- 1 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 25TH DAY OF MARCH, 2025 PRESENT THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM AND THE HON'BLE MR. JUSTICE G BASAVARAJA REGULAR FIRST APPEAL NO. 100151 OF 2020 (SP) BETWEEN: SHRI. BABASO ASWALE S/O. BHAU ASWALE AGE: 50 YEARS, OCC: AGRICULTURE, R/O: AKKOL-591211, TQ: CHIKODI, DIST: BELAGAVI. …APPELLANT (BY SRI. CHETAN MUNNOLLI, ADVOCATE) AND: SHRI. SARVAJEET S/O. VIJAY HUDDAR AGE: 41 YEARS, OCC: AGRICULTURE AND BUSINESS, R/O. AKKOL-591211, TQ: CHIKODI, DIST: BELAGAVI. …RESPONDENT (BY SRI. NEELENDRA D.GUNDE, ADVOCATE) THIS RFA IS FILED UNDER SEC. 96 OF C.P.C., AGAINST THE JUDGMENT AND DECREE DATED 29.11.2019 PASSED IN O.S.NO.96/2017 (OLD O.S.NO.72/2014) ON THE FILE OF THE SENIOR CIVIL JUDGE AND JUDICIAL MAGISTRATE FIRST CLASS, NIPANI, DECREEING THE SUIT FILED FOR SPECIFIC PERFORMANCE OF CONTRACT. THIS APPEAL COMING ON FOR FINAL HEARING THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM AND THE HON'BLE MR. JUSTICE G BASAVARAJA Digitally signed by MOHANKUMAR B SHELAR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2025.04.22 10:46:31 +0530 - 2 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM) The captioned appeal is by the defendant who is questioning the decree for specific performance granted by the trial Court in O.S.No.72/2014. 2. For the sake of convenience the parties are referred to as per their rank before the trial Court. 3. The facts leading to the case are as under: The subject matter of the present suit revolves around an agreement of sale executed between the plaintiff and the defendant concerning an agricultural land bearing Survey No.156/3, measuring a total of 4.28 acres. Out of this total extent, a portion measuring 1 acre 30 guntas 08 anna was agreed to be sold under the agreement dated 30.08.2013 for a total sale consideration of Rs.41,90,000/-. The plaintiff, relying upon the said agreement, has instituted the present suit seeking specific performance of the contract. The plaintiff contends that the defendant, due to legal necessity, offered to sell the - 3 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 suit property, and pursuant to such an understanding, the agreement of sale was executed on 30.08.2013. As per the terms of the agreement, the defendant received an earnest amount of Rs.10,00,000/- from the plaintiff. Further, the plaintiff has specifically averred that the defendant had agreed to conclude the sale transaction and execute the registered sale deed on or before 28.02.2014. However, despite repeated requests and readiness on the part of the plaintiff to fulfill his obligations under the agreement, the defendant allegedly failed to perform his part of the contract. Consequently, the plaintiff issued a legal notice to the defendant, but upon receiving no response, he was constrained to institute the present suit seeking the relief of specific performance of the contract. 4. Upon being served with the summons of the suit, the defendant entered an appearance and filed a written statement vehemently denying the assertions made by the plaintiff. Although the defendant admitted to the transaction, including the execution of the agreement and - 4 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 receipt of the earnest money of Rs.10,00,000/-, he contended that he was not the absolute owner of the suit property. Instead, he claimed that the property was jointly owned by him along with his wife and children. As such, he argued that he alone could not have entered into an agreement to sell the property without the consent and participation of the other joint owners. Based on this assertion, the defendant contested the maintainability of the suit and sought its dismissal. 5. In order to substantiate their respective claims, both the plaintiff and the defendant led oral as well as documentary evidence before the trial court. The plaintiff examined himself as P.W.1 and relied upon a total of ten documents, which were marked as Exhibits P1 to P10. On the other hand, the defendant examined himself as D.W.1 and placed reliance on a copy of the plaint filed in O.S. No. 50/2013 to support his contention. 6. Upon a thorough appreciation of the evidence placed on record by both parties, the trial court - 5 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 adjudicated the matter and ultimately decreed the suit in favor of the plaintiff. The court directed the defendant to execute and register the sale deed in favor of the plaintiff within a period of three months from the date of the judgment, upon receipt of the balance sale consideration from the plaintiff. Aggrieved by this decision, the defendant has challenged the trial court’s judgment in the present appeal. 