IN THE HIGH COURT OF KARNATAKA GULBARGA BENCH BEFORE THE HON BLE MRS. JUSTICE RATHNAKALA. RSA No.2598/2007

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1 1 IN THE HIGH COURT OF KARNATAKA GULBARGA BENCH DATED THIS THE 15 TH DAY OF APRIL, 2014 BEFORE THE HON BLE MRS. JUSTICE RATHNAKALA RSA No.2598/2007 BETWEEN: SRI BHEEMRAO S/O BABARAO DHANNAURE AGED ABOUT 52 YEARS AGRICULTURIST RESIDING IN EKAMBA VILLAGE BASAVAKALYAN TALUK APPELLANT (BY SRI JAHANGIR ALI & SRI MOHD. ALI, ADVS.) AND: 1. KRISHNA SINCE DECEASED, BY HIS LEGAL REPRESENTATIVES: a) SMT NARSABAI W/O DAMODAR GAIKWAD AGED ABOUT 47 YEARS HOUSEHOLDER RESIDING IN MANNALI VILLAGE BASAVAKALYAN TALUK b) SMT. ULABAI D/O THE DECEASED KRISHNA & W/O BABU GAIKWAD AGED 43 YEARS,

2 2 HOUSEHOLDER RESIDING IN GUTTI VILLAGE, BASAVAKALYAN TQ., BIDAR DT c) VIDYAWATI D/O THE DECEASED KRISHNA AGED ABOUT 40 YEARS, HOUSEHOLDER, RESIDING IN BASAVAKALYAN BASAVAKALYAN TQ SRI DEVIDAS S/O THE DECEASED KRISHNA AGED ABOUT 48 YEARS EX.MILITARY SERVICE RESIDING IN MANNALI VILLAGE BASAVAKALYAN TQ SMT PRAYAGBAI W/O LATE KRISHNA AGED ABOUT 68 YEARS AGRICULTURIST RESIDING IN MANNALI VILLAGE BASAVAKALYAN TQ (BY SRI AMEET KUMAR DESHPANDE, ADV.) Amended as per Court Order dated Since deceased by her LRs R1(a) to (c) & R1 & R2 already on record.... RESPONDENTS THIS RSA IS FILED UNDER SECTION 100 OF CPC AGAINST THE JUDGEMENT AND DECREE DATED PASSED IN RA.NO.13/2001 ON THE FILE OF THE CIVIL JUDGE (SR.DN.) BASAVAKALYAN, ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGEMENT AND DECREE DATED PASSED IN OS.NO.40/1986 ON THE FILE OF THE CIVIL JUDGE (JR.DN.) AND JMFC., BASAVAKALYAN, DECREEING THE SUIT FOR SPECIFIC PERFORMANCE OF CONTRACT AND INJUNCTION. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT DELIVERED THE FOLLOWING:

3 3 JUDGMENT This is a plaintiff s appeal against the judgment and decree passed by the Civil Judge (Sr.Dn) Basavakalyan in R.A.No.13/2001. The appeal was filed by the defendants before the Trial Court against the plaintiff. 2. For the sake of convenience, the parties will be referred to as per their status before the Trial Court. 3. The suit was instituted by the plaintiff before the Civil Judge (Sr.Dn) Basavkalyan Court against the defendants for specific performance of contract of agreement of sale in respect of an agricultural property i.e., Sy.No.54/1 measuring 3 acres out of 5 acres 14 guntas of the same survey number situated at Ekamba village, Taluk Basavkalyan. The first defendant Krishna was the executant of the agreement second defendant is the son and third defendant is the wife: they were alleged to be the members of the joint family and suit property as the undivided joint family property. Prayer was sought for a

