- 1 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE ASHOK S.KINAGI REGULAR SECOND APPEAL NO. 1273 OF 2016 (SP) BETWEEN: SRI. C. MANJUNATH, S/O G. CHITRASHEKAR, AGED ABOUT 29 YEARS, AGRICULTURIST, R/AT:IUDP LAYOUT, 10TH MAIN ROAD, 2ND CROSS ROAD, NO.269, BANGALORE ROAD, CHITRADURGA - 577 501. …APPELLANT (BY SMT. S.B. LAKSHMI, ADVOCATE FOR SMT. RATTIHALLI GEETHA VEERANNA, ADVOCATE) AND: 1. K.M. VRUNDAMMA, W/O LATE K.M. NARASIMHA REDDY, AGED ABOUT 51 YEARS, 2. K N LAKSHMIKANTHA REDDY S/O K.M.NARASIMHA REDDY, AGED ABOUT 27 YEARS, 3. K N SARITHA D/O K.M.NARASIMHA REDDY, AGED ABOUT 23 YEARS, 4. K N SRINIVASA REDDY S/O K.M.NARASIMHA REDDY, AGED ABOUT 20 YEARS, Digitally signed by SUNITHA K S Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 RESPONDENTS 1 TO 4 ALL ARE RESIDING AT TURUVANUR VILLAGE, CHITRADURGA TALUK, CHITRADURGA DISTRICT - 577 501. …RESPONDENTS (BY SRI. S.C. VIJAYA KUMAR, ADVOCATE) THIS RSA IS FILED UNDER SECTION 100 OF CPC. AGAINST THE JUDGMENT AND DECREE DATED 21.04.2016 PASSED IN RA NO.50/2015 ON THE FILE OF THE 1ST ADDL. DIST AND SESSIONS JUDGE, CHITRADURGA, PARTLY ALLOWING THE APPEAL AND MODIFYING THE JUDGMENT AND DECREE DATED 29.08.2015 PASSED IN OS NO.40/2009 ON THE FILE OF THE II ADDL. SENIOR CIVIL JUDGE AND JMFC., CHITRADURGA. THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI ORAL JUDGMENT This Regular Second Appeal is filed by the appellant, challenging the judgment and decree dated 21.04.2016 passed in R.A.No.50/2015 by the learned First Additional District and Sessions Judge, Chitradurga, modifying the judgment and decree dated 29.08.2015 passed in O.S.No.40/2009 by the learned II Additional Senior Civil Judge and JMFC, Chitradurga. - 3 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 2. For convenience, the parties are referred to, based on their ranking before the trial Court. The Appellant was the plaintiff, and the respondents were the defendants. 3. Brief facts, leading rise to the filing of this appeal are as follows: The plaintiff filed a suit against the defendants for specific performance of contract. It is the case of the plaintiff that, the defendants are the owners and possessors of the suit schedule property. On 10.04.2008, for family and legal necessity, they agreed to sell the same to the plaintiff for a sale consideration Rs.7,50,000/-, received Rs.1,00,000/- as an advance sale consideration, agreed to receive the balance sale consideration of Rs.6,50,000/-, and execute a registered sale deed in favour of the plaintiff conveying the ownership of the suit schedule property, and hand over the possession of the suit schedule property, within one year. The plaintiff was/is ready and willing to perform his part of the - 4 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 contract, by paying the balance sale consideration amount of Rs.6,50,000/- to the defendants, and get executed a registered sale deed. The plaintiff intimated to the defendants that he was/is ready and willing to perform his part of the contract. The defendants did not come forward to conclude the sale transaction. On 31.01.2009, the plaintiff issued a legal notice to the defendants, insisting the defendants to come to the Sub-Registrar office with a survey sketch for executing the registered sale deed, and to convey the ownership and possession over the suit schedule property in favour of the plaintiff by receiving Rs. 6,50,000/- on 28.02.2009. The defendants failed to appear as requested in a legal notice sent by the plaintiff. The defendants replied to the legal notice after 2 months from the date of service. Hence, a cause of action arose for the plaintiff to file a suit for specific performance of a contract. Accordingly, prays to decree the suit. 4. The defendants filed a written statement admitting their ownership over the suit schedule property, - 5 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 execution and registration of sale agreement dated 10.04.2008. It is contended that the defendants neither agreed to sell the suit schedule property nor agreed to receive the balance sale consideration amount of Rs.6,50,000/-. It is contended that the transaction between the plaintiff and defendants is a loan transaction, and not sale. An agreement was executed as a security for the purpose of repayment of the loan amount. It is contended that the defendants have borrowed a sum of Rs.1,00,000/- from the plaintiff. When the defendants sought time to repay the loan amount, the plaintiffs issued a legal notice, and they have suitably replied to the same. It is contended that there is an encumbrance on the suit schedule property in the plaintiff's name. Hence, on these grounds, prays to dismiss the suit. 5. The trial Court, based on the pleadings of the parties, framed the following issues: 1. Whether the plaintiffs prove that, the defendants agreed to sell the suit property for Rs.7,50,000/- on 10.04.2008 and executed a - 6 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 sale agreement on the same day by receiving advance amount of Rs.1,00,000/- and further agreed to execute registered sale deed by receiving the remaining sale consideration within one year? 2. Whether the plaintiff proves, he is always ready and willing to perform his part of contract under the sale agreement date: 10.04.2008? 