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2009 Supreme(Kar) 926

High Court of Karnataka
THE HONOURABLE MR. JUSTICE K.L. MANJUNATH & THE HONOURABLE MRS. JUSTICE B.V. NAGARATHNA
Syed Zaheer Major & Others
Versus
C.V. Siddaveerappa
R.F.A.No.377 of 2003 C/w RFA.No.376 of 2003
Decided On : 18-12-2009

Advocates Appeared:
For the Petitioners:M.V. Raghunath Achar, Advocate. For the Respondent: C.N. Kamath for C/R.

Headnote:SPECIFIC RELIEF ACT, 1963 - Section 20(2): [K.L. Manjunath & B.V.Nagarathna,JJ] Circumstances when discretion may be exercised not to decree Specific Performance - Held, Discretion to decree Specific Performance cannot be exercised (i) When the terms of the contract or the conduct of the parties at the time of entering into contract or the circumstances under which the contract was entered into are such that they give the plaintiff an unfair advantage over the defendant; (ii) Where the performance of the contract would involve some hardship to the defendant whereas, its non-performance would involve no such hardship on the plaintiff; (iii) That it makes it inequitable to enforce Specific performance. Further, While explaining these circumstances, Explanation-I speaks about unfair disadvantage Explanation-II related to hardship which is a circumstance is favour of the defendant, while Explanations-III and IV are in favour of the plaintiff when in a case where the plaintiff has done substantial acts in consequence of a contract capable of Specific Performance or refused Specific performance, merely because the contract is not enforceable at the instance of the defendant.

       LIMITATION ACT, 1963 - Article 54: [K.L. Manjunath & B.V. Nagarathna, JJ] Suit for Specific Performance of a contract - Period of Limitation - Time from which period begins to run - Held, Article 54 of the Limitation Act specifies two points of time from which time begins to run for the purpose of computing the period of three years limitation with regard to filing suits for Specific Performance of contract. One, is the date fixed for the performance of the contract and two, if no such date is fixed then when the plaintiff has notice of the performance being refused.

       SPECIFIC RELIEF ACT, 1963 - Section 20 & Contract Act, 1872, Section 23 :[K.L. Manjunath & B.V. Nagarathna, JJ] Agreement to sell granted land during subsistence of non-alienation period - Suit for specific performance filed after the non-alienation period - Appellants seeking non-enforceability of the agreement, grievance of the appellant was that the Specific Performance has been sought prior to the expiry of the non-alienation clause - Held, It is to be noted that at the time of grant, non-alienation clause for a period of 15 years was imposed and it is only after the lapse of said period, the suit for Specific Performance was filed by the respondent. Therefore, it cannot be said that there has been a breach of the non-alienation clause or that the Specific Performance has been sought prior to the expiry of the non-alienation clause. Further, In the instant case and the agreement of sale specifically mentions that the sale deed would be executed after the period of non-alienation is completed. Therefore, the agreement in question cannot be held to be null and void or hit by Section 23 of the Contract Act. The Trial Court was correct in holding that the respondent who had filed the suit for Specific Performance was ready and willing and had in fact performed his part f the contract and there was no reason as to why Specific Performance relief could not be granted to him.

Judgment :-

These two appeals are filed against the Judgment and Decree dated 16.12.2002 passed in O.S.No.179/1999 and O.S.No.55/1995 respectively. The plaintiffs in O.S.No.55/1995 are the defendants in O.S.No.179/1999 and vice-versa.

2. For the sake of convenience the parties shall be referred to in terms of their status in RFA.No.377/2003.

3. According to the appellants they filed O.S.No.55/1995 seeking the relief of declaration that the agreement dated 6.5.1991 is unenforceable as they are the owners and for possession of the suit schedule property and also for enquiry of accounts under Order XX Rule 12 CPC. During the pendency of the trial the first plaintiff i.e., Syed Mehaboob died and his legal representatives were brought on record as 1(a) to (e) who are the appellants. According to the appellants suit schedule property bearing Sy.No.33/P measuring 4 acres each is situated in Hirekolale village with common boundaries and the same was granted to Syed Zaheer, the first appellant along with Naimunnissa, w/o of Syed Mahaboob. After the death of Naimunnissa, the Khatha was mutated in the name of the first and second appellants. That the appellants were in debt and in strained financial circumstances and the first respondent herein who was a close friend and in whom the appellants and obtained a deed of agreement of sale of the schedule property in his favour by deed dated 6.5.1991. The said agreement according to them is not signed by Late Syed Mahaboob but only the appellants had signed it. According to the appellants they wanted a loan from the respondent and he advanced the entire sum of Rs.3,40,000/-then respondent took possession under the said agreement and he has been in cultivation of the schedule property and has more than four annual coffee crops. According to them the value of the crop is more than Rs.5,00,000/- in the year 1993-94. The agreement with the respondent was that he should reimburse a sum of Rs.3,40,000/-with interest and the respondent should return the property to the appellants. According to the appellants, there was a non-alienation clause of fifteen years when the property was granted and that such an agreement is not enforceable as there was a violation of the said term in the grant when the agreement was executed. Hence they filled the suit for declaration that the agreement dated 6.5.1991 is unenforceable and sought possession from the respondent.

4. The respondent herein upon service of notice entered appearance and denied the material allegations made against him. He however admitted that possession was with him and that the coffee plants were six to seven years old and that he had developed estate and re-planted the coffee plants since the earlier plants were not yielding and that he had spent not less than Rs.1,35.000/- for development of the coffee estate. He has also stated that coffee had started yielding from the year 1994-95 and that after knowing about the value of the coffee estate and in order to make a wrongful gain and defeat the bonafide purchaser’s interest, the appellants had filed the collusive suit and that the agreement dated 6.5.1991 was enforceable and that there was no unfair advantage that the first respondent had taken and that even if there was a non-alienation clause as between the parties the said agreement was enforceable. After the period of non-alienation the first respondent was entitled for the registration of the sale deed from the appellants and respondent Nos. 2 to 4. On the basis of the said pleadings he had sought dismissal of the suit with costs.

5. The trial court framed the following issues for its consideration:

1. Whether the plaintiffs prove that the agreement dated: 6.5.1991 is not deed of agreement of sale but it is only securities deed for receipts of Rs.3,40,000/- from the defendants?

2. Whether agreement dated: 6.5.1991 by land grant rules, since the land is suit darkasth land with not alienation of condition is the grant?

3. Whether the plaintif





































































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