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2003 Supreme(Kar) 751
Karnataka High Court
KHAMARUNNISA - Appellant
Versus
MUDALAPPA - Respondent
Decided On : 09-04-03
R.S.A. : 1379 of 1995
M.S.PURSHOTAM RAO
Headnote:Insufficiently stamped and unregistered document -reliability of
KARNATAKA STAMP ACT, 1957 - Section 33 & 35 -Insufficiently stamped and unregistered document -reliability of - should be admitted into evidence by impounding.
[A. V. Srinivasa Reddy, J.] - When the document is tendered in evidence by the plaintiff while in witness box and objection is raised by the defendants that the document is inadmissible in evidence as it is not duly stamped or for want of registration, it is obligatory upon the trial Judge to apply his mind to the objection raised and to decide the objection in accordance with law. As both courts have not granted the relief of specific performance of the agreement the question whether the agreement could have at all been admitted in evidence does not assume much importance. In the very decision at para 3 their Lordships observed, "on the question whether the document was duly stamped it was said with some justification that it was not open to the Court to exclude the document from being read in evidence on the ground that it was not duly stamped because in any event under Section 33 of the Stamp Act it is obligatory upon the court to impound the document and recover duty and penalty as provided in proviso (a) to S.35".
Cases Referred: AIR 1955, Mad 591; AIR 1993 SC 1318; 1997 (4) Kar.L.J 264; 1998 (6) Kar.L.J 547; AIR 1978 SC 1393; AIR 2001 SC 3712; 1995 AIHC 1402.
Compensation for breach of contract
SPECIFIC RELIEF ACT, 1963 - Section 21 -Grant of compensation for breach of contract -not dependent on result of the suit or a specific pleadings for the relief.
[A. V. Srinivasa Reddy, J.] The right to seek return of earnest money, flows from general principle and a prayer for return of the earnest money is not governed by Section 21 which deals with award of compensation or damages, entitlement to which follows only from a breach by the party who has broken the contact. As earnest money cannot be equated with either damages or compensation so as to say that it is to be governed by Section 21. The bar that prohibits award of compensation under sub-section (5) of Section 21 unless a claim is made for such compensation in plaint would certainly not be applicable to earnest money so as to preclude the court from exercising its jurisdiction and to order its repayment. Damages and compensation are not to be equated wit earnest money while determining the right of the purchaser to seek for its return. In cases where specific performance is refused, the court may direct a refund even though plaintiff has not specifically asked for it in the plaint.
Cases Referred: AIR 1955, Mad 591; AIR 1993 SC 1318; 1997 (4) Kar.L.J 264; 1998 (6) Kar.L.J 547; AIR 1978 SC 1393; AIR 2001 SC 3712; 1995 AIHC 1402.
Maintainability of appeal
CIVIL PROCEDURE CODE, 1908 - Section 100 -Understamped and unregistered document relied upon -falls short of agreement to sell -may constitute a contract -finding of facts cannot be interfered under.
[A. V. Srinivasa Reddy, J.] - It is not in dispute that the defendant was incapable of performing his part of the contract even as on the date of entering in to the agreement owing to a statutory bar that was in operation under the provisions of Prevention of Fragmentation and Consolidation of Holdings Act. The said Act prevented transfer of property which may lead to fragmentation of a holding. Ex.P1 is dated 1983. The said Act was repealed only on 3-12-1990. Even construing Ex.P1 as an agreement to sell, no decree could have been passed by the courts below as the as agreement entered into between the parties was unenforceable in law even as on the date of agreement. Therefore the suit filed by plaintiff for specific performance has been rightly rejected by the courts below and the concurrent findings of the courts-below on this issue does not call for any interference.
Cases Referred: AIR 1955, Mad 591; AIR 1993 SC 1318; 1997 (4) Kar.L.J 264; 1998 (6) Kar.L.J 547; AIR 1978 SC 1393; AIR 2001 SC 3712; 1995 AIHC 1402.
( 1 ) IN this second appeal the appellant-plaintiff challenges the judgment and decree dated 17-8-1995 passed in R. A. No. 1/95 on the file of the Civil Judge and JMFC, Chikkaballapur affirming the judgment and decree dated 16. 11. 1994 passed in O. S. No. 122/91 dismissing the suit for specific performance of the agreement of sale.
( 2 ) REFERENCE is made to the parties to this appeal by their rank and status in the suit.
( 3 ) THE plaintiff filed the suit on the following averments: The defendant as manager of his family entered into the 'suit agreement to sell two lands for a legal necessity of his family. The consideration of Rs. 30,000/- was paid in full. The defendant had agreed to execute a registered deed after removal of the then existing ban on registration of fragments. The plaintiff is ready and willing to perform her part of the contract but the defendant was not ready and willing to perform his part of the contract despite causing issue of a legal notice demanding the defendant to execute the sale deed.
( 4 ) THE defendant denied the execution of the agreement itself.
( 5 ) BOTH the courts below have recorded concurrent findings to the effect that the plaintiff has established the execution and the passing of the consideration under the agreement Ex. P1. Despite coming to the said conclusion both the Courts below have reached the conclusion that the agreement to sell cannot be enforced because by its very nature Ex P1 is not an agreement to sell but a sale contract executed on an improperly stamped paper and being unregistered is invalid. In the light of these findings the suit and the first appeal filed by the plaintiffs have been dismissed. Aggrieved, the plaintiffs have come up in this second appeal.
( 6 ) THE findings that Ex. P1 is not an agreement to sell but a contract of sale executed on an improperly stamped paper and is unregistered are pure findings of fact and cannot be questioned in this second appeal. In fact the appellants do not question these findings at all.
( 7 ) I have heard learned Counsel on both sides.
( 8 ) LEARNED Counsel Mr. M. S. Purushothama Rao submitted that the Courts below erred in not granting the relief after coming to the conclusion that the execution of Ex P1 is proved. It is his further submission that even after coming to a conclusion that Ex. P1 is unenforcible in law, the Courts below ought to have ordered return of the earnest money paid under Ex. P1 to which relief the plaintiffs were entitled in equity.
( 9 ) THE substantial questions of law that arises for consideration in this appeal are: 1. Whether the Courts-below were right in refusing to grant the relief of proof of execution of the agreement and passing of consideration in pursuance to such agreement? 2. Whether the Courts-below were right in declining to make an order for return of earnest money to the plaintiff? point No. 1:-
( 10 ) IT is not in dispute that the defendant was incapable of performing his part of the contract even as on the date of entering into the agreement owing to a statutory bar that was in operation under the provisions of Prevention of Fragmentation and consolidation of Holdings Act. The said Act prevented transfer of property which may lead to fragmentation of a holding. Ex. P1 is dated 1983. The said Act was repealed only on 3-12-1990. Even construing Ex. P1 as an agreement to sell, no decree could have been passed by the Courts below as the agreement entered into between the parties was unenforceable in law even as on the date of agreement. Therefore the suit filed by plaintiff for specific performance has been rightly rejected by the Courts below and the concurrent findings of the Courts-below on this issue does not call for any interference. Point No. 2 : -
( 11 ) IT is submitted by learned Counsel Mr. Purushothama Rao that having refused to pass a decree for specific performance the courts should have in equity made an order for the return of earnest money along with
