- 1 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF JULY, 2025 BEFORE THE HON'BLE MS. JUSTICE JYOTI MULIMANI REGULAR FIRST APPEAL NO. 616 OF 2018 (SP) BETWEEN: SRI. L.MUTHURAJ S/O H.M.LINGEGOWDA, AGED ABOUT 44 YEARS, R/A #667, NEXT TO MARKET, BEHIND MOSQUE, MANDYA CITY-571 401. …APPELLANT (BY SRI. DEEPAK., ADVOCATE FOR SRI. R.VYBHAV., ADVOCATE) AND: 1. SMT. BHAGYA W/O LATE H.C.CHOWDAIAH, AGED ABOUT 52 YEARS, BOOTHA HOSUR VILLAGE, KOTHATHI HOBLI, MANDYA TALUK AND DISTRICT-571 403. 2. SRI. H.CHANDAN S/O H.C.CHOWDAIAH, AGED ABOUT 40 YEARS, R/AT BOOTHA HOSUR VILLAGE, KOTHATHI HOBLI, MANDYA TALUK AND DISTRICT-571 403. 3. SRI. H.C.SAGAR S/O H.C.CHOWDAIAH, AGED ABOUT 35 YEARS, R/AT BOOTHA HOSUR VILLAGE, Digitally signed by PREMCHANDRA M R Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 KOTHATHI HOBLI, MANDYA TALUK AND DISTRICT-571 403. …RESPONDENTS (BY SRI. PRASANNA., ADVOCATE) THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION 96 OF THE CODE OF CIVIL PROCEDURE. THIS REGULAR FIRST APPEAL IS LISTED FOR FINAL HEARING, THIS DAY, THE JUDGMENT WAS DELIVERED AS UNDER: ORAL JUDGMENT Sri.Deepak, counsel on behalf of Sri.R.Vybhav., for the appellant and Sri.H.S.Shankar, counsel on behalf of Sri.Prasanna, for the respondents have appeared in person. 2. This is an appeal from the Court of Prl. Senior Civil Judge and CJM, Mandya. 3. For convenience's sake, the parties are referred to as per their status and rankings before the Trial Court. 4. The plaint averments are these: The defendants are the absolute owners in possession of the suit schedule property. The defendants needed money to repay the hand loans borrowed by the first defendant and also - 3 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 to cover the education expenses of the third and fourth defendants, hence, they agreed to sell the property in favor of the plaintiff on 08.01.2014 for a valuable consideration of Rs.12,00,000/- and on the same day, towards part of sale consideration, they received Rs.10,00,000/- as earnest money out of sale consideration from the plaintiff before the Sub- Registrar, Mandya and agreed to execute the sale deed and to hand over the possession of the suit schedule property in favor of the plaintiff within two years from that date, by receiving the balance sale consideration of Rs.2,00,000/- from the plaintiff. At the time of executing the sale agreement, the defendants agreed to submit the E-katha of the scheduled property to produce it before the Sub-Registrar for the registration of the absolute sale deed; however, they did not facilitate its production or come forward to perform their part of the contract. Hence, the plaintiff issued a legal notice on 19.11.2015 calling upon the defendants to execute the sale deed, which was duly served on them, but in vain. Hence, the plaintiff was compelled to seek refuge in the Court of law and filed a suit seeking the relief of Specific Performance. - 4 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 After service of the suit summons, defendant No.1 appeared through his counsel and filed a written statement and denied the plaint averments. He contended that the plaintiff was known to him and hence, for legal necessity, he had obtained a loan of Rs.5,00,000/- from the plaintiff and had agreed to repay the same with interest at the rate of 1% per month and on the same day, he executed the sale agreement. The plaintiff, for the security of the said loan amount, had obtained a sale agreement. He also stated that he has paid the loan amount with interest of Rs.4,00,000/- and requested the plaintiff to receive the balance amount and cancel the sale agreement, but the plaintiff did not cancel the documents. It is further contended that he never agreed to sell the