- 1 - HC-KAR NC: 2026:KHC-D:785 RSA No. 5181 of 2012 IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 22ND DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR REGULAR SECOND APPEAL NO.5181 OF 2012 (SP) BETWEEN: 1. SRI RAMADAS KELU NAIK, S/O. KELU SHIVA NAIK, AGED ABOUT 71 YEARS, BUSINESSMAN, PRESENTLY RESIDING AT HARIDEVANAGAR, HABBUVADA, KARWAR-581302. 2. M/S. MAHESH ENTERPRISES CUTINO ROAD, KARWAR, BY ITS MANAGING PARTNER, RAMDAS KELU NAIK. …APPELLANTS (BY SRI V. M. SHEELAVANT, ADVOCATE) AND: 1. SRI GURUNATH S/O. MAHADEV BADKAR, AGED ABOUT 79 YEARS, ADVOCATE, RESIDING AT NO.43, PUHYA SECTOR, V. SRISHATI COMPLEX, MORA ROAD (E), TANE, MUMBAI-541101, MAHARASHTRA STATE. 2. SMT. ANU W/O. MANOHAR KALAS, AGE : MAJOR, RESIDING AT: KENCHA ROAD, KAJUBAG, KARWAR-581302. …RESPONDENTS (BY SRI A. S. PATIL, ADV. FOR R1 AND R2) THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION 100 R/W. ORDER 41 RULE 1 OF THE CODE OF THE CIVIL PROCEDURE, PRAYING TO CALL FOR THE RECORDS, ALLOW THE APPEAL AND SET ASIDE THE JUDGMENT AND DECREE DATED Digitally signed by MALLIKARJUN RUDRAYYA KALMATH Location: High Court of Karnataka, Dharwad Bench - 2 - HC-KAR NC: 2026:KHC-D:785 RSA No. 5181 of 2012 14.10.2011 PASSED BY THE DISTRICT AND SESSIONS JUDGE, KARWAR IN R.A.NO.39/2010 CONFIRMING THE JUDGMENT AND DECREE DATED 06.02.2010 PASSED BY THE ADDITIONAL CIVIL JUDGE (SR.DN.) KARWAR IN O.S.NO.75/2004, IN THE INTEREST OF JUSTICE AND EQUITY AND ETC. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR) Though the matter is listed for admission, with the consent of learned counsel appearing for both the parties, it is taken up for final disposal. 2. This appeal is filed by the plaintiffs challenging the judgment and decree dated 14.10.2011 passed in R.A.No.39/2010 on the file of District Judge, Uttara Kannada, Karwar1, which confirmed the judgment and decree dated 06.02.2010 passed in O.S.No.75/2004 on the file of Additional Civil Judge (SR.DN.), Karwar2, thereby the suit filed for specific performance of contract was partly decreed by directing defendant No.1 to pay a sum of Rs.1,50,000/- along with 1 Hereinafter referred to as the ‘First Appellate Court’ 2 Hereinafter referred to as the ‘Trial Court’ - 3 - HC-KAR NC: 2026:KHC-D:785 RSA No. 5181 of 2012 interest at the rate of 18% per annum to the plaintiffs and the suit for the main relief of specific performance was dismissed. 3. Being aggrieved by the same, the plaintiffs have preferred this regular second appeal. 4. For the purpose of convenience and easy reference, ranking of the parties is referred to as per their status before the Trial Court. 5. The admitted pleadings are that defendant No.1 is the owner of the suit properties. According to the plaintiffs, there was an agreement of sale dated 09.01.1989 for a total sale consideration amount of Rs.1,50,000/-. The plaintiffs have paid the said consideration amount to defendant No.1; however, the sale deed could not be registered since there was a non- alienation clause for a period of 15 years from the date of grant. Therefore, it was agreed that the sale deed would be executed after completion of non-alienation period. 6. It is the case of the plaintiffs that, in the year 1993, the Karwar Urban Development Authority3 acquired the suit schedule properties and developed them on an equity basis. In the meantime, defendant No.1 sold a portion of the suit schedule 3 Hereinafter referred to as the ‘KUDA’ - 4 - HC-KAR NC: 2026:KHC-D:785 RSA No. 5181 of 2012 properties to one Lakshmi, who in turn sold the same to defendant No.2. Therefore, the plaintiffs filed the suit for specific performance of contract. 7. Defendant Nos.1 and 2 appeared and filed their written statements. Defendant No.1 denied the averments made in the plaint, except the factum of sale agreement dated 09.01.1989, receipt of earnest amount of Rs.1,50,000/- from the plaintiffs, issuance of legal notice by the plaintiffs and the reply thereto given by him. Defendant No.2, in his written statement, contended that he is a bonafide purchaser of 16 guntas of land bearing Sy.No.404/1A and that, after verifying all the revenue and survey records, he purchased the same with bonafide intention. 