4 4 direction to the defendants to execute a sale deed by receiving the remaining sale consideration of Rs.500/- from the plaintiff: consequential relief of perpetual injunction against the defendants was also sought for. 4. It was the case of the plaintiff first defendant entered into an agreement of sale in respect of agricultural property owned by him and received the part consideration amount of Rs.3,000/- and delivered the actual possession of the property to the plaintiff. He had executed a receipt for having received the advance amount. It was agreed that the remaining part of sale consideration of Rs.500/- will be paid by the plaintiff at the time of registration of the sale deed. Since the defendants started illegally interfering with the possession of the plaintiff over the suit land, he was constrained to file an original suit against the defendants for an order of perpetual injunction and rectification of the records of rights in respect of the said land in O.S.No.40/1986 on the file of the Munsiff Court at

5 5 Basavakalyan. In the said suit though the defendants appeared, they did not contest, but filed their Consent written statement having no objection to decree the suit. As per the decree passed in the said suit the revenue records are mutated to the name of the plaintiff. Accordingly, plaintiff s name appears in the records of rights. Since there was prohibition for registration in the year 1973, sale deed could not be effected. After the Bar was lifted, the plaintiff requested the defendants to execute the sale deed by receiving balance sale consideration amount of Rs.500/-. Instead of executing sale deed, the first defendant got filed suit for declaration of title and possession through his son second defendant in O.S.No.5/1984 against the plaintiff. The plaintiff is ready and willing to perform his part of contract and ready to pay stamp duty and other expenses. 5. The suit was contested by defendants No.2 and 3. Plaint allegation regarding suit transaction was denied. It was alleged, while the first defendant was in intoxicated

6 6 condition his signature was obtained by the plaintiff on paper and thereafter agreement of sale was drawn, at that time the second defendant was still a minor and the defendants No.2 and 3 demanded for the return of the said agreement. The plaintiff obtained illegal possession of the property: however there was settlement between the parties that the defendants would repay the advance amount of Rs.3,000/- to the plaintiff. The plaintiff brought the defendants to Basavakalyan and promised them to hand over the paper and possession of the land to them in the Court and again obtained their signature on the paper. That is how consent written statement came to be filed by the defendants in O.S.No.224/ After a full pledged trial and on hearing both sides the Trial Court decreed the suit as prayed for. In appeal by the defendants the judgment of the Trial Court was modified thereby holding that the plaintiff is entitled to recover the refund of earnest money of Rs.3,000/- with interest at the

7 7 rate of 6% p.a. from the date of the suit till the entire realisation. 7. Sri Jahangir Ali, learned counsel for the appellant submits both Courts below though disbelieved the defence setup by the defendants, the Lower Appellate Court made out a new case under Section 20 of the Specific Relief Act, which was never pleaded by the defendants. Redelivery of possession is ordered nearly after 35 years of the agreement of sale. The Lower Appellate Court has last site of the evidence that, there was legal restriction for registration at the time of sale agreement: soon after the restriction was lifted plaintiff repeatedly called upon the defendants to execute the sale deed and there was no delay on the part of the plaintiff in instituting the suit. Accordingly, prays to set aside the judgment and decree passed by the Lower Appellate Court. 8. Sri Ameet Kumar Deshapande, for the contesting respondents would reply the suit since not filed within

8 8 time stipulated by Article 64 of the Limitation Act the plaintiff was legally disentitled for the relief: though the learned Trial Court did not dwell upon the question of limitation rightly discretionary relief under Section 20 of the Specific Relief Act 1963 is rejected. The plaintiff slept over the matter for more than a decade and the situation has become irreversible for him to get the relief. The contentions of the petitioner that after lifting of fragmentation Act he called upon the defendant to execute the sale deed is a story subsequently developed while drafting the plaint. Unexplained long delay was sufficient for the learned lower Court to refuse the execution of the sale deed. Hence on the said ground alone it was held impugned judgment does not call for interference. Following judgments are relied by the respondents. 1) AIR 1997 SC page:1751 (K.S.Vidyanadam and Others vs Vairavan)

