- 1 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 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. 100272 OF 2025 (SP/DE/IN) BETWEEN: 1. SMT. KAMALAWWA W/O. HANAMAPPA @ HANAMANTAPPA HULAGERA, AGE: 50 YEARS, OCC: AGRICULTURE, R/O: ILAKAL-587 125, TQ: ILKAL, DIST: BAGALKOTE. 2. VENKATESH S/O. HANAMAPPA @ HANAMANTAPPA HULAGERA, AGE: 31 YEARS, OCC: AGRICULTURE, R/O: ILAKAL-587 125, TQ: ILKAL, DIST: BAGALKOTE. 3. RAVI S/O. HANAMAPPA @ HANAMANTAPPA HULAGERA, AGE: 29 YEARS, OCC: AGRICULTURE, R/O: ILAKAL-587 125, TQ: ILKAL, DIST: BAGALKOTE. 4. PRAVEEN S/O. HANAMAPPA @ HANAMANTAPPA HULAGERA, AGE: 27 YEARS, OCC: AGRICULTURE, R/O: ILAKAL-587 125, TQ: ILKAL, DIST: BAGALKOTE. 5. BHAGYA D/O. HANAMAPPA @ HANAMANTAPPA HULAGERA, AGE: 25 YEARS, OCC: AGRICULTURE, MALLIKARJUN RUDRAYYA KALMATH Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: High Court of Karnataka, Dharwad Bench Date: 2025.09.18 11:16:57 +0530 - 2 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 R/O: ILAKAL-587 125, TQ: ILKAL, DIST: BAGALKOTE. 6. KAVITA D/O. HANAMAPPA @ HANAMANTAPPA HULAGERA AGE: 23 YEARS, OCC: AGRICULTURE, R/O: ILAKAL-587 125, TQ: ILKAL, DIST: BAGALKOTE. … APPELLANTS (BY SRI. SHRIHARSH A. NEELOPANT, ADVOCATE) AND: 1. HANAMAPPA @ HANAMANTAPPA S/O. MALLAPPA GUDIMANI, AGE: 32 YEARS, OCC: AGRICULTURE, R/O: HULAGERA-583 281, POST: HULAGERA, TQ: KUSHTAGI, DIST: KOPPAL. 2. SRI. MALLIKARJUN S/O. VEERAPPA SHETTAR, AGE: 45 YEARS, OCC: AGRICULTURE AND BUSINESS, R/O: SHETTAR STREET, NEAR BASAVANNA TEMPLE, ILAKAL-587 125, TQ: ILKAL, DIST: BAGALKOTE. … RESPONDENTS THIS RFA IS FILED UNDER SECTION 96 READ WITH ORDER 41 RULE 1 OF CPC., PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT AND DECREE DATED 24.07.2023 PASSED IN O.S. NO.182/2015 ON THE FILE OF THE SENIOR CIVIL JUDGE, KUSHTAGI, AND DECREE THE SUIT BEARING O.S. NO.182/2015 IN ITS ENTIRELY, IN THE INTEREST OF JUSTICE AND EQUITY. THIS APPEAL, COMING ON FOR ORDERS THIS DAY, JUDGMENT IS DELIVERED THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 ORAL JUDGMENT (PER: THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR) The appeal is filed by the plaintiffs calling in question the judgment and decree dated 24.07.2023 in O.S.No.182/2015 passed by Senior Civil Judge, Kushtagi, thereby, the suit filed for a specific performance of contract is decreed in part by refunding earnest amount with interest but not decreeing the suit for main relief of specific performance of contract. Also the plaintiff being aggrieved by the judgment and decree directing to pay requisite stamp duty and penalty of Rs.1,48,500/- on documentary evidence at Ex.P1 by sending document to Deputy Commissioner, Koppal, to recover the said amount as land revenue. 2. For the sake of convenience and easy reference, the parties are referred to as per their rankings before the Trial Court. 3. The plaintiffs have filed a suit for specific performance of contract by making averments that the defendants are owners of the land bearing Sy.No.177 - 4 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 Hissa-A measuring 7 acres 13 guntas of Hulagera village and defendant No.1 for his legal and family necessities had agreed to sell 4 acres of land, out of 7 acres 13 guntas to the plaintiffs and accordingly, an agreement of sale was executed on 04.11.2010 for total sale consideration amount of Rs.13,60,000/-. Out of it, plaintiffs have paid an earnest amount of Rs.2,00,000/- and defendants have accepted the same. When this being the fact, in spite of repeated request for calling upon defendants to execute a sale deed, the defendants have not come forward to execute registered sale deed. It is contended in the plaint that the plaintiffs are ever ready and willing to perform their part of contract. Therefore, filed a suit for specific performance of contract. 4. Further it is stated that defendant No.2 had purchased property from defendant No.1. The defendant No.1 filed the written statement and denied all the averments such as execution of agreement of sale and receipt of earnest money of Rs.2,00,000/-. Therefore, prays to dismiss the suit. - 5 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 5. The defendant No.2 had filed the written statement and contended that defendant No.1 is owner of the suit schedule land and he had sold the same for his family and legal necessities through registered sale deed dated 19.02.2013. Therefore, defendant No.2 is a bonafide purchaser. Hence, prays to dismiss the suit. 6. Upon the pleadings, the trial Court has framed following issues: ISSUES 1. Whether the plaintiffs proves that, the defendant agree to sell 4 acres out of 7 acre 13 guntas and agreed to for Rs.13,60,000/-? 