IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN MONDAY, THE 29TH NOVEMBER 2010 / 8TH AGRAHAYANA 1932 AS.No. 62 of 2002() ---------------------------- OS.122/1996 of PRL.SUB COURT, KOTTAYAM .................... APPELLANT/PLAINTIFF: ---------------------------------- REMA DEVI, W/O. NARAYANAN NAIR, MAYABHAVAN, VADAKKUMBHAGOMKARA, CHIRAKKADAVU VILLAGE. BY ADV. SRI.V.B.PREMACHANDRAN, SRI.K.N.GOVINDANKUTTY MENON. RESPONDENTS/DEFENDANTS: --------------------------------------------- 1. SARASAMMA, W/O. RAJAPPAN PILLAI, VECHUKUNNEL HOUSE, KANJIRAPPALLY VILLAGE. 2. V.R. RADHAKRISHNAN, S/O. RAJAPPAN PILLAI VECHUKUNNEL HOUSE, KANJIRAPPALLY VILLAGE. 3. ANITHA, W/O. RADHAKRISHNAN, VECHUKUNNEL HOUSE, KANJIRAPPALLY VILLAGE. BY ADV. SRI.T.M.ABDUL LATHEEF THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 29/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs AS.No. 62 of 2002 ORDER ON C.M.P.NOs.611 & 1603 OF 2002 IN A.S. NO.62/2002 DISMISSED 29/11/2010. SD/- M.N.KRISHNAN, JUDGE //TRUE COPY// P.A. TO JUDGE rs M.N. KRISHNAN, J. = = = = = = = = = = = = = = = A.S. NO. 62 OF 2002 = = = = = = = = = = = = = = = Dated this the 29th day of November , 2010. J U D G M E N T This appeal is preferred against the judgment and decree passed by the Principal Subordinate Judge, Kottayam in O.S.122/96. The suit is one for return of the advance amount due under a contract. It is the case of the plaintiff that an agreement was entered into for the purchase of one acre and 46.2 cents of property from, the first defendant and one acre from defendants 2 and 3. The agreement was executed on 25.10.95 fixing the sale consideration at Rs.10,75,000/- and an advance amount of Rs.50,000/- was paid. The term of the agreement was for three years. It was also agreed that in the event of reduction in the extent of property proportionate reduction in A.S. 62 OF 2002 -2- sale value also has to be arrived at. When the property was measured 12 cents of property were found to be Government puramboke and therefore the plaintiff did not want to include it in the document. The defendants did not agree with the same and so ultimately the plaintiff has to rescind the contract. Therefore he prayed for the return of the advance amount. 2. On the other hand, the defendants would contend that the total breach is committed by the plaintiff. According to the defendants the property was measured and it was found four cents short of the actual extent and it was agreed to have a reduced rate for the same. But the plaintiff did not have proper fund with him, wanted to wriggle out of the contract and hence committed the breach. It is also contended that the defendant after the sale agreement had A.S. 62 OF 2002 -3- entered into an agreement for the purchase of one acre and 7 cents of property for a consideration of 11 lakhs and paid Rs.50,000/- as advance. When this contract was broken the defendants approached the other party for return of the advance amount but he did not agree and it was forfeited as per the terms of the agreement. Therefore the defendants had suffered damages on account of the breach of the contract committed by the plaintiff. Therefore it is submitted that the suit is liable to be dismissed. 3. In the trial court Exts. A1 to A3 and B1 to B6 were marked. PWs.1 and 2 and DWs.1 to 3 were examined. On an analysis of the materials the trial court has dismissed the suit. It is against that decision the plaintiff has come up in appeal. A.S. 62 OF 2002 -4- 4. Heard the learned counsel for the appellant as well as the respondent. Now the two points that arise for determination in the appeal are whether the plaintiff has committed the breach of the contract and even if it is so whether the defendants had sustained any damages and (2) whether the plaintiff is entitled to any refund of advance amount. 5. Now, admittedly, the sale agreement has been entered into between the parties on 25.10.95 with respect to two acres and 46½ cents of property covered by a document. The consideration was fixed at Rs.10,75,000/- and an advance amount of Rs.50,000/- was paid. The stipulated time in the contract was three months. There was also a recital in the agreement that if there is any shortage in the extent that has to be taken into consideration A.S. 62 OF 2002 -5- by reducing the total value. The plaintiff would contend that when an attempt was made to measure the property and when it was measured through PW2 it was found that there was a shortage of extent of 12 cents. But according to him the defendants insisted to include those 12 cents as well otherwise they were not prepared to part with the property. 