IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH THURSDAY, THE 26TH FEBRUARY 2009 / 7TH PHALGUNA 1930 AS.NO. 29 OF 1997() ------------------------------- OS.179/1993 OF PRL.SUB COURT,KOTTAYAM .................... APPELLANT(S) - DEFENDANT: ----------------------------------------- N. CHANDRASEKHARAN NAIR, S/O. NEELAKANTA PILLAI, SREEVARAHATH AT ULLALA, NOW RESIDING AT WATER AUTHORITY QUARTERS A-MULLAKKAL, THIRUMALA WARD, ALAPPUZHA. BY ADV. SRI.V.SIVASWAMY SRI.V.V.ASOKAN RESPONDENT(S) - PLAINTIFF: ----------------------------------------- VINI JOY, W/O.JOY JOSEPH, RESIDING AT ILLICKAL, PADINJATTUMCHERIMEL, PADINJAREMURI, NADUVILE VILLAGE, VAIKOM. ADV. SRI.MATHEW PHILIP EDAPPALLIL THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 26/02/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P.JOSEPH, J. = = = = = = = = = = = = = = = = = = = = = = = = A.S. No.29 of 1997 = = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 26th day of February, 2009 J U D G M E N T ---------------------- By the impugned judgment the learned Sub Judge, Kottayam directed the appellant to return the sum of Rs.50,000/- taken as advance sale consideration with interest at the rate of 18% per annum from the date of suit till date of decree and thereafter at 6% till realisation. 2. It is not in dispute that the appellant executed Ext.A1, agreement for sale dated 19.7.1992 in favour of the respondent agreeing to sell 62 cents of land and building thereon for a total consideration of Rs.6,10,000/- fixing the period of agreement as six months. It is conceded by both sides that the appellant took Rs.1,000/- as token advance on 29.6.1992 followed by another sum of Rs.49,000/- on the date of Ext.A1 agreeing that the amount will be adjusted in the sale consideration when sale deed is executed. On 18.1.1993 respondent issued Ext.B1, notice rescinding the contract stating that the appellant has no marketable title over the property agreed to be sold, there was liability outstanding with the Life Insurance Corporation of India for which the property was mortgaged which fact was not disclosed to the respondent at the time of Ext.A1, A.S. No.29 of 1997 -: 2 :- appellant failed to discharge that liability and produce the encumbrance certificate of the original title deed and also to measure the property to the satisfaction of the respondent. Appellant received that notice on 23.1.1993 and sent Ext.A3, reply dated 27.1.1993 denying the said allegations and contending that a few days before the day on which the period of six months was to expire, the husband of the respondent approached him with a request for time since he was not able to raise the balance sale consideration by that time. Appellant also expressed his willingness to execute the sale deed as per Ext.A1. Respondent however, was not inclined to accept that suggestion and proceeded to file the suit seeking recovery of the advance sale consideration with interest at the rate of 24% per annum. Appellant filed written statement taking up similar contentions as stated in Ext.A3, reply notice. Appellant also contended that since the respondent committed breach he suffered huge loss in that he had to sell the property for a lesser amount and that expecting the transaction as per Ext.A1 to go through, he had agreed to purchase another item of property for which he had raised a loan and paid interest on such amount. Learned Sub Judge found that the breach was on the part of the appellant and granted decree in favour of the A.S. No.29 of 1997 -: 3 :- respondent as aforesaid. Hence this appeal. 3. Learned counsel for the appellant contended that finding of the learned Sub Judge that the appellant was at breach is not sustainable or justified in the light of the evidence on record. It is also submitted by the learned counsel that learned Sub Judge was carried away by the fact that appellant was involved in a vigilance case during the relevant time. Learned counsel contended that it was uncharitable to describe the appellant as “a self-proclaimed cheat” as seen from paragraph 27 of the judgment. Learned counsel for the respondent contended that breach was on the part of the appellant and hence the respondent is entitled to get back the advance money. 4. There is no dispute that the appellant had executed agreement in favour of the respondent and that by the time Ext.A1 was executed, he received Rs.50,000 as advance. So far as advance money is concerned, it becomes part of the sale consideration when the transaction goes through and as distinguished from earnest money even if the proposed vendee is at breach, the vendor is bound to return the advance money. But of course he is entitled to adjust the advance money in case he has suffered any loss on account of the breach committed by the vendee. In this case appellant has a A.S. No.29 of 1997 -: 4 :- contention that he suffered loss and is entitled to adjust the advance sale consideration towards such loss. Hence it has become necessary to consider whether the breach was on the part of the respondent. 5. Though respondent has a contention that the building referred to in Ext.A1 and agreed to be sold had several cracks which affected the structural soundness of the building itself, in the absence of appropriate evidence in that regard learned Sub Judge did not uphold that contention. What remains is whether the appellant had a marketable title over the property at the time of Ext.A1 and even by the day on which the time stipulated in Ext.A1 expired and whether as agreed in Ext.A1, property was measured to the satisfaction of the respondent. Since the respondent and her husband were abroad during the relevant time P.W.1, brother of the husband of the respondent gave evidence. Appellant gave contra evidence as D.W.1. D.W.2 is an attester in Ext.A1 who admitted that he negotiated the sale of the property. P.W.2 was examined for the respondent to prove the alleged damage of the building but his evidence is not germane for consideration in the light of the finding of the learned Sub Judge which I have stated above. 