K.a.S.R.Prabu v. Mrs.T. Nalini

Madras HC21 Nov 2025CS/92/2020

Case brief

AI extract

What is this about?

Earnest-money/advance refund suit dismissed (Madras HC, single judge, 21.11.2025). Search terms: caveat emptor; attesting witnesses of sale agreement not examined; sale deed executed during pendency of suit voids agreement-based refund claim; collusion between purchaser and ex parte vendor; Income Tax provisional attachment post-dated mortgage redemption; no evidence of mortgagee's knowledge or representation; DHFL/Piramal Finance CIRP — Administrator not impleaded, no claim against successor company; refund of Rs.1,34,23,150/- with 12% interest refused; suit dismissed without costs.

What did the court decide?

The plaintiff, being the purchaser, is bound by the principle of caveat emptor and it was his duty to verify and enquire about the property and its encumbrances. ¶¶103

K.a.S.R.Prabu Vs Mrs.T. Nalini — Insolvency and Bankruptcy | Madras HC (2025)

What the court decided

AI extract

Outcome

Dismissed

¶¶163

Issue for consideration

Whether the plaintiff is entitled to recovery of earnest money received on the basis of agreement dated 20.06.2019 — a sum of Rs.1,34,23,150/- towards the principal amount as on 22.01.2020 together with interest at the rate of 12% p.a. on principal of Rs.1,25,45,000/- from the defendants? +1 more

¶¶134

Court's answer

Mere production of the agreement (Ex.P.9) is not sufficient to prove its contents; the plaintiff failed to examine any one of the attesting witnesses of Ex.P.9 even though he could have done so.

¶¶153

Ratio / Principle

The plaintiff, being the purchaser, is bound by the principle of caveat emptor and it was his duty to verify and enquire about the property and its encumbrances.

¶¶103

Key takeaways

There is no evidence that the 2nd defendant had knowledge of the provisional Income Tax attachment; the attachment post-dated the settlement of the mortgage; the plaintiff merely guessed the 2nd defendant's awareness, so the plaintiff failed to prove any representation by the 2nd defendant, which is therefore not liable to pay.ratio¶¶126
Without impleading the Administrator appointed for M/s. Dewan Housing Finance Corporation Ltd. under the CIRP, the plaintiff cannot claim any compensation as against the 2nd defendant.ratio¶¶129

Detailed headnote1 paragraphs

Madras High Court (P. Dhanabal, J.; decided 21.11.2025) dismissed C.S. No.92 of 2020, a purchaser's suit for refund of earnest money of Rs.1,34,23,150/- with 12% p.a. interest on Rs.1,25,45,000/- paid under a sale agreement dated 20.06.2019 (consideration Rs.1,83,00,000/-) after discovery of a provisional Income Tax attachment covering the vendor's tax dues. On Issue 2 (liability of both defendants): no evidence that the 2nd defendant (M/s. Piramal Finance Ltd., successor to DHFL through CIRP) had knowledge of the attachment, which post-dated the mortgage settlement; the plaintiff's awareness of it rested on guesswork; the Administrator appointed for DHFL under the CIRP was not impleaded; and the plaintiff's conduct — taking a sale deed (Ex.P.16, 22.04.2021) from the ex parte 1st defendant during the pendency and then mortgaging the property to Mrs. Uma Devi (Ex.P.17) — showed collusion with the 1st defendant, so no relief lay against the 2nd defendant. The purchaser was held bound by caveat emptor. On Issue 1 (refund of earnest money): mere production of the agreement (Ex.P.9) without examining any of its attesting witnesses did not prove its contents; and once the sale deed was executed during the suit the agreement lost its validity, extinguishing any claim for return of advance money founded on it. Suit dismissed; no order as to costs.

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C.S. No.92 of 2020

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Dated: 21.11.2025

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CORAM :

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THE HONOURABLE MR.JUSTICE P.DHANABAL

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C.S. No.92 of 2020

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K.A.S. Prabu S/o. K.A.S. Ramdoss

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… Plaintiff

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vs.

