Lt. Cdr. M.C. Kendall Vs. S. Chandrasekhar - Court Judgment

N.D.V. Bhat, J.

1. This Appeal is preferred against the Judgment and Decree dated 13-8-1981 passed by the Principal Civil Judge, Bangalore District, Bangalore in O.S.No. 61/1980.

2. The facts relevant for the disposal of this appeal, briefly stated, are as under:

Plaintiff filed a suit at O.S.No. 61/1980 before the Court of Principal Civil Judge, Bangalore District praying for a decree for specific performance of the agreement said to have taken place between him and defendant-1 on 21-1-1980 in respect of Sy.Nos. 23, 24, 26 and 27/2 of Gottigere Village, Bangalore District. In short the case of the plaintiff is as under: An Agreement of Sale of the aforesaid Sy.Nos. was entered into on 21-1-1980 between the plaintiff and defendant-1. The sale price was fixed at Rs. 1,46,000/-. It was agreed that on the said date that plaintiff should pay Rs. 39,000/- to defendant-1 and defendant-1 should deliver possession of the aforesaid lands to the plaintiff on 23-1-1980. It was also agreed that the Sale Deed should be executed within 60 days from 21-1-1980. The formal Agreement in that behalf was required to be executed on 23-1-1980 and an amount of Rs. 1,001/- was also paid by plaintiff to defendant-1 at the time of Agreement, that is to say, on 21-1-1980. Defendant-1 however, did not hand over the possession of the property on 23-1-1980. Efforts made by the plaintiff to hand over the amount of Rs. 39,000/- and to take possession of the properties from defendant-1 did not fructify since defendant-1 by then had changed his mind. Plaintiff, therefore, sent a letter dated 24-1-1980 to defendant-1 by registered A.D. with a copy thereof to defendant-2. A cheque for Rs. 39,000/- was also sent to defendant-1 along with the said letter. However, defendant-1 refused to receive the envelope containing the letter and the cheque, with the result, the same came back to the plaintiff. The subsequent notices issued on behalf of the plaintiff also did not have the desired result. Under these circumstances, plaintiff filed the suit praying for a decree for specific performance as also for other reliefs referred to in the plaint.

3. Defendant-1 in his written statement took the stand that there was no concluded contract between him and plaintiff. He contended that plaintiff prevailed upon defendant-1 to sign a document (Ex.P-1) stating that it was subject to finalisation by the execution of a formal agreement duly stamped after all terms were settled. According to him, the consideration mentioned in Ex.P-1 was not an agreed one. He also took the contention that in any event he was not in a position to put the plaintiff in possession of the properties since defendant-3 who is his mother had an undivided half share in the same. Defendant-1 denied all other allegations made in the plaint contrary to the stand taken by him. He prayed for dismissal of the suit.

4. Defendant-2 who is the father of defendant-1 and who is said to be the scribe of Ex.P-1 resisted the suit of the plaintiff more or less on grounds similar to those taken by defendant-1 in his written statement.

5. Defendant-3 who is the mother of defendant-1 apart from taking the contention that there was no privity of contract between her and plaintiff, also contended that there was no enforceable agreement and asserted that she had undivided half share in the suit properties. She denied all other allegations made in the plaint which are not specifically admitted by her. She prayed for the dismissal of the suit.

6. The lower Court, on the basis of the pleadings, framed the following issues:

'1. Plaintiff to prove that 1st defendant had agreed to sell the suit properties for Rs. 1,46,000/- on 21-1-1980?

2. 1st defendant to prove that he was prevailed upon by plaintiff to sign the document?

3. Plaintiff to prove that document dated 21-1-1980 is a concluded contract?

4. Defendant to prove that plaintiff is not an agriculturist?

5. Plaintiff to prove that 1st defendant committed breach of agreement?

6. 1st defendant to prove that plaintiff committed breach of agreement?

7. Plaintiff to prove that he is entitled to a decree for specific performance?

8. Plaintiff to prove that 1st defendant is liable to pay compensation for illegal use and retention of Rs. 1,100/- received on 21-1-1980?

9. Additional Issue: Whether plaintiff is entitled specific performance under Section 12(3) of Specific Relief Act?

10. To what reliefs?'

7. Plaintiff examined himself. Ex.P-1 to P-9 were marked for him. None was examined for defendants. However, Ex.D-1 and D-1(a) were marked for the defendants in the course of cross-examination of plaintiff.

8. The lower Court on a consideration of the evidence on record and for the reasons reflected in its Judgment answered Issue No. 1 in the affirmative Issue Nos. 2 and 3 in the negative and Issue Nb.4 was answered by holding that plaintiff is an agriculturist. Issue Nos. 5 and 6 were answered as not arising for consideration. Issue No. 7 was answered in the negative and Issue No. 8 was answered by holding that plaintiff is entitled to the compensation of Rs. 1,001/- together with interest at 12% per annum as damages. Issue No. 9 which was an additional issue was answered by holding that plaintiff is not entitled to specific performance. In the result, a decree for Rs. 1,001/-with interest at 12% from 21-1-1980 upto the date of payment was passed in favour of the plaintiff and against defendant-1. Plaintiff being aggrieved by the decree of the lower Court refusing the order of specific performance has preferred this appeal.

9. During the pendency of the appeal and in the course of the argument, the appellant filed an application at I.A.No. IV under Order 6 Rule 17 read with Order 7 Rule 7 and Section 151 CPC for amendment of the plaint in view of the changed circumstances after the disposal of the suit by the trial Court and during the pendency of the appeal. It was alleged in the affidavit accompanying the application that on 15-6-1982 defendants-1 and 3 (respondents-1 and 3 in the appeal) between themselves had entered into a partition deed, a copy of which is appended to the application at I.A.No. IV and in the partition suit properties were divided by metes and bounds though it appears that the said division was not by metes and bounds in the strict sense of the terms. It was further alleged that Sy.Nos. 23 and 27/2 have fallen to the share of defendant-1 (respondent-1 in this appeal) whereas other two lands viz., Sy.Nos. 24 and 26 have been allotted to the share of defendant-3. It was also contended that the partition is unequivocal in view of the extent of the lands and other amenities available. It was further alleged by the plaintiff (appellant) that the short fall in respect of half share of defendant-1 in relation to the total agreed consideration of Rs. 1,46,000/- would work out Rs. 8,100/- and even if the appellant were to succeed there would be no necessity of he being driven to a separate suit for partition for allotment of the share of the 1st defendant to the appellant. It was further stated that under Section 12(3)(a) of the Specific Relief Act the Court may direct defendant-1 to perform specifically so much of his part of the contract as he can perform for a consideration of Rs. 64,900/- since the con side ration for the part of the agreement which must be left unperformed works out to Rs. 81,100/-. Plaintiff (appellant) prayed for amendment of his plaint in the aforesaid terms. This Court after hearing the Counsels on either side and for the reasons reflected in its order dated 5-3-1991 on I.A.No. IV allowed A.No. IV permitting the plaintiff to amend the plaint. Accordingly, the plaint stands amended in the aforesaid terms.

10. After the arguments were heard and the Judgment was reserved, it was noticed by us that there was difficulty with respect to the jurisdiction of this Court on account of the valuation of the suit having been brought down below Rupees one lakh. The matter was, therefore, taken up before the Court for hearing on that aspect. Accordingly, we have heard Sri S.S. Ullal, the learned Counsel for the Appellant and Sri B.S. Pranesh Rao, learned Counsel for respondent-3.

11. It is seen that the suit in question as it stood before the amendment was for a decree directing the 1st defendant to transfer the suit properties to the plaintiff by a sufficient instrument transferring the 1st defendant's agricultural lands bearing Sy. Nos. 23, 24, 26 and 27/2 of Gottigere village and to deliver possession of the said property, as also for mesne profits at the rate of at least Rs. 18,000/-per year for withholding the transfer and for a declaration that the 1st defendant is liable to pay compensation for illegal use and retention of the sum of Rs. 1,001/- paid by the plaintiff to the 1st defendant on 21-1-1980. The valuation shown in the plaint both for the purpose of jurisdiction and Court fee was Rs. 1,46,000/-. The made of valuation was obviously under Section 40(a) of the Karnataka Court Fees and Suits Valuation Act, 1958 (hereinafter referred to as the Court Fees Act). Under Section 40(a) of the Court Fees Act, in a suit for specific performance, whether with or without possession, fee shall be payable in the case of a contract of sale, computed on the amount of consideration. Under Section 50 of the Court Fees Act, in a suit as to whose value for the purpose of determining the jurisdiction of Courts, specific provision is not otherwise made in the Act or any other law, value for that purpose and the purpose of computing the fee payable under the Act shall be the same.

