BASAVARAJ versus PADMAVATHI & ANR. on 5 January 2023

1. Feeling aggrieved and dissatisfied with impugned judgment(s)and order(s) dated 27.11.2020 and 06.12.2021 passed by the High Courtof Karnataka at Kalaburagi Bench in Regular First Appeal (RFA) No.5033/2011 and Review Petition (RP) No. 200036/2021 respectively, bywhich, the High Court has allowed the said appeal preferred byrespondents herein – original defendants and has quashed and set asidethe judgment and decree passed by the learned Trial Court decreeingthe suit for specific performance, the original plaintiff has preferred thepresent appeals.

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2. The facts leading to the present appeals in a nutshell are asunder: - G

2.1 That respondent No. 1 herein – original defendant No. 1executed an agreement to sell dated 13.03.2007 in favour of the appellantherein – original plaintiff – buyer agreeing to sell the land in question onor before 31.07.2007 for a sale consideration of Rs. 12,74,000/-. Rs. 3

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Alakhs were paid as earnest money. The receipt was issued by respondentNo. 1 for the same. That thereafter, as respondent No. 1 – seller did notexecute the sale deed, the appellant got issued a legal notice dated20.11.2007 asking the respondent(s) to receive the balance saleconsideration and execute the sale deed. The seller replied to the legalnotice vide reply dated 03.12.2007 denying the execution of agreementBto sell. That thereafter, the appellant – buyer filed the suit for specificperformance on 14.02.2008 vide O.S. No. 17/2008. The originaldefendants – sellers filed their written statement and opposed the suit.The defendants denied the execution of agreement to sell. It was alsothe case of the defendants in the written statement that the plaintiff wasCnot ready to perform his part of the contract. Therefore, the defendantsdenied readiness and willingness on the part of the plaintiff – buyer toperform his part of the contract.

2.2 Both the parties led evidence before the Trial Court. Theplaintiff led evidence by examining witnesses, on his readiness andDwillingness to perform his part of the contract. It was brought on recordthat plaintiff went with cash to the seller but the seller did not accept thesame. That thereafter, on appreciation of evidence the learned Trial Courtdecreed the suit for specific performance vide judgment and decreedated 30.09.2011. The learned Trial Court believed the case of the plaintiff– buyer as to the execution of agreement to sell. The learned Trial CourtEalso believed the plaintiff’s case as to the payment of earnest money ofRs. 3 lakhs to the seller. The learned Trial Court also held that the plaintiff– buyer was ready and willing to perform his part of the contract. Thatpursuant to the judgment and decree passed by the learned Trial Court,the buyer – original plaintiff deposited an amount of Rs. 9,74,000/- beforeFthe learned Trial Court which is still reported to be lying with the TrialCourt.

2.3 Feeling aggrieved and dissatisfied with the judgment and decreepassed by the learned Trial Court, respondents herein – sellers preferredthe appeal before the High Court. By the impugned judgment and orderGthe High Court has allowed the said appeal and has set aside the judgmentand decree passed by the learned Trial Court, mainly on the ground thatthe plaintiff was not ready and willing to perform his part of the contract.The impugned judgment and order passed by the High Court is the subjectmatter of present appeals.

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2.4 The appellant also filed a review petition which came to bedismissed by the High Court, and the judgment passed in the reviewpetition is also the subject matter of one of the appeals.

3. Shri K. Parmeshwar, learned counsel appearing on behalf ofthe appellant has vehemently submitted that in the facts and circumstancesof the case, the Hon’ble High Court has materially erred in reversingthe findings of the Trial Court on readiness and willingness of the appellant.

3.1 It is submitted that on appreciation of entire evidence on recordthe learned Trial Court recorded findings as to readiness and willingnessof the appellant, in favour of the appellant, and such findings were notrequired to be interfered with by the High Court.

3.2 It is further submitted that all through, out and right from thevery beginning, the appellant – buyer was ready and willing to performhis part of the contract. He has prayed that the following aspects emergingfrom the evidence on record be considered, while considering the issueas to readiness and willingness on the part of the appellant to performhis part of the agreement dated 13.03.2007: -

(i) That the appellant specifically averred in the plaint that heis ready and willing to perform the agreement dated13.03.2007;

(ii) That in the suit notice dated 20.11.2007 the plaintiffspecifically averred that he is ready and willing to pay thebalance sale consideration;

(iii) The plaintiff in his evidence stated that he is ready andwilling to perform the agreement. In the deposition it wasfurther stated that he approached the defendant – seller inthe month of June, 2007 and again in July, 2007 with thebalance sale consideration. That there is no cross-examination in this regard;

(iv) The plaintiff examined PW2 and PW3, the attestors to theagreement to sell, who specifically stated that in June, 2007,the plaintiff approached the defendants and asked them totake the balance sale consideration in cash. That there isno cross- examination in this regard;

(v) That the DW-1 – first defendant admitted in her cross-examination that she executed the agreement and that shewas the owner of the said property; A

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A(vi)That she had affixed her signatures on the agreement andthat she received Rs. 3 lakhs;

(vii) That the appellant had deposited the balance considerationof Rs. 9,74,000/- before the learned Trial Court on31.10.2011.

