High Court allowed regular first appeal, modifying trial court decree to award 9% interest on Rs.5 lakhs recovered from defendants for defective purchase agreement performance, stating retention of funds by defaulting party warrants compensation.
Trial court decree modified to award appellants Rs.5,00,000 with 9% interest from judgment date till realization.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 17TH DAY OF JULY 2012
BEFORE
THE HON’BLE MR. JUSTICE A.S. BOPANNA
REGULAR FIRST APPEAL NO. 1212/2010
BETWEEN:
AGED ABOUT 54 YEARS, W/O. LATE S.S. POTHNIS, RESIDING AT NO. 77/31, 7TH MAIN, 5TH CROSS, SRINIVASANAGAR, BANGALORE – 560 050 ... APPELLANTS
(BY SRI S.G. KRISHNA MURTHY, ADV.)
AND:
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THIS RFA IS FILED U/SEC. 96, R/W O-41, RULE-1 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED: 05.03.2010 PASSED IN O.S. NO. 8591/2006 ON THE FILE OF THE XXXIADDL. CITY CIVIL JUDGE, BANGALORE, PARTLY DECREEING THE SUIT FOR RECOVERY OF MONEY.
THIS RFA COMING ON FOR ADMISSION THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
The appellants herein are the plaintiffs in O.S. No.8591/2006.
The suit in question was filed seeking recovery of sum of Rs.6,37,500/- with interest at 9% per annum as claimed in the plaint. The Court below has ultimately decreed the suit in part directing the defendants to pay to the plaintiffs a sum of Rs.5,00,000/-. The plaintiffs therefore claiming to be aggrieved by the said judgment dated 05.03.2010 insofar as non-grant of interest is before this Court in this appeal.
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into an agreement of sale dated 26.09.2003 seeking to purchase the property owned by the defendants and on the same day a sum of Rs.5,00,000/- was paid as the advance sale consideration. The defendants were thereafter required to furnish the title deeds and the necessary documents to complete the transaction. The defendants did not perform their part of the contract according to the plaintiffs even though they were ready to perform their part. Hence, ultimately on realizing that the transaction would not fructify, the plaintiffs chose to seek for refund of advance amount with interest thereof. It is in that regard, the suit was instituted seeking for the advance of Rs.5,00,000/and interest thereon at 9% from the date the amount was received by the defendants till the date of suit and thereafter at the same rate till realization.
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were ready and willing to perform their part, the plaintiffs were not in fact ready and therefore the transaction could not be completed for the default of the plaintiffs. As such the defendants are entitled to forfeit the advance which had been paid by them is their contention. Hence, it was contended that the defendants are neither liable to repay the advance amount as claimed nor any interest thereon.
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judgment of the Court below on the said issue no.3 would contend that the Court below has misdirected itself. It is contended that the very manner of consideration of issue nos. 1 and 2 and holding it against the defendants would clearly indicate that the defendants were at fault and they had not complied with the requirements under the agreement to discharge their obligation and at the same time having
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retained the money belonging to the plaintiffs, the plaintiffs in any event were entitled to be compensated. In that regard, it is contended by the learned counsel that Ex.P1 namely the sale agreement in fact contains a clause that the plaintiffs would be entitled to recover double the advance amount in the event of there being any default on the part of the defendants. Despite such right being available to the plaintiffs, they have only chosen to seek interest at 9% and when the issue nos. 1 and 2 were held against the defendants, the said amount in any event ought to have been granted to the plaintiffs. It is therefore contended that the Court below while considering these aspects had made certain observations which was not relevant in as much as the notices issued earlier were only seeking specific performance and the question of seeking interest in the said notice would not have arisen. In any event, there is pleading in the plaint that the plaintiffs are entitled to interest and therefore these aspects should have been considered by the Court below. Hence, it is contended that the judgment and decree of Court below calls for modification.
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counsel for the appellants, I have perused the findings rendered by the Court below on issue no.3. In that regard, the Court below has rejected the claim for interest only on the ground that the demand for interest had not been made and there is no cogent documentary evidence. In that regard, I have also perused the findings rendered by the Court below on issue nos. 1 and 2. The defendants in fact had taken up the contention that they are not even liable to refund the amount of Rs.5,00,000/. While considering the said contention, the Court below has rejected the contention putforth and has arrived at the conclusion that the plaintiffs were ready and willing to perform their part of the contract and the transaction could not be completed only due to the fact that the defendants had not furnished the documents to the plaintiffs. These observations of the Court below in fact would indicate that though the defendants had received a sum of Rs.5,00,000/- as advance far back as on 26.09.2003 had not complied
their part of the agreement. Therefore, in such circumstances the plaintiffs in any event would be put to loss to the said extent inasmuch
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as the defendants have retained the money belonging to the plaintiffs without complying with the obligations of the agreement of sale.
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properties and when the defendants have failed to perform their part of the agreement and they had the benefit of retaining the property, there would be substantial escalation in the price of the property and in such event when that benefit has been denied to the plaintiffs, the rate of interest sought at 9% is also reasonable.
of the judgment dated 05.03.2010. In that view, the suit stands decreed in its entirety.
Sd/JUDGE
ST*
3 issues framed by the court
Whether the trial court erred in denying interest on the decretal amount of Rs.5,00,000/- when the plaintiffs were ready and willing to perform their part of the contract and the defendants defaulted.
Whether the appellants are entitled to a modification of the decree to include interest at 9% per annum from the date of the appeal judgment till realization.
Whether the trial court appropriately assessed the claim for interest despite holding against the defendants on issues regarding default in furnishing title documents.
Sri Vinay S. Pothnis and Smt B. Janaki
Sri Anil B.S. and Smt Anitha B.S.
A.S. Bopanna
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
