AI Structured Summary
Not yet generated for this judgment
Judgment
Honourable Mr. Justice G. Rajasuriaa
Heard both sides.
The epitome and the long and short of the relevant facts absolutely necessary and germane for the disposal of this appeal would run thus.
The plaintiff filed the suit for specific performance by making the following prayers:
(a) To direct the defendants to execute the sale deed and deliver possession of the suit property to the plaintiff as per the terms of the sale
agreement dated 08.02.2005 executed by the plaintiff and late S.S. Sathyamoorthi failing which this Honourable Court execute the sale deed on
behalf of the defendants.
(b) To direct the defendants to pay cost of the suit"" alternatively
(a) To direct the defendants to pay the plaintiff a sum of Rs.11,81,802.50 with interest on Rs.10,05,000/-at 18% p.a. from the date suit till the
date of payment.
(b) To create a charge over the suit property for due payment of the aforesaid sum u/s 55(d) of the Transfer of Property Act, and
(c) To direct the defendant pay the costs of the suit.
(extracted as such)
The defendants resisted the suit by filing the written statement.
The trial Court framed the relevant issues. During trial, the plaintiff examined himself as P.W.1 along with P.W.2-Ayyasamy and P.W.3-
Ramasamy and marked Exs.A1 to A32. On the side of the defendants, D1-Santhi examined herself as D.W.1 along with D.W.2-Sekar and
marked Exs.B1 to B23.
Ultimately the trial Court decreed the suit by ordering the defendants to return a sum of Rs.10,05,000/-with 6% per annum from 08.02.2005 till
the date of realisation.
Being aggrieved by and dissatisfied with the said judgment, the defendants preferred this appeal on various grounds.
The whole kit and caboodle of facts and figures as stood exposited from the records could pithily and precisely be set out thus: Ex.A1-the
agreement to sell dated 08.02.2005 emerged between the plaintiff and the defendants'' propositus namely the deceased Sathyamoorthy whose
legal heirs are D1-the widow, D2 and D3 -his minor children; whereby the said Sathyamoorthy agreed to sell the immovable property described in
the schedule of the plaint in favour of the plaintiff for a total sale consideration of Rs.30 lakhs. As on the date of emergence of Ex.A1, a sum of
Rs.4 lakhs was paid in cash and a sum of Rs.2 lakhs by way of Demand Draft in favour of Sathyamoorthy. Subsequently, on the following four
occasions, ie.
(i) On 19.04.2005 a sum of Rs.50,000/
(ii) On 09.08.2005 a sum of Rs.50,000/
(iii) On 13.09.2005 a sum of Rs.1,05,000/
(iv) On 15.10.2005 a sum of Rs.2,00,000/-
the plaintiff paid to Sathyamoorthy totally an additional sum of Rs.4,05,000/-. As such, Sathyamoorthy according to the plaintiff, received totally a
sum of Rs.10,05,000/-during his lifetime. Even though the time stipulated for performance of the contract was thirty five days, yet the sale deed did
not get fructify. Ultimately, the plaintiff filed the suit seeking specific performance of the said agreement to sell with an alternative prayer for refund
of the amount in the event of specific performance being not ordered by the Court.
The nitty-gritty, the gist and kernel of the averments in the written statement was to the effect that the suit agreement to sell is a concocted one
and the purported signatures of Sathyamoorthy found in the said document were forged and fabricated ones and in stricto sensu there was no
agreement to sell at all as alleged by the plaintiff; the said Sathyamoorthy was a drunkard; consequently he was suffering from liver trouble and in
fact he died even before the suit. Taking undue advantage of the situation, the plaintiff has chosen to file this vexatious suit.
The fact remains that the purported signatures in the agreement to sell were sent to the expert who gave his opinion that those signatures were
that of Sathyamoorthy only. After considering pro et contra, the lower Court without ordering specific performance, directed the defendants to
repay the amount as set out supra.
The learned counsel for the appellants/defendants would pilot his arguments by pointing out that the lower Court failed to take into
consideration the fact that time was the essence of the contract; on the failure of the plaintiff to get his part of the contract performed, he had to
lose the amount paid under the agreement to sell, but the lower Court without taking into consideration the salient features of Ex.A1, simply
ordered the return of the amount, to which the plaintiff was not at all entitled to. The plaintiff was not entitled to 6% interest per annum from the
date of the agreement to sell till the filing of the suit in the absence of any clause to that effect.
In a bid to torpedo and pulverise the arguments as put forth and set forth on the side of the appellants/defendants, the learned counsel for the
plaintiff would submit that Sathyamoorthy committed default in performing his part of the contract, which alone necessitated the plaintiff to file the
suit. However, the trial Court did not order specific performance, but directed the defendants to return the amount with interest, which cannot be
found fault with.
