The High Court allowed the appeal partly in a suit for recovery of sale consideration. The court held that the payment was an advance, not earnest money, and modified the interest from 9% to 6% under Section 34 CPC, starting from August 20, 2013.
Recovery of Rs.50 lakhs plus 6% interest from 20/8/2013 till realization instead of 9% interest.
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.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE
&
THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN
FRIDAY, THE 25TH DAY OF NOVEMBER 2022 / 4TH AGRAHAYANA, 1944
RFA NO. 12 OF 2018
AGAINST THE JUDGMENT in OS 138/2013 OF SUB COURT, MAVELIKKARA
APPELLANT/S:
1 LATHEEF RAWTHER (DIED)(*) S/O.SEETHAR RAWTHER, VALUPARAMBIL, CHUNAKARA VILLAGE, CHUNAKARA SOUTH, CHARUMMODU P.O., MAVELIKARA TALUK, ALAPPUZHA DISTRICT- PIN 690 505.
ADDL.A2 SHYLAJA W/O. LATHEEF RAWTHER, VALUPARAMBIL, CHUNAKARA SOUTH, CHARUMMODU P.O., CHUNAKKARA VILLAGE, MAVELIKARA TALUK, ALAPPUZHA DISTRICT, PIN - 690505.
ADDL.A3 SALIH.L. S/O. LATE LATHEEF RAWTHER, VALUPARAMBIL, CHUNAKARA SOUTH, CHARUMMODU P.O., CHUNAKKARA VILLAGE, MAVELIKARA TALUK, ALAPPUZHA DISTRICT, PIN - 690505.
ADDL.A4 HUSSAIN.L. S/O. LATE LATHEEF RAWTHER, VALUPARAMBIL, CHUNAKARA SOUTH, CHARUMMODU P.O., CHUNAKKARA VILLAGE, MAVELIKARA TALUK, ALAPPUZHA DISTRICT, PIN - 690505.
ADDL.A5 SHAMLA.L. D/O. LATE LATHEEF RAWTHER, VALUPARAMBIL, CHUNAKARA SOUTH, CHARUMMODU P.O., CHUNAKKARA VILLAGE, MAVELIKARA TALUK, ALAPPUZHA DISTRICT, PIN - 690505. {(*) A1 DIED, LRS ADDL.A2 TO ADDL.A5 IMPLEADED BY ORDER ON IA 2/2019 DATED 7/2/2019} BY ADV SRI.ROY CHACKO
R.F.A.No.12 of 2018
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RESPONDENT/S:
ASHARAF S/O.IBRAHIM RAWTHER, AISHA MAHAL (MULLAMKUTTIYIL) ADIKATTUKULANGARA P.O., ADIKATTUKULANGARA MURI, PALAMEL VILLAGE 690 510.
BY ADVS. KUM.ANAGHA LAKSHMY RAMAN SRI.LEGITH T.KOTTAKKAL SRI.S.VINOD BHAT
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 17.11.2022, THE COURT ON 25/11/2022 DELIVERED THE FOLLOWING:
A.MUHAMED MUSTAQUE & SHOBA ANNAMMA EAPEN, JJ.
R.F.A.No.12/2018
Dated this the 25th day of November, 2022
J U D G M E N T
A.Muhamed Mustaque, J.
This is an appeal filed by the defendant in a suit
for return of advance sale consideration. The plaintiff and defendant entered into an agreement for sale on 26/2/2013. The plaintiff paid Rs.50
lakhs towards sale consideration to the defendant. The total consideration fixed for purchase of the immovable property was Rs.2.30 crores. The sale was not materialised. The parties alleged breach and default against each other. The Sub Judge, by a detailed order allowed the suit for recovery of Rs.50 lakhs together with 9% interest from the date of agreement for sale till realisation.
the appellant Shri Roy Chacko, argued in detail.
He also placed reliance on the following Judgments
R.F.A.No.12 of 2018
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of the Hon'ble Supreme Court, this Court and the High Court of Madras:
. Shree Hanuman Cotton Mills and another, v. Tata Air Craft Ltd. [AIR 1970 SC 1986]
. Kannan Menon v. Kuttikrishna Menon &
Others [1962 KLJ 257]
. P.R. Gunasekaran v. K.Balasubramani and Ors. [MANU/TN/1538/2016]
According to the learned counsel, the plaintiff committed default and therefore, the defendant was entitled to forfeit the advance amount. Placing reliance on the above judgments, it was submitted
that the appeal be allowed and the judgment of the Sub Judge be reversed.
counsel for the plaintiff Shri S. Vinod Bhat and
Smt Anagha Lakshmy Raman submitted that the
agreement clearly states that Rs.50 lakhs was paid
as an advance amount and not as an earnest money.
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It was further argued that the defendant did not
raise any counter claim seeking damages from the plaintiff.
lakhs was paid as earnest money for performance. When any part amount is paid towards sale consideration, normally, it has to be presumed
that it is an advance amount towards the sale consideration. In the absence of any material to
show that it was earnest money, any default, on
the part of the plaintiff is immaterial or
irrelevant, for considering his right to seek
R.F.A.No.12 of 2018
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refund of advance amount paid. The default would
be relevant only while considering the question related to 'charge' as referable under Section 55(6)(b) of the Transfer of Property Act, 1882.
In this case, the court had not granted a relief of 'charge' in favour of the plaintiff.
claim, claiming damages. In such circumstances, the plaintiff is entitled for refund of advance amount paid. However, we find that 9% interest has been awarded from the date of agreement, as interest. There is no such stipulation regarding
payment of interest in the agreement. The six months time was fixed therein for performance of
agreement. The agreement was on 26.2.2013,
wrongly mentioned as 26.2.2011 in the impugned
judgment. Therefore, the plaintiff can demand interest only after the expiry of the period for
performance. Thus, the plaintiff would be
entitled for interest only from 20.8.2013 onwards.
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We are also of the view that the interest awarded
is on higher side as it is not a commercial transaction. We are of the view that the court could not have ordered interest beyond 6% overlooking the mandate under Section 34 of the Civil Procedure Code. Thus, we modify the impugned decree ordering recovery of Rs.50 lakhs along with 6% interest from 20/8/2013 till the date of realisation. The appeal is allowed
partly. The parties are directed to suffer their respective costs.
Sd/-
A.MUHAMED MUSTAQUE, JUDGE
Sd/-
SHOBA ANNAMMA EAPEN, JUDGE
ms
3 issues framed by the court
Whether the advance amount of Rs.50 lakhs is refundable or forfeitable as earnest money.
Whether the interest awarded at 9% should be modified given the absence of stipulation and the mandate under the Civil Procedure Code.
From what date the plaintiff is entitled to interest on the refunded amount.
Colour shows how this judgement treated each authority
Shree Hanuman Cotton Mills and another, v. Tata Air Craft Ltd.Referred¶35
Shree Hanuman Cotton Mills and another, v. Tata Air Craft Ltd. [AIR 1970 SC 1986] · Who else cites this
Kannan Menon v. Kuttikrishna Menon & OthersReferred¶36
Kannan Menon v. Kuttikrishna Menon & Others [1962 KLJ 257]
P.R. Gunasekaran v. K.Balasubramani and Ors.Referred¶38
P.R. Gunasekaran v. K.Balasubramani and Ors. [MANU/TN/1538/2016]
2 provisions across 2 enactments
Shyla
Asharaf
A.Muhamed Mustaque
Shoba Annamma Eapen
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
A.Muhamed Mustaque and Shoba Annamma Eapen
Parties & counsel