9 9 2) AIR 2003 SC page: 1391 (Manjunanth Anandappa Urf.Shivappa Hanasi Vs Tammanasa And Ors) 3) AIR 2006 (6) ALD 20 (SC) (M. Meenakshi & Ors vs Metadin Agarwal (D) By Lrs. & Ors) 4) AIR 2001 KANT page: 442 (H. M. Krishana Reddy vs. H. C. Naryana Reddy) 5) AIR 2003 SC page: 2362 (Manohar Manohar Singh vs Maya) 6) Sri Ballappa vs Raghupathi Karnataka High Court Judgment dated This case was admitted to adjudicate the following question of law: 1) Whether the lower appellate court was correct in law in reversing the judgment and decree of the learned trial Judge by having recourse to section 20 of the Specific Relief Act, more so when he agreed with the learned trial Judge on all other issues? 10. Facts that are not in dispute between the parties are that the plaintiff entered into an agreement with the

10 10 defendants in respect of 3 acres of land out of 5 acres 14 guntas in Sy.No.54/1 of Ekamba village, Basvakalyan Taluk, Bidar District. The agreement was executed by Kirshina as per the agreement Ex.P1. The possession of the property was delivered on the date of the agreement only by receiving Rs.3,000/- out of agreed sale consideration of Rs.3,500/-: balance amount of Rs.500/- was to be paid at the time of registration. No time was fixed in the agreement for conclusion of sale transaction. As per description of the property, to the Eastern side of the property agreed to be sold, land in the ownership of the plaintiff Kirshina is situated. A receipt/ex.p2 was passed by Kirshina for having received the advance amount of Rs.3,000/-. The plaintiff was constrained to file a suit for permanent injunction and rectification of the entries in the revenue records in respect of suit land against the owner and his family members in O.S.No.224/1973. When they interfered with the possession of the property agreed to be sold.

11 In the plaint, O.S.No.224/1997 it was alleged to the effect that in view of the prohibition for registration, sale deed could not be executed. He is ready to pay the balance consideration of Rs.500/- and he has a right to file the suit for specific performance and also for recovery of paid amount of Rs.3,000/- in case, there is any defect or if it is not possible for registration. The suit was filed on On the very same day, the defendants hastened to file their consent written statement agreeing for decree of the suit. It was admitted in the written statement there is prohibition for registration. It was specifically mentioned that defendants 2 and 3, consent for execution of agreement of sale. Accordingly, the suit came to be decreed. 12. Subsequently the son of vendor namely Devidas/second respondent herein filed a suit for declaration and possession against both agreement holders of the land in Sy.No.54/1 i.e., Krishna the plaintiff herein,

12 12 Raya Bai and also his both parents in O.S.No.5/1984. The plaint averments in the said suit was that the plaintiff s father was leading immoral life and without there being legal necessity, he sold the joint family property to the defendants therein. The plaintiff on attaining majority, repeatedly requested to restore the back the possession of property from defendant 3 which they did not heed. Relief of declaration was sought to the effect that the suit property is an ancestral property and also possession was sought. The defendant Nos.1 and 2 i.e. parents of the plaintiff remained ex-parte. The purchasers i.e., defendant Nos.3 and 4 (the plaintiff of this suit and Raybai who had purchased remaining extent of land in the said survey number) contested the suit. After full pledged trial, the Trial Court dismissed the suit. The appeal filed against the said judgment of the Trial Court came to be dismissed in R.A.No.21/1994 thereby the judgments and decrees in both suits i.e., O.S.No.224/1973 filed by the plaintiff and O.S.No.5/1984 filed by the vendor s son i.e., defendant

13 13 No.2/second respondent herein have become final. This is the factual matrix. 13. The lower Appellate Court has been persuaded by the following judgments: i) Kanshi Ram vs. Om Prakash Jawal and others reported in Supreme Appeals Reported (Civil) 1996 Supreme Court page 527; ii) Yellappa vs. Durgappa reported in ILR 2006 Kar. 4654; iii) A.C.Arulappan vs. Smt.Ahalya Naik reported in AIR 2001 Supreme Court 2783; iv) Manohar Lal alias Manohar Singh vs. Maya reported in AIR 2003 Supreme Court 2362; v) Smt. Sheetawwa vs. Hemareddi reported in ILR 2004 Kar On noticing that there was a long lapse of more than a decade in instituting the suit and also that the plaintiff did not furnish the material particulars as to when the prohibition on registration (as contended by the plaintiff) was lifted and when the defendant refused to execute the

