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2025 Supreme(Kar) 1713

IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
C.M. POONACHA, J.
Maruti, S/o. Shiddappa Kalal - Appellant
Versus
Manjunath, S/o. Mailarappa Mali and Anr. – Respondents
Regular Second Appeal No.5659 of 2009 (DEC/INJ)
Decided On : 18-02-2025

Advocates Appeared:
For the Appellant :Sri Dinesh M Kulkarni, Advocate
For the Respondents:Sri Mahesh Wodeyar, Advocate.

The court held that a sale deed remains valid despite non-payment of consideration, affirming ownership rests with the purchaser as per registered transaction under the Transfer of Property Act.

Headnote:(A) Code of Civil Procedure, 1908 - Section 100 - Karnataka Co-operative Societies Act, 1959 - Sections 31, 32, and 33 - Transfer of Property Act, 1882 - Section 54 - Plaintiff's suit for declaration and injunction dismissed by lower courts, claiming ownership via sale deed. Courts affirmed that title did not pass due to unpaid sale consideration, hence the property remained with original owner. The appeal allowed, reversing lower court decisions - The plaintiff is declared absolute owner of suit property. (Paras 1, 11, 20, 24, 35)

(B) Ownership Transfer - The transfer of property as per sale deed remains valid despite unpaid consideration; recourse lies with vendor to recover price, not to invalidate the deed. (Paras 25, 29)

Facts of the case:
The appellant purchased property from Shyam Kalal who obtained it from the original owner in a conditional sale deed. The original owner sold property to the appellant; the trial court dismissed the plaintiff's suit for injunction and declaration, stating the sale was void due to mortgage and non-payment conditions stipulated in the sale deed. Defendants claimed ownership through subsequent sale, citing adverse possession and valid mortgage discharge. (Paras 3, 6, 34)

Findings of Court:
The trial and appellate courts ruled that the sale deed executed in favor of the plaintiff was void, denying him title; however, they were wrong to do so as non-payment of consideration does not invalidate a sale once executed, per the Transfer of Property Act. The plaintiff's ownership and possession were upheld. (Paras 30, 40)

Issues: Whether the trial and appellate courts were justified in holding that the sale deeds did not convey title? Whether the plaintiff acquired title despite claims under the Karnataka Co-operative Societies Act? (Paras 13, 21)

Ratio Decidendi: The court ruled that the sale deed remains valid despite non-payment of consideration. The legal effect of a duly executed sale deed isn't negated by non-payment; any claims must be pursued as debts. Hence, the plaintiff retains ownership rights. (Paras 27, 28, 34)

Result: The appeal is allowed, and the plaintiff is declared the absolute owner with no binding effect from the defendants' subsequent transactions.

JUDGMENT :

C.M. POONACHA, J.

The present second appeal is filed under Section 100 of the Code of Civil Procedure, 1908, [Hereinafter referred to as ‘CPC’] by the plaintiff challenging the judgment and decree dated 24.08.2009 passed in R.A.No.61/2008 by District and Sessions Judge (Fast Track Court), Haveri, [Hereinafter referred to as the ‘first appellate Court’] and the judgment and decree dated 19.4.2008 passed in OS No.12/2004 by the Civil Judge (Sr.Dn) and JMFC, Hangal, [Hereinafter referred to as the ‘trial Court’], wherein the suit for declaration and injunction has been dismissed by the Trial Court which has been affirmed by the first appellate Court.

2. The parties will be referred to as per their ranking before the Trial Court for the sake of convenience.

3. It is the case of the plaintiff that property bearing Sy.No.314/B, plot No.20 measuring 11 guntas (TMC No.4487),[Hereinafter referred to as the ‘suit property’] originally belonged to one Hanamanthappa Rajappa Chikkannavar and it was part of property bearing Sy.No.314/1 which totally measured 7 acres 29 guntas. That out of the said property, an extent of 4 acres was converted to non agricultural purpose on 27.3.1981 and at that time, it was bearing Sy.No.314/1A, plot No.21 measuring 11 guntas. The suit property is described in para 2 of the plaint as Sy.No.314/B, plot No.20 measuring 11 guntas and given TMC No.4487. The boundaries have also been mentioned. That the suit property was sold by the original owners to defendant No.1 on 25.5.1981 for a total sale consideration of Rs.4,000/- and the possession was handed over on the same day. That defendant No.1 vide registered Sale Deed dated 13.4.1983 sold the said property for a total sale consideration of Rs.9,000/- to one Shyam Kalal and possession was also handed over on the said date, consequent to which, the name of Shyam Kalal was entered in the revenue records in respect of TMC No.4487 Plot No.20. That thereafter the said Shyam Kalal sold the suit property to the plaintiff for sale consideration vide registered Sale Deed dated 5.4.1989. That the plaintiff was also put in possession of the said property and the name of the plaintiff has been entered in the municipal records. That the plaintiff has also paid development charges in respect of the suit property.

4. It is the further case of the plaintiff that in the year 1994 as per the order of the Director of Land Records, KGP was done and said Sy.No.314/1A was give new No.314/B and in that survey number totally 32 plots were laid and plot No.21 i.e., RS No.314/1A was numbered as RS 314/1B, Plot No.20. That in view of the variation in the number, the plaintiff requested the legal representatives of the original owner to get the Rectification Deed executed since the name of defendant No.1 was appearing in the revenue records. Hence, it was agreed that the original owner should execute a Rectification Deed in favour of defendant No.1 and thereafter, defendant No.1 should execute the Rectification Deed in favour of Shyam Kalal and thereafter, Shaym Kalal in favour of the plaintiff. That accordingly, the Rectification Deed was executed by the legal representatives of the original owner in favour of defendant No.1 on 29.11.2003 and the Sale Deed dated 29.5.2009 in favour of defendant No.1 was corrected. It is the further case of plaintiff that defendant No.1 as per the agreement, did not execute any Rectification Deed in favour of Shyam Kalal, but in collusion, he executed a Sale Deed in favour of defendant No.2 on 26.5.2004 and on the strength of the said Sale Deed, defendant No.2 interfered with the lawful possession of the plaintiff. Hence, the plaintiff filed the suit for declaration and injunction.

5. Defendant No.1 entered appearance through his counsel and filed written statement denying the plaint averments. Further, he admitted the description of the suit property. The conversion of the suit property to non agricultural purpose on 27.3.1981 was also admitted, as

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