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3.3 Learned counsel appearing on behalf of the appellant – buyerhas further submitted that as such the defendant took a dishonest standbefore the learned Trial Court and denied the execution of the agreement.It is further submitted that in the written statement, the specific standtaken by the defendants was that no agreement to sell was executedCbetween the parties. It is contended that however, defendant No. 1subsequently admitted that Rs. 3 lakhs were received by her, and areceipt dated 13.03.2007 was issued in that regard.

3.4 It is further contended that even the seller – defendant No. 1took contradictory and dishonest pleas. She initially denied the executionDof the agreement, then denied that it was an agreement to sell but onlyan agreement in respect of a loan transaction.

3.5 It is next contended by learned counsel appearing on behalf ofthe appellant that as such there are concurrent findings recorded by thelearned Trial Court as well as the High Court on execution of theEagreement to sell by defendant No. 1 and to the effect that Rs. 3 lakhswere paid by the buyer by way of earnest money and that the agreementto sell was not in respect of security and/or a loan transaction but it wasfor an outright sale.

3.6 Learned counsel appearing on behalf of the appellant hasFheavily relied upon the decision of this Court in the case of Indira Kaurand Ors. Vs. Sheo Lal Kapoor; (1988) 2 SCC 488 (para 8, 9 and10) and the subsequent decision of this Court in the case of BeemaneniMaha Lakshmi Vs. Gangumalla Appa Rao; (2019) 6 SCC 233 (para14) on the aspect of readiness and willingness on the part of the buyer.It is submitted that in the case of Indira Kaur (supra) it was held thatGno adverse inference can be drawn against the plaintiff as to whether hehad the means to pay the balance consideration on the grounds of non-production of passbook, accounts or other documentary evidence.

3.7 It is submitted that in the case of Beemaneni Maha Lakshmi(supra) it was observed and held by this Court that failure on the part ofHthe vendee to “demonstrate” that he was having sufficient money with him to pay the balance sale consideration by the date of his evidence isnot of much of consequence.

3.8 It is further submitted that in the case of Ramrati Kuer Vs.Dwarika Prasad Singh; (1967) 1 SCR 153 (para 9), it was observedand held by this Court that in the absence of a specific prayer asking forthe party to produce accounts and their subsequent failure to do so, noadverse inference could be drawn.

3.9 Making the above submissions and relying upon the afore-cited decisions, it is submitted that the High Court has materially erred inreversing the findings of the Trial Court on readiness and willingness onthe part of appellant. Therefore, it is prayed that the present appeals beallowed and the impugned judgments bet set aside.

4. Present appeals are vehemently opposed by Shri ShaileshMadiyal, learned counsel appearing on behalf of the seller - respondents– original defendants.

4.1 Learned counsel appearing on behalf of the respondents –seller submitted that cogent reasons have been assigned by the HighCourt while reversing the judgment and decree passed by the learnedTrial Court and reversing the findings as to the readiness and willingnesson the part of the appellant.

4.2 It is further submitted that the appellant – original plaintiff hasnot demonstrated and/or led any evidence that he had sufficient means/funds/cash to pay the balance sale consideration. It is submitted that inabsence of such evidence the High Court has rightly held that the buyer– original plaintiff has failed to establish and prove readiness andwillingness on his part to perform the agreement dated 13.03.2007.

4.3 It is submitted that in the written statement itself it was thespecific case on behalf of the defendants that the plaintiff was not readyand willing to perform his part of the agreement.

4.4 Learned counsel appearing on behalf of respondents – originaldefendants, has relied upon the decision of this Court in the case of J.P.Builders and Anr. Vs. A. Ramadas and Anr.; (2011) 1 SCC 429 aswell as the recent decision of this Court in the case of U.N.Krishnamurthy Vs. A.M. Krishnamurthy; 2022 SCC OnLine SC840 in support of his prayer to dismiss the present appeals.

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A5. We have heard learned counsel appearing on behalf of therespective parties at length.

6. At the outset, it is required to be noted that the learned TrialCourt, on appreciation of evidence on record, specifically recordedfindings on readiness and willingness on the part of the plaintiff to performBhis part of the agreement. The findings recorded on readiness andwillingness on the part of the plaintiff were on appreciation of the entireevidence on record. In the legal notice which was issued on 20.11.2007,the plaintiff asked the defendant to receive the balance amount andexecute the sale deed. In reply to the legal notice, the defendant deniedthe execution of agreement to sell itself. That thereafter, the plaintiffCfiled the suit for specific performance in which it was specifically averredthat he was ready and willing to perform the agreement dated 13.03.2007.In his deposition, the plaintiff specifically stated that he was ready andwilling to perform his obligations under the agreement. He further statedthat he approached the defendant in the month of June, 2007 and againDin July, 2007 with the balance sale consideration. There is no cross-examination in this regard. The plaintiff also examined two witnesses,PW-2 and PW-3, who were attestors to agreement to sell dated13.03.2007, who specifically stated that in July, 2007, the plaintiffapproached the defendants and asked them to accept the balance saleconsideration in cash, to that also there is no cross-examination. TheEreceipt of Rs. 3 lakhs by way of earnest money, has been held to beproved by both the courts below. Within a period of one month frompassing of the decree, the plaintiff deposited the balance sale considerationi.e., Rs. 9,74,000/- before the learned Trial Court. Considering theaforesaid facts and circumstances of the case, it is observed that theFHigh Court has materially erred in reversing the decree by reversing thefindings of the Trial Court on readiness and willingness of the appellant.