14 14 sale deed, the lower Appellate Court held that the plaintiff did not show his activeness to get the registered sale deed, and it is most appropriate and proper to grant the relief of refund of earnest money with reasonable interest by way of damages. Thereby appeal came to be allowed. 14. While referring the above said judgments the Lower Appellate Court should have noticed that on fact, case on hand was distinguishable. It was not the case where the plaintiff had claimed alternative relief of damages and also not a situation where equity had to be worked out, having regard to the position, each party was placed. There was nothing suggesting that the plaintiff had suppressed any material fact and was at taking unfair advantage over the defendant. The defence that the transaction was not for the family necessity etc had already been negatived in the suit filed by the son of the vendor in O.S.No.5/1984. Admittedly the defendant was in possession of the property

15 15 for more than two decades. The legal formulae to be adopted for adjudication of the appeal, was otherwise. 15. The Apex Court in its judgment reported in (1988) 1 Supreme Court Cases 143 in the case of Ajaib Singh vs. Gurbax Singh and Others did not endorse view taken by the High Court in declining to enforce agreement of sale between the parties. In the said case the High Court on observing that due to rise in prices of land with passage of time held that it would be unjust to grant the relief claimed - the view of the Apex Court was, major portion of the agreed price having already been paid long back and only Rs.75/- remaining to be paid at the time of execution of the sale deed and the premises being with purchaser throughout in part performance of the agreement. It was held that the High Court erred in exercising it s discretion to refuse the relief, and the case was remanded to High Court. 16. Following judgments were noted in the above judgment - Madamsetty Satyanarayana v. G. Yellogi Rao,

16 16 (1965) 2 SCR 221: AIR 1965 SC 1405 and Dr.Jiwan Lal v. Brij Mohan Mehra, (1972) 2 SCC 757: (1973) 2 SCR 230. Following lines from the judgment in Lindsay Petroleum Co. v. Hurd. 4 (Law Reports 5 PC 221 at 239) was quoted in Dr.Jiwan Lal s case. The doctrine of laches in courts of equity is not an arbitrary or technical doctrine. Where it would be practically unjust to give a remedy either because the party has by his conduct done that which might fairly be regarded as an equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material. In Satyanarayana s case (referred supra) after an elaborate discussion of the decisions, Indian and English, as to whether mere delay amounts to waiver or abandonment and whether conduct of the plaintiff indicated that the delay was due to waiver or abandonment of the contract on

17 17 the plaintiff s part, the principles reigning the field was summed up as follows: (11) The result of the aforesaid discussion of the case law may be briefly stated thus: While in English mere delay or laches may be a ground for refusing to give a relief of specific performance, in India mere delay without such conduct on the part of the plaintiff as would cause prejudice to the defendant does not empower a Court to refuse such a relief. But as in England so in India, proof of abandonment or waiver of a right is not a precondition necessary to disentitle the plaintiff to the said relief, for if abandonment or waiver is established, no question of discretion on the part of the Court would arise. We have used the expression waiver in its legally accepted sence, namely, waiver is contractual, and may constitute a cause of action; it is an agreement to release or not to assert a right ; see Dawson s Bank Ltd. V. Nippou Menkwa Kabushiki Kaisha, 62 Ind Appellant 100 at p.108: (AIR 1935 PC 79 at p.82). It is not possible or desirable to lay down the circumstances under which a Court can exercise its discretion against the plaintiff. But they must be

18 18 such that the representation by or the conduct or neglect of the plaintiff is directly responsible in inducing the defendant to change his position to his prejudice or such as to bring about a situation when it would be inequitable to give him such a relief. In Debendra Nath Mandal vs. Sakhilal Kar and Others reported in A.I.R (37) 1950 Calcutta 526 it was held, In a case where the Court comes to the conclusion that time is not the essence of the contract for the purchase of immovable property, the failure by the plaintiff to fulfil the condition of paying a portion of the purchase-money required of him under the contract within the stipulated period will not ipso facto, disentitle him to get a decree for specific performance, In the circumstances of a particular case the Court has to enquire whether the delay which has taken place is properly explained by the plaintiff. The mere fact that there has been some delay is not sufficient to put him out of Court. The question whether the lapse of time destroys the plaintiff s right has also to be considered with reference to other attendant circumstances. If the plaintiff has been in

