- 1 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 8TH DAY OF JANUARY 2025 PRESENT THE HON'BLE MR. JUSTICE ASHOK S. KINAGI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA REGULAR FIRST APPEAL NO. 100075 OF 2019 (SP) BETWEEN: SRI. RAGHAVENDRA S/O VISHNU GUJAMAGADI AGE: 39 YEARS, OCC: AGRICULTURE, R/O: NARGUND, DIST: GADAG-582207. …APPELLANT (BY SRI. S M KALWAD, ADV FOR APPELLANT) AND: SRI. GOVINDAGOUDA S/O BASANAGOUDA DODDAHANAMANTHGOUDAR AGE: 44 YEARS, OCC: AGRICULTURE, R/O: HIREKOPPA, Q: NARAGUND, DIST: GADAG-582207. …RESPONDENT (BY SRI. JAGADISH PATIL, ADV FOR SOLE RESPONDENT) RFA FILED UNDER SEC. 96 READ WITH ORDER 41 RULE 1 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 06.10.2018 PASSED IN O.S.NO.76/2016 ON THE FILE OF THE ADDITIONAL SENOR CIVIL JUDGE, GADAG, PARTLY DECREEING THE SUIT FILED FOR SPECIFIC PERFORMANCE OF CONTRACT. THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: Digitally signed by MOHANKUMAR B SHELAR Location: High Court of Karnataka, Dharwad Bench - 2 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 CORAM: THE HON'BLE MR. JUSTICE ASHOK S. KINAGI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE ASHOK S. KINAGI) This regular first appeal is filed challenging the judgment and decree dated 06.10.2018 passed in O.S.No.76/2016 by the learned Additional Senior Civil Judge, Gadag. 2. For convenience, the parties are referred to, as per their ranking before the trial court. The appellant was the plaintiff and the respondent was the defendant. 3. Brief facts leading rise to the filing of this regular first appeal are as under: The plaintiff filed the suit against the defendant for the relief of specific performance of the contract. It is the case of the plaintiff that the defendant is the absolute owner of the suit schedule property and agreed to sell the suit schedule property for his legal and family necessity and executed a registered agreement for sale dated 20.06.2014 for valuable consideration of Rs.16,00,000/-. - 3 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 Out of which, a sum of Rs.14,50,000/- was paid by the plaintiff to the defendant as an advance sale consideration amount and agreed that, the balance consideration amount to be paid at the time of registration of the sale deed. It was agreed that the plaintiff would bear the registration expenses and if there is any loan on the suit land, the defendant should clear the debt on the said land. The plaintiff requested the defendant to receive the balance sale consideration amount and execute a registered sale deed, but the defendant failed to receive the balance consideration amount and execute the registered sale deed. Hence, a cause of action arose for the plaintiff to file the suit for the relief of specific performance of the contract. Accordingly, pray to decree the suit. 4. The defendant filed a written statement denying the averments made in the plaint and also denied execution of the agreement of sale in favour of the plaintiff and receiving advance sale consideration amount. It is - 4 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 stated that, the plaintiff is doing money lending business and the plaintiff had created the alleged sale agreement. It is stated that, one Laxman Reddy is the resident of the same village i.e., Hirekoppa wherein, the defendant is residing. There was a monetary transaction between the plaintiff and the said Laxman Reddy. The plaintiff demanded the said Laxman Reddy to give one document as a security to the said monetary transaction. Laxman Reddy being the close friend of the defendant has requested him to give security for the said monetary transaction of the plaintiff and Laxman Reddy. The defendant agreed to do so. It is contended that, no sale transaction is entered into between him and the plaintiff. The plaintiff is doing money lending business without having any valid licence. Hence, pray to dismiss the suit. 5. The trial court, based on the pleadings of the parties, framed the following issues: 1. Whether the plaintiff proves that the defendant is the owner in possession of the - 5 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 suit land and agreed to sell the suit land to him for Rs.16,00,000/- and received Rs.14,50,000/- as advanced money and executed agreement of sale on 20.06.2014? 2. Whether the plaintiff further proves that he is ready and willing to perform his part of contract? 3. Whether the defendant proves that the sale agreement is created one as contended in para No.17 of his written statement? 4. Whether the plaintiff is entitled for the relief of as sought for? 5. What order or decree? 6. The plaintiff, to substantiate his case, examined himself as P.W.1, examined two witnesses as P.Ws.2 and 3 and got marked 2 documents as Exs.P1 and P2. In rebuttal, the defendant examined himself as D.W.1, one witness was examined as D.W.2 and no documents were produced. The trial court, after recording the evidence, hearing on both sides and on assessment of oral and documentary evidence, answered issue No.1 in the - 6 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 affirmative, issue Nos.2 and 3 in the negative, issue No.4 partly in the affirmative and issue No.5 as per the final order and the suit of the plaintiff was partly decreed with costs. It is held that, the plaintiff is entitled for refund of Rs.14,50,000/- from the defendant with interest at the rate of 9% p.a. from the date of the suit till its realization. The suit of the plaintiff for the relief of specific performance of the contract was dismissed. The plaintiff aggrieved by the dismissal of the suit for specific performance of contract, filed this regular first appeal. 