This appeal of legal representatives of third defendant arises out of the judgment and decree dated 25.11.2010 passed by the First Additional District Judge, Mysore in R.A.No.114/2010.

2. By the impugned judgment, the First Appellate Court has allowed the appeal and modified the judgment and decree of the trial Court dated 09.02.2010 passed in O.S.No.49/2002 by the Presiding Officer, Small Causes Court and Civil Judge (Senior Division), Mysore.

3. The first respondent is the plaintiff, second respondent is the first defendant before the trial Court. Defendant No.2 was the City Co-operative Bank Limited who is not impleaded either in the first appeal or in this case. Defendant No.3- C. Padmavathi is the mother of present appellants. For the purpose of convenience, the parties will be referred to hereafter with their ranks before the trial Court.

4. The subject matter of litigation is the house property bearing No.981, CH-6/1 situated at Geetha Road, Chamaraja Mohalla, Mysore.

5. The plaintiff filed O.S.No.49/2002 initially against defendants No.1 and 2 alone for specific performance of agreement of sale. Her case in brief is as follows:

Defendant No.1 executed an agreement of sale on 27.06.2001 agreeing to sell the suit property for consideration Rs.5,40,000/-. She received Rs.80,000/- on 27.06.2001 and Rs.1,70,000/- on 21.09.2001 as part of sale consideration. Defendant No.1 agreed to receive the balance consideration and execute the sale deed within three months from the date of agreement of sale. Defendant No.1 went on postponing the matter and did not execute the sale deed despite demand notice dated 18.12.2001. Plaintiff contended that she was always ready and willing to perform her part of contract.

6. Since the property was mortgaged to defendant No.2 – The City Co-operative Bank Limited, the same is impleaded as defendant No.2. Defendants No.1 and 2, though appeared through their counsel, did not file written statement. During pendency of the suit, defendant No.3 - C. Padmavathi purchased the suit schedule property on 19.08.2006. Therefore, she was impleaded as defendant No.3.

7. Defendant No.3 contested the suit by filing the written statement. The gist of her written statement is as follows;

The execution of agreement of sale, terms of the sale and receipt of part consideration are all denied. The readiness and willingness on the part of the plaintiff to perform her part of the contract is denied. She has purchased the property from the first defendant after issuing notice of purchase in ‘Sankranthi’ newspaper dated 12.08.2006 and after proper verification. She is a bonafide purchaser for value without notice. Therefore, suit be dismissed.

8. On the basis of the pleadings, the trial Court framed the following issues and additional issues:-

1. Whether the plaintiff proves that 1st defendant had agreed to sell the suit schedule property for Rs.5,40,000/- and executed agreement of sale by receiving Rs.80,000/- as advance on 27.6.2001, further plaintiff proves that on 21.09.2001 defendant received Rs.1,70,000/- and extended period of agreement by making endorsement on the agreement of sale dated 27.6.2001?

2. Whether the plaintiff proves that she was always ready and willing to perform her part of contract?

3. Whether the 3rd defendant proves that she is the bonafide purchaser of the suit property for valuable consideration?

4. Whether the plaintiffs entitled for the reliefs of specific performance of contract?

5. To what decree or order?

Additional Issues:

1. Whether the 3rd defendant proves that she is the bonafide purchaser of the property in good faith?

2. Whether the plaintiff in the alternative entitled for the relief of refund of earnest money of Rs.2,50,000/- with interest at 21% p.a ?

9. Parties adduced evidence. On plaintiff’s side PW1 is examined and Exhibits P1, P2 and P3 are marked. On the side of defendant No.3 DW1 is examined and Exhibits D1 to D5 are marked. The trial Court, after hearing the parties, partly decre