THE HON'BLE SRI JUSTICE M.LAXMAN
APPEAL SUIT No.188 of 2022
JUDGMENT:
1. This appeal is taken up for final disposal with the consent of both the learned counsel.
2. The present Appeal Suit is directed against the judgment and decree dated 11.04.2022 in O.S.No.31 of 2017 on the file of the Court of learned Principal District Judge, Warangal wherein and whereby the suit filed by the appellant herein for specific performance of agreement of sale dated 31.10.2011 was dismissed. Aggrieved by the same, the present Appeal Suit is filed at the instance of the appellant.
3. For the sake of convenience the parties hereinafter are referred to as they are arrayed in the suit.
4. The sum and substance of the case is that, originally the 1st defendant is absolute owner and possessor of agricultural land admeasuring Ac 05.04 gts forming part of Survey Nos.19/A, 23/A, 16, 17, 45/B, 45/A, 46, 331 and 47/B situated at Vasanthapur Village, Geesugonda Mandal, Warangal District. The plaintiff entered into an agreement of sale dated 31.10.2011 with the 1st defendant for purchase of the same. Out of the said 2 extent of land, the 1st defendant also agreed to sell Ac 0.07 gts of land for which she was not holding title. The plaintiff intended to purchase the same and thereafter, agreed to execute registered sale deed. The total sale consideration was Rs.26,52,000/-. On the date of agreement, Rs.10,00,000/- was paid by the plaintiff and the balance sale consideration was agreed to be paid within 45 days or at the time of registration whichever was earlier.
5. Since the plaintiff failed to pay the balance sale consideration within 45 days and as time was the essence of contract, the 1st defendant issued legal notice on 29.04.2016 and subsequently, the said agreement was cancelled. The earnest sale consideration of Rs.10,00,000/- was forfeited. Therefore, the present suit has been filed for specific performance of agreement of sale.
6. The case of the defendants is that, there is no dispute with regard to agreement of sale dated 31.10.2011 and the terms and conditions stipulated therein. The receipt of part sale consideration of Rs.10,00,000/- by the 1st defendant is also not in dispute. The 1st defendant is aware of the fact that the plaintiff obtained loan from Axis Bank, as she was guarantor for the said loan transaction. The plaintiff is also aware of the fact that Ac. 3 0.07 gts of land would be conveyed to her only if the 1st defendant gets her title to the property from the real owner. Further, the plaintiff obtained loan from Axis Bank and she is defaulter in payment of the loan due to which the Bank has instituted suit for recovery of money and then the 1st defendant paid the amount. The plaintiff without having sufficient means entered into the agreement of sale and therefore, she has not challenged the said cancellation of agreement of sale dated 31.10.2011. Since, the plaintiff never expressed her readiness and willingness to pay the balance sale consideration therefore, the suit is not maintainable.
7. On the basis of the above pleadings, the following Issues are framed by the trial Court:-
(i) Whether the agreement of sale dated 31.10.2011 is true, valid and binding on the defendant ?
(ii) Whether time is the essence of agreement of sale dated 31.10.2011 ?
(iii)Whether the plaintiff was ready and willing to perform the part of contract ?
(iv)Whether the plaintiff is entitled to the specific performance of agreement of sale dated 31.10.2011 ?
(v) To what relief ?4
8. The prove the case of the plaintiff, she herself got examined as PW1 and got marked Exs.A1 to A12. The 1st defendant examined herself as DW1 and also examined DW2 and got marked Exs.B1 to B5.
9. Heard learned counsel appearing on either side.
10. The following points emerges for consideration:
1. Whether the plaintiff has performed or has always been ready and willing to perform her part of contract ?
2. Whether the plaintiff is entitled for refund of advance sale consideration in the event, specific performance of agreement of sale is refused ?
Point No.1:
11. There is no dispute with regard to the fact that on the date of execution of agreement of sale an amount of Rs.10,00,000/- was paid by the plaintiff. Till the legal notice was issued by the 1st defendant, there was no readiness and willingness on the part of the plaintiff for payment of balance sale consideration. No evidence is placed on record to show that the plaintiff was having sufficient means to pay the balance sale consideration of Rs.16,52,000/-. From the evidence, it is also evident that when the plaintiff failed to pay the loan amount within time, the Bank 5 instituted the suit. This was taken note of by the trial Court while considering the fact of capacity of the plaintiff to pay balance sale consideration and the same is not in dispute. Though a specific date is fixed for the purpose of concluding the contract, from the conduct of the parties, it can be inferred that, the plaintiff slept over for almost four years and six months and wokeup when the 1st defendant has issued legal notice cancelling the agreement of sale. This itself is a ground to show that the plaintiff has no means to pay the balance sale consideration. The said aspect was rightly taken into consideration by the trial Court and rightly dismissed the suit for specific performance of agreement of sale. Therefore, such a finding given by the trial Court requires no interference.
12. It is an admitted fact that the plaintiff has paid an amount of Rs.10,00,000/- towards advance sale consideration. The 1st defendant issued legal notice by forfeiting the said amount when there is no forfeiture clause in the agreement of sale. Further, if the amount paid is a security for the performance of contract i.e., 'Earnest Money Deposit' then only, the 1st defendant has a right to forfeit such an amount. He has no right to forfeit the payment paid as advance sale consideration.
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13. Learned counsel for the defendants contended that the 1st defendant had discharged the loan amount of the plaintiff when the Bank filed suit for recovery of money against her. There is no proof or record to that effect before the trial Court. The 1st defendant had not set up the plea of set off in the written statement in respect of adjustment of sale consideration. Therefore, his plea of discharge of loan has no bearing on the refund of advance sale consideration.
14. It is agreed by the defendants that they have no grievance if the amount is ordered to be refunded. Hence, this Court, to meet the ends of justice feels that, the 1st defendant shall refund the advance sale consideration of Rs.10,00,000/- in respect of the agreement of sale to the plaintiff.
15. In the result, the Appeal Suit is partly allowed as follows:-
(a) The 1st defendant is directed to refund the advance sale consideration of Rs.10,00,000/- (Rupees ten lakhs only) within eight weeks from today. If the amount is not refunded within the time stipulated, the 1st defendant is directed to pay interest @ 12% per annum on the said amount.7
(b) Thereafter, the 1st defendant is directed to deposit the said amount in the Bank Account number given by the plaintiff towards full and final satisfaction of the discharge of amount.
(c) The plaintiff is directed to furnish the details of her Bank Account to the 1st defendant, within a period of four weeks from today.
(d) Till the amount is paid, the suit property shall stand encumbered to the extent of above liability. No costs. Miscellaneous Petitions, pending if any, shall stand closed.
______________________ JUSTICE M.LAXMAN 05.12.2022 ESP 8 THE HON'BLE SRI JUSTICE M.LAXMAN 123 A.S.No.188 of 2022 Dated: 05.12.2022 ESP