- 1 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 IN THE HIGH COURT OF KARNATAKA,AT DHARWAD DATED THIS THE 16TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE S.R. KRISHNA KUMAR AND THE HON'BLE MR. JUSTICE C.M. POONACHA REGULAR FIRST APPEAL NO. 100294 OF 2024 (SP) BETWEEN: M. RAFIQ S/O. LATE M.D.KHALEEL SAB AGE: 63 YEARS, OCC: CONTRACTOR, R/O. CHITAWADAGI-583211, TQ: HOSAPETE, DIST: VIJAYANAGAR. &APPELLANT (BY SRI. SHRIHARSH A.NEELOPANT, ADVOCATE) AND: 1. SATHYANARAYANA JANNU S/O. MADHUKARAPPA, SAIBABA JEWELERS, JEWELRY SHOP, BASAVESHWARA BAZAAR, HAGARIBOMMANAHALLI-583212, TQ: HAGARIBOMMANAHALLI, DIST: VIJAYANAGAR. 2. SHAHID BASHA NANDI BEVOORU S/O. YAKUBSAB, R/O. MILITARY BAYALU, RAMANAGARA, HAGARIBOMMANAHALLI-583212, TQ: HAGARIBOMMANAHALLI, DIST: VIJAYANGAR. Digitally signed by SAMREEN AYUB DESHNUR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 3. SMT. M. KAVERI W/O. RAMESH R/O. HOUSE NO.8, KVOR COLONY, NEAR PRASIDDHI SCHOOL, HAGARIBOMMANAHALLI-583212, TQ: HAGARIBOMMANAHALLI, DIST: VIJAYANAGAR. 4. SMT. M.MEENAKSHI W/O. M. DURGESH R/O. 15TH WARD, NEAR SAIBABA TEMPLE, KVOR COLONY, HAGARIBOMMANAHALLI-583212, TQ: HAGARIBOMMANAHALLI, DIST: VIJAYANAGAR. &RESPONDENTS (NOTICE TO RESPONDENTS - SERVED) THIS RFA IS FILED UNDER SECTION 96 OF CPC AGAINST THE JUDGMENT AND DECREE DATED 05.03.2024 PASSED IN O.S.NO.49/2020 ON THE FILE OF THE SENIOR CIVIL JUDGE, AND JUDICIAL MAGISTRATE FIRST CLASS, HAGARIBOMMANAHALLI, DECREEING THE SUIT FILED FOR SPECIFIC PERFORMANCE OF CONTRACT. THIS APPEAL COMING ON FOR ORDERS THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE S.R. KRISHNA KUMAR AND THE HON'BLE MR. JUSTICE C.M. POONACHA - 3 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE C.M. POONACHA) The present appeal is filed under Section 96 of Code of Civil Procedure, 1908, by the defendant No.1 calling in question the judgment and decree dated 05.03.2024 passed in OS No.49/2020 by the Senior Civil Judge and JMFC, Hagaribommanahalli1, whereunder, the suit for specific performance filed by the respondent No.1/plaintiff has been decreed by the Trial Court. 2. The parties are referred to as per their ranking before the Trial Court for the sake of convenience. 3. It is the case of the plaintiff that the defendant No.1 is the absolute owner of the property bearing Sy.No.388/B measuring 0-95 cents situated at Chintrapalli Village, Ballari District2. That the defendant No.1 agreed to sell the suit property in favour of the plaintiff for a total sale consideration of Rs.71,00,000/-. Accordingly, the plaintiff 1 Hereinafter referred to as 8the Trial Court9 2 Hereinafter referred to as 8suit property9 - 4 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 and defendant No.1 entered into an agreement of sale dated 11.09.2018, wherein the plaintiff paid an advance of Rs.10,10,000/- and agreed to pay the balance amount of Rs.60,90,000/- within five months from the date of the agreement and agreed to execute the sale deed consequent to receipt of balance sale consideration. 4. It is the further case of the plaintiff that he was ready and willing to complete the sale transaction and, in fact, he was waiting at the Sub-Registrar Office, however, the defendant No.1 did not turn up on the date fixed. That on 16.02.2019, the defendant No.1 issued a notice calling upon the plaintiff to complete the sale transaction, which was duly replied by the plaintiff vide a reply dated 07.05.2019. It is the further case of the plaintiff that, he was ready and willing to pay the balance sale consideration of Rs.60,90,000/-, and that the defendant No.1 has committed breach of agreement. Subsequently, the defendant No.1 has sold sites formed in the suit property to defendant Nos.2 to 4 vide registered Sale Deeds dated - 5 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 27.06.2019 and 30.06.2019.That the plaintiff got issued a legal notice dated 28.08.2020, calling upon the defendant No.1 to receive the balance sale consideration and complete the sale transaction in terms of the agreement dated 11.09.2018. Since the defendant No.1 failed to comply with the demand vide the legal notice dated 28.08.2020, the plaintiff has filed the suit seeking specific performance of the agreement of sale. 5. The defendant Nos.1 to 4 entered appearance through their counsel and contest the suit by filing their written statement. The execution of the agreement and the receipt of advance amount of Rs.10,10,000/- was admitted. It is the specific case of defendant No.1 that, since he was in urgent need of money, he entered into the agreement of sale dated 11.09.2018, and despite lapse of five months mentioned in the agreement, since the plaintiff did not come forward to pay the balance sale consideration and complete the sale transaction, he got issued a legal notice dated 16.02.2019, despite which the plaintiff did not come - 6 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 forward to pay the balance sale consideration and complete the sale transaction. That having no other option, the defendant No.1 alienated the portions of suit property in favour of defendant Nos.2 to 4. Hence, the defendant No.1 sought for dismissal of the suit. 6. The Trial Court consequent to the pleadings of the parties framed the following issues: <ISSUES 1) Whether the plaintiff proves that, the 1st defendant being the owner of the schedule property agreed to sell the same for a valuable consideration of Rs.71,00,000/- and executed unregistered agreement of sale dated: 11.09.2018 by receiving an advance consideration amount of Rs.10,10,000/-? 