Buyer entitled to charged decree within limitation under Section 55(6)(b) of the Transfer of Property Act if non-performance not due to buyer's fault.

JUDGMENT :

Challenging the dismissal of a suit for return of advance sale consideration, the plaintiff is in appeal.

2. Ext.A1 agreement dated 11.11.2013 was entered into between the plaintiff and the predecessor of the defendants, Rosamma. As per Ext.A1, an extent of 25 cents with the residential building thereon was agreed to be conveyed by Rosamma to the plaintiff for a sale consideration of Rs. 62.50 lakhs. On the date of agreement an amount of Rs. 12.5 lakhs was paid towards advance sale consideration. The balance consideration was payable on or before 11.05.2014. Alleging breach of the agreement by the defendants, the suit was filed for return of the advance sale consideration.

3. The defendants admitted Ext.A1 agreement executed by the predecessor. It was contended that the agreement was entered into for raising of funds for the treatment of their mother Rosamma. Consequent on the failure of the plaintiff to pay the balance sale consideration, there occurred breach. Rosamma had entered into an agreement for sale with the third party-Rajan for purchase of his property. An amount of Rs. 13 lakhs was paid towards advance sale consideration. Consequent on the failure of the plaintiff to perform Ext.A1 agreement, the said transaction could not go through. Though a suit was filed against the said Rajan for return of the advance sale consideration, the same was dismissed for the inability of Rosamma to pay court fee. It was contended that the suit is barred by limitation. On these allegations a counter claim was raised for damages of Rs. 13 lakhs.

4. The trial court dismissed the suit and the counter claim as barred by limitation. There is no appeal by the defendants challenging the dismissal of the counter claim. Therefore, the claim for damages by the defendants does not survive for consideration.

5. I have heard Sri. B. Krishnan, the learned counsel for the appellant and Sri. M. Narendra Kumar the learned counsel for the respondent.

6. The points that arise for determination are :-

(i) Relief having been claimed for money charged on immovable property is not Article 62 of the Limitation Act applicable ?

(ii) Is the plaintiff entitled for charged decree in terms of Section 55(6)(b) of the Transfer of property Act ?

7. The relief claimed in the plaint reads thus:-

“Directing the Defendants jointly as legal heirs of Late Smt. Pottiyan R. Rosamma to pay to the Plaintiff an amount of Rs.21,50,000.00 (Rupees Twenty One lakhs and Fifty Thousand only) with interest thereon @ 12% per annum from the date of this Suit till realization and cast the same as a charge over the Plaint schedule properties.”

The relief contains two parts-first part seeking personal decree and the second part claiming a decree charged on the plaint schedule properties. In case of breach of an agreement for sale, even if the purchaser is found to be responsible for the breach, still, unless the seller proves that he suffered damages consequent to the breach, he is bound to return the sale consideration or the part thereof, as may have been received by him. In Kannan Menon v. Kuttikrishna Menon and Ors. 1962 KLJ 257, this Court held :-

“It follows therefore that any payment made of part of purchase money at the time of the contract for sale, must, even if the blame for its breach is on the buyer, be refunded to the buyer.”

In Saramma v. Varghese [Laws (Ker) 2014 (9) Page 1], a Division Bench of this Court held :-

“The provisions under section 55 of the Transfer of Property Act do not provide for retention of advance money by the vendor in the event of any breach on the part of purchaser.”

In Crompton Greaves Limited. v. Icon Integrated Industries and Software Ltd. 2021 (3) KLT 377(D.B), it was held :-

“.....A vendee through whose default a contract for sale falls, is entitled to recover the amount of purchase money paid by him and the vendor can only resist the claim by seeking to set off against the said sum any damages which he might have incurred by a reason of the vendee's