IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 5

TH
DAY OF SEPTEMBER 2012
BEFORE
THE HONBLE MR.JUSTICE S. ABDUL NAZEER
REGULAR SECOND APPEAL NO.4/2010
A/W RSA CROB.NO.8/2010 (MON).
RSA NO.4/2010
Between:
Sri K.Ramachandra,
Aged about 47 years,
S/o C.Krishnamurthy,
R/a No.205, Kshetrayya Road,
K.R.Mohalla, Mysore 12. . Appellant.
(By Sri B.S. Nagaraj, Adv.)
And :
1 Sri D.Deepak Ramarajeurs,
Aged about 50 years,
S/o late Devaraja Urs.
2 Smt. Subbammanni,
Aged about 76 years,
W/o late Devaraja Urs,
2
Both are r/a No.78, 1
st
Stage,
8
th
Cross, Gokulam,
Mysore 570 024. . Respondents.
(By Sri G. Balakrishna Shastry, Adv. for R2
R1 served and unrepresented.)
RSA CROB.NO.8/2010
Between:
1 Sri D.Deepak Ramarajeurs,
S/o late Devaraja Urs,
Aged about 53 years.
2 Smt. Subbamanni,
W/o late Devaraja Urs,
Aged about 77 years.
Both are r/o No.78, 1
st
Stage,
8
th
Cross, Gokulam,
Mysore 570 003. . Cross-Objectors.
(By Sri G. Balakrishna Shastry, Adv.)
And:
K. Ramachandra,
S/o C. Krishna Murthy,
Aged about 47 years,
R/a No.205, Kshetrayya Road,
K.R.Mohalla, Mysore-570 012. . Respondent.
(By Sri B.S. Nagaraj, Adv.)
3
Regular Second Appeal No.4/2010 is filed under Sec.100 of
CPC against the judgment and decree dated 1.9.2009 in
R.A.No.83/2007 passed by the II Addl. District Judge at Mysore
and confirming the judgment and decree dated 13.7.2007 in
O.S.No.289/2005 passed by the learned Judge Small Causes and
Civil Judge (Sr.Dn.) at Mysore, etc.
RSA.CROB.No.8/2010 is filed under Order 41 Rule 22 of
CPC against the judgment and decree dated 1.9.2009 in
R.A.No.83/2007 passed by the II Addl. District Judge at Mysore
and confirming the judgment and decree dated 13.7.2007 in
O.S.No.289/2005 passed by the learned Judge Small Causes and
Civil Judge (Sr.Dn.) at Mysore, etc.
This Regular Second Appeal & RSA.CROB. coming on for
Admission this day, the Court delivered the following:
JUDGMENT
This appeal is directed against the judgment and decree in
R.A.No.83/2007 dated 1.9.2009 on the file of the II Additional
District Judge at Mysore reversing the judgment and decree in
O.S.No.289/2005 dated 13.7.2007 on the file of the Small Causes
Court and Addl. Civil Judge (Sr.Dn.), Mysore. The appellant is the
plaintiff in the suit and the respondents are the defendants.
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2. The plaintiff filed the above suit for recovery of a sum of
Rs.3,65,609/- with interest at 16% per annum from the date of the
suit till the date of realisation. It is the case of the plaintiff that he
had entered into an agreement to sell dated 22.8.2001 with the
defendants for sale of the suit schedule property for a total
consideration of Rs.8,75,000/-. A sum of Rs.1 lakh was paid as
advance and the time stipulated for completion of the sale
transaction was six months. It is further contended that by mutual
agreement, time was extended by three months from 22.2.2002. On
5.1.2002, the defendants had received a sum of Rs.1,25,000/- from
the plaintiff towards further advance. The defendants got issued a
notice dated 11.3.2002 to the plaintiff through their learned
Advocate contending that they were always ready and willing to
perform their part of the contract and blamed the plaintiff for non-
completion of the sale transaction. In the said notice, the
defendants have admitted the receipt of a sum of Rs.1,25,000/- as
further advance but have contended that the time for completion of
the sale transaction has expired on 22.2.2002. Therefore, they are
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entitled to rescind the contract. The plaintiff sent a reply to the said
notice stating that time for completion of the sale transaction has
been extended and that he is always ready and willing to perform
his part of the contract. The defendants sent yet another notice
dated 9.9.2002 to the plaintiff enclosing a cheque for Rs.1,25,000/-
towards refund of the advance money received on 5.1.2002. It is
the case of the plaintiff that defendants have no right to rescind the
contract unilaterally.
