- 1 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE ASHOK S.KINAGI REGULAR SECOND APPEAL NO. 470 OF 2008 (SP) C/W REGULAR SECOND APPEAL NO. 471 OF 2008 IN RSA No. 470/2008 BETWEEN: SRI B NANJUNDAIAH S/O. BOREGOWDA AGED ABOUT 57 YEARS R/O. SEEGEHALLI, KASABA HOBLI TURUVEKERE TALUK, TUMKUR DISTRICT – 573 031 …APPELLANT (BY SRI. SHANKARLINGAPPA NAGARAJ, ADVOCATE SMT. K. LALITHA, ADVOCATE) AND: 1. SMT LAKKAMMA W/O. LATE L. SIDDAPPA SINCE DEAD BY LR 2. SRI S RAJANNA S/O. LAKKAMMA AGED ABOUT 33 YEARS R/O. SEEGEHALLI MUDDLAPURA KASABA HOBLI, TURUVEKERE TALUK, TUMKUR DISTRICT – 573 031 …RESPONDENTS (BY SRI. PAWAN KUMAR, ADVOCATE FOR SRI. M N MADHUSUDHAN, ADVOCATE FOR R2 V/O DATED 06.04.2023 R2 IS LR OF DECEASED R1) Digitally signed by SHILPABAI S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 THIS RSA IS FILED U/S. 100 OF CPC AGAINST THE JUDGEMENT & DECREE DTD 7.11.07 PASSED IN R.A.NO 137/06 ON THE FILE OF THE CIVIL JUDGE, (SR.DN), & JMFC., TURUVEKERE, DISMISSING THE APPEAL AND CONFIRMING THE JUDGEMENT AND DECREE DTD 27.1.03 PASSED IN OS 145/1997 ON THE FILE OF THE CIVIL JUDGE, (JR.DN), & JMFC., TURUVEKERE. IN RSA NO. 471/2008 BETWEEN: SRI B NANJUNDAIAH S/O BOREGOWDA AGED ABOUT 67 YEARS R/OF SEEGEHALLI KASABA HOBLI, TURUVEKERE TALUK TUMKUR DISTRICT ...APPELLANT (BY SRI. SHANKARLINGAPPA NAGARAJ., ADVOCATE SMT. K. LALITHA, ADVOCATE) AND: 1. SMT LAKKAMMA W/O LATE L. SIDDAPPA SINCE DEAD BY LR 2. SRI S RAJANNA S/O LAKKAMMA AGED ABOUT 48 YEARS R/O. SEEGEHALLI MUDDLAPURA KASABA HOBLI, TURUVEKERE TALUK, TUMKUR DISTRICT – 573 031 ...RESPONDENTS (V/C/O DTD 7-12-2011 SRI. PAWAN KUMAR, ADVOCATE FOR SRI. MADHUSUDHAN, ADVOCATE) THIS RSA IS FILED U/S. 100 OF CPC AGAINST THE JUDGEMENT & DECREE DTD 7.11.07 PASSED IN R.A.NO - 3 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 151/06 ON THE FILE OF THE CIVIL JUDGE, (JR.DN), & JMFC., TURUVEKERE, ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGEMENT AND DECREE DTD 7.7.97 PASSED IN OS 65/1990 ON THE FILE OF THE CIVIL JUDGE, (JR.DN), & JMFC., TURUVEKERE. THESE APPEALS, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI ORAL JUDGMENT These Regular Second appeals arise out of the common judgment dated 07.11.2007 passed in R.A.No.151/2006 and R.A.No.137/2006 by the learned Civil Judge (Sr.Dn.) and JMFC, Turuvekere, and the judgment and decree dated 07.07.1997 passed in O.S.No.65/1990 by the learned Munsiff and JMFC, Turuvekere and the judgment and decree dated 27.01.2003 passed in O.S.No.145/1997 by the learned Civil Judge (Jr.Dn.) and JMFC, Turuvekere. 2. The plaintiffs in O.S.No.65/1990 filed a suit for the relief of a declaration, possession and mesne profits against one B.Nanjudaiah, who is the plaintiff in - 4 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 O.S.No.145/1997, wherein a suit is filed for specific performance of a contract against the plaintiffs in O.S.No.65/1990. 3. For convenience, the parties are referred to by their names. 4. Brief facts leading rise to the filing of these appeals are as follows: O.S.No.65/1990: Lakkamma and S.Rajanna filed a suit in O.S.No.65/1990 for the relief of declaration, possession and mesne profits against B.Nanjundaiah. It is the case of the plaintiffs in O.S.No.65/1990 that Lakkamma and S.Rajanna are the absolute owners of the suit schedule properties and they were in actual possession and enjoyment of the suit schedule properties till 15.02.1986. In the month of February 1986, they were in need of money for the marriage of 2nd plaintiff i.e., Rajanna, as such they approached B.Nanjundaiah, and requested a - 5 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 hand loan of Rs. 6,000/-. B.Nanjundaiah agreed to lend a money on the condition that Lakkamma and Rajanna have to execute a sale agreement in favour of B.Nanjundaiah as security for the repayment of the loan amount, within a period of 4 years. It was agreed that B.Nanjundaiah is to enjoy the suit schedule properties till repayment of the loan amount, instead of the interest. It is contended that they have executed a sale agreement on 15.02.1986 in favour of B.Nanjundaiah. It is contended that B.Nanjundaiah had also executed another agreement