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2025 Supreme(Kar) 183

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ANU SIVARAMAN, K. MANMADHA RAO, JJ.
Smt. Malliga Since Deceased, Represented By Lr's : Sri. Dhanpal, (S/o. Late N. Subramanya) and Ors. – Appellants
Versus
Althaf, S/o. Mehaboob Mia – Respondent 
Commercial Appeal No.265 of 2023
Decided On : 03-07-2025

Advocates Appeared:
For the Appellants : Sri. Anil Shekar K.S., Adv.
For the Respondent: Sri. Shivayogi B. Hallur, Adv.

A Joint Development Agreement is enforceable where a party can prove execution and compliance, with discrepancies in signatures deemed insufficient to challenge the agreement's validity.

Headnote:(A) Specific Relief Act, 1963 - Section 14(3)(c)(ii) - The Commercial Court decreed a suit for specific performance of a Joint Development Agreement (JDA) dated 08.05.2013 between the parties regarding property development. The court found that the signature discrepancies raised by the appellant were an afterthought, leading to a conclusion that the JDA was duly executed and acted upon. The court also established that substantial payments had been made by the plaintiff in accordance with the agreement. (Paras 5, 7, 9, 11, 15)

(B) Contract Law - The court affirmed that for a decree of specific performance to be denied, there must be clear evidence of an absence of obligation or interest from the contracting party, which was not established by the appellant. (Paras 10, 12)

Facts of the case:
The appellant, an owner of the property, entered into a Joint Development Agreement with the respondent for construction, where the respondent claimed significant payments and subsequent construction took place. The appellant later refused to fulfill obligations under the JDA. The Commercial Court considered various evidence, including bank records and payments, to establish the execution and compliance with the JDA. (Paras 3, 4, 6)

Findings of Court:
The Commercial Court found the JDA duly executed, the payments made by the plaintiff were substantiated, and the appellant's claims of repayment were not adequately supported. The court ordered the appellant to execute the Sale Deed and granted a permanent injunction to the plaintiff. (Paras 7, 8, 13)

Issues: The questions focused on the validity of the JDA execution, payment proofs, and whether specific performance could be enforced. (Paras 5, 11)

Ratio Decidendi: The court reasoned that since no compelling evidence was presented by the appellant regarding the alleged fraud with signatures, the JDA was enforceable and a decree for specific performance was justified under the circumstances. (Paras 12, 15)

Result: Appeal dismissed.

Table of Content
1. ownership and specifics of joint development agreement (Para 1 , 3 , 4)
2. validity of the joint development agreement. (Para 2)
3. commercial court findings on evidence and agreements (Para 5 , 6 , 7)
4. arguments on financial transactions and jda validity (Para 8 , 9 , 10)
5. assessment of evidence and execution of agreements (Para 11 , 12 , 13 , 14)
6. affirmation of commercial court's decree on specific performance (Para 15)

JUDGMENT :

(ANU SIVARAMAN, J.)

This appeal has been filed by the appellants against the judgment and decree passed in Com.O.S.No.4029/2017 dated 22.05.2023 passed by the LXXXVII Additional City Civil and Sessions Judge at Bengaluru (CCH-88) ('Commercial Court' for short).

2. We have heard Shri. Anil Shekar K.S, learned counsel appearing for the appellants and Shri. Shivayogi B. Hallur, learned counsel appearing for the respondent.

3. The contentions of the appellants are as follows :-

The defendant in a suit for specific performance of a Joint Development Agreement ('JDA' for short) dated 08.05.2013 is the appellant herein. The appellant was the owner in possession of the property having a total extent of 30 feet x 70 feet situated on 3rd Cross, Muneshwara Block, Bengaluru. The property was mortgaged to the Padmashree Credit Co-operative Society. The JDA was entered into by which the respondent agreed to construct a residential apartment on ground and three floors consisting of eight flats in the portion of the property measuring 30 feet x 50 feet as consideration, the respondent agreed to pay Rs.1,42,00,000/- to the appellant in consideration of the permission to put up the apartment in the said portion of the property. Further, it was agreed that the respondent would also put up a residential house consisting of ground plus three floors, with each floor measuring 600 sq. ft. in the remaining property measuring 30 feet x 20 feet. It was also agreed that the cost of construction and expenditure to obtain permissions to put up the construction of the residential house would be deducted from the agreed consideration of Rs.1,42,00,000/-. A schedule for payment of the amounts was also provided in the agreement. It is stated in the plaint that the plaintiff paid a sum of Rs.25,00,000/- to the Society by way of cheques and the entire property mortgaged by the defendant was redeemed by the plaintiff. However, GPA was not executed in favour of the plaintiff as agreed. It was contended that the plaintiff had paid a further amount of Rs.75,50,000/- by way of Banker's cheque and demand drafts on different dates and spent a sum of Rs.62,00,000/- for construction of the building on the appellant's share of the land. It is submitted that pursuant to the specific agreements between the parties, the construction was made as one building consisting of four one bedroom apartments, which fell to the share of the land owner/appellant and four two bedroom apartments, which could be sold by the plaintiff - builder. However, after construction of the appellant's share of the built-up area was complete, the appellant refused to perform her contractual obligations. The plaintiff lodged a complaint before the Vyalikaval Police Station on 10.11.2016 and an injunction suit was filed by the appellant as O.S.No.402/2017 before the City Civil Court, Bengaluru. Further, the police complaints were also filed. It is contended that the defendant also obtained an ex-parte order of ad-interim temporary injunction against the plaintiff by suppressing true facts and it has therefore become necessary to seek the specific performance of the agreement between the parties.

4. The appellant entered appearance and filed written statement denying the contentions and stating that she is the owner in possession and enjoyment of the house property bearing BBMP Khata, PID No.99/106/1/1 of 3rd Cross, Muneshwara Block, P.G.Halli, Bengaluru and that she had filed a suit for permanent injunction as O.S.No.402/2017 before the City Civil Court and th

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