3. Whether the defendants prove that, the sale agreement dtd:10.04.2008 is created one as alleged in their written statement? 4. Whether plaintiff is entitled for suit relief? 5. What order or decree? 6. The plaintiff, to prove his case, examined himself as PW1, examined two witnesses as PW2 and PW3, and marked 13 documents as Ex.P1 to Ex.P13. On the other hand, defendant No1 was examined as DW1, examined one witness as DW2, and marked four - 7 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 documents as Ex.D1 to Ex.D4. The trial Court, after recording the evidence, hearing on both sides, and on assessing the verbal and documentary evidence, answered issue Nos.1, 2 and 4 in the affirmative, issue No.3 in the negative and issue No.5 as per the final order. The Trial Court decreed the suit of the plaintiff for specific performance of a contract vide judgment dated 29.08.2015. The defendants were directed to execute the registered sale deed regarding the suit property by receiving the remaining sale consideration of Rs.6,50,000/- in favour of the plaintiff. The defendants were directed to put the plaintiff in possession of the suit property. 7. The defendants, aggrieved by the judgment and decree passed in O.S.No. 40/2009, preferred an appeal in RA.No.50/2015 on the file of learned first Additional District and Sessions Judge, Chitradurga. The first Appellate Court, after hearing the learned counsel for the parties, framed the following points for consideration. - 8 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 1. Whether appellants-defendants made out sufficient grounds to allow I.A.2? 2. Whether defendants-appellants prove that the finding recorded by the trial Court about object and intention of the parties to execute and get registered agreement of sale marked at Ex.P1 entitlement of plaintiff for the relief of specific performance are contrary to the evidence placed by the parties and law? 3. Whether appellants-defendants made out sufficient grounds to interfere in the impugned judgement and decree? 4. What order? 8. The first appellate court, on reassessing verbal and documentary evidence, answered point Nos.1 and 2 in the affirmative, point No.3 partly in the affirmative, and point No.4 as per final order. 9. The First Appellate Court allowed IA.No.2 filed under Order 41 Rule 27 of CPC. The permission was granted to the defendants to produce copy of the price list - 9 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 of 2007-08, 2009-10 of Turuvanur village issued by District Registrar, Chitradurga, and appeal was partly allowed vide judgment dated 21.04.2016. The judgment and decree passed by the trial Court in O.S.No.40/2009 was modified. The prayer made by the plaintiff in OS No.40/2009 for specific performance of agreement of the sale marked at Ex.P1 was rejected. The defendants shall pay/refund Rs.1,00,000/- at the rate of 12% per annum from 10.04.2008 to the plaintiff. The payment of Rs.1,00,000/- with interest at the rate of 12% per annum from 10.04.2008 by the defendants to the plaintiff shall be a charge on the plaint schedule property. The plaintiff, aggrieved by the judgment and decree dated 21.04.2016, passed in R.A.No.50/2015, filed this Regular Second Appeal. 10. Heard the arguments of the learned counsel for the plaintiff, and the defendants. 11. Learned counsel for the plaintiff submits that the defendants executed a registered sale agreement in - 10 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 favour of the plaintiff, dated 10.04.2008, agreeing to sell the suit schedule property for a consideration of Rs.7,50,000/- and accordingly, the plaintiff paid a sum of Rs.1,00,000/- as an advance sale consideration amount. She submits that the said sale agreement is registered, and the defendants have taken a defence that the transaction between the plaintiff and defendants is a loan transaction, not a sale transaction. She submits that any amount of oral evidence to contradict, vary the terms of instrument, is inadmissible in evidence as per Sections 91 and 92 of the Indian Evidence Act, 1872. The first appellate court has failed to consider Sections 91 and 92 of the Indian Evidence Act, 1872. She submits that the transaction between the plaintiff and defendants is a sale transaction, not a loan transaction, as contended by the defendants in the written statement. She submits that the first appellate Court has not correctly reappreciated the entire evidence on record, and has committed an error in reversing and modifying the judgment and decree passed by the trial Court. She further submits that the trial court - 11 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 has rightly recorded its finding that the plaintiff has proved the execution of the sale agreement by the defendants, and the plaintiff was/is always ready and willing to perform his part of a contract, and rightly decreed the suit. The First Appellate Court committed an error in reversing and modifying the judgment and decree passed by the trial Court. Hence, on these grounds, she prays to allow the appeal. 