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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 23RD DAY OF JULY 2021

PRESENT

THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE HEMANT CHANDANGOUDAR

R.F.A. NO.1308 OF 2013 (SP)

BETWEEN:

K. MUNIYAPPA
S/O LATE KEMPANNA
AGED ABOUT 71 YEARS
R/AT NO.84, 1ST MAIN ROAD,
AYYAPPASWAMY TEMPLE ROAD
SOMESHWARANAGAR, YELAHANKA POST
BANGALORE-560 064.

SINCE DEAD BY HIS LEGAL REPRESENTATIVES

1(A) SMT. N. ANJINAMMA

W/O. LATE K. MUNIYAPPA
AGED ABOUT 65 YEARS

1(B) M. SATISH
S/O LATE K. MUNIYAPPA
AGED ABOUT 44 YEARS

1(C) DHARMA PRAKASH.M

S/O LATE K. MUNIYAPPA
AGED ABOUT 40 YEARS

1(D) SMT. M. VEENA

W/O DR. S.M. PRASAD
D/O LATE K. MUNIYAPPA
AGED ABOUT 38 YEARS.
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ALL ARE RESIDING AT NO.83

3RD MAIN ROAD, 1ST CROSS
AYYAPPASWAMY TEMPLE ROAD
SOMESHWARANAGAR
YELAHANKA POST
BANGALORE-560 064. ...APPELLANTS

(CAUSE TITLE AMENDED AS PER THE ORDER DATED

28.03.2016)

(BY SRI MALLA REDDY, B.V., ADVOCATE)

AND:

J. PALANISWAMY
S/O LATE JAYARAM ACHAR
AGED ABOUT 55 YEARS
R/AT NO 1254, HIG 2ND STAGE
SECTOR-B, YELAHANKA NEW TOWN
BANGALORE-560 064. ...RESPONDENT

(BY SRI RAVI RAJ, B.A., ADVOCATE)

---
THIS R.F.A. IS FILED UNDER SECTION 96 OF CPC,
AGAINST THE JUDGMENT AND DECREE DATED 20.04.2013
PASSED IN O.S.263/2009 ON THE FILE OF PRESIDING
OFFICER, FTC-II, BENGALURU RURAL DISTRICT,
BENGALURU, DECREEING THE SUIT FOR SPECIFIC
PERFORMANCE.

THIS RFA HAVING BEEN HEARD AND RESERVED ON

15.07.2021 FOR JUDGMENT AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY HEMANT
CHANDANGOUDAR J., DELIVERED THE FOLLOWING:

JUDGMENT

This appeal under Section 96 of Code of Civil

Procedure, 1908 is filed against the judgment and decree

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dated 20.4.2013 passed in OS No.263/2009 by the Fast

Track Court - II, Bengaluru Rural District, Bengaluru.

The ranking of the parties are referred as per their

ranking before the Trial Court for convenience.

2. The defendant is in appeal. The plaintiff filed a

suit for specific performance of the agreement of sale dated

4.10.2007 thereby directing the defendant to execute the

sale deed by receiving balance sale consideration in terms of

the aforesaid agreement of sale in respect of the suit

schedule property. Plaint averments in brief are as follows:

i) The defendant who is the owner of the suit

schedule property agreed to sell the same in favour of
the plaintiff for a valuable sale consideration of
Rs.17,75,000./- by executing an agreement of sale
dated 4.10.2007. In pursuance of the same, the
plaintiff paid a sum of Rs.2,00,000/-towards advance
sale consideration, the receipt of which is duly
acknowledged by the defendant. The possession of the
suit schedule property was required to be delivered at
the time of registration of sale deed and the sale deed
was required to be executed by the defendant in favour
of the plaintiff or his nominee within two months from
the date of the defendant furnishing the BBMP katha
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and the latest BBMP tax paid receipt. Since the

defendant delayed the execution of the sale deed, the
plaintiff appointed Sri B Prabhakar as his nominee and
the plaintiff and nominee by legal notice dated
26.4.2008 called upon the defendant to execute the
sale deed in favour of the said nominee. The
defendant, having admitted the execution of sale
agreement, did not intend to perform his part of the
contract. Hence, the plaintiff was constrained to issue
legal notice dated 6.10.2008 calling upon the
defendant to execute the sale deed. However, the
defendant went on increasing the sale consideration of
the suit schedule property and was trying to enter into
an agreement of sale with a third party. Hence, the
plaintiff was constrained to file the suit.