7. The learned counsel appearing for the defendant, while conceding that the execution of the agreement of sale and receipt of the earnest money were admitted facts, has contended that the trial court failed to exercise its discretion judiciously in granting the relief of specific performance. He has argued that the grant of such relief is discretionary in nature and should be based on the overall facts and circumstances of the case. He has further contended that the plaintiff failed to adduce sufficient material to prove his readiness and willingness to perform his part of the contract. Apart from making a bald - 6 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 assertion in the legal notice and the plaint, the plaintiff did not produce any cogent evidence to establish his financial capacity to pay the balance sale consideration. In support of his argument, the learned counsel has placed reliance on the judgment rendered by the Hon’ble Supreme Court in the case of Mehaboob Rehman v. [2019 (19) SCC 415], wherein it was held that mere assertion of readiness and willingness is not sufficient and that a plaintiff must substantiate the same through concrete evidence. 8. In contrast, the learned counsel for the plaintiff has countered the submissions made by the defendant and has argued that the defendant has not raised any serious challenge to the validity of the agreement of sale. The primary defense taken by the defendant was that the property in question was joint family ancestral property, and therefore, he alone could not have executed the agreement. However, he has not produced any cogent evidence to substantiate this claim. With respect to the issue of readiness and willingness, the learned counsel for - 7 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 the plaintiff has pointed out that the plaintiff, upon expiry of the stipulated period under the agreement, promptly issued a legal notice to the defendant and thereafter filed the present suit in 2014. The fact that the plaintiff had already paid a substantial earnest amount of Rs.10,00,000/- at the time of execution of the agreement itself demonstrates his financial capacity and readiness to complete the transaction. The learned counsel has further submitted that the plaintiff has been continuously pursuing the litigation since 2014, which is indicative of his bona fide intention to enforce the agreement. 9. In view of the above contentions, the primary question that arises for consideration in the present appeal is whether the trial court rightly exercised its discretion in granting the relief of specific performance in favor of the plaintiff. The court will have to examine whether the plaintiff has adequately established his readiness and willingness to perform his part of the contract and whether - 8 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 any justifiable grounds exist for interfering with the trial court’s judgment. 10. Heard the learned counsel appearing for the defendant and the learned counsel appearing for the plaintiff. 11. The following points would arise for consideration: "(1) Whether trial Court was justified in exercising the judicial discretion in favour of the plaintiff and granting the relief of specific performance of contract? (2) Whether the finding of the trial Court that plaintiff has succeeded in proving his readiness and willingness warrants any interference?" FINDINGS ON POINT No.1: 12. Plaintiff has approached the Court seeking the relief of specific performance of contract based on the agreement of sale dated 30.8.2013. Plaintiff pursuant to agreement has paid a sum of Rs.10,00,000/- way back in - 9 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 2013. The due execution and receipt of earnest money is admitted by the defendant in an unequivocal terms. Before we delve into the matter, we deem it fit to take note of the stand taken by the defendant in the written statement. 13. Para 3 of the written statement would be relevant and the same is culled out as under: "3. The allegations made out in the Plaint Para No.3 that, the defendant is the owner of land measuring 01 As-30Gs.- 08Annas-00Ps. out of land bearing its R.S. No.156/3 totally measuring 04As-28Gs.