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SUPREME COURT OF INDIA
S. ABDUL NAZEER, DEEPAK GUPTA, JJ.
C.S. Venkatesh – Appellant
Versus
A.S.C. Murthy (D) By Lrs. & Ors. – Respondents
Civil Appeal No. 8425 of 2009
Decided On : 07-02-2020
(A) Specific Relief Act, 1963 – Sections 16(c) and 20 – Suit for specific performance of agreement of reconveyance – Real character of transaction has to be ascertained from provisions of documents viewed in light of surrounding circumstances – Since two documents were executed on same day, transaction cannot be a mortgage by way of conditional sale in view of express provisions contained in Section 58(c) of Transfer of Property Act, 1882 – Since execution of reconveyance deed has already been established, question of holding sale deed to be nominal cannot be accepted. (Paras 7 and 13)
(B) Specific Relief Act, 1963 – Sections 16(c) and 20 – Suit for specific performance of agreement of reconveyance – Suit decreed by High Court by holding that sale deed executed by plaintiff in favour of defendants was security for loan advanced by defendants – Continuous readiness and willingness on part of plaintiff is a condition precedent to grant relief of performance – If plaintiff fails to either aver or prove the same, he must fail – To adjudge whether plaintiff is ready and willing to perform his part of contract, court must take into consideration conduct of plaintiff prior and subsequent to filing of suit along with other attending circumstances – Amount which he has to pay defendant must be of necessity to be proved to be available – Right from date of execution of contract till date of decree, he must prove that he is ready and willing to perform his part of contract – Court may infer from facts and circumstances whether plaintiff was ready and was always ready to perform his contract – It is not necessary for plaintiff to produce ready money, but it is mandatory on his part to prove that he has the means to generate consideration amount – Plaintiff was not ready to perform his part of obligation as per agreement – Plaintiff had mortgaged property with bank and bank had obtained an award against plaintiff – When suit property was put up for auction, defendants paid entire amount to bank which was payable by plaintiff under this award – This aspect also indicates conduct of plaintiff – Taking an overall view of matter, trial court rightly held that plaintiff was not ready and willing to perform his part of contract – High Court was not justified in reversing well-reasoned judgment of trial court – Judgment of High Court set aside and judgment and decree passed by trial court restored. (Paras 14, 20, 22, 23 and 24)
Facts of the case:
Present appeal is directed against judgment and decree in RFA No.626 of 2001 dated 21.08.2006 passed by the High Court of Karnataka at Bangalore, whereby the High Court has allowed the appeal and set aside the judgment and decree in O.S. No. 3308 of 1988 passed by the Civil Judge, Bangalore City.
Findings of the Court:
Plaintiff was not ready to perform his part of the obligation as per the agreement. Further, the plaintiff had mortgaged the property with the bank and the bank had obtained an award against the plaintiff. When the suit property was put up for auction, defendants paid the entire amount to the bank which was payable by the plaintiff under this award. This aspect also indicates the conduct of the plaintiff.
Result : Appeal allowed.
JUDGMENT :
S. ABDUL NAZEER, J.
1. This appeal is directed against the judgment and decree in RFA No.626 of 2001 dated 21.08.2006 passed by the High Court of Karnataka at Bangalore, whereby the High Court has allowed the appeal and set aside the judgment and decree in O.S. No. 3308 of 1988 passed by the Civil Judge, Bangalore City.
2. A.S.C. Murthy was the plaintiff in the suit. He died during the pendency of the suit. Therefore, his wife Smt. Jayashree was brought on record as his legal representative. She is the first respondent in this appeal. C.S. Venkatesh, the appellant herein, was defendant No.2 in the suit. C. Sethurama Rao, was the defendant No.1 in the suit. He also died during the pendency of the suit, therefore, his wife Smt. C.S. Lalithamma was brought on record as his legal representative. She is arrayed as respondent No. 2A in this appeal. Defendant Nos. 3 and 4 are respondent Nos. 3 and 4 in this appeal. The parties are hereinafter referred to in their respective capacities before the trial court.
3. The subject matter of the suit was the property situated at Site No. 522, 17th Main Banashankari, I Stage, First Block, Srinagar, Bangalore – 560 050 (hereinafter referred to as ‘the schedule property’).
4. A.S.C. Murthy had filed the above suit against defendants for specific performance of the agreement of reconveyance dated 23.04.1975 in respect of the schedule property and alternatively to declare that the sale deed dated 23.04.1975 executed by him in favour of the defendants is null and void. It was alleged in the plaint that the City Improvement Trust Board, Bangalore (for short ‘CITB’) had allotted the site in question in favour of the plaintiff. Thereafter, he commenced construction of the building on the said site. Since he did not have sufficient funds, he approached the defendants for certain financial assistance. Accordingly, the defendants advanced a sum of Rs.2,000/-as loan. Subsequently, a further sum of Rs.10,000/-was advanced on the condition of payment of interest at the rate of 18% p.a. However, the plaintiff failed to pay the interest on the said sum as agreed, except for a period of two months. Since the defendants were in need of accommodation, the plaintiff put them in possession of the schedule property by executing a deed of mortgage dated 11.10.1973. According to the plaintiff, the defendants have advanced, in all, a sum of Rs.29,000/-. As the plaintiff could not pay the interest regularly, the defendants asked the plaintiff to execute a nominal sale deed in order to ensure prompt payment of interest. Accordingly, the plaintiff executed a deed of sale dated 23.04.1975 in favour of the defendants for a sale consideration of Rs.35,000/-by receiving Rs.6000/-, the difference in the sale price. It was alleged that the sale deed was executed as a security for the amount advanced by the defendants. It was contended that the defendants executed an agreement of reconveyance in respect of the schedule property dated 23.04.1975 in favour of the plaintiff. It was also agreed that the defendants were put in possession of the schedule property on the understanding that they need not pay rent and the plaintiff need not pay interest on the amount advanced by them to the plaintiff. After the expiry of five years and the defendants having received the sum of Rs.35,000/-advanced by them, the plaintiff demanded that the defendants execute a reconveyance deed in terms of the agreement of reconveyance dated 23.04.1975. However, the defendants have failed to execute sale deed.
5. The second defendant filed the written statement admitting the execution of the mortgage deed dated 11.10.1973 and borrowing of a sum of Rs.29,000/-by the plaintiff. It was contended that the defendants agreed to reconvey the property and executed the reconveyance agreement prior to the execution of the sale deed. However, the plaintiff did not agree for reconveyance. The plaintiff gave up his demand for reconveyance and executed the sale dee
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