IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD TUESDAY, THE THIRTIETH DAY OF AUGUST TWO THOUSAND AND ELEVEN PRESENT THE HON'BLE SRI JUSTICE K.C.BHANU APPEAL SUIT NO.260 OF 2011 Between : Smt Bommireddy Padma …APPELLANT A N D Union of India. …RESPONDENT THE HON'BLE SRI JUSTICE K.C. BHANU APPEAL SUIT NO.260 OF 2011 JUDGMENT: The appeal is directed against the judgment and decree, dated 04.02.2011 in O.S.No.692 of 2007 on the file of the II Additional Senior Civil Judge, Kakinada, whereunder and whereby, a preliminary decree was passed directing the respondents herein/defendants to execute the sale deed in pursuance of an agreement, dated 27.03.2005 in respect of the plaint schedule property after depositing the balance sale consideration, which would be arrived at after considering the value of Ac.1.00 of land in the plaint schedule property as Rs.5,00,000/- along with interest @ 24% per annum on such balance sale consideration from the date of agreement of sale till deposit to the suit account towards balance sale consideration 2. The brief facts that are necessary for disposal of the appeal may be stated as follows: The schedule property originally belonged to one Mohammad Ghouse. He died in the year 1976. He got five sons namely Sabuddin, husband of 1st defendant and father of defendant Nos.2 to 4, and defendant Nos.5 to 8. After the death of Md.Ghouse, Shabuddin being he eldest son managed the schedule property and as such the pattadar passbook and the title deed etc, were given in the name of Md.Shabuddin. He died on 13.03.2000. Later defendant No.5 was looking after the affairs of schedule property being the next elder in the family. It is stated that the schedule property is an extent of Ac.1.63 cents of land in Survey Nos.35/6, 38/7 and 38/13; whereas it is actual extent on measurements is Ac.1.23 cents. The plaintiff was inducted as tenant in the schedule property on 12.07.2002 for a term of two years. The plaintiff paid an amount of Rs.1,00,000/- to defendant Nos.1 and 5 on no rent (Maktha) and no interest basis. The said amount had to be returned after two years. But, however, the lease has been extended from time to time and it is subsisting. Defendant Nos.5 and 6 on their behalf and on behalf of the other defendants offered to sell away the schedule property at Rs.4,00,000/- per acre. They executed a sale agreement, dated 27.03.2005 in favour of the plaintiff and received advance of Rs.2,20,000/-. It is agreed that the sale deed is to be obtained within two months after measuring the land. Later the 5th defendant received another sum of Rs.20,000/- on 13.03.2006. On mutual discussions the rate was fixed and further enhanced to Rs.5,00,000/- per acre instead of Rs.4,00,000/- and it was accepted by the plaintiff. As per the letter-receipt, dated 13.03.2006, the sale deed is to be executed by May 2006, as per the measurements of the land. At the time of the sale agreement itself the defendants handed over the passbook and the title deed and other relevant record pertaining to the schedule property to the plaintiff. Later the plaintiff demanded the defendants repeatedly to execute the sale deed and perform their part of the contract after receiving the balance of sale consideration at the enhanced rate, personally and through elers. The defendants refused to do so on one pretext or the other. Therefore, the plaintiff got issued a legal notice, dated 26.06.2007 to the defendants. They received the said notice and got issued a reply notice, dated 03.07.2007, admitting the tenancy from 12.7.2002, payment of advance of Rs.1,00,000/- in pursuance of lease, execution of agreement of sale etc. In the capacity of tenant, the plaintiff is in possession an enjoyment and cultivating the schedule property. The defendants have to execute a sale deed after receiving balance of sale consideration. Hence, the suit. 3. Defendant Nos.2 to 4 remained ex parte. The 5t h defendant filed written statement which was adopted by defendant Nos.1, 6 and 7. They contended that the schedule property originally belonged to Md.Ghouse and he died in the year 1976. After his death, the husband of 1st defendant managed the said property and hence, pattaar passbook and title deeds were issued in his name. After his death, defendant Nos.5 and 6 are looking after the schedule property as the agents of 1st defendant. The entire extent is Ac.1.63 cents but not Ac. 1.23 cents. The plaintiff had taken lease of the schedule property for a period of two years from 12.07.2002 and paid Rs.1,00,000/- as advance on no interest and no maktha basis. After expiry of the lease period, the defendants tried to return the said advance amount, but the plaintiff did not receive the same with an evil intention to grab the property by one way or the other. There was no extension of lease subsequently. He has been continuing there as a trespasser and not as a cultivating tenant. The 1st defendant wanted to sell away the property and she sent a word to the plaintiff through the 5th defendant. The plaintiff agreed to purchase the same for Rs.5,00,000/- per acre and paid Rs.1,00,000/- but not Rs.2,20,000/- as alleged in the plaint. As per the 8th condition of the said agreement, the plaintiff agreed to purchase the land at the prevailing market rate at the time of his purchase. He executed an unregistered sale agreement for the property and agreed to purchase the same