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1992 Supreme(Mad) 451

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE THANIKKACHALAM
S.Arumuga Lakshmi Ammal
Versus
S.Mohamcd Shaffi
S.A.No.623 of 1982
Decided On : 09-09-1992

Advocates:
Peppin Fernando for R.Balasubramanian, for Appellant. T.R.Rajagopalan, for Respondent.

Due to breach of agreement no claim for refund of advance can be made by plaintiff.

Headnote:Contract Act, 1872-Section 74-In an agreement for sale plaintiff paying advance amount- Agreement providing for forfeiture of advance amount in case of breach of contract by plaintiff - Held, cannot claim for refund of advance paid.

       

Judgment :

The plaintiff is the appellant herein The case of the plaintiff is as under: The defendant agreed to sell his properties to the plaintiff on 112. 1978 bearing door Nos.l74/C4 ground floor and 174/C9 at Tirunelveli Junction High Road, Tirunelveli for a sum of Rs.70,000. Accordingly, an agreement of sale was executed on 112. 1978. The plaintiff paid an advance of Rs.5,001 to the defendant. The sale was to be completed within 40 days. According to the plaintiff, the conditions stipulated in the sale agreement was not fulfilled by the defendant within the period stipulated therein. The plaintiff was willing to perform her part of the contract. The plaintiff sent a telegraphic notice dated 22. 1979 to the defendant since he was negotiating to sell the property to a third party. Thereafter, a regular notice dated 22. 1979 was sent by the plaintiff to the defendant. The defendant sent a reply dated 22. 1979 containing false allegations. Therefore, according to the plaintiff, the defendant committed breach of contract and hence the defendant is liable to return the advance amount of Rs.5,001.

.2. According to the defendant, since the defendant required money urgently, he entered into a contract with the plaintiff to sell his property. The sale agreement was executed on 112. 1978 and the sale is to be completed positively before 21. 1979. Therefore, the time is the essence of the contract. The property agreed to be sold to the plaintiff was under mortgage to a third parly and the plaintiffs husband agreed to pay the mortgage amount before the sale deed is executed. The mortgage amount payable to the third party was settled at Rs.29,000 and the plaintiffs husband agreed to pay this amount at Madras before 10th January, 1979 to the mortgagee. But the plaintiffs husband failed to pay this amount to the mortgagee before the stipulated date, hence, the mortgage could not be discharged. The mortgagee was pressing the mort-gager for repayment of the mortgage money. Under such circumstances time to complete the said transaction was extended to 22. 1979 from 21. 1979 as fixed earlier in the said agreement. Even then, the plaintiff failed to discharge the prior mortgage. Since the plaintiff committed breach of trust, according to the terms of the sale agreement, the advance amount of Rs.5,001 paid by him was forfeited. Since the plaintiff committed breach of trust the defendant claimed damages from the plaintiff at Rs.5,001. Therefore, the plaintiff is not entitled to ask for return of the advance amount of Rs.5,001.

3. The plaintiff filed 8 documents. The defendant filed 10 documents. Mr.Suryanarayanan examined himself as P.W.I and Sheikh Mohammed examined himself as D.W.I. Considering the facts arising in this case, the trial court decreed the suit with costs as prayed for against the defendant. On appeal, the first appellate court appraising the facts arising in this case held that the plaintiff committed breach of contract and therefore she is not entitled to recover Rs.5,001 from the defendant. The damages claimed by the defendant was also rejected. Thus, the judgment and decree of the trial court was set aside and the appeal was allowed in part.

4. The learned counsel appearing for the appellant submitted as under.

5. The plaintiff was ready and willing to perform his part of the contract within the time stipulated in the sale agreement. The defendant failed to furnish the original title deeds, the name of the prior mortgagee and the amount due to that person. Further, the defendant failed to furnish the municipal valuation certificate and the income tax clearance certificate for the purpose of completing the sale transaction. Therefore, the sale could not be completed due to the breach of contract committed by the defendant. Under such circumstances, the plaintiff is entitled to get back the advance amount paid to the defendant The learned counsel further submitted that as per the provisions of Sec.74 of the Indian Contract

















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