- 1 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 22ND 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. 100206 OF 2019 (SP) BETWEEN: SRI. BASAVARAJ A/F. SHETTAPPA NALAVADI AGE: 46 YEARS, OCCU:AGRICULTURE, R/O:MULAGUND, TQ: DIST: GADAG, PIN 582117. …APPELLANT (BY SRI. SHARNAPPA S. KOLIWAD, ADVOCATE) AND: J.T.K. ARIHANT APPLIANCES PVT., LTD., J.T.K. TOWER HUBBALLI, REPRESENTED BY ITS MANAGING DIRECTOR SHRI HANUMANCHAND S/O. JETHMAL JAIN AGE:65 YEAJRS, OCCU: AGRICULTURE AND BUSINESS, R/O: CLUB ROAD, HUBBALLI, TQ:HUBBALLI, DIST:DHARWAD, PIN-580032. …RESPONDENT (BY SRI. R.V. ITAGI AND SRI. PRAVEENKUMAR G. KULKARNI, ADVOCATES) THIS RFA IS FILED UNDER SEC. 96 READ WITH ORDER 41 RULE 1 OF CPC., AGAINST THE JUDGMENT AND DECREE Digitally signed by MANJANNA E Location: HIGH COURT OF KARNATAKA Date: 2025.02.01 15:14:06 +0530 - 2 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 DATED:11.12.2018 PASSED IN O.S.NO.153/2015 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE AND CHIEF JUDICIAL MAGISTRATE, GADAG, 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 ASHOK S. KINAGI AND THE HON'BLE MR. JUSTICE UMESH M ADIGA ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE UMESH M ADIGA) 1. This Regular First Appeal is filed by the appellant, challenging the judgment and decree dated 11.12.2018, passed in O.S.No.153/2015, by the learned Prl. Senior Civil Judge and CJM, Gadag (in short,`trial Court’) 2. For the sake of convenience, the parties are referred to as per their ranking before the trial Court. 3. The appellant was the defendant and the respondent was the plaintiff. The plaintiff filed a suit against the defendant for the relief of specific performance of contract. - 3 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 4. Brief facts of the case of both the parties before the trial Court are that: The plaintiff contended that defendant had agreed to sell the suit schedule properties bearing Sy.No.19/2, measuring 4 Acres 6 guntas situated at Basappa Village, Gadag Hobli, Tq: Gadag, land bearing Sy.No.221/2, measuring 2 acres 21 guntas, land bearing Sy.No.223/2+5B measuring 3 acres 30 guntas, land bearing Sy.No.224/2+4B, measuring 2 acres 1 gunta, situated at Mulagund village, Gadag Hobli, Taluka Gadag. for a sum of Rs.50,00,000/- and the defendant received an earnest money of Rs.49,00,000/- from the plaintiff through cheques and executed the registered Agreement of Sale in favour of the plaintiff on 03.08.2013 and also the defendant had agreed to execute the Sale Deed in favour of the plaintiff by receiving the remaining amount of Rs.1,00,000/- within three months from the date of agreement. The plaintiff was/is always ready and willing to perform his part of contract, however, the defendant did - 4 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 not come forward to execute the registered Sale Deed by receiving balance sale consideration amount. 5. It is also contended by the plaintiff that, in the last week of August 2015, he requested the defendant to execute a registered Sale Deed and deliver the possession of the suit schedule properties as per the terms of the agreement. But the defendant did not heed to the request of the plaintiff and came forward to execute the registered sale deed. Hence, plaintiff was constrained to file the suit. With these reasons, prays to decree the suit for specific performance of a Agreement of Sale or in alternative relief refund of earnest money of Rs.49,00,000/- with interest at 18% p.a. from the date of receipt of the amount i.e., 03.08.2013 till realization of the entire amount. 6. The defendant filed his written statement denying the plaint averments. It is contended by the defendant that the plaintiff has entered into business transaction with HELMHOLT2 / Association of Delhi and he has parted Rs.23,00,000/- towards finance, service and - 5 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 bond charges after the business transaction entered by the plaintiff with HELMHOLT2 / Association, Delhi-92, and the said business opportunity was parted by the defendant as the defendant has entered the said business with the said Company on behalf of the plaintiff and the plaintiff for ensuring the safety of the invested amount by him, had drafted and hatched a plan against the defendant as that of the agreement of the sale transaction. He further contended that he had not at all taken Rs.49,00,000/- from the plaintiff for selling his agricultural lands. The alleged Agreement of Sale is the sham and bogus document. It is further contended by the defendant that suit is bad for non-joinder of necessary parties. Since, the defendant had no intention to sell the properties nor there was any agreement of sale, plaintiff was not at all entitled for the relief of specific performance. Hence, prayed to dismiss the suit. 7. The trial Court based on the pleadings of the parties, framed the following issues: - 6 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 ISSUES 1. Whether the plaintiff proves that, the defendant has executed the registered agreement of sale dated 03.08.2013 at document number 4287 for Rs.50 lakhs by receiving the earnest money of Rs.49 Lakhs in respect of the suit properties with the plaintiff? 2. Whether defendant proves that, the above said registered agreement of sale is executed as a security by him only for the purpose of the safety of the plaintiff funds invested for his business interest with HELMHOLT2/ Association of Delhi as per the memo of understanding as contended by him in para No.12 of his written statement? 3. Whether the defendant proves that, the suit for the plaintiff is bad for non-joinder of necessary parties to the suit as contended in para No.13 and 22 of his written statement? 