suit property for a meager sum, and the suit property is an ancestral joint family property worth more than Rs.25,00,000/-. Among other grounds, he prayed for dismissal of the suit. Based on the pleadings, the Trial Court framed issues. The plaintiff examined himself as PW1, and two witnesses were examined as PW2 and 3 and produced seven documents marked as Ex.P.1 to Ex.P.7. The defendants neither adduced - 5 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 oral evidence nor furnished documentary evidence. The Trial Court vide Judgment dated 28.11.2017 dismissed the suit. Hence, the plaintiff has filed the present appeal under Section 96 of CPC. 5. Counsel Sri.Deepak, for the appellant, submits that the Judgment and decree of the Trial Court are contrary to law and opposed to the oral and documentary evidence on record. Next, he submits that the Trial Court has erred in holding that Ex.P.1 is a loan agreement executed by defendants for the loan availed by them from the plaintiff and not an agreement for sale. He submits that the agreement was registered before the Sub-Registrar, and the defendants received Rs.10,00,000/- as advance for the sale of schedule property and affixed their thumb impression in the presence of the Sub-Registrar. A further submission is made that the Trial Court has failed to look into the contents of Ex.P.1 Agreement for sale dated 08.01.2014 and give effect to the intent of the party as specified in the agreement. It is also submitted that the defendants themselves admitted to having executed the agreement for sale in favor of the plaintiff in the written - 6 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 statement. The defendants have failed to discharge the burden by leading evidence to prove that the agreement is a loan agreement. Counsel vehemently contended that the Trial Court erred in concluding that the agreement for sale is a loan agreement on the basis that the plaintiff was in the business of money lending. It is submitted that the Court erred in not giving effect to the recital and contents of Ex.P.1, but erroneously held that the agreement to be a loan agreement based on the depositions of PW1. Lastly, he submits that viewed from any angle, the Judgment of the Trial Court is untenable and the same is liable to be set aside. Counsel, therefore, submits that the appeal may be allowed and the plaintiff's suit may be decreed. 6. Sri.H.S.Shankar, counsel for the respondents, justified the Judgment of the Trial Court. Next, he submits that the plaintiff was a moneylender and the defendants needed money; hence, for security purposes, they executed an agreement for sale. - 7 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 A further submission is made that the suit schedule property is an ancestral joint family property, and the defendants did not execute an agreement for sale and never agreed to execute a sale deed within two years. Counsel vehemently contended that in the plaint, the schedule property is described as a vacant site; however, in the alleged agreement for sale, it is shown as a house measuring 40 X 50 ft. Urging other contentions, lastly, he submits that the appellant has not made any grounds to interfere with the Judgment and Decree of the Trial Court. Hence, the appeal may be dismissed. Counsel placed reliance on the decision in H.M.MAHADEVAPPA AND ANOTHER VS. P. LOKESHA - R.S.A.NO.139/2018, disposed on 28.06.2024. 7. Heard the arguments and perused the appeal papers and the records with care. 8. The following points would arise for consideration: 1) Whether there is an offer by the defendants to sell the suit schedule property in favor of the - 8 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 plaintiff, and acceptance by the plaintiff to purchase the suit schedule property and whether there is a binding contract between the plaintiff and the defendants? 