- 1 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM REGULAR FIRST APPEAL NO. 922 OF 2022 (SP) BETWEEN: 1. SMT. DAKSHAYINI @ CHANDRAKALA W/O K. MAHESH AGED ABOUT 40 YEARS R/O K.R. EXTENSION, SADHANA ROAD TUMKURU CITY-572102. …APPELLANT (BY SRI. V.B. SIDDARAMAIAH, ADVOCATE) AND: 1. SRI. ANJINAPPA S/O LATE SIDDAIAH AGED 54 YEARS 2. SRI. NARASIMHAMURTHY S/O LATE SIDDAIAH AGED 53 YEARS R1 AND R2 ARE R/AT ARAKERE VILALGE KASABA HOBLI-572106 TUMAKURU TQ AND DISTRICT 3. SRI. A.S. HANUMAKKA W/O LAKSHMAIAH D/O LATE SIDDAIAH MAJOR R/O HALEGUBBI Digitally signed by AL BHAGYA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 A.K. COLONY, PRABHUVANAHALLI POST GUBBI TALUK-572 216. TUMAKURU DISTRICT. 4. SMT A.S. LAKSHMIDEVAMMA W/O NARASIMHARAJU D/O LATE SIDDAIAH MAJOR R/O THIMLAPURA, A.K. COLONY ARAKERE POST TUMAKURU TALUK AND DISTRICT TUMKURU-572106. …RESPONDENTS (BY SRI. MADHUSUDHAN .M.N, ADVOCATE) THIS RFA IS FILED UNDER SECTION 96 R/W ORDER 41 RULE 1 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 30.03.2022 PASSED IN OS No.385/2015 ON THE FILE OF THE III ADDITIONAL SENIOR CIVIL JUDGE AND JMFC TUMAKURU, DISMISSING THE SUIT FOR SPECIFIC PERFORMANCE. THIS APPEAL, COMING ON FOR DICTATING JUDGMENT, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL JUDGMENT This appeal is by the unsuccessful plaintiff assailing the dismissal of the suit for specific performance of contract filed in O.S.No.385/2015. - 3 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 2. For the sake of brevity, the parties are referred to as per their rank before the trial Court. 3. The facts leading to the case are as under: Plaintiff has filed a suit seeking relief of specific performance of contract based on an agreement of sale dated 24.03.2011. Plaintiff asserts that one Siddaiah and defendant Nos.1 and 2 have offered to sell the sites within a period of 7 months. As per the plaintiff's version, it is pleaded that defendant Nos.1 and 2 were required to get the land converted and obtain necessary sanction from the Town Planning Authority for formation of sites. Plaintiff therefore specifically pleaded that under the agreement, she was entitled to secure four sites. Plaintiff therefore contended that though seven months time is pleaded, time was not the essence of the contract and the said period would commence only after defendants secure the approved layout plan. - 4 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 Plaintiff has specifically pleaded that she was ever ready and willing to perform her part of contract. Plaintiff has alleged that despite expiry of seven months, defendants failed to apply for conversion of the suit land while ancestor Siddaiah died on 21.05.2012. Plaintiff has also pleaded that defendants expressed their inability to get the land converted. After persistent demand, it is averred that defendants applied for conversion on 25.01.2014 and they assured that they would execute sale deed in respect of four sites immediately after securing conversion order and layout plan. The present suit is filed alleging that despite securing conversion order, they have not disclosed it to the plaintiff and only when plaintiff came to know that defendants are selling the sites having secured conversion order, issued a legal notice on 28.04.2015 calling upon defendants to execute the sale deed. Since defendants failed to comply the terms of the agreement and failed to reply to the notice, the present suit is filed. - 5 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 Defendants appeared through their counsel and filed common written statement. The defendants on the contrary disputed the very agreement dated 24.03.2011. Though defendants admitted that 25 guntas of land had fallen to the share of Siddaiah and further admitted that they have secured conversion order to be used for residential purpose and an approved layout plan is also secured, defendants on the contrary alleged that the suit agreement is fraudulently secured by plaintiff and it is a concocted document. Plaintiff in support of her contention examined herself as PW.1 and examined two witnesses as PWs.2 and 3 and in all relied on 22 documents which were produced and marked as Exs.P-1 to P-22. Defendants examined defendant No.2 as DW.1 and did not choose to adduce any rebuttal evidence. Trial Court based on pleadings and oral and documentary evidence answered issue No.1 in the - 6 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 affirmative and issue No.3 in the negative. While answering issue No.2 relating to readiness and willingness, trial Court answered the said issue in the negative and against the plaintiff and suit is dismissed. 