-00Annas-00Ps. of Akkol Village are absolutely false, malafied and concocted one, as along with defendant there are other co-owners namely 1) Miss. Tejaswani D/o Babaso Aswale, 2) Master Sourabh S/o Babaso Aswale, 3) Kumari. Radhika D/o Babaso Aswale and 4) Sou. Vaishali W/o Babaso Aswale of Akkol and the said fact brought to the notice of the plaintiff by legal reply given to the notice issued by the plaintiff. The further allegations made out in the same Para that, the defendant has offered to sell the suit lands to meet out his family and legal necessities and to pay the debts are absolutely false, malafied and concocted and illegal one and as such this defendant denied the same specifically and as such the plaintiff be put to strict proof of the same. In fact, it is submitted here that, after the talks were held in between the plaintiff and defendant, the defendant told to the plaintiff that, he will ask his family members who are also co- owners of the suit land and thereafter the transaction will be settled and fixed, but as the plaintiff had insisted to the - 10 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 defendant that, let the first agreement be executed and thereafter let the defendant asked his family members. The further allegations made out in the said Para that, the plaintiff has expressed his desire to purchase the suit land and after negotiations finally offered Rs.41,90,000-00 (Rs. Forty one Lakhs ninety thousand only) was made by the plaintiff which was proper consideration for the sale of suit land as per the existing market value and that, thereby the defendant has executed a agreement of sale with respect to the suit land in favour of the plaintiff on 30-08-2013 after receiving earnest money Rs.10,00,000-00 (Rs. Ten Lakhs only) from the plaintiff out of total sale consideration of Rs.41,90,000-00 (Rs. Forty one Lakhs ninety thousand only) are absolutely false, malafied and concocted one and illegal one and as such this defendant denied the same specifically and as such the plaintiff be put to strict proof of the same. In fact, as stated above, the defendant has executed the agreement of sale as alleged in notice on 30-08-2013 and he has received an amount of Rs. 10,00,000-00 as earnest amount towards part performance of contract and executed the said alleged agreement of sale by stating that, he will get confirmation from his family members who are also legally co-owners of the suit land and if they consented for the said sale transaction, then the sale deed is to be executed, otherwise the said transaction will be cancelled and the amount of Rs. 10,00,000=00 will be returned to the plaintiff and accordingly the defendant went to his house for asking the consent of his family members for the said sale transaction for which the other co-owners have not agreed for the same, hence, very soon, the defendant came back to the house of the plaintiff and told him take the earnest amount of Rs. 10,00,000=00 and cancelled the sale transaction, but the - 11 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 plaintiff under one pretext to other postponed the same by saying that, it will be cancelled very soon, and as such believing in the words of the plaintiff, the defendant kept mum and thereafter got surprised when he received the legal notice from the plaintiff to which the defendant has replied very suitably in the above stated things. Hence, the suit of the plaintiff is fatal for non-joinder of necessary parties to the suit, as there are other co-owners of the suit land as stated above and as such unless, the plaintiff joined the other co-owners, the suit of the plaintiff is deserves to be dismissed and be dismissed with costs. (Emphasis supplied by me) 14. The plaintiff, apart from producing the suit agreement as primary evidence, has also furnished several crucial documents that shed light on the defendant’s conduct in the present case. One such document is the certified copy of a sale deed, which has been marked as Ex.P8. The plaintiff has relied upon this document to establish that the defendant, under compelling financial and legal necessities, has sold portions of the joint family ancestral property. The contents of Ex.P8 explicitly indicate that the defendant, in the past, has executed a sale deed for a portion of the ancestral property due to pressing financial circumstances. Similarly, the plaintiff - 12 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 has also presented another sale deed, marked as Ex.P9, which pertains to the sale of a residential property bearing VPC No. 624/2 by the defendant. This further corroborates the plaintiff’s assertion that the defendant has been consistently alienating portions of his ancestral and family- owned properties to address financial constraints. Additionally, during the course of cross-examination, the plaintiff extensively questioned the defendant to demonstrate that the defendant was compelled by financial exigencies to engage in these alienations. Another critical aspect elicited during the cross- examination was the fact that the defendant has chosen not to contest the partition suit filed by his wife and children, which is pending adjudication in O.S.No.50/2013. This lack of contest further strengthens the plaintiff’s case that the defendant has been divesting ancestral properties due to financial distress, thereby reinforcing the argument that the agreement to sell in question was also executed under similar compulsions. - 13 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 