4. Whether the defendant proves that, this court has got no jurisdiction to try the suit of the plaintiff as contended in para No.15 and 23 of his written statement? 5. Whether the plaintiff proves that, he was and is ready and willing to perform his part of contract? - 7 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 6. Whether the plaintiff is entitled for the relief of decree of specific performance as prayed for? OR In the alternative, whether the plaintiff is entitled for the refund of the earnest money of Rs.49 Lakhs from the defendant along with interest at the rate of 18% p.a. from 03.08.2013 till the realization of the entire amount? 7. What order or decree? 8. The plaintiff to substantiate its case, examined three witnesses as PWs.1 to 3 and marked seven documents as Exs.P.1 to P.7. The defendant did not lead any oral and documentary evidence. The trial Court after recording the evidence, hearing on both sides and on assessment of oral and documentary evidence, answered Issue No.1 and 5 in the affirmative, Issue No.6 in the partly affirmative and Issue No. 2, 3 and 4 in the negative, Issue No.7 as per the final order. The suit of the plaintiff was decreed with cost; the defendant was directed to execute the Sale Deed in respect of the suit properties in - 8 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 favour of the plaintiff by receiving balance sale consideration amount of Rs.1,00,000/- and also to deliver the possession. The defendant being aggrieved by the judgment and decree passed in O.S No.153/2015 filed this Regular First Appeal. 9. Heard the learned counsels appearing for both the parties to the suit. 10. Learned counsel for the appellant/defendant would submit that the respondent/plaintiff has not at all paid the amount of Rs.49,00,000/- to the defendant. On the contrary, he has paid the said amount to HELMHOLT2/ Association of Delhi as security. Plaintiff got created the agreement of sale and has not paid the amount of Rs.49,00,000/- to defendant and defendant had no intention to sell the properties. He further submits that the defendant during course of the trial could not appear before the trial Court and lead his evidence to rebut the evidence of the plaintiff. The trial Court did not give proper opportunity to the defendant to - 9 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 lead evidence. The trial Court disposed of the matter hurriedly causing prejudice to the rights of the defendant. The defendant has got valid reasons and hence, he may be permitted to appear before the trial Court and lead the evidence. With these reasons, he prays to allow the appeal by setting aside the impugned judgment and remanding the matter to the trial Court for recording of the evidence of the defendant. 11. Per contra, learned counsel for the respondent/plaintiff submits that the trial Court has given sufficient opportunity to the defendant to lead his evidence, however, the defendant was not diligent in prosecuting the suit. Therefore, the trial Court held that the defendant did not lead the evidence and after hearing the matter and considering the merits of the case, rightly decreed the suit. The suit is of the year 2015 and it was disposed off in the year 2018. Therefore, it is not justifiable to interfere with the judgment and remand the - 10 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 matter to the trial Court for recording the evidence of the defendant. 12. He further submits that the plaintiff has produced the relevant documents and led the evidence of PWs.1 to 3 to prove the agreement of sale executed by the defendant and receipt of a sum of Rs.49,00,000/- towards part of sale consideration. Considering the same, the trial Court has rightly decreed the suit. With these reasons, he prays to dismiss the appeal. 13. Looking to the materials placed on record as well as contentions of the parties, the following points emerge for our consideration : (i) Whether the trial Court has given proper and sufficient opportunity to the defendant to lead evidence to enable the trial Court to decide the matter on merits? (ii) Whether the appellant/defendant be permitted to lead additional evidence ? (iii) What order or decree? 14. Point No.1: The contentions of the plaintiff are as stated in the above paras. The defendant - 11 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 is the owner of the suit schedule properties and he has agreed to sell the aforementioned properties for sum of Rs.50,00,000/- and the plaintiff has also agreed to purchase the same. In view of the said talks, defendant executed agreement of sale dated 03.08.2013 by receiving a sum of Rs.49,00,000/- from the plaintiff through four cheques dated 05.08.2013 towards earnest money. It was also agreed that the defendant would execute the Sale Deed in favour of the plaintiff after obtaining the balance sale consideration of Rs.1,00,000/-. The plaintiff was ready and willing to perform his part of the contract. In the month of August 2015, the plaintiff orally requested the defendant to execute the Sale Deed and to deliver the possession of the suit properties. However, the defendant did not come forward to execute the Sale Deed as per the agreement of sale. 15. The defendant denied the execution of agreement of sale. On the contrary, his contention is that, it was the document for the security executed in favour of - 12 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 the plaintiff and sum of Rs.49,00,000/- was not at all paid to the defendant. He has totally denied the averments made in the plaint. 