- 1 - HC-KAR NC: 2025:KHC-D:9072 RFA No. 100332 of 2025 IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 22ND DAY OF JULY, 2025 BEFORE THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR REGULAR FIRST APPEAL NO.100332 OF 2025 (SP) BETWEEN: SHRI MAHADEV S/O BHIMAPPA BELAGALI, AGE: 50 YEARS, OCC: AGRICULTURE, R/O: SHIVAPUR VILLAGE 591 312, TAL: MUDALAGI, DIST: BELAGAVI. … APPELLANT (BY SRI P.G. NAIK, ADVOCATE.) AND: SHRI LAXMAPPA S/O SHIVAGOUDA PATIL, AGE: 73 YEARS, OCC: AGRICULTURE, R/O: NEAR HANCHINAL COACHING SCHOOL, GURLAPUR ROAD, MUDALAGI-591 312, DIST: BELAGAVI. … RESPONDENT THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION 96 READ WITH ORDER 41 RULE 1 OF THE CIVIL PROCEDURE CODE, 1908, PRAYING TO SET ASIDE THE JUDGMENT AND DECREE DATED 04.04.2025, PASSED IN O.S.NO.162/2017, ON THE FILE OF THE LEARNED I ADDITIONAL SENIOR CIVIL JUDGE, GOKAK C/C II ADDITIONAL SENIOR CIVIL JUDGE, GOKAK, REJECTING CLAIM OF THE PLAINTIFF/APPELLANT FOR RELIEF OF SPECIFIC PERFORMANCE OF CONTRACT AND FINDING ON ISSUE NO.2 AND SUIT OF THE PLAINTIFF MAY KINDLY BE DECREED AS PRAYED FOR IN THE SUIT BY DIRECTING THE DEFENDANT/RESPONDENT TO EXECUTE THE REGISTERED SALE DEED IN FAVOUR OF THE PLAINTIFF IN RESPECT OF THE SUIT PROPERTY, IN THE INTEREST OF JUSTICE AND EQUITY. MALLIKARJUN RUDRAYYA KALMATH Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Date: 2025.08.14 12:07:14 +0530 - 2 - HC-KAR NC: 2025:KHC-D:9072 RFA No. 100332 of 2025 THIS APPEAL COMING ON FOR ADMISSION THIS DAY, JUDGMENT IS DELIVERED THEREIN AS UNDER: ORAL JUDGMENT (PER: THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR) This appeal is filed by the plaintiff calling in question the judgment and decree dated 04.04.2025, passed by the II Additional Senior Civil Judge, Gokak, concurrent charge II Additional Senior Civil Judge, Gokak, in O.S.No.162/2017, thereby the suit filed for the relief of specific performance of contract is partly decreed refunding earnest amount and the main relief of specific performance is dismissed. 2. Heard the arguments of learned counsels for both the sides and perused the material placed before the Court. 3. For the purpose of convenience and easy reference, ranking of the parties is referred to as per their status before the trial Court. 4. It is the case of plaintiff that the defendant is the owner of the suit schedule land and the defendant for - 3 - HC-KAR NC: 2025:KHC-D:9072 RFA No. 100332 of 2025 his family necessities approached the plaintiff for selling the suit schedule land and accordingly an agreement of sale was executed on 20.10.2014 for total sale consideration amount of Rs.10,86,000/- and the defendant has received Rs.9,00,000/- as earnest money and it is agreed, the balance sale consideration amount would be paid at the time of registration of sale deed, but the defendant had not executed the registered sale deed. Therefore, the plaintiff has issued legal notice to the defendant, but the defendant did not reply to the same. Therefore, the plaintiff is constrained to file the suit for specific performance. 5. The defendant has filed the written statement and admitted that execution of agreement of sale was for the security to hand loan of Rs.7,00,000/- and on interest basis, but not executed agreement of sale in favour of the plaintiff intending to sell the land. The charging of interest and hand loan fee is at the rate of 2.5% per month and thus, the agreement of sale is only for the purpose of - 4 - HC-KAR NC: 2025:KHC-D:9072 RFA No. 100332 of 2025 security towards hand loan. Therefore, prays to dismiss the suit. 6. Upon the pleadings, the trial Court has framed the following: 1. Whether plaintiff proves the due execution of the alleged agreement of sale dated 20.10.2014 by the defendant in favour of the plaintiff and passing of the alleged advance sale consideration of Rs.9,00,000/- to the defendant? 2. Whether plaintiff proves that he has always been ready and willing to perform his part of contract as per the said sale agreement? 3. Whether the defendant proves that the alleged agreement is concocted by the plaintiff as alleged in the written statement? 4. Whether plaintiff is entitled for the reliefs claimed in the plaint? 