15. In light of the aforementioned significant details, the court is now called upon to assess the equities involved in this case and determine whether the plaintiff has made out a compelling case warranting the exercise of judicial discretion in his favor. The evidentiary record overwhelmingly suggests that the defendant has alienated nearly every portion of his ancestral property due to financial necessity. The fact that the defendant’s wife and children have initiated a partition suit further underscores the defendant’s financial distress and conduct in multiple transactions beyond the scope of the present suit. The defendant’s recurring practice of selling off property assets at various stages, seemingly as a means to alleviate financial difficulties and domestic pressures, indicates that the agreement in question was executed under similar circumstances. Moreover, the plaintiff’s payment of Rs.10,00,000/- as earnest money way back in 2013 is a fact that cannot be ignored. This was a substantial investment at that time, made by the plaintiff with the expectation of acquiring a valuable agricultural property. - 14 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 Any indulgence in favor of the defendant at this stage would not only cause grave prejudice to the plaintiff but would also diminish the monetary value of his investment from 2013, thereby significantly impairing his prospects of acquiring agricultural land under the agreed terms. Given these considerations, the balance of equities leans heavily in favor of the plaintiff, who has demonstrated his commitment to the transaction through both financial investment and persistent litigation efforts. 16. Therefore, in view of the cumulative findings and supporting evidence, the court is of the considered opinion that the plaintiff is entitled to the discretionary relief of specific performance. The equities of the case strongly favor the plaintiff, who had invested a significant sum of Rs.10,00,000/- as far back as 2013. The fact that possession was not transferred to the plaintiff further strengthens his case, as the defendant has not only retained possession of the property but has also continued to derive usufructuary benefits from the agricultural land, - 15 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 despite having received a substantial sum in earnest money. This long-standing financial benefit enjoyed by the defendant, coupled with his repeated alienation of property under financial distress, lends credence to the plaintiff’s claim that the suit agreement was executed in good faith and with the genuine intention of completing the sale transaction. Accordingly, the first point for determination is answered in the affirmative, affirming the plaintiff’s entitlement to the relief sought. 17. The defendant has attempted to challenge the procedural aspects of the trial proceedings. Specifically, the learned counsel for the defendant has pointed out that the trial court, while entertaining the application filed by the plaintiff, deleted Issue Nos.1 and 2 from the list of framed issues. Issue No.1 was framed to cast the burden on the plaintiff to prove that the defendant had executed an agreement to sell by receiving an earnest amount. Issue No.2 pertained to the proof of payment of Rs.10,00,000/- as earnest money. While it is true that the - 16 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 trial court ought not to have deleted these two crucial issues, upon examining the case records, this court is of the view that no serious prejudice has been caused to the defendant as a result of this procedural lapse. The primary reason for this conclusion is that the defendant has unequivocally admitted, in clear and unambiguous terms, the execution of the agreement to sell and the receipt of Rs.10,00,000/- as earnest money. In light of such an admission, the deletion of these two issues does not materially impact the outcome of the case, as the fundamental facts remain undisputed. Furthermore, if the defendant genuinely believed that the deletion of these issues caused him prejudice, he had the legal recourse to challenge the same at the appropriate stage. However, no such challenge was pursued by the defendant. Given these circumstances, and considering that there exists no dispute regarding the execution of the agreement or the receipt of earnest money, the defendant’s contention regarding procedural irregularities is untenable and is - 17 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 accordingly rejected. Accordingly point no.1 is answered in the affirmative. FINDINGS ON POINT No.2: 18. The defendant has attempted to challenge the procedural aspects of the trial proceedings. Specifically, the learned counsel for the defendant has pointed out that the trial court, while entertaining the