3. The defendant after appearing through his

counsel filed written statement and contended as follows:

(i) The execution of agreement of sale in

favour of the plaintiff is admitted. The other
averments made in the plaint were specifically denied
and the sale agreement was terminated because the
plaintiff failed to pay the further advance amount of
Rs.15,75,000/- within the specified time of two months
from the date of agreement of sale. The plaintiff
having failed to comply with the terms and conditions
of the agreement of sale is not entitled for the relief
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sought for in the suit. Hence, sought for dismissal of

the suit.

4. The Trial Court after considering the pleadings

framed issues as to whether the plaintiff was ready and

willing to perform his part of the contract. The plaintiff to

substantiate his claim examined himself as PW1,

B Prabhakar as PW2 and C Illappa as PW3 and marked the

documents at Exs.P1 to P8. The defendant examined himself

as DW1 and marked the documents as Exs.D1 to D8.

5. The Trial Court after examining the evidence on

record held that the plaintiff has proved that he was always

ready and willing to perform his part of the contract and

accordingly decreed the suit. Taking exception to the same,

the defendant has filed this appeal.

6. Learned counsel for the appellant/defendant

submitted that as per the terms contained in the sale

agreement, the plaintiff was required to pay the further

amount of Rs.15,75,000/- within two months from the date

of agreement of sale and upon receipt of the same, the

defendant was required to execute and register the sale deed

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in favour of the plaintiff. However, the plaintiff did not come

forward to pay the balance sale consideration within the

specified time, hence the plaintiff has failed to perform his

part of the contract. He further submitted that the plaintiff

having failed to aver that he is ready and willing to perform

his part of the contract is not entitled for grant of

discretionary relief of specific performance under Section

16(c) of the Specific Relief Act, 1963. In support, reliance is

placed on the decision of the Apex Court in the case of

Balakrishna and another -vs- Bhagawan Das (D) by

LRs and others reported in AIR 2008 SC 1786, J P

Builders and another -vs- A Ramadas Rao and others

reported in 2011 (1) SCC 429 and Man Kaur (dead) by

L.Rs -vs- Hartar Singh Sangha reported in (2010) 10

SCC 512.

7. He further submitted that the plaintiff having

failed to perform his part of the contract, the defendant

forfeited Rs.2,00,000/- received as advance of sale

consideration from the plaintiff and terminated the sale

agreement which was notified to the plaintiff in the reply

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notice. Hence, he submitted that the plaintiff having not

sought for declaration to declare that the termination of sale

deed as bad in law, the suit is not maintainable. In support

of his submission, a reliance is placed on the decision of the

Apex Court in the case of I S Sikandar (D) by LRs. -vs-

K Subramanya and others reported in (2013) 15 SCC 27.

8. He further submitted that the suit schedule

property was sought to be acquired by the Bangalore

Development Authority by issuing a preliminary notification

under Section 17(1) and (3) of the Bangalore Development

Authority Act, 1976. Hence, the contract has become

impossible to be performed and the defendant is not under

an obligation to perform his part of the contract as

enumerated under Section 56 of the Indian Contract Act,

1872.

9. On the other hand, learned counsel for the

respondent/plaintiff submitted that the Trial Court

considering the evidence on record has rightly decreed the

suit. He further submitted that since furnishing of BBMP

katha extract and latest tax paid receipt was a condition

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precedent for the plaintiff to pay the balance sale

consideration of Rs.15,75,000/-, the defendant having failed

to furnish the same, has failed to perform his part of the

contract. He further submitted that in the legal notice at

Exs.P2 and P5, which form part of the plaint, it is

categorically stated that the plaintiff was always ready and

willing to perform his part of the contract. Hence, the

plaintiff is entitled for discretionary relief of specific

performance of the contract and the Trial Court considering

the same, has decreed the suit.

10. He further submitted that there is no statutory

embargo for alienating the suit schedule property upon

issuance of preliminary notification under Section 17(1) of

the Bangalore Development Authority Act. Hence, he

submitted that the contract cannot be rendered as impossible

to perform .

11. We have considered the submissions of the

learned counsel for the parties and perused the Trial Court

records.
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12. The defendant has admitted the execution of the

agreement of sale in favor of plaintiff at Ex.P.1. The points

that arise for consideration in this appeal are, whether the

plaintiff is entitled for grant of decree for specific

performance in view of the provisions contained in Sections

16(c) and 20 of the Specific Relief Act, 1963 and whether the

performance of contract is rendered impossible as

enumerated under Section 56 of the Indian Contract Act.

