- 1 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM REGULAR FIRST APPEAL NO.421 OF 2025 (SP) BETWEEN: SMT. PALLAVI D/O MANCHEGOWDA AGED ABOUT 47 YEARS R/AT HALUVADI VILLAGE KOTHATHI HOBLI MANDYA TLAUK MANDYA DISTRICT - 571 403. …APPELLANT (BY SRI. VIKRAM H. BHAT, ADVOCATE FOR SRI. CHANDRASHEKAR H. B., ADVOCATE) AND: SRI. M. D. JAVARAPPA S/O LATE M. DEVAIAH AGED ABOUT 74 YEARS R/AT RAJAKUMAR EXTENTION BEHIND KSRTC DEPOT SUGER TOWN MANDYA DISTRICT - 571 403. …RESPONDENT (BY SRI. AKSHAY PRASAD, ADVOCATE FOR SRI. VAISHALI HEGDE., ADVOCATE) THIS RFA IS FILED UNDER SEC.96 OF CPC., AGAINST THE JUDGEMENT AND DECREE DATED 28.10.2024 PASSED IN OS NO.126/2018 ON THE FILE OF II ADDITIONAL SENIOR CIVIL JUDGE AND JMFC, AT MANDYA., DECREEING THE SUIT FOR SPECIFIC PERFORMANCE OF CONTRACT. Digitally signed by AL BHAGYA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 THIS APPEAL, COMING ON FOR PART-HEARD IN ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM ORAL JUDGMENT The captioned appeal is filed by the appellant - defendant assailing the judgment and decree dated 28.10.2024 passed in O.S.No.126/2018 on the file of the II Additional Senior Civil Judge and JMFC at Mandya, wherein the plaintiff's suit seeking relief of specific performance of contract is decreed. 2. For the sake of brevity, the parties are referred to as per their rankings before the Trial Court. 3. Brief facts leading to the case are as under; The plaintiff instituted the suit for specific performance on the strength of a registered agreement of sale dated 23.09.2016. It is the specific case of the plaintiff that the defendant agreed to sell the suit schedule property for a total sale consideration of Rs.12,00,000/- - 3 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 and, pursuant thereto, executed the agreement of sale after receiving a substantial advance amount of Rs.10,00,000/-. The plaintiff further pleaded that the defendant undertook to secure the necessary revenue records, including an updated 11-E sketch, and thereafter to complete the sale by receiving the balance consideration. It is categorically averred that despite repeated demands and readiness on the part of the plaintiff to perform his part of the contract, the defendant failed and neglected to conclude the transaction. This compelled the plaintiff to issue a legal notice dated 02.05.2018. As the defendant neither replied to the said notice nor complied with the contractual obligations, the plaintiff was constrained to institute the present suit in O.S.No.126/2018. 4. Upon service of summons, the defendant entered appearance and filed her written statement. While admitting the execution of the agreement of sale, the defendant contended that the suit schedule property was - 4 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 worth more than Rs.50,00,000/- and that she never intended to alienate the same for a consideration of Rs.12,00,000/-. It was further contended that she had availed a hand loan of Rs.10,00,000/- from the plaintiff to meet her financial necessities and that the agreement of sale was executed only as a collateral security for the said loan transaction. The defendant specifically asserted her willingness to repay the alleged loan amount with interest and, on that basis, sought dismissal of the suit. 5. Based on the rival pleadings, the Trial Court framed appropriate issues for consideration. 6. In order to substantiate his case, the plaintiff examined himself as P.W.1 and examined three supporting witnesses. He relied upon the registered agreement of sale and other connected documents, which were marked as Exs.P-1 to P-8. 7. The defendant examined herself as D.W.1 and examined one independent witness, namely C.Nagaraju, - 5 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 as D.W.2. However, the defendant did not produce any documentary evidence in support of her defence. 8. On an overall appreciation of the oral and documentary evidence, the Trial Court answered Issue No.4 in the negative, holding that the defendant had failed to establish that the agreement of sale was executed merely as a security for a hand loan of Rs.10,00,000/-. While answering Issue No.3 in the affirmative, the Trial Court held that the plaintiff had proved his continuous readiness and willingness to perform his part of the contract and, accordingly, exercised its discretion in favour of the plaintiff by decreeing the suit for specific performance. 9. Heard the learned counsel appearing for the defendant and the learned counsel appearing for the plaintiff. 10. This Court has independently re-examined the pleadings, the written statement, the oral and - 6 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 documentary evidence adduced by the plaintiff, as well as the oral evidence led by the defendant and her witness. 