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Judgment
N. Kumar, J.—This regular first appeal is preferred by defendant Nos. 2, 3 and 4 challenging the Judgment and Decree of the trial Court which has decreed the suit of the plaintiff for recovery of sale consideration of Rs. 15 lakhs with interest holding that the suit filed by the plaintiff for main relief of specific performance of contract and for declaration to declare the partition deed dated 29.4.2009 is not binding on the plaintiff.
For the purpose of convenience, the parties are referred to as they are referred to in the original suit.
The first defendant and second defendants are husband and wife and defendants 3 and 4 are their children. The subject matter of the suit is coffee lands situated in the villages of Basavanahalli and Malali, Kasaba Hobli, Sakaleshpur Taluk comprising in nine survey numbers in all measuring 4 acres 27 guntas which are more fully described in the schedule to the plaint and hereinafter referred to as the schedule properties.
The case of the plaintiff is, the schedule properties are the joint family properties of the defendants. For discharging the debt due to KVSSN, Sakaleshpur and for meeting the other necessity of the family like the education of defendant Nos. 3 and 4, defendant No. 1 who was the Kartha of the joint family offered to sell the schedule properties to the plaintiff for consideration of Rs. 15,50,000/-. The terms of the agreement of the sale was reduced into writing on 30.10.2000 and it was also duly registered. Under the agreement of sale, the plaintiff paid a sum of Rs. 15,00,000/- towards sale consideration in the presence of the witnesses and balance of Rs. 50,000/- was payable at the time of execution of registration of sale deed.
The parties agreed that the transaction should be completed before 30.4.2001. The first defendant had agreed to make available the relevant documents of title relating to schedule properties being RR, RTC and Pahani etc., within 60 days from the date of the agreement. The defendant No. 1 failed to do so. Time was not the essence of the contract. Defendant No. 1 executed acknowledgements dated 21.2.2002 and 30.10.2002 by extending time for performance of agreement. Defendant No. 1 in order to discharge the debt due to KVSSN, Sakaleshpura for getting attachment on the plaint schedule properties raised, pleaded for some more time. He was also negotiating with KVSSN for one time settlement. Therefore, on 26.11.2002, the first defendant made an endorsement on the original agreement dated 30.10.2000 undertaking to discharge the debts and get the plaint schedule properties free from the attachment and then execute sale deed before 20.10.2005 or at any date later than that when the plaintiff called upon the defendant to execute the sale deed.
In the said endorsement dated 26.11.2002, the first defendant has undertaken that the same shall be executed by him at any time even after 20.10.2005 when plaintiff makes a written request to defendant No. 1 to execute a registered sale deed.
The case of the plaintiff is, defendant did not make any serious efforts either to discharge the debts due to KVSSN or to get the attachment on the property raised. He also did not obtain tax clearance certificate under Section 230-A of the IT Act which was necessary for the registration of the sale deed. When the plaintiff demanded to press the first defendant for the execution of the sale deed, the defendants in collusion with each other have brought it to existence a registered partition deed dated 29.4.2009 purporting to effect a partition of the family properties. The said document is fraudulent one intending to defeat the claim of the plaintiff.
Under the said fraudulent partition deed dated 29.4.2009, the first defendant is not allotted any share in the immovable properties of the family. Only a sum of Rs. 25,000/- is shown to be allotted to him for his share. The defendant is only entitled to be maintained from the income of the family and who has no share in the family properties at item Nos. 1, 6 to 8 of plaint schedule properties. Defendant No. 3 was allotted item Nos. 2 to 5 and item No. 9 was shown as allotted to the share of 4th defendant.
Defendants 2 to 4 were aware about the Sale Agreement dated 30.10.2000. The sale consideration received was made use of by the first defendant to obtain degree in Dental Surgery for 3rd defendant. 4th defendant has completed his Graduation in Engineering. He was always ready and willing to perform his part of contract by keeping available balance sale consideration of Rs. 50,000/-. Inspite of approaching the defendants several times and inspite of sending a legal notice dated 10.10.2009 which is served on defendants 1,3 and 4, but, the defendants have failed execute the sale deed and they have sent an untenable reply on 21.10.2009. The plaintiff has not been intimated so far whether the debt due to KVSSN is discharged and whether the attachment of the property has been raised. Therefore, the plaintiff was constrained to file a suit for specific performance of the agreement or in the alternative for refund of Rs. 15 lakhs and for other reliefs.