in favour of Lakkamma and S.Rajanna, agreeing to reconvey the properties by receiving a sum of Rs.6,000/- after a period of 4 years. It is contended that B.Nanjundaiah intimated them that, they need not execute the registered sale deed in terms of the sale agreement dated 15.02.1986, as it requires payment of stamp duty and registration purposes. B.Nanjundiah has informed them that he would institute a suit based on the sale agreement and in the proceedings, Lakkamma and Rajanna have to - 6 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 admit before the Court that they would not interfere with the possession of B.Nanjudiah over the suit schedule properties by filing a compromise petition. Accordingly, B.Nanjundaiah instituted a suit in O.S.No.154/1986, and Nanjundaiah forced Lakkamma and S.Rajanna to put their signatures on the compromise without informing the contents of the compromise petition. Thus, B.Nanjundiah got the compromise decree passed in O.S.No.154/1986 by altering the date of the agreement dated 15.04.1986 instead of 15.02.1986. It is contended that Lakkamma and S.Rajanna were ready and willing to pay the hand loan of Rs.6,000/- to B.Nanjundaiah and take back the possession of the suit schedule properties in terms of the alleged sale agreement dated 15.02.1986. Lakkamma and S.Rajanna issued a legal notice to B.Nanjundiah on 23.01.1990 demanding B.Nanjudiah to accept Rs.6,000/- and hand over the possession of the suit schedule properties. B.Nanjundaiah failed to deliver the possession of the suit schedule properties. Hence, Lakkamma and - 7 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 S.Rajanna filed a suit for declaration to declare them as owners, and thereby directing B.Nanjundaiah to deliver the possession of the suit schedule properties. Accordingly, prays for a decree in favour of Lakkamma and S.Rajanna. 5. B.Nanjundaiah filed a written statement in O.S.No.65/1990 denying the averments made in the plaint and it is contended that Lakkamma and S.Rajanna agreed to sell the suit schedule properties in favour of Nanjundaiah for a consideration of Rs.6,000/- and accordingly, executed the sale agreement dated 15.02.1986 and in part performance of contract, delivered the possession of the suit schedule properties. Subsequently, Lakkamma and S.Rajanna tried to interfere with the peaceful possession and enjoyment over the suit schedule properties. B. Nanjundaiah filed a suit in O.S.No.154/1986, and the suit was ended in a compromise, and a permanent injunction was granted in favour of B.Nanjundaiah. It is stated that B.Nanjundaiah - 8 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 is in lawful possession and enjoyment of the suit schedule properties from 15.04.1986. Hence, a suit filed by Lakkamma and S.Rajanna in O.S.No.65/1990 is not maintainable, and hence, prays to dismiss the suit. 6. In O.S.No.145/1997: B. Nanjundaiah filed a suit in O.S.No.145/1997 for the relief of specific performance of a contract. It is contended that Lakkamma and S.Rajanna have expressed their willingness to sell the suit schedule properties. B.Nanjundiah agreed to purchase the suit schedule properties for a consideration of Rs.6,000/- and accordingly, B.Nanjundiah paid Rs.6,000/- to Lakkamma and S.Rajanna, and accordingly, they executed a sale agreement in favour of B.Nanjundiah on 15.04.1986. In part performance of a contract, Lakkamma and S.Rajanna delivered the possession of the suit schedule properties in favour of B.Nanjundaiah. It is contended that Lakkamma and Rajanna agreed to execute sale deed within 15 days. It is contended that Lakkamma and S.Rajanna tried to - 9 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 interfere with the peaceful possession and enjoyment over the suit schedule properties. B.Nanjundaiah filed a suit in O.S.No.154/1986 for the relief of permanent injunction. In the said suit, Lakkamma and S.Rajanna entered into a compromise, and the said suit was decreed. He submits that B.Nanjundaiah was ready and willing to perform his part of contract, but Lakkamma and S.Rajanna did not perform their part of contract. It is also stated that B.Nanjundaiah could not get executed the registered sale deed because the fragmentation Act was in force. Hence, B.Nanjundaiah could not get the sale deed executed. Accordingly, prays to decree the suit for specific performance of a contract. 