12. Plaintiff when he filed the plaint in the Court of the Civil Judge, Bangalore had shown the valuation of the suit for the purpose of jurisdiction and Court fee at Rs. 1,46,000/- obviously on account of the fact that he wanted a decree for specific performance directing the defendant to transfer the properties shown in the schedule to the plaint by a sufficient instrument. The properties described in the plaint (before amendment) were Sy.Nos. 23, 24, 26 and 27/2 of Gottigere Village. Specific performance was sought regarding the aforesaid properties on the basis that defendant-1 had the exclusive right in respect of the aforesaid lands. The amount of Rs. 1,46,000/- was shown in the plaint since the same was the purchase price in the alleged agreement at Ex.P-1 dated 21-1-1980.

13. However, by virtue of the amendment of the plaint, the position with reference to the claim of the plaintiff and consequently decree prayed for has stood changed. With a view to have a clear idea as regards as to what is the amendment prayed for and effected in the plaint on the amendment being allowed, it is found necessary to extract the relevant portion of the plaint after it stood amended. The relevant portions are the portions reflected in paras 15(a) to 15(h). They read as under:

'15(a). The plaintiff concedes unequivocally that the suit schedule properties belonged to defendants 1 and 3 in equal moieties (vide plaintiff's Memo dated 20-2-1991, filed before High Court in RFA.255/1981).

15(b). Under Section 22 of the Specific Relief Act, it is permissible to work out a partition and seek separate possession of such half share of the 1st defendant by way of Specific Performance in this very suit.

15(c). On 15-6-1982, (i.e., after the disposal of the suit by the trial Court, but during the pendency of the same in the Appellate Court), Defendants 1 and 3 entered into a Deed of Partition registered as Document No. 1664 of 1982-83 in Book I Volume 1849 at pages 32 to 36 in the office of the Sub-Registrar, South Taluk, Bangalore.

15(d). The said partition by metes and bounds has been effected only to the extent permissible under the Fragmentation of Holdings (Prevention Act) Act. Since a partition in contravention of the provisions of the said statute would not in any case be possible or practicable, the plaintiff is agreeable for a specific performance by way of sale and delivery of possession limited to the properties allotted to the 1st defendant under Schedule-B of the aforesaid deed of partition dated 15-6-1982 viz., Survey Nos. 23 and 27/2 of Gottigere Village, Bangalore South Taluk, Bangalore for a proportionately reduced consideration. The shortfall in respect of the half-share of the 1st defendant in relation to the total agreed consideration- of Rs. 1,46,000/- works out to Rs. 8,100/-.

15(e). Under Section 12(3)(a) of the Specific Relief Act, it is prayed that the Court may be pleased to direct the 1st defendant to perform specifically so much of the part of the contract as he can perform for a consideration of Rs. 64,900/- (Rs. 73,000/- Rs. 8,100/-).

15(f). Under Section 13 of the Specific Relief Act, since the 1st defendant has after the Contract acquired a full and absolute interest in and title to Survey No. 23 and Survey No. 27/2 of Gottigere Village the plaintiff is entitled to compel him to make good the contract out of such interests.

15(g). The said items of property taken by themselves stand on a separate and independent footing and hence there will be no injustice whatever if the Court directs Specific Performance in that respect as prayed for.

15(h). The plaintiff reaffirms that he relinquishes all claims to the performance of that part of the Contract which the 1st defendant was unable to perform, or for loss or damages due to his default.'

It is also necessary to extract para-16 of the plaint which reads as under:

'16(1) That the 1st defendant shall transfer the said property to take plaintiff by a sufficient instrument transferring the 1st defendant's agricultural land bearing Survey Nos. 23 and 27/2 of Gottigere Village situated at Bannerghatta Main Road, Bangalore, more particularly described in the schedule to the plaint, together with the house and other structures standing thereon and including the trees, well, pump set, pump house, fencing, water pipes etc., and deliver possession thereof for a consideration of Rs. 64,900/-.

(2) That the 1st defendant shall pay mesne profits at the rate of atleast Rs. 18,000/- per year for withholding the same;

(3) Declare that the 1st defendant is liable to pay compensation for illegal use and retention of the sum of Rs. 1,001 /- paid by the plaintiff on 21-1-1980;

(4) Granting all such consequential and other reliefs as this Hon'ble Court may deem fit in the interest of justice.'

On a careful perusal of the plaint as it stood amended, it is seen that the consideration for the sale is brought down to Rs. 64,000/- as is clear from the portions underlined in the relevant paras of the plaint extracted hereinabove. It is therefore clear that the valuation for the purpose of Court fee and jurisdiction should correspondingly stand at Rs. 64,900/- only in the context of Section 40(a) of the Court-fees Act.

14. Sri S.S. Ullal, learned Counsel for the appellant, however, contended that the valuation for the purpose of Court fee and jurisdiction as reflected in para-15 of the plaint is kept in tact as it stood when the plaint was put for the first time in the Court of Civil Judge, Bangalore. The learned Counsel also argued that he has not claimed any refund of a portion of Court fee and that therefore, there is no change in the valuation at all. We are unable to agree with the learned Counsel for the appellant. Although, ordinarily it is the value put by the plaintiff on his suit that prima facie determines, the jurisdiction, it does not follow that plaintiff in every case is at liberty to assign any arbitrary value and thus be free to choose the Court in which he should bring the suit. In this connection, the following passage in Mulla's Code of Civil Procedure (Fourteenth Edition) at page 183 would throw adequate light on this aspect. Under the caption 'over-valuation and under-valuation' the said passage reads as under:

'8. Over-valuation and under-valuation - Although ordinarily it is the value put by the plaintiff on his suit that prima facie determines jurisdiction, it does not follow that a plaintiff is in every case at liberty to assign any arbitrary value to the suit and thus be free to choose the Court in which he should bring the suit. Cases do occur in which a plaintiff over-values his suit or he under-values it. The over-valuation or under-valuation may be erroneous, or it may be done intentionally by the plaintiff for the purpose of bringing the suit in a Court different from that in which it would lie if it were properly valued. If the over-valuation or under-valuation is patent on the face of the plaint, it is the duty of the Court to which the plaint is presented to return it to the plaintiff to be presented to the proper Court under Order 7, Rule 10, If it is not patent on the face of the plaint, but objection is taken by the defendant that it is over-valued or under-valued, the Court may require the plaintiff to show that the suit has been properly valued if there are prima facie grounds for believing that the suit has not been properly valued but not otherwise.'

Once when the law is clear as regards as to what should be the amount of valuation for the purpose of jurisdiction, it is the legislative enactment that will have to be looked into. As pointed out earlier it is Section 40(a) of the Court Fees Act and the amount of consideration for the contract of sale to enforce which decree is sought for, that would determine the 'valuation'. In this case, plaintiff had rightly shown the valuation at Rs. 1,46,000/- before the plant was amended since plaintiff had sought for a decree for specific performance of all the properties reflected in Ex.P-1, the alleged agreement for sale which shows the purchase price at Rs. 1,46,000/-. However, as pointed out earlier, the complexion of the plaint has changed on account of the amendment and the consideration for the sale of the 'reduced' consideration payable by the plaintiff, according to his own assertion, is Rs. 64,900/-. In this view of the matter, it is clear that the fact that the plaintiff has not got amended para-15 of the plaint and the fact that the earlier valuation shown as Rs 1,46,000/- is allowed to remain as it was, will not come in the way of the Court in assessing the correct valuation, if the valuation at Rs. 1,46,000/- is patently an over valuation. Under these circumstances, we cannot agree with Sri S.S. Ullal, learned Counsel for the appellant that the valuation at Rs. 1,46,000/- will have to be taken as the valuation for the purpose of jurisdiction. In our considered view, the amount of Rs. 64,900/- will have to be taken as the valuation for the purpose of jurisdiction. We hasten to add here that plaintiff has in item No. 2 of the relief column has prayed for the mesne profits at the rate of at least Rs. 18,000/-per year withholding the transfer of property. At this juncture, it is necessary to mention here that according to plaintiff, defendant was liable to hand over possession on 23-1-1980 and the suit was filed in the Court of Civil Judge, Bangalore District on 1-3-1980. It is therefore clear that as on the date of presentation of plaint the alleged wrongful withholding of possession was only for two months. It is well settled that mesne profits after suit do not form part of the cause of action even though there may be a prayer in the plaint for mesne profits after suit. In this connection, the following passage in Mulla's Code of Civil Procedure (14th Edition) at page 39 can be usefully referred to. The said passage reads as under:

'4. Mesne profits after suit do not affect pecuniary jurisdiction - The value of a suit for the recovery of possession and mesne profits is the value of the immovable property plus mesne profits up to the date of the suit. Mesne profits after suit do not form part of the cause of action even though there be a prayer in the plaint for mesne profits after suit. If the suit is properly brought in the Court of a Munsiff for the recovery of possession of land and mesne profits prior to the date of the suit, and there is also a prayer for mesne profits from the date of the institution of the suit, which are claimed or assessed at a sum beyond the pecuniary jurisdiction of the Munsiff, the Munsiff has jurisdiction to fix the mesne profits from and after the date of the institution of the suit and to pass a decree therefor although the amount may be beyond his pecuniary jurisdiction.'