19 19 substantial possession of the benefits under the contract and is in effect claiming the completion of the legal estate, delay will not, if properly explained, affect his right to obtain specific performance. This principle, however, is subject to a proviso. If the fact that the plaintiff has been in possession is used in extenuation of the delay which has taken place in filing the suit for specific performance, such possession must, in order to have that effect, be a possession under the contract and such that the vendor must know or be taken to know that the purchaser claims to be in possession under the contract. The provisions contained in S.55, T.P.Act, read with Ss.51 and 52, Contract Act, are not inconsistent with the principle stated above. 17. The brief note of the principles in this regard, from the judgment of the Division Bench of Bihar reported in AIR 1974 Patna 113 (V 61 C 29) in the case of Mahabir Mahto vs. Mt.Sanjha and others, reads as follows: (A) A relief for specific performance is an equitable relief and if there are laches on the part of the

20 20 person suing for such a relief it may be refused to him. But laches is not the same thing as mere delay. A claim for specific performance of contract if filed within the period of limitation cannot be defeated on the mere ground of delay, unless the delay, amounts in the circumstance of the particular case, to an abandonment of the plaintiff s claim for specific performance of the contract or circumstances have so changed that the granting of the relief for specific performance could prejudice the defendant Waiver, abandonment or acquiescence cannot be inferred merely from the period of delay The Court cannot arbitrarily apply a time-limit to non-suit a litigant who, under the statutory provisions is entitled to seek the relief within a prescribed period When the discretion has been exercised arbitrarily, the appellate Court can interfere. 18. As such Schedule to the Limitation Act 1963 Article 54 stipulates the limitation in respect of suit for specific performance of the contract. Accordingly it is three years, which runs from the date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that the

21 21 performance is refused. In the case on hand the agreement Ex.P1 did not stipulate any date for performance of the contract. The contention of the plaintiff was since there was prohibition for registration in the year 1973, the registration of the sale deed was not effected but subsequently, after bar on registration of the sale deed was lifted and registration of the deeds of sale were continued, the plaintiff requested the defendant to execute the absolute registered sale deed in favour of the plaintiff by receiving the remaining consideration amount of Rs.500/- from the plaintiff... But the Lower Appellate Court disbelieved the said contention for not furnishing the particulars as to the date on which prohibition was lifted and the date of which the defendants refused to execute the sale deed. 19. Even the Statute which came in the way of the registration of the sale deed is also not properly spelt by the plaintiff. As such at the relevant point of time, Karnataka

22 22 Prevention of Fragmentation of Consolidations of Holdings Act 1966 was in vogue. The Act prohibited the sale deed in fragment except with the permission of the Tahsildar or the owner of the contiguous land of the same survey number and there was no such total prohibition. The said Act was repealed w.e.f Were the parties to the contract really under the impression that the subject matter of the agreement, is hit by the above Act, is not clear, since there is no mention of Fragmentation Act in the agreement Ex.P After the repealing of the Act on , it is only the suit filed by the vendor s son i.e., O.S.No.5/1984 which indicates the resistance to the said agreement of sale. In the said suit, the vendor/krishna remained ex-parte. Within three years of filing of the said suit, the plaintiff filed the present suit O.S.No.40/1986. In the said suit, the Trial Court though had framed an issue with regard to resjudicata, no issue regarding question of limitation was