3. The defendants have filed their written statement
contending that as per clause 8 of the agreement, the agreement
would get automatically terminated if the plaintiff fails to get the
sale deed executed as per clauses 6, 7 and 9 thereof upon which the
defendants would get right to forfeit Rs.1 lakh from out of the
advance amount. Since the plaintiff has failed to come forward to
get the sale deed registered within the time stipulated in the
agreement, they have rescinded the contract. It is contended that
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they have not agreed for extension of a further period of three
months time as contended in the plaint.
4. On the basis of the pleadings of the parties, the trial Court
has framed the issues as under:
(i) Whether the defendants prove that they are entitled
to forfeit an amount of Rs.1,00,000/- as per the
condition No.8 of the agreement dated 22.8.2001?
(ii) Whether the defendants prove that since the
plaintiff has not encashed the cheque for Rs.1,25,000/-,
he is entitled to recover the same?
(iii) Whether the defendants prove that there can be
recession of the contract unilaterally?
(iv) Whether the plaintiff is entitled to recover the suit
claim?
(v) To what order or decree, the parties are entitled
to?
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5. The plaintiff got himself examined as P.W1 and
documents Ex.P1 to Ex.P6 have been marked in his evidence. First
defendant got himself examined as D.W1 and documents Ex.D1 to
Ex.D12 were marked in his evidence. On appreciation of the
materials on record the trial Court has decreed the suit by directing
the defendants to refund a sum of Rs.3,65,609/-, which consists of
Rs.2,25,000/- towards advance and further advance and balance is
towards interest as on the date of the suit. The trial Court further
directed for payment of interest at the rate of 16% per annum on
Rs.2,25,000/- from the date of the suit till the date of realisation.
6. Feeling aggrieved, the defendants filed an appeal in
R.A.No.83/2007. The lower appellate Court on re-appreciation of
the materials on record has held that forfeiture of Rs.1 lakh by the
defendants is in order. Therefore, it directed the defendants to
refund a sum of Rs.1,25,000/- with interest at 6% per annum from
the date of the suit till the date of realisation of the suit claim. As
8
noticed above, the plaintiff has filed this appeal challenging the
said judgment and decree.
7. The defendants have filed cross-objections challenging
the judgment and decree of the lower appellate Court directing
them to refund a sum of Rs.1,25,000/- with interest at 6% per
annum.
8. Learned Counsel for the appellant would contend that the
defendants have rescinded the contract on certain assumptions and
surmises. They have paid a sum of Rs.1,25,000/- towards further
advance. The defendants are not justified in unilaterally rescinding
the contract. It is further argued that the trial Court on appreciation
of the facts and circumstances of the case has rightly directed
refund of the entire amount of Rs.2,25,000/- with up-to date
interest.
9. On the other hand, learned Counsel appearing for the
defendants/cross-objectors submits that it is on account of default
9
of the plaintiff, the sale transaction did not go through. The plaintiff
did not come forward to execute the sale deed within the period
prescribed. A sum of Rs.1,25,000/- was paid by the plaintiff to the
defendants on 5.1.2002. However, time was not extended up-to
22.5.2002 from 22.2.2002 for execution of the sale deed. In fact, in
the agreement at Ex.P1, the insertion of the clause relating to
extension of time has been manipulated. In the circumstances,
question of refund of the amount of Rs.1,25,000/- does not arise.
