Absence of privity of contract absolves the subsequent purchaser from liability to repay the sale consideration under the agreement of sale when specific performance is denied due to lack of evidence of readiness and willingness.

ORDER :

1. Leave granted.

2. The present appeal arises from the Final Judgment and Order dated 06.10.2023 (hereinafter referred to as the ‘Impugned Order’) passed by a learned Single Judge of the High Court of Karnataka at Bengaluru (hereinafter referred to as the ‘High Court’) in Regular First Appeal No. 2607 of 2007 (SP), whereby the appeal filed by respondent no. 1 was partly allowed setting aside the Judgment and Order dated 30.08.2007 passed in O.S. No. 4152/2003 on the file of the XI Additional City Civil Judge, CCH-8, Bangalore City (hereinafter referred to as the ‘Trial Court’).

3. It will be useful to advert to the relevant factual matrix in which the present appeal has traversed to this Court. One M. Anjanappa S/o Munisonnappa (hereinafter also referred to as the ‘defendant no. 1’) was the original owner of property bearing Site No. 3, Katha No. 1197, carved out of Sy. No. 39 of Lingarajapuram Village, Kasaba Hobli, Bengaluru North Taluk, Bengaluru (hereinafter referred to as the ‘suit schedule property’). On 15.04.1981, M. Anjanappa executed a registered General Power of Attorney (hereinafter referred to as ‘GPA’) in favour of one T. Ramaiah. Thereafter, on 27.01.2001, the aforesaid T. Ramaiah, the GPA-holder, entered into an Agreement of Sale of the suit schedule property in favour of respondent no. 1. T. Ramaiah, the GPA-holder, died on 03.07.2001.

4. The appellant purchased the suit schedule property from the aforesaid owner M. Anjanappa vide a Registered Sale Deed dated 11.03.2003 for a consideration amount of Rs. 2,62,500/-. On the same day, by way of abundant caution, the appellant insisted upon a cancellation of the registered GPA Deed dated 15.04.1981. Accordingly, the Registered instrument being the GPA Deed was cancelled, even though the GPA-holder T. Ramaiah had, as noted in the preceding paragraph, passed away way back, on 03.07.2001 itself.

5. On 18.06.2003, respondent no. 1 filed O.S. No. 4152/2003 before the Trial Court for specific performance, inter alia, seeking a direction against the defendants therein to execute a Registered Sale Deed in his favour in respect of the suit schedule property. The Trial Court, on appreciation of the entire pleadings of the parties and the evidence on record, dismissed the suit for specific performance vide order dated 30.08.2007. In appeal against the same, the High Court vide the Impugned Order, partly allowed the appeal and decreed the suit holding the appellant and M. Anjanappa (since deceased and represented by the respondent no. 2) jointly and severally liable to return the sale consideration amount of Rs. 1,75,000/- stipulated under the Agreement of Sale dated 27.01.2001 along with interest @ 6% per annum.

SUBMISSIONS BY THE APPELLANT:

6. Mr. Sampat Anand Shetty, learned counsel for the appellant, submitted at the outset, that the High Court in the Impugned Order fell in error in reversing the well-reasoned order of the Trial Court, without appreciating all the contentious issues framed by the Trial Court. It was contended that the High Court erroneously fastened the liability on the appellant to pay the alleged sale consideration amount of Rs. 1,75,000/- with interest at the rate of 6% per annum, alongwith M. Anjanappa, notwithstanding the fact that there is no privity of contract between the appellant and the respondent no. 1 as per the Agreement of Sale dated 27.01.2001 in respect of the suit schedule property.

7. It was further argued that High Court gave unnecessary attention to the concept of “unjust enrichment” and invoked the alleged indemnity clause, even though these points were not raised before the Trial Court. Further, it was subm