12. Per contra, the learned counsel for the defendants submits that the suit filed by the plaintiff is premature, before the expiry of the time stipulated in the sale agreement, the plaintiff got issued a legal notice calling upon the defendants to receive balance consideration amount and execute a registered sale deed. He submits that the transaction between the plaintiff and defendants is a loan transaction, not a sale transaction. He submits that the defendants have borrowed a loan of Rs.1,00,000/- from the plaintiff under a security, for payment of a loan amount. The defendants executed a - 12 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 mortgage deed. He submits that the plaintiff had played a fraud on the defendants, and got executed an alleged sale agreement. He submits that the defendants have affixed a signature on the blank papers. The plaintiff has misused the blank papers. He further submits that DW2 is also one of the attesting witnesses to the sale agreement. The first appellate Court, considering the evidence of DW2, has rightly held that the transaction between the plaintiff and defendants is a loan transaction, and not a sale transaction. He further submits that the plaintiff has not produced any records to demonstrate that the plaintiff has the financial capacity to purchase the suit schedule property. The plaintiff has failed to prove that he was/is always ready and willing to perform his part of contract. He submits that there is no compliance of Section 16 (c) of the Specific Relief Act. He also submits that, in case if, relief for specific performance of a contract is granted, the defendant will be put to hardship. The plaintiff has failed to prove that, in case, if suit for specific performance of contract is granted, the defendant would not be put to any - 13 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 hardship. Hence, on these grounds, he prays to dismiss the appeal. 13. This Court, admitted the appeal to consider the following substantial questions of law. 1. Whether the first appellate court has committed legal error in reversing the judgment of the trial Court in holding that Ex.P1 is a mortgage deed and not a agreement of sale and interpretation of the documents by the first appellate Court, is illegal? 2. Whether the first appellate Court has committed any legal error in considering the value of the property and holding that the same has under valued for the purpose of sale transaction? Reg. Substantial Questions of law Nos.1 and 2: 14. Substantial question Nos.1 and 2 are interconnected, and are taken together for common discussion, to avoid the repetition of facts. 15. The plaintiff, to prove his case, examined himself as PW1. He deposed that the defendants are the absolute - 14 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 owners of the suit schedule property, and agreed to sell the suit schedule property for a consideration of Rs.7,50,000/- and the plaintiff paid Rs.1,00,000/- as an advance sale consideration amount to the defendants, and the defendants after receiving the advance sale consideration amount of Rs.1,00,000/- executed a registered sale agreement on 10.04.2008 and it was agreed that the balance sale consideration amount shall be paid within one year from the date of execution of registered sale agreement dated 10.04.2008. Before the expiry of one year, the plaintiff requested the defendants to receive balance sale consideration amount and execute a registered sale deed, but the defendants postponed on one pretext or the other. The plaintiff, to establish that he was/is always ready and willing to perform his part of contract, plaintiff issued a legal notice calling upon the defendants to receive the balance sale consideration amount, and execute a registered sale deed. The defendants replied to the legal notice after 2 months, denying the receipt of the balance sale consideration - 15 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 amount, and execute a registered sale deed. The plaintiff, to prove that the defendants have executed a sale agreement, produced the documents. Ex.P1 is the original registered sale agreement dated 10.04.2008, which discloses that the defendants agreed to sell the suit schedule property for a consideration of Rs.7,50,000/- and received Rs.1,00,000/- as advance sale consideration amount, and it was agreed that the balance sale consideration amount be paid within one year from the date of execution of sale agreement. Ex.P2 is the RTC extract, which discloses that the defendants are the absolute owners of the suit schedule property. Ex.P3 is the proforma No.15. Ex.P4 is the office copy of the legal notice dated 31.01.2009 issued by the plaintiff to the defendants calling upon them to receive balance sale consideration amount of Rs.6,50,000/-, and execute a registered sale deed. - 16 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 Ex.P5 to Ex.P7 are the postal acknowledgements. Ex.P8 is the copy of the notice issued by the defendants on 20.11.2009 stating that it is a loan transaction. Ex.P9 to P12 are the four postal receipts. Ex.P13 is the reply notice issued by the defendants to the legal notice sent by the plaintiff. 