Bombay High Court
M/S Chaware Oil Industries, Thr. ... vs Sachin S/O Prakashrao Deshmukh on 19 January, 2024
Author: G. A. Sanap
Bench: G. A. Sanap
2024:BHC-NAG:1246
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR.
SECOND APPEAL NO. 19 OF 2020
APPELLANTS : 1. M/s. Chaware Oil Industries, a
Partnership Firm through its Partner
Shri Deokumar Rukhabdas Chaware,
Aged about 85 years, Occu: Business,
R/o. Chaware Line, Karanja (Lad),
Tah. Karanja (Lad), Distt. Washim.
Sau. Surekhabai W/o. Rajkumar
Chaware (since deceased through legal
representatives)
2. Pradeep S/o. Rajkumar Chaware, Aged
about 56 years, Occu: Business.
3. Amol S/o. Rajkumar Chaware, Aged
about 47 years, Occu: Business,
Nos.2 & 3 R/o. Chaware Line, Karanja
(Lad), Tah. Karanja (Lad), Distt.
Washim.
4. Sau. Jyoti W/o. Kiran Jain, Aged about
52 years, Occ: Household, R/o. Near
RTO Office, Kesarbagh Road, Indore.
5. Deokumar Rukhabdas Chaware, Aged
about 85 years, Occu: Business, R/o.
Chaware Line, Karanja (Lad), Tah.
Karanja (Lad), Distt. Washim.
//VERSUS//
RESPONDENT : Sachin S/o. Prakashrao Deshmukh,
Aged about 49 years, Occu: Business,
R/o. Prabhat Colony, Near Dasara
Maidan Road, Tq. & Distt. Amravati.
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**************************************************************
Mr. M.R. Joharapurkar, Advocate for the Appellants.
Mr. A.M. Sudame, Advocate for the Respondent.
**************************************************************
CORAM : G. A. SANAP, J.
DATED : 19th JANUARY, 2024.
ORAL JUDGMENT
. Admit. Heard finally with the consent of the learned
advocates for the parties.
02] In this second appeal, challenge is to the judgment and
order dated 1st August, 2019, passed by the learned District
Judge-2, Amravati, whereby the learned District Judge dismissed
the appeal filed by the appellants and confirmed the judgment and
decree dated 29th September, 2012 for refund of the earnest money,
passed by the learned Civil Judge (Senior Division), Amravati.
03] This Court by order dated 7th February, 2020 observed
that the following substantial question of law may arise for
consideration:
(1) Whether the suit for recovery, which was filed on
07.04.2008, was within limitation?
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04] The facts leading to this question are as follows:
The appellants/defendants had agreed to sell the suit
property to the respondent/plaintiff pursuant to the agreement dated
25th July, 2002, for a total consideration of Rs.33,51,000/-. The
amount of Rs.8,71,000/- was paid as earnest money. The appellants
had agreed to execute the sale-deed on or before 30 th June, 2003. It
appears that no action was taken on the part of the parties to give
finality to the agreement till 10th April, 2005. The respondent
thereafter filed a suit for refund of earnest money from the
appellants on the ground that the contract was rescinded on 10 th
April, 2005, and on that date, the appellants had refunded
Rs.3,31,000/-, being a part of the total earnest money, with a
promise to pay the balance amount of the earnest money of
Rs.5,00,000/-. It is the case of the respondent that, on failure of the
appellants to pay the balance amount of earnest money, he issued a
notice. The notice was replied, but the earnest money was not paid.
He, therefore, filed the suit. The appellants opposed the said suit.
According to the appellants, the agreement for sale was not
rescinded as alleged. The appellants expressed their readiness and
willingness to execute the sale-deed in favour of the respondent on
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receipt of the balance consideration. The appellants have set up a
defence that the amount of Rs.3,31,000/-, paid to the respondent on
10th April, 2005, had nothing to do with the refund of the earnest
money, but it was a separate loan transaction.
05] The Courts below have recorded a concurrent finding of
fact that the suit filed for recovery of the balance amount of the
earnest money was within limitation. As far as the fact with regard to
the recession of the contract is concerned, the Trial Court held that
the contract was rescinded on 10th April, 2005. However, the
learned Judge of the Appellate Court did not agree with this finding
on the point of the recession of the contract.
06] The learned advocate for the appellants submitted that the
reversal of the finding of the Trial Court with regard to the recession
of contract by the Appellate Court would show that the Appellate
Court has indirectly accepted the case of the appellants that the
amount of Rs.3,31,000/-, paid to the respondent was not towards
the earnest money but was an independent transaction. The learned
advocate submitted that the earnest money was forfeited in terms of
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the stipulation of the agreement on 30 th June, 2003. The learned
advocate submitted that the cause of action sought to be set up for
filing the suit on 10th April, 2005 was just to bring his time-barred
suit within limitation. The learned advocate further submitted that
without setting up a justifiable reason for filing the suit for recovery
of the earnest money alone, the suit by itself would not be
maintainable in law. The learned advocate submitted that the
amount of earnest money in this case was forfeited on 30 th June,
2003, and not thereafter, as held by the Courts below.
