Allowed

Balan v. Sunilkumar

Kerala HC12 Jan 2017SA/803/2001

Case brief

AI extract

What is this about?

The Kerala High Court allowed a second appeal against the appellate court’s decree confirming a suit for recovery of Rs.51,000. The High Court set aside the lower courts’ findings, holding them perverse for misinterpreting agreements and failing to appreciate cogent evidence of the defendant’s loss due to plaintiff’s breach and subsequent sale of the property.

What did the court decide?

The judgments and decrees of the courts below were set aside and the suit was dismissed.

Balan Vs Sunilkumar — Contract and Commercial Disputes | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE K.HARILAL

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THURSDAY, THE 12TH DAY OF JANUARY 2017/22ND POUSHA, 1938

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SA.No. 803 of 2001

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AGAINST THE JUDGMENT & DECREE DATED 2.3.2001 IN AS.460/1998 of I ADDL.DISTRICT COURT, THRISSUR

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AGAINST THE JUDGMENT & DECREE DATED 28.3.1998 IN OS.647/1997 of PRL.MUNSIFF COURT,THRISSUR

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APPELLANT/APPELLANT/DEFENDANT:

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BALAN, S/O.MALIKKATTIL SANKARANUNNY, VALLACHIRA DESOM, VILLAGE, THRISSUR TALUK.

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BY ADV. SRI.N.P.SAMUEL

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RESPONDENTS/RESPONDENTS/PLAINTIFFS:

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1. SUNIL KUMAR,S/O.PUZHAKKADAVIL SREEDHARAN, VALLACHIRA VILLAGE AND DESOM, THRISSUR TALUK, THRISSUR DISTRICT, P.O. OLLUR.

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2. RAMACHANDRAN, S/O.THIRUNILATHIL PRABHAKARA MENON, VALLIKUNNATHUSSERY DESOM, CHEVOOR VILLAGE, THRISSUR TALUK, THRISSUR DISTRICT.

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3. SATHEESH KUMAR,S/O. KALLIYATH BALAN, VALLIKUNNATHUSSERY DESOM, CHEVOOR VILLAGE, THRISSUR TALUK.

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4. BABU, S/O.CHERKKARA KUMARAN, VALLIKUNNATHUSSERY DESOM, CHEVOOR VILLAGE, THRISSUR TALUK.

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5. DAVID, S/O. KUNNAMPLAKKAL LONAPPAN, VALLIKUNNATHUSSERY DESOM, CHEVOOR VILLAGE, THRISSUR DISTRICT.

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R1 TO R5 BY ADVS. SRI.M.V.BOSE

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SMT.NISHA BOSE

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SRI.VINOD MADHAVAN

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THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 12-01-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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OKB

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K.HARILAL, J.

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_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

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S.A. No.803 of 2001

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_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

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Dated this the 12^th day of January, 2017

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JUDGMENT

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~ ~ ~ ~ ~ ~ ~

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The appellant is the defendant in O.S.No.647/1997 of the Principal Munsiff's Court, Thrissur as well as the appellant in A.S. No.460/1998 and the respondents herein are the plaintiffs in the Original Suit. The suit was one for recovery of advance money on breach of contract and the defendant suffered decree for payment of a sum of Rs.51,000/- with interest @ 6% per annum from the date of suit till recovery and the said decree was confirmed by the lower appellate court also. Thus, the concurrent findings of the courts below are under challenge.

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The plaintiffs instituted O.S.No.647/1997 before the Munsiff's Court against the defendant seeking recovery of a sum of Rs.51,000/- from him with interest alleging that they had entered into Ext.A1 agreement dated 17.2.1997

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SA.803/01 :2:

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for sale, whereby they agreed to purchase 6¼ cents of land belonging to the defendant for a total consideration of Rs.2,50,000/- and at the time of agreement the plaintiffs had paid Rs.26,000/- as advance to the defendant. Subsequently, on 25.9.1996 they had paid Rs.25,000/- to the defendant. However, the defendant failed to perform his part of the contract by not executing the sale deed. So the plaintiffs are entitled to recover the amount of Rs.51,000/- paid as advance to the Government.

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The defendant denied the averment and contended that on account of breach committed by the plaintiffs he had suffered a loss of Rs.50,000/- and he is entitled to adjust the amount received by him as earnest money. According to the defendant, on the strength of the registered agreement he had entered into Ext.B2 agreement dated 30.9.1996 with D.W.2 for purchase of the property; but since the plaintiffs committed breach of contract with the defendant he could not fulfill his obligation under Ext.B2. Consequently, DW2 adjusted the sum of Rs.50,000/- given by the appellant as earnest money

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SA.803/01 :3:

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and the defendant suffered a loss to the tune of Rs.50,000/-. Hence the plaintiffs are not entitled to recover Rs.51,000/- from him.