After service of summons, defendant No. 1 filed a detailed written statement. It was contended, the suit is barred by limitation and therefore, on that ground alone, the suit is liable to be dismissed. It is categorically admitted in the written statement that the schedule properties are the joint family properties prior to the partition deed dated 29.4.2009 however, after the partition, item Nos. 1, 6, 7 and 8 have fell to the share of third defendants, item No. 9 was allotted to the share of second defendant and she is the absolute owner in possession of the same.
The 2nd defendant is not a party to the agreement of sale dated 30.10.2000 and therefore, she is not bound by the terms of the agreement. The 1st defendant was never the guardian of defendants 3 and 4. It is the 2nd defendant, who was the guardian of defendants 3 and 4. Item Nos. 2 to 5 have fallen to the share of the 3rd defendant in the said partition and he is the absolute owner in possession of the same. Similarly, item No. 9 has fallen to the share of the 4th defendant and she is in possession of the same. Therefore, as the first defendant is not the owner of the schedule property, he is not liable to execute any sale deed in favour of the plaintiff. The 1st defendant denied that the shara on the agreement dated 21.02.2002 and on 26.11.2002 is valid and he has not executed the same. It is fabricated by the plaintiff. The Joint Family did not own any other properties. The minors have attained majority and it is for them to protect their interest and as the 1st defendant is not continuing any more as their guardian, he has no right to represent them. In the partition deed, dated 29.04.2009, the parties have effected a partition of not only the schedule properties but also the joint family properties. Plaintiff is not a party to the said document. There cannot be a partial cancellation of the partition deed. On that ground also, the suit is liable to be dismissed. It was open to the plaintiff to have cleared the loan due to KVSSN and he could have deducted the said amount after the sale consideration. Otherwise, the plaintiff could have paid the said amount and obtained a receipt. However, even now, the loan due to the said society is not discharged. It only shows that the plaintiff has not paid the amount mentioned in the agreement. The 1st defendant has not agreed to execute the sale deed in respect of the schedule property. He has not executed any agreement dated 30.10.2000. He has offered the property as security and has returned the money and cancelled the agreement on 25.08.2003 in the presence of the witness and therefore, the agreement dated 30.10.2000 is illegal. A legal notice was received and a reply was sent to the counsel. The plaintiff is aware of all the above transactions. He kept quiet and the suit is filed, after, the period of limitation is over. The 1st defendant denied all other allegations in the plaint. He denied that he had agreed to furnish the requisite documents to the plaintiff before executing the sale deed. He is under no obligation. It is for the plaintiff to explain why he kept quiet for ten long years. The plaintiff did not demand the defendant to execute the sale deed. In terms of the partition deed, katha has been made out in the name of defendants 2 to 4. Revenue Entries are made. The challenge for such entries by the plaintiff are dismissed and it has attained finality and therefore, he sought for dismissal of the suit.
The 4th defendant has filed an independent written statement. His case is, he is not a party to the agreement of sale dated 30.10.2000. The 1st defendant is not the guardian of the 4th defendant. Now that she has attained majority, the 1st defendant has no more right to represent her. It is also admitted that the schedule properties are all joint family properties under a registered partition deed dated 29.04.2009. The schedule property is partitioned among defendants 2 to 4. As the 4th defendant is not a party to the agreement dated 30.04.2000, it is unenforceable against her. If endorsements are made on a registered agreement of sale, those endorsements also have to be registered without which the time for completion of the sale transaction cannot be extended. It is not clear as to who wrote the endorsement, on what date the endorsements were written and the 4th defendant is in no way connected by the said endorsement. The education of the 4th defendant was completed with the funds provided by the relatives of the family and also by the loans raised. The 1st defendant has not taken care of the 4th defendant. The 1st defendant has also not taken any steps to improve the family and his properties. The 1st defendant is addicted to vices. He had no right to enter into an agreement or alienate the property. Item No. 9 of schedule property is mutated in her name. She got it under the partition deed. She is the absolute owner of the same and therefore, she is not liable to execute any sale deed. She has reiterated the other allegations made by the 1st defendant regarding mortgage, clearing the debt etc.
