Partly allowed

Chatla Veeraswamy, v. Penugonda Harinathababu

Telangana HC4 Oct 2013AS/101/2012

Case brief

AI extract

What is this about?

The High Court dismissed the appellants' appeal for specific performance of an agreement of sale for agricultural land. The court held that the appellants failed to establish continuous readiness and willingness and financial capacity to pay the balance consideration, as required by law. However, the advance amount paid is refundable with interest.

What did the court decide?

The appeal allowed in part; specific performance denied, but a decree for refund of Rs. 5,50,000 with 6% interest from 15.07.2006 granted.

Chatla Veeraswamy, Vs Penugonda Harinathababu — Specific Performance | Telangana HC (2013)

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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD

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FRIDAY, THE FOURTH DAY OF OCTOBER TWO THOUSAND AND THIRTEEN

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PRESENT

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THE HON'BLE SRI JUSTICE VILAS V. AFZULPURKAR

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APPEAL SUIT No.101 of 2012

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BETWEEN

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Chatla Veeraswamy and another.

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…APPELLANTS

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AND

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Penugonda Harinathababu.

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…RESPONDENTS

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Counsel for the Appellants: MR. M.L. ALI

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Counsel for the Respondent: MR. M.V.S. SURESH KUMAR For MR. S.D. GOWD

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The Court made the following:

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JUDGMENT:

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Unsuccessful plaintiffss in O.S.No.204 of 2007 on the file of the Senior Civil judge, Nuzvid, are the appellants. The aforesaid suit for specific performance of agreement of sale dated 03.07.2006 filed by the appellants was dismissed, on contest, under judgment and decree dated 24.11.2011.

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2. The bare facts, on the basis of which the suit was filed, are set out below and for the sake of convenience, the parties are referred to as they are

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arrayed in the suit.

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(a) The defendant is, admittedly, the owner and possessor of land admeasuring Ac.2.00 cents in R.S.No.127-P situated within Nuzvid municipal limits. It is alleged that in order to meet the necessities of the defendant, he had agreed to sell the said land (hereinafter referred to as the suit schedule property) to the plaintiffss for a consideration of Rs.8,50,000/and executed a suit agreement Ex.A1 by receiving advance consideration of Rs.2,00,000/-. It is stated that as per the agreement itself, out of the balance sale consideration, Rs.4,00,000/- was to be paid on or before 13.07.2006 and the remaining amount of Rs.2,50,000/- on or before 30.09.2006. It was further recited in the agreement that the defendant shall clear off all debts or encumbrance and get the land measured before 30.09.2006 and thereafter, register the sale deed in favour of the plaintiffs. It is further alleged that the plaintiffs approached the defendant with a sum of Rs.4,00,000/- but the defendant requested the plaintiffs to pay only Rs.3,50,000/- on 15.07.2006 on the ground that he is otherwise busy and accordingly, paid a sum of Rs.3,50,000/- on 15.07.2006, which was endorsed, accordingly, by the defendant on the reverse of Ex.A1 under endorsement Ex.A2.

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(b) It is alleged that, thereafter, on 30.09.2006 when the plaintiffs expressed their readiness and willingness to pay the balance amount and obtain registered sale deed, the defendant requested the plaintiffs to wait till 31.10.2006 and accordingly, endorsed on the suit agreement extending the time up to 31.10.2006 under Ex.A3. The defendant is alleged to have further extended the time up to 05.12.2006 as per endorsement Ex.A4 and thereafter, up to 10.02.2007 under endorsement Ex.A5. The plaintiffs, thereafter, alleged that though they approached the defendant on several occasions expressing readiness and willingness, the defendant postponed, from time to time, up to last week of April 2007 and thereafter, on 05.05.2007 addressed a letter Ex.A6 canceling

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the agreement and enclosed a demand draft for Rs.5,50,000/-.

