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2023 Supreme(Kar) 1037

IN THE HIGH COURT OF KARNATAKA
H.P. Sandesh, J.
Shivanna – Appellant
Versus
Sannamma – Respondent
R.S.A. No. 1679/2016 (SP)
Decided On : 24-02-2023

Advocates appeared:
K.M.Sanath Kumara, Advocate, Abubacker Shafi, Advocate

The court established that the discretion under Section 20 of the Specific Relief Act must consider all relevant evidence, including the existence of alternative properties, when determining whether to grant specific performance.

Headnote:

SPECIFIC PERFORMANCE - CONTRACT LAW - SPECIFIC RELIEF ACT, 1963 - SECTION 20 - The court discussed the provisions of Section 20 of the Specific Relief Act, 1963, which allows the court to exercise discretion in granting specific performance of a contract. The court interpreted this section to mean that the hardship of the parties must be considered when deciding whether to grant specific performance. The court found that the lower courts had erred in their discretion by not adequately considering evidence of alternative properties owned by the defendants, which would mitigate any claimed hardship. This misapplication of the law influenced the court's decision to reverse the lower courts' judgments and grant specific performance.

Fact of the Case:

The plaintiff sought specific performance of a sale agreement for agricultural land, claiming the defendants had agreed to sell the property for Rs.2 lakhs but failed to execute the sale deed after receiving Rs.1,95,000. The defendants denied the sale agreement, claiming it was a mortgage deed due to their illiteracy. The trial court found the sale agreement valid but denied specific performance, ordering a refund instead, citing hardship for the defendants.

Finding of the Court:

The appellate court upheld the trial court's decision, stating that the defendants would suffer hardship if specific performance were granted. However, the higher court found that both lower courts failed to consider evidence of other properties owned by the defendants, which would alleviate any hardship.

Issues: 1. Whether the appellate court was justified in rejecting the application under Order XLI, Rule 27 of CPC for additional documents necessary for adjudication on hardship. 2. Whether the findings of the lower courts regarding hardship were supported by evidence.

Ratio Decidendi: The court held that the lower courts erred in their discretion under Section 20 of the Specific Relief Act by not considering evidence of alternative properties owned by the defendants. The court emphasized that the existence of other properties should have influenced the decision on hardship and specific performance.

Final Decision: The appeal was allowed, the judgments of the lower courts were set aside, and the defendants were ordered to execute the sale deed in favor of the plaintiff within two months, or the plaintiff could seek a court order to obtain the deed.

JUDGMENT

1. This appeal is filed challenging the judgment and decree dtd. 12/4/2017 passed in R.A.No.25/2016 on the file of the Senior Civil Judge and JMFC, Periyapatna and the judgment and decree dtd. 8/8/2016 passed in O.S.No.202/2012 on the file of the Civil Judge and JMFC, Periyapatna.

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

3. The factual matrix of the case of the plaintiff before the Trial Court while seeking the relief of specific performance of contract is that suit schedule property is an agricultural land bearing Sy.No.14/1, measuring 1 acre, situate at Mellahalli Village, Ravandur Hobli, Periyapatna Taluk. It is the case of the plaintiff that the defendants have approached the plaintiff to sell the said property, in order to perform the marriage of the second defendant and agreed to sell the same for a sale consideration of Rs.2.00 lakhs and executed the sale agreement dtd. 27/2/2012 and received an amount of Rs.1, 95, 000.00 and balance amount of Rs.5, 000.00 was payable at the time of registration of the sale deed and the time fixed for registration is three months. It is the contention of the plaintiff that he waited for nearly two months but, the defendants did not come forward to execute the sale deed and hence, issued notice on 10/5/2012 and an untenable reply was given and hence, the suit is filed for the relief of specific performance.

4. In pursuance of the suit summons, the defendants appeared and filed the written statement and denied the execution of the sale agreement but, contended that defendant No.1 approached the plaintiff for a sum of Rs.1.00 lakh, the plaintiff agreed to pay the amount and asked the defendants to executed Aadhar pathra (mortgage deed) pertaining to the suit schedule property, for which the defendants agreed and executed the Aadhar pathra in favour of the plaintiff and not the sale agreement as contended by the plaintiff. It is also contended that they are illiterate persons, the daughter of the first defendant is no more and therefore, the defendant Nos.2 and 3 are residing with the first defendant and taking advantage of illiteracy, document of sale agreement has been created by the plaintiff.

5. Based on the pleadings of the parties, the Trial Court has framed the issues with regard to whether the sale agreement was executed by receiving the balance consideration, whether the defendants failed to execute the sale deed and whether the plaintiff was ready and willing to get the sale deed registered in his favour. The Trial Court also framed the issue with regard to the defence of the defendants whether it was an Aadhar pathra and not an agreement of sale.

6. The Trial Court, after considering both oral and documentary evidence placed on record i.e., the evidence of the witnesses P.Ws.1, 2 and 3 and the documents of Exs.P1 to P7 and evidence of D.W.1, answered issue Nos.1 to 3 and 5 as 'affirmative' and issue No.4 as 'negative', in coming to the conclusion that the document executed is not an Aadhar pathra and it was a sale agreement. However, instead of granting the relief of specific performance, moulded the relief and directed the defendants to refund the earnest money with interest at 18% p.a., in coming to the conclusion that, except the said property, there is no other property belonging to the defendants and hardship is in favour of the defendants.

7. Being aggrieved by the judgment and decree of the Trial Court, an appeal was filed in R.A.No.25/2016 before the First Appellate Court and while filing the appeal, an application is also filed under Order XLI, Rule 27 of C.P.C. seeking to produce additional documents i.e., the copy of the plaint and also order sheet to show that the defendants are having other alternative property and one more suit is also filed by the first defendant.

8. The First Appellate Court, on re-appreciation of both oral and documentary evidence placed

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