Dated this the sub day of SCPtembcI3 §[j : .
Present:
rm Korma: an-. JIIST'IC'.B§ 55.2. 1; v[ .'
'rim Hozrnm xx. JtIS'I'I€:E '
REGULAR mzgfr a.1§rr=::..'1;,z(e. % 1'766[
BETWEEN :
Smi. Sharadamma; ~
W/0 late Sri D. :S'1tam'_'--an1aa, 1: ..
Aged about 60. . '
R/at No. 24,? b V.
Next to PIatoInaticS_.P1'o.~iua':té.- ~
B. Naxayaiiapuffigl, "ii". "
Whitefield Road;
Dooravaxfinagar '
Bangalore-5.60.0I6;. ,_ % ...APPELLAN'1'
(By Szji.' €?--._S. V%SW§$WfiI3;' Senior Adv., for
:As__sociafes,.....Smt. I-LR. Vasudha, Adv.)
Sfi
S / o
' Aged about 45 years,
'A 1 -- .. [at No." 1680,
_ »'2n<% Crass, 3rd Stage,
-Pr "shllagar,
._ "Ba1§1galore-560 O21. RESPOHDEN1'
V ' ._ ;'{By Sri. Subha Rae for M/S Subba Rao,
Sri B.V. Gangieddy, Adv. for C] R)
This Rcgular First Appeal is filed under 1
r/W Section 96 of CPC against the Judgment
3.4.2007 passed in O.S.No. 1051/2903 on the
11* Additional City Civil Judge,
for specific performance of
This appeal being rcsci*aé;d'A at is
coming on for Pmnotgnccxnent gmfV"-..judgé:incnt.v th5.s day,
Bannurmath J., delivér5:;t- _
V 'n;:iy:1 _th.§ Imsuccessfixl defendant
dated 3.4.3007 passed by
the VVII"-'3_Q""City Civil Judge, Bangalore City in
0.3. 'A v
* facts giving raise to the present appeal are as
'folibwsz . ' L'
'1"'1.:1c respondent] plaintiff' hczein had filed a suit for
pexformance of the contract against the
” appeliant/ defendant herein in respect of the suit schedule
P1’0P€I’t}’-
6″”
11
exercising the judicious discretion as required under Section 20
of the Act, the impugned judgement and decree
uxxsustainabie. it is also submitted that, evenwiiiiougii
Court had framed the additionai “i;s’sug_ -; fifiaeb T.
alternate prayer for refund, not by
Court indicates non application V
the irnpuged judgment and Eable aside.
8. On tilejotherihiwaflnib Sii«.V:’S;1;bi5a;«’f§iao, learned Senior
Counsel for piéiiniiiijirespondent argued in
supportiof Q33 and decree passed in
his favoliii u ”
that, the decision relied upon by the
in the case of 1MDA.R:!0 –::a- usage
P.D%0UzA -13- EHONDRHLO NAIDU [2904-{5} SCC 549]
V A es such, it will not help the appellant to take his case any
fiirther. it is submitted that, the intention of the parties has to
u be gathered by bare reading of the document —- Ex.P.2 and as its
6] has been held as per incurium in the later
nomenclature or titie and the terms and conditions put therein
12
clearly indicate that, that eyes opened the defendafit-jt_’c.:entercd
into an agreement of sale, which was rightly
Court and as such, the present appe._a.I__is deiicidef is
submitted that, so far as clauses; 4;’_e.t::.t1 s.;.t ‘
pointed out by the
that they are only penal case, the
defendant failed to t contract and merely
because option is g;ivee..to.:’th.e tfloes not mean that
the Court specific performance.
The pronouncement in the
cast: mum’ [2004f6) sec 649;,
as. Ajgesnzjf-‘ sax. smamnamsnuz [Am 2007
SC 1236}
V have heard both the Counsel at length and
AA «.11. At the outset, we have to note that the
‘ tjrotacuncement in the case of IMDARAO -93- HARM) [1999f8)
” 416] has been distriztgujshed and declared as per ina1nu’ m
in the iater decision. in the case of P.D’SOI3ZA –w- SHONDRILO
%w
13
1\£dIDU{2004(6) SOC 64913116 as such, the same&Vis_’4ef for
the appellant’s contentions.