Under Item No. 3 of relief column, plaintiff has also prayed for a declaration that the 1st defendant is liable to pay compensation for illegal use and retention of the sum of Rs. 1,001/- paid by the plaintiff on 21-1-1980. It will suffice if it is observed that the same would not add anything substantial so as bring the valuation anything near Rs. 1,00,000/- so as to fall within the compass of Section 19(2) of the Karnataka Civil Courts Act, 1964 as it stands amended by the Karnataka Civil Courts Laws (Amendment) Act, 1989 (Karnataka Act No. 13/1989) (hereinafter referred to as the Amendment Act).

15. From what is stated hereinabove, it emerges that this appeal is against a decree passed by a Civil Judge in a suit the valuation of which is below Rs. 1,00,000/-. If that be so, the question that would arise for consideration is as to whether the Court can exercise the jurisdiction in deciding the appeal on merits. At this juncture, it is necessary to state here that the amendment of the plaint relates back to the date of presentation of plaint. In this connection, the Decision in TRAVANCORE MICA CO. v. K & H CHAMBERS MADRAS; the Decision in ALL INDIA REPORTERS LTD. v. RAMACHANDRA; the Decision BRIJ KISHORE v. MUSHTARI KHATOON. It is pointed out by the Bombay High Court in the case of All India Reporters that the date of institution of suit or the date from which the amendment takes effect does not depend upon the discretion of the Court. It is further pointed out in the said case that though the Court has a discretion either to allow the amendment or refuse the amendment of the plaint prayed for, the amendment of the plaint relates back to the original date of the suit once when the discretion to grant amendment is exercised by the Court. We are in respectful agreement with the said proposition. Under the circumstances, on account of the deeming fiction the suit of the plaintiff as it stands mended should be deemed to have been presented as on 1-3-1980. At this juncture, it is indeed necessary to refer to para Nos. 15(a), (b), (c), (e) and (h) of the plaint extracted hereinabove. Plaintiff by this amendment has restricted his claim for specific performance by way of sale and delivery of possession of the properties allotted to the share of defendant No. 1 under Schedule 'B' of the Partition Deed dated 15-6-1982, viz., Sy.Nos. 23 and 27/2 of Gottigere Village. Under para-15(a) of the plaint, he has unequivocally admitted that the suit schedule properties belonged to defendants-1 and 3 in equal moieties. In para-15(b) of the plaint, he has stated that under Section 22 of the Specific Relief Act, it is permissible to work out a partition and seek separate possession of such half share of the 1st defendant by way of specific performance in this very suit. In para-15(e) of the plaint he has stated that under Section 12(3)(a) of the Specific Relief Act, the Court may be pleased to direct the 1st defendant to perform specifically so much of the part of the contract as he can perform for a consideration of Rs. 64,900/-.

In para-15(g) of the plaint, he has stated that the items of property taken by themselves stand on a separate and independent footing and hence there will be no injustice whatever if the Court directs specific performance in that respect as prayed for. In para-15(c) of the plaint he has referred to the actual partition that is said to have taken place between defendants-1 and 3 on 15-6-1982. At this stage, it would be indeed convenient to extract again para-15(e) of the plaint in particular. It reads as under:

'15(e) Under Section 12(3)(a) of the Specific Relief Act, it is prayed that the Court may be pleased to direct the 1st defendant to perform specifically so much of the part of the contract as he can perform for a consideration of Rs. 64,000/- (Rs. 73,000/- Rs. 8,100/-).'

In this connection, it is also necessary to mention here that defendant-1 (respondent-1) in his written statement filed before the lower Court on 12-1-1981 had taken a stand that he has got only undivided half share in the properties covered by Ex.P-1, the alleged agreement for sale. Paras-4 and 7 of his written statement would clearly reflect the stand of defendant-1. Defendant-3 also had in his written statement taken the stand that she had an undivided share. Even according to the plaintiff, as reflected from his deposition before the lower Court, copies of documents (presumably relating to the title of the suit property) were given to him on 20-1-1980, and that his Advocate scrutinised the documents and told him (plaintiff) that the documents disclosed two persons as owners of properties. It is therefore, not as if the amendment was necessitated on account of subsequent events. It was indeed possible for the plaintiff to have had recourse to the provisions of Section 12(3)(a) of the Specific Relief Act, even at the time when he presented his plaint initially on 1-3-1980. The averments reflected in paras-15(a), (b) and (e) of the plaint (as they stand after amendment) could have been made even in the original plaint. It is no doubt true that the actual division is alleged to have taken place between defendant-1 and defendant-3 only on 15-6-1982 after the disposal of the suit. However, the hard fact remains, on plaintiff's own showing at para-15(a) of the plaint that both defendants-1 and 3 had half share in the suit schedule properties even on the date of the agreement. In this view of the matter it cannot also be said that plaintiff's claim limiting it to defendant-1's share was based on subsequent events. As pointed out earlier, averments in paras-15(a) and (b) could have been made even at the time of the filing of the original suit in Court on 1-3-1980; though on account of changed circumstances, that is to say, actual division of properties between defendant-1 and defendant-3 at a later date, plaintiff could certainly pray for moulding the reliefs in appeal in that context. Under these circumstances, the fact that actual division of the share in the properties in question took place subsequently will not make any difference to the proposition that the amendment relates back to the date of presentation of plaint.

16. Section 96 of the Code of Civil Procedure provides that an appeal shall lie from every decree passed by any Court exercising original jurisdiction to the Court authorised to hear appeals from the Decisions of such Court. It is necessary to notice here that Section 96 does not create a forum for appeal. It only confers a right on the party to the suit to prefer an appeal. However, the forum of appeal is created by the Karnataka Civil Courts Act 1964. Section 19 of the said Act provides the forum of appeals from the decrees passed by the Civil Courts. It provides that appeals from decrees and orders passed by a Civil Judge in original suits and proceedings of Civil nature shall when appeals are allowed by law, lie to the District Court, when the amount or value of the subject matter of the original suit or proceedings is less than Rs. 1,00,000/- and to the High Court in other cases. It is necessary to mention here that before the Karnataka Civil Courts Laws (Amendment) Act, 1989 came into force on the 17th day of April 1989, appeal lay to the District Court from the decree passed by the Civil Judge only in those cases when the amount or value of the subject matter of the original suit or proceeding was Rs. 20,000/-. However, by the aforesaid Amendment Act, in Section 19(1) of the Principal Act for the words 'twenty thousand rupees' the words 'one lakh rupees' were substituted. With effect from the date of coming into force of Act No. 13/1989, an appeal against the decree of a Civil Judge where the valuation of the suit is less than Rs. 1,00,000/- shall lie to the District Court and not to the High Court.

17. Further, Section 4(1)(c) of the Amendment Act provides for transfer of appeals against the decrees passed by the Civil Judge pending before the High Court in original suits or proceedings of a civil nature, the amount or value of subject matter of which is less than rupees one lakh. The said provision reads as under:

'4. Transfer of suits and appeals -

(1) Notwithstanding anything contained in the Karnataka Act 11 of 1964 of Karnataka Act 21 of 1964 or in any other law or provisions having the force of law, -

(a) (b) xxx xxx xxx(c) appeals and proceedings connected therewith pending before the High Court from decrees and orders passed by a Civil Judge in original suits or proceedings of a civil nature the amount or value of the subject matter of which is less than one lakh rupees shall, on the date of commencement of this Act, stand transferred to the District Court and shall be disposed of by such Courts in accordance with law as if such appeals or proceedings had been preferred to such Court.'

The provisions of Section 4(1) (a) and (b) are not extracted since they are not necessary for our purpose.

17. The instant appeal was pending before this Court on the date of the commencement of the aforesaid Amendment Act. We have held earlier hereinabove, for the reasons recorded in detail, that the amendment relates back to the date of the suit. We have also pointed out that the appeal is against a decree of a Civil Judge in a suit, the amount or value of the subject matter of which is less than rupees one lakh. In this view of the matter, Section 4(1)(c) of Amendment Act is attracted to this appeal. It is true that when the appeal was preferred this Court had the jurisdiction to decide this appeal; it is also true that the valuation of the plaint is brought down on account of the amendment; it is also clear that the amendment of the plaint was allowed after the date of the commencement of the Amendment Act; but once when the amendment is allowed resulting in deflation of the valuation of the subject matter of the suit and consequently of the appeal on account of the deeming fiction, the valuation as on the date of presentation of the plaint viz., on 1-3-1980 in the Court of Civil Judge and that therefore, the valuation of the appeal from the date of its presentation will have to be deemed as less than rupees one lakh. In our view, there is no escape from such a conclusion.