2. Whether the plaintiffs proves that, plaintiffs paid Rs.2,00,000/- to clear the debts and loan and defendant has received the same and agreed to execute the registered sale deed after receiving balance amount ? 3. Whether the plaintiffs are ready and will to pay Rs.11,60,000/- and issued legal notice ? 4. Whether the plaintiff is entitled to specific performance and in the alternate for recovery of Rs.2,00,000/-with interest as prayed? 5. Whether the defendant proves that he is ready to pay Rs.2,00,000/- with 18% interest to the plaintiffs? - 6 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 6. What Order of Decree? 7. The plaintiff No.1(d) examined himself as PW-1 and got marked documents as Exs.P1 to P7. The defendant No.1 examined himself as DW-1 and defendant No.2 was examined as DW-2 and documents are marked as Exs.D1 to D20. The trial Court has dismissed the suit on the reason that the plaintiffs failed to prove that they are ready and willing to perform their part of contract by paying fine of Rs.11,60,000/-. Therefore, the trial Court dismissed the relief of specific performance and granted decree for refund of earnest amount of Rs.2,00,000/- with interest at the rate of 18% p.a., also the trial Court ordered the plaintiffs to pay deficit stamp duty and penalty of Rs.1,48,500/-, on the document of Ex.P1-agreement of sale. 8. Being aggrieved by dismissal of the suit for the main relief of specific performance, plaintiffs have filed this appeal by raising various grounds in the memorandum of appeal and learned counsel for appellants/plaintiffs argued in consonance with the grounds raised as usual and vehemently - 7 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 submitted that, here the agreement of sale is proved to have been executed and the plaintiffs were ever ready and willing to perform their part of contract. 9. Further submitted that, time is not the essence of contract. Therefore, when the plaintiffs have issued legal notice on 04.10.2012, but the plaintiffs have not replied, it shows the attitude on the part of defendant No.1 and during pendency of the suit; the defendant No.1 has sold out the land in favour of defendant No.2. Therefore, the defendant No.2 is not a bonafide purchaser. Therefore, he submitted that when agreement of sale is proved, and the plaintiffs were ever ready and willing to perform their part of contract. Therefore, the suit ought to have been decreed for the relief of specific performance. Therefore, prays to allow the appeal. 10. The appeal is at the admission stage. Therefore, the questions for consideration are as follows: i. Whether, the discretion exercised by the trial Court in not granting the relief of specific performance but granting the relief - 8 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 of refund of earnest amount, requires any interference by this Court? ii. Whether, the Trial Court is correct in ordering the plaintiffs to pay the deficit stamp duty and penalty in the context of the facts and circumstances involved in the case? 11. It is not disputed that the defendant No.1 is the owner of the suit schedule land. The plaintiffs claim is merely on the agreement of sale dated 04.11.2010. The total agreed amount is Rs.13,60,000/-, as per the plaintiffs they paid Rs.2,00,000/- to defendant No.1 as earnest money and defendant No.1 has received the same. Though agreement of sale is proved, still the question is, ‘whether to grant relief of specific performance, since it is a discretionary relief as per Section 20 of Specific Relief Act, 1963 (for short, ‘S.R. Act’). 