6.1 From the impugned judgment and order passed by the HighCourt, it appears that the reasoning given by the High Court is that theplaintiff has not proved that he had the cash and/or amount and/orGsufficient funds/means to pay the balance sale consideration, as nopassbook and/or bank accounts was produced. In the case of RamratiKuer (supra) which has been specifically considered by this Court inthe case of Indira Kaur (supra), it was observed and held as under: - “Fourthly, it is urged that the respondents did not produce anyaccounts even though their case was that accounts wereH

maintained and that Basekhi Singh used to give maintenanceallowance to the widows who were messing separately. It is urgedthat adverse inference should be drawn from the fact accountswere not produced by the respondents and that if they had beenproduced that would have shown payment not of maintenanceallowance but of half share of the income to the widows by virtueof their right to the property. Itis true that Dwarika Prasad Singhsaid that his father used to keep accounts. But no attempt wasmade on behalf of the appellant to ask the court to order DwarikaPrasad Singh to produce the accounts. An adverse inference couldonly have been drawn against the plaintiffs-respondents if theappellant had asked the court to order them to produce accountsand they had failed to produce them after admitting that BasekhiSingh used to keep accounts. But no such prayer was made tothe court, and in the circumstances no adverse inference could bedrawn from the non-production of accounts. But it is urged thateven so the accounts would have been the best evidence to showthat maintenance was being given to the widows and the bestevidence was withheld by the plaintiffs and only oral evidencewas produced to the effect that the widows were being givenmaintenance by Basekhi Singh. Even if it be that accounts wouldbe the best evidence of payment of maintenance and they hadbeen withheld, all that one can say is that the oral evidence thatmaintenance was being given to widows may not be acceptable;but no adverse inference can be drawn (in the absence of anyprayer by the appellant that accounts be produced) that if theyhad been produced they would have shown that income was dividedhalf and half in accordance with the title claimed by the appellant.”

6.2 In the case of Indira Kaur (supra) this Court after consideringthe observations made by this Court in the case of Ramrati Kuer (supra)has set aside the findings recorded by three courts below whereby anadverse inference had been drawn against the plaintiff therein for notproducing the passbook and thereby holding that the plaintiff was notready and willing to perform his part of the agreement. It is observedand held that unless the plaintiff was called upon to produce the passbookeither by the defendant or, the Court orders him to do so, no adverseinference can be drawn.

6.3 Applying the law laid down by this Court in the aforesaid twocases to the facts of the case on hand, no adverse inference could have AB

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Abeen drawn by the High Court. The High Court seriously erred in reversingthe findings recorded by the learned Trial Court on the readiness andwillingness of the appellant.

7. Considering the circumstances narrated hereinabove, we areof the opinion that the High Court has materially erred in quashing andBsetting aside the judgment and decree passed by the learned Trial Courtby reversing the findings on the readiness and willingness of the appellant.Under the circumstances, the impugned judgment(s) and order(s) passedby the High Court is/are held to be unsustainable and the same deserveto be quashed and set aside. However, at the same time, to do thecomplete justice, we are of the opinion that if the plaintiff is directed toCpay a further sum of Rs. 10 lakhs towards sale consideration, it willmeet the ends of justice.

8. In view of the above discussion and for the reasons statedabove, the present appeals succeed. Impugned judgment(s) and order(s)passed by the High Court are hereby quashed and set aside. The judgmentDand decree passed by the learned Trial Court for specific performanceof the agreement to sell dated 13.03.2007 is hereby restored. However,to do complete justice, we direct the plaintiff to pay to defendant No. 1a further sum of Rs. 10 lakhs to be deposited within a period of eightweeks from today and on such payment, defendant No. 1 is directed toEexecute the sale deed in favour of the original plaintiff – appellant withina period of two weeks therefrom. Defendant No. 1 shall also be permittedto withdraw the amount i.e., Rs. 9,74,000/- deposited by the plaintiff on31.10.2011, pursuant to the judgment and decree passed by the learnedTrial Court, with the interest accrued thereon, which shall be paid todefendant No. 1 by an account payee cheque. Present appeals areFaccordingly allowed with the above further directions. No order as tocosts.

Bibhuti Bhushan Bose

Appeals allowed.

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