18. Sri S.S. Ullal, learned Counsel for the appellant, however, filed an application in the course of the submission of arguments with reference to the jurisdiction of this Court on 2-8-1991, praying that this Court be pleased to retain the above appeal on its file and to hear and dispose of the same or alternatively if this Court holds that the above appeal stands transferred to the District Court, Bangalore Rural be pleased to suo motu withdraw the above appeal from the said Court to itself and to hear and dispose of the same and to grant such other further reliefs as the Court deems fit and proper under the circumstances of the case.

19. In the course of the affidavit accompanying the said application at I.A.No. VI the appellant has narrated the circumstances leading to the amendment and has averred that the same does not affect the jurisdiction of this Court. Since this aspect is touched upon earlier in this Judgment, it is not necessary to advert to the details in this behalf. However, with reference to the alternative prayer to suo motu withdraw the appeal, the appellant has averred in para-8 of the affidavit as under:

'8. I respectfully submit that the above appeal was filed in 1981 and has been pending for the last 10 (ten) years. The above appeal having come up for hearing after 10 (ten) years, has been fully heard by a Division Bench of this Hon'ble Court. Being a Superior Court and the highest Court of the land and of plenary jurisdiction, there is neither any want or lack of jurisdiction, inherent, territorial, pecuniary or otherwise, nor any scope to complain of injustice or miscarriage of justice, As the appeal has already been fully heard, it would be in the fitness of things and in the interest of all parties concerned, that this appeal should be disposed by this Hon'ble Court itself as otherwise it will give room for indefinite delay. It may also be noted that by the amendment of the plaint, I am not pressing for any relief against the 3rd respondent and the 1st defendant has not contested the appeal and the 2nd defendant who has no interest in the property, and against whom no relief is prayed, is even otherwise ex parte. As such, it is a fit case where this Court may and ought to act suo motu and without notice to any parties. As already stated. I have only restricted the reliefs claimed and the valuation and jurisdiction of the Court are not affected. This application has nevertheless been filed only by way of abundant caution.'

20. Respondent-1's Advocate had remained absent on the date in question though his name was shown in the cause list. Respondent-2 has remained absent all throughout though served. Sri Pranesh Rao, learned Counsel for respondent-3 who was present in the Court did not choose to file any written objection to the application at I.A.No. VI, but he submitted that the application is not in accordance with law and he opposes the same. We have heard the argument on the said application as well.

21. We have given our anxious consideration to the submissions made by the learned Counsels. As pointed out earlier, for the reasons stated in detail, we have held that the appeal stands transferred to the District Court, Bangalore. However, the question for consideration is as to whether the same deserves to be withdrawn or treated as withdrawn in the facts and circumstances of the case, in exercise of the power vested in this Court under Section 24 of the Code of Civil Procedure. It is a hard fact that the appeal is pending in this Court for nearly 10 years. It is seen that the arguments were heard at length on the merits of the case occupying considerable amount of time. If therefore, the appeal is not disposed of by treating the same as withdrawn under Section 24 of CPC the same is likely to take considerable amount of time for reaching its terminal point. We have conscientiously applied our mind to this aspect and on such conscientious application of mind, we are indeed of the view that the ends of justice would be better served by withdrawing the appeal to ourselves and to dispose it of. We are aware that if we decide the appeal on merits we will be depriving the unsuccessful party a right of appeal since a second appeal is provided for against the Judgment and decree passed by the District Court. Sri Pranesh Rao learned Counsel for respondent-3 contended that if the appeal is decided in this Court a right of appeal would be lost to the unsuccessful party. It is seen that Sri Pranesh Rao, learned Counsel represents respondent-3. Advocate for respondent-1 who is a contesting respondent has practically remained absent all throughout the argument. Respondent-2 has no subsisting interest in the appeal. Further, respondent-3 also does not appear to be affected even if the Judgment to be delivered by this Court goes against defendant Further, the totality of the circumstances alluded to hereinabove, if considered in a proper perspective would indicate that the ends of Justice is in favour of withdrawal. Accordingly, in exercise of the said power we hereby order that the appeal be and treated as, withdrawn from the District Court, Bangalore to the file of this Court. It is necessary to notice here that Section 4(1)(c) of the Karnataka Civil Courts Laws (Amendment) Act, 1989 is in the nature of a deeming fiction. What it says is that the appeal stands transferred. In that view of the matter, we are indeed of the view that it is not necessary for us to observe any formality other than the one which we have adopted immediately hereinabove.

22. If that be so, the points for our consideration in this appeal are as under:

(1) Whether the appellant proves that respondent-1 has entered into an agreement to sell the properties in question?

(2) Whether the appellant has always been ready and willing to perform his part of the contract?

(3) Whether the appellant is entitled to claim specific performance as prayed for in his amended plaint?

(4) What order?

POINT NO. 1

23. The appellant in support of this case, has relied on his own oral evidence as also on the evidence flowing from the documents marked at Ex.P-1 to Ex.P-9. At this juncture, it is necessary to mention here that the trial Court has under issue No. 1 held that the 1st defendant had agreed to sell the suit properties for Rs. 1,46,000/-on 21-1-1980. However, the trial Court answered issue No. 4 by holding that the document dated 21-1-1980 does not bring into being a concluded contract. In this view of the matter, the trial Court has held that it was not necessary to consider the submission made by the plaintiff with reference to the provisions of Section 12(3) of the Specific Relief Act.

24. It will have to be seen as to whether the finding of the lower Court that there was no concluded contract that is to say, a binding contract between the plaintiff and defendant-1 is correct. In this connection, the document at Ex.P-1 which appears to be the foundation of plaintiff's case is required to be examined in the first instance. It would be useful to extract the contents of Ex.P-1. The document under the caption 'sale agreement' reads as under:

'Received Rs. 1,001/- (Rupees one thousand and one only) as an advance towards sale agreement of the agricultural property bearing Survey Nos. 23, 24, 26 and 27/2 (total extent of 5A-09 G) of Gottigere village situated on Bannerghatta Main Road, for an agreed price of Rs. 1,46,000/- (Rupees one lakh and forty six thousand only). It is mutually agreed to have a formal agreement on 23-1-1980, where the purchaser pays a sum of Rs. 39,000/- (Rupees thirty nine thousand only) and takes a possession of the land.

The registration will be completed within 60 days subject to all clearances from both the parties.

The sale agreement is entered into between the purchaser, commander M.C. Kendalli No. 6, Palmgroove Road, Bangalore and the seller S, Chandra Shekhar s/o M. Shivaswamy residing at 105, 34-B Cross, 11th Main IV T Block, Jayanagar, Bangalore-11.'

It is necessary to notice here that the execution of this document is not denied by defendant-1 or for that matter by defendant-2 who is a witness for as also a scribe of Ex.P-1. In fact, the trial Court has as pointed out earlier, held that this agreement is proved though it has taken the view that it is not a concluded contract. The trial Court has in para-22 of its Judgment took the view that the two important aspects, viz., the inspection of the title deeds and drawing up of an agreement on 23-1-1980, were left to be arranged at the office of the plaintiff's Advocate and that therefore there was no binding contract between the plaintiff and defendant-1. Before reaching that conclusion the learned Civil Judge has in para-21 of his Judgment observed as under:

'21. In deciding whether the contract is a concluded contract or not, 'the essential question is to find out whether the formal document is of such a nature that it was the very condition of the contract or whether it was commemorative of the evidence on the point. In order to decide this matter the entire negotiations and the correspondence on which the contract depends must be considered. It is a matter of construction whether the execution of a further contract is a condition of the contract or a mere expression of a desire of the parties as to the manner in which the transaction already agreed to will go through. The fact that the parties refer to the preparation of an agreement by which the terms agreed upon are to be put in a more formal shape does not prevent the existence of a binding contract. But there may be cases where the signing of a further formal agreement is made at condition or term of the bargain and if the formal agreement is not approved and signed there is no concluded contract.' (INDIAN CONTRACT ACT by Pollock & Mulla, 9th Edition, Page 84).