7. Lakkamma and S.Rajanna filed a written statement denying the averments made in the plaint, and it is denied that they have executed the sale agreement agreeing to sell the suit schedule properties for a consideration of Rs.6,000/-. It is contended that the transaction between Lakkamma and S.Rajanna is a loan - 10 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 transaction and not a sale transaction, and Lakkamma and S.Rajanna had no intention to sell the suit schedule properties. It is contended that decree obtained in O.S.No.154/1986 is collusive. It is contended that the suit filed by the plaintiff is barred by limitation, and it is also contended that the alleged sale agreement is in violation of Section 5 of the Fragmentation Act. Hence, it is unenforceable. Accordingly, prays to dismiss the suit in O.S.No.145/1997. 8. The trial Court in O.S.No.65/1990, based on the pleadings of the parties, framed the following issues. 1) Does plaintiffs 1 and 2 prove that they had obtained loan for Rs.6,000/- from the defendant on 15.02.1986, for the marriage celebration of plaintiff No.2? 2) Does plaintiffs prove that they had executed a nominal agreement to sell in respect of the suit property in favour of defendant, and it was intended to execute a deed of security for the loan amount obtained? 3) Does plaintiffs proves that the defendant on 15.2.1986 had executed the deed of reconveyance in favour of the plaintiffs to the effect that after 4 years he will re- - 11 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 delivered the possession of the suit property in case the plaintiffs re-aidi Rs.6,000/-? 4) Does plaintiffs prove that the compromise decree passed in O.S.no.154/96 on the file of Munsiff, Tiptur, was obtained behind their back and without their knowledge and it will not bind therein? 5) Does plaintiff prove that they are ready to re-pay Rs.6,000//- to defendant and they are entitled for the possession of the suit property from the defendant? 6) Does defendant prove that in view of the compromise decree in O.S.no.154/86, he is entitled to retain the possession of the suit property as contended in written statement? 7) Does defendant prove that the suit is barred by law of limitation? As contended in written statement? 8) Does plaintiffs prove that they are entitled for the relief of declaration and possession as prayed? 9) What order or decree? 9. The plaintiffs in O.S.No.65/1990, Lakkamma was examined as PW.1, examined 3 witnesses as PWs.2 to PW.4, and marked 3 documents as Exs.P1 to P3. In rebuttal, B.Nanjundiah was examined as DW.1 and got marked 10 documents as Exs.D1 to D.10. The trial Court - 12 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 after recording the evidence, hearing both sides, and after assessing the verbal and documentary evidence, answered issue Nos.1 to 5 and 8 in the negative, issue Nos.6 and 7 in the affirmative, and issue No.9 as per the final order. The suit in O.S.No.65/1990 was dismissed vide judgment dated 07.07.1997. 10. The trial Court in O.S.No.145/1997, based on the pleadings of the parties framed the following issues. 1) Is the plaintiff proves that the defendants 1 and 2 have agreed to sell the suit land in his favour for Rs.6000-00 on 15.04.86? 2) Is the plaintiff proves that in part performance of the contract defendants have delivered possession of the suit land in his favour by receiving entire sale consideration amount on 15.04.86 itself? 3) Is the plaintiff proves that he was and is ready and willing to get registered sale deed in terms of agreement dated 15.04.1986? 4) Are the defendants proves that they have borrowed Rs.6,000-00 as a loan from the plaintiff and for that they had pledged the suit land infavour of plaintiff? 5) Are the defendants proves that the plaintiff has created the suit agreement? - 13 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 6) Is there no cause of action for the suit? 7) Is the suit barred by limitation? 