16. The plaintiff in support of its case examined himself as PW.1 and in his affidavit filed in lieu of his evidence has re-iterated the plaint averments. He has produced the RTCs of the suit properties as Exs.P.1 to P.4; registered sale agreement at Ex.P.5 and Statement of Account at Ex.P.6. The plaintiff has also examined the Manager of the Bank as PW.2 to prove the payment of amount. Thereafter, case was posted for defendant’s evidence. On 15.11.2018, the evidence of plaintiff was completed and the matter was posted for evidence of defendant. It was adjourned to 03.12.2018 for defendant’s evidence. On 03.12.2018, time was prayed on behalf of the defendant for his evidence and it was adjourned to 06.12.2018. On 06.12.2018, advocate for the defendant was absent and considering the same, the trial Court has taken the evidence of the defendant as ‘nil’ and posted the - 13 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 matter for arguments and on 10.12.2018, the matter was heard and the suit was disposed of on 11.12.2018. 17. Looking to the order sheet of the trial Court as narrated above, the defendant was not given sufficient opportunity to lead evidence on his behalf and even he has no opportunity to file application seeking permission to lead the evidence. Within span of a week. After closure of evidence of the plaintiff, the matter was disposed off after taking the evidence of defendant as ‘nil’. These facts reveal that defendant had no proper opportunity to lead his evidence. The defendant in his written statement as well as in the cross-examination of PW.1 contended that he had not executed the agreement of sale as contended in the plaint and according to him, it was only the document of the security executed in favour of the plaintiff and the defendant had no intention to sell the suit properties. Matter involves right over an immovable properties. Considering the said contention of defendant, the matter requires detailed consideration by - 14 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 the trial Court. Looking to the order sheet referred above, he was not given sufficient opportunity to lead his evidence and put forth his contention. Hence, it is a fit case to remand the case for permitting defendant to lead evidence and thereafter decide the issue between the parties. In view of the above discussions, we answer Point No.1 in the negative. 18. Point No.2: The appellant-defendant during the pendency of the appeal filed an application under Order XLI Rule 27 of CPC seeking permission to lead additional evidence. The said application is supported by the affidavit of the appellant and he produced photo copies of some of the documents. The respondent-plaintiff has filed objection to the said application. As already stated above, the defendant was not given proper opportunity to lead his evidence and in point No.1 we have already held that defendant was not given just and proper opportunity to lead his evidence. Therefore, the matter needs to be re- - 15 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 considered by the trial Court. In view of the said findings, the appellant can produce the documents before the trial Court and lead his evidence. 19. The Hon’ble Apex Court in the case of Union of India V/s. K.V.Lakshman and others,1 held that, “ Order XLI Rule 27 of CPC is the provision which enables the party to file additional evidence at the first and second appellate stage. The Court should permit the parties to file such an additional evidence in a party appeal and he is able to pursue the appellate Court that there was a valid reason for not permitting the said evidence at the trial stage and the additional evidence is relevant for deciding the rights of the parties which are the subject matter of the lis. After all, the Court substantially should do justice to the parties.” Admittedly, in the instant case, as observed above, the trial Court did not provide sufficient opportunity to the defendant to produce documents and to lead his evidence. In view of the reasons stated above and considering the 1 AIR 2016 Supreme Court 3139 - 16 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 ratio laid down in the aforesaid case, we are of the view that I.A.No.2/2019 needs to be allowed and answer Point No.2 in the affirmative. The trial Court framed issues casting burden on the defendant to prove three issues. Without evidence of defendant, the said issues were answered. After recording the evidence, the trial Court has to appreciate such evidence and give findings on the said issues. Hence, the matter needs to be relegated to the trial Court to record evidence of defendant and decide the suit afresh. 20. Accordingly, we proceed to pass the following: ORDER i) The appeal is allowed. ii) The judgment and decree dated 11.12.2018, passed in O.S.No.153/2015, by the learned Prl. Senior Civil Judge and CJM, Gadag is set aside, subject to payment of cost of Rs.25,000/- payable by the defendant to the - 17 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 plaintiff on the date of appearance before the trial Court. The suit is restored. iii) I.A.No.2/2019 filed by the appellant is allowed and the documents are taken on record. Office is directed to transmit the trial Court records and the documents produced along with I.A.No.2/2019, to the concerned trial Court. iv) The trial Court is directed to provide proper opportunity to the defendant to lead his evidence. v) The parties are directed to appear before the trial Court on 17.02.2025 without awaiting any further notice. vi) This Court has not made any adjudication on the merits in issue. vii) All the contentions of the parties are kept open. The trial Court shall dispose off the - 18 - NC: 2025:KHC-D:1190-DB RFA No. 100206 of 2019 suit without being influenced by any observations made in this judgment. viii) The office is directed to refund the Court fee to the appellant/defendant as per Section 64 of the Karnataka Court Fees and Suits Valuation Act, 1958. Sd/- (ASHOK S. KINAGI) JUDGE Sd/- (UMESH M ADIGA) JUDGE VB/Ct-cmu LIST NO.: 1 SL NO.: 13