'The circumstance that the parties do intend a subsequent agreement to be made is evidence to show that they did not intend the previous negotiations to amount to an agreement, though not conclusive; they will be bound by previous agreement 'if it is clear that such an agreement has been made.' The terms of a contract have retrospective application if the parties during negotiations act on that 'understanding and in the anticipation that on the contract being made it would govern what was being done. Where, however, the formalities are not of the parties selection, so that nothing turns upon the intention of the parties, no inference against a concluded agreement can be drawn from the non-completion of these formalities. Thus, while a suit was pending the parties entered into a written agreement whereby the plaintiff agreed to accept the property of the defendant in adjustment of the suit. The agreement was not recorded as required under Section 98 of the CPC then in force, being Act VIII of 1859 (now Code of Civil Procedure, 1908 Order 21, Rule 2). It was not, therefore, such a final adjustment of the suit as precluded the case from being proceeded with. The plaintiff, taking advantage of that fact, proceeded with the suit, and obtained a decree against the defendant. The defendant subsequently brought a suit against the plaintiff for damages for breach of the agreement; and it was held that he was entitled to damages, there having been a binding agreement between the parties, though the formality of recording the agreement was not completed. Such cases, however, must be distinguished from those where the negotiations have not led to a concluded agreement. Thus in Koylash Chunder v. Tariney Chum the defendant wrote to the plaintiff: 'The value of your house has been fixed through the broker at Rs. 13,125. Agreeing to that value, I write this letter. Please come over to the office of my attorney between three and four this day, with the title deeds of the house and receive the earnest.' In reply, the plaintiff wrote: 'You having agreed to purchase our house for Rs. 13,125/-, have sent a letter through the broker and we are agreeable to it, and we will be present between three and four this day at your attorney's and receive the earnest'. The plaintiff and the defendant met at the attorney's office, but the attorney was absent, and accordingly no inspection of title deeds of payment of the earnest money took place. The plaintiff sued the defendant for specific performance, but it was held that there was no binding contract, as two important matters viz., inspection of the deeds and the amount and payment of the earnest money were left to be arranged at the attorney's office. Garth C.J. said: 'As regards the earnest money, it must be observed that both parties treat that as an element in the bargain...suppose the meeting had taken place, and the parties had been unable to agree as to the amount of the earnest money, how could it possibly have been said that they have arrived at any binding agreement? A provision is an agreement for the sale of a house that 'on approval of the title by the purchaser's solicitor the purchase money should be paid' has not the effect of rendering the completeness of the agreement conditional upon the approval of the title by the solicitor, but of simply fixing the time for the payment of the purchase money without waiting for a conveyance.' (INDIAN CONTRACT ACT BY Pollock and Mulla, 9th Edition, Page 88-89).'

25. Before examining the correctness or otherwise of the finding given by the learned Civil Judge, particularly at para-22 of his Judgment, relying on the observations made earlier at para-21 extracted hereinabove, it is indeed necessary to set out the salient features of the agreement at Ex.P-1. The agreement has already been extracted earlier. A close examination of Ex.P-1 dated 21-1-1980 discloses the following features:

(1) The document is designated as a sale agreement.

(2) It was agreed that defendant-1 should sell Sy.Nos. 23, 24, 26 and 27/2 (total extent of 5A-09G) of Gottigere village.

(3) Purchase price is fixed for Rs. 1,46,000/-.

(4) It was agreed to have a formal agreement on 23-1-1980, where the Purchaser pays a sum of Rs. 39,000/- and take possession of the lands.

(5) Registration to be completed within 60 days subject to clearance from both the parties.

(6) A sum of Rs. 1,001/- was paid as an advance towards the sale agreement by the plaintiff to defendant-1.

Thus it is seen that the parties to Ex.P-1 were ad-idem, with respect to the properties to be sold, the purchase price of the properties to be sold, the date within the registration of sale deed to be executed, the date on which the possession is to be delivered and the date on which the portion of the purchase price to be paid. These circumstances apparently did not weigh with the learned Civil Judge while deciding the issue as to whether there was a binding contract. However, as pointed out earlier, the fact that the formal agreement was required to be drawn up and title deeds were required to be inspected did weigh with him in reaching a conclusion that there is no binding contract. In this connection, the learned Civil Judge has particularly relied on a portion of the notice dated 1-2-1980 and marked as Ex.P-6 sent to the Advocate for defendant-1 by the Advocate for plaintiff. This aspect is dealt with by the learned Civil Judge in para-19 of his Judgment. In the said notice at para-6 therein it is stated as under:

'6. You have apparently advised your client that the matter was at the stage of negotiation after the agreement to sell. It is hardly necessary for me to point out that advice is contrary to law. The property which is the subject matter of the agreement having been specified and so too the sale price, there was nothing further which could be the matter of negotiation. So far as the question of title is concerned, from the copies of the sale deeds which were furnished to my client and the other documents such as the khata transfer and the record of rights and pahani, and on the solemn assurance given by your client and his father that your client was the sole owner in possession of the property, the only question that remained was to peruse the original documents of sale and to investigate who were the heirs of your client's deceased brother S. Shivakumar. It was for that purpose that my client urgently pressed your client and his father to accompany him to his legal advisor's office so that this doubt may be clarified. There was no doubt whatsoever that the sale deed will have to be registered with 60 days from the date of the agreement to sell, namely. 21st January 1980.'

The learned Civil Judge with reference to the portion in the notice culled out hereinabove has observed as follows:

'20....Whether investigation was done in this respect to ascertain, whether deceased Shivakumar was a married man or a bachelor is not made known to the Court. When the matter is in the hands of an Advocate, it is presumed that Advocate will investigate the title of the seller and then will tender his opinion about the actual title of the seller. It is rather difficult to accept that in the face of the documents, the purchaser believed the representations made by the parents of the purchaser. This assertion that plaintiff believed the words of defendants-2 and 3 is rather difficult to digest.'

In fact this aspect was highlighted by Sri Pranesh Rao, learned Counsel for respondent-3 before us. On a careful consideration of this aspect, we are indeed of the view that the same does not affect Ex.P-1, from being a binding contract if the same can be held otherwise as constituting a binding agreement. In this connection, it is significant to note that the portion of the observations made in Indian Contract and Specific Relief Acts by Pollock and Mulla and extracted by the learned Civil Judge and culled out earlier hereinabove, itself would support our view. In the said book (Tenth Edition) at page 101, it is observed as under:

'A provision in the agreement for sale of a house that 'on approval of the title by the purchaser's solicitor the purchase money should be paid' has not the effect of rendering the completeness of the agreement, conditional upon the approval of the title by the solicitor, but simply fixing the time for payment of purchase money without waiting for conveyance.'

In the instant case, there is not even an analogous recital in Ex.P-1. Further as pointed out earlier, purchase price was agreed to; the properties are also described in terms of Sy.Nos. the date within which the registration presumably of sale deed should be completed is also agreed to between the parties. Further, the date on which the possession is required to be delivered to the plaintiff and the portion of the purchase money to be paid by the plaintiff to defendant-1 is also settled. It is no doubt true that a formal agreement was also stipulated in Ex.P-1. However, it appears to us that formal agreement referred to in Ex.P-1 was to give a legal share to the agreement in Ex.P-1. When we say so we have in mind the observations made in BRANCA v. COBARRO, (1947) 2 All E.R. 101. In the said case, by an agreement dated July 15, 1946, the vendor agreed to sell the lease and goodwill of a mushroom farm for 5,000, payable as follows:

'A deposit of 5,000 on July 15, 1946 E 2,500 on July 18, 1946, and the balance within six months from the date of the agreement In the event of default by the purchaser in the conditions of payment, the farm was to 'go back' to the vendor 'as his full property' and the purchaser was to have no claim in the 3,000 already paid. The agreement concluded:'This is a provisional agreement until a fully legalised agreement drawn up by a solicitor and embodying all the conditions herewith stated is signed.'

In the context of the said facts, it was held that the language of the final clause and more especially the word 'until' implied that the agreement was intended to be immediately fully binding and to remain so unless and until superceded by a subsequent agreement of the same tenor but expressed in a more precise and formal language. We hasten to add here that the language reflected in Ex.P-1 is not exactly similar. However, in the context of the totality of the language reflected in Ex.P-1 the said observation, in our view, will mutatis mutandis apply with reference to Ex.P-1 also. We may add here that the language in Ex.P-1 is even more rigid than the document dealt with in Branca's case. In the first place, the document is described as a sale agreement; further all the conditions to constitute an agreement for sale are agreed to. No ingredient required to constitute a completed agreement for sale is wanting in Ex.P-1. Under these circumstances, reference to the drawing up of a formal agreement has to be understood only in the way and manner as was done in Branca's case. Further the sentence relating to formal agreement in Ex.P-1 reads as under:

'It is mutually agreed to have a formal agreement on 23-1-1980, where the purchaser pays a sum of Rs. 39,000/- (Rupees thirty nine thousand only) takes possession of the land.'

It appears to us, in the context of the language of the portion from Ex.P-1 culled out hereinabove particularly from the portion underlined that the formal agreement stipulated in Ex.P-1 was to evidence the payment of Rs. 39,000/- and the delivery of possession. Further plaintiff in the course of his evidence has stated that Ex.P-1 is the concluded contract and defendants wanted a recording of payment of Rs. 39,000/- and handing over possession to a future date that is on 23-1-1980. He has further stated that the further agreement referred to in line No. 10 of Ex.P-1 is for the payment of cash and taking delivery of possession, Apart from the fact that defendants have not challenged this part of the evidence in cross-examination of plaintiff, they have also not stepped into the witness box. Further it is significant to note that there is no stipulation about the approval of the title by the plaintiff in Ex.P-1. Even if there were to be such a stipulation as pointed out earlier with reference to the observation in the book 'Indian Contract and Specific Relief Acts (10th Edition) at Page 107' and culled out earlier, the same will not have the effect of rendering the completeness of the agreement conditional to the same. Further, in the context of the provisions of Section 91 of the Evidence Act the complexion of Ex.P-1 will have to be determined from the language employed there. Under these circumstances, we are unable to agree with the view taken by the learned Civil Judge that Ex.P-1 does not constitute a binding contract.