23 23 framed. The Limitation being a mixed question of fact and law, even without defence being setup to that effect, the Court was required to examine the bar if any to the relief, as envisaged in Section 3 of Limitation Act. Even the Lower Appellate Court also lost sight of it s jurisdiction under Section 3 of Limitation Act. However looking to the conduct of the parties, I am convinced that there is no violence to Article 54 of the Limitation Act and relief sought is not hit by Section 3 of the said Act. 21. As noticed in the preceding para the plaintiff faced resistance from vendor s son Devidas for the first time when he filed suit for declaration in respect of subject matter of the contract in O.S.No.5/1984 on Present suit is filed on The time gap between the two suits is well within 3 years, the time contemplated for enforcement of contract by Article 54 of Limitation Act. 22. If the parties to the contract were under the impression that the subject matter of the suit is covered by

24 24 the Fragmentation Act, no wonder the plaintiff did not insist for execution of the contract. It has come in the evidence of Devidas that as on the date of filing of the consent written statement in O.S.No.224/1973, he was a major. Still the matter was not precipitated by him until All the contentions disputing the veracity of the agreement are set at nought by dismissal of his suit O.S.No.5/1984: subsequently said dismissal is endorsed by the First Appellate Court. When the plaintiff is found eligible and entitled to enforce the contract, and was exercising his ownership rights with possession over the property for more than a decade from the date of agreement, I do not see any valid reason, why he should be non-suited. The judgments cited for the respondents have no application to the facts on hand. It is not a case where the plaintiff has waived of his right or acquiesced the ownership rights of his vendor or any third party right is created over the property due to passage of time.

25 In the case of Sardar Singh vs. Krishna Devi (Smt) and Another reported in [1994 (4) SCC 18], the Apex Court held as under:.section 20(1) of the Specific Relief Act, 1963 provides that the jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief, merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. The grant of relief of specific performance is discretionary. The circumstances specified in Section 20 are only illustrative and not exhaustive. The court would take into consideration the circumstances in each case, the conduct of the parties and the respective interest under the contract. In the case of K.Narendra vs. Riviera Apartments (P) Ltd. [1999 (5) SCC 77 (Smt) and Another reported in [1994 (4) SCC 18], the Apex Court observed as under: 29. Section 20 of the Specific Relief Act, 1963 provides that the Jurisdiction to decree

26 26 specific performance is discretionary and the Court is not bound to grant such relief merely because it is lawful to do so; the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. Performance of the contract involving some hard ship on the defendant, which he did not foreseen while non-performance involving no such hardship on the plaintiff, is one of the circumstances in which the court may properly exercise discretion not to decree specific performance. The doctrine of comparative hardship has been thus statutorily recognized in India. However, mere inadequacy of consideration or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not constitute an unfair advantage to the plaintiff over the defendant or unforeseeable hardship on the defendant. The principle underlying Section 20 has been summed up by this Court in Lourdu Mari David v. Lous Chinnaya Arogiaswamy by stating that that the decree for specific performance is in discretion of the Court but the discretion should not be used arbitrarily; that discretion should be

27 27 exercised on sound principles of law capable of correction by an appellate Court. 24. That takes us to the position that among other factors delay can also be one of the ground to refuse the relief to a plaintiff, but it cannot be the sole ground for such refusal when it is shown that the conduct of the plaintiff will not debar him from getting the relief. It is quite natural that within this 40 years, the property value has escalated to a sufficient extent. The trial Court has directed the defendants to execute the sale deed by receiving remaining part of sale consideration i.e., Rs.500/- with interest at 6% per annum. Having regard to the diminition in the value of money viz-a-viz escalation in the value of the land, mere payment of balance sale consideration of Rs.500/- with 6% interest is inadequate. Hence, in my opinion the ends of justice will be better served if the plaintiff is directed to pay 15% of the present market price of the property as per Sub Registrar s Guidelines Value towards balance

28 28 consideration. That would suffice the ends of justice being met. 25. Accordingly, the appeal is allowed. The judgment and decree passed by the Lower Appellate Court in R.A.No.13/2001 dated is set aside and the judgment and decree passed by the Trial Court is modified to the extent that defendants/respondents herein shall execute the registered sale deed in favour of the appellant/plaintiff in respect of the suit property on receiving an amount equivalent to 15% of the present market value of the property towards remaining sale consideration within six weeks. Parties shall bear their own costs. Sdu/VM Sd/- JUDGE