6. Facts remained that even as on the date of Ext.A1 and A.S. No.29 of 1997 -: 5 :- the day on which the period stipulated therein expired (18.1.1993), appellant owed Rs.1,20,000/- to the LIC of India as certified in Ext.A2 and admitted by the appellant also when examined as D.W.1. He also admitted that the original title deed of the property was pledged with the LIC as security for the due repayment of the loan. According to him, a photocopy of that sale deed was given to P.W.1 for perusal. P.W.1 however denied that. Learned counsel for the appellant contended that P.W.1 is a practising lawyer and hence it is unlikely that without perusing at least the photocopy of the sale deed he would have agreed to his brother and brother's wife purchasing the property. P.W.1 stated that he was under the impression that his brother (husband of the respondent) had talked about those matters with the appellant. That apart in Ext.A1 there is no reference to the liability outstanding with the LIC of India on the date of that agreement. On the other hand, what is stated in Ext.A1 is that appellant would produce necessary encumbrance certificate to show that there was no liability over the property. It is not as if in Ext.A1 it is stated that there was a liability outstanding with the LIC of India which the appellant would discharge within the period of six months. On the other hand, the impression one gets from the relevant clause in A.S. No.29 of 1997 -: 6 :- Ext.A1 is that there was no such liability over the property which fact the appellant would convince the respondent by producing necessary encumbrance certificate. But it turned out as I stated above that there was a liability outstanding with the LIC of India on the date of Ext.A1. There is no case for the appellant that the said liability was discharged within the period stipulated in Ext.A1 or even on the date of Ext.A3, reply. Appellant did not also get the encumbrance certificate to convince the respondent that there was no other liability over the property. Thus a breach has been committed by the appellant in that regard. 7. Now as regards measuring the property is concerned, it is nobody's case that at the time of Ext.A1 the property agreed to be sold was measured. According to the appellant he had measured the property in the presence of D.W.2, broker as agreed to by both sides and D.W.2 was satisfied about the extent and measurement. D.W.2 denied that and claimed that in his presence no such measurement was taken. If that be so, again there was failure on the part of the appellant in convincing the respondent as to the extent of the property agreed to be sold and its measurement. This assumes importance in the light of the admitted fact that one side of the said A.S. No.29 of 1997 -: 7 :- property was a Thodu and in between, there is a puramboke as well though according to the appellant, the property was well bounded on all sides. 8. Learned counsel for the appellant then contends that the conduct of the respondent in waiting upto the last day of the period referred to in Ext.A1 and issuing Ext.B1 notice on the last day rescinding the contract is suspicious. According to learned counsel for appellant by Ext.A3 dated 27.1.1993 appellant expressed his willingness to perform his part of the agreement. But that also is of no avail since Ext.B1 was sent only on the last day of the period of six months referred to in Ext.A1. I find no reason to interfere with the finding entered by the learned Sub Judge that the appellant was at breach. 9. Assuming that breach was on the part of respondent, next question is whether the appellant has suffered loss on account of that. Though he claimed that he had to sell the property referred to in Ext.A1 for a lesser price, even his own evidence would show that the actual sale consideration and the one shown in the sale deed differed. With regard to the loss in that way and his agreeing to purchase another item by raising loan and suffering loss on account of A.S. No.29 of 1997 -: 8 :- payment of interest, what is available is only the interested version of the appellant. Relevant documents are not produced. Therefore in that respect also the contention of the appellant cannot be accepted. 10. So far as the observation made by the learned Sub Judge regarding the nature and character of the appellant as referred to in paragraph 27 of the judgment is concerned, I make it clear that the said observation was unnecessary for the decision of the case and the circumstances did not warrant such an observation. 11. It is lastly argued by the learned counsel for the appellant that the learned Sub Judge was not justified in directing the appellant to pay interest at the rate of 18% per annum from the date of suit till date of decree. Learned counsel requested that the rate of interest may be modified as 6%. 12. So far as rate of interest is concerned, there is no contract between the parties stipulating payment of interest though Ext.A1 enabled the respondent to realise damages from the appellant in case of breach. In the facts and circumstances of the case and considering the rate of interest prevalent in Nationalised Banks during the relevant time I am satisfied that interest at the rate of 9% from the date of suit till date of decree and thereafter as directed by the learned Sub Judge A.S. No.29 of 1997 -: 9 :- will be sufficient in the ends of justice. The judgment and decree passed by the learned Sub Judge are modified accordingly. Resultantly the appeal is allowed in part in the following lines: (i) The interest payable by the appellant from the date of suit till date of decree on the principal sum of Rs.50,000/- is modified as 9% per annum. (ii) In all other respects the judgment and decree of the court below are confirmed. (iii) Parties are directed to suffer their respective costs in this appeal. Civil Miscellaneous Petition Nos.196 and 3328 of 1997 shall stand dismissed. THOMAS P.JOSEPH, JUDGE. vsv THOMAS P.JOSEPH, J. =================== A.S. NO.29 OF 1997 =================== J U D G M E N T 26TH FEBRUARY, 2009