- 1 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 10TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR REGULAR FIRST APPEAL NO.100171 OF 2021 (SP) C/W REGULAR FIRST APPEAL NO.100332 OF 2022 (SP) IN RFA NO. 100171 OF 2021: BETWEEN: SRI. NAGARAJ S/O. GURAPPA YALABURGI, AGE: 52 YEARS, OCC: AGRICULTURE, R/O: HOMBAL VILLAGE, TQ: AND DIST: GADAG, PIN-582 102. … APPELLANT (BY SRI. DINESH M. KULKARNI, ADVOCATE) AND: 1. SMT. VEERAVVA W/O CHANNAVEERAPPA DADDUR, AGE: 67 YEARS, OCC: HOUSEHOLD, R/O: HOMBAL VILLAGE, TQ: AND DIST: GADAG, PIN-582 102. 2. SRI. BASAVARAJ S/O CHANNAVEERAPPA DADDUR, AGE: 47 YEARS, OCC: AGRICULTURE, R/O: HOMBAL VILLAGE, TQ: AND DIST: GADAG, PIN-582 102. 3. SMT. RATNAVVA W/O MALLIKARJUN HUDAKAR, AGE: 42 YEARS, OCC: HOUSEHOLD, R/O: HOMBALA VILLAGE, TQ: AND DIST: GADAG, PIN-582 102. … RESPONDENTS (BY SRI. MALLIKARJUNASWAMY B. HIREMATH, ADVOCATE) Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION 96 READ WITH ORDER XLI RULE 1 OF CPC., 1908, PRAYING TO SET ASIDE THE JUDGMENT DATED 01.03.2021 AND DECREE DATED 08.03.2021 PASSED IN O.S.NO.172/2019 ON THE FILE OF THE ADDITIONAL SENIOR CIVIL JUDGE, GADAG. IN RFA NO.100332 OF 2022: BETWEEN: SRI. BASAVANNEVVA D/O GURAPPA YALABURGI, AGE: 42 YEARS, OCC: PVT. JOB, R/O: HOMBAL VILLAGE, TQ: AND DIST: GADAG, PIN-582 102. … APPELLANT (BY SRI. DINESH M. KULKARNI, ADVOCATE) AND: 1. SMT. VEERAVVA W/O CHANNAVEERAPPA DADDUR, AGE: 67 YEARS, OCC: HOUSEHOLD, R/O: HOMBAL VILLAGE, TQ: AND DIST: GADAG, PIN-582 102. 2. SRI. BASAVARAJ S/O CHANNAVEERAPPA DADDUR, AGE: 47 YEARS, OCC: AGRICULTURE, R/O: HOMBAL VILLAGE, TQ: AND DIST: GADAG, PIN-582 102. 3. SMT. RATNAVVA W/O MALLIKARJUN HUDAKAR, AGE: 42 YEARS, OCC: HOUSEHOLD, R/O: HOMBALA VILLAGE, TQ: AND DIST: GADAG, PIN-582 102. … RESPONDENTS (R1 TO R3-SERVED AND UNREPRESENTED) THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION 96 READ WITH ORDER XLI RULE 1 OF CPC., 1908, PRAYING TO SET ASIDE THE JUDGMENT DATED 01.03.2021 AND DECREE DATED 12.03.2021 PASSED IN O.S.NO.174/2019 ON THE FILE OF THE ADDITIONAL SENIOR CIVIL JUDGE, GADAG. THESE APPEALS, COMING ON FOR ADMISSION THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 ORAL JUDGMENT (PER: THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR) Both these appeals are filed by the plaintiffs questioning the judgment & decree passed in OS Nos.172/2019 and 174/2019, dated 1.3.2021, by the learned Addl. Senior Civil Judge, Gadag1, thereby, suits filed by the plaintiffs for specific performance of contract are dismissed, even without giving alternate relief of refund of the earnest amount to the plaintiffs. 2. For the sake of convenience and easy reference, the parties are referred to as per their rankings before the Trial Court. 3. The facts in RFA No.100171/2021: the defendants are the owners and in possession of the suit schedule land. As the defendants were in need of money, they approached the plaintiff for selling the suit schedule land to the plaintiff. Accordingly, an agreement of sale was executed on 26.12.2017 for sale consideration of Rs.4 lakh per acre for total extent of 3 acres of agricultural land i.e. for total sale 1 Hereinafter referred to as ‘trial Court’ - 4 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 consideration of Rs.12 lakhs, and they received the earnest amount of Rs.3,50,000/- from the plaintiff. 4. The facts in RFA No.100332/2022: the defendants are the owners and in possession of the suit schedule land. As the defendants were in need of money, they approached the plaintiff for selling the suit schedule land to the plaintiff. Accordingly, an agreement of sale was executed on 26.12.2017 for sale consideration of Rs.4 lakh per acre for total extent of 3 acres of agricultural land i.e. for total sale consideration of Rs.12 lakhs, and they received the earnest money of Rs.10 lakhs. 