IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS THURSDAY, THE 1ST DECEMBER 2011 / 10TH AGRAHAYANA 1933 RSA.No. 499 of 2009() --------------------- AS.37/2005 of SUB COURT,THODUPUZHA OS.29/2001 of MUNCIFF COURT,THODUPUZHA .................... APPELLANTS ------------------------------ 1. RAMAKRISHNAN, S/O. KUTTAN, AGED 72 YEARS, ELAMTHANATHU HOUSE, UDUMPANNUR KARA, UDUMPANNUR VILLAGE, THODUPUZHA TALUK. 2. THANKAMANI, W/O. RAMAKRISHNAN, AGED 69 YEARS, -DO- BY ADV. SRI.T.V.GEORGE SRI.JIMMY GEORGE (THADATHIL) RESPONDENT(S): RESPONDENTS -------------------------- 1. SEBASTIAN, S/O. ABRAHAM, AGED ABOUT 46 YEARS, KARIKKAVAYALIL HOUSE, VELLAMTHANAM KARA, UDUMPANNUR VILLAGE, THODUPUZHA TALUK. 2. V.V. JOSEPH, VAZHAPPILLIL HOUSE, KURICHITHANAM, KOTTAYAM DISTRICT. 3. MARYKUTTY, W/O. V.V. JOSEPH, -DO- ADV. SRI.N.K.MOHANLAL FOR CAVEATOR THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 29/11/2011, THE COURT ON 1.12.2011 PASSED THE FOLLOWING: M.L.JOSEPH FRANCIS, J. ----------------------------------------------- R.S.A. No.499 of 2009 ----------------------------------------------- Dated 1st December, 2011. J U D G M E N T This appeal is filed by the defendants 1 and 2 in O.S.29/01 on the file of the Munsiff Court, Thodupuzha. The first respondent herein was the plaintiff in that suit, which was filed by him for return of advance amount due under an agreement for sale. Respondents 2 and 3 herein were the defendants 3 and 4 in that suit. 2. The case of the plaintiff is briefly as follows : The plaintiff and defendants 1 and 2 entered into an agreement for sale whereby the plaintiff agreed to purchase and the defendants 1 and 2 agreed to sell the plaint schedule property to the plaintiff for a total sale consideration of Rs.3,25,000/- and received an advance sale consideration of Rs.40,000/- on 27.11.1999. The sale was to be effected by 1.3.2000. On 28.2.2000 defendants 1 and 2 accepted a further sale consideration of Rs.25,000/- agreeing to extend the period of contract by a further period of 90 days and the same has been endorsed on the agreement. In breach of the agreement, on 25.3.2000, the defendants 1 and 2 issued a lawyer notice RSA 499/09 2 alleging that they were present in the SRO on 1.3.2000, ready to execute sale deed and when the plaintiff failed to turn up with balance sale consideration, the period was extended by 3 weeks more at the request of the plaintiff and that too was expired. The plaintiff was called upon to pay the balance sale consideration of Rs.2,60,000/- in 7 days and on his failure he would be liable for damages to the tune of Rs.75,000/-. Plaintiff issued a reply notice detailing the circumstances and intimated that the agreement was extended not by three weeks but by 3 months and the plaintiff also affirmed his willingness to pay the balance before 31.5.2000. In the last week of March, 2000, the plaintiff was informed through his friend that the plaintiff is free to rescind from contract. Plaintiff refused to oblige. On 10.5.2000 plaintiff learnt that the plaint schedule property was purchased by defendants 3 and 4 for a total sale consideration of Rs.3,80,000/- as per document No.1762/00 of Karikode SRO. Defendants 1 and 2 committed breach of contract and the plaintiff is entitled to get back the advance sale consideration with interest and costs and also damages to the tune of Rs.10,000/-. RSA 499/09 3 3. Defendants 1 and 2 in their written statements admitted the execution of the agreement and also the receipt of Rs.40,000/-. According to defendants 1 and 2 Rs.40,000/- was advanced as security and it is not an advance payment. The period of agreement was agreed to be the essence of contract. On the date of expiry of the agreement on 1.3.2000 defendants visited SRO Karikkode and prepared to execute the sale deed. But the plaintiff did not turn up and he was not ready and willing to perform his part of contract. On 7.3.2000, plaintiff approached them and pleaded for extension of time for raising funds. Accordingly the period was extended by 3 weeks by receiving a sum of Rs.25,000/-. It is not correct to say that the same was endorsed on the agreement and defendants 1 and 2 subscribed their signature upon the same. The endorsement has been fabricated for the purpose of the suit. On 25.3.2000 they issued a notice to the plaintiff. Since the plaintiff was not willing to perform the contract even within the extended period, the property was sold at a loss. Defendants 1 and 2 sustained heavy loss due to the breach of contract by the plaintiff. Therefore, the plaintiff lost the security amount of RSA 499/09 4 Rs.40,000/-. Defendants have paid a sum of Rs.15,000/- as brokerage for the agreement dated 27.11.1999. On account of the reduction in the sale consideration also they sustained heavy loss. Defendants have sustained a loss of Rs.1,00,000/- for which the plaintiff alone is liable. Defendants have limited their claim at Rs.25,000/- and that has been set off. With the above contentions, defendants 1 and 2 prayed for dismissal of the suit. 4. Defendants 3 and 4 in their written statement contended that they are bonafide purchasers for valuable consideration without notice. They have effected mutation and is in absolute possession and enjoyment of the property. If at all plaintiff is entitled to any relief, that is to be realised from defendants 1 and 2 only and the plaintiff is not entitled for a charged decree. 