A.V. Chandrashekara, J.@mdashThis appeal filed by the plaintiff u/s 96 of CPC is directed against the judgment and decree passed by the learned Additional Senior Civil Judge, Chikmagalur in O.S.209/2006 on 14.2.2013. Suit filed by the plaintiff for the relief of specific performance is dismissed. But the learned Judge has decreed the suit directing the defendants 1 to 3 to return the advance amount of Rupees 50 Lakhs with interest at 10% p.a. thereon from the date of suit till realization. Suit is dismissed against other defendants. Being aggrieved by the rejection of his prayer for specific performance of the contract, plaintiff has approached this Court by filing this appeal. Appellant herein is the plaintiff. Respondent No. 1 herein is the defendant No. 1. Respondent No. 2 is the wife of respondent No. 1 i.e., defendant No. 1. Respondent Nos. 3 and 4/defendant Nos. 3 and 4 are the children of defendant Nos. 1 and 2. Respondent Nos. 5 and 6 are the defendant Nos. 5 and 6 and they are subsequent purchasers of the suit schedule property. Respondent No. 7 herein is the defendant No. 7 and is the son of the plaintiff. Suit against defendant Nos. 8 and 9 came to be dismissed in the Trial Court itself.
2. Parties will be referred to as plaintiff and defendant Nos. 1 to 7 respectively as per their status in the Trial Court.
3. Defendant Nos. 1 to 4 are the members of the joint family of which defendant No. 1 is the manager of the suit schedule property measuring in all 89.32 acres of coffee plantation comprising of Sy. Nos. 348/P1, 349, 545, 453, 454, 455 and 520 of Araluguppe village of Chikmagalur Taluk, since these lands had fallen to the share of the defendant No. 1 at a partition between the plaintiff and the defendant No. 1.
4. The case put forth by the plaintiff in the Trial Court is that a pre-emption clause had been inserted when the partition took place providing for first offer to the brothers before any alienation. According to the plaintiff, defendant Nos. 1 to 4 had agreed to sell in all 25 acres of land in Sy. Nos. 455 and 520 of Araluguppe Village as described in schedule 3 of the suit, in favour of the plaintiff for a total consideration of Rs. 1 Crore vide agreement of sale dated 1.6.1999 and that on the same date a sum of Rs. 3 Lakhs had been paid as advance by the plaintiff to defendant Nos. 1 to 4 through a cheque dated 7.6.1999 drawn on Karnataka Bank and that plaintiff had agreed to pay in all a sum of Rs. 22 Lakhs on or before 30.6.1999. Since defendant No. 1 had raised loan from Karnataka Bank, he i.e., the defendant No. 1 was to seek concession from the Bank and if the loan did not exceed Rs. 75 Lakhs, plaintiff would pay the same to the Bank and defendant Nos. 1 to 4 would pay to the Karnataka Bank the remaining loan balance in excess of Rs. 75 Lakhs. The time stipulated in the agreement dated 7.6.1999 was three months. Plaintiff is stated to have paid in all a sum of Rs. 24,25,022/- to the defendant Nos. 1 to 4 on various dates through his son, the defendant No 7.
5. Inspite of the receipt of money towards the advance on various dates, the defendant Nos. 1 to 4 did not clear the Bank dues and did not execute the sale deed as agreed. When demand was made to execute a sale deed in the year 2002, the defendant Nos. 1 to 4 requested the plaintiff that they would pay back in all a sum of Rs. 50,000/- inclusive of interest on the amount already received. Plaintiff agreed and accordingly a cheque was issued in favour of his son for Rs. 50 Lakhs and the said cheque came to be dishonoured. Consequently, defendant No. 7 initiated criminal proceedings for offence punishable u/s 138 of Negotiable Instruments Act in CMM Court at Bangalore.
6. After the receipt of the summons from the criminal Court, defendant No. 1 approached the plaintiff for reconciliation and executed a supplemental Agreement on 25.9.2002 agreeing to sell suit schedule "A" property for Rs. 1.30 Crores in favour of the plaintiff and agreed that Rs. 50 Lakhs due to the plaintiff relating to the dishonoured cheque could be treated as advance towards the supplemental agreement dated 25.9.2002. As per this agreement dated 25.9.2002, the defendant Nos. 1 to 4 were to clear all the loan due to the Karnataka Bank and then only plaintiff to pay the balance consideration of Rs. 80 Lakhs to the defendants at the time of execution of the sale deed. With this agreement, plaintiff agreed for withdrawal of criminal case filed in CMM Court, Bangalore of offence punishable u/s 138 of NI Act. It was also agreed that in the event of breach of agreement, defendant Nos. 1 to 4 wanted to return the advance amount of Rs. 50 Lakhs with interest at 24% p.a. thereon.