8) Is the suit hit by principle of “Resjudicata” 9) Is the plaintiff entitle to the relief sought for? 10) What order or decree? 11. To substantiate the case of the plaintiff B.Nanjundiah was examined as PW.1, examined one witness as PW.2, and marked 2 documents as Ex.P1 and Ex.P2. Lakkamma and S.Rajanna did not enter the witness box. The trial Court, after recording the evidence of Nanjundaiah and the witness, after assessing the verbal and documentary evidence, answered issue Nos . 1, 2 and 7 in the affirmative, issue Nos . 3 to 6, 8 and 9 in the negative and issue No.10 as per the final order. The suit of B.Nanjundaiah was dismissed vide judgment dated 27.01.2003. 12. B.Nanjundaiah aggrieved by the judgment and decree passed in O.S.No.145/1997, preferred an appeal in R.A.No.137/2006, and Lakkamma and S.Rajanna, - 14 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 aggrieved by the dismissal of the suit in O.S.No.65/1990 preferred an appeal in R.A.No.151/2006 on the file of the learned Civil Judge, (Sr.Dn.) and JMFC, Turuvekere. 13. The first Appellate Court clubbed both the appeals, and passed a common judgment. The first Appellate Court, after hearing the learned counsel for the parties, framed the following points for consideration:- 1) Whether the Court below has erred in appreciating the materials placed on record in O.S.65/90? 2) Whether the Court below has erred in appreciating the materials placed on record in O.S.145-97? 3) Whether the impugned judgments and decrees need interference by this Court/ 4) What order? 14. The first Appellate Court, after reassessing the verbal and documentary evidence, answered point No.1 in the affirmative, point No.2 in the negative, point No.3 partly affirmative, and point No.4 as per the final order. The appeal in R.A.No.151/2006, was allowed with costs - 15 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 throughout and the appeal in R.A.No.137/2006 was dismissed with costs vide judgment dated 07.11.2007 and the judgment and decree dated 07.07.1997 passed in O.S.No.65/1990 was set aside, and consequently decreed the suit of Lakkamma and S.Rajanna and declared that they are the absolute owners of the suit schedule properties and directed B.Nanjundaiah to vacate and hand over the possession of the suit schedule properties to Lakkamma and Rajanna within a period of 3 months from the date of receiving a sum of Rs.6,000/- from them, and confirmed the judgment and decree passed in O.S.No.145/1997 wherein the suit is filed by B. Nanjundaiah. 15. B.Nanjundaiah, aggrieved by the common judgment and decree passed in R.A.No.151/2006 and R.A.No.137/2006, preferred these regular second appeals. - 16 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 16. Heard the arguments of the learned counsel for B.Nanjundaiah, and learned counsel for Lakkamma and S.Rajanna. 17. Learned counsel for B. Nanjundiah submits that the Lakkamma and Rajanna are the absolute owners of the suit schedule properties and they agreed to sell the suit schedule properties for a consideration of Rs.6,000/-, accordingly B.Nanjundiah paid Rs. 6,000/- to Lakkamma and S.Rajanna. Accordingly, they executed a sale agreement dated 15.04.1986 and they delivered the possession of the suit schedule properties in part performance of a contract. He submits that Lakkamma and S.Rajanna tried to interfere with the peaceful possession and enjoyment over the suit schedule properties. B.Nanjundaiah filed a suit in O.S.No.154/1986 for the relief of perpetual injunction. The said suit was ended in a compromise. He submits that Nanjundaiah could not get the sale deed executed on the ground that on the date of executing the sale agreement dated 15.04.1986, the - 17 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 Fragmentation Act was in force. Hence, B. Nanjundaiah could not get the sale deed executed. Therefore, by a decree passed in O.S.No.154/1986, he is in lawful possession and enjoyment of the suit schedule property. He submits that B. Nanjundaiah has filed a suit in O.S.No.145/1997 for the relief of specific performance of a contract. He submits that the transaction between Lakkamma, S.Rajanna and B. Nanjundaiah is a sale transaction and not a loan transaction. The said aspect was not adequately considered by the first Appellate Court, and committed an error in decreeing the suit in O.S.No.65/1990. He also submits that the first Appellate Court committed an error in granting mesne profits. Hence, on these grounds, he prays to allow the appeals. 