5. In the trial court, PW1 to PW3 and DW1 were examined and Exts.A1 to A4 and Exts.B1 to B4 series were marked. The learned Munsiff, on considering the evidence decreed to the suit, allowing the plaintiff to realise a sum of Rs.83,027/- with interest on a sum of Rs.65,000/- at the rate of RSA 499/09 5 12% per annum from the date of the suit till date of decree and thereafter, at the rate of 6% till realization together with costs from defendants 1 and 2 and charged on the plaint schedule property. Against that judgment and decree, the defendants 1 and 2 filed an appeal as A.S.37/05 before the Sub Court, Thodupuzha, which was dismissed by that court, confirming the judgment and decree of the trial court. Against that judgment and decree, the appellants/defendants 1 and 2 filed this Second Appeal. 6. Heard the learned counsel for the appellants and the learned counsel for the first respondent. 7. At the time of hearing, the leaned counsel for the appellants raised the following arguments : The courts below failed to appreciate the fact that the first respondent/ plaintiff could not raise the balance sale consideration and as such he sought for extension of the agreements for 3 weeks time orally by paying a paltry amount of Rs.25,000/- to the appellants. Even after the expiry of 3 weeks time, he could not raise the required amount. Hence, he fabricated the endorsement on the foot of the agreement as if the period has been extended for a RSA 499/09 6 period of 3 months and fabricated/forged the signatures of appellants also in connivance with PW2, who is his close aid. The endorsement on the foot of Ext.A1 cannot be read as an extension for three months time. The courts below failed to appreciate the fact that the appellants were badly in need of money and as such they have agreed to sell their property to the first respondent/plaintiff and in such a situation, there is no chance or possibility by no stretch of imagination to allow three months period more for execution of sale deed. The courts below failed to appreciate the fact that the time was the essence of the contract and as such the plaintiff has committed the breach of contract and he cannot claim return of the advance amount. Learned counsel for the first respondent/plaintiff supported the judgments of the courts below. 8. During the pendency of this appeal, the appellants filed I.A.No.1194/2009 to receive additional documents. That petition cannot be allowed, as nothing is mentioned by the appellants about those documents in the appeal memo or in the written statement. Therefore, that RSA 499/09 7 petition is dismissed. 9. In the decision reported in Lakshmipathy A.K. (dead) and others v. Rai Saheb Pannalal H., Lahoti Charitable Trust and others [2010 KHC 6012 (S.C.)], it was held that the presumption is that time is not to be of the essence of contract in case of sale of immovable property, unless contrary intention is expressed. 10. When the plaintiff was examined as PW1, he deposed that the contract dated 27.11.99 for purchase of the plaint schedule property was valid upto 1.3.2000. He had paid an amount of Rs.40,000/- to the appellant towards the advance of sale consideration. PW1 gave evidence that the agreement was again extended by 90 days paying a further consideration of Rs.25,000/- on 28.2.2000. PW2 and PW3 are independent witnesses examined on the side of the first respondent. PW2 gave evidence that he wrote the endorsement in Ext.A1 showing the receipt of Rs.25,000/- on 28.2.2000 and the extension of the period of agreement by 90 days. He gave evidence to the effect that the parties put their signatures in his presence. He has tendered his signature also to Ext.A1. PW3 RSA 499/09 8 gave evidence to the effect that at the instance of the appellants he persuaded 1st respondent to withdraw from the contract as the appellants had a better deal, but his attempt did not succeed. 11. When the first defendant was examined as DW1, he admitted the payments, but denied the endorsement on Ext.A1. Execution of Ext.A1 agreement and the payment of the amount on 27.11.1999 as well as on 28.2.2000 is not disputed. The only dispute is with regard to the endorsement in Ext.A1 whereby the period was extended by 3 months. The contention of the appellant is that the period was extended only by 3 weeks and the endorsement on Ext.A1 is fabricated. But the above contention of the appellants cannot be accepted in view of the testimony of PW2. PW2 categorically deposed before the lower court that it is he who wrote the endorsement and the parties signed the same in his presence and he has also affixed his signature in the document. Even though PW2 was cross examined nothing has been brought out to discredit his version. 12. It has come out in evidence that the defendants 1 and 2 sold the properties to defendants 2 and 4 before the RSA 499/09 9 expiry of the extended period. Since the trial court and the appellate court concurrently found on the basis of the evidence on record that the defendant 1 and 2 committed breach of contract and that the plaintiff is entitled to get return of advance amount together with reasonable compensation of Rs.10,000/-, I find no reason to interfere with the judgment and decree of the courts below, in this Second Appeal. Accordingly, this Second Appeal is dismissed as it is without any merits. The parties are directed to suffer their respective costs in this Second Appeal. Sd/- M.L.JOSEPH FRANCIS, JUDGE. tgs (True copy) P.S. to Judge.