26. The point in question can also be discerned from another aspect. The intention of the parties was a matter which was within the special knowledge of the parties. The title deed if at all was required to be verified by the plaintiff. He has deposed that he Believed in what was represented to him by defendant-1 and defendant-2 at the time when Ex.P-1 was executed. The conduct of the plaintiff at the earliest point of time next after Ex.P-1 was executed, that is to say, when he issued a notice dated 24-1-1980 as per Ex.P-2 confirms the same. It would be indeed useful to cull out a portion of the said notice. Among other things, it is stated as under:

'In pursuance of the sale agreement entered into on 21st January 1980, between you and myself in the presence of your father Mr. M. Shivaswamy, (Special Secretary to Managing Director, State Bank of Mysore) and Mr. S. Bhatt, both of whom have signed the agreement.

I hereby call upon you to deliver possession of the property bearing Sy.Nos. 23, 24, 26 and 27/2 having a total extent of 5 acres 9 guntas (together with the house, pump house, pump set, well, outhouses, fencing and all improvements) situated at Gottigere village on Bannerghatta Main Road which is more fully described in the copies of sale deed given to me, against the payment of Rupees Thirty nine thousand only (Rs. 39,000/-).

As an earnest of the performance of my part of the agreement I am sending my account payee crossed cheque for Rs. 39,000/- in your favour. If you express your desire for payment by cash or bank draft, that also will be done, subject to the condition that such payment should be simultaneous, to your handing possession to me.

I waited the whole of yesterday 23-1-1980, for you to come to me to complete all that was necessary in accordance with the said sale agreement. I regret to say that you have defaulted.'

Then again the fast but one para of the said notice reads as under:

'I request you to fix a date immediately and to hand over vacant possession of the property referred to above and receive simultaneously the sum of Rupees Thirty nine thousand only (Rs. 39,000/-). The cheque sent herewith No. S.B./3-085852 dated 24 January 1960 drawn on State Bank of Hyderabad, Bangalore-560 047 is to be encashed immediately after handing over possession and not before.'

The conduct of the plaintiff reflected in the aforesaid notice immediately a day after the date stipulate for drawing up of a formal agreement where Rs. 39,000/- was to be given by him to defendant-1 and to take possession from the latter, confirms the oral evidence of the plaintiff, that he believed in the representation of defendants-1 and 2 with reference to the title of the properties. The same would go to show that the agreement was completed in all respects in the contemplation of the plaintiff. The intention of the parties in relation to Ex.P-1 is confirmed, apart from the intransic evidence reflected in Ex.P-1, by the oral evidence of plaintiff and by his conduct at the earliest post of time. Defendant-1 and defendant-2 who is the father of defendant-1 and the scribe of Ex.P-1 are the persons who could have spoken as to crucial aspects, have failed to step into the witness box. The intention with reference to the drawing up of a formal document was certainly within their special knowledge. However, for reasons best known to them they have not stepped into the witness box, and have not rebutted the evidence of plaintiff that the further agreement referred to in Ex.P-1 was regarding the payment of cash and delivery of possession. This Court is constrained to observe that they could not muster courage to subject themselves to the cross-examination. It is needless to say that omission on their part to step into the witness box is a very important circumstances which would militate against the version of defendants with reference to the contents and intent of Ex.P-1. Looked at from this point of view also it is difficult to hold that Ex.P-1 does not constitute a binding contract.

27. The Supreme Court in the Decision in KOLLIPARA SRIRAMULU [(dead) by his L.Rs.] v. T. ASWATHA NARAYANA [(dead) by his L.Rs.] AND ORS., : [1968]3SCR387 among other things, pointed out that the fact that a subsequent agreement being prepared may be evidence that the previous negotiation did not amount to a concluded agreement, but the mere fact that persons wish to have a formal agreement drawn up does not establish the proposition that they cannot be bound by a previous agreement. In the said case, the Supreme Court has quoted the observations made in VON HATZFELDT WILDENBURG v. ALEXANDER, (1912) I Ch. 284 @ 288 which reads as under:

'It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored.' In other words, there may be a case where the signing of a further formal agreement is made a condition or term of the bargain and if the formal agreement is not approved and signed there is no concluded contract. In ROSSILTER v. MILLER (1878) 3 AC 1124 Lord Cairns said:'If you find not an unqualified acceptance subject to the condition that an agreement is to be prepared and agreed upon between the parties, and until that condition is fulfilled no contract is to arise then you cannot find a concluded contract.' In Currimbhoy and Co. Ltd. v. Greet the Judicial Committee expressed the view that the principle of the English law which is summarised in the Judgment of Parker, J., in (1912) 1 Ch. 284 was applicable in India. The question in the present appeals is whether the execution of a formal agreement was intended to be a condition of the bargain dated July 6, 1952 or whether it was a mere expression of the desire of the parties for a formal agreement which can be ignored. The evidence adduced on behalf of respondent-1 does not show that the drawing up of a written agreement was a pre-requisite to the coming into effect of the oral agreement, it is therefore not possible to accept the contention of the appellant that the oral agreement was ineffective in law because there is no execution of any formal written document. As regards the other point, it is true that there is no specific agreement with regard to the mode of payment but, this does not necessarily make the agreement ineffective. The mere omission to settle the mode of payment does not affect the completeness of the contract because the vital terms of the contract like the price and area of the land and the time for completion of the sale were all fixed. We accordingly hold that Mr. Gokhale is unable to make good his argument on this aspect of the case.'

A careful perusal of the above passage quoted with approval by the Supreme Court indeed goes to show that the question as to whether a particular agreement is a binding contract or not depends upon the intention of the parties and the special circumstances of each particular case. We have already pointed out earlier as to how the different circumstances brought into being on record would unmistakably indicate a binding contract between plaintiff and defendant-1. Under these circumstances, we have also shown as to how the finding given by the learned Civil Judge with reference to the two aspects dealt with by him is not correct.

28. For the reasons stated hereinabove, we have no hesitation whatsoever in answering Point No. 1 in the affirmative.

POINT NOS. 2 AND 3 :

29. These two points are in extricably mixed with each other. As such they are taken up for discussion together.

30. It is seen that the lower Court has negatived the claim of the plaintiff for specific performance on the ground that there was no concluded contract. We have held hereinabove that the finding of the lower Court in that behalf is not correct. However, simply because plaintiff has proved the agreement which is binding on the parties, it would not follow that specific performance can be granted as a matter of course. This Court is required to see as to whether plaintiff has always been ready and willing to perform is part of the contract and he has averred the same in his plaint and proved the same by acceptable evidence. Then again the Court is required to see as to whether the facts and circumstances of the case are such as would warrant the refusal of performance, including the element of hardship. This Court is also required to see if the performance cannot be enforced in whole whether specific performance can be enforced in part with reference to Section 12 of the Specific Relief Act.

31. In this case we have made a detailed reference to the plaint as it stands amended. Before considering the question as to whether Section 12 of the Specific Relief Act can be called in and in favour of the plaintiff, it would be convenient to consider the other two aspects viz., those relating to the readiness and willingness on the part of the plaintiff to perform his part of the contract and the question relating to the element of hardship.

32. In para-11 of the plaint, plaintiff has averred among other things that he has done whatever was possible. In para-12 of his plaint, he has averred thai he is ready and willing to pay the purchase money, to the 1st defendant and has requisite money ready for the purpose. Further as early as 24-1-1980, that is to say, within three days next after the agreement at Ex.P-1, he had issued a notice to defendant-1 calling upon him to deliver the possession and had also sent a cheque for Rs. 39,000/- along with the notice. Further in his evidence he has stated as under:

'1 was always ready and willing to perform my part of the contract and have demonstrated my willingness orally and through letters. Even now I am ready and willing to pay the balance amount and take the document from defendant-1.'

