1. Aggrieved by the judgment and decree in A.S.Tfo.38 of “2004 dated 29.9.2007 of the Sub Court, Kattappana the plaintiff came up with this second appeal. Cross objection No. 3 of 2009 was also preferred on receipt of notice of appeal by the respondent. The dispute involved in the suit in O.S.No.318 of 2001 on-the fife of the Munsiffs Court, Kattappana is pertaining to Ext.AI contract for sale dated 22.3.2001 and the claim of the plaintiff for return of advance amount.

2. Ext.A1 contract for sale was admittedly entered into between the plaintiff and the defendant agreeing to sell an immovable property admittedly belonged to a third person one Aandamrna. The defendant had earlier entered into a contract for sale of an immovable property having a large extent of 6.250 cents with its owner Aandamrna under Ext.37 contract dated 21.3.2001 and paid an advance amount of Rs.5,000/- to the said Aandamrna by which Aandamma agreed to self 6.250 cents of property to the defendant. On the -next day, the defendant executed Ext.A1 contract for sale with the plaintiff agreeing to sell a portion of the property having an extent of 5.250 cents to the plaintiff on a sale consideration of Rs.85,000/-per cent, totalling an amount of Rs.4,42,250/-. Subsequently, the said contract was rescinded by the plaintiff by issuing Ext.A2 notice on the ground that the defendant was not having saleable interest over the property and demanded return of the advance amount but the same did not serve the purpose and hence the suit in O.S.No.318 of 2001.

3. The defendant contested the suit stating that the plaintiff is not entitled to return of the advance amount as he has suffered monetary loss on account of non-performance of Ext.A1 contract for safe and that he was forced to purchase the property from Aandamma by availing loan and by selling gold ornaments under Ext.B1 sale deed dated 16.7.2001. Ext.A2 notice was issued subsequently on 17.8.2001 fully knowing that the defendant had purchased the property from its lawful owner Aandamma as per Ext.B7 contract for sale. A counter claim was also raised for recovery of an amount of Rs.68,940/-, but the claim was limited to Rs.25,000/- being the loss and damages sustained by the defendant on account of non-performance of Ext.A1 contract for safe.

4. The trial court, on hearing both the parties and on consideration of the pleadings and evidence, decreed the suit in O.S.No.318 of 2001 granting the relief of recovery of advance amount of Rs.25,000/- to the plaintiff and dismissing the counter claim by its judgment dated 14.8.2005 against which A.S.No.38 of 2004 was preferred by the defendant before the Sub Court, Kattappana. The first appellate court, on hearing both the parties, confirmed the dismissal of the counter claim, but set aside the decree granted to the plaintiff for recovery of advance amount by allowing the appeal in part as per its decree and judgment dated 19.8.2007, against which this second appeal and cross objection were filed by the respective plaintiff and the defendant.

5. Heard the learned counsels Sri. Naveen Thomas for the appellant and Sri. Grashious Kuriakose for the respondent,

6. It is submitted by the learned counsel for the appellant that the lower court has virtually passed an inconsistent decree. The suit was filed for return of the advance amount. The effect of forfeiture clause, if any, in the contract for safe pertaining to the advance amount unless quantified by mutual agreement would operate to the extent of actual damages sustained. The parties are governed by Section 73 of the Contract Act and the advance amount, if any, received is liable to be returned in the absence of evidence showing the actual damage suffered by the other party due to non-performance of the contract by the plaintiff or due to its rescission. Both the trial court and the appellate court found that there is no evidence to show the actual damages sustained by the defendant and as such the counter claim rais