The 2nd defendant - mother has filed an independent written statement. She has reiterated the allegations made by the 1st and the 4th defendant. She also contends that the agreement of sale is not binding on her, the suit is barred by time and that she is the absolute owner of the property, which has fallen to her share under the registered partition deed. As the plaintiff is not a party to the partition deed, she has no right to maintain the suit and she has no obligation to execute the sale deed. Defendant No. 3, the son has adopted the written statement of the 2nd defendant.
The Trial Court has framed eight issues and three additional issues, which are as under:
"1. Whether the plaintiff proves that, defendant No. 1 executed the Registered Sale Agreement as a kartha of the family in favour of the plaintiff on 30.10.2000 to sale the suit property for Rs. 15,50,000/- by receiving the Rs. 15,00,000/- as advance amount and agreed to execute the Registered Sale Deed in favour of plaintiff by receiving the balance amount?
Whether the plaintiff further proves that defendant No. 1 has executed the endorsements dated 21.02.2002, 30.10.2002, 26.11.2002 in respect of executing of sale deed?
Whether the plaintiff proves that defendants have created the Registered Partition Deed dated 29.04.2009 in between them to defraud the plaintiff?
Whether the plaintiff proves that, he has ever ready to perform his part of contract but defendant has failed to perform their part of contract?
Whether the defendant proves that suit is barred by time?
Whether defendant No. 2 to 4 proves that said alleged Agreement is not binding on them?
What are the relief plaintiff entitled so far?
What order or decree?
ADDITIONAL ISSUES
Whether the plaintiff proves that, first defendant has agreed to sell the suit schedule properties for his family legal necessity?
Whether the defendants prove that, first defendant had borrowed money from plaintiff by mortgaging the suit schedule properties and subsequently he has repaid the said loan amount and cancelled the Sale Agreement by Cancellation Deed dated 25.08.2003?
Whether the defendants 2 to 4 prove that, first defendant had addicted to bad habits and he has completely neglected the welfare of minors and their joint family affairs?"
The plaintiff in order to substantiate his claim examined himself as P.W.1 and examined the witnesses to the endorsements as P.Ws.2 to 4 and produced 62 documents, which are marked as Ex. P1 to Ex. P62. The 1st defendant is examined as D.W.1 and the 3rd defendant is examined as D.W.2 and on behalf of the defendants, 48 documents are produced, which are marked as Ex. D1 to Ex. D48.
The Trial Court, on appreciation of the oral and documentary evidence on record held that the plaintiff has proved that defendant No. 1 executed the registered sale agreement as a kartha of the family in favour of the plaintiff on 30.10.2000 to sell the suit property for Rs. 15,50,000/- by receiving Rs. 15,00,000/- as advance amount and agreed to execute the sale deed in favour by the plaintiff by receiving the balance amount. Further, it held that the plaintiff has proved that the defendant No. 1 has executed the endorsements dated 21.02.2002, 30.10.2002 and 26.11.2002 in respect of executing of sale deed. Further, the Court held that the plaintiff has proved that the defendants have created the registered partition deed dated 29.04.2009 in between them, to defraud the plaintiff. It also held that the plaintiff has proved that he was ever ready to perform his part of the contract, but the defendants failed to perform their part of the contract. The defendants have failed to prove that the suit is barred by time. Defendants 2 to 4 also submits that the suit agreement is not binding on them. It also held that the plaintiff has proved that the 1st defendant agreed to sell the suit schedule properties for his family''s legal necessity. The defendants have failed to prove that the 1st defendant had borrowed money from the plaintiff by mortgaging the suit schedule property and that subsequently, he has repaid the said amount and cancelled the sale agreement by cancellation deed dated 25.08.2003. The defendants 2 to 4 failed to prove that the 1st defendant was addicted to bad habits and he has completely neglected the welfare of minors and the joint family affairs. After holding all the issues in favour of the plaintiff, it also held that though the plaintiff has proved the sale transaction, execution of sale agreement and that he was always ready and willing to perform his part of the contract, but admittedly, the 1st defendant has agreed to sell all the ancestral and joint family properties, which are available to the Joint Family of defendants 1 to 4. He declined to exercise the discretion in granting the decree for specific performance. In his view, if the decree for specific performance is granted, the defendants would be put to more hardship and inconvenience and they will be left with no ancestral properties. Therefore, the suit for specific performance was dismissed. However, he decreed the suit for refund of Rs. 15,00,000/- paid under the agreement with interest at 12% p.a from the date of suit till realisation.