18. Per contra, learned counsel Sri. Pawan Kumar, for Lakkamma and Rajanna, submits that the transaction between the parties to the suits is a loan transaction and not a sale transaction. He submits that the plaintiffs have executed the agreement on 15.02.1986 as security for the - 18 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 repayment of the loan amount. He submits that B.Nanjundaiah created the alleged sale agreement dated 15.04.1986. He also submits that B.Nanjundaiah has committed fraud on Lakkamma and S.Rajanna and obtained the compromise decree in O.S.No.154/1986. B.Nanjundaiah filed a suit for specific performance of a contract in 1997, which is barred by limitation. He submits that both the courts below have concurrently recorded a finding of fact that the suit filed by the plaintiff in O.S.No.145/1997 is barred by limitation. He also submits that the trial Court has rightly recorded a finding that B.Nanjundaiah has failed to establish that he was ready and willing to perform his part of the contract, and there is no compliance with Section 16(c) of the Specific Relief Act, 1963. He also submits that the alleged sale agreement is contrary to Section 5 of the Fragmentation Act, and the said agreement is not enforceable. To buttress his arguments, he placed reliance on the judgment of the Hon’ble Apex Court in the case of - 19 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 MUNISHAMAPPA VS. M. RAMA REDDY AND OTHERS reported in 2023 SCC ONLINE SC 170 and submits that the said agreement is forbidden by Section 23 of the Indian Contract Act. The first Appellate Court was justified in passing the impugned judgment. Hence on these grounds, he prays to dismiss the appeals. 19. The appeals are admitted on 07.12.2011 to consider the following Substantial questions of law. 1. Even if the appellate Court had on the basis of evidence concluded that the transaction was not a sale but in the nature of mortgage, was it right in directing the defendants to pay mesne profit? 2. Whether the alleged agreement dated 15.02.1986 impact the agreement dated 15.04.1986 and if so, could it have been considered as a transaction of a mortgage rather than sale? 20. Perused the records, and considered the submissions of learned counsel for the parties. - 20 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 21. Reg. Substantial question of law No.1: There is no dispute regarding the ownership of the suit schedule properties. Admittedly, Lakkamma and S.Rajanna are the absolute owners of the suit schedule properties. They approached B.Nanjundaiah in 1986 and requested to advance hand loan of Rs. 6,000/-, and B.Nanjundaiah agreed to advance a hand loan of Rs. 6,000/-, and he insisted them on executing a sale agreement as security for the repayment of the loan amount. It was agreed that Lakkamma and S.Rajanna agreed to repay the said loan amount within 4 years. B. Nanjundaiah insisted Lakkamma and S.Rajanna to execute the sale agreement as a security for the repayment of the loan amount, and further, it was agreed that B.Nanjundaiah is to enjoy the suit schedule properties till Lakkamma and S.Rajanna pay the amount, and the said amount does not carry any interest and accordingly, they executed the agreement dated 15.02.1986. Lakkamma and S.Rajanna requested B.Nanjundaiah to accept - 21 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 Rs.6,000/- and deliver the possession of the suit schedule properties. B.Nanjundaiah, instead of accepting Rs. 6,000/- and delivering the possession, filed a suit in O.S.No.154/1986 for the relief of perpetual injunction, and a compromise petition was filed, and a compromise decree was drawn in O.S.No.154/1986. 