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In response thereto, the plaintiffs sent a registered legal notice dated 14.05.2007 Ex.A7 and returned the demand draft. The defendant in turn replied to the said notice under his reply notice dated 09.06.2007 Ex.A9. The plaintiffs further alleged that they deposited the balance amount of Rs.3,00,000/-, in the account of the first plaintiff, in State Bank of India, Gampalagudem Branch and informed the defendant that they are ready to pay the balance consideration and take the sale deed. It is alleged that the defendant was obliged to get the land measured and provide title deeds and encumbrance certificate for 13 years, which the defendant has failed to do and as such, the present suit for specific performance came to be filed on 20.12.2007.

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(c) The defendant filed a written statement admitting the execution of Ex.A1 suit agreement but stated that the said agreement came to be executed as defendant needed the money for business expenditure for improving his joint family businesses along with his two sons. The defendant states that but for that he had no necessity to offer the schedule land for sale. It is stated that since the defendant was in urgent need of substantial finances, he wanted the sale consideration to be paid in one lump sum to enable him to utilize the amount for business purpose but on plaintiffs’ request three months time was granted to them making it clear that the balance amount of Rs.6,50,000/- is to be paid in the first installment of Rs.4,00,000/- on or before 13.07.2006 and balance of Rs.2,50,000/- on or before 30.09.2006. The defendant, therefore, admits the execution of the agreement and receipt of advance of Rs.2,00,000/- initially. It is also alleged that at the time of the said sale transaction, the defendant informed the plaintiffs that the title documents of the land are subject to mortgage in O.A.No.147 of 2003 pending before the Debts Recovery Tribunal, Visakhapatnam wherein the defendant is one of the guarantors and the original title deeds have to be obtained from DRT after finalization of the said

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case. It is, however, alleged that the plaintiffs had no objection for furnishing the original documents at the time of registration of sale deed and based on that understanding Ex.A1 transaction was entered into.

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(d) The defendant, however, states that the first installment was not paid on 13.07.2006 as agreed and two days, thereafter, on 15.07.2006 only Rs.3,50,000/- was tendered as against Rs.4,00,000/agreed. However, the defendant ignored the said minor lapse and received the said payment and endorsed accordingly in the suit agreement. It is, however, stated that the balance last installment payable on 30.09.2006 was never paid and though the defendant never extended the time for payment of balance consideration,

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when the plaintiffs approached the defendant and began demanding original title deeds, the defendant expressed inability on account of pendency of DRT case and further extensions under the endorsements are only for production of original title deeds.

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(e) The defendant, however, denied that any obligation is cast on him under Ex.A1 to clear off debts or furnishing encumbrances or measure the land. It is also alleged that the suit agreement is in the nature of a bill maktha, which means that the plaintiffs have agreed to purchase the suit schedule property for a sum of Rs.8,50,000/- lakhs irrespective of the extent of the land situated within the boundaries therein and as such, the question of measuring the land does not arise. The defendant, further, stated that in DRT proceedings, referred to above, he is only a surety and as the matter is being said to take more time, he was not in a position to obtain original title deed from DRT. It is further reiterated that the endorsements Ex.A3 to A5 relate to time extended for production of title deeds and not for payment of balance amount and since the plaint allegations do not state about payment of balance amount as per the agreed schedule, the plaintiffs were held not entitled to specific

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performance. It is stated that since the plaintiffs were repeatedly making demands for original title deeds and harassing the defendant, since the said performance became impossible, the contract stood frustrated under Section 56 of the Contract Act and it is in that context that the defendant cancelled the suit agreement under his notice dated 05.05.2007, Ex.A6. The readiness and willingness on the part of the plaintiffs was, therefore, denied as there was no allegation in the plaint that the balance money was offered on time as per the schedule fixed nor the suit was filed immediately.

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3. Based on the pleadings, as above, the trial Court framed the following issues for consideration:

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1. Whether the plaintiffs are entitled to get regular sale in their favour?

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2. To what relief?

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4. First plaintiff examined himself as P.W.1 and also examined P.W.2, who attested the endorsements, Exs.A3 to A5 and P.W.3, scribe of Ex.A1 and marked Exs.A1 to A11 reference to which is already made in the paragraphs above. The defendant examined himself as D.W.1 but did not adduce any documentary evidence.