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T. Nalini W/o. D. Thennarasu

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M/s. Piramal Finance Limited formerly known as M/s. Dewan Housing Finance Corporation Ltd., (DHFL), represented by its Manager, Kodambakkam Branch. [2^nd defendant's name amended as per the order dated 18.09.2025 in A. No.4654 of 2025] ... Defendants

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PRAYER: The Suit is filed under Order IV Rule I of Original Side Rules

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read with Order VII Rule 1 of Civil Procedure Code praying for judgment and decree against the defendants:

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directing the defendants to repay the earnest money received on the basis of agreement dated 20.06.2019 to the Plaintiff a sum of Rs.1,34,23,150/- towards the principal amount as on 22.01.2020 together with interest at the rate of 12% p.a. on principal Rs.1,25,45,000/- from the date of Plaint till the date of realization; and

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Page No.1

Exhibit No.	Date	Description of Documents
Ex.P.1	23.11.1994	Certified copy of the Sale Deed in favour of D. Thennarasu
Ex.P.2	16.11.2007	Certified copy of the Settlement Deed in favour of T. Kanimozhi and T. Nalini.
Ex.P.3	30.07.2014	Certified copy of the Settlement Deed executed by T. Kanimozhi in respect of her 50% of share in favour of T. Nalini.
Ex.P.4	05.11.2015	Photocopy of the Memorandum of Deposit of Title by the 1^stdefendant in favour of the 2^nddefendant.
Ex.P.5	06.08.2019	Printout of the Online Patta in the name of D. Thennarasu.
Ex.P.6	-	Original Encumbrance Certificate from SRO, Kodambakkam for the period from 01.01.1970 to 31.12.1974.
Ex.P.7	01.01.1975 to	Online printout of the Encumbrance

	31.10.1996.	C.S. No.92 of 2020 Certificate from SRO, Kodambakkam.
Ex.P.8.	01.11.1996 to 07.06.2019.	Online printout of the Encumbrance Certificate from SRO, Ashok Nagar.
Ex.P.9.	20.06.2019.	Original Sale Agreement in between the Plaintiff and the 1^stDefendant.
Ex.P.10	20.06.2019	Photocopy of Demand Draft Nos.152981 and 152982 in favour of DHFL on behalf of Mrs. Nalini Thennarasu by P. Shakila.
Ex.P.11	22.07.2019	Photocopy of the loan closure letter of DHFL.
Ex.P.12	30.07.2019	Certified copy of the receipt executed by the 2^nddefendant in favour of the 1^st defendant.
Ex.P.13	01.01.2019 to 30.07.2019.	Online printout of the Encumbrance Certificate from SRO, Ashok Nagar.
Ex.P.14	26.12.2019	Office copy of the Legal notice sent by the Plaintiff to the 1^stdefendant.
Ex.P.15	26.12.2019	Office copy of the Legal notice sent by the Plaintiff to the 2^nddefendant along with postal acknowledgement card.
Ex.P.16	22.04.2021	Certified copy of the Sale Deed executed by the 1^stdefendant in favour of the Plaintiff.
Ex.P.17	22.04.2021	Certified copy of the Mortgage Deed executed by the Plaintiff in favour of Mrs. Umadevi.
Ex.P.18	07.07.2021	Photocopy of the summon of the Income Tax department to the Plaintiff.
Ex.P.19	07.07.2021	Photocopy of the summon of the District Registrar to the Plaintiff.
Ex.P.20	15.07.2021	Copy of the statement of the Plaintiff to the District Registrar with District

		Registrar	office sea	l.	C.S. No.92 of 2020
Ex.P.21	07.10.2021	Original r order of t	eply und he Distric	er RTI wit t Registrar	h copy of the .
Ex.P.22	-	Printout for the pe	of the E riod 20.04	ncumbran .2021 to	ce Certificate 25.04.2021.
Ex.P.23	-	Photograp certificate	h with .	CD alon	g with 65B
Ex.P.24	08.06.2019 to 29.06.2019.	Certified Plaintiff's Bank Ltd.	copy of wife P. ,	the bank Shakila	statement of in Karnataka
Ex.P.25	03.07.2019 to 30.07.2019	Certified Plaintiff's Bank Ltd.	copy of wife P. ,	the bank Shakila	statement of in Karnataka
Ex.P.26		Certified Plaintiff's Karnataka	copy of compa Bank Lt	the bank ny R.P. d.,	statement of Builders in

Exhibit No.	Date	Description of Documents
Ex.D.1	03.08.2022	Certified true copy of the Board Resolution.
Ex.D.2	03.11.2021	Copy of the Certificate of Incorporation pursuant to change of name.

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