2) Whether the defendant No.1 proves that, the alleged agreement of sale dated: 11.09.2018 is only for need of urgent money to discharge the sundry debts as contended in the written statement? 3) Whether the plaintiff proves his readiness and willingness perform his part of contract? - 7 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 4) Whether the plaintiff is entitled for the relief as sought for? 5) What order or decree? RECAST ISSUES 1) Whether the defendant No.1 proves that, the plaintiff was not ready and willing to perform his part of contract with balance sale consideration amount, hence he got issued legal notice to plaintiff and sold suit schedule property to defendant No.2 to 4? 2) Whether the plaintiff is entitled for the relief as sought for? 3) What order or decree?= 7. The plaintiff examined himself as PW1 and two witnesses were examined as PW2 and PW3. The documentary evidence at Ex.P1 to P38 was marked. The defendant No.1 examined himself as DW1 and got marked Ex.D1. - 8 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 8. The Trial Court by its judgment and decree dated 05.03.2024, decreed the suit of the plaintiff and pass the following order: <Suit of the plaintiff is decreed with cost. Consequently, the defendants 1 to 4 are hereby directed to execute the registered sale deed in favour of the plaintiff with respect to suit schedule property (which is now in the form of sites) in pursuance of the agreement of sale dated 11.09.2018 within 60 days from the date of this judgment by receiving the balance sale consideration amount of Rs.60,90,000/-. In default, the plaintiff is at liberty to deposit the balance sale consideration amount in this Court and to proceed to get the registered sale deed with regard to suit schedule property through due process of law. Draw decree accordingly.= 9. Being aggrieved, the defendant No.1 has filed the present appeal. 10. Heard learned counsel for the appellant/defendant No.1. The respondents are served and unrepresented. - 9 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 11. Learned counsel for the appellant/defendant No.1 assailing the judgment and decree passed by the Trial Court contends that admittedly the plaintiff did not complete the sale transaction within the stipulated period of five months as contemplated under the agreement of sale dated 11.09.2018. That despite the legal notice dated 16.02.2019, issued by defendant No.1, the plaintiff did not come forward to complete the sale transaction and the said notice was responded to by the plaintiff vide reply dated 07.05.2019. That, since the plaintiff did not complete the sale transaction within the time stipulated and since the defendant No.1 was in need of money, the defendant No.1 alienated portions of the suit property on 13.06.2019 and 27.06.2019 to defendant Nos.2 to 4. That after lapse of more than one year i.e., on 28.08.2020, the defendants got issued legal notice. Hence, it is submitted that the suit filed by the plaintiff for specific performance ought not to have been decreed by the Trial Court. - 10 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 12. Learned counsel for the appellant/defendant No.1 further submits, on instructions, that the appellant/defendant No.1 is ready and willing to refund a total sum of Rs.15,00,000/-, and has filed an affidavit dated 11.09.2025, to that effect. 13. The submissions of learned counsel for the appellant/defendant No.1 has been considered and the material on record has been perused. 14. The question that would arise for consideration is: Whether the Trial Court was justified in decreeing the suit and ordering specific performance? 15. The relevant factual matrix is undisputed inasmuch as, the agreement of sale dated 11.09.2018 (Ex.P1) is admitted. It is also admitted that, vide the agreement of sale dated 11.09.2018, the plaintiff paid an advance of Rs.10,10,000/- and that the sale transaction was required to be completed within five months i.e., on or before 11.02.2019 when the balance sale consideration of - 11 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 Rs.60,90,000/- was to be paid by the plaintiff and defendant No.1 was required to execute the sale deed conveying the suit property. 