IN THE HIGH COURT OF KARNATAKA
Sachin Shankar Magadum, J.
Somashekar – Appellant
Versus
M. V. Gururaju – Respondent
R.S.A No. 1423 of 2019 (SP)
Decided On : 17-11-2022
specific performance - agreement to sell - Sec. 16(c) of Specific Relief Act, 1963 - [Sy.No.457/6, Agreement to Sell, Specific Performance] - The court discussed the plaintiff's claim for specific performance of an agreement to sell a portion of property and the defendants' contention that the agreement was executed only as security for a loan. The court found that the plaintiff proved the agreement and the advance payment, and that the defendants failed to substantiate their defense. The court also highlighted the discretionary nature of specific performance and the equitable considerations involved in granting the relief.
Fact of the Case:
The plaintiff filed a suit seeking enforcement of an agreement to sell a portion of property. The defendants claimed that the agreement was executed as security for a loan and that they had no intention to sell the property.
Finding of the Court:
The Trial Court and the Appellate Court found in favor of the plaintiff, holding that the agreement was proved, the advance payment was made, and the defendants' defenses were not substantiated.
Issues: The main issues were whether the agreement to sell was proved, whether the defendants' defense of the agreement being a loan transaction was substantiated, and whether the plaintiff was entitled to specific performance.
Ratio Decidendi: The court emphasized the discretionary nature of specific performance, the need to consider equitable considerations, and the importance of concurrent findings by the lower courts.
Final Decision: The appeal was dismissed, and no substantial question of law was found to arise for consideration.
JUDGMENT/ORDER
1. The captioned second appeal is filed by unsuccessful defendants who have questioned the concurrent findings of the Courts below wherein plaintiff's suit for specific performance of contract based on an agreement to sell dtd. 19/1/2005 is held to be proved and decreed by both the Courts.
2. For the sake of brevity, the parties are referred to as per their rank before the Trial Court.
3. The plaintiff has filed the present suit seeking enforcement of an agreement dtd. 19/1/2005. Plaintiff claims that defendants offered to sell a portion of property bearing Sy.No.457/6. Plaintiff has specifically pleaded that out of the said survey number, a portion measuring 30x100 feet was agreed to be sold by the defendants. Plaintiff has specifically pleaded that this property was originally owned by one Ningegowda who was also called as Ninga. The said original owner secured a conversion order and he was in exclusive possession till his death and after his death, his wife Ningamma inherited the properties. Plaintiff therefore claimed that Ningamma along with her family members were in need of money and therefore, for legal necessity offered to sell the suit schedule property. Plaintiff claimed that he accepted the offer and sale consideration was arrived at Rs.2,25,000.00 and pursuant to agreement to sell dtd. 19/1/2005, plaintiff claimed that he has tendered Rs.1,75,000.00 as an advance in presence of witnesses. The present suit is filed alleging that though plaintiff is ready and willing to perform his part of contract, defendants have deliberately not come forward to perform their part of contract and therefore, a legal notice was also issued on 8/12/2006 calling upon defendants to complete the transaction by executing sale deed. Plaintiff has alleged that defendants have even evaded the notice sent by him.
4. Defendants who were initially placed exparte filed miscellaneous petition and were permitted to contest the suit. After seeking leave, the defendants filed written statement on 12/2/2018. Defendants contended that they were in need of loan to the tune of Rs.1,00,000.00 and therefore, the present agreement to sell is executed only as a security and they had no intention to sell the property. The defendants also claimed that first defendant and his father Ningegowda for legal necessity borrowed loan of Rs.20,000.00 from one M.Chandru and executed a mortgage deed on 3/3/1994 and therefore, sought for dismissal of the suit by contending that the family of defendants had no intention to sell the property and claimed that the money lent by plaintiff was a loan transaction and the document on which the present suit is filed was offered and executed only by way of a security.
5. Based on rival pleadings, the Trial Court framed, in all, five issues and plaintiff to substantiate his claim that defendants have offered to sell the suit property and have received Rs.1,75,000.00 as advance sale consideration, examined himself as PW.1 and also examined two witnesses to agreement of sale which is marked as Ex.P-1. To counter the evidence of plaintiffs, defendants have also let in oral evidence of second defendant and adduced documentary evidence vide Exs.D-1 to D-5.
6. Trial Court having examined oral and documentary evidence answered issue Nos.1 and 2 in the affirmative while issue No.3 was answered in the negative and against defendants. Trial Court having assessed oral evidence of plaintiff who is examined as PW.1 and also oral evidence of PWs.2 and 3 who are witnesses to the agreement of sale held that plaintiff has succeeded in proving the suit agreement dtd. 19/1/2005 and has also succeeded in proving that he has paid an advance amount of Rs.1,75,000.00 and was ever ready and willing to perform his part of contract. While answering issue No.3, Trial Court took strong exceptions to the stand taken by the defendants in the present case on hand. Trial Court referring to Exs.D-1 to D-4 coupled with Ex.D-5 which is the encumbrance
The discretionary nature of specific performance and the equitable considerations involved in granting the relief.
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The exercise of discretion in specific performance cases must align with principles of preventing undue hardship, as established under Section 20 of the Specific Relief Act.
Agreement to Sell – Where plaintiffs have proved readiness and willingness on their part to purchase suit schedule property they are entitled to decree for specific performance.
To obtain a decree for specific performance, the plaintiff must prove continuous readiness and willingness to perform his part of the contract at all stages from the date of the agreement till the da....
Registered sale agreements presumed genuine; admission of execution and substantial advance proves readiness for specific performance; time not essence in immovable property sales; defendants fail to....
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