7. Heard the learned counsel for the plaintiff and the learned counsel for the defendant. 8. Learned counsel for the plaintiff submits that, defendant has agreed to sell the suit schedule property and executed a registered agreement of sale in favour of the plaintiff and received Rs.14,50,000/- as advance sale consideration amount. He submits that, the plaintiff has pleaded that, he was/is ready and willing to perform his part of the contract, but on the contrary, the defendant - 7 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 failed to perform his part of the contract. There is a breach of contract on the part of the defendant. He also submits that, once the agreement is proved, the trial court is required to pass decree for specific performance of contract. Hence, on these grounds, he submits that, the judgment and decree passed by the trial court is perverse and arbitrary and prays to allow the appeal. 9. To buttress his arguments, he placed reliance on the following judgments. i) Aniglase Yohannan vs Ramlatha and Others reported in (2005) 7 SCC 534. ii) K.Prakash vs B.R.Sampath Kumar reported in 2015 SAR (Civil) 82. iii) A Maria Angelena (dead) and Others vs A.G.Balkis Bee reported in (2002) 9 SCC 597. - 8 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 10. Per contra, learned counsel for the defendant submits that, the plaintiff has failed to establish that, he was/is ready and willing to perform his part of the contract. He submits that, the plaintiff has not complied with the requirement of Section 16(c) of the Specific Relief Act. He submits that the trial court has rightly exercised discretion under Section 20 of the Specific Relief Act and the judgment and decree passed by the trial court is just and proper and does not call for any interference by this court. Hence, on these grounds, he prays to dismiss the appeal. 11. Perused the records and considered the submission of the learned counsel for the parties. The points that would arise for our consideration are; 1) Whether the plaintiff proves that he was/is ready and willing to perform his part of contract? 2) Whether the plaintiff proves that judgment and decree passed by the trial court is perverse and arbitrary? - 9 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 3) What order or decree? Point No.1. 12. It is the case of the plaintiff that, the defendant is the absolute owner of the suit schedule property. He agreed to sell the suit schedule property for valuable consideration of Rs.16,00,000/- and paid advance consideration amount of Rs.14,50,000/- to the defendant. After receiving the advance sale consideration amount, the defendant executed the registered agreement of sale dated 20.06.2014 and it was agreed that, balance sale consideration amount to be paid at the time of registration of the sale deed. The plaintiff was/is ready and willing to perform his part of the contract. The plaintiff, to substantiate his case, examined himself as P.W.1. He reiterated the plaint averments in his examination-in-chief. To prove that, the defendant is the absolute owner of the suit schedule property, produced Ex.P1-RTC extract, which discloses that, the defendant is the absolute owner of the suit schedule property. Ex.P2 is the registered agreement - 10 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 of sale, which discloses that, the defendant had executed a agreement of sale in favour of the plaintiff agreeing to sell the suit schedule property for consideration of Rs.16,00,000/- and the plaintiff has paid a sum of Rs.14,50,000/- to the defendant on the date of execution of the agreement of sale. It was agreed that, the balance consideration amount to be paid at the time of registration of the sale deed. P.W.1 has deposed that, he requested the defendant to receive the balance consideration amount and execute the registered sale deed. But, the defendant did not receive the balance consideration amount and execute the sale deed. Further, the plaintiff also examined attesting witness and scribe as P.Ws.2 and 3, who have deposed that, defendant agreed to sell the suit schedule property for valuable consideration of Rs.16,00,000/- and the plaintiff has paid a sum of Rs.14,50,000/- to the defendant as an advance sale consideration amount and the defendant has executed the registered agreement of sale as per Ex.P2. The signatures of P.Ws.2 and 3 are marked as Ex.P2(c) and P2(e) respectively. During the - 11 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 course of cross-examination of P.Ws.1 to 3, the defendant except suggesting that, there was a transaction between the plaintiff and D.W.2, there is no privity of contract between plaintiff and the defendant. The said suggestion was denied by P.Ws.1 to 3. 