7. Since, the defendant Nos. 1 to 4 were in financial crisis to repay the loan due to the Bank, plaintiff waited patiently. Then he came to know that defendant Nos. 1 to 4 had sold the suit schedule property for Rs. 1.75 crores in favour of defendant Nos. 5 and 6 vide sale deed dated 11.8.2003. The sale deed executed by defendant Nos. 1 to 4 in favour of defendant Nos. 5 and 6 is stated to be illegal and that does not bind him. Hence, plaintiff chose to file a suit for the reliefs of a) declaration that the sale deed dated 11.8.2003 were null and void b) specific performance of contract based on supplemental agreement dated 25.9.2002 c) Handing over the possession of suit "A" schedule property to him in the alternative for refund of advance amount of Rs. 50 Lakhs with Court costs.
8. Defendant Nos. 1 to 4 appeared before the Trial Court and defendant No. 1 alone filed written statement admitting the relationship, but categorically denying the binding effect of the clause of pre-emption mentioned in the partition deed agreement of 1955, the execution of sale'' agreement of 1999 and 2002 and the receipt of advance amount and the nature of the agreement etc. But, he had pleaded that receipt of Rs. 24,25,022/- was only as a loan from the plaintiff but not as advance It was his case hat he had to issue a blank signed cheque to the defendant No. 1 under force and that the contents have been written by plaintiff and his son the defendant No. 7. Necessary pleadings are found as to how signatures of himself and his family members were obtained by the plaintiff. The said written statement came to be adopted by defendant Nos. 2 to 4. They had prayed for dismissal of the suit.
9. The defendants 5 to 6, who are the purchasers had contested the suit by filing written statement denying the averment that the documents of 1999 and 2002 were agreements of sale in essence. According to them when 25 acres could be agreed to be sold for Rs. 1 crore in 1999 it is ununderstandable as to how about 80 acres could be agreed to be sold for just 1.30 crores in 2002. It was pleaded that the agreement of 2002 had not at all seen the light of the day till suit was filed and as such the suit was barred by time. It was further pleaded that they were bonafide purchasers for consideration without notice and that suit property was sold by defendants 1 to 4 in their favour for Rs. 1.75 lakhs only after cutting most of the standing trees to clear the loan due to bank. With these pleadings defendants 5 and 6 had prayed for dismissal of the suit. On this basis of the above pleadings following 8 issue came to be framed:--
1. Whether the plaintiff proves that the sale deed dated 11.08.2003 executed by the defendant No. 1 in favour of the defendant No. 5 is null and void?
2. Whether the plaintiff proves that the execution of the supplementary agreement to sell dated 25.09.2002 by the defendant No. 1 to 4 in his favour for selling the suit "A" schedule property?
3. Whether the plaintiff prove the payment of sale advance of R. 50,00,000/- to the defendants in pursuance to the execution of the supplementary sale agreement dated 25.09.2002?
4. Whether the plaintiff has been ready and willing to perform his part of the contract?
5. Whether the suit is barred by limitation?
6. Whether the defendant No. 5 proves that he is the bonafide purchaser of the suit property?
7. Whether the plaintiff is entitled for the relief claimed in the suit?
8. What order or decree?
10. In support of his case, plaintiff has examined himself as PW-1 and one Sri I.E. Chandra Shekar has been examined as PW-2. Eight exhibits have been got marked on their behalf. The defendant No. 6- purchaser has examined himself as DW-1 and has got marked in all 24 exhibits. Defendants 1 to 4 have chosen not to lead evidence on their behalf After hearing arguments, the learned judge has answered issues 1,4 and 5 in the negative and has answered issues 2,3 and 7 affirmatively in part and has ultimately decreed the suit in part directing the defendants 1 to 3 to return Rs. 50,00,000/- with interest at 10% p.a. thereon from the date of suit till realization. It is this judgment and decree insofar as it relates to the rejection of the prayer for specific performance alone which is called in question as per the grounds urged in the appeal memo.
11. We have heard the learned counsel for the appellant regarding admission copies of the supplemental agreement is made available to as by the learned counsel for the appellant while submitting arguments. He has relied upon the decision reported in
12. It is contended that the Trial Court has not properly analysed the documentary and oral evidence in right perspective more so when adverse inference is drawn u/s 114(G) of Evidence Act against the defendants 1 to 4 in not entering the witness box to substantiate their pleadings. It is contended that when issues Nos. 4 and 5 have been held in the negative, suit should have been decreed as prayed more so when time was not the essence of the contract. The Trial Court is stated to have adopted a wrong approach to the real state of affairs and that the impugned judgment is based on surmises and conjectures without there being any basis for the same. The Judgment, according to the learned counsel for the appellant, is not based on either logic or reasoning. It is contended that the judgment is opposed to law, facts and probabilities. Hence, he has prayed for admitting the case, to call for records and dispose off on merits.