16. During the cross-examination of PW1, it was suggested to PW1 that the transaction between the plaintiff and defendants is a loan transaction and not a sale transaction, and the defendants never agreed to sell the suit schedule property for a consideration shown in the sale agreement. The defendants borrowed a loan of Rs.1,00,000/- from the plaintiff by mortgaging the suit schedule property. The defendants are ready to repay the loan amount along with interest. PW1 denied the said suggestion. - 17 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 17. It is also stated that the plaintiff was/is always ready and willing to perform his part of contract by paying the balance consideration amount. It is suggested that, the plaintiff got created the sale agreement to knock away the suit schedule property. The said suggestion was denied by PW1. Further, the plaintiff, also examined PW2, who is the scribe of Ex.P1. He has deposed that, he has drafted Ex.P1, his signature is marked as Ex.P1(a). After drafting the Ex.P1, he has read over the contents of Ex.P1. After having understood the contents of Ex.P1, the parties have affixed the signatures on Ex.P1. During the course of cross examination, he admitted that the sale talks were not held in his presence. The plaintiff also examined an attesting witness as PW3. He has deposed in the same line of PW1. The defendants in the course of cross examination tried to elicitate from the mouth of PW2 and PW3 that the plaintiff colluding with the PW2 and PW3 got created Ex.P1. PW2 and PW3 denied the said suggestion. - 18 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 18. On the other hand, defendant No.1 was examined as DW1. She deposed that the defendants obtained a loan of Rs.1,00,000/- from the plaintiff, and as a security for the purpose of repayment of loan amount, executed a mortgage deed. The transaction between the plaintiff and the defendants is a loan transaction and not a sale transaction. The plaintiff played fraud on the defendants and got executed a sale agreement. The defendants never intended to act upon Ex.P1. Defendants also examined one attesting witness to Ex.P1, who deposed that the transaction between the plaintiff and defendants is a loan transaction, not a sale transaction. From the perusal of evidence of DW1, DW1 has no where stated that defendant No.2 was present at the time of sale talks. DW2 has stated that he had affixed his signature on the blank stamp paper. 19. From the perusal of the evidence on record, it discloses that the defendants are the absolute owners of the suit schedule property, and they agreed to sell the suit - 19 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 schedule property for a consideration of Rs.7,50,000/-, and accordingly, the plaintiff paid a sum of Rs.1,00,000/- to the defendants towards an advance sale consideration amount. It was agreed that the balance sale consideration amount be paid within one year from the date of execution of sale agreement. Before the expiry of one year, the plaintiff got issued a legal notice to the defendants on 31.01.2009, narrating that the defendants had agreed to sell the suit schedule property, and calling upon the defendants to receive a balance consideration amount, and execute a registered sale deed. The defendants replied to the legal notice as per Ex.P8 dated 20.04.2009, admitting the ownership over the suit schedule property. It is denied regarding the execution of a sale agreement, and it is stated that the defendants have borrowed a sum of Rs.1,00,000/- from the plaintiff and as a security for repayment of loan, executed a mortgage deed, and the said transaction between the plaintiff and defendants is a loan transaction. Admittedly, the defendants have not denied the signature on Ex.P1. The defendants have taken - 20 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 a contention that the plaintiff committed fraud against the defendants and got executed Ex.P1. The burden is on the defendants to establish that the plaintiff, by playing a fraud got executed Ex.P1, i.e, a registered sale agreement. The defendants did not challenge the registered sale agreement till date, except issuing a reply notice. The plaintiff has proved that the defendants executed the sale agreement as per Ex.P1. The plaintiff paid a sum of Rs.1,00,000/- to the defendants, towards the advance sale consideration amount, and also proved that the plaintiffs by issuing legal notice to the defendants demonstrated that, the plaintiff was/is always ready and willing to perform his part of a contract. 20. Though, the defendants have taken a defence that it is a loan transaction, not a sale transaction, Sections 91 and 92 of the Indian Evidence Act, 1872 reads as follows: - 21 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 91. Evidence of terms of contracts, grants and other dispositions of property reduced to form of documents. - When the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence³ shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained. Exception 1.