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5. The trial Court, on consideration of evidence, came to the conclusion that the plaintiffs’ version that though the plaintiffs offered first installment of Rs.4,00,000/- on 13.07.2006, the defendant has, allegedly, agreed to receive only Rs.3,50,000 that too two days after the due date, is improbable and unbelievable and such contention is raised only to get over the default of the plaintiffs in paying Rs.4,00,000/- on or before 13.07.2006. Similarly, the trial Court also disbelieved the plaintiffs’ contention that they offered balance amount of Rs.3,00,000/- on 30.09.2006, as there was no such mention in the notices preceding the suit. The readiness and willingness of the plaintiffs was also not accepted by the trial Court, as the balance amount was neither

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offered to the defendant nor deposited in any of the banks and disbelieving the bonafides of the plaintiffs, the relief of specific performance was denied.

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6. I have heard Mr. M.L. Ali, learned counsel for the appellants and Mr. M.V.S. Suresh Kumar, learned counsel appearing on behalf of the respondent.

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7. In this appeal, Mr. M.L. Ali, learned counsel for the appellants, vehemently contended that the suit agreement, Ex.A1, as well as the endorsements, Exs.A2 to A5, having been admitted by the defendant, it cannot be said that the plaintiffs have committed any default in complying with their obligation, as the defendant himself endorsed in Ex.A1 that he is extending time. Learned counsel also points out that though the defendant himself states in the written statement that he ignored and condoned the payment of Rs.3,50,000/- on 15.07.2006, as against Rs.4,00,000/- by 13.07.2006, it was not open for the trial court to once again find fault with the plaintiffs. Learned counsel also contends that unilateral cancellation of the agreement under Ex.A6 dated 05.05.2007 by the defendant was clearly unsustainable, as the plaintiffs were not at fault and it is the defendant, who was unable to produce the original title documents. Further, the readiness and willingness of the plaintiffs, according to the learned counsel, was established by the fact that the plaintiffs have deposited the balance amount in SBI account of the first plaintiff and duly informed the defendant, as per the subsequent exchange of notices, Exs.A7 to A10.

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8. Learned counsel place reliance upon cross-examination of D.W.1 wherein the defendant stated that he had not issued any notice in writing demanding payment of balance sale consideration, as the plaintiffs were visiting him once in 10 to 15 days. It was also suggested to him that subsequently as IIIT was being established at Nuzvid within two furlongs of the suit schedule property and thereby, there was a hike in prices of land

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because of which the defendant cancelled the suit agreement. It was also suggested to him that the plaintiffs were never informed of disputes before the DRT.

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Learned counsel also placed reliance upon the evidence of P.W.2, who is a witness to all the endorsements, Exs.A2 to A5, who states that he was present when the defendant extended the time for his own reasons. Learned counsel also points out that under Ex.A6 unilateral cancellation effected by the defendant also there is no allegation of default against the plaintiffs.

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9. On the question of law, learned counsel submits that time was not the essence of the contract, as the defendant himself went on extending the time under endorsements, Exs.A3 to A5.

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Learned counsel placed strong reliance on the following decisions, reference to which will be made appropriately in the paragraphs hereunder.

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[1] R.R. GOPAL SAINCHAR v. RAJENDRA PRASAD ; FAQUIR [2] CHAND AND ANOTHER v. SUDESH KUMAR I ; G. RAMANAMMA v.

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P. CHIRANHEEVI RAO^[3] ; K. VIJAYA LAKSHMI v.