2) Whether the plaintiff is entitled to the relief of specific performance? This Regular First appeal is filed under Section 96 of the CPC, and this Court is the final Court of facts, which is expected to reassess the entire oral and documentary evidence on record. The facts are sufficiently said and do not require reiteration. In this case, the plaintiff sued to enforce the specific performance of a Contract to execute a conveyance in respect of the suit property. The case of the defendants, as put forth before the Trial Court, is that they needed money since they knew the plaintiff hence, they had obtained a loan of Rs.5,00,000/- from him, agreeing to repay the same with interest @ 1% per month and on the very same day, they executed the sale agreement. To be precise, the defendants contended that they needed money to clear the hand loans, to manage the household expenses, - 9 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 and offered to sell the suit schedule property, and the plaintiff agreed to purchase the same for a valuable consideration. Before I answer the points for consideration, I propose to say a few words on the simple law of contracts. In the laws of contracts, agreements are made either by words of mouth or in writing. To determine whether, in any given case, it is reasonable to infer the existence of an agreement, it has long been usual to employ the language of offer and acceptance. In other words, the Court examines all the circumstances to see if one party be assumed to have made a firm ‘offer’ and if the other may likewise be taken to have ‘accepted’ that offer. These complementary ideas present a convenient method of analyzing a situation, provided that they are not applied too literally and that facts are not sacrificed to phrases. The first task of the plaintiff is to prove the presence of a definite offer made either to a particular person or, as in advertisements of rewards for services to be rendered, to the public at large. Proof of an offer to enter into legal relations upon definite terms must be followed by the production of - 10 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 evidence from which the Courts may infer an intention by the offeree to accept that offer. There may be said to be three basic essentials to the creation of a contract: agreement, contractual intention and consideration. To determine whether the parties have reached an agreement, it is customary to inquire whether a definite offer has been made by one party and whether the other has accepted that offer. 9. Counsel Sri.H.S.Shankar, in presenting his arguments, strenuously urged that the plaintiff was a moneylender and had lent money to one Mr.Narayan and Mr.Nagaraj. He drew the attention of the Court to the cross- examination of PW1. While arguing the case, counsel for the defendants contended that the defendants never intended to sell the suit schedule property to the plaintiff; as such, there is no offer by the defendants to sell the suit schedule property to the plaintiff. By way of reply to this contention, Sri.Deepak, counsel for the plaintiff, submits that the reference made by counsel for the defendants has no relevance because the plaintiff had filed a suit for recovery of money against Mr.Narayan and was - 11 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 constrained to initiate proceedings for a Cheque bounce case against Mr.Nagaraj. Bearing the fundamental principles of law of contracts in mind, let me determine whether there is a valid offer and acceptance in the present case. To see whether there is an offer and acceptance, let me consider the