5. Thereafter, the plaintiffs called upon the defendants to execute the sale deed by issuing legal notice dated 7.5.2019, but the defendants did not turn up to execute the registered sale deed in favour of the plaintiffs. Therefore, the plaintiffs were constrained to file the above two suits for specific performance of the contract. The defendants remained absent inspite of service of notice on - 5 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 them. Therefore, they placed exparte. The trial Court has framed following points for consideration in both suits: a) Whether the plaintiff has made out sufficient grounds to entitle for relief as claimed in plaint? b) What order or Decree? 6. In both the suits, the plaintiff examined himself as PW1 and other two witnesses as PW2 and PW3. The trial Court dismissed the suit filed for specific performance of the contract on the reason that there is no proof of identification of witnesses PW2 and PW3, who were stated to be the attesting witnesses to the agreement of sale. Therefore, disbelieving the case of the plaintiffs, the trial Court dismissed the suits filed for specific performance of the contract. Aggrieved by the same, the plaintiffs have preferred these appeals. 7. Learned counsel for the appellants/plaintiffs submitted that the trial Court committed an error in disbelieving the evidence of PW2 and PW3. He submitted that the agreement of sale were proved to have been - 6 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 executed by the plaintiffs and the defendants, and the plaintiffs have paid substantial part amount to the defendants. Further, the agreement of sale is proved by the witnesses i.e., PW2 and PW3, who were attesting witnesses to the said agreement of sale. In the absence of rebuttal evidence by the defendants, the trial Court committed an error in dismissing the suits. Thus, prays to grant decree for specific performance of contract by allowing the above appeals. 8. On the other hand, learned counsel for the respondents/defendants submitted that the trial Court is correct in disbelieving the evidence of PW2 and PW3 that they have not proved the identification that they are signatories to the agreement of sale as witnesses. When PW2 and PW3 have not proved the identification for having signed the agreement of sale as attesting witnesses, the agreement of sale itself is doubtful. Therefore, the trial Court has rightly dismissed the suits. Thus, he prays to confirm the judgment and decree of the trial Court. - 7 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 9. Upon hearing both sides, the following points would arise for my consideration in these appeals: i. Whether, in the facts and circumstances of the case involved, the plaintiffs are entitled to decree for specific performance of contract as per Section 20 of the Specific Relief Act, 19632? ii. Whether the impugned judgment and decree passed by the trial Court needs interference by this Court? 10. Upon considering the reasons assigned by the trial Court, the trial Court has disbelieved the evidence of PW2 and PW3 on the reason that they have not produced any document to show that they are Basavaraj Hunasikatti & Smt. Renuka @ Renavva w/o Sharanappa Yarageri. Therefore, on the question of identification of these PW2 and PW3, the trial Court dismissed the suits. Upon considering the evidence of PW2 and PW3, they have stated that they have affixed their signature on the agreement of sale dated 26.12.2017. Upon considering the evidence of PW2 and 2 ‘Hereinafter referred to as ‘Act, 1963’ - 8 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 PW3, there is no reason that PW2 and PW3 have impersonated. The trial Court ought to have assigned substantial reason in disbelieving the evidence of PW2 and PW3, as to how they are to be disbelieved. Mere identification of proof is not produced, that itself is not sufficient to say that they are not identified. Ex.P1 is the original agreement of sale in both cases. The defendants have not appeared before the trial Court nor filed their written statement. There is no denial by the defendants of the plaintiffs’ case. Therefore, the agreement of sale dated 26.12.2017 is proved to have been executed. 