12. Further, the plaintiffs have to prove that they were ever ready and willing to perform their part of the contract. The trial Court held that the plaintiffs failed to - 9 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 prove that the plaintiffs were and is willing to perform their part of contract as per Section 16(c) of the S.R. Act. Admittedly, the agreement of sale is dated 04.11.2010 which is unregistered. As per plaintiffs, for the first time, they have called upon the defendant No.1 in the month of September 2012 and finally on 04.12.2012 to execute the registered sale deed. The suit is filed on 09.11.2012. Just about for completion of 3 years from the date of agreement of sale, two months before, first time the plaintiffs have called upon the defendant No.1 to execute the sale deed. Ex.P4 is the legal notice but there is no evidence by the plaintiffs to prove ‘whether they were ready and willing to perform their part of contract. Furthermore, as per Section 20 of the S.R. Act, grant of decree for specific performance is a discretionary relief, though agreement is proved and grant of decree is lawful to do so. Therefore, the findings given by the trial Court in not granting the decree for relief of specific performance, is found to be correct. 13. Where the decree is granted for specific performance though lawful to do so is made, if it amounts to - 10 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 an unfair advantage over the defendants by the plaintiffs and if there would be any hardship to defendant, then the discretion could not be exercised in favour of plaintiffs. Therefore, in this regard, the trial Court has correctly held that the plaintiffs are not entitled to decree for specific performance and ordering refund of earnest amount of Rs.2,00,000/- with interest at the rate of 18% p.a., is found to be correct. Accordingly, the suit filed for specific performance is correctly dismissed by giving alternative relief, which needs no interference. To this extent, the judgment and decree passed by the trial Court requires confirmation. 14. But so far as, trial Court directing the plaintiffs to pay stamp duty and penalty of Rs.1,48,500/- is concerned, is found to be not correct. The trial Court by applying Article 5(e)(ii) of the Karnataka Stamp Act, 1957 determined ‘Stamp duty’ and ‘Penalty’ and directed the plaintiffs to pay the stamp duty. This approach of trial Court is not correct. Here, when the plaintiffs have filed a suit for Specific Performance of contract, the Court fee is required to be paid - 11 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 as per Karnataka Court Fees and Suits Valuation Act, 1956 but not under the Karnataka Stamp Act. Payment of stamp duty as per Karnataka Stamp Act is for getting registration of document/instruments but not at the time of filing the suits before the Civil Court. Here, the trial Court has misconstrued the scope of Karnataka Stamp Act and Karnataka Court Fees and Suit Valuation Act. 15. The Karnataka Stamp Act, 1957 is applicable where an instrument is to be registered before the competent authority. The payment of stamp duty is nothing but the Court fee to be paid while instituting suit/petition before the Courts of Law. Payment of stamp duty and payment of Court fee are two different aspects. Court fee is payable while instituting a suit/petitions making valuation of the subject matter and relief claimed in the suit/petition which is entirely different from payment of stamp duty. Stamp duty is payable on the instruments when it is going to be registered at the time of registration. The trial Court has not cited these two enactments. Therefore, the trial Court has misconstrued itself that, stamp duty is equal to Court - 12 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 fee. Therefore, what the impression trial Court got in its mind, stamp duty is assumed to be Court fee, is not correct. The trial Court shall consider it by applying the provisions of the Karnataka Court Fees and Suit Valuation Act. It was swayed away by the Karnataka Stamp Act. Therefore, the judgment and decree of the trial Court calling upon the plaintiff to pay stamp duty of Rs.1,48,500/-, is set aside. To this extent, the appeal is allowed in part. Accordingly, I answer point No.(i) and (ii) in the Negative. 16. Hence, I proceed to pass the following: ORDER i. The appeal is allowed in part. ii. The judgment and decree dated 24.07.2023 in O.S.No.182/2015 passed by Senior Civil Judge, Kushtagi, is confirmed insofaras refund of earnest amount of Rs.2,00,000/- with interest at the interest of 18% p.a. - 13 - HC-KAR NC: 2025:KHC-D:9068 RFA No. 100272 of 2025 iii. The judgment and decree sofaras calling upon the plaintiffs to pay deficit stamp duty of Rs.1,48,500/- is hereby set aside. iv. Draw decree accordingly. Sd/- (HANCHATE SANJEEVKUMAR) JUDGE RKM, CT:BCK LIST NO.: 1 SL NO.: 24