material evidence on record. The plaintiff was examined as PW1, and he states that the defendants executed an agreement for sale, and he was always ready and willing to perform his part of the contract. One Mr.P.Manju - a person known to both the plaintiff and defendants was examined as PW2, and he also states that the defendants, to meet their family needs, executed an agreement for sale in favour of the plaintiff. Except for filing the written statement and cross- examining PW1, the defendants did not enter the witness box to disprove the plaintiff’s case. Ex.P.1 is the Agreement for Sale dated 08.01.2014. Perused the document and contents with care. From the perusal of the document, i.e., Ex.P.1, the nomenclature of the document is as under: - 12 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 "±ÀÄzÀÝ PÀæAiÀÄzÀ M¥ÀàAzÀzÀ PÀgÁgÀÄ ¥ÀvÀæ" In the document, it is stated as under: "PÀæªÀĪÉãÉAzÀgÉ µÉqÀÆå¯ï£À°è £ÀªÀÄÆzÀÄ ªÀiÁrgÀĪÀ ¸ÀévÀÄÛ ªÉÄîÌAqÀ £ÀªÀÄä°è ºÉZï.¹.ZËqÀAiÀÄå DzÀ £À£ÀUÉ ¦vÁæfðvÀªÁV §A¢gÀvÀPÀÌ D¹ÛAiÀiÁVgÀÄvÀÛzÉ. £ÀAvÀgÀ ¸ÀzÀj ¸ÀéwÛUÉ ¥ÁªÀw ªÀiÁqÀ¨ÉÃPÁzÀ PÀAzÁAiÀĪÀ£ÀÄß ¸ÀA§AzsÀ¥ÀlÖ ¸ÀÆ£ÀUÀºÀ½î UÁæªÀÄ¥ÀAZÁ¬Äw PÀbÉÃjUÉ ¥ÁªÀw ªÀiÁr £À£Àß ºÉ¸ÀjUÉ SÁvÉ ªÀUÁðªÀuÉ ªÀiÁr¹PÉÆAqÀÄ F §UÉÎ £ÀªÀÄÆ£É-9 ªÀÄvÀÄÛ £ÀªÀÄÆ£É-11 £ÀÄß ¸ÀºÀ ¥ÀqÉzÀÄPÉÆArgÀÄvÉÛãÉ. F jÃwAiÀiÁV £ÀªÀÄä ¸ÀA¥ÀÆtð ºÀPÀĄ̈ÁzsÀåvÉUÉ M¼À¥ÀlÄÖ ºÁ° £ÀªÀÄä ¸Áé¢üãÁ£ÀĨsÀªÀzÀ°ègÀĪÀ ¸ÀévÀÛ£ÀÄß £ÁªÀÅ £ÀªÀÄä zÀgÀzÀÄ ¤«ÄvÀÛöåªÁV CAzÀgÉ ªÀÄĨsÉÊ ¸Á®UÀ¼À£ÀÄß wÃgÀĪÀ½ ªÀiÁqÀ®Ä ºÁUÀÆ UÀȺÀPÀÈvÀåzÀ RaðUÁV ¸ÀºÀ ¤ªÀÄUÉ £ÀUÀzÀÄ UËgÀߪÉÄAmï ZÀ¯ÁªÀuÉ gÀÆ.12,00,000/- (ºÀ£ÉßgÀqÀÄ ®PÀë) gÀÆ¥Á¬ÄUÀ½UÉ ±ÀÄzÀÝ PÀæAiÀÄPÉÌ PÉÆqÀ®Ä M¦à F §UÉÎ CqÁé£ÁìV F PÀgÁgÀÄ ¥ÀvÀæ jf¸ÀÖgï ªÉÃ¼É ¸À¨ï jf¸ÁÖçgï gÀªÀgÀ ¸ÀªÀÄPÀëªÀÄ ¤«ÄäAzÀ £ÀUÀzÁV gÀÆ.10,00,000/- (ºÀvÀÄÛ ®PÀë) gÀÆ¥Á¬ÄUÀ¼À£ÀÄß £ÀUÀzÁV ¥ÀqÉzÀÄPÉÆArgÀÄvÉÛêÉ. E£ÀÄß G½PÉAiÀiÁzÀ gÀÆ.2,00,000/- (JgÀqÀÄ ®PÀë) gÀÆ¥Á¬ÄUÀ¼À£ÀÄß F¯ÁUÁAiÀÄÄÛ 2(JgÀqÀÄ) ªÀµÀðUÀ¼À ªÁ¬ÄzÉ M¼ÀUÁV ¤ÃªÀÅ C¥ÉÃPÉë¥ÀlÖ ¢£ÀzÀAzÀÄ ¤ÃªÀÅ PÉüÀĪÀ ¥ÀPÀÌ zÁR¯Áw ¸ÀªÉÄÃvÀªÁV §AzÀÄ ¤ªÀÄUÁUÀ°Ã CxÀªÁ ¤«ÄäAzÀ C¢üPÁgÀ ¥ÀqÉzÀÄ ¤ÃªÀÅ ºÉýzÀªÀjUÁUÀ°Ã PÀæªÀĪÁzÀ PÀæAiÀÄ¥ÀvÀæ §gɹ jf¸ÀÖgï ªÀiÁr¹PÉÆqÀĪÁUÀ ¤«ÄäAzÀ £ÀUÀzÁV ¥ÀqÉzÀÄPÉƼÀÄîvÉÛêÉ." - 13 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 It is seen from the contents of the document, i.e., Ex.P.1, there is an offer by the defendants to sell the suit schedule property to the plaintiff and acceptance by the plaintiff to purchase the same from the defendants. The defendants did not step into the witness box. From the material evidence on record it is seen that there is sufficient interaction between the plaintiff and the defendants, and there is a meeting of minds between the parties before the formation of the contract. It is perhaps well to observe that the evidence is sufficient to prove that the defendants intended to sell the property and offered to sell the same to the plaintiff. If the Court evaluates the material on record, it can be safely held that there is proof of the intention of creating a legal relationship between the plaintiff and the defendants. Accordingly, this Court thinks that there is an offer and acceptance, and there is a binding contract between the plaintiff and the defendants. The contention regarding money lending and loan agreement must necessarily fail, since a perusal of the cross-examination of PW1 reflects that a suggestion was made to the plaintiff that he is a moneylender, but the same has been denied by the plaintiff. Moreover, what is required to be looked into is whether there is - 14 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 an offer and acceptance, and whether the defendants executed an agreement for sale. Hence, drawing a presumption and concluding that it is a loan transaction is wrong. The other contention about the ancestral property and the misdescription of the property must