13. In rebuttal, the defendant examined himself as D.W.1. He reiterated the written statement averments in his examination-in-chief. He deposed that, the plaintiff is doing money lending business without any valid licence. He deposed that, there was a transaction between the plaintiff and Laxman Reddy i.e., D.W.2 and the plaintiff insisted Laxman Reddy to execute the security. The said Laxman Reddy requested the defendant to give security. Hence, the defendant had executed Ex.P2-agreement of sale as security to the loan obtained by Laxman Reddy. He further deposed that, plaintiff has never performed his part of the contract. 14. Further, the defendant has also examined one witness as D.W.2, who has deposed that, there was a - 12 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 transaction between the plaintiff and the Laxman Reddy and at the request of D.W.2, the defendant executed the agreement of sale as security for the transaction entered into between the plaintiff and D.W.2. D.W.2 was cross- examined at length. 15. From the perusal of the evidence of P.Ws.1 to 3 and D.Ws.1 and 2, it is clear that, the defendant is the absolute owner of the suit schedule property and the defendant agreed to sell the suit schedule property for valuable consideration of Rs.16,00,000/- and the plaintiff paid Rs.14,50,000/- as an advance consideration amount to the defendant and the defendant executed registered agreement of sale in favour of the plaintiff. It is presumed that the transaction is genuine and binding on the parties. From the perusal of Ex.P2, the time was not the essence of the contract. The agreement of sale was executed on 20.06.2014 and the plaintiff has filed the suit on 20.04.2016. The plaintiff has not issued a legal notice to the defendant expressing his intention that, he was/is - 13 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 ready and willing to perform his part of the contract. Directly, without issuing a notice to the defendant, the plaintiff had filed the suit for specific performance of the contract. Though, the plaintiff has pleaded that, he was/is ready and willing to perform his part of the contract, but the plaintiff prior to the filing of the suit, has not shown his willingness that he was ready and willing to perform his part of the contract. Both readiness and willingness are the essential ingredients for claiming the relief of specific performance of the contract. While readiness means the capacity of the plaintiff to perform the contract which would include his financial position, willingness relates to the conduct of the plaintiff. It was also noticed that, the plaintiff has not produced any records to establish that, he was having stable financial position to pay the balance consideration amount. 16. The Hon’ble Apex Court in the case of the R. Shama Naik v. G. Srinivasiah [Neutral Citation: 2024 INSC 927] held that, while readiness means the capacity - 14 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 of the plaintiff to perform the contract which would include his financial position, willingness relates to the conduct of the plaintiff. In the instant case, the plaintiff has failed to perform his part of the contract. The decisions relied upon by the plaintiff are not applicable to the case on hand. We have perused the citations. In the cases, the plaintiff issued a legal notice expressing his readiness and willingness to perform a contract. Admittedly, in the instant case, the plaintiff has not issued a legal notice to establish his readiness and willingness. 17. Further, the learned counsel for the plaintiff submits that, the plaintiff has deposited balance sale consideration amount as per the order passed by the trial court on I.A.No.5. The trial court has recorded a finding that, the said application was filed, when the learned counsel for the defendant has advanced his final arguments. The trial court considering that the plaintiff has failed to establish that he was/is ready and willing to perform his part of the contract, has rightly answered - 15 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 issue No.2 in the negative. In view of the above discussion, we answer point No.1 in the negative. Point No.2. 18. The trial court, on the basis of the evidence on record, has recorded a finding that the plaintiff was not ready and willing to perform his part of the contract and the plaintiff has not issued the notice prior to the filing of the suit and recorded a finding that, there arises a serious doubt in the mind of the court regarding alleged readiness and willingness to perform his part of the contract. Just because, merely the plaintiff has proved execution of the registered agreement of sale, is not a ground to grant the relief of specific performance of the contract. It is the discretion of the court under Section 20 of the Specific Relief Act. The trial court has exercised its discretion under Section 20 of the Specific Relief Act and has rightly granted alternative relief of refund of the amount. In view of the above discussion, we answer point No.2 in the negative. - 16 - NC: 2025:KHC-D:274-DB RFA No. 100075 of 2019 Point No.3. 19. In view of the above discussion, we proceed to pass the following; ORDER The Regular Fist Appeal is dismissed. The judgment and decree dated 06.10.2018 passed in O.S.No.76/2016 by the learned Additional Senior Civil Judge, Gadag is hereby confirmed. No order as to the cost. Sd/- (ASHOK S. KINAGI) JUDGE Sd/- (UMESH M ADIGA) JUDGE MBS CT: BSB List No.: 1 Sl No.: 10