The plaintiff has not preferred any appeal insofar as the denial of the decree for specific performance is concerned. The 1st defendant, who received the money under the agreement has not chosen to challenge the said judgment and decree. It is defendant No. 2, the wife of the 1st defendant, who had no right in these properties and defendants 3 and 4 who are minors, as on the date of the agreement of sale have preferred this first appeal.
The learned counsel for the appellants-defendants 2 to 4 canvassed two grounds challenging the judgment and decree. Firstly, he contended that though on the date of the agreement of sale defendants 3 and 4 were minors, on the day the endorsements were made extending the period of limitation, they had become majors. Their signature is not obtained to those endorsements and therefore, insofar as they are concerned, the suit is barred by time, which has not been properly appreciated by the Trial Court. Consequently, he contended that under the last endorsement dated 26.11.2002 which is marked as Ex. P11, the time fixed for performance of the contract is 20.10.2005. In view of Article 54 of the Limitation Act, when once, time is fixed for performance of the contract, the time for filing the suit for specific performance begins from the date fixed for performance. Therefore, the plaintiff ought to have filed the suit on or before 20.10.2008. However, the suit filed on 02.03.2012 is clearly barred by limitation and therefore, he submits that the judgment and decree of the Trial Court insofar as defendants 2 to 4 are concerned is liable to be set-aside.
Per contra, the learned counsel appearing for the plaintiffs-respondents submits that admittedly, the schedule property is the Joint Family Property. The 1st defendant entered into an agreement to sell the property as a kartha of the Joint Family. Though on the date of the agreement of sale defendants 3 and 4 were minors even after they attained majority, the 1st defendant continued as the kartha of the joint family and therefore, the agreement was entered into as kartha of the family and when these endorsements are also executed as kartha of the family duly binding all the members. Therefore, there is no substance in the first contention.
Insofar as the period of limitation is concerned, no doubt in Ex. P11, the period fixed for completion is 20.10.2005. But the recitals in the said document shows that to complete the sale transactions before that date, the defendants had to discharge debts due to the Society and make the property free from encumbrances and they should take steps to get the attachment raised. The sale transaction is to be completed either before the date or on the date or after the date. From the written statement it is clear that even to this day, they have not discharged the debt and attachment is not raised. Legal notice is issued before filing of the suit. When they denied the liability, suit is filed on 02.03.2012.
Article 54 makes it clear that the period of three years is to be computed from the date fixed for performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused. A reading of the endorsement makes it very clear that the sale transaction is to be completed on or before 20.10.2005, but the defendant failed to perform his obligations under the contract. The sale is to be completed after he performs those obligations and the plaintiff issues notice calling upon him to perform his part of the obligation. It is only when the defendant has refused to comply with the notice issued, the time for specific performance stands. The legal notice was issued on 10.10.2009 and therefore, the suit filed on 02.03.2012 is well within time as rightly held by the Trial Court. Therefore, he submits that no case for interference is made out.
In the light of the aforesaid discussions, the points that arise for our consideration are:
"(a) Whether the endorsements dated 21.02.2002, 30.10.2002 and 26.11.2002 under which the time for performance of the contract was extended are not binding on the defendants 2 to 4 as they have not affixed the signature to the said endorsement?
(b) Whether the suit of the plaintiff for specific performance and in the alternative for recovery of money paid under the agreement of sale is barred by limitation?"