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G. VENKATESWARA PRASAD^[4] ; PYDI RAMANA @ RAMULU v. [5] DAVARASETTY MANMADAHA RAO ; CHIINTAKAYALA SIVARAMAKRISHNA v. NADIMPALLI VENKATA RAMA RAJU^[6] and T.M. JAYARAMA REDDY v. BINGI SREERAMAIAH CHETTY^[7]

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10. Mr. M.V.S. Suresh Kumar, learned counsel for the respondent, on the other hand, contends that though the trial Court has dismissed the suit under issue No.1, it has considered that the plaintiffs have failed to aver and establish that they had necessary funds available and that they were ready and willing to discharge their obligation. Learned counsel points out that after

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the last extension, Ex.A5 up to 10.02.2007 till the letter of cancellation of the defendant under Ex.A6, there is no action whatsoever on the part of the plaintiffs to establish readiness and willingness. Learned counsel, further, points out the improbability in plaintiffs’ case wherein it is contended in the plaint that though the plaintiffs went with Rs.4,00,000/- of first installment on 13.07.2006, the defendant requested to pay only Rs.3,50,000/- on 15.07.2006 and submits that the trial Court had rightly commented that such conduct on the part of the defendant is improbable as no vendor would decline to receive the amount, if offered on time, as fixed under the contract. Learned counsel submits that such plea is taken by the plaintiffs only to get over the default committed by them in complying with the fulfillment of first installment of Rs.4,00,000/- under the agreement.

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11. Learned counsel also submits that there is no proof of availability of funds with the appellant/plaintiffs and refers to the relevant portion of evidence of P.W.1 where he states that “… It is true there is no piece of document to show that I was in possession of Rs.3,00,000/- with me except my oral evidence...” Learned counsel further submits that the plaintiffs have examined P.W.2, who states that he was present on all dates of endorsements, Exs.A2 to A5 and that “…The said amount was kept on the table on every occasion but the defendant has not received the said amount on all 3 occasions…” According to the learned counsel, it is improbable to believe such statement. Further, P.W.3, who scribed Ex.A1, states that the entire transaction took place in his presence. It was pointed out from his cross-examination that “…On 30.09.2006, plaintiff No.1 alone approached me at Mylavaram and represented that I have to measure the suit land on that day itself and also stated that he will pay the balance of amount to the defendant on the same day and get registration of regular sale deed. Accordingly, myself and P.W.3 came over to Nuzvid for that purpose. P.W.1 brought the amount but not paid the amount to the defendant on the above said date. Learned counsel, therefore, criticizes the said evidence to point

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out the improbability in plaintiffs’ case and submits that the absence of readiness and willingness on the part of the plaintiffs is evident from the improbable pleas raised coupled with the fact that there is no averment in the plaint to offer balance consideration on or before the due date nor there is any evidence in support of even the further plea of the plaintiffs that he deposited Rs.3,00,000/- in his savings bank account in SBI, Gampalagudem branch. Learned counsel explains the letter of cancellation given by the defendant, as the defendant states in the evidence that one Lazarus acting on behalf of the plaintiffs started threatening the defendant whereupon he cancelled the agreement.

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12. Learned counsel placed reliance upon a latest decision of the [8] Supreme court in J.P. BUILDERS v. A. RAMADAS RAO where the Supreme Court specifically interpreted Section 16 of the Specific Relief Act, particularly, clause (c) thereof to hold that the compliance with the readiness and willingness is a condition precedent for obtaining relief of grant of specific performance and the plaintiffs must aver continuous readiness and willingness, which has to be assessed from the entirety of the facts and circumstances and the intention and the conduct of the party concerned.

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13. In the light of these rival contentions, the following points arise for consideration:

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1. Whether the appellants/plaintiffs have established his readiness and willingness to perform the contract, as required under Section 16(c) of the Specific Relief Act?

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2. Whether the discretion exercised by the trial Court under Section 20 of the Specific Relief Act is justified on the facts and circumstances of the case?

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Point No.1:

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14. It is significant to notice from the plaintiffs’ averments that in the entire plaint the financial capacity of the plaintiffs is not averred nor as to the manner in which the plaintiffs had raised the sale consideration amount of Rs.8,50,000/-. It is also to be remembered that the defendant is an established businessman having exclusive properties and businesses in the name of Brindavan Rice and Flour Mill, Brindavan General Stores and Tata Idea Cellular Showroom at Nuzvid. That the defendant intended to raise the money by selling the schedule property for the purpose of opening another showroom as per the demand of Tata Ideal Cellular Company and for augmenting stocks in the existing businesses. Thus, only for meeting the aforesaid business expenditure, he contemplated selling of suit land for a substantial consideration of Rs.8,50,000/- and pleads that the defendant was in need of entire money in lump sum but on the request of the plaintiffs agreed to give them three months time. Though the suit agreement is dated 03.07.2006 whereunder the defendant received Rs.2,00,000/-, it is significant to notice that within 10 days, thereafter, first installment of Rs.4,00,000/- was fixed on or before 13.07.2006 and the last installment of Rs.2,50,000/- on or before 30.09.2006. The said agreed schedule of payment, therefore, was necessary to be fulfilled by the plaintiffs, who were seeking discretionary relief of specific performance.

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15. In the light of these circumstances, it is evident that except for augmenting business resources, there was no other need for defendant to agree to sell the suit schedule property. Viewed at this angle, therefore, the time fixed for performance to discharge the obligation viz. to pay the balance sale consideration on the date fixed, makes time the essence of the contract, which also justifies that simultaneously with execution of Ex.A1, on payment of Rs.2,00,000/- within ten days, the first installment of Rs.4,00,000/became payable and at the request of the plaintiffs, they were granted time up to 30.09.2006. Thus, in an action for specific performance of the contract,

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the payment of amount on the due dates ought to have been fulfilled by the plaintiffs, which in other words being the requirement of Section 16(c) of the Specific Relief Act.

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16. A substantial argument is raised by the learned counsel for the appellants with regard to endorsements Exs.A2 to A5, all of which were, admittedly, made by the defendant. Exs.A2 to A5 were written in Telugu language and they were got translated into English language by the official Translator of this Court with consent of learned counsel for the parties. The translated endorsements of Exs.A2 to A5 read as under,

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Ex.A2:

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“This Agreement of loan amount of Rs.3,50,000/(Rupees Three Lakhs Fifty Thousand only) was received today, on 15.07.2006, as you have paid to me.”

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Sd/- Sd/P. Dhana Rao 15.07.2006 Ex.A3: 30.09.2006

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“As per my request, the time limit decided in this agreement was extended up to 31.10.2006. It is decided that I should give possession of my original Sale Deed and get the sale property registered.

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It is written with my consent. “

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Witnesses:

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1. P. Dhana Rao Sd/2. T. Lazarus xxx

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Scribe by Pagadala Sambasiva Rao

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Ex.A4: 31.10.2006

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“The stipulated period decided as per this agreement is further extended upto 05.12.2006 as per my wish and so agreed accordingly.

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It is written with my consent.”

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Witnesses:

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1. P. Dhana Rao Sd/2. T. Lazarus xxx Scribe by Pagadala Sambasiva Rao

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Ex.A5:

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“The stipulated period decided as per this agreement, is further extended upto 10.02.2007 as per my wish and so agreed accordingly.”

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Sd/- Sd/P. Dhana Rao 6/2/2007”

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17. It would be evident from the above endorsements, particularly, Ex.A3 that when the plaintiffs insisted upon production of original title deeds and documents, the defendant sought additional time for that purpose, as the documents were with DRT. It is difficult to accept the contention of the plaintiffs that by virtue of the said endorsements the payment of last installment under Ex.A1 was postponed or extended beyond 30.09.2006. The endorsements by themselves do not give rise to such a conclusion apart from the fact that such a conclusion would be contrary to the intention of the defendant behind entering into the transaction of sale. As stated above, the defendant had agreed to sell the schedule property only to raise finances as early as possible for his business venture. It is, therefore, difficult to accept that the defendant would have agreed to voluntarily extend the time for payment even beyond 30.09.2006. The evidence of P.W.2 that every time the plaintiffs called upon the defendant and the money was kept on the table is also unbelievable as P.W.1 did not state so and if the sale is being resorted to by the defendant for the sake of raising monies, it is highly improbable and unbelievable to accept the plaintiffs’ claim that on 13.07.2006

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though they went with Rs.4,00,000/- as first installment, the defendant agreed to receive only Rs.3,50,000/- that too on 15.07.2006 and that when the plaintiffs went to pay the last installment on 30.09.2006, the defendant voluntarily kept on postponing the receipt of balance amount beyond 30.09.2006. Such plea, therefore, is inconsistent with the circumstances under which Ex.A1 transaction took place between the parties.