11. On the basis of the rival submissions and the material on record, the following points arise for consideration: (i) Whether the finding recorded by the Trial Court that the defendant failed to prove that the suit agreement was executed as a collateral security for a hand loan of Rs.10,00,000/- is perverse and warrants interference by this Court? (ii) Whether the Trial Court has exercised its discretion judiciously while granting the relief of specific performance in favour of the plaintiff? (iii) What order? Findings on point No.(i) :- 12. On a meticulous and conjoint examination of the averments made in the plaint and the written statement, it - 7 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 emerges without any ambiguity that the defendant has unequivocally admitted the due execution of the registered agreement of sale dated 23.09.2016, which is marked as Ex.P.1. The defendant has further candidly admitted the receipt of a sum of Rs.10,00,000/- pursuant to the execution of the said registered agreement of sale. Therefore, the execution of Ex.P.1 and the passing of consideration to the extent of Rs.10,00,000/- are not in dispute. 13. The defence set up by the defendant is not one of denial of execution, but a plea of avoidance. The defendant’s principal contention is that she had availed a hand loan of Rs.10,00,000/- from the plaintiff and that the registered agreement of sale was executed only as a collateral security to secure repayment of the said loan. Thus, while the execution of the document is admitted, the nature and character of the transaction is sought to be altered by the defendant. - 8 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 14. In order to discharge his initial burden and to establish that the transaction was entered into with the sole and specific intention of purchasing the suit schedule property, the plaintiff stepped into the witness box and examined himself as P.W.1. He produced the registered agreement of sale and examined two attesting witnesses to Ex.P.1. The consistent oral evidence of the plaintiff and the attesting witnesses clearly demonstrates that the amount of Rs.10,00,000/- was paid towards advance sale consideration and not as a hand loan. 15. Though the defendant subjected the plaintiff and the two attesting witnesses to extensive cross- examination, no material admissions were elicited to probabilise the defence theory that the transaction was, in substance, a loan transaction camouflaged as an agreement of sale. There is absolutely no admission forthcoming from the mouth of P.W.1 or the attesting witnesses to suggest that Ex.P.1 was executed as a - 9 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 security or that the parties never intended to complete the sale transaction. 16. In the light of the plaintiff having successfully discharged the initial burden cast upon him by proving execution of the registered agreement of sale and payment of substantial advance sale consideration, the onus squarely shifted on the defendant to establish that the agreement was executed only by way of collateral security for a hand loan. It is in this context that this Court has carefully scrutinised the evidence led by the defendant, who examined herself as D.W.1. 17. Before proceeding to analyse the rival equities and the discretionary relief sought, it would be apposite for this Court to advert to certain crucial admissions elicited in the cross-examination of D.W.1. These admissions have a direct bearing on the credibility of the defence set up by the defendant and on the determination as to whether equity tilts in favour of enforcing the - 10 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 registered agreement of sale in favour of the plaintiff or in accepting the defendant’s plea that the transaction was merely a loan arrangement. In view of the same, this Court deems it appropriate to extract the relevant portions of the cross-examination of D.W.1 for closer scrutiny. 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D ¸ÀªÀÄAiÀÄzÀ°è 2-3 ¨Áj ªÁ¢ £À£Àß PÀZÉÃjUÉ §A¢zÀÝgÀÄ CAzÀgÉ ¸Àj. ¸ÁQë ªÀÄÄAzÀĪÀjzÀÄ §rØAiÀĺÀt PÉüÀ®Ä §A¢zÀÝgÀÄ. ¸ÀĨsÁµï £ÀUÀgÀzÀ°è£À £À£Àß ªÀÄ£ÉUÉ ªÁ¢ §A¢zÀÝgÀÄ CAzÀgÉ §rØ ºÀt PÉüÀ®Ä §A¢zÀÝgÀÄ." (emphasis supplied) 18. On a careful and meticulous reading of the aforesaid cross-examination of D.W.1, several crucial and unequivocal admissions emerge, which have a direct and decisive bearing on the plaintiff’s claim founded on the suit agreement and his entitlement to seek enforcement of the contract. 