4. Learned counsel appearing for the plaintiff reiterating the grounds urged in the appeal memo has strenuously argued and contented that the findings recorded by the trial Court on issue No.2 suffers from perversity. He would point out that trial Court has misread the recitals found in the agreement of sale. Referring to the recitals, he would point out that the agreement imposed an obligation on the owners to secure conversion order and also approval of the layout plan from the concerned Town Planning Authority. He would point out that the defendants were guilty and have breached the conditions imposed on them under the agreement of sale. These crucial aspects are not properly appreciated by the trial Court and therefore, he would request this Court to reverse the findings on issue No.2 and decree the suit. - 7 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 5. Per contra, learned counsel appearing for the defendants has disputed the agreement on the premise that signatures of defendants are not found on each page. He has also pointed out that signatures vary. Further, referring to the recitals in the suit agreement, he would point out that seven months time was stipulated to conclude the transaction. Referring to the recitals in the agreement, he would vehemently argue and contend that there is no recital indicating that defendants were required to secure conversion order. He would further point out that there is absolutely no material to show that plaintiff had approached the defendants. Therefore, he would contend that time was the essence of contract and since plaintiff has failed to prove her readiness and willingness, trial Court was justified in dismissing the suit. 6. Heard learned counsel for the appellant/plaintiff and learned counsel for the respondents/defendants. The following points would arise for consideration: - 8 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 1) Whether the finding of the trial Court on Issue No.2 that plaintiff has failed to prove readiness and willingness, suffers from perversity and warrants interference? 2) Whether trial Court having misread the recitals in the sale deed erred in not exercising discretion in favour of plaintiff having answered issue No.1 in the affirmative and issue No.3 in the negative? 3) What order? Finding on Point Nos.1 and 2: 7. Before this Court proceeds to adjudicate upon the issue as to whether time was the essence of the contract and whether there was any delay or laxity on the part of the plaintiff in performing her part of the obligations under the agreement, it would be imperative to first undertake a careful examination of the relevant recitals of the agreement to sell. The Trial Court, while dealing with this aspect, has already extracted certain pertinent clauses at paragraph 15 of its judgment. However, this Court considers it necessary and appropriate to undertake an independent and holistic scrutiny of the - 9 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 entire terms and conditions set out in the suit agreement, particularly to determine the true intention of the parties at the time of entering into the contract. 8. A specific focus must be directed towards understanding whether the plaintiff’s intention was to purchase fully developed sites to be formed by the defendants, subject to their obtaining necessary approvals, including the conversion order and sanctioned layout plan. In this context, the description of the property provided in the schedule appended to the suit agreement assumes considerable significance. The language used in the schedule may offer crucial insight into whether the contract was for the sale of developed sites or otherwise, and thereby would have a direct bearing on the question of whether time was a fundamental term of the agreement. 9. Accordingly, this Court finds it essential to reproduce the schedule annexed to the suit agreement for - 10 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 ready reference and for a more meaningful adjudication of the issue at hand. The schedule reads as follows: " ೈನ ೆಡೂ ಸ ನ ವರ ತುಮಕೂರು ಾಲೂಕು, ಕಸಾ ೋಬ, ಅರ ೆ!ೆ "ಾ#ಮದ ಸ&ೆ' ನಂ.110 ರ) *ದ+ಯ ನವರ -ೆ."ೆ ಬಂ/ರುವ 1-25 ಗುಂ1ೆ ಜ3ೕ4ನ 5ೈ6 (0-25 ಗುಂ1ೆ ಜ3ೕನು <ಾವ= ಕನಷ'? @ಾA* ೈಟುಗCಾD ಂಗA* ಅಪFವ @ಾAಸುವ ಧ ಅಳೆಯ ೈಟುಗಳI) 0-25ವ=ಳK ಪF!ಾ ಜ3ೕ4"ೆ LೆಕುMಬಂN:- ಪFವ' ೆM:-ಸ&ೆ' ನಂ.104 ರಲ) ಂಗA*ರುವ SೇಔU, ಪWXಮ ೆM: ಇZೇ ಸ&ೆ' ನಂಬರು 5ೈ6 <ಾವ=ಗಳI ಉ* ೊಂAರುವ 1-00 ಎಕ!ೆ ಜ3ೕನು, ಉತರ ೆM: ಚಂದ#^ೇಖರಯ ನವರ ಜ3ೕನು, ದ`ಣ ೆM: ಹನುಮಂತ!ಾಯಪc ನವರ ಜ3ೕನು. ಈ ಮeೆ ಇರುವ ಸತು ಈ ಕ#ಯದ ಕ!ಾf"ೆ ಒಳಪhರುತZೆ ಎಂಬುZಾD ಒic ಬ!ೆದು ೊಟh ೈಟುಗಳ ಕ#ಯದ ಕ!ಾರು ಪತ#." 10. On a close examination of the property schedule appended to the suit agreement, it becomes evidently clear that the plaintiff intended to purchase developed sites which were to be formed by the defendants, only after securing a valid conversion order - 11 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 and obtaining approval of the layout plan from the competent Town Planning Authority. This understanding is not only reflected in the language of the schedule but is also fortified by the recitals contained in the agreement to sell. A perusal of the record further discloses that the defendants demonstrated complete indifference and negligence in securing the required conversion order within the stipulated time. On the contrary, it is revealed that the defendants were able to obtain the conversion order only belatedly, on 29.05.2014. Notably, even after securing the conversion and layout approval, the defendants failed to communicate the same to the plaintiff. There is no material on record to indicate that the plaintiff was ever intimated about the compliance with these conditions precedent, which were fundamental to the performance of the agreement. 