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2025 Supreme(Online)(KAR) 5474
IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH
MR. JUSTICE HANCHATE SANJEEVKUMAR, J
Rachappa S/o. Irappa Baligar @ Kajar – Appellant
Versus
Savakka W/o. Sangappa Mulimani – Respondent
REGULAR FIRST APPEAL NO.100325 OF 2016 (SP)
Advocate Appeared:
For the Appellant :SRI GIRISH A.YADAWAD, ADVOCATE
FOR the Respondent:SRI G.I. GACHCHINAMATH, ADVOCATE FOR C/R1
The court emphasized that the discretion to grant specific performance must consider the comparative hardship between parties, and mere proof of an agreement does not compel enforcement if it results in unfair advantage or hardship.
Headnote:(A) Specific Relief Act, 1963 - Section 20 - Regular First Appeal - Suit for specific performance of contract - The Trial Court decreed the suit directing the defendant to execute a registered Sale Deed in favor of the plaintiff for a balance amount of Rs.2,80,000/- - The defendant contended that the agreement was for security of a loan and not for sale - The court found that granting specific performance would cause undue hardship to the defendant and his family, as the property was a joint family dwelling house and the sale price was inadequate - The court emphasized the discretionary nature of specific performance and the need to consider comparative hardship. (Paras 16-20)
(B) Appeal - The appellate court found that the trial court did not adequately consider the hardship imposed on the defendant and set aside the decree for specific performance while allowing an alternative relief of refund of earnest money with interest. (Paras 20-21)
Facts of the case:
The plaintiff filed a suit for specific performance of a contract for the sale of property, having paid an advance of Rs.9,20,000/- against a total consideration of Rs.12,00,000/-. The defendant denied the agreement, claiming it was merely a loan transaction.
Findings of Court:
The appellate court determined that enforcing the contract would impose greater hardship on the defendant than on the plaintiff, given the nature of the property and its value.
Issues: The main issues were whether the agreement was valid and whether enforcing it would cause undue hardship to the defendant.
Ratio Decidendi: The court ruled that the discretion to grant specific performance must consider the comparative hardship between the parties, and mere proof of an agreement does not compel enforcement if it results in unfair advantage or hardship.
Result: The appeal is allowed in part; the decree for specific performance is set aside, and the defendant is ordered to refund the earnest money with interest.
ORAL JUDGMENT
(PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR)
This Regular First Appeal is filed by the defendant challenging the judgment and decree dated 05.10.2016, passed in O.S No.26/2014, on the file of Senior Civil Judge and JMFC, Mudhol (hereinafter referred to as the ‘Trial Court’), thereby the suit filed for specific performance of contract is decreed by directing the defendant to execute registered Sale Deed in favour of the plaintiff by receiving the balance sale consideration amount of Rs.2,80,000/-.
2. For the sake of convenience and easy reference, the parties are referred to as per their rankings before the Trial Court.
3. The plaintiff has filed the suit for specific performance of contract. The suit properties in the present suit are VPC Nos.1180/1 and 1180/2 and the said suit properties are adjacent to each other within the jurisdiction of Lokapur Town, Mudhol Taluk. The defendant is the owner of the suit property. It is pleaded that the defendant was in need of money for family and legal necessities. So, he took out the suit properties for sale, for consideration amount of Rs.12,00,000/-, which was accepted by the plaintiff. Accordingly, the defendant has received advance amount of Rs.9,20,000/- and the balance amount payable by the plaintiff was Rs.2,80,000/- and accordingly executed the agreement of sale on 18.01.2013. But, after execution of agreement of sale, though the plaintiff was ready and willing to perform her part of contract, the defendant was not ready to receive the balance sale consideration amount and also for execution of registered Sale Deed. Therefore, the plaintiff got issued legal notice by calling upon the defendant to execute registered Sale Deed and perform his part of contract. But the defendant gave false reply without mentioning any valid reasons not to execute registered Sale Deed. Therefore, the plaintiff has filed the suit for specific performance of contract.
4. The defendant has filed written statement denying all the pleadings of the plaintiff and also denying the fact that he has executed agreement of sale and received part sale consideration amount of Rs.9,20,000/-. It is also averred that there was a transaction between the plaintiff and defendant and for security purpose agreement of sale was executed. But the defendant has not performed his part of contract. Therefore, prays to dismiss the suit.
5. Upon considering the pleading of both the parties, the Trial Court, has framed the following issues:
1. “Whether the plaintiff proves that defendant being the owner of suit properties agreed to sell them to her for total consideration of Rs.12 lakhs and received advance money of Rs.9,20,000/- and executed registered agreement of sale on 18.01.2013 as contended in para no.3 and 4 of plaint?
2. Whether plaintiff proves that she is ever ready and willing to perform her part of contract?
3. Whether the defendant proves that the alleged agreement of sale is created, illegal and bogus as contended in para no.9 and 10 of written statement?
4. Whether the defendant proves that he alone has no right to execute alleged agreement of sale?
5. Whether the plaintiff is entitled for relief sought for?
6. What order or decree?”
6. The plaintiff himself was examined as PW.1 and other three witnesses are examined as PW.2 to PW.4 and got marked documents as Ex.P1 to Ex.P7. The defendant was examined as DW.1 and one witness is examined as DW.2 and got marked documents as Ex.D1 to Ex.D7.
7. The Trial Court has decreed the suit for the main relief by directing the defendant to execute registered Sale Deed in favour of the plaintiff by receiving balance sale consideration amount of Rs.2,80,000/-. The Trial Court has assigned reason that Ex.P2 and Ex.P3 are the registered agreement of sale and the plaintiff has proved that he was ready and willing to perform his part of contract. Further, the Trial Court has assigned reason that the father and brother of defendant have consented for selling away the property