22. Admittedly, as of the date of executing the alleged sale agreement dated 15.02.1986/15.04.1986 as per Ex.P1 and Ex.D1, the Karnataka Prevention of Fragmentation and Consolidation of Holdings Act, 1966, was in force. Section 6 prohibits from transferring the lands, which reads as follows: 6. Fragmentation prohibited:- “No land in any area shall be transferred or partitioned or subdivided so as to seize the fragment”. 23. Admittedly, B. Nanjundaiah himself has pleaded in the O.S.No.145/1997 that he was unable to get the sale deed executed because the fragmentation act was in force. - 22 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 Even assuming that Lakkamma and S.Rajanna executed the sale agreement, the said sale agreement is forbidden by the law and said agreement is unenforceable as per Section 23 of the Indian Contract Act. Though, the agreement of sale was executed, according to the case of B.Nanjundaiah the sale agreement was executed on 15.04.1986. B.Nanjundaiah had not taken any steps to file the suit for specific performance of a contract till 1997. Thus, the suit filed in O.S.No.145/1997 is barred by limitation. 24. Admittedly, B.Nanjundaiah admitted the ownership of Lakkamma and S.Rajanna and filed a suit against them for specific performance of a contract in O.S.No.145/1997. The first Appellate Court has rightly decreed the suit in O.S.No.65/1990 filed by Lakkamma and S.Rajanna, and declared that they are the owners of the suit schedule properties, and directed B.Nanjundaiah to hand over the vacant possession of the suit schedule properties. The transaction between the parties to the suit - 23 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 is the loan transaction and not a sale transaction. B.Nanjundaiah enjoyed the suit schedule properties even after the expiry of 4 years, without accepting any amount from Lakkamma and S.Rajanna, and during the pendency of the suit in O.S.No.65/1990, B.Nanjundaiah filed a suit in O.S.No.145/1997 i.e., after 7 years from the date of filing the suit in O.S.No.65/1990. Thus, B.Nanjundaiah enjoyed the suit schedule properties without accepting the amount offered by Lakkamma and S.Rajanna. 25. The first Appellate Court was justified in granting the relief of mesne profits from the date of suit till the delivery of possession of the suit schedule properties to Lakkamma and Rajanna and held that a separate enquiry is necessary to determine the quantum of mesne profits. The first Appellate Court, while passing the judgment, held that Lakkamma and S.Rajanna are entitled to mesne profits from the date of suit till the date of delivery of possession. However, the first Appellate Court has not determined the quantum of compensation - 24 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 and directed to pay mesne profit and ordered for a separate enquiry. In view of the above discussion, I answer the substantial question of law No.1 in the affirmative. 26. Reg. Substantial question of law No.2: Though, Lakkamma and S.Rajanna contended that they have executed the sale agreement on 15.02.1986 and not on 15.04.1986. It is contended that B.Nanjundaiah created the sale agreement dated 15.04.1986. The said agreement is concocted. Ex.P1 was executed on 15.02.1986 and Ex.D1 was executed on 15.04.1986. Ex.P1 was executed on plain paper. The first Appellate Court has discussed the documents i.e., Ex.P1 and Ex.D1 in para Nos.34 and 35 of the impugned judgment, which reads as follows: “34. As already pointed the plaintiff No.1 and her witnesses have unequivocally stated on oath that the document marked at Ex.P1 and Ex.D1 were executed on the same day at the residence of PW2, in their presence. Though the defendant contended - 25 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 that the document marked at Ex. P1 was a concocted and forged document, he has failed to substantiate the said contention. The statements made by Pw2 to PW4 makes it clear that absolutely there is no reason to suspect their testimony as to execution of these two documents on very same day and in their presence. Thus the materials on record gives an impression that either due to oversight or inadvertence in Ex. P1 the Month of the document was mentioned as February instead of April. The date and year of Ex. P1 and Ex. D1 are the same. As such, it is to be held that the plaintiffs have proved that the document marked at Ex. D1 was a nominal agreement to sell as a security for repayment of loan amount and that the defendant had executed the agreement marked at Ex.P1, agreeing to re-deliver the possession of the schedule properties to the plaintiffs on receiving loan amount. 