19. A reading of the very first portion of the cross- examination clearly reveals that the defendant is not an illiterate or unsophisticated person. On the contrary, she has admitted that she is an active member of a political party and that she had contested the APMC elections, wherein she was elected as President in the year 2018 and - 13 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 held the said office for a period of ten months. This admission assumes significance inasmuch as it establishes that the defendant is a person accustomed to public life, administrative responsibilities, and decision-making, and cannot be heard to contend that she was unaware of the nature or consequences of the documents executed by her. 20. More importantly, the defendant has candidly admitted in her cross-examination that before affixing her signature on any document, she would read and verify the contents thereof and that only upon being satisfied with the contents would she proceed to sign such document. This admission strikes at the very root of the defence that the registered agreement of sale was executed mechanically or without understanding its tenor. 21. The further course of cross-examination unequivocally discloses that the defendant has admitted her signature on the suit agreement and has also - 14 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 acknowledged receipt of a substantial sum of Rs.10,00,000/- from the plaintiff. The defendant has not disputed the receipt of the said amount nor has she produced any contemporaneous material to demonstrate that the said amount was received as a hand loan. On the contrary, the tenor of her admissions reinforces the plaintiff’s case that the amount was paid towards advance sale consideration. 22. Significantly, the cross-examination also reveals that the defendant had undertaken steps necessary to complete the sale transaction. The defendant has further admitted that the plaintiff had visited the APMC office on two or three occasions during the period when she was functioning as President, which probabilises the plaintiff’s version that he was persistently following up for completion of the sale transaction. 23. Apart from the aforesaid admissions elicited in the oral evidence, this Court also finds it apposite to refer - 15 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 to the pleadings of the defendant herself. In this regard, this Court deems it fit to extract paragraph No.13 of the written statement, wherein the defendant has admitted that she was in dire need of financial assistance to meet her legal necessities. "13. The defendant submits that during the month of September, 2016, the defendant was in dire need of financial assistance to meet his legal necessities. In that context, some of the friends of defendant suggested the name of plaintiff in order to avail any financial assistance to meet his legal necessities. Accordingly, the defendant approached the plaintiff for financial assistance in a sum of Rs.10 lakhs (Ten Lakhs) as security to meet his legal necessities and the defendant agreed to repay the said loan amount as narrated in the sale agreement executed by the defendant in favour of the plaintiff. However, the defendant has been paying the agreed interest to the plaintiff as agreed by them at the time of borrowing the said loan amount. However, the defendant has made arrangements to repay the aforesaid loan amount of Rs.10,00,000/- (Rupees Ten Lakhs) borrowed from the plaintiff together with the agreed interest due if any and to complete the said transaction. Though, - 16 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 this fact is known to the plaintiff, inspite of it, she has filed the present false suit only to gain by lawful means and also to harass the defendant unnecessarily if possible. As such, there is no merit in the suit and it is liable to be dismissed." (emphasis supplied) 24. The said admission in the pleadings assumes importance, as it corroborates the plaintiff’s case that the defendant, being in financial distress, had voluntarily agreed to alienate the suit schedule property and executed the registered agreement of sale after receiving a substantial advance amount. 25. On an overall and cumulative appreciation of the admissions elicited in the cross-examination of the defendant examined as D.W.1, read conjointly with the categorical averments made by the defendant herself in paragraph No.13 of the written statement extracted supra, and in the absence of any independent or rebuttal evidence forthcoming from the defendant to substantiate the plea that the amount of Rs.10,00,000/- received from - 17 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 the plaintiff was towards a hand loan, this Court is of the considered view that the plaintiff has clearly established his entitlement to seek enforcement of the suit agreement. The defence that the transaction was a mere loan secured by an agreement of sale remains a bald assertion, unsupported by either documentary evidence or credible oral testimony. 