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Judgment
Ashok B. Hinchigeri, J.—This appeal is directed against the judgment and decree, dated 20.1.2009 passed by the Court of the XIV Additional City Civil Judge, Bangalore in O.S. No. 2188/2003. The facts of the case in brief are that the respondent - defendants entered into an agreement of sale on 14.7.2002 in respect of the suit schedule property for a valuable consideration of Rs. 12,25,000/-. On the same day, the appellant - plaintiffs paid the advance of Rs. 3,25,000/- to the respondents. The agreement did not fructify into the sale deed. After the exchange of the notices and replies between the parties, they settled the matter by entering into the agreement of cancellation of sale on 7.2.2003. Pursuant to the said cancellation agreement, the respondents returned Rs. 2,50,000/- to the appellants. Agitating their right to get back the balance advance of Rs. 75,000/- and Rs. 1,500/- interest thereon, the appellants filed the suit for recovery. The suit was resisted by the respondents by filing the written statement. The respondents took the plea that as per the sale agreement, dated 14.7.2002, they were entitled to forfeit the entire advance amount of Rs. 3,25,000/- and that on the request of the appellants, they (respondents) forfeited only Rs. 75,000/- and returned Rs. 2,50,000/-.
Based on the rival pleadings, the Trial Court formulated the following issues:
Whether the plaintiff proves that the defendants entered into agreement to sell the property on 14/7/2002 for consideration of Rs. 12,25,000/- and plaintiffs have paid an advance amount of Rs. 3,25,000/-?
Whether plaintiff further proves that as per the advice of elders they have cancelled the agreement of sale dated 7/2/2003 and defendant have refunded a sum of Rs. 2,50,000/- and promised to pay remaining Rs. 75,000/-?
Whether plaintiff is entitled for Rs. 76,500/- with 24% interest over the amount from the date of the suit till its realisation and other reliefs?
What order or decree?
The appellant No. 2 was examined as PW 1 on behalf of the appellants marking the documents at Ex. P1 to P7. On behalf of the respondents, the first respondent was examined as DW 1. On considering the pleadings, oral and documentary evidence placed on its record, the Trial Court answered the contentious issues in favour of the respondents and dismissed the suit. Aggrieved by the dismissal of the suit, this appeal is filed.
Smt. Sheela Krishna, the learned counsel for the appellants submits that there is no forfeiture clause in the cancellation agreement (Ex. P2). As it is not in dispute that the respondents had received the advance sale consideration of Rs. 3,25,000/-, they (respondents) are obliged to return the balance amount of Rs. 75,000/- and the interest at the rate of 24% per annum thereon. It is her contention that if it were the intention of the parties that respondents be permitted to forfeit Rs. 75,000/-, it would have found its expression in one of the clauses of the cancellation agreement.
Per contra, Sri R.B. Sadashivappa, the learned counsel for the respondents submits that the sale agreement, dated 14.7.2002 provided for the forfeiture of the entire amount of Rs. 3,25,000/-. He submits that because of the reaching of the understanding between the two parties, the forfeiture clause does not find a place in cancellation agreement at Ex. P2. The respondents have only deducted Rs. 75,000/- and readily returned Rs. 2,50,000/-. According to him, if the cancellation agreement were not to be arrived at, then it was open to the respondents to forfeit the entire amount of Rs. 3,25,000/-.
I have browsed through the L.C.Rs. The second part of Clause 7 of the sale agreement, dated 14.7.2002 reads as follows:
The purchasers doth hereby agree and covenant with the Vendors that on their failure to perform their part of the contract in accordance with the terms and conditions of this agreement, their advance amount of Rs. 3,25,000/- shall be forfeited to the Vendors and the Purchasers are entitled to the refund of further amounts if they have paid under this agreement.
The perusal of the above-extracted clause shows that the respondents were entitled to forfeit the entire amount of Rs. 3,25,000/-. On the exchange of the notices and the replies between themselves and on the intervention of the well-wishers, they amicably settled the matter by entering into the cancellation agreement, dated 7.2.2003 (Ex. P2). The relevant clause regarding the return of the amount reads as follows:
That the FIRST PARTY have agreed to return the advance amount after having mutually agreed between the parties and well-wishers a sum of Rs. 2,50,000/- is paid to the SECOND PARTY by way of Account Payee Cheque bearing No. 011545 drawn on State Bank of Mysore, Cleveland Town Branch, Bangalore - 560 005, dt. 7-2-03 and that the SECOND PARTY hereby acknowledge the receipt of receiving the above mentioned cheque in the presence of the witnesses mentioned herein below.
Pursuant to the aforesaid cancellation agreement, the respondents have issued the cheque for Rs. 2,50,000/- to the appellants and the appellants have encashed the same. There is no clause in the cancellation agreement that the respondents would pay the balance amount of Rs. 75,000/-. Inferentially and impliedly, the appellants appear to have agreed to the forfeiture of Rs. 75,000/- by the respondents.
In her cross-examination, PW 1 (appellant No. 2) has stated that there is no other oral agreement between them.
In support of their claims, the appellants have not examined any witnesses to the cancellation agreement at Ex. P2. Nor they have got any independent witness examined. Not finding any basis for directing the respondents to return Rs. 75,000/-, the Trial Court has dismissed the appellants'' suit. Not finding any error or infirmity in the judgment passed by the Trial Court, I decline to interfere. This appeal is dismissed. No order as to costs.