Point [a]:
From the evidence on record, it is clear that execution of Ex. P1 is not only proved but it is also admitted. In fact the specific case of the 1st defendant is Ex. P1, the ''agreement of sale'' is no more in existence because he has repaid the said amount and the agreement of sale is cancelled by execution of a deed of cancellation dated 25.08.2003. It is a registered agreement. A sum of Rs. 15,00,000/- is paid under the agreement, out of the said total sale consideration of Rs. 15,50,000/-. The fact that the 1st defendant has not chosen to challenge the decree of the Trial Court shows that he accepted the decree. Though a feeble attempt is made by the defendants 2 to 4 to contend that no consideration is passed under the agreement, the evidence on record clearly establishes the payment of Rs. 15,00,000/- as consideration in Trial Court. On proper appreciation of both oral and documentary evidence on record, the Trial Court has categorically held that the suit agreement is executed, registered and Rs. 15,00,000/- is paid under the agreement. Probably, that is the reason why the learned counsel for the appellant was fair enough not to challenge the said finding of fact, which is based on legal evidence. However, the argument was, on the date of the agreement, defendants 3 and 4 were minors. But on the day endorsements were executed after the extended period, their signature was not obtained to the endorsements. Therefore, those endorsements do not bind the defendants 2 to 4 and therefore, they are not liable to pay any money under the agreement. As rightly pointed out by the Trial Court, the suit agreement was executed by the 1st defendant, firstly as the kartha of the Joint Family and also as a natural guardian of defendants 3 and 4. It is the specific case of all the defendants that the schedule properties are all joint family properties. That is why they have completed partition of all these Joint Family properties under a partition deed.
As is clear from the defence, the Joint Family dissected only on 29.04.2009. The 1st defendant is a party to the said registered partition deed. Curiously, he is not allotted any of the suit schedule items though he is the kartha of the family. The 2nd defendant or the 1st defendant has no title or right in the properties, has given a major chuck in the schedule property. The Joint family continued and the 1st defendant was the kartha and in that capacity, on 21.02.2002, 30.10.2002 and 26.11.2002, he has executed these endorsements. Therefore, the said endorsements not only bind the 1st defendant, but binds all the members of the Joint Family. This is precisely what the Trial Court has said. On perusal of the legal evidence on record, as such, no case for interference is made out.
Insofar as the bar of limitation is concerned, Article 54 makes it very clear that a suit for specific performance of the contract has to be filed within three years from the date fixed for the purpose, or if no such date is fixed when the plaintiff has notice that the performance is refused. In the instant case, reliance is placed by both the parties on the endorsement dated 26.11.2002. The relevant portion of the endorsement reads as under:
From the aforesaid endorsement, it is clear that the sale transaction could not be completed because the 1st defendant did not discharge the loan to the Society. He was unable to get the Court attachment raised. That is the reason for extending the time for completion of the sale transaction. It is to be noticed that at this stage, the total consideration agreed upon is Rs. 15,50,000/-. Rs. 15,00,000/- is paid on the date of the agreement and the agreement was registered. It is only after the 1st defendant discharging the loan to the Society, getting the attachment raised, when the property becomes free from encumbrance he could execute the sale deed and the balance sale consideration is to be given. It is nobody''s case that the plaintiff was not ready with that Rs. 50,000/-. The case canvassed is that, the time fixed is 20.10.2005 in which the sale transaction should have been completed. It is true that is the time fixed for performance, provided the defendant performs his obligation. Admittedly, the defendant has not performed his obligation to the Society and attachment was not raised. Therefore, the endorsement provided for such a contingency. It is clearly stated that the defendants have agreed to clear the loan to the Society, get the attachment raised and handover all documents of title before 20.10.2005 or on that date or after the aforesaid period and thereafter, when the plaintiff issues a notice in writing calling upon them to execute the sale deed, they would execute the sale deed. This endorsement is not disputed. Therefore, when we read the entire endorsement as a whole, though the date is fixed as 20.10.2005, a provision was made for extension, if the defendants did not perform their obligations. The execution of the sale deed was dependent on the defendant clearing the debt due to the Society and get the attachment raised and the plaintiff issuing a notice calling upon the defendant to execute a sale deed.
In the instant case, till today, attachment is not raised but still the plaintiff having waited for sufficiently long period got issued a legal notice dated 10.10.2009 which was duly served on the defendants. They have sent a reply refusing to comply with the demand made by him for specific performance or for return of money. The cause of action commenced on 10.10.2009 the date of legal notice or 21.10.2009, the date of reply notice where they refused to perform their part of the contract. Therefore, the Trial Court, on the basis of the aforesaid undisputed facts rightly came to the conclusion that the suit of the plaintiff is not barred by time.
In the light of the aforesaid discussion, we do not see any merit in this appeal. Hence, we pass the following order:
Appeal is dismissed.
No costs.