The points for consideration are as to:
(1) Whether the trial Court was not justified in mandating the defendants to return the sum of Rs.10,05,000/-with 6% interest per annum in view of
the clause in Ex.A1 to the effect that within 35 days the sale deed in favour of the plaintiff, by the defendants'' propositus Sathyamoorthy should be
got executed and on the plaintiff failing to do so, he had to forfeit the sum paid by him to the defendants?
(2) Whether there is any perversity or illegality in the
judgment of the trial Court?
At the outset, I would like to refer to the decision of the Hon''ble Apex Court cited by the learned counsel for the appellant:
P.S. Ranakrishna Reddy Vs. M.K. Bhagyalakshmi and Another, ; certain excerpts from it would run thus:
A document, as is well known, must be read in its entirety. The intention of the parties, it is equally well settled, must be gathered from the
document itself. All parts of the deed must be read in their entirety so as to ascertain the nature thereof.
14...........It is clear that in the event of commission of any breach on the part of the respondent, the appellant was entitled to forfeit the entire
amount of advance. The very fact that the parties intentionally incorporated such default clause clearly goes to show that they intended to lay down
their rights and obligations under the contract explicitly. They, therefore, knew the terms thereof. They understood the same. There is no
uncertainty or vagueness therein.
The learned counsel for the appellants would submit that the aforesaid decision would exemplify and demonstrate, indicate and project that if
there is a default clause to the effect that the plaintiff on his failure to perform his part of the contract should forfeit the entire amount paid in
advance, the same cannot be taken lightly and it should be given effect to.
A thorough reading of the decision cited by the learned counsel for the appellants, would unambiguously and unequivocally point out that the
facts involved in that case were entirely different from the facts involved in this case, so to say, a different kettle of fish is involved in this case. In
the cited precedent, both parties consciously contemplated as to what would be the liabilities of either of them in the event of breach. It is found
incorporated in that agreement that in the event of the proposed purchaser failing to purchase the property, he should forego the advance amount
and if the land owner fails to execute the sale deed, he had to return the advance amount with a sum of Rs.500/-in addition thereto. As such, the
Court by reading the entire judgment was of the view that the clauses found mentioned in the said agreement to sell were consciously incorporated
intending the same to be acted upon and those clauses were not mere clauses in terrorem. However, in this case in Ex.A1, no such stipulations are
found envisaged.
It is a trite proposition of law that relating to specific performance of agreement to sell relating to immovable property, time is not the essence
of contract. It is also a common or garden principle of law, that if it is a mere clause in terrorem, it cannot be enforced in stricto sensu merely on
the expiry of the time stipulated for performance of the contract. The defendants invoking the forfeiture clause must be in a position to establish
unambiguously and unequivocally that Sathyamoorthy was not at all at fault in performing his part of the contract. The conduct of the parties also
during the pendency of the suit should be taken note of. The defendants in fact, took various pleas and one among them was that Sathyamoorthy
did not sign Ex.A1 etc., however, such a plea is found to be totally untenable. The trial Court by its reasoned finding held that the plea of the
defendants to the effect that the said Sathyamoorthy did not execute the agreement to sell at all was incorrect and in such a case, there is no
question of assuming or presuming that Sathyamoorthy was ready and willing to perform his part of the contract. The defendants being the legal
heirs of Sathyamoorthy, who are also in possession of the suit property, should necessarily refund the amount received by Sathyamoorthy during
his lifetime. Here the plaintiff has not filed any cross appeal as against the dismissal of the prayer for specific performance at the instance of the
plaintiff and in such a case, this Court need not dilate on other points as to how far Sathyamoorthy was justified in entering into such agreement to
sell with the plaintiff, for and on behalf of the minor also without obtaining permission to sell the minor''s share from the District Court concerned.
Axiomatically and glaringly, one error I could notice from the judgment of the trial Court, which directed the defendants to pay 6% interest per
annum from the date of agreement till realisation, which means that pre suit interest also was awarded over and above pendente lite interest and
post decreetal decree interest.
The core question arises as to how far the trial Court was justified in awarding such pre suit interest even though there is no clause in Ex.A1 to
that effect. Without assigning any reason whatsoever for awarding pre suit interest, the trial Court simply passed such order warranting interference
in this appeal to that limited extent. There is also nothing to show that such interest was awarded by way of damages taking into consideration the
special circumstances involved in this matter. Ex.A1 emerged on 08.02.2005, whereas, the suit was filed on 24.04.2006. As such, awarding of
interest without any basis, in my considered opinion was unwarranted. However, pendente lite interest and post decreetal interest at the rate of 6%
per annum is having the back up of Section 34 of CPC with which this Court need not interfere. Accordingly, the appeal is partly allowed. The
judgment and decree of the trial Court in directing the defendants to refund the sum of Rs.10,05,000/-with 6% interest per annum from the date of
the suit till the date of realisation is confirmed. However, the direction in the trial Court''s decree to the effect that 6% interest is payable from the
date of agreement till the filing of the suit, is set aside. No costs. Consequently, connected miscellaneous petitions are closed.