Therefore, the lower appellate Court ought to have allowed the
appeal in full.
10. While admitting the appeal, this Court has framed the
substantial question of law as under:
Whether the first appellate Court was justified in
arriving at a finding that the period prescribed under
the agreement of sale had expired, when it was not
denied that by a legal notice, the defendants had
extended the period for the performance of the
mortgage in 1956 and thereafter had resiled from the
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offer to sell the property that the plaintiff was ready
and willing and hence, whether the first appellate
Court was justified in modifying the judgment and
decree of the trial Court?
11. Clause 6 of the agreement at Ex.P1 clearly states that
within a period of six months, the plaintiff has to pay the balance of
the sale consideration to the defendants and got the sale deed
registered after giving notice in writing to that effect. Clause 8 of
the agreement authorises the defendants to rescind the contract in
case the plaintiff did not come forward for execution of the sale
deed and for forfeiture of the advance amount of Rs.1 lakh paid
under the agreement at Ex.P1. The contention of the plaintiff is that
the period for performance of the contract has been extended till
22.5.2002. The plaintiff relies on the further advance made on
5.1.2002. It is not in dispute that defendants have received a sum of
Rs.1,25,000/- on 5.1.2002. However, they deny the extension of
time for completion of the sale transaction. I have perused the
endorsement made in Ex.P1. It is clear that the endorsement
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relating to extension of time has been manipulated by insertion of
four lines above the endorsement made by them about the receipt
of further amount of Rs.1,25,000/-. The lower appellate Court has
recorded a finding of fact on this question as under:
Even though the plaintiff has claimed that by mutual
consent of himself and defendants, the time for
completing sale transaction was extended up-to
22.5.2002 from 22.2.2002, the defendants have denied
the said claim and have contended that the plaintiff has
deliberately manipulated the endorsement made on the
agreement by inserting 4 lines above the endorsement
made by them about receipt of the further amount of
Rs.1,25,000/-. On careful scrutiny of the endorsement
made at the end of the sale agreement at Ex.P1, it can
be seen that first 4 lines are written with one pen and
remaining portion is written with another pen. There is
clear differences in the appearance of the writing and it
is crystal clear that first 4 lines of the endorsement is
written with a different ink and the remaining portion
is written with another pen with different ink. The
writing of first 4 lines is distinct and the ink is lighter
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than the remaining portion of the endorsement, which
is written with dark ink. Hence, the claim of the
defendants that they had made endorsement only
regarding receipt of Rs.1,25,000/- from the plaintiff
towards further advance amount of the sale transaction
and the plaintiff has deliberately inserted another 4
lines above the said endorsement can be safely
believed. The endorsement made on the sale
agreement regarding the extension of time for
completion of sale transaction makes it abundantly
clear that the plaintiff has deliberately added those 4
lines fearing that his suit claim would be barred by
limitation.
12. It is thus clear that there is no extension of time of three
months as contended by the plaintiff for completion of the sale
transaction. In the circumstances, it is futile to contend that the
parties by mutual consent have extended the time for completion of
the contract. The defendants are justified in rescinding the contract
in accordance with clause 8 contained in Ex.P1.
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13. The lower appellate Court after a detailed consideration
of the facts and circumstances of the case has rightly come to a
conclusion that the defendants are entitled to withhold a sum of
Rs.1 lakh paid by the plaintiff towards advance. The lower
appellate Court is also right in directing the defendants to refund a
sum of Rs.1,25,000/- paid by the plaintiff subsequently, because
the agreement does not authorise them to retain the said amount.
Though the trial Court has awarded interest at the rate of 16% per
annum, the agreement Ex.P1 does not contain such a clause. That is
why the lower appellate Court has awarded interest at 6% per
annum from the date of the suit till the date of payment. The
substantial question of law framed as above is answered
accordingly.
14. There is no merit in this appeal and in the cross-
objection. They are accordingly dismissed. No costs.
Sd/-
JUDGE.
BMM/-