12. However, the Division ‘case
of am. away: -03- Dr. 3.3. met’ ‘
224] has held that, Where fllfi,-agvk-‘flfilfififlt provideerv option to the
vendor to repay the moiiey property and the
parties have Vgigxfeernentett that manner and –
such option, Whether
it wou1d._rrot~ tofigant the decree for specific
performance it 1 to the terms of the
agreement and right of the prospective
ventior to t;jxe1’eise pay ofl’ the amount and
The scope of this question. was
Apex Court vie-é-v”is., Sections 20, 23
T’ 10 the case of M.L. DEFENDER SINGH -vs-
‘ H 1973 SC 2457], the i~Ion’h1e Supreme Court
V
”16. The posifion stated above is in
oorjomzity with the principles found
stated in Sir Edward I4Yy’s “Treatise on
“Mu
the Specific Performance of ‘ ”
(Sixth Edn. Atp.65). It was said thefe: V – ”
«file question
the contract? Is it oef£ein’ K V’
shall be done,”t;y;;{z atsunz.
whether by way of perzqfty er
to secure, “the ._of irery
act? Or, £5′-.’t’ ‘two things
shalt be party
‘Qf or the payment
“the :§ym_jefVfnéneVq?,51jt” the former, the
AfciC:tVofVA3thepen,gI or other like sum being
— prevent the Court’s
»._e:g,fore:’ng of the very act, and
into execution the intention
of the If the latter, the oonmtct is
:v’;-settisfied by the payment of a sum of
and there is no gmu”nd for
‘ against the party having the
election to compel the performance of the
other alternative.
From what has been said it will be
gathered that contracts ff the kind new
under d1′:5c:uss~.»’on are diweible into three
cfasseesr
é/
14
If in other respects it can and
15
(1′) Where the sum v Vt” H
strictly a penalty w a
of seazring the
contract, as the 1
(it) Where the name * di zofbe
paid as ” for a
Ofthe oontrg§,¢t;_” ” V V’ ”
“(:’i:’) zhé”~éum+fi_gmd is an
1, zh;e’_ which magL__!g_e
V ».sebe;jm££:g;f$rVt.’theberféofirzance of the ad
” of ihetierson Qlyxhem the
” or the act done.
u” the stipulated payment
either Of the two fi?’st-
‘jitezttioned heads, the Court will ergforce
Xftllght to be enforced, just in the same
Vwayasaoontractnottodeapartiwlar
act, with a penalty added to secure its
pezfomzanoe or (1 sum named as
liquidated damages, may be speaficallg
enforced by means of an irgiwzction
against breaking it. On the other mg,
where the contract comes under the third
head, it is satisfied by the paggnent of the
17
the i~Io11’b1e Supreme Court, the Court is required to determine
this aspect on the facts and circumstances of eaeh-V
it, to find out whether specific perfoI’mance.’:_:ofV
convey a property ought to be or ‘not.
14. On detail reading of Ex;.P.2::’a11s1 4
and 5 therein, in our view, eieariy iuci-ieiates £t1:’v”t5.vt}:;eVVi1:J:teni:iorx
of the party was never to go of Ciausc 5 of
the agreement gives ..fh\&A’%*¢nnd0I’AA Iefund the
advance sale con_side1atio_n_ the time fixed
for 4 of the said agreement
fmthervvielearlgir -.that:¢~*’even in case Where vendor fails to
execute the4″‘rengVisteied”vsai’edeed and even where the purchaser
,.,_is with “” “balance sale consideration within the
then the vendor is only Iequimd to refund the
jilconsideration along with liquidated damages at
the rate of 3% per month or 36% per annum. In our view, as
A ~?_”‘ these two clear options available to the vendor, them is
absolutely no clause indicating the right of the pmvchaser to
“take steps for specific performance in case the alleged vendor
failed to perform her part. Such clause is normally found in
ép,
18
agreement of sale and on the other hand, clauses 4 “abeing
most unusual, it can be gathered that, the fine
parties was never to sell and purchase j
dispute, but Ex.P.2 was executed’ :’t€:3..’_2e
amount of Rs.2,50,00{)/~ advanced and tedmiitediyvépaidt to
defendant by the purchaser. clear from
the conduct of the _ out by fill’?
