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Shyla @ Shymol Kamalasanan & Another v/s Joseph


Company & Directors' Information:- JOSEPH AND CO PVT LTD [Active] CIN = U01211KL1954PTC000507

Company & Directors' Information:- E R JOSEPH & CO PVT LTD [Strike Off] CIN = U28920WB1955PTC022404

    RFA. No. 188 of 2012

    Decided On, 11 March 2020

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN

    For the Appellants: M.S. Unnikrishnan, Advocate. For the Respondent: R1, A.C. Devasia, Advocate.



Judgment Text


1. The defendants in O.S.No.19 of 2007 on the files of the Sub-Court, Kattappana, has filed this appeal impugning the judgment and decree of the said Court, as per which, an amount of Rs.2 lakhs has been allowed to be recovered by the plaintiff/respondent herein, being the advance sale consideration paid by him under an agreement of sale dated 02/09/2006 along with the interest thereon.

2. The appellants have assailed the judgment and decree in question not merely on the ground that it has allowed the respondent/plaintiff to recover the afore said amount but also because it has rejected their counter claim for an amount of Rs.2 lakhs, which they sought on the basis that the plaint schedule property had been occupied by the respondent/plaintiff during the period in the agreement was in force.

3. The appellants thus pray that this appeal be allowed, setting aside the judgment and decree of the Trial Court and allowing their counter claim.

4. The facts, compendiously, as are relevant for my consideration, is that the appellants entered into an agreement of sale with respect to their property, having an extent of 2.20 Ares in Re-Survey No.449/8 of Kanjikuzhy Village, with the respondent on 02/09/2006 - the original of which has been marked on record as Ext.A1 - for a total sale consideration of Rs.7,40,000/-, with the term for execution of the sale deed being fixed as 28/02/2007.

5. Curiously, Ext.A1 agreement records that the plaintiff has paid Rs.2 lakhs as advance, while that the appellants/defendants will obtain a loan of Rs.5 lakhs on it - the liability of repayment of which will be on the shoulders of the plaintiff-and that the latter will pay the balance amount of Rs.40,000/- on or before 28/02/2007, leading to the execution of the sale deed.

6. It transpires that the appellants/ defendants, thereafter, issued a lawyer's notice to the plaintiff, namely Ext.A4, on 21/02/2007 stating that in spite of their effort, they were not able to obtain a loan for Rs.5 lakhs on the property and that at the best, they will be able to obtain only Rs.2,50,000/-. In the said notice they, therefore, notified the respondent that the agreement has been rendered unenforcible; but offered that if the plaintiff pays the balance Rs.2,50,000/-, along with the remaining sale consideration of Rs.40,000/-, on or before the term of the agreement, the sale deed can be executed.

7. However, the plaintiff did not accede to this and he, therefore, filed a suit seeking specific performance of the agreement; and in the alternative, for realization of the advance amounts paid, as also the amounts spent by him for improvement of the plaint schedule property. The claim for improvement was based on the assertion that as per Ext.A1 agreement, the plaint schedule property had been given to him in possession on its date and that he had, thereafter, made certain constructions thereon, so as to enhance its value.

8. That being so, once the suit had been so filed, the defendants raised a counter claim alleging that since the plaintiff was in possession of the plaint schedule property and had exploited the resources thereon, including the tapping of the rubber trees and harvesting of pepper and coffee, they are entitled to damages for an amount of Rs.2 lakhs and thus prayed that the suit be decreed in such fashion. They also prayed that the claim of the plaintiff be rejected because, it was he who was in breach of Ext.A1 agreement and therefore, that he is not entitled to seek either its specific performance or for return of the advance amounts paid.

9. I notice from the records that the suit and the counter claim was taken to trial by the Trial Court and that Exts.A1 to A5 were marked on the side of the plaintiff; while Exts.B1 to B4 were marked on the side of the defendants. Ext.C1, which is a Commission Report was marked as a Court exhibit and the testimonies of PW1 and PW2 were recorded on the side of the plaintiff; while that of DW1 and DW2 on the side of the defendants.

10. The Trial Court, after an evaluation of the pleadings and evidence on record, came to the conclusion that it was the respondent/plaintiff who was in breach of Ext.A1 agreement and therefore, that the same cannot be specifically enforced, but that he was entitled to the advance sale consideration of Rs.2 lakhs, thus decreeing the suit for the said amount, along with the interest at the rate of 12%.

11. However, on the question of the counter claim, the Trial Court found that since the respondent/plaintiff was in possession of the property as per Ext.A1 agreement and since he was specifically allowed to use the same under its terms, the appellants/defendants were not entitled to seek any compensation for such occupation and thus rejected the same, even though in Ext.C1 the learned Advocate Commissioner had found that the respondent/plaintiff had obtained benefit of Rs.35,750/- by tapping the rubber trees and harvesting pepper and coffee there from.

12. It is this judgment and decree which is assailed before me in this appeal.

13. I have heard Shri.M.S.Unnikrishnan, learned counsel appearing for the defendants and Shri.A.C. Devasia, learned counsel appearing for the respondent.

14. For the sake of convenience, I will hereinafter refer to the parties as they are arrayed at the Trial Court.

15. As has already been stated above, as per Ext.A1 agreement, the plaintiff paid an amount of Rs.2 lakhs as advance, reserving a further sum of Rs.40,000/- to be paid on or before 28/02/2007. Interestingly, in the said agreement the defendants unequivocally agreed that they will take a loan on the said property for an amount of Rs.5 lakhs and that the plaintiff will thereafter pay off the same, by honouring the monthly installments. However, it is also expressly admitted by the defendants that they did not obtain a loan for Rs.5 lakhs on the property in spite of their best effort; but that they were able to obtain a loan only for Rs.2,50,000/-, which amounts had been credited to their accounts on or about 15/09/2006.

16. That said, pertinently, there is nothing on record to show that the defendants had informed the plaintiff that such a loan had been availed or that they had received Rs.2,50,000/-; and this becomes crucial because, in Ext.A4 notice issued by them subsequently on 21/02/2007, what is stated is:

“My client though made earnest efforts to get the loan could not succeed. No bank is inclined to grant a loan more than Rs.2,50,000/-. Under the above circumstances it is impossible to perform the above said part of the contract.

So I kindly request you to arrange Rs.2,50,000/- plus Rs.40,000/- on or before 28/02/2007 so that my client can execute sale deed in your favour” (sic).

17. It is, therefore, uncontestable that, going by Ext.A4, the defendants had not obtained any loan until the date on which it was issued, namely 21/02/2007, but they assert in the written statement and in their counter claim that they had obtained a loan of Rs.2,50,000/- on or about 15/09/2006, which is several months before this. After they say that they had obtained such a loan, they allege that they were unable to obtain loan for Rs.5 lakhs in spite of their best effort, but no evidence has been led by them in any manner to show what effort and steps they had taken to obtain such a loan. Vitally, they have chosen not to examine any witness - including the Officer attached to the Bank, from where they say that they have obtained a loan for Rs.2,50,000/- to establish why they were unable to get a loan for Rs.5 lakhs; but then assert that the value of the property was only Rs.5 lakhs and therefore, that such a loan could not have been obtained.

18. Therefore, the germane question is whether the conclusions of the Trial Court, that the plaintiff was in breach of Ext.A1, can be found to be tenable in law.

19. In this regard, it is no doubt true that while the plaintiff was examined as PW1, he also said that the value of the property was only about Rs.5 lakhs and that it may not be possible to get a loan for that amount. However, this is of no relevance because, as per Ext.A1, it was the defendants who had taken upon themselves the obligation to obtain a loan of Rs.5 lakhs on the property and it does not stipulate any such burden on the plaintiff.

20. Therefore, when the defendants had themselves taken over this burden and in the absence of anything to show that they had tried to obtain a loan for Rs.5 lakhs but had failed; or that they were able to obtain only a loan of Rs.2,50,000/- earlier - which fact is also belayed by Ext.A4 - I cannot find any fault that can be attributed to the plaintiff, as has been done by the Trial Court. Obviously, therefore, the decree to extent to which the advance amount has been ordered to be repaid cannot be found to be in error at all.

21. I further notice that the Trial Court has rejected the claim of the plaintiff for additional compensation on account of the improvements made in the property, but since he is not in appeal I see no reason to disturb such findings.

22. The above being so, the next issue is as to whether the counter claim of the defendants ought to have been allowed by the Trial Court.

23. As has already been recorded above, the edifice of the counter claim is that the plaintiff had used the plaint schedule property until 25/03/2007, when it was admittedly surrendered back in possession to the defendants. According to the defendants, the plaintiff had used the property and had obtained certain benefits from it; but that since Ext.A1 sale agreement did not fructify into a sale deed, they are entitled to recover the amounts that have been so obtained by the plaintiff.

24. However, as have already seen above, it is expressly as per the terms of Ext.A1 agreement that the plaintiff was put in possession of the plaint schedule property. The agreement also says that the plaintiff is entitled to use the same and enjoy its usufructs and that he has to pay only the balance sale consideration of Rs.40,000/- on or before 28/02/2007. When the sale deed did not fructify for the reasons that I have already said above, the plaintiff surrendered possession of the property back to the defendants on 25/03/2007. Indubitably, therefore, he was in possession of the property for only less than a month after the term shown in Ext.A1 had expired; and therefore, normally, the claim of the defendants for damages would not be sustainable, except if they are able to show that the plaintiff had acted contrary to the terms of the said agreement.

25. In this context, it is relevant that at the instance of the defendants a learned Advocate Commissioner had been deputed by the Trial Court and he preferred Ext.C1 report, wherein, it is stated that, as per his estimation, an amount of Rs.35,750/- was obtained by the plaintiff by tapping of the rubber trees standing in the plaint schedule property and by harvesting of pepper and coffee. Even that being so, an order to return this money would become apposite only if the plaintiff is demonstrated to have violated Ext.A1 in any manner. However, as found by me above, as per Ext.A1, the plaintiff was entitled to possess the property and to use the usufructs therefrom. This is perhaps because the parties intended and expected that the sale deed would eventually be executed but unfortunately this was not to be and the said agreement fell apart.

26. In such scenario, therefore, the question that renders crucial for this Court's assessment is whether this is on account of any fault that can be attributed to the plaintiff. As I have noticed above, it cannot be held so, since, contractually, it was the full responsibility of the defendants to obtain Rs.5 lakhs loan on the property, which they could not do or which they did not try to achieve; and ineluctably thus, I cannot find the counter claim to be on strong foundations.

27. Resultantly, I find favour with the impugned judgment and decree of the Trial Court with respect to the dismissal of the counter claim also, thus leaving me with the final question as to whether the interest awarded by the said Court on the decree amount requires to be re-looked, as has also been pleaded for by the appellants/defendants.

28. The impugned judgment and

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decree allows the plaintiff to recover Rs.2 lakhs from the defendants, with 12% interest per annum, which sum has been charged on the property under Section 55(6)(b) of the Transfer of Property Act. The decree was delivered on 29/10/2009, but the Trial Court does not say why it has adopted the rate as 12%, in the absence of any evidence to show that this was the applicable rate of interest at the relevant time. 29. I am, therefore, of the view that the interests of both parties will be sufficiently balanced if the rate of interest is reduced to 9%, which I am of the view would be sufficient succor to the plaintiff, since the rate now granted appears to be slightly excessive, particularly when there is no contractual rate applicable and no evidence to establish the normal interest on bank transactions at that time. Resultantly, this appeal is allowed in part, confirming the holdings and findings of the Trial Court; however, reducing the rate of interest on the amount of Rs.2 lakhs from 12% to 9% per annum and ordering that the decree amount will stand charged to the plaint schedule property under Section 55(6) (b) of the Transfer of Property Act. In the nature of the circumstances and factors that I have seen above, I deem it appropriate not to make any order as to costs and to direct the parties to suffer their respective cost in this appeal.
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