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18. Readiness and willingness of the plaintiffs is also required to be examined from the point of view of his ability to pay the sale consideration. The only evidence, which we find from his statement as P.W.1, is with regard to arrangement relating to Rs.3,00,000/- payable by 30.09.2006. P.W.1 states that “ Myself and the second plaintiff are classmates … I am a Government employee and 2^nd plaintiff is also a Government employee… Out of total amount paid under Ex.A1 I paid Rs.3,00,000/- where as second plaintiff paid Rs.2,00,000/- and I also paid Rs.50,000/- … Myself and 2^nd plaintiff perused the Photostat copy of the sale deed of the defendant … Just 2 days prior to Ex.A1 we went to plaint schedule land and inspected the same … We have not enquired the defendant about encumbrances on the plaint schedule property on or before execution of Ex.A1.” Admittedly, the plaintiffs had not obtained any encumbrance certificate before the execution of the agreement but they state that the required amount was with them to pay the balance amount of 30.09.2006. In the said Rs.3,00,000/- there is no amount belonging to the second plaintiff and he states that Rs.3,00,000/- was kept with his mother-in-law from 30.09.2066 till the date it was deposited in the savings bank account of the first plaintiff. The plaintiffs are, however, unable to state the source of his mother-in-law, who is said to be an agriculturist. Plaintiffs states that even out of Rs.3,00,000/-, his mother-in-law gave him Rs.2,00,000/- one week prior to 30.09.2006 and the remaining Rs.1,00,000/- is out of his savings. There is, however, no evidence in support of the aforesaid claim, nor availability of funds with the mother-in-law

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of the plaintiffs is established nor there is any evidence of deposit of Rs.3,00,000/- in his own savings account in SBI, Gampalagudem branch.

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19. On the mere oral submission of the first plaintiff, who is a Government employee and who has hardly savings of Rs.1,00,000/-, it is difficult to accept that they agreed to purchase the suit schedule property for Rs.8,50,000/- and tendered the amounts on the dates fixed in the agreement. Even out of payment of advance amount on the date of Ex.A1 also the contribution of the first plaintiff is only Rs.50,000/- whereas the second plaintiff is said to have paid the substantial amount. The readiness and willingness, as contemplated under Section 16(c) of the Specific Relief Act, is required to be established by the plaintiffs in a specific performance suit satisfying the Court that they were continuously ready and willing to discharge their obligation.

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20. As held by the Supreme Court in J.P. BUILDERS’s case (8 supra), if the plaintiff fails to aver and prove readiness and willingness, he must fail and the conduct of the plaintiffs prior and subsequent to the suit along with other circumstances become relevant. As noted earlier in this judgment, there is no averment in the plaint supporting the plaintiffs’ case that on 30.09.2006 the plaintiffs had offered the balance amount to the defendant and the only averment in para 4 is that plaintiffs expressed their readiness and willingness and because the defendant requested them to wait by extending time, the plaintiffs did not pay the balance amount, as the defendant himself expressed his disinterest to receive the sale consideration amount. Such an averment does not fit into the natural course of events and the conduct of a vendor, who has agreed to sell the property to raise money for his business. The trial Court, though has not considered these aspects in detail, has ultimately reached the correct conclusion and has declined to exercise discretion in favour of the plaintiffs.

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21. Learned counsel for the appellants relied upon several decisions, as referred to above and it is necessary to refer to the ratio of the said decisions. However, on the analysis of the evidence, as above, the ratio of the decisions cited by the learned counsel for the appellants would not assist the appellants on the facts and circumstances of the case.

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22. The decision in R.R. GOPAL SAINCHAR’s case (1 supra) is relied upon reiterating the principle under Section 16(1)(c) of the Specific Relief Act. The decision in FAQUIR CHAND’s case (2 supra) has also held that compliance of readiness and willingness has to be in principle and substance and not in letter and form and must be seen from the conduct as continuous readiness and willingness.