11. Though the agreement of sale is proved to have been executed, but still discretion lies with the Court whether to grant decree or not for specific performance of contract as per Section 20 of the Act, 1963 (before Amendment Act of 2018). The Hon’ble Supreme Court in the following decisions has categorically held that even the agreement of sale is proved and granted decree in lawful suit, but still the Court has discretion whether to grant decree or not for specific performance of contract. - 9 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 i) Jayakantham & Others Vs. Abaykumar3; ii) Shama Naik Vs. G Srinivasaiah4; iii) Zarina Siddiqui Vs. Ramalingam Alias R. Amaranathan5; iv) Tek Chand & Others Vs. Deep Chand & Others6; and v) Vijay A. Mittal & Others Vs. Kulwant Rai (dead) through LRs & Another. 12. In this regard, the suit schedule land, which is an agricultural land, is the only source of livelihood of the defendants, as submitted by the learned counsel for the respondents/defendants. Upon believing the fact that if the suit schedule land is only source of livelihood for the defendants and if, on the guise of the decree, the schedule land is sold to the plaintiffs, then it would be an unfair advantage over the defendants by the plaintiffs. Therefore, the Court in its discretion, decree for specific performance cannot be granted. In this regard, the trial Court is correct in not granting decree for specific performance of the contract. 3 (2017) 5 SCC 178 4 2024 SCC Online 3586 5 (2015) 1 SCC 705 6 (2001) 4 SCC 488 - 10 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 13. However, the trial Court committed an error in not decreeing the suit for refund of the earnest amount to the plaintiffs. The plaintiffs have prayed an alternate relief for grant of refund of earnest amount in the plaint. When execution of agreement of sale is proved and in the plaint, the plaintiffs have made prayer for refund of earnest amount, then the trial Court ought to have considered for refund of earnest amount to the plaintiffs. Therefore, the plaintiffs are entitled for refund of earnest amount with interest at the rate of 12% per annum from the date of agreement of sale i.e., 26.12.2017 till realization. To this extent, both appeals are liable to be allowed. Accordingly, I answer Point No.i in the “partly affirmative” holding that the plaintiffs are entitled for refund of earnest amount with interest as stated above. Hence, Point No.ii is answered “partly affirmative” in the above terms. 14. For the foregoing reasons, I proceed to pass the following: - 11 - HC-KAR NC: 2025:KHC-D:7487 RFA No. 100171 of 2021 C/W RFA No. 100332 of 2022 ORDER a) Both appeals are allowed in part with costs. b) The judgment and decree dated 1.3.2021 passed in OS Nos.172/2019 and 174/2019 are hereby set-aside. Consequently, both the suits are partly decreed insofar as refund of earnest money is concerned. c) The defendants shall deposit the earnest money along with interest as stated above before the trial Court within a period of three months from today and Court fee paid by plaintiff in the suit and in appeal. d) Further, the plaintiffs in both the cases are entitled to recover the Court fee paid in both the suits as well as in these appeals, from the defendants. e) Draw decree accordingly. f) Registry to send a copy of this judgment to the trial Court along with TCR forthwith. Sd/- (HANCHATE SANJEEVKUMAR) JUDGE JTR CT:BCK LIST NO.: 1 SL NO.: 22