learned Counsel for this was an
agreement for have permitted the
vendor to construction in the
property i;t1:ve”v~e,1’iege:vivvVetgreement and similarly if
really the ctefendent of selling, she would not have
spent nfmney construction in the existing
would have gone to the alleged
that immediately after receiving the sum of
,_Rs.2;5€)1;,bA00/e”‘eifraim the plasma: the defendant put up
4een»st1″I1ctann;;.is not disputed by the plaintifi’ and in fact, in his
ereeejejéenzinaiion, he admits to the same.
H 15. Similarly, even before the pIa1’ntifl’Woke up by issuing
legal notice dated 9.11.2002, the conduct of the party is
19
relevant to be noted. Seven days prior to the said nofice —
Ex.P.4 issued by the plaintifl on 2.2.2002, the defendanttthhs in
fact lodged a poiice complaint narrating the
under which Ex.P.2 came into existence,….the.x
conduct of the p1aiz1tifi’ in
ageement of sale and thexeby_»fomin«g- defenéant to tsp
police coxnpiaint in this Iegaztlf» 6:[1:1.é002, in
fact the defendant has as per’ wherein
again the circumstances as been narrated
in detail. No deuht the to this as per Ex.P.4
menfiorfiné an egieement of sale and not loan
eansactioe, ..wm¢h’ only title of the deed — Ex.P.2
and the aflegegi of sale. In our v’mW, on detail
we”fir–.d”that, by xeading clauses 4 and 5 in
surrounding circumstances and the conduct of
the only a loan txsansaetion and Ex.P.2 came to
C be or by way of security and both the parties never
act upon it as an agreement of sale. The possibility
enbsequent dispute between the parties because of the
” not giving the receipts for the interest paid, it has
resulted in the present suit. By reading the clauses in the
,§'”
20
agreement especially clauses 4 and 5, as them is”
giving any right to the purchaser for enfoiciz-ifi’ 4′
agitement and on the other hand: as-
panic” s themselves agzeed that in the’.ev?e_i3i’lvoflbIeac_vA”
remedy would be by way of for V L’
in our opinion, the .._$ucll is
legally estopped from other than such
compensation or c£é1mage;;;””* — if
16;. In i1oi1…_conside1*atio11 of these aspects by
the 13331″ “t1ie;i§*’ prospective has resulted in the
unjusji’a’.ng1 illegal elven otheiwise, We find that the trial
V to elcemise its d1scre’ tion under Section 20 of
the Section directs the jurisdiction to decree
a for performance is discretion and the Court is not
bound such zelief mexely because it is lawful to do so;
VA discretion of the Court is not arbitrary but sound and
mgsonabxs, gumed by judicial principles and capable of
correction by a court of appeal. in our vfiew, the trial. Court has
failed to exercise this jurisdiction properly.
-0=9’f”$
21
17. Looking at the case from any angle, we the
impugned judgment and deczee is
the findings above and as such, thesame iset
aside.
18. in the result and _1jeas<":«"11S.VV:S"t.ett:rvViv; above, the
appeal is allowed in flerms:
a) The:’j1;dg1r:xe:it 3.4.2007 passed
1/.2¢é%;;_;a’ xx Additional City
_ ____ v_ decreeing the suit for
specific; .. aside and in
subsfitfifteqé elefexldant is directed
to asuzfi 61′. 2,$E},0G0/ – (Rupees two lakhs
only) with interest at the agreed
p§3;.’:inonth fimn 23.03.2002 tiii the
daiie..of myment.
VA ‘*fV’i1e. ciefendantj appeiiant is aiso divested to pay to
p}aint.ifi’ a sum of Rs.20,()90/– (Rupees twenty
thousand only) as damages.
gy-
Nsu/–
22
C) In the circumstances ofjizhc casé,” ;:_) ax’tieVs .L
directed to bear their
sal-
¢