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2024 Supreme(Kar) 675

IN THE HIGH COURT OF KARNATAKA
S.G. Pandit, C.M. Poonacha , JJ.
Mr. Mahaboob Munaver - Appellant
Versus
Sri. Ashwathanarayana Guptha M.S. and ors. - Respondents
R.F.A. No.59 of 2016 (SP)
Decided On : 25-04-2024

Advocates:
Advocate Appeared:
For the Appellant :Sri. Dhananjay V. Joshi, Senior Counsel for Sri. H.L. Pradeep Kumar, Advocate for Lrs of Deceased
For the Respondent:Sri. Vasanth V. Fernandes, Advocate

The plaintiff must demonstrate both readiness and willingness to perform a contract for specific performance, including financial capacity, and agreements must be duly stamped to be enforceable.

Headnote:(A) Code of Civil Procedure, 1908 - Section 96 - Specific Relief Act, 1963 - Section 16(c) - Appeal against decree for specific performance - The Trial Court decreed the suit for specific performance of an agreement of sale for Rs. 36,50,000/- with costs, finding the plaintiff ready and willing to perform his part of the contract - The defendant contended the agreement was insufficiently stamped and the plaintiff incapable of paying the balance consideration - The court found the agreement duly executed and the plaintiff's readiness was not adequately proven - The appeal was partly allowed, setting aside the decree and directing the defendant to pay Rs. 50,000/- with interest. (Paras 1, 8, 28, 34)

(B) Specific Performance - Readiness and Willingness - The court emphasized that the plaintiff must demonstrate both readiness and willingness to perform the contract, which includes having the necessary funds available. (Paras 26, 35)

(C) Stamp Duty - The court held that the agreement was insufficiently stamped and directed it to be impounded for assessment of duty and penalty. (Paras 28, 34)

Facts of the case:
The plaintiff entered into an agreement to purchase two vacant sites for Rs. 36,50,000/- and paid an advance of Rs. 50,000/-. The defendant failed to execute the sale deed despite repeated requests, leading to the suit for specific performance.

Findings of Court:
The Trial Court decreed the suit, finding the agreement duly executed and the plaintiff ready to perform.

Issues: The main issues were the execution of the agreement, the plaintiff's readiness and willingness to perform, and the validity of the agreement regarding stamp duty.

Ratio Decidendi: The court ruled that the plaintiff must prove both readiness and willingness to perform the contract, including financial capacity, and that the agreement was insufficiently stamped.

Result: Appeal partly allowed.

JUDGMENT :

C.M. Poonacha, J.

The present first appeal is filed by the defendant under section 96 of the Code of Civil Procedure, 1908, challenging the judgment and decree dated 30.11.2015 passed in OS No.195/2012 by the Principal Senior Civil Judge at Kolar[Hereinafter referred to as the 'Trial Court'], whereunder the suit for specific performance filed by the plaintiff has been decreed with costs.

2. For the sake of convenience, the parties herein are referred as per their rank before the Trial Court.

3. It is the case of the plaintiff that the defendant claims to be the owner of two vacant sites[Hereinafter referred to as the 'suit property'] and offered to sell the same and accordingly, after negotiations, the plaintiff agreed to purchase the suit property and entered into an Agreement of Sale dated [Hereinafter referred to as the 'Agreement] 18.10.20104, whereunder the defendant agreed to sell the suit property to the plaintiff for a total sale consideration of Rs. 36,50,000/- and received an advance amount of Rs. 50,000/- on the date of the Agreement. It was further agreed that the balance sale consideration of Rs. 36.00 lakhs would be paid within three months and the Sale Deed would be executed in favour of the plaintiff.

4. It is the further case of the plaintiff that when he approached the defendant by the end of November 2010 to complete the sale transaction, the defendant sought for some time. That inspite of repeated attempts, the defendant went on postponing to perform his part of the contract. That the plaintiff got issued a legal notice dated 4.11.2011 calling upon the defendant to come to the office of the Sub Registrar, Kolar on 21.11.2011 to execute the registered Sale Deed and receive the balance sale consideration. That despite service of the notice on the defendant, there is no response to the same. It is averred that the plaintiff was always ready and willing to perform his part of the contract. That the defendant has evaded performing the contract. Hence, the plaintiff filed a suit for specific performance.

5. During the pendency of the suit, the plaintiff died and his wife and children came on record as his legal representatives.

6. The defendant entered appearance in the suit and filed his written statement denying the case of the plaintiff. The defendant has further contended that the plaintiff is incapable of performing his part of the contract since he has only paid a sum of Rs. 50,000/- out of the sale consideration of Rs. 36,50,000/- and that the plaintiff was not in a position to pay the balance sale consideration. Hence, he sought for dismissal of the suit.

7. Consequent to the pleadings, the Trial Court framed the following issues:

    i) "Whether the plaintiff proves that the defendant has agreed to sell the suit schedule properties to him and executed an agreement of the sale dated 18.10.2010 for valuable consideration of Rs. 36,50,000/- and received part sale consideration amount of Rs. 50,000/-?

    ii) Whether plaintiff proves that he was/is always ready and willing to perform his part of contract?

    iii) Whether plaintiff is entitled to the relief of specific performance of contract?

    iv) What order or decree?"

8. Plaintiff No.1(d) examined himself as PW.1. A witness to the Agreement was examined as PW.2. The advocate who drafted the Agreement was examined as PW.3. Exs.P1 to P14 were marked in evidence. The defendant examined himself as DW.1. The wife of the defendant was examined as DW.2. Exs.D1 to D5 were marked in evidence. The Trial Court, by its judgment and decree dated 30.11.2015 decreed the suit and passed the following order:

    "The suit of the plaintiff/LRS is hereby decreed with costs.

    It is hereby ordered and decreed that defendant shall execute the regular registered sale deed by receiving balance sale consideration of Rs. 36 lakhs (Rupees Thirty lakhs only) from him in respect of the suit schedule properties in favour of the plaintiff/LRs as per the sale agreement dt. 18.10.2010-Ex.P1 within 60 (sixty)

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