11. In the backdrop of these significant factual details, this Court has once again revisited the relevant clauses and recitals contained in the suit agreement - 12 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 marked at Ex.P-1, which have also been extracted by the Trial Court in paragraph 15 of its judgment. While the Trial Court does refer to the key recitals which explicitly state that the defendants had agreed to form a layout and thereafter sell four developed sites to the plaintiff only after obtaining the necessary conversion order and layout plan approval, the Trial Court nonetheless proceeds to hold that the agreement was not contingent upon such compliance and that the sale could be concluded even in the absence of conversion or layout formation. This finding, in the considered opinion of this Court, is wholly perverse and directly contrary to the plain language of the recitals in the agreement, and the clear description provided in the property schedule. Such a conclusion overlooks the cumulative intent of the parties and the essential preconditions that governed the performance of contractual obligations. 12. Upon a holistic reading of the entire suit agreement marked as Ex.P-1, this Court is satisfied that - 13 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 the plaintiff has successfully established that time was never intended to be the essence of the contract. The intention of the plaintiff was to purchase four developed sites, and her role was limited to completing the transaction by paying the balance sale consideration once the defendants had fulfilled their obligations of securing the conversion order and approval of the layout. What is even more telling is that the plaintiff paid a sum of Rs.5,00,000/- as advance consideration, specifically to enable the defendants to obtain the conversion order. Despite receiving this sum and thereafter securing both the conversion and layout approval, the defendants proceeded to alienate the sites to third parties, in total disregard of their contractual obligation to the plaintiff. This conduct betrays the bona fide of the defendants and underscores their breach of contract. 13. Therefore, when the agreement is read in its entirety, it becomes clear that no immediate or unconditional obligation was cast upon the plaintiff, except - 14 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 to pay the balance sale consideration after the defendants fulfilled the stipulated conditions. The finding of the Trial Court that the plaintiff was not ready and willing to perform her part of the contract is, therefore, factually and legally untenable. It is perverse, ignores the true intent of the agreement, and fails to appreciate the conditional nature of the plaintiff’s obligation. This Court is of the view that such a finding, based on a misreading of the agreement, cannot be sustained. 14. Furthermore, the fact that the defendants utilised the advance amount paid by the plaintiff towards securing the conversion order cannot be overlooked. In such circumstances, equity must weigh heavily in favour of the plaintiff. The conduct of the defendants is not only unfair and unprincipled, but also borders on sharp practice. Instead of honouring the agreement, the defendants took a dishonest stand in the suit proceedings by asserting that the suit agreement was concocted and fraudulent. However, this contention was rightly rejected - 15 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 by the Trial Court, which recorded a categorical finding under Issue No.1 that the suit agreement was duly executed and proved. Correspondingly, the defence of fraud and fabrication was negatived under Issue No.3. Having accepted the validity and execution of the suit agreement, and having also found that a substantial part of the sale consideration was paid at the inception of the contract, there is absolutely no credible material placed by the defendants to disentitle the plaintiff from seeking the equitable remedy of specific performance of contract. 15. The plaintiff, in the instant case, has placed on record convincing, cogent, and reliable evidence to establish that her conduct has been consistent and fair throughout the transaction. In contrast, the defendants’ conduct is found to be wholly untrustworthy and lacks candour. The deliberate attempt by the defendants to disown a validly executed agreement and to alienate the property to third parties, despite receiving consideration from the plaintiff, speaks volumes of their intention to - 16 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 unjustly enrich themselves. In view of these glaring facts and the perversity of the reasoning adopted by the Trial Court, this Court is constrained to interfere. The finding recorded on Issue No.2 by the Trial Court is therefore liable to be, and is hereby, set aside. Accordingly, point Nos.1 and 2 are answered in the affirmative. 