application filed by the plaintiff, deleted Issue Nos.1 and 2 from the list of framed issues. Issue No.1 was framed to cast the burden on the plaintiff to prove that the defendant had executed an agreement to sell by receiving an earnest amount. Issue No.2 pertained to the proof of payment of Rs.10,00,000/- as earnest money. While it is true that the trial court ought not to have deleted these two crucial issues, upon examining the case records, this court is of the view that no serious prejudice has been caused to the defendant as a result of this procedural lapse. The primary reason for this conclusion is that the defendant has unequivocally admitted, in clear and unambiguous terms, - 18 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 the execution of the agreement to sell and the receipt of Rs.10,00,000/- as earnest money. In light of such an admission, the deletion of these two issues does not materially impact the outcome of the case, as the fundamental facts remain undisputed. Furthermore, if the defendant genuinely believed that the deletion of these issues caused him prejudice, he had the legal recourse to challenge the same at the appropriate stage. However, no such challenge was pursued by the defendant. Given these circumstances, and considering that there exists no dispute regarding the execution of the agreement or the receipt of earnest money, the defendant’s contention regarding procedural irregularities is untenable and is accordingly rejected. 19. Additionally, the defendant has made a feeble attempt before this court to argue that the plaintiff lacks the financial capacity to conclude the transaction. However, a careful perusal of the written statement reveals that no such contention was raised at any stage of - 19 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 the trial proceedings. It is particularly notable that the defendant, during cross-examination, did not even put forth a single suggestion to the plaintiff regarding any purported lack of financial capability to complete the sale transaction. In the realm of contract law and in particular under the doctrine of specific performance, it is well settled that the burden lies on the plaintiff to demonstrate readiness and willingness to perform his obligations under the contract. However, the law does not mandate that a plaintiff must possess liquid cash or maintain a significant bank balance at every given moment to establish financial readiness. Instead, financial capacity can be assessed through a variety of means, including the plaintiff’s ability to mobilize funds when required, his financial standing, and his conduct in pursuing the transaction in good faith. 20. In the present case, the plaintiff has successfully demonstrated his financial capacity by making an initial earnest money payment of Rs.10,00,000/- at the time of executing the agreement. This substantial payment itself - 20 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 serves as prima facie evidence of the plaintiff’s financial preparedness. Furthermore, the plaintiff’s prompt action in issuing legal notices and promptly initiating legal proceedings further supports his assertion of readiness and willingness. The timeline of events, as gathered from the pleadings and the records, clearly indicates that the plaintiff remained vigilant and consistently expressed his intention to conclude the transaction. In contrast, the defendant’s conduct especially his failure to contest the partition suit filed by his wife and children reveals an effort to evade his contractual obligations under the guise of financial incapacity. This court, upon independent examination and reassessment of the evidence, finds that the plaintiff has successfully met the requirements set forth under Section 16(c) of the Specific Relief Act, which mandates that the party seeking specific performance must demonstrate his continuous readiness and willingness to perform his part of the contract. - 21 - NC: 2025:KHC-D:5507-DB RFA No. 100151 of 2020 21. In view of the foregoing discussion, it is held that the plaintiff has satisfactorily discharged his burden of proof regarding financial capacity and intent to perform the contract. The speculative and belated contention raised by the defendant in this regard is not only unsubstantiated but also contrary to the principles governing specific performance. Accordingly, Point No.2 is answered in the negative, affirming that the plaintiff has fulfilled his obligations under Section 16(c) of the Specific Relief Act and is entitled to the relief sought. 22. In the light of the discussions made supra, we proceed to pass the following: ORDER The appeal is devoid of merits and accordingly, stands dismissed. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE Sd/- (G BASAVARAJA) JUDGE ALB Ct:vh List No.: 1 Sl No.: 32