and the time is fixed as two months from the date of agreement. Time is essence of the contract. The said agreement is not admissible in law. The present market rate per acre is more than Rs.10.00 lakhs and the defendants demanded for the same. On that the plaintiff raised dispute before the elders who advised the plaintiff to pay the prevailing market rate for which the plaintiff did not agree. As the plaintiff failed to comply with the conditions laid in the agreement, defendant Nos.1, 5 and 6 got a legal notice issued to the plaintiff informing that the sale agreement stands cancelled. After receipt of the said notice, the plaintiff filed ATC No.25 of 2006 against the defendants Nos.1, 5, 6 and 7. The plaintiff has no right to file the suit for specific performance of agreement of sale, dated 27.03.2005 which stands cancelled by the defendants as the plaintiff failed to comply with the conditions in the said agreement. The defendant got issued a legal notice, dated 10.11.2006, to the plaintiff informing that he is not entitled to return of the amount paid by him. The value of the suit is not correct as the extent of the schedule property is Ac.1.63 cents and not Ac. 1.23 cents. The defendants are ready to sell away the schedule property to the plaintiff if he pays at the prevailing market value which is more than Rs.10.00 lakhs per acre as per the 8th condition of the sale agreement. There are no merits in the suit and hence, the same may be dismissed with exemplary costs 4. Basing on the above pleadings the following issues are framed for trial: “1. Whether the agreement of sale, dated 27.03.2005 is true, valid and biding on the defendants? 2. Whether the plaintiff is entitled for the advance amount of Rs.2,40,000/- with interest at 24% p.a., in case if the plaintiff is not entitled to the relief of specific performance? 3. To what relief?” 5. During trial, on behalf of plaintiff, P.Ws.1 to 3 were examined and Exs.A.1 to A.13 were got marked and on behalf defendants, DWs.1 and 2 were examined and Exs.B.1 to B3 were got marked. 6. The trial Court after considering the evidence on record decreed the suit as stated above. Challenging the same the preset appeal is filed by the appellant/plaintiff. 7. Learned counsel for the appellant/plaintiff contended that ExA.1 does not stipulate about payment of interest @24% per annum which is arbitrary and unjust; that the question of passing preliminary decree does not arise in a suit for specific performance and hence, he prays to set aside the finding with regard to grant of interest @24% per annum on the remaining balance of sale consideration. 8. On the other hand, learned counsel for the respondents/defendants contended that since Ex.A.1 transaction is of the year 2005, there is appreciation in the value of immovable properties considerably; that granting of interest @24% per annum cannot be shown on higher side and it would not cause hardship to the appellant/plaintiff or he cannot to be in a disadvantage position by virtue of granting interest @24% per annum and hence, he prays to dismiss the appeal. 9. Insofar as grant of relief of specific performance based upon agreement of sale i.e., Ex.A.1 the findings of the trial Court have become final. No cross-objections have been filed to challenge the findings with regard to entitlement of specific performance of contract in favour of the appellant. But, the trial Court while decreeing the suit directed the appellant to pay the balance amount of Rs.3,75,000/- together with interest @24% per annum. 10. The grievance of the appellant is that interest @ 24% per annum granted by the trial Court is exorbitant and not warranted in view of the conditions laid down under Exs.A.1 and A2. No doubt, Exs.A.1 and 2 do not stipulate the payment of interest, but at the same time granting of interest during the pendency of suit is within the discretion of the Court. That discretion must be exercised judiciously. Agreement between the parties is in respect of sale of Ac.01.23 cents. The appellant agreed to purchase Ac.1.23 cents of land @ Rs.5,00,000/- per acre. The agreement is executed in the year 2005 and six years have been elapsed. Therefore, there is every possibility of increase in land value from the date of execution of document till the date of decree. Considering these aspects, the trial Court rightly granted interest but it is some what higher side and exorbitant. So, the interest can be reduced to 12% per annum. In stead of passing preliminary decree, the trial Court ought to have passed a final decree in the suit. 11. Accordingly, the suit is decreed directing the respondents/defendants to execute registered sale deed in pursuance of Exs.A.1 and A2 after payment of remaining balance amount with interest @ 12% per annum thereon from the date of suit till the date of payment by the appellant/plaintiff @ Rs.5,00,000/- per acre after deducting the amount paid at the time of Ex.A.1 and after measuring the entire land. The entire exercise shall be completed within a period of three moths from the date of receipt of copy of this judgment. In case the defendants fail to execute the registered sale deed, the appellant/plaintiff is at liberty to get the same done through the process of Court. 12. Accordingly, the Appeal is allowed to the extent indicated above. There shall be no order as to costs. _______________ K.C. BHANU, J AUGUST 30, 2011 YVL