5. What order or decree? 7. On behalf of plaintiff, the plaintiff is examined as PW.1 and two witnesses as PW.2 and PW.3 and got marked the documents as Exs.P1 to P.9. On behalf of - 5 - HC-KAR NC: 2025:KHC-D:9072 RFA No. 100332 of 2025 defendant, the defendant is examined as DW.1 and got marked the documents as Exs.D.1 and D.2. 8. The trial Court has dismissed the suit for the main relief of specific performance, but granted decree for alternative relief of refund of earnest amount of Rs.9,00,000/- with interest at the rate of 12% p.a. from the date of filing of the suit with proportionate cost on Rs.9,00,000/- only. 9. The trial Court assigned reason that though the agreement of sale is proved, but still granting the relief of specific performance of contract is the discretion of the trial Court whether to grant specific performance or not to grant. Therefore, the trial Court has decreed the suit only for refund of earnest amount as decree for specific performance would cause hardship to the defendant. Therefore decreed the suit for the alternative relief of refund of earnest amount. - 6 - HC-KAR NC: 2025:KHC-D:9072 RFA No. 100332 of 2025 10. Being aggrieved by it, the plaintiff has filed appeal by raising various grounds and submitted that agreement of sale is registered agreement of sale and its execution is proved through Ex.P.2 and P.3 and also the defendant agreed execution of agreement of sale. Therefore, the plaintiff is entitled to decree for specific performance. Therefore, prays to allow the appeal. 11. The trial Court held that agreement of sale dated 20.10.2014 is proved and the defendant has received advance amount of Rs.9,00,000/-. The trial Court held that the plaintiff failed to prove that he was ready and willing to perform his part of contract. The trial Court by exercising discretion as per section 20 of the Specific Relief Act (‘the Act’ for short) has decreed the suit in part only refunding of advance amount. 12. Section 20 of the Act is a discretionary relief (before amendment). There are several factors for considering grant of specific performance of contract. If for - 7 - HC-KAR NC: 2025:KHC-D:9072 RFA No. 100332 of 2025 the defendant the suit land is only land for his livelihood, then the discretion could not be exercised in favour of plaintiff granting relief of specific performance of contract. If there is unfair advantage over the plaintiff by the defendant, then in such circumstance the discretionary relief cannot be granted for granting the main relief. If there would be any hardship for the defendant, by granting decree for specific performance of contract, then under this circumstance also relief of decree for specific performance of contract cannot be granted. 13. Hence, considering these principles, it is the case of defendant that though he had executed an agreement of sale, but it is only for security purpose and received hand loan of Rs.7,00,000/- with charging interest at the rate of 2.5% per month. Though PW.2 and PW.3 have deposed regarding execution of agreement of sale and this is admitted by defendant, but that agreement is for the purpose of receiving hand loan from the plaintiff. Therefore, the discretion is vested with the trial Court to - 8 - HC-KAR NC: 2025:KHC-D:9072 RFA No. 100332 of 2025 grant or not to grant the relief of specific performance of contract. Therefore, in this regard exercise of discretionary relief is found to be correct in granting decree for refund of earnest amount with interest as stated in the decree. Therefore, the trial Court is justified in not granting decree for specific performance of contract and decreeing alternative relief of refunding the earnest amount. 14. Therefore, it is not a fit case to grant decree for specific performance of contract as the suit schedule land is agricultural land, which is meant for livelihood of defendant and his family. Therefore, confirming the decree for refund of earnest amount, there is no material available to admit the appeal. Therefore, the appeal being devoid of merit is liable to be dismissed. Accordingly the appeal is dismissed. Sd/- (HANCHATE SANJEEVKUMAR) JUDGE MRK CT:BCK LIST NO.: 1 SL NO.: 31