33. Sri Pranesh Rao, learned Counsel for respondent-3 contended that the fact that plaintiff along with his notice dated 24-1-1980 at Ex.P-2 sent only a cheque and not cash and that he has stated that the same be encashed immediately after handing over possession of the property and not before, would go to show that he was not ready and willing to perform his part of the contract. In this connection he has invited our attention to the last but one para in the notice of the plaintiff at Ex.P-2. This portion is already culled out hereinabove. On a careful consideration of the submission of Sri Pranesh Rao, we are unable to agree with him. The circumstances under which Ex.P-2 was sent along with the cheque cannot be lost sight of. The circumstances narrated in the notice would go to show that there was already an attempt on the part of the defendants to go back on the agreement at Ex.P-1. Inspite of it plaintiff sent the cheque, though he was required to give cash only at the time of delivery. Ex.P-2 was only a notice to defendant-1 calling upon him to hand over possession. Plaintiff could have, as well, called upon the defendant to take cash and deliver the property. However if to show his bonafides he had sent the cheque along with the notice with a rider, the same cannot be found fault with, when there was no certainty that possession would be delivered. Under these circumstances, we do not find any merit in the submission made by Sri Pranesh Rao in this behalf. On the other hand, the averment made by the plaintiff in his plaint, the conduct reflected in the notice at Ex.P-2 and the statement made by him on oath before Court and extracted earlier would go to show beyond a shadow of doubt that plaintiff has always been ready and willing to perform his part of the contract. However, we hasten to add here that this Court is also required to consider whether his averment in the plaint particularly in the amended plaint that he is required to pay only a sum of Rs. 64,900/-, in the context of the changed circumstances read with the provision of Section 12(3) of the Specific Relief Act would have any impact on the result of the suit. This aspect however will be dealt with while dealing with the provisions of Section 12 of the Specific Relief Act.

34. The next aspect required to be considered is the element of hardship. In this connection, the provisions of Section 20 of the Specific Relief Act would assume significance. It reads as under:

'(1) The jurisdiction to decrees specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable guided by judicial principles and capable of correction by a Court of Appeal.

(2) The following are cases in which the Court may properly exercise discretion not to decree specific performance.

(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or

(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;

(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.

Explanation-1 - Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of Clause (a) or hardship within the meaning of Clause (b).

Expianation-2 - The question whether the performance of a contract would involve hardship on the defendant within the meaning of Clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.

(3) The Court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.

(4) The Court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party.'

A perusal of the aforesaid provision would go to show as to under what circumstances hardship can be taken into consideration in refusing specific performance. It is not possible to enumerate the different circumstances which constitute hardship. It will suffice if it is noted that the question of hardship will have to be adjudged in the facts and circumstances of the case. In this connection, the observations of the Privy Council in the Decision in DEVIS v. SHWE GO, 11 I.C. 801 (PC) throw light on an important aspect of the matter. Among other things, it is observed in the said case as under:

'In the absence of any evidence of fraud or misrepresentation on the part of the plaintiff which induced the defendant to enter into the contract, their Lordships see no reason to accede to the argument. The bargain is onerous, but there is nothing to show that it is unconscionable. The defendant knew all along that a lakh was the plaintiff's limit; it is in evidence that he had frequently urged the defendant's daughter to advise him to sell the land if he was getting a higher offer. It is difficult to say under the circumstances that he took an improper advantage of his position or the difficulties of the defendant.'

Then again, it is necessary to remember that mere rise in price subsequent to the date of the contract or inadequacy of price is not to be treated as a hardship entailing refusal of specific performance of the contract. Further, the hardship involved should be one not foreseen by the party and should be collateral to the contract. In sum, it is not just one factor or two, that is relevant for consideration. But it is the sum total of various factors which is required to enter into the judicial verdict. In the instant case, defendant-1 has not pleaded hardship muchless adduced any evidence. He has not even stepped into the witness box. Under these circumstances, it is not at all possible to hold that the performance of the contract would involve some hardship on the defendant which he did not forsee.

35. If that be so, the next question for consideration is as to whether the plaintiff can call in aid the provisions of Section 12 of the Specific Relief Act. In this connection, the allegations made by the plaintiff in paras-15(a) to 15(h) deserve to be noted. We have on the earlier occasion extracted portion of the same in the context of the consideration of the question of jurisdiction. Even at the risk of repetition the whole portion covered by para-15(a) to 15(h) deserves to be extracted here again for immediate reference. The same reads as under:

'15(a) The plaintiff concedes unequivocally that the suit schedule properties belonged to defendants-1 and 3 in equal moieties (vide plaintiff's memo dated 20-2-1991, filed before High Court in RFA 255/1981).

15(b) Under Section 22 of the Specific Relief Act, it is permissible to work out a partition and seek separate possession of such half share of the 1st defendant by way of Specific Performance in this very suit.

15(c) On 15-6-1982, (i.e., after the disposal of the suit by the trial Court, but during the pendency of the same in the Appellate Court), defendants 1 and 3 have entered into a deed of partition registered as Document No. 1664 of 1982-83 in Book I Volume 1849 at pages 32 to 36 in the office of the Sub-Registrar, South Taluk, Bangalore.

15(d) The said partition by metes and bounds has been affected only to the extent permissible under the Fragmentation of Holdings (Prevention) Act. Since a partition in contravention of the provisions of the said statute would not in any case be possible or practicable, the plaintiff is agreeable for a specific performance by way of sale and delivery of possession limited to the properties allotted to the 1st defendant under Schedule-B of the aforesaid deed of partition dated 15-6-1982 viz., Sy.Nos. 23 and 27/2 of Gottigere village, Bangalore South Taluk, Bangalore for a proportionately reduced consideration. The shortfall in respect of the half-share of the 1st defendant in relation to the total agreed consideration of Rs. 1,46,000/- works out to Rs. 8,100/-.

15(e) Under Section 12(3) of the Specific Relief Act, it is prayed that the Court may be pleased to direct the 1st defendant to perform specifically so much of the part of the contract as he can perform for a consideration of Rs. 64,900/- (Rs. 73,000 - Rs. 8,100).

15(f) Under Section 13 of the Specific Relief Act, since the 1st defendant has after the contract acquired a full and absolute interest in and title to Sy.No. 23 and Sy.No. 27/2 of Gottigere village the plaintiff is entitled to compel him to make good the contract out of such interests,

16(g) The said items of property taken by themselves stand on a separate and independent footing and hence there will be no injustice whatever if the Court directs specific performance in that respect as prayed for.

15(h) The plaintiff reaffirms that he relinquishes all claims to the performance of that part of the contract which the 1st defendant was unable to perform, or for loss or damages due to his default.'

It is necessary to note here that the aforesaid paras in the plaint are added by way of amendment of the plaint consequent to the order dated 5-3-1991 by us on the application at I.A.No. IV for amendment of the plaint.

36. At this jucnture, it is necessary to mention here that after the amendment was effected by the plaintiff, this Court by its order dated 7-3-1991 directed the respondents to file additional written statement if any by 25-3-1991 with a further direction that the amended plaint copies shall be served on the 1st and the 3rd defendant forthwith, as reflected in the order sheet dated 7-3-1991. By a Memo dated 12-3-1991 the learned Counsel for the plaintiff submitted that amendment copies of the plaint have been duly served on Sri B.S. Pranesh Rao,- Advocate for respondent-3 in the open Court on 1-3-1991 and on Sri S. Subbaramaiah, Advocate for respondent-1 on 11-3-1991 along with a true copy of acknowledgement.

37. However, additional written statements were not filed either by defendant-1 or defendant-3. Defendant-2 is not concerned with the properties.

38. From what is stated hereinabove, it is clear that the allegations reflected in para-15 are not denied. It is necessary to consider the impact of Order 8 Rule 5 CPC in such a situation. It reads as under:

'Order 8 Rule 5 - Specific denial -.(1) Every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability;

Provided that the Court may in its discretion require any fact so admitted to be proved otherwise than by such admission.

(2) Where the defendant has not filed a pleading, it shall be lawful for the Court to pronounce Judgment on the basis of the facts contained in the plaint, except as against a person under a disability, but the Court may, in its discretion, require any such fact to be proved.

(3) In exercising its discretion under the proviso to Sub-rule (1) or under Sub-rule (2), the Court shall have due regard to the fact whether the defendant could have, or has, engaged a pleader.

(4) Whenever a Judgment is pronounced under this Rule, a decree shall be drawn up in accordance with such Judgment and such decree shall bear the date on which the Judgment was pronounced.'

It is necessary to notice here that before Order 8 Rule 5 was amended by 1976 Amendment there was controversy as to whether Sub-rule 2 (old) would apply to a case where the written statement has not been filed at all. However, this Court has taken the view in SAKINA BEE v. MOHAMED AMEER AND ORS., 1976(1) KLJ 365 that there is nothing in the language of Order 8, Rule 5 CPC to limit its application only to cases where a pleading has been lodged by the defendant. This Court while taking the said view had followed the Decision of the Bombay High Court in SHRIRAM SURAJMAL v. SHRIRAM JHUS JHUNWALLA, AIR 1936 Bombay 285. It is significant to note here that new Sub-rule (2) confirms the view taken by this Court in Sakina Bee's case.

