Nanjappan vs Ramasamy & Anr

3. Brief facts, giving rise to the present appeal, are as follows :- Respondents have pleaded that on 30.09.1987, the appellant agreed to sell the suit property to the respondents for a sum of Rs.45,000/- and an agreement of sale was entered into and the appellant received a sum of Rs.25,000/- as advance on the same day and it was agreed that the balance amount shall be paid within a period of 2 years and the sale be executed and to that effect a Sale Agreement (Ex. P1) was executed. As the appellant was unable to vacate the house on 21.03.1990, the time stipulated for performance was extended and Second Agreement (Ex. P-2) was executed, on which day, the respondents paid a further advance of Rs.15,000/- and the period was extended to another three years. According to the respondents, within the stipulated period, the appellant did not shift to another house and on 09.03.1993, the respondents paid a further sum of Rs. 2,500/- to the appellant and third Sale Agreement (Ex. P-3) was executed and the period was extended by another two years. Case of the respondents is that they were ready and willing to perform their part of contract in getting the sale executed by paying the balance amount to the appellant but the appellant did not come forward to execute the sale deed. There was exchange of legal notice between the parties, and thereafter, respondents filed a suit for specific performance stating that they were always ready and willing to perform their part of the contract.

9. The appellant pleaded that as per the agreement between the parties, sale price was agreed to be Rs.3 lakhs and only to reduce registration charges and stamp duty, in the agreement sale price was written as Rs.45,000/-. All three courts below disbelieved the said version of the appellant that the sale price was fixed at rupees three lakhs and that only for the purpose of registration charges and stamp duty, in the agreement the sale price was written as Rs.45,000/-.

5. Upon consideration of entire facts and evidence, trial court, vide its judgment dated 21.12.2001, declined the relief of specific performance by observing that the respondents did not prove that they were ready and willing to make the balance sale consideration. The trial court did not accept the defence plea that the original sale consideration was agreed at Rs.3 lakhs and in order to reduce the registration charges and stamp duty, in the agreement, the sale consideration was mentioned as Rs.45,000/-. Being aggrieved by the dismissal of the suit, the respondents filed first appeal which was allowed, vide judgment dated 30.12.2003. While allowing the appeal, the first appellate court held that having paid substantial sale consideration of Rs.42,500/- and left with only Rs. 2,500/- to be paid, it cannot be said that the respondents were not ready and willing to take the sale. The first appellate court, inter alia, held that the appellant did not discharge the onus to prove that the value of the property was mentioned as Rs.45,000/- as against the actual market value of Rs.3 lakhs and that no knowledgeable person will agree to sell the property for Rs.45,000/- when the true value of the property is more than rupees three lakhs. Being aggrieved by the decree for specific performance, the appellant approached the High Court by filing second appeal, wherein the High Court affirmed the view taken by the first appellate Court and dismissed the second appeal.

16. The next point falling for determination is the relief to be granted to the respondents-plaintiffs. Admittedly, respondents have paid advance amount of Rs.42,500/-, even though, the respondents are not entitled to the relief of specific performance, in our view, the advance amount of Rs.42,500/- paid by the respondents is to be refunded to the respondents with interest at the rate of 9% per annum. In addition, the appellant is directed to pay compensation of Rs.2,00,000/- to the respondents.

17. In the result, the impugned judgment dated 17.11.2011 passed by the High Court in Second Appeal No.332/2005 is set aside and this appeal is allowed. The appellant shall refund Rs.42,500/- with 9% interest per annum from the date of third agreement of sale dated March 9, 1993. Both parties shall bear their respective costs.

February 24, 2015