16. Conclusions: a) The trial Court, after detailed evaluation, has categorically held under Issue No.1 that the agreement to sell is duly proved and has concurrently rejected the defendants’ contention of forgery by answering Issue No.3 in the negative. Once the Court accepts the agreement and finds that the same is validly executed, it necessarily follows that the plaintiff’s part-performance namely, payment of advance consideration and adherence to the terms must be considered in the proper context. Despite this, the trial Court paradoxically concludes that the plaintiff failed to demonstrate readiness and willingness, - 17 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 which amounts to a contradictory and unsustainable finding in law. b) The recitals in the agreement to sell clearly demonstrate that the plaintiff’s intention was to purchase fully developed residential sites, and, reciprocally, the defendants had agreed to sell such sites after securing necessary statutory approvals. The agreement unmistakably records that the defendants undertook the obligation to obtain conversion of the land and secure approval of the layout plan from the competent Town Planning Authority. It is, therefore, evident from the very terms of the agreement that both parties contemplated the sale and purchase of developed sites, and not mere undivided land or agricultural property. The mutual obligations, as recorded in the agreement, leave no room for doubt that the contract was to be performed only upon formation of the layout and completion of statutory formalities by the defendants. - 18 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 c) A plain reading of the recitals in the agreement to sell makes it evident that the primary obligation was on the defendants to secure conversion of the land and obtain layout approval from the Town Planning Authority before any sale transaction could be completed. The plaintiff’s obligation to pay the balance sale consideration was contingent upon the defendants fulfilling these preconditions. The trial Court, however, misdirected itself by interpreting the agreement as requiring the plaintiff to perform her obligation irrespective of the defendants’ compliance with their part. This amounts to a clear misreading of the agreement and a failure to appreciate the true intention of the parties. d) The records unequivocally establish that the plaintiff paid an advance amount of Rs.5,00,000/- under the agreement. This amount, by all available indications, was intended and in fact used by the defendants towards securing conversion of the land. This financial contribution by the plaintiff not only at the inception but towards - 19 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 facilitating compliance with statutory requirements substantiates her continued interest and intent to complete the transaction, subject to the defendants fulfilling their obligations. This fact militates against any suggestion of default, negligence, or indifference on the part of the plaintiff. e) The defendants did not secure conversion within the period contemplated under the agreement, and only obtained it much later on 29.05.2014. Even then, they failed to notify the plaintiff or call upon her to complete the transaction. Instead, they proceeded to sell the developed sites to third parties. This conduct reveals a clear breach of contract and a dishonest attempt to sideline the plaintiff. In such a scenario, the burden cannot be shifted onto the plaintiff to show readiness and willingness, when the essential preconditions for performance were not met due to the defendants’ inaction. - 20 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 f) There is nothing on record to indicate that the defendants called upon the plaintiff to perform her part of the contract after obtaining conversion and layout approval. No legal notice or communication was issued by the defendants demonstrating any intent to enforce the agreement or complete the sale in favour of the plaintiff. On the contrary, their defence was a complete denial of the agreement itself, which has been disbelieved by the Court. Thus, the question of plaintiff not being ready or willing does not arise when the defendants themselves repudiated the contract. g) The plaintiff, by paying a substantial advance and awaiting compliance by the defendants, has acted in accordance with the agreement. She has not taken any steps inconsistent with the contract. Her conduct is marked by good faith and patience. Equity, therefore, favours the plaintiff, particularly when the defendants received monetary benefit and then turned around to deny the existence of the agreement. - 21 - HC-KAR NC: 2025:KHC:28862 RFA No. 922 of 2022 Finding on Point No.3: 17. For the foregoing reasons, this Court proceeds to pass the following: ORDER (i) The appeal is allowed; (ii) The judgment and decree dated 30.03.2022 passed in O.S.No.385/2015 on the file of the III Additional Senior Civil Judge and JMFC at Tumakuru is set aside. Consequently, suit filed by the plaintiff in O.S.No.385/2015 is decreed; (iii) Defendants are hereby directed to execute sale deed by accepting the balance sale consideration of Rs.7,20,000/-; (iv) Plaintiff shall deposit the balance sale consideration within a period of two months from the date of receipt of a copy of this order; (v) Draw decree accordingly. SD/- (SACHIN SHANKAR MAGADUM) JUDGE CA/List No.: 1 Sl No.: 49