13. The agreement of sale at Ex.P1 specifies that

the sale deed was required to be executed in favour of the

plaintiff or his nominee within sixty days from the date of

agreement of sale subject to the condition that the Khata of

the schedule property is transferred in the name of the

defendant. The plaintiff and alleged nominee of the plaintiff

issued a legal notice at Ex.P2 dated 26.4.2008 calling upon

the defendant to obtain BBMP katha and tax paid receipt and

execute and register the sale deed in favour of the plaintiff

and his nominee. The defendant issued reply notice dated

16/17.5.2008 at Ex.P4 denying the contents of the legal

notice and also terminated the agreement of sale on the

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ground that the plaintiff has failed to perform his part of the

obligation by paying the balance sale consideration and

further forfeited the amount paid towards the advance sale

consideration, since the time stipulated for completion of the

sale transaction expired on 3.12.2017. Thereafter, the

plaintiff issued another legal notice dated 8.11.2008 at Ex.P5

calling upon the defendant to execute and register the sale

deed in favour of the plaintiff. The defendant issued a reply

notice dated 3.12.2008 denying the allegations made in the

legal notice at Ex.P5. It is only thereafter the plaintiff filed

the suit.

14. In the agreement of sale at Ex.P1, it is

specifically specified that the sale transaction should be

completed within sixty days from the date of execution of

agreement of sale on 4.10.2007. The legal notices at Ex.P2

and Ex.P5 were issued on 26.4.2008 and 8.11.2008 much

after the expiry of the sixty days. The condition precedent for

payment of balance sale consideration by the plaintiff is that

the defendant should get his name transferred in the

property record. The defendant has not produced any

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document or stated in the reply notice that his name is

effected as owner in the relevant property records. The

contention of the defendant is that he had agreed to sell the

property in “AS IS WHERE IS BASIS “ .

15. Sections 16(c) and 20 of the Specific Relief Act,

1963 mandate readiness and willingness on the part of the

plaintiff to perform his part of the contract and it is a

condition precedent for obtaining relief for grant of specific

performance. It further mandates that in a suit for specific

performance, the plaintiff must aver and prove continuous

readiness and willingness to perform the contract on his part

from the date of contract, the onus is on the plaintiff.

16. The Apex Court in the case of Man Kaur (dead

by LRs.) (supra) at para 23 has held as follows:

"This contention has no merit. There are two

distinct issues. The first issue is the breach by the
defendant - vendor which gives a cause of action
to the plaintiff to file a suit for specific
performance. The second issue relates to the
personal bar to enforcement of a specific
performance by persons enumerated in section
16 of the Act. A person who fails to aver and
prove that he has performed or has always been
ready and willing to perform the essential terms
of the contract which are to be performed by him
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(other than the terms the performance of which

has been prevented or waived by the defendant)
is barred from claiming specific performance.
Therefore, even assuming that the defendant had
committed breach, if the plaintiff fails to aver in
the plaint or prove that he was always ready and
willing to perform the essential terms of contract
which are required to be performed by him (other
than the terms the performance of which has
been prevented or waived by the plaintiff), there
is a bar to specific performance in his favour.
Therefore, the assumption of the respondent that
readiness and willingness on the part of plaintiff is
something which need not be proved, if the
plaintiff is able to establish that defendant refused
to execute the sale deed and thereby committed
breach, is not correct. Let us give an example.
Take a case where there is a contract for sale for
a consideration of Rs.10 lakhs and earnest money
of Rs.1 lakh was paid and the vendor wrongly
refuses to execute the sale deed unless the
purchaser is ready to pay Rs.15 lakhs. In such a
case there is a clear breach by the defendant.
But in that case, if plaintiff did not have the
balance Rs.9 lakhs (and the money required for
stamp duty and registration) or the capacity to
arrange and pay such money, when the contract
had to be performed, the plaintiff will not be
entitled to specific performance, even if he proves
breach by defendant, as he was not `ready and
willing' to perform his obligations."

17. In the written statement, the defendant has

taken up a categorical plea that the defendant was always

ready and willing to perform his part of the contract,

however, the plaintiff has not come forward to perform his

part of the contract by paying the balance sale consideration.