8. After appreciating the evidence on record, the Trial Court dismissed the suit insofar as the main relief of suit for specific performance is concerned and partly decreed the suit by granting alternative relief of refund of the earnest amount of Rs.1,50,000/- along with interest at the rate of 18% per annum to the plaintiff, as stated above. - 5 - HC-KAR NC: 2026:KHC-D:785 RSA No. 5181 of 2012 9. Being aggrieved by the same, the plaintiffs preferred a regular appeal before the First Appellate Court, which concurred with the findings of the Trial Court and dismissed the appeal. 10. Against this, the plaintiffs have preferred this regular second appeal, inter alia, contending various grounds and raising substantial questions of law. 11. When the appeal is taken up for admission, the question arises whether any substantial question of law is involved, considering the factual matrix, namely, that the parties executed a sale agreement dated 09.01.1989, which remains unregistered, and that possession of the property was not handed over to the plaintiffs. 12. According to the plaintiffs, they paid Rs.1,50,000/- to defendant No.1. However, due a clause of non-alienation for 15 years, the registered sale deed could not be executed. In the year 1993, KUDA had acquired the suit properties, which were subsequently released after certain legal proceedings. Thereafter, defendant No.1 sold a portion of the suit property measuring 16 guntas of land bearing Sy.No.405/1A to one Shivanand, who in turns sold the same to defendant No.2. Defendant No.1 also sold another portion of the suit property to - 6 - HC-KAR NC: 2026:KHC-D:785 RSA No. 5181 of 2012 one Suresh Naik; but Suresh Naik was not made a party to the suit. The Trial Court held that defendant No.2 is a bonafide purchaser, that relief under Section 20 of the Specific Relief Act, 19634, is discretionary, and that the suit is barred by limitation. Accordingly, the Trial Court dismissed the suit, a finding concurred with by the First Appellate Court. 13. Upon considering the factual matrix of the case, although the agreement of sale is proved, the Court has discretion to grant relief in the form of a decree for specific performance under Section 20 of the S.R. Act, 1963. This Court has to see whether the exercise of such discretion was correct or not. The First Appellate Court did not specifically consider whether the plaintiffs obtained any unfair advantage over the defendants or whether there was arbitrariness in dismissing the suit. I find no arbitrariness in dismissing the suit while granting the alternative relief of refund of the amount, which was correctly upheld by the First Appellate Court. 14. At most, the plaintiffs are claiming rights being holder of the agreement of sale and not more than that. The plaintiffs have not impleaded the purchasers of the other portion, who is 4 Hereinafter referred to as the ‘S.R. Act’ - 7 - HC-KAR NC: 2026:KHC-D:785 RSA No. 5181 of 2012 Suresh Naik, and are making a claim only against defendant No.2. However, defendant No.2 purchased the property from Suresh Naik, who in turn purchased from defendant No.1. Therefore, the exercise by both the Trial Court and the First Appellate Court in declining to grant a decree for specific performance is found to be just and proper, and requires no interference. 15. Further, the Trial Court, exercising its discretion, ordered the refund of Rs.150,000/- along with interest at the rate of 18% per annum, which meets the ends of justice for the plaintiffs, a finding rightly concurred with by the First Appellate Court. Therefore, having found no substantial question of law involved, the appeal deserves to be dismissed. 16. Accordingly, the appeal is dismissed. 17. No order as to cost. Sd/- (HANCHATE SANJEEVKUMAR) JUDGE PMP /CT-AN List No.: 1 Sl No.: 22