07] The learned advocate for the respondent submitted that
the concurrent findings of fact on the point of limitation recorded by
the Courts below is supported by the evidence. The learned advocate
submitted that the Appellate Court has not recorded a categorical
finding that the amount of Rs.3,31,000/-, proved to have been
received by the appellants was not towards the part of refund of the
earnest money, but it was a separate transaction of advance of money
to the respondent. The learned advocate submitted that the facts,
circumstances, and evidence produced before the Court clearly
indicate that the cause of action accrued in favour of the plaintiff for
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filing the suit when the forfeiture of the earnest money was
communicated to the respondent pursuant to the reply to the notice
of the respondent by the appellants, Exh.14 dated 22nd May, 2006.
The learned advocate submitted that the issue of limitation has to be
answered keeping in mind the facts of the case and the evidence
adduced by the parties. The learned advocate submitted that there is
no reason to interfere with the concurrent findings of fact recorded
by the Courts below.
08] I have gone through the record and proceedings. At the
outset, it is necessary to state that the question of limitation is not a
pure question of fact, but it is the mixed question of law and fact.
The question of limitation has to be addressed, keeping in mind the
facts of the case and the evidence adduced by the parties. In short,
while addressing the issue of limitation, there cannot be any straight-
jacket formula or rule. The answer to the question depends upon the
facts of the case and the evidence adduced by the parties. On going
through the record and proceedings, particularly the decisions
rendered by the Courts below, I am satisfied that the Courts below
have not committed any error or mistake while addressing this issue
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of limitation in favour of the respondent and against the appellants.
The Trial Court, on threadbare analysis of the evidence, rejected the
defence of the appellants. The Trial Court, as can be seen from the
judgment and order, has taken into consideration the entire factual
gamut of the case as well as the evidence on record. The First
Appellate Court, except for the issue of recession of contract as put-
forth by the respondent, has not reversed any other finding of fact
recorded by the Trial Court. It is undisputed that even by reply
dated 22nd May, 2006 Exh.14, the appellants contended that they
were ready and willing to perform their part of the contract. They
called upon the respondent to pay the balance consideration and
appear before the Sub-Registrar for execution of the sale-deed on a
particular date. This fact would clearly indicate that, till the date of
the reply dated 22nd May, 2006, on the part of the appellants, this
agreement for sale dated 25th July, 2002, was not terminated. There
was no separate specific intimation to the respondent by the
appellants that, on termination of the agreement on 30 th June, 2003,
the earnest money was forfeited. The case of the appellants set up in
the written statement, in my view, would go against the appellants.
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09] I have already observed that the First Appellate Court has
not set aside the observation or the order passed by the learned Trial
Judge that the amount of Rs.3,31,000/-, paid to the appellants, was
part of the earnest money. Both the Courts below have not recorded
a finding of fact that the payment of Rs.3,31,000/- had nothing to
do with this transaction of agreement to sell, but it was an
independent loan transaction, as sought to be contended by the
appellants.
10] Whether the earnest money would stand forfeited or not
in this situation would be a question of fact. The payment of
Rs.3,31,000/- by the appellants to the respondent on 10 th April,
2005, clearly suggests that the agreement for sale was not terminated
by the parties. The parties, as can be seen from the evidence, did not
expressly terminate the said agreement. The material on record
suggests that there was some understanding between the parties after
the expiry period of that agreement i.e. 30 th June, 2003, with regard
to certain issues necessary for giving finality to this agreement one
way or the other. In my view, the learned Judge of the Appellate
Court has rightly observed that the appellants not only waived their
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right to forfeit the earnest money but also suppressed the facts about
the true nature of the transaction. The Courts below have not
committed any mistake in concluding that the forfeiture of the
earnest money was expressly communicated to the respondent by a
reply dated 22nd May, 2006. The Courts below have rightly observed
that in this case, Article 113 would be applicable.
11] In the facts and circumstances, I am of the view that the
Courts below have not committed any illegality. The issue of
limitation was answered keeping in mind the facts and the evidence
on record. Accordingly, I answer the above question in the
affirmative. As a result of this, the appeal is dismissed.
12] The learned advocate for the appellants submits that for
the purpose of six weeks from today, the respondent may not be
allowed to withdraw the amount of Rs.5,00,000/-.
13] The learned advocate for the respondent opposes this
prayer.
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14] In view of the facts and circumstances, the respondent
shall not withdraw this amount for the next six weeks.
(G. A. SANAP, J.)
Vijay
Signed by: Mr. Vijay Kumar
Designation: PA To Honourable Judge
Date: 01/02/2024 15:49:42
