Court Partially Allows Appeal, Orders Refund of Advance Payment with Interest - 2024-06-14

Background

In this case, the plaintiffs entered into a sale agreement with the defendants to purchase a property. The plaintiffs paid a substantial amount as advance, but the defendants later refused to execute the sale deed. The plaintiffs filed a suit seeking specific performance of the agreement, as well as an alternate relief of return of the advance payment.

Arguments

The plaintiffs argued that they had paid a total of ₹16 lakh as advance and were ready and willing to perform their part of the agreement. They claimed that the defendants were trying to sell the property to a third party at a higher price, despite the existing agreement with the plaintiffs.

The defendants, on the other hand, denied receiving the full advance payment and claimed that the plaintiffs had failed to pay the balance sale consideration within the stipulated time, thereby breaching the agreement. They also argued that the suit was barred by limitation and under Order II Rule 2 of the Code of Civil Procedure.

Court's Analysis and Reasoning

The court found that the plaintiffs had only proved the payment of ₹15 lakh as advance and not the additional ₹1 lakh they had claimed. The court also held that the time was essence of the contract and the plaintiffs had failed to prove their readiness and willingness to perform their part of the agreement within the stipulated time.

However, the court recognized that the plaintiffs were entitled to the alternate relief of refund of the advance payment of ₹15 lakh, along with interest at the rate of 9% per annum from the date of the suit until the date of the decree, and post-decree interest at the rate of 6% per annum until the date of realization.

Decision

The court partially allowed the appeal, confirming the trial court's decision to deny the relief of specific performance, but setting aside the trial court's decision on the alternate relief. The court directed the defendants to pay the plaintiffs the refund of ₹15 lakh, along with the specified interest amounts.