The Punjab and Haryana High Court dismissed this second appeal against a decree for recovery of Rs. 3.50 lacs. The court upheld the lower court's finding that the agreement to sell was security for a loan and ruled that 6% interest under Section 34 CPC was applicable.
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 PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH
R.S.A. No. 3898 of 2006 (O&M) Date of Decision : 15.1.2009
Tarwinder Mohan Singh Bhatia
.......... Appellant
Versus
Amrik Singh & others
...... Respondents
CORAM : HON'BLE MR. JUSTICE VINOD K. SHARMA
Present : Mr. Padam Jain, Advocate for the appellant.
Mr. Rajbir Wasu, Advocate for the respondents.
VINOD K. SHARMA, J. (ORAL)
This regular second appeal is directed against the judgments and decree dated 20.8.2004 and 19.8.2006 passed by the learned Courts below vide which decree for recovery of Rs. 3.50 lacs along with interest @ 6% per annum, has been passed against appellant.
The plaintiff-respondents claimed that there was an agreement to sell executed between the parties on 12.3.1999.
The plaintiffs paid a sum of Rs. 3.50 lacs as earnest money out of the total sale consideration of Rs. 4.00 lacs.
A sum of Rs. 50,000/- was agreed to be paid at the time of registration of the sale deed.
It was also the case of the plaintiff-respondent that defendant-
R.S.A. No. 3898 of 2006 (O&M)
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appellant failed to comply with the terms of the contract as he did not appear before the Registrar for registration of the sale deed on the date fixed. The plaintiffs further alleged that they were always and still willing to perform their part of contract.
The suit was contested, wherein a plea was taken that the agreement to sell was not intended to be acted upon as in fact it was a loan transaction between the parties and the agreement to sell was executed as a security. The defendant-appellant further claimed that in fact loan was advanced to the appellant in the year 1993 and an agreement to sell Ex. D-1 executed by way of security.
It was further the case of the defendant-appellant that he had been regularly paying the interest against the loan, however, no proof of payment was brought on record nor he was able to prove the rate of interest on which the loan was advanced.
The appellant-defendant also produced on record two other agreement to sell Ex. D-2 & Ex. D-3 qua the property in dispute.
The learned Courts below recorded a concurrent finding of fact that Ex. P-3 was not an agreement to sell but merely security for a loan transaction. The learned Courts in order to come to this conclusion relied upon the agreements to sell Ex. D-1 to Ex. D-3.
It was held that in fact there was transaction of loan between
the parties.
The decree for specific performance was declined.
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In view of the fact that loan transaction stood proved between the parties suit was ordered to be decreed for recovery of Rs. 3.50 lacs along with interest @ 6% per annum as envisaged under Section 34 of the Code of Civil Procedure.
The learned counsel for the appellant vehemently contends that once the learned Courts came to the conclusion that agreement Ex. P-1 was in fact not an agreement to sell no reliance could be placed thereon.
Initially the loan was only for a sum of Rupees one lac and, therefore, by applying the principles of “Damu Pat” the interest of more than the principal could not be awarded.
There is no force in the contention raised by the learned counsel for the appellant. Once a specific stand was taken by the appellant that there was a loan transaction between the parties and Ex. P-1 was security and contents of agreement were not disputed, the amount mentioned in the agreement was rightly taken to be loan amount. As no rate of interest was agreed or proved, the learned Courts below rightly decreed the suit for recovery of Rs. 3.5 lacs with interest @ 6 % per annum, as per provisions of Section 34 CPC.
The concurrent finding of fact recorded by the learned Courts below is not open to challenge in this second appeal.
No question of law much less substantial question of law arises for consideration by this Court.
Dismissed.
15.1.2009 ( VINOD K. SHARMA ) 'sp' JUDGE
3 issues framed by the court
Whether interest can be awarded exceeding the principal under the principles of 'Damu Pat' when agreed amount is treated as a loan.
Whether the concurrent finding of fact that Ex. P-1 was security for a loan transaction is open to challenge.
Whether a substantial question of law arises for consideration in this second appeal.
1 provisions across 1 enactments
Tarwinder Mohan Singh Bhatia
Amrik Singh & others
Vinod K. Sharma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