13. After having heard the learned counsel for the appellant and after having perused the impugned judgment and the supplemental agreement made available to us at the time of submission of arguments, we are of the opinion that following point arises for our consideration:--
Whether the case on hand is fit to be admitted?
Reasons:
14. In a suit for specific performance, it is always incumbent upon the person relying upon an agreement of sale to effectively discharge the burden that the document is an out and out sale agreement. Mere proof of a document styled as agreement of sale will be insufficient to grant the equitable relief of specific performance. As such examining the circumstances surrounding a document styled as agreement of sale is an absolute necessity and courts cannot lightly ignore the circumstances on the ground that due execution of such a document is proved.
15. Plaintiff and 1st defendant are brothers. Both are agriculturists and were dependent upon the income from their respective coffee plantations. The extent of land agreed to be sold by defendants 1 to 4 on 07.06.1999 vide Ex.P4, the alleged agreement of sale for Rs. 1 crore was just 25 acres of land in Sy. Nos. 455 and 520 of Araluguppe village, as described in Suit Schedule ''B''. As rightly pointed out by the learned Judge, the total extent of Sy. No. 455 and 520 is 18.35 acres and 25 acres respectively. The extent of 25 acres of land sought to be sold in 1999 is not at all described by boundaries at all and as such there was no consensus ad idem in respect of the identity of the property to be sold. This is one circumstance which has weighed in the mind of the Trial Court. This is very much relevant because in the alleged agreement of 2002 marked as Ex.P5, the extent of land clearly defined by boundaries is mentioned. If 25 acres of land could be agreed to be sold for one crore rupees in 1991, it is un-understandable how entire extent of 80 and odd acres could be sold for just Rs. 1.30 crores that too after the lapse of about 3 years. This is yet another circumstance which has a bearing on the intention of the parties to term the document as an agreements of sale.
16. Though 3 months time was contemplated for completing the sale transaction vide Ex.P4, the plaintiff went on making payment on different dates exceeding the time limit. He very well knew that the defendants 1 to 4 had raised substantial loan from Karnataka Bank by mortgaging the suit ''A'' property and was liable to redeem huge arrears of loan. It is not as though he was unaware of the Bank loan. If the defendants 1 to 4 did not take any steps to clear the loan to the Bank, nothing prevented him from approaching the Bank and clearing the loan on the strength of Ex.P4. The learned Judge has come to the conclusion that plaintiff did not do his part of the contract since he did not possess the requisite amount. This inference is based on proper evaluation of the evidence.
17. The fact that Ex.P4 was not really intended to be an out and out agreement of sale because the defendant No. 1 ultimately agreed to return the amount of Rs. 22 lakhs with interest thereon by giving a cheque in a sum of Rs. 50 lakhs favouring his son the 7th defendant. This arrangement was in 2002 i.e., after the lapse of execution of Ex.P4. If really the plaintiff had requisite finance with him and if the defendants 1 to 4 had agreed to sell out and out, plaintiff would not have agreed for such an arrangement of receiving a cheque for Rs. 50 lakhs. Whatever amount was paid on different dates by the plaintiff the defendants 1 to 4 was only to meet some financial requirements pertaining to the maintenance of the coffee plantation. If he had really intended to purchase ''B'' schedule property, plaintiff would have called upon them to execute a sale deed by receiving the balance consideration. There is nothing on record to show that plaintiff in fact had called upon them to perform their part of the contract.
18. In fact the learned Judge has specifically referred to the details of the payment of small amount made by the plaintiff before 07.06.1999 and 30.11.1999. In fact such endorsements are neither supported by receipts nor endorsements. This is yet another aspect which makes the authenticity of the document dated 07.06.1999 as an out and out agreement of sale. In this regard necessary discussion is found in paragraphs 33 and 34 of the impugned judgment.
19. If really Ex.P2 the letter written by the 1st defendants stating that he could not get clearance from the Bank and as such he was sending a cheque for Rs. 50 lakhs, plaintiff would not have accepted the same. On the other hand, he would have tried to enforce the contract by issuing a notice. Hence the learned Judge has rightly drawn an inference that the agreement of 1999 i.e., Ex.P4 had stood cancelled. Necessary discussion is found in paragraph 37 of the judgment
20. When a cheque for Rs. 50 Lakhs was received in connection with the cancellation of earlier agreement of sale dated 1.6.1999 i.e., Ex.P-4 the moot point that arises is as to whether Ex.P-5, the document dated 25.9.2002 is an out and out agreement of sale. In the light of defendant Nos. 1 to 3 in not stepping into the witness box to deny the genuineness of their signatures and in the light of terms of Ex.P-4 as only a collateral document for the amounts received by them on various dates from the plaintiff, there is no difficulty in holding that Ex.P-5''s due execution is proved. As already discussed, the relief of specific performance cannot be granted automatically the moment due execution is proved. Court has to make a conscious effort to know the actual intention of the parties at that time, the surrounding circumstances and the subsequent events.
