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IN THE HIGH COURT OF MADRAS
V. Ramasubramanian, T. Mathivanan, JJ.
G.M. Jagannathan and Ors. - Appellants
Vs.
H. Indira and Ors. - Respondents
A.S. No. 217 of 2013, M.P. Nos. 1, 2 of 2014 and 1 of 2015
Decided On : 03-08-2015
Transfer of Property Act, 1882 – Section 55 – Code of Civil Procedure, 1908 – Order 6, Rule 2 – Appreciation of the evidences – Challenging the Judgment and Decree dated 12.2.2013 made in O.S. No. 44 of 2009 on the file of the learned Principal District Judge, Vellore, this Memorandum of regular Appeal has been preferred by the Defendants in the Suit. – The Respondents 1 & 2 herein are the Plaintiffs – Held, Such a charge would extend and ensure in respect of purchase or earnest money paid before title passes and the property has been delivered by the seller to buyer on the sellers interest in the property including in respect of interest on purchase money and costs awarded to buyer. – It has also been held that on facts that the so-called "deposit or earnest money" was actually part payment of the purchase price only and therefore, the amount so deposited by the buyers became refundable to them as the prepaid purchase price deposited with the sellers and the sellers necessarily became liable to refund the same with interest due thereon. – This attracted the first limb of Section 55(6)(b) and thus, attracted the Statutory charge envisaged therein, which encompassed the whole of the sum deposited and the interest due thereon. – What the Apex Court has observed in the above cited decisions is that in case the advance amount is to be refunded to the purchaser by the seller, then the purchaser is entitled to get interest. – No particular rate of interest is specified under sub-section (1) to Section 34. – It has been specified that it is the discretion