16. It is forthcoming that between the dates of execution of the agreement i.e., 11.09.2018 and the aforementioned 11.02.2019, there was no correspondence between the parties. The appellant/defendant No.1 vide legal notice dated 16.02.2019 (Ex.P7) intimated the plaintiff that the period for completion of the sale transaction had lapsed on 11.02.2019, called upon the plaintiff to appear before the Sub-Registrar Office on 22.02.2019, with the balance sale consideration of Rs.60,90,000/-, and complete the sale transaction, failing which the advance amount of Rs.10,10,000/- paid by the plaintiff would be forfeited by cancelling the agreement of sale. 17. The plaintiff vide reply dated 07.05.2019 (Ex.P8), responding to the notice dated 16.02.2019 (Ex.P7), intimated the defendant No.1 that he was waiting at the Sub-Registrar Office on 22.02.2019, and the defendant - 12 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 No.1 did not turn up. Hence, the plaintiff called upon the defendant No.1 to fix a date for execution of the sale deed by receiving the balance sale consideration of Rs.60,90,000/-. 18. It is forthcoming from the record that the defendant No.1 vide registered sale deeds dated 27.06.2019 (Ex.P3) and 13.06.2019 (Ex.P4) alienated the portions of the suit property i.e., sites formed in the suit property to defendant Nos.2 to 4. Thereafter, the plaintiff issued a legal notice dated 28.08.2020 (Ex.P13) calling upon the defendant No.1 to execute the sale deed on 07.09.2020. Subsequently, the plaintiff has filed the suit. 19. It is clear and forthcoming from the aforementioned that during the period within which the sale transaction was required to be completed under the agreement of sale dated 11.09.2018, the plaintiff did not pay the balance sale consideration or call upon the defendant No.1 to complete the sale transaction. Further, it is pertinent to note that vide notice dated 16.02.2019 - 13 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 (Ex.P7), the defendant No.1 had called upon the plaintiff to complete the sale transaction, failing which the advance amount of the sale of Rs.10,10,000/- paid under the agreement of sale date 11.09.2018 (Ex.P1) would be forfeited and the said agreement should be cancelled. Despite receipt of the said notice, the plaintiff after a lapse of nearly three months, responded to the same vide reply dated 07.05.2019 (Ex.P8) by stating that he was waiting at the Sub-Registrar Office on the date fixed and reiterated his demand that he was ready to complete the sale transaction. Thereafter, it was only after a lapse of more than one year i.e., vide legal notice dated 28.08.2020 (Ex.P13), the plaintiff called upon the defendant No.1 to execute the sale transaction, by which time the defendant No.1 had already alienated portions of the suit property by vide registered sale deeds dated 27.06.2019 and 13.06.2019 (Ex.P.3 and P4). 20. It is also forthcoming that the plaintiff has not adduced any evidence to demonstrate that he was ready - 14 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 and willing to complete the sale transaction during the period as contemplated under the agreement of sale dated 11.09.2018 (Ex.P1). It is also pertinent to note that after receipt of the legal notice dated 16.02.2019 (Ex.P7), wherein the defendant No.1 had clearly intimated to the plaintiff to complete the sale transaction on 22.02.2019, failing which the advance amount would be forfeited and agreement would be cancelled, apart from merely stating that it was the defendant No.1 who did not turn up to complete the sale transaction on the date fixed, merely reiterated his demand by issuance of the reply dated 07.05.2019 (Ex.P8). It is also pertinent to note that, even if it was the defendant No.1 who was not present on the date fixed i.e., on 22.02.2019, there is no explanation on behalf of the plaintiff for the delay of nearly three months before the legal notice dated 07.05.2019 (Ex.P8) was issued. Further, the plaintiff has not done any act until issuance of the legal notice dated 28.08.2020 (Ex.P13), more than 15 months after issuance of Ex.P8. - 15 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 21. It is also pertinent to note that although in the legal notice dated 16.02.2019 (Ex.P7), the defendant No.1 intimated the plaintiff to complete the sale transaction on 22.02.2019, failing which, the advance amount of Rs.10,10,000/-, would be forfeited by cancelling the agreement of sale dated 11.09.2018, the plaintiff neither in the reply notice dated 07.05.2019 (Ex.P8) nor the legal notice dated 28.08.2020 (Ex.P13), has either referred to or contraverted the assertion of defendant No.1 regarding forfeiture and cancellation as noticed above, by taking a stand that the same is untenable in law. It is also pertinent to note that, in the legal notice dated 28.08.2020 (Ex.P8), the alienations of portions of the suit property have been noticed. However, in the suit filed by the plaintiff no relief is sought with regard to the alienations made by the defendant No.1 to defendants No.2 to 4. 