendants. Whether such endorsement and acknowledgements would bind all the defendants cannot be answered in the affirmative. Admittedly, all the defendants have not affixed their signatures on the endorsement on all occasions. Therefore, this is the primary indication that the entire sale consideration has not been received by all the defendants. It is the specific case of defendants 2 to 4 that the defendant No. 1 was an indisciplined man, who was always in need of money and possibly entered into a transaction from time to time and having received the advance thereafter, without their knowledge, would not render the transaction as a completed transaction whereby the consideration has not been received by all the defendants.

Further insofar as the discretion and power vested in the court in terms of Section 20 of the Specific Relief Act, 1963 would also require the court to take into consideration whether the defendants had entered into a contract in circumstances which though not rendering the contract void makes it inequitable to enforce specific performance would also have to be kept in view by the trial court. It is the case of the appellants that except for this less than half acre of land, they did not hold any other property, which is not seriously disputed by the respondent. However, it is the case of the respondent that in order to purchase this suit property, he had sold other lands belonging to him, which would result in inequity in his favour, which would, in any event, evoke sympathy for the respondent as well.

However, having regard to the circumstance that the respondent has parted with substantial amount, even if in favour of defendant No. 1 alone, interests of justice would require that the plaintiff should reimburse all this amount fully with interest thereon. It would be just and equitable therefore to direct the appellants to refund the said amount with nominal interest thereon in a total sum of Rs. 10.00 lakh which the appellants shall refund to the respondent within a period of three months and on such payment, the sale deed that has been executed in favour of the respondent shall be cancelled. This judgment and decree shall be transmitted to the Sub-Registrar concerned in terms of Section 31(2) of the Specific Relief Act, 1963 with a direction that the sale deed executed in favour of the respondent shall stand cancelled.

The appeal stands disposed of.