21. Ex.P-5 is dated 25.9.2002. The said document styled as supplemental agreement to sale dated 7.6.2009 bears the signatures of defendant Nos. 1 to 3 only. Signature of defendant No. 4 though found a place in Ex.P-4 dated 7.6.2009, her signature is not to be found in Ex.P-5. Hence, it is un-understandable as to how suit came to be filed against defendant No. 4 i.e., the daughter of defendant No. 1. When the document marked as Exa.P-4 came to an end after the plaintiff received a cheque for Rs. 50 Lakhs, how Exa.P-5 could be considered as supplemental to Ex.P-4?
22. As already discussed, how 89 acres could be agreed to be sold for Rs. 1.30 crores in the year 2002 when hardly 25 acres had been agreed to be sold for Rs. 1 Corer in 1999. Admittedly, no period is mentioned in Ex.P-5 within which the sale deed should have been executed. It is mentioned that cheque amount of Rs. 50 Lakhs is treated as advance as per transaction vide Ex.P-5. The defendant Nos. 1 to 4 had to clear the bank loan. Nothing prevented the plaintiff to have paid the balance of consideration of Rs. 80 Lakhs to the bank and to have called upon them to perform their part of the contract.
23. Though article 54(2) of the Limitation was applicable in the light of not mentioning the period, the plaintiff should have called upon the defaulting parties to perform their part of the contract, atleast the issuing a notice atleast within a reasonable time. There is nothing on record to show that such an attempt was made by the plaintiff. The sale deed executed by defendant Nos. 1 to 4 in favour of defendant Nos. 5 and 6 is dated 11.8.2003, what is deposed by PW-1 is that immediately she approached the revenue authorities to object for change of katha. Instead of immediately filing a suit or issuing notice, plaintiff kept quiet for more than 3 years. Though, suit is not specifically barred by time, as held in the Trial Court, the inordinate delay in approaching the Court is a serious lapse or latches which disentitles the plaintiff to seek the equitable relief of specific performance. This delay has to be kept in mind, moreso when the prices of immovable properties will be escalating from year to year.
24. The learned Judge has elaborately and meticulously discussed the evidence. Proper evaluation is done keeping in mind the duty of the Civil Court to ascertain the actual nature of the document, mandate of Section 16(c) of specific Relief Act and the latches on the part of the agreement holder. Infact the learned Judge has considered all the contentions raised before him and referred to and discussed all the decisions cited before him.
25. In this Court, the learned counsel has relied upon the decision reported in
In the event of breach of any of the terms set forth herein, the vendor shall refund a sum of Rs. 50 Lakhs over due interest @ 24% p.a. from this date till the date of realization.
26. Paragraph 31 of the above decision in
31. The agreement does not specifically provide for specific performance. Nor does it bar specific performance. It provides for payment of damages in the event of breach by either party. The provision for damages in the agreement is not intended to provide the vendor an option of paying money in lieu of specific performance. Therefore, we are of the view that the plaintiff will be entitled to seek specific performance (even in the absence of a specific provision therefor) subject to his proving breach by the defendant and that he was ready and willing to perform his obligation under the contract, in terms of the contact.
27. Though Ex. P5 provides for specific performance, time is not stipulated for performance of the contract. Here is a plaintiff, who is none other than the brother of the defendant No. 1 who knew very well that Ex.P-4 could not be enforced and he was happy to receive Rs. 50 Lakhs through a cheque. Having known him very well and his earlier conduct very well, still if he had ventured to have another agreement, he has done at his own risk. Taking into consideration the earlier events and the contents of Ex.P-5 as a whole, it can be said that Ex.P-5 is only a document to secure an amount of Rs. 50 Lakhs for the defendant Nos. 1 5o 3. Thus, the said decision cited before is clearly distinguishable on facts. Therefore, the said decision is of no assistance to the plaintiff. Having considered all these aspects we are of the firm opinion that the appeal is devoid of merits. We answer points 1 and 2 in the affirmative and hence it is not a fit case to be admitted. Hence, we proceed to pass the following order:--
a) Appeal is dismissed as not fit for admission.
b) Appellant to bear his own cost.