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In the cross - examination, PW1 - plaintiff has admitted that

he has not produced any document to show that he was

possessing requisite funds to pay the balance sale

consideration as on the date of issuance of legal notice at

Ex.P5. In a suit for specific performance, the burden is on

the plaintiff to prove that he was always ready and willing to

perform his part of the contract by paying the sale

consideration. In the present case, admittedly, the plaintiff

has not placed any evidence so as to prove that he had

requisite funds to pay the sale consideration as on the date

of issuance of legal notice at Ex.P5 and also as on the date of

filing of the suit.

18. The Division Bench of this Court in the case of

Sri Punny Akat Philip Raju -vs- Dinesh Reddy reported

in ILR 2016 Kar. 2252, considering the provision of

Sections 16(c) and 20 of the Specific Relief Act, 1963 has

held that in a suit for specific performance of contract, the

plaintiff has to prove the satisfaction of the Court that he

possesses the requisite funds and he has produced such

documentary evidence which would enable the Court to come

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to the conclusion that the plaintiff is ready with requisite

balance sale consideration to complete the sale consideration

and if no evidence is adduced in this regard by way of

documentary evidence, no prudent man would come to the

conclusion that the person has proved the possession of the

funds. In view of the aforesaid proposition of law enunciated

by the Hon’ble Supreme Court and Division Bench of this

Court , it is held that plaintiff having failed to prove that he

had the requisite funds to pay the balance consideration is

not entitled for relief for granting the decree for specific

performance under Section 16(c) of the Specific Relief Act,

1963.

19. In the reply notice dated 17.5.2008 at Ex.P4, the

defendant has categorically stated that the agreement of sale

stands cancelled in view of non-payment of balance sale

consideration within sixty days from the date of agreement of

sale. The Apex Court in the case of I S Sikandar (supra)

has held that if the plaintiff has not sought for declaratory

relief to declare that the termination of agreement of sale as

bad in law, the Court cannot grant decree for specific

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performance on the basis of agreement of sale in the

absence of such prayer. In view of the decision of the Apex

Court, the plaintiff having not sought for such declaratory

relief, the suit filed by the plaintiff is not maintainable.

20. The agreement of sale was executed before

issuance of preliminary notification under Section 17 of BDA

Act, 1976 proposing to acquire the suit property among other

lands. It is only during the pendency of this appeal in 2018 ,

final notification under Section 19 of BDA Act, 1976 was

issued for acquiring the land for formation of residential

layout. The Apex Court in the case of Sukhbir Singh -vs-

Ajit Singh reported in 2021 SCC ON LINE SC 357 referring

to Section 21 of the Specific Relief Act, 1963 and following

the decisions in the case of Jagdish Singh v Nathu Singh ,

(1992) 1 SCC 647 and Urmila Devi v Deity, Mandir Shree

Chamunda Devi , (2018) 2 SCC 284 has held that when the

contract becomes impossible to perform with no fault of the

plaintiff, Section 21 of the Specific Relief Act enables the

court to award compensation in lieu and substitution of the

decree for specific performance and the plaintiff shall be

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entitled to the amount of compensation determined and

awarded under the provisions of Land Acquisition Act, 1976.

Since it is held that the plaintiff is not entitled for grant of

decree for specific performance, the plaintiff is not entitled

for the compensation in terms of Section 21 of the Specific

Relief Act, 1963.

21. Admittedly, the plaintiff in the suit has not sought

for an alternative relief of refund of the earnest money as

required under Section 22 of the Specific Relief Act, 1963.

When a query was put to the learned counsel for the

defendant as to whether the defendant is willing to refund

the earnest money, on instructions from the defendant, he

filed a memo stating that the defendant is willing to refund

the earnest money. The said memo was taken on record on

15.7.2021. The defendant undertakes to refund the earnest

money along with interest at the rate of 6% p.a. to plaintiff

within six weeks from today. The aforesaid undertaking is

placed on record.

22. In view of the discussion in the preceding paras,

it is held that the plaintiff has not made out a case for
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granting the discretionary relief of specific performance of

sale agreement dated 4.10.2007.

The appeal is allowed. The impugned judgment and

decree dated 20.4.2013 passed in OS No.263/2009 by the

Fast Track Court - II, Bengaluru Rural District, Bengaluru is

set aside. The suit filed by the plaintiff for specific

performance is dismissed with liberty to the plaintiff to take

recourse to such remedies as may be available to him in law

with regard to the refund of the earnest money paid by him

to the defendant.

Sd/-
JUDGE

Sd/-
JUDGE

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