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On the aforesaid rival pleadings both parties adduced evidence consisting of Exts.A1 to A3 and B1 to B4 and the oral testimony of P.W.1, D.W.1 and D.W.2. After considering the evidence on record the trial court decreed the suit and, in appeal, the appellate court also concurred with the findings of the trial court.

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Heard the learned counsel for the appellant and the learned counsel for the respondents.

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In view of the submissions at the Bar, the question to be considered is, whether there is any illegality or perversity in the findings whereby the courts below granted the decree permitting the plaintiffs to recover a sum of Rs.51,000/- from the defendant. Put it differently, the question of law to be considered is, is not the appreciation of evidence made by the courts below perverse inasmuch as it omitted to accept cogent evidence and relying on conjectures?

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SA.803/01 :4:

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It is not disputed that the courts below have concurrently found that the plaintiffs have committed breach of contract. But, they have not challenged the said finding by way of cross objection in the appeal filed by the defendant. The defendant has set up a case that the plaintiffs are not entitled to recover a sum of Rs.51,000/from him as the said amount was the earnest money and he had suffered damages due to the breach of contract committed by the plaintiffs. It is his case that on the strength of Ext.A1 agreement the defendant had entered into Ext.B2 agreement dated 30.9.1996 with D.W.2 for purchase of 6 cents of property and building belonging to D.W.2 and he had paid a sum of Rs.50,000/- to D.W.2 as earnest money. Since the plaintiffs committed breach of contract, the subsequent agreement, Ext.B2, also went in failure and thereby he had sustained a loss of Rs.50,000/-, which he had paid to D.W.2 as earnest money. In order to substantiate the said case, the defendant has relied on Exts.B1 to B4.

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Going by the impugned judgment passed in appeal,

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SA.803/01 :5:

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the lower appellate court found that the sum of Rs.51,000/paid by the plaintiffs to the defendant was not the earnest money as contended by the plaintiff. As regards the alleged loss sustained by the defendant, consequent on the failure of Ext.B2 agreement, the courts below found that no reliance can be placed on Exts.B1 to B3. In order to substantiate the aforesaid finding the appellate court found that nowhere in Ext.B1 notice sent by the defendant to the plaintiffs he has stated that D.W.2 had forfeited Rs.50,000/-, which he had paid as earnest money under Ext.B2. Secondly, the court found that no reliance can be placed on Ext.B2 agreement as the same could have been executed to circumvent the claim of advance amount that may be raised by the plaintiffs against him.

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Going by Ext.A2 notice it is seen that the said notice was dated 22.2.1997 and Ext.B3 notice sent by D.W.2 to the defendant was issued on 22.4.1997 only. Going by Ext.B3 notice, it could be seen that D.W.2 had informed the defendant that he had forfeited Rs.50,000/-, which the defendant had paid to him on the defendant's

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SA.803/01 :6:

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breach of contract to him. Thus, the forfeiture of Rs.50,000/- came to the knowledge of the defendant after the issuance of Ext.B1 reply notice to the plaintiffs. Therefore, this Court cannot find fault with the defendant in not disclosing forfeiture of Rs.50,000/- raised by D.W.2 in Ext.B1 notice. Moreover, in the written statement filed by the defendant, he specifically disclosed the full particulars of Ext.B2 agreement whereunder he suffered a loss of Rs.50,000/-.

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Coming to the second point, going by Ext.A1 agreement, it is seen that Ext.A1 agreement was executed on 17.8.1996 and the period provided for performance of the contract expires on 17.2.1997 only. Thus, Ext.B2 agreement between the defendant and D.W.2 was long before the expiry of Ext.A1 agreement between the plaintiffs and the defendant. If that be so, it could never be presumed that Ext.B2 is a concocted document made in anticipation of any kind of claim for return of money from the plaintiffs, in case Ext.A1 agreement fails.

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On an analysis of the evidence of D.Ws.1 and 2,

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SA.803/01 :7:

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this Court does not find any reason to disbelieve their evidence adduced in support of Exts.B1 to B4. In other words, this Court does not find any reason to disbelieve the loss suffered by the defendant under Ext.B2 agreement entered between the defendant and D.W.2. But, the courts below miserably failed to appreciate Exts.B1 to B3 and Ext.A1 in their correct perspective and thereby the findings are vitiated by perversity and consequential illegality in the findings. More over, the courts below went wrong by misinterpreting Exts.A1 and B2 agreements. In the above analysis, the judgments and decrees passed by the courts below are set aside and the suit will stand dismissed. This Second Appeal will stand allowed.

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All pending interlocutory applications will stand closed.

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Sd/K.HARILAL, Judge.

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Okb

Balan v. Sunilkumar

Case brief

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Balan v. Sunilkumar

Case brief

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