also necessarily fail because the defendants were aware of the nature of the property and have agreed to sell the same; the description of the property is correctly described in the plaint schedule. Let me answer the second point. The law is well-settled that the plaintiff must aver as well as prove his readiness and willingness to perform his part of the obligation. The distinction between readiness and willingness is that the former has reference to financial capacity, and the latter to the conduct of the plaintiff wanting specific performance. While ‘willingness’ is merely a mental process, ‘readiness’ is something to do with translating that will into action and is preceded by the necessary preparation of being in a position to be ready. In other words, while ‘willingness’ may be something to do mainly with a person’s mental process to do an act, the readiness implies the proximity of such willingness and its ultimate - 15 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 physical manifestation. Readiness must, in all cases, be backed by willingness, and its imminent physical action is demonstrated when it is about to be put into action. The onus of proof of being ready and willing to perform his part of the contract from the date of the contract to the date of filing of the suit is on the plaintiff. An averment that the plaintiff is ready and willing to perform his part of the contract is sufficient compliance with Section 16(c) of the Specific Relief Act. It is not necessary for the plaintiff to further aver that he had made a demand upon the defendants to execute the sale deed on a particular date. Nor is it necessary that the plaintiff must have averred his readiness and willingness in the notice, if he has sent one. As already noted above, the plaintiff sued to enforce a specific performance of a contract to execute a conveyance in respect of the suit schedule property. While answering point No.1, I have already held that there is an offer and acceptance, and there is a binding contract between the plaintiff and the defendants. If we carefully look into the pleadings and the oral and documentary evidence on record, it would appear that the - 16 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 plaintiff has established he is entitled to the relief of a specific performance. However, the Trial Court has viewed the issue as if it were a loan transaction. Moreover, the defendants themselves have admitted the execution of the agreement; hence, the Trial Court could not have viewed the issue from a different perspective. The circumstances would justify the interference by this Court, and in my view, the material evidence on record is sufficient to grant the relief of specific performance. The Trial Court has failed to appreciate the issue from the right perspective. I may venture to say that the Trial Court has failed to have regard to relevant considerations and disregarded relevant matters. To conclude, I can say only this much that the plaintiff has established his case, and he is entitled to the relief. 10. The Judgment dated 28.11.2017 passed by the Prl. Senior Civil Judge and CJM, Mandya in O.S.No.51/2016 is set aside. The plaintiff's suit is decreed. The defendants are hereby directed to execute the sale deed on receiving the balance sale consideration amount within 30 days from today, failing which the plaintiff to secure the sale deed through the Court. The - 17 - HC-KAR NC: 2025:KHC:27206 RFA No. 616 of 2018 Registry concerned is hereby directed to draw the decree accordingly. 11. Resultantly, the Regular First Appeal is allowed. Because of the disposal of the appeal, pending interlocutory applications, if any, are disposed of. Sd/- (JYOTI MULIMANI) JUDGE MRP List No.: 1 Sl No.: 31