22. Having regard to the factual matrix as noticed above, the Trial Court clearly erred in decreeing the suit and - 16 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 ordering for specific performance of the agreement dated 11.09.2018. 23. At this juncture, it is pertinent to note that the appellant/defendant No.1 has offered to deposit a sum of Rs.15,00,000/- and to that effect an affidavit dated 11.09.2025 has been filed, which reads as under; <AFFIDAVIT Herein M. Rafiq, S/o. Late M. D. Khaleel Sab, Age: 63 years, Occ: Contractor, R/o. Chitawadagi, Tq: Hosapete, Dist: Vijayanagar, today at Dharwad do hereby state on solemn affirmation as under: 1. I am the appellant in the above appeal. I know facts of the case and well conversant about the case. Hence I am swearing to this affidavit. 2. For the purpose of avoiding repetition, the facts and grounds urged in the memorandum of appeal may kindly be treated as part and parcel of this affidavit. 3. I state that I have preferred the above appeal challenging the impugned judgment and decree dated: 05.03.2024 passed in O.S No. 49/2020 passed by the court of Senior Civil Judge and JMFC, Hagaribommanahalli, thereby decreeing the suit, the respondent No.1/plaintiff for specific performance. - 17 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 4. I submit that, I voluntarily depositing sum of Rs. 15,00,000-00 payable to the respondent / plaintiff by virtue of demand draft bearing No.000170 dated: 10.09.2025 drawn on Axis Bank Ltd, Hagaribommanahalli Branch in the name of Registry which the respondent/plaintiff is entitled to withdraw the said amount. 5. I submit that, I am making the above deposits voluntarily before this Hon'ble Court. I further submit that, the respondent / plaintiff can withdraw the said amount at any time. The said amount is with regard to advance amount under the agreement of sale in question. Hence, this affidavit. Place: Dharwad Sd/- Date: 11.09.2025 Deponent Identified by me Sd/- Advocate= 24. Along with the affidavit, the appellant has deposited a sum of Rs.15,00,000/- vide the Demand Draft bearing No.000170 dated 10.09.2025 drawn in favour of Additional Registrar General of the High Court of Karnataka, Dharwad Bench, Dharwad. - 18 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 25. In the aforementioned facts and situation, the agreement having been admitted and the plaintiff admittedly not having taken any steps during the period of validity of the agreement to complete the sale transaction, and the defendant having alienated portions of the suit property as noticed above, having regard to the voluntary offer made by the appellant/defendant No.1 to deposit a sum of Rs.15,00,000/-, it is just and proper that the judgment and decree passed by the Trial Court ordering specific performance be interfered with and the appellant/defendant No.1 be directed to refund the advance amount of Rs.10,10,000/- together with appropriate interest. 26. In view of the aforementioned discussion, the question framed for consideration is answered in the negative. 27. In the result, we pass the following: - 19 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 ORDER (i) The appeal is partly allowed with costs; (ii) The judgment and decree dated 05.03.2024 passed in OS No.49/2020 by the Senior Civil Judge and JMFC, Hagaribommanahalli, is modified to the extent of setting aside the order directing specific performance of the agreement of sale dated 11.09.2018 and holding that the appellant/defendant No.1 shall pay the plaintiff a sum of Rs.10,10,000/- together with appropriate interest, which cumulative amount is quantified at Rs.15,00,000/-; (iii) The Registry shall encash the Demand Draft bearing No.000170 dated 10.09.2025 of Rs.15,00,000/- filed along with the affidavit dated 11.09.2025 by the appellant and the said amount shall be kept in - 20 - HC-KAR NC: 2025:KHC-D:12131-DB RFA No. 100294 of 2024 a fixed deposit in any the nationalised bank with the automatic renewal clause. (iv) The Registry shall send a communication to respondent No.1/plaintiff regarding this order as well as the deposit made as noticed above. (v) In the event the respondent No.1 appears and makes a request for withdrawal, the Registry shall disburse the amount in deposit together with accrued interest in favour of the respondent No.1, after due verification and in accordance with law. (vi) The Registry to draw modified decree accordingly. Sd/- (S.R. KRISHNA KUMAR) JUDGE Sd/- (C.M. POONACHA) JUDGE SMM / Ct:vh List No.: 1 Sl No.: 3