35. The perusal of the impugned Judgment in OS No.65/90 indicates that the court below dis-believed the case of the plaintiffs on the ground that the PW2 has not explained discrepancy found in Ex.P1 and D1 while mentioning the Month of the documents and that the PW2 admitted the document marked at Ex.D1 is a real document. As already discussed herein above nodoubt the PW2 has failed to give any explanation for the discrepancy nor stated anything - 26 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 denying genuineness of document marked at Ex.D1. However, in the considered view of this court absolutely there is no valid reason to suspect the statements of Pw1 and her witnesses as to execution of documents marked at Ex. P1 and D1 on a particular day and execution of document marked at Ex.P1 by the defendant though not on 15.2.1986. Thus in the considered view of this court no much importance can be attached to the discrepancy found in Ex.P1 while mentioning the month of the document. The reasonings given by the court below indicates that it was impressed by the argument advanced on behalf of the defendant contending that the document marked at Ex.P1 was either forged or concocted. The court below observed that the document marked at Ex. P1 have been written on a plain paper, it could have been antidated. Further the court below opined that if really parties had agreed to execute two Agreements, they would have got the said documents on two sets of stamp papers. No doubt the document marked at Ex. P1 has been prepared on a plain paper though the document marked at Ex. D1 is prepared on stamp paper. It is to be noted that in the averments of plaint itself the plaintiffs have contended that two agreements in question were executed on the same date. Inspite of the same during the cross-examination of plaintiff No.1 no attempt was made to deny execution of two - 27 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 documents on a particular day and no attempt was made to elicit from the mouth of plaintiff No.1 as to any reason for not executing document marked at Ex. P1 on a stamp paper. Even during the cross- examination of PW2 to PW4 no attempt was made by the defendant in this regard. As such, the court below should not have swayed by the arguments advanced by the defendant. Further when the defendant has failed to deny his signature on Ex. P1 and execution of the said document, the court below ought not to have presumed that the document marked at Ex P1 was got prepared by putting antidate. In view of the said reasons, it is to be held that the court below has failed to properly appreciate the materials placed on record”. 27. The first Appellate Court has rightly appreciated the entire evidence on record, and held that the transaction between the parties to the suits is a loan transaction, and not a sale transaction. The first Appellate Court was justified in passing the impugned judgment. I do not find any error in the findings recorded by the first Appellate Court. I concur with the findings recorded with the first Appellate Court in the impugned judgment. In - 28 - HC-KAR NC: 2025:KHC:32785 RSA No. 470 of 2008 C/W RSA No. 471 of 2008 view of the above discussion, I answer the substantial question of law No.2 in the affirmative. 28. In view of the above discussion, I proceed to pass the following order: ORDER i. The Regular Second Appeals are dismissed. ii. The judgment and decree passed in R.A.No.151/2006 and R.A.No.137/2006 dated 07.11.2007 by the learned Civil Judge (Sr.Dn.) and JMFC, Turvekere, is hereby confirmed. iii. No order as to the costs. In view of the dismissal of the appeals, pending applications, if any, stand disposed of. Sd/- (ASHOK S.KINAGI) JUDGE SKS List No.: 1 Sl No.: 2