26. It is significant to note that in paragraph No.13 of the written statement, the defendant has admitted that she was in dire need of financial assistance during September 2016. This admission, far from advancing the defendant’s case, fortifies the plaintiff’s version that the defendant, being in financial distress, voluntarily entered into a registered agreement of sale after receiving a substantial portion of the sale consideration. The plea that the defendant agreed to repay the alleged loan amount contrary to recitals in the sale agreement is self- contradictory and inherently improbable, particularly in the absence of any contemporaneous document evidencing - 18 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 the alleged loan transaction, agreed rate of interest, or repayment schedule. The assertion of payment of interest is also not supported by any documentary proof whatsoever. Accordingly point no.(i) is answered in "Negative". Findings on point No.(ii):- 27. The relief of specific performance is undoubtedly discretionary in nature; however, such discretion is neither arbitrary nor unstructured. It is to be exercised on sound judicial principles, having regard to the facts and circumstances of each case, the conduct of the parties, and the equities arising out of the contract. Where the execution of the agreement is admitted, consideration is proved, and readiness and willingness on the part of the plaintiff is established, the Court would ordinarily be bound to grant the relief of specific performance unless it is demonstrated that enforcement of the contract would result in undue hardship or would be inequitable. It is - 19 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 equally well settled that specific performance ought to be refused only where compensation in terms of money would afford an adequate and complete remedy. 28. In the case on hand, the plaintiff has established that he entered into the transaction with a bona fide intention of purchasing the suit schedule property and has paid a substantial portion of the agreed sale consideration. Out of the total consideration of Rs.12,00,000/-, a sum of Rs.10,00,000/- which constitutes more than 80% of the total consideration was paid at the time of execution of the agreement. On the other hand, the defendant, who is admittedly engaged in business and actively involved in public life and politics, has miserably failed to probabilise her defence that the transaction was one of loan and that the agreement of sale was executed merely as collateral security. 29. The defendant has not placed any material on record to demonstrate that the parties intended a loan - 20 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 transaction. No promissory note, receipt, account statement, proof of interest payment, or any contemporaneous correspondence has been produced. More importantly, the defendant has neither pleaded nor established any comparative hardship that would ensue if the contract is specifically enforced. In such circumstances, the balance of equity and discretion unmistakably tilts in favour of the plaintiff. On the contrary, denial of the relief of specific performance would result in irreparable loss to the plaintiff, who has parted with a substantial amount and has consistently demonstrated readiness and willingness to perform his part of the contract. 30. On an independent re-appreciation of the oral and documentary evidence, this Court finds no infirmity, illegality, or perversity in the conclusions arrived at by the Trial Court. The Trial Court was fully justified in holding that the agreement of sale executed by the defendant in favour of the plaintiff, after receipt of Rs.10,00,000/- as - 21 - HC-KAR NC: 2026:KHC:5451 RFA No. 421 of 2025 advance sale consideration, was intended for sale and not as a security for any alleged hand loan. The Trial Court was also justified in holding that the defendant failed to perform her part of the contract and that the plaintiff successfully proved his continuous readiness and willingness to perform his obligations. 31. The findings recorded by the Trial Court are founded on cogent, consistent, and clinching evidence. This Court does not find any valid ground warranting interference in appeal. Accordingly, Point No.(ii) is answered in the "Affirmative". 32. Point No.(iii):- For the foregoing reasons, this Court proceeds to pass the following; ORDER (i) The appeal is dismissed. (ii) Pending applications, if any, are also dismissed. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE NBM List No.: 1 Sl No.: 9