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The decision in G. RAMANAMMA’s case (3 supra) was really a case considering exercise of discretion under Section 20 of the Specific Relief Act where it was held that the conduct of the parties, length of time when the plaintiff approaches the Court and inability of the plaintiff to establish the contentions and pleas raised in the plaint are all collectively required to be taken into consideration for the purpose of exercise of discretion under Section 20 of the Specific Relief Act. The decision in K. VIJAYA LAKSHMI’s case (4 supra) was a case where this court in a second appeal was examining concurrent findings of both the Courts holding that the plaintiff is entitled to specific performance. Readiness and willingness of the plaintiff was considered and the decree was not disturbed. The decision in PYDI RAMANA @ RAMULU’s case (5 supra) considered Section 16(c) as well as Section 20 of the Specific Relief Act where on facts the plaintiff had proved readiness and willingness. Similarly, the issue of readiness and willingness was considered in the decision of the Division Bench of this court i n CHIINTAKAYALA SIVARAMAKRISHNA’s case (6 supra) where on facts it was found that the plaintiff was not ready and willing. Further decision i n T.M. JAYARAMA REDDY’s case (7 supra) was a case where the

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capacity of the plaintiff to pay the amount was not in doubt and it was held that it was not necessary for the plaintiff to deposit balance money into the Court. As stated above, the latest decision of the Supreme Court in J.P. BUILDERS’s case (8 supra) has authoritatively laid down the object and purpose of insertion of clause (c) in Section 16 of the Specific Relief Act as per recommendations of the 9^th Law Commission’s Report.

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The plaintiffs, on facts, having not satisfied the aforesaid requirement, point No.1 is answered against the appellants/plaintiffs.

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POINT No.2:

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23. In view of finding on point No.1, the question as to discretion does not arise. Hence, that aspect is answered accordingly. However, admittedly, the plaintiffs have paid Rs.5,50,000/- to the defendant. The trial Court while dismissing the suit, however, has not directed refund of the said amount. It is well settled that when a suit for specific performance is dismissed normally, the Court would order refund of the amount, admittedly, paid by the plaintiffs to the defendant unless the terms and conditions of the agreement provide for forfeiture of the said amount and a finding is reached that the said forfeiture is envisaged on account of default committed by the plaintiffs. In the present case, neither there is any forfeiture clause in the agreement nor there is any reason as to why the said amount is not refundable to the plaintiffs. In fact, the defendant himself had tendered the amount by way of demand draft along with Ex.A6.

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24. I am, therefore, of the view that though appellants/plaintiffs are not entitled to the relief of specific performance of the agreement of sale, they are entitled to the refund of the said admitted amount of Rs.5,50,000/-. However, the said amount in the aggregate having been paid to the defendant on 15.07.2006, the defendant is also required to refund the said amount with reasonable interest on par with interest accrued on a savings

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bank account.

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25. While confirming the judgment and decree of the trial Court and denying the primary relief of specific performance of the agreement of sale to the appellants/plaintiffs, a decree for refund of the advance amount of Rs.5,50,000/- (Rupees Five Lakhs Fifty Thousand) is granted to the appellants/plaintiffs with interest at 6% per annum from 15.07.2006 till payment.

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The appeal suit is, accordingly, allowed in part. As a sequel, the miscellaneous applications, if any, shall stand closed. In the circumstances, there shall be no order as to costs.

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_____________________ VILAS V. AFZULPURKAR, J

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October 4^th 2013 DSK

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[1] 1997 (1) ALD 25 (DB) [2] 2006 (7) SUPREME 388 [3] 2010 (4) ALD 799 [4] 2012 (2) ALD 18 [5] 2011 (5) ALD 362 [6] 2012 (4) ALD 183 (DB) [7] 2000 (4) ALT 81 (DB) [8] (2001) 1 SCC 429

Chatla Veeraswamy, v. Penugonda Harinathababu

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Chatla Veeraswamy, v. Penugonda Harinathababu

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