- 1 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF AUGUST, 2025 PRESENT THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND THE HON'BLE MR. JUSTICE RAJESH RAI K COMMERCIAL APPEAL NO. 477 OF 2022 (MON) BETWEEN: 1. SRI R RAJANNA SINCE DEAD BY LRS SMT MICHEAL RANI WIFE OF LATE R RAJANNA AGED ABOUT 57 YEARS RESIDING AT SEEGEHALLI VILLAGE, K.R. PURAM HOBLI, BENGALURU EAST TALUK PRESENTLY RESIDING AT FLAT NO.310, TRINITY RESIDENCY, LOURDU NAGAR MAIN ROAD, DODDABASAVANAPURA, VIRGONAGAR POST BENGALURU-560 049 2. SRI. JAMES SON OF LATE R. RAJANNA AGED ABOUT 37 YEARS RESIDING AT SEEGEHALLI VILLAGE, K.R. PURAM HOBLI, BENGALURU EAST TALUK PRESENTLY RESIDING AT FLAT NO.310 TRINITY RESIDENCY, LOURDU NAGAR MAIN ROAD, DODDABASAVANAPURA, VIRGONAGAR POST BENGALURU-560 049 Digitally signed by PANKAJA S Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 3. SRI. JOHN PETER SON OF LATE R. RAJANNA AGED ABOUT 35 YEARS RESIDING AT SEEGEHALLI VILLAGE, K.R. PURAM HOBLI, BENGALURU EAST TALUK PRESENTLY RESIDING AT FLAT NO.310 TRINITY RESIDENCY, LOURDU NAGAR MAIN ROAD, DODDABASAVANAPURA, VIRGONAGAR POST BENGALURU-560 049 …APPELLANTS (BY SRI. FAYAZ SAB B.G, ADVOCATE) AND: 1. M/S DWARAKA BUILDERS & DEVELOPERS REPRESENTED BY ITS MANAGING PARTNERS SRI MALYADRI SON OF NARASIMHULU OFFICE AT FLAT NO.C-220 EUPORIA SUN CITY APARTMENT SARJAPURA MAIN ROAD, IBLUR VILLAGE, BENGALURU-560 0102 PRESENTLY OFFICE AT SY.NO.95/3 SAI BALAJI RESIDENCY, NAGONDANAHALLI VILLAGE, KAIDOTA MAIN ROAD BENGALURU-560 066 2. M/S DWARAKA BUILDERS & DEVELOPERS REPRESENTED BY ITS MANAGING PARTNERS SRI. VENKATESHWARALU OFFICE AT FLAT NO.C-220 EUPORIA SUN CITY APARTMENT SARJAPURA MAIN ROAD, IBLUR VILLAGE, BENGALURU-5600102 PRESENTLY OFFICE AT SY NO.95/3 SAI BALAJI RESIDENCY, NAGONDANAHALLI VILLAGE, KAIDOTA MAIN ROAD BENGALURU-560 066 …RESPONDENTS (BY SRI. ASHOK B PATIL, ADVOCATE FOR R1 & R2) - 3 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 THIS COMAP IS FILED UNDER SECTION 13(1A) OF COMMERCIAL COURT ACT 2015 PRAYING TO SET ASIDE THE JUDGMENT AND DECREE DATED 13.12.2021 PASSED IN COM.O.S.NO.27/2020 ON THE FILE OF LXXXIII ADDL. CITY CIVIL AND SESSIONS JUDGE AT BENGALURU CITY (CCH-84) WHEREIN THE SUIT OF THE RESPONDENTS/PLAINTIFFS IS DECREE WITH COST, WHEREIN DIRECTED THESE APPELLANTS TO PAY RS.20,00,000/- TO THE RESPONDENT/PLAINTIFFS WITH INTEREST AT 9% PER ANNUM FROM THE DATE OF SUIT TILL REALIZATION OF THE ENTIRE AMOUNT, IN THE INTEREST OF JUSTICE AND EQUITY. THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE MR. JUSTICE RAJESH RAI K ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE RAJESH RAI K) Defendant Nos.2 to 4 in Com.O.S. No. 27/2020 on the file of the LXXXIII Additional City Civil Judge and Sessions Judge, at Bengaluru City, (hereinafter referred to as "the Trial Court") have filed this commercial appeal challenging the judgment and decree dated 13.12.2021 by which the suit in Com.O.S.No.27/2020 was decreed with costs by directing that defendant Nos.2 to 4 are jointly and severally liable to pay Rs.20,00,000/- to the plaintiffs with interest @ 9% p.a. from the date of suit till realization of the entire amount. - 4 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 2. For the sake of convenience, the parties are referred to by their ranks before the Trial Court. 3. The suit in Com.O.S.27/2020 was filed by the plaintiffs for recovery of money of Rs.20,00,000/- along with interest as per law from defendants and for such other relief. 4. The plaintiffs contended that, they are the developers and have entered into a registered joint development agreement with the defendants on 22.03.2014 for the development of the property of the defendants and have paid Rs.20,00,000/- as refundable deposit and that the said amount is refundable to the plaintiffs after handing over the possession of defendants' share as per the JDA. The plaintiffs have completed the construction of the project and handed over the possession of the defendants' share. Thereafter, the plaintiffs approached the defendants seeking the return of refundable deposit but the defendants' have not returned the same. The plaintiffs have handed over the original documents including the JDA to the Apartment Owners Association and the same was acknowledged by the Association on 16.11.2019. Since the refundable deposit had not been refunded despite of - 5 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 notice and completion of the project, the plaintiffs filed the suit for recovery of the same. 5. During the pendency of the suit, defendant No.1 died and defendant Nos.2 to 4 are legal heirs of the defendant No.1. Defendants have appeared through their counsel, but neither have they filed the written statement, nor have they contested the suit. 6. The Trial Court, thereafter, recorded the evidence on the issues framed. Plaintiff No.1 - Malyadri was examined as PW.1 and marked 10 documents as Exs.P1 to P10. PW.1 was not cross-examined by any of the defendants. The Trial Court, thereafter considering the oral and documentary evidence, held that the plaintiffs had proved that they are entitled for refund of the refundable security deposit of Rs.20,00,000/- from the defendants. Accordingly, the Trial Court held that the plaintiffs are entitled for the recovery of Rs.20,00,000/- from the defendant Nos.2 to 4 jointly and severally with interest @ 9% p.a from the date of suit till realization. - 6 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 7. Being aggrieved by the said judgment and decree, defendant Nos.2 to 4 are before this Court in the present appeal. 