Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(Kar) 102

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
H.T. Narendra Prasad, Rajendra Badamikar, JJ.
Shri Ravindra Shantinath Chougule – Appellant
Versus
Shri Mahesh Arjunsa Kalpavruksha @ Mirajkar – Respondent
R.F.A.No.100220 of 2015 (SP)
Decided On : 06-04-2022

Advocates:
Advocate Appeared:
For the Appellant : Sri.G.R.Gurumath Senior Counsel For Sri.Sanjay S.Katageri, Adv.
For the Respondent: Sri.Anant Mandgi, Senior Counsel For Sri.Sangram S.Kulkarni & Sri.V.P.Kulkarni, Advs.

Point of Law : As per proviso to Section 55(5)(b) Transfer of Property Act, the buyer is at liberty to retain out of the purchase-money the amount of any encumbrance on the property existing as on the date of the sale, and shall pay the amount so retained to the persons entitled thereto.

Headnote:
Civil Procedure Code, 1908 – Section 96 –Specific Relief Act, 1963 – Section 16(c)(ii), 16, 20 –Evidence Act, 1872 – Section 91 –Transfer of Property Act, 1882 – Section 55(5) – Whether performance of a contract would involve hardship on defendant within meaning of clause (b) shall, except in cases where hardship has resulted from any act of plaintiff subsequent to contract, be determined with reference to circumstances existing at time of the contract – Para 22.
Finding of the court: If pleadings so manifest then plaintiff should not be denied the relief – Trial court and first appellate court concurrently holding that plaintiff failed to establish that he was ready and willing to perform his part of contract and, therefore, denying the relief – High Court granting relief in second appeal without formulating any question of law and without discussing any evidence in this regard – It is observed that, once evidence on record shows that a material alteration is made in a deed, after its execution, without the consent of party liable under it, deed is rendered void from time of alteration so as to prevent person who has made or authorized alteration from putting deed in suit to enforce against a party bound by it –Under such circumstances, when plaintiff has interpolated agreement of sale and when his conduct establish that he was not ever ready and willing to perform his part of contract, question of exercising discretion in favour of plaintiff does not arise at all – Under such circumstances, question of exercising discretion in favour of plaintiff by granting discretionary relief of specific performance does not arise at all – Though execution of agreement is admitted, conduct of plaintiff disentitles him from enforcing this specific performance.
Results: Appeal is dismissed.

JUDGMENT :

Rajendra Badamikar, J.

This appeal is filed by the appellant/plaintiff under Section 96 of CPC challenging the judgment and decree passed in O.S.No.100/2010 dated 01.08.2015 on the file of the I Additional Senior Civil Judge, Belagavi whereby the trial court has rejected the prayer of the plaintiff for specific performance but granted alternative relief of refund of earnest money.

2. For the sake of convenience, parties shall be referred with the original ranks occupied by them before the trial court.

3. Brief factual matrix leading to the case are as under:

The plaintiff has filed a suit for specific performance of contract dated 12.09.2007 and 20.09.2007 pertaining to the suit schedule property. It is asserted that defendant is the owner in possession of the suit schedule property and due to financial difficulties, he offered to sell the suit schedule property. The plaintiff intended to develop the horticulture approached the defendant and after negotiation the price of the property was fixed at Rs.5,20,000/per acre including the structure. Accordingly, an agreement of sale was entered on 12.09.2007 in the presence of two witnesses. It is also contended that defendant has received Rs.2,10,000/as earnest money by executing the agreement of sale by putting his signature on 20.09.2007. It is further asserted that, it was agreed between the parties that defendant should clear the encumbrance of Ashray Credit Society and after clearance of encumbrance, the defendant was required to inform the same to the plaintiff and thereafter within two months the sale deed is required to be executed by the defendant. According to the plaintiff, some supplementary clause is inserted in agreement by handwriting incorporating that, if the plaintiff fails to get the sale deed registered within two months, the defendant is at liberty to sell the suit schedule property to others and return the earnest money. That the plaintiff was all along ready and willing to perform his part of contract and requested the defendant to complete the sale transaction by accepting the balance sale consideration, but the defendant went on postponing the same. Hence, he got issued legal notice dated 27.09.2008 which was replied on 06.10.2008 contending that time was the essence of the contract. Thereafter, the plaintiff has got issued second legal notice on 13.12.2008 and the defendant gave evasive reply. Hence, the plaintiff claims that he constrained to file the present suit.

4. After service of summons, the defendant has appeared through his counsel filed his written statement admitting the agreement of sale, but he contended that suit is not maintainable, as the alleged sale agreement came to be forfeited as on the date of institution of the suit by virtue of specific clause mentioned in it. The defendant admits the terms of agreement between the parties, but he denied that as per the terms of the agreement he was required to clear encumbrance of Ashray Credit Society and inform the same to the plaintiff and thereafter within two months, the sale deed was required to be executed. He admits that supplementary clause was incorporated and also receiving two legal notices and contends that he has properly replied the same. He denied that plaintiff was all along ready and willing to perform his part of contract and he has approached the defendant regularly and defendant went on postponing the same. He further contended that plaintiff has approached the court with malafide intention as he being real estate agent, he is in the habit of creating documents. He also disputes the financial capacity of the plaintiff to purchase the suit schedule property. Hence, he contended that as per the terms of the agreement, after expiry of two months, the agreement automatically stands cancelled and suit is barred by time and as such, sought for dismissal of the suit.

5. On the basis of the pleadings, following issues have been framed.

i) Whether the plaintiff proves that defendant h