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2023 Supreme(Kar) 657

IN THE HIGH COURT OF KARNATAKA
H.P. Sandesh, J.
Krishnegowda Y.N. – Appellant
Versus
Shivashankar And Other – Respondent
R.S.A. NO.787 of 2018 (SP)
Decided On : 21-10-2023

Advocates appeared:
Sri H.Manjunath, Advocate, for the Appellant; Sri Yadunandan N., Advocate, for the Respondent.

The court must exercise discretion judiciously in granting specific performance, taking into account the evidence and circumstances of the case.

Headnote:

specific performance - sale agreement - 2022 (7) SCC 1, 2023 (1) KLR 121 (SC), 2022 (1) KLR 328, 2023 (1) KLR 413 (SC)

Fact of the Case:

Plaintiffs agreed to purchase property from defendant, who later refused to execute sale deed. Plaintiffs filed suit for specific performance. Trial Court found no agreement and declined relief. First Appellate Court reversed finding and decreed suit. Defendant filed second appeal.

Finding of the Court:

First Appellate Court erred in finding agreement of sale. Defendant's signature on agreement not disputed. Contradictions in defendant's evidence. Defendant failed to prove loan transaction. Defendant's family members not party to agreement. Agreement cannot be enforced against coparceners. Plaintiffs failed to prove market value of property. Discretion to grant specific performance not exercised judiciously. Appeal allowed in part, directing refund of earnest money with interest.

Issues: Existence of sale agreement, enforcement against coparceners, market value of property, exercise of discretion

Ratio Decidendi: Contradictions in evidence, failure to prove loan transaction, agreement unenforceable against coparceners, discretion to grant specific performance

Final Decision: Appeal allowed in part, directing refund of earnest money with interest

JUDGMENT

1. This second appeal is filed challenging the judgment and decree dated 07.03.2018 passed in R.A.No.15/2017 by the V Additional District and Sessions Court, Hassan.

2. The parties are referred to as per their original rankings before the Trial Court to avoid confusion and for the convenience of the Court.

3. The factual matrix of the case of the plaintiffs before the Trial Court is that the defendant has expressed his wish to sell the suit schedule property and the plaintiffs have agreed to purchase the suit schedule property. Hence, on 28.10.2013, the defendant has executed an agreement of sale to an extent of 29 guntas for sale consideration of Rs.5,80,000/- by receiving an advance amount of Rs.10,000/- and also agreed to receive the balance sale consideration of Rs.5,70,000/- at the time of registration and sale deed which has to be executed within a period of three months from the date of the agreement. It is the case of the plaintiffs that when they personally met the defendant and requested to execute the registered sale deed, the defendant has given evasive reply. Therefore, without any other alternative, the plaintiffs issued a legal notice on 05.12.2013 calling upon the defendant to execute the sale deed as per the sale agreement. Inspite of receipt of the notice, the defendant did not execute the sale deed.

Thus, panchayath was held in that regard and in the pnachayath, the defendant agreed to execute the sale deed but, later, the defendant has dodged the execution of the registered sale deed on one ground or the other. Therefore, the plaintiffs have got issued another legal notice on 20.12.2014 asking the defendant to execute the registered sale deed and the defendant got issued a reply notice refusing to execute the registered sale deed. Hence, without any other alternative, the plaintiffs have filed the suit for the relief of specific performance.

4. The defendant appeared and filed the written statement denying the averments made in the plaint and contended that it was only a loan transaction and not the sale transaction. The defendant also taken the contention that the suit schedule property is an ancestral property and the defendant alone is not having any right to sell the suit schedule property. It is also contended by the defendant that he has personally met the plaintiffs and repaid the amount of Rs.10,000/- and requested them to handover the loan agreement but the plaintiffs have not returned the said agreement but the defendant is at utter surprised that the said agreement is turned as sale agreement. It is also contended that present value of the suit schedule property is Rs.35,000/- per gunta and hence, the defendant could not have agreed to sell the suit schedule property at the rate of Rs.20,000/- per gunta.

5. The Trial Court having considered the pleadings of both the parties, framed the issues and allowed the parties to lead their evidence. In order to prove the case of the plaintiffs, 2nd plaintiff examined as PW1 and got marked the documents at Ex.P1 to P20 and also examined two witnesses as PW2 and PW3. On the other hand, the defendant examined himself as DW1 and got marked the documents at Ex.D1 to D8. The Trial Court having considered both oral and documentary evidence placed on record answered Issue No.1 as negative in coming to the conclusion that the plaintiffs have fraudulently obtained the signature of the defendant on the document by giving an amount of Rs.10,000/- as a money transaction and not as a sale transaction and hence, declined to grant any relief of specific performance. Being aggrieved by the judgment and decree of the Trial Court, an appeal was preferred before the First Appellate Court. The First Appellate Court on re-appreciation of both oral and documentary evidence placed on record reversed the finding of the Trial Court in coming to the conclusion that an agreement of sale was executed by receiving part sale consideration of Rs.10,000/- and hence, the Trial Court has

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