8. We have heard the learned counsel Sri. Fayaz Sab B.G for the appellants and the learned counsel Sri. Ashok B Patil for respondent Nos. 1 and 2 and also perused the records placed before us. 9. Learned counsel for the appellants/defendant Nos.2 to 4 contended that though defendant Nos.2 to 4 had engaged a counsel, due to reasons beyond their control, they could not instruct their counsel to conduct the proceedings before the Trial Court. He also contended that, after their appearance through their counsel before the Trial Court, the suit was transferred to the Commercial Court. Thereafter, the notice or summons was not served to them. Further, it is contended that the impugned decree has far reaching civil consequences inasmuch as executing the decree and since defendant Nos.2 to 4 have valuable defence in the suit, an opportunity deserves to be granted to them to contest the suit on merits. Accordingly, he prays to allow the appeal. - 7 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 10. Per contra, the learned counsel for the plaintiffs/respondent Nos.1 and 2 contended that defendant Nos.2 to 4 have not even whispered about their defence in the suit and therefore, an opportunity to contest the suit cannot be granted for the mere asking unless they make out a ground to unsettle the judgment and decree passed by the Trial Court. He further contends that on meticulous examination of the material placed on record the Trial Court is justified in directing defendant Nos.2 to 4 to pay Rs.20,00,000/- to the plaintiffs with interest @ 9% p.a. from the date of suit till realization of the entire amount and thus, prays that the appeal filed by the defendants Nos.2 to 4 be dismissed. 11. Having considered the submissions made by the learned counsel for the plaintiffs and defendant Nos.2 to 4, the sole point which arises for our consideration in this appeal is: Whether defendant Nos.2 to 4 deserves to be provided with an opportunity to contest the suit on merits? 12. It is not in dispute that defendant Nos.2 to 4 had engaged a counsel to contest the suit and the counsel had - 8 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 entered appearance. However, the defendants neither filed any written statement, nor did cross-examine the witness, who was examined in favour of the plaintiffs and have not entered the witness box to adduce evidence in support of their claim. They also did not address arguments on the merits of the suit. The contention of defendant Nos.2 to 4 for the non-filing of the written statement and not contesting the suit is that, though they knew that the suit has been transferred from the Civil Court to the Commercial Court they were not aware of earlier O.S No.377/2019 having been changed to new number as Com.O.S.No.27/2020 and also not received any notice or summons from the Trial Court in respect of the said suit. 13. Having regard to the relief sought for in the suit, which had far reaching consequences, we are of the opinion that, an opportunity deserves to be granted to defendant Nos.2 to 4 to contest the suit on merits. In such circumstance, considering the facts and circumstance of the case, defendant Nos.2 to 4 are granted one opportunity to contest the suit before the Trial Court. - 9 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 14. Consequently, the point for determination raised by this Court is held in favour of defendant Nos.2 to 4. Hence, the following: ORDER i. The appeal is allowed. ii. The impugned judgment and decree dated 13.12.2021 passed by the Trial Court in Com.O.S.No.27/2020 is set aside. iii. The suit is remitted back to the Trial Court for reconsideration in accordance with law. iv. The parties shall appear before the Trial Court on 03.09.2025 without expecting any further notice from the Trial Court. v. Defendant Nos.2 to 4 are permitted to file their written statement and also permitted to cross examine PW.1. Further, both the parties are permitted to lead evidence and produce documents they intend to rely on. vi. If the Trial Court considers that any fresh issue arises, it may frame issues and thereafter record the evidence of the parties. vii. The Trial Court is directed to dispose off the suit as early as possible and in accordance with - 10 - HC-KAR NC: 2025:KHC:30610-DB COMAP No. 477 of 2022 the Karnataka (Case Flow management in Subordinate Courts) Rules, 2005. SD/- (ANU SIVARAMAN) JUDGE SD/- (RAJESH RAI K) JUDGE PKS List No.: 1 Sl No.: 6