39. Having regard to the fact that defendant-1 though represented by an Advocate has shown utter indifference to the proceedings in this appeal and has not filed additional written statement and defendant-3 who is represented by an Advocate who has been present all throughout has also not filed any additional written statement though opportunity was given, we did not consider it necessary to call upon the plaintiff-appellant to prove the partition between defendant-1 and defendant-3 (respondent-1 and respondent-3) or the allotment of the properties in the way and manner as stated in paras 15(c) and 15(d) of the plaint, more so, on account of the fact that plaintiff-appellant has produced a certified copy of the partition deed dated 15-6-1982 between defendant-1 and defendant-3.

39. If this be so, the important question for consideration is whether the plaintiff can call in aid the provisions of Section 12 of the Specific Relief Act. It reads as under:

'12. Specific performance of part of contract -

(1) Except as otherwise hereinafter provided in this Section, the Court shall not direct the specific performance of a part of a contract.

(2) Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed bears only a small proportion to the whole in value and admits of compensation in money, the Court, may, at the suit of either party, direct this specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.

(3) Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed either -

(a) forms a considerable part of the whole, though admitting of compensation in money; or

(b) does not admit of compensation in money;

he is not entitled to obtain a decree for specific performance; but the Court may, at the suit of the other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, if the other party -

(i) in a case falling under Clause (a), pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and in a case falling under Clause (b), a pays or has paid the consideration for the whole of the contract without any abatement; and

(ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant.

(4} When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the Court may direct specific performance of the former part.'

40. At this juncture, it is necessary to notice that, although Sub-section (3) of Section 12 of the Specific Relief Act 1963 corresponds with Section 15 of the repealed Act, it has altered and clarified the law. With a view to highlight the crucial distinction between Section 12(3) of the 1963 Act on the one hand and Section 15 of the repealed Act it is necessary to juxtapose the aforesaid two provisions:

Section 12(3) of theSpecific Relief Act.

Section 15 of the repealed Act ..

12. Specificperformance of part of contract -

(1) XXX XXX (2) XXX XXX

15. Specificperformance of part of contract where part performed is large -

(3) Where a party to a contract isunable to perform the whole of his part of it, and the part which must beleft unperformed either -

Where a party to a contract is unable to perform the whole ofhis part of it, and the part which must be left unperformed forms aconsiderable portion of the whole, or does not admit of compensation inmoney, he is not entitled to obtain a decree for specific performance. Butthe Court

(a) forms a considerable part of the whole, though admitting ofcompensation in money; or

(b) does not admit of compensation in money; he is not entitledto obtain a decree for specific performance; but the Court may, at the suitof the other party, direct the party in default to perform specifically somuch of his part of the contract as he can perform, if the other party -

may, at the suit of the other party, direct the party in defaultto perform specifically so much of his part of the contract as he canperform, provided that the plaintiff relinquishes all claim to furtherperformance, and all right to compensation either for the deficiency, or forthe loss or damage sustained by him through the default of the defendant.

(i) in a case falling under clause (a), pays or has paid theagreed consideration for the whole of the contract reduced by theconsideration for the part which must be left unperformed and in a casefalling under clause (b), a pays or has paid the consideration for the wholeof the contract without any abatement; and

(ii) in either case, relinquishes all claims to the performanceof the remaining part of the contract and all right to compensation, eitherfor the deficiency or for the loss or damage sustained by him through thedefault of the defendant.'

A close examination of the aforesaid two provisions culled out hereinabove, would go to show that under the old Act there was no question of reduction of consideration at the suit of the purchaser, for the part which must be left unperformed. However, Section 12(3) makes a departure in this behalf. The said provision culled out hereinabove earlier will indeed go to show under what circumstances the purchaser is entitled to the reduction of the consideration for the part that is left unperformed. Under the said Section even if the part which is left unperformed forms considerable part of the whole though admitting of compensation in money, the purchaser is entitled to specific performance of so much of the part of the contract which the vendor can perform, provided he (purchaser) pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed subject to the further condition that he (purchaser) relinquishes all claims to the performance of the remaining part of the contract, and all right to compensation either for the deficiency or for the loss or damages sustained by him through the default of the defendant. In the instant case it can be said without any difficulty that the part of the contract which cannot be performed by defendant-1 forms considerable part of the whole though admits of compensation. When we say that the part which cannot be performed admits of compensation we have taken into consideration the nature of the contract between the parties, the nature of the property, the price fixed for the property, the fact that the same is divisible and in fact divided though subsequently thereby leading to the inference that compensation may be measured in terms of money. We have taken into consideration the provisions of Section 21 of the Specific Relief Act, 1963. Further, the plaintiff has in para 15(h) of the plaint, has reaffirmed that he relinquishes all claims to the performance of that part of the contract which the 1st defendant was unable to perform, or for loss or damages due to his default. Further in para 15(d) of the plaint, he has stated that plaintiff was agreeable for a specific performance by way of sale and delivery of possession limited to the properties allotted to the 1st defendant under Schedule B of the aforesaid Deed of Partition dated 15-6-1982 viz., Survey Numbers 23 and 27/2 of Gottigere Village, Bangalore South Taluk, Bangalore for a proportionately reduced consideration. He has further stated that the short fall in respect of the half share of the 1st defendant in relation to the total agreed consideration of Rs. 1,46,000/- works out to Rs. 8,100/-. Sri S.S. Ullal has, in the course of his arguments, submitted that the valuation of the share of the properties allotted to the plaintiff as against the valuation of the property allotted to defendant-3 in the Partition Deed dated 156-1982 is in the proportion of 40:50 respectively. We have verified with reference to the certified copy of the Partition Deed, the correctness of the submission in this behalf and on such verification we have found that his submission in this behalf is correct. At this juncture, it is necessary to mention here that defendant-1 or for that matter any of the defendants has not chosen to rebut the allegations made in this behalf by the plaintiff in para-15(d) of the plaint. Under these circumstances, we have no hesitation whatsoever that the reduced consideration would work out at Rs. 64,900/-. For the reasons stated immediately hereinabove, we have no hesitation to hold that plaintiff can call in aid the provisions of Section 12(3) of the Act and can enforce part of the claim for reduced consideration that is to say for Rs. 64,900/- (Rs. 73,000 - Rs. 8,100) if he is otherwise entitled to the decree for specific performance.

41. Thus it is seen that there was a binding contract between the plaintiff and defendant-1 as per Ex.P-1. It is further seen that plaintiff has always been wilting to perform his part of the contract. We have also held that the performance of the contract would not involve the 1st defendant in some hardship which he had not foreseen at the time of the agreement at Ex.P-1. We have also held that the contract can be performed in part. We have further held that in the partition which took place between defendant-1 and defendant-3 on 15-6-1982 Sy.Nos. 23 and 27/2 are allotted to the plaintiff. We have further held that plaintiff is entitled to the reduction of consideration and on such reduction he is liberty to pay only Rs. 64,900/-. The lower Court has held that the plaintiff was an agriculturist when he entered into the agreement at Ex.P-1. Even otherwise, as pointed out by this Court in the Decision SHIVANANJAPPA SIDRAMAPPA PRANTUR v. VIRUPAKSHAPPA ALLAPPA BAGI, ILR (Karnataka) 1080(1) 702 this aspect does not assume significance in the context of the question as to whether a decree for specific performance can be granted. Under these circumstances, we answer Point Nos. 2 and 3 in the affirmative including the question relating to the element of hardship.

42. For the reasons stated hereinabove, we pass the following order:

The appeal is allowed. The Judgment and decree dated 13-8-1981 passed by the Principal Civil Judge, Bangalore District, Bangalore in O.S. No. 61 of 1980 dismissing the suit of the plaintiff for specific performance and giving a direction to return the amount of Rs. 1,001/- with 12% interest from 21-1-1980 upto the date of payment is set aside.

The suit for specific performance prayed for by the plaintiff is decreed by directing defendant-1 - S. Chandrasekhar, s/o M. Shivaswamy to execute a safe deed in favour of plaintiff-Lt. Cdr. M.C. Kendall for a sum of Rs. 64,900/- regarding Sy.Nos. 23 and 27/2 of Gottigere Village, Bangalore District, Bangalore and deliver possession of the same within three months from today after taking the amount from the plaintiff. If defendant-1 fails to execute a sale deed within three months from today and deliver possession of the aforesaid properties to the plaintiff, the plaintiff is at liberty to get the sale deed executed through the Court of Principal Civil Judge, Bangalore District, Bangalore and to obtain possession after depositing the amount of Rs. 64,900/-.

(iii) The amount of Rs. 1,001/- which the plaintiff had paid to defendant-1 by way of advance on 21-1-1980 shall stand adjusted towards the amount of Rs. 64,900/- payable by plaintiff to defendant-1 towards the same.

(iv) Defendant-1 is directed to pay the cost of this appeal to the plaintiff. Rest of the defendants shall bear their own costs.