- When a public officer is required by law to be appointed in writing, and when it is shown that any particular person has acted as such officer, the writing by which he is appointed need not be proved. Exception 2. Wills [admitted to probate in [India]] may be proved by the probate. Explanation 1-This section applies equally to cases in which the contracts, grants or dispositions of property referred to are contained in one document, and to cases in which they are contained in more documents than one. Explanation. 2. Where there are more originals than one, one original only need be proved. Explanation 3. The statement, in any document whatever, of a fact other than the - 22 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 facts referred to in this section, shall not preclude the admission of oral evidence as to the same fact.) 92. Exclusion of evidence of oral agreement. - When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms: Proviso (1). Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto, such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, [want or failure] of consideration, or mistake in fact or law: Proviso (2). The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document: Proviso (3). The existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved: - 23 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 Proviso (4). The existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be moved, except in cases in which such contract, grant or disposition of property s by law required to be in writing, or has been registered according to the law inforce for the time being as to the registration of documents: Proviso (5)-Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, may be proved: Provided that the annexing of such incident would not be repugnant to, or monsistent with, the exp express terms of the contract: Proviso (6)-Any fact may be proved which shows in what manner the language of a document is related to existing facts. 21. Section 91 mandates the production of the original document when the terms of a transaction have been reduced to writing. While Section 92 prohibits the admission of oral evidence to contradict, vary or add to the terms of a document once it has been proved under Section 91. - 24 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 22. Admittedly, Ex.P1 is the registered instrument executed by the defendant in favour of the plaintiff. The defence taken by the defendant that it is a loan and not a sale is not tenable and is barred under Sections 91 and 92 of Indian Evidence Act, 1872. The oral evidence of DW1 and DW2 to prove to contrary cannot be accepted. A written document can’t be countenanced by way of oral evidence. 23. The Trial Court was justified in decreeing the suit for the specific performance of the Contract. The first appellate Court, except extracting the depositions of the witnesses, has reversed and modified the judgment and decree passed by the trial Court. 24. The First Appellate Court has not assigned any reasons for reversing and modifying the judgment and decree passed by the Trial Court. Further, the first appellate Court has not recorded its findings that the transaction between the plaintiff and defendant was a loan transaction, but not a sale transaction. Without recording - 25 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 any of its finding, the first appellate Court, has reversed the judgment and decree passed by the Trial Court. The judgment and decree passed by the first appellate Court is without the application of mind. Thus, the judgment and decree passed by the First appellate Court is arbitrary, and erroneous and the same is liable to be set aside. 25. In view of the above discussions, I answer substantial questions of law in the affirmative. 26. Accordingly, I proceed to pass the following order. ORDER 1. The appeal is allowed. 2. The judgment and decree passed by the First Appellate Court in R.A.NO.50/2015 dated 21.04.2016 passed by the first Additional District and Sessions Judge, Chitradurga, is set aside. 3. After disposal of the appeal, learned counsel for the plaintiff submits that the plaintiff will restrict his claim - 26 - NC: 2025:KHC:12538 RSA No. 1273 of 2016 only to the extent of 13 acres, and the judgment and decree passed by the trial Court may be modified. 4. The submission is placed on record. 5. The Judgment and decree passed by the Trial Court is modified. 6. The Defendants are directed to execute a registered sale deed regarding the suit schedule property to the extent of 13 acres, by receiving the balance sale consideration amount of Rs.6,50,000/-, in favour of the plaintiff within 3 months from the date of receipt of copy of this order. 7. The rest of the judgment passed by the Trial Court is maintained. 8. No order as to the costs. Sd/- (ASHOK S.KINAGI) JUDGE RCK, List No.: 1 Sl No.: 5