6. On the other hand the defendants would contend that when DW2 who had accompanied PW2 was also involved in the measurement had found that the extent was reduced only by 4 cents and not 12 cents. PW2 is a Village Officer and DW2 is a Surveyor. One has to state that in no document of title puramboke land will be included and therefore it is always to be stated that puramboke land cannot be mixed up with the private land. Now one witness says it as 12 A.S. 62 OF 2002 -6- cents the other witness says it as 4 cents and in the notice issued by the plaintiff in favour of defendant it was stated that measurement was not taken. So there was an imperative duty on the part of the plaintiff to have taken some steps to measure the property so that the Court would have been in a position to understand the real difference in the extent of the land. The plaintiff has not done so and he has to blame himself for the same. When the property involved is two acre and 46½ cents since the ordinary human course of conduct is to get the property whichever is available to be measured and proceed with the transaction. Therefore I feel that there had been laches on the part of the plaintiff. 7. The defendants also should have co- operated in a better manner to know about the A.S. 62 OF 2002 -7- correct extent of the property and so it is only correct to hold that both the parties have contributed to the factum of the breach of contract. 8. Now the next question is whether the plaintiff is entitled to return of the advance amount. The question of total forfeiture arises only when it assumes the characteristic of an earnest money. Earnest money is in the form of a security for the purpose of the contract. But an amount of advance is a part of consideration and it becomes the part of the consideration when sale goes through. So this is the difference between the earnest money and an advance money. 9. Now the recitals in the document would show that the parties wanted this money to be treated as a part of consideration and it is A.S. 62 OF 2002 -8- described as really an advance amount. Then the doctrine of unjust enrichment will also come into play. Under S.74 of the contract Act it is stated when there is a breach and defendant suffers on account of the breach, is only entitled to a reasonable amount as compensation and not the entire amount. Now there is a case for the defendants that they had entered into an agreement for purchase of another property and on account of the failure by the plaintiff to perform this contract, they could not proceed with the transaction and the said person did not pay the advance which the defendants had paid. He had been examined as DW3 but the Court below felt that the evidence of DW3 is of a interested nature and one cannot rely totally upon that and so did not proceed to accept the evidence of DW3 as well. So the only method, left behind is to A.S. 62 OF 2002 -9- assess a reasonable compensation for the defendant and direct him to pay back the balance amount. After bestowing my best thoughts and also the nature of the contentions of the parties it is nothing but reasonable that the defendants could have suffered certain amount as damages on account of the attitude of the plaintiff. Therefore taking into consideration those aspects I feel that Rs.20,000/- can be given as damages to the defendant and therefore there should be a direction to pay the balance amount of Rs.30,000/- out of the advance amount. So I find the judgment and decree of the trial court requires interference. Therefore they are set aside and a decree is passed in favour of the plaintiff as follows: A.S. 62 OF 2002 -10- 10. The plaintiff is given a decree for realisation of an amount of Rs.30,000/- with 6% interest on the said sum from the date of suit till realisation and the defendants are directed to pay the same and the property which was the subject matter of agreement shall be a charge for the same. Considering the peculiar circumstances of the case, the parties are directed to bear their respective costs both in the suit as well as in the appeal. Sd/- M.N. KRISHNAN, JUDGE. ul/- [true copy] P.A. To Judge. A.S. 62 OF 2002 -11- M.N. KRISHNAN, J. = = = = = = = = = = A.S. No. 62 OF 2002 = = = = = = = = = = = J U D G M E N T 29th November, 2010.