JUDGMENT: (Per Hon'ble Mr Justice R.Kantha Rao)

1. A.S.No.271 of 2006 is directed against the judgment and decree dated 29.04.2006 passed in O.S.No.44 of 2002 by the I Additional District Judge, Kadapa.

2. The appellant filed the suit for specific performance of agreement to sell, dated 28.03.2001 executed by the respondent and also for permanent injunction restraining the respondent from interfering with his possession and enjoyment of the schedule mentioned property, which is a cinema theatre. The suit was dismissed without costs. Feeling aggrieved, the appellant/plaintiff preferred this appeal.

3. Cross-objections (S.R.) No.6858 of 2006 are filed by the respondent challenging the finding of the trial Court that the respondent did not disclose to the appellant all the debts due upon the schedule mentioned property as on the date of the suit agreement to sell.

4. FACTS: The respondent who is the owner of M/s. Sri Venkateshwra Theatre, Nagarajupalli, Kadapa District hereinafter referred to as schedule mentioned property, agreed to sell the same to the appellant for a consideration of Rs.64,00,000/- and the appellant also agreed to purchase the same. On 28.03.2001 the respondent executed an agreement to sell the schedule mentioned property to the respondent for an amount of Rs.64,00,000/-. Out of the total sale consideration, the appellant received an amount of Rs.17,12,000/- on the date of the agreement to sell. Subsequent thereto, admittedly the appellant paid some amounts to the respondent/defendant on various occasions and also paid to the institutions for which the respondent became due. In all the appellant paid total consideration of Rs.35,47,000/- as on 25.10.2001 to the respondent.

5. It was stipulated in the agreement that if a good and marketable title is made and the property is found to be free from all encumbrances, attachments, charges and other claims, the appellant has to pay the balance of sale consideration by 28.03.2001 in three equal instalments and the respondent has to clear all the debts secured and unsecured to the government and non-government, private banks, other financial institutions etc. from out of the payment of sale proceeds by the purchaser and keep the said schedule mentioned property free from all encumbrances, attachments, charges etc. The respondent shall deliver vacant possession of the schedule mentioned property after receiving the entire sale consideration from the appellant and execute registered sale deed in his favour.

6. It was further stipulated in the agreement that if a good and marketable title is not made or the property is found to be subject to any encumbrances, attachments or charges or other claims or demands, the appellant shall be at liberty to rescind the agreement and the respondent shall in that event and on demand by the appellant repay whatever the sum paid by the respondent together with interest @ 10% per annum.

7. It was also stipulated under the agreement that if the respondent fails or neglects to complete the sale after the title being made out as aforesaid or otherwise to carry out any one or more of the obligations on her part, as provided in the agreement or otherwise required by law, the appellant will be at liberty to enforce the specific performance of agreement by instituting legal proceedings or at his option, may sue the vendor for recovery of the earnest money with interest, costs and other reliefs. It was further stipulated that if the appellant fails to pay the balance of sale price within the period prescribed under the agreement, the earnest money shall be forfeited to the respondent or she may at her option enforce specific performance of the agreement in which event the appellant will also be liable to pay the costs and expenses incurred to such suit or proceeding.

8. It is the contention of the appellant that at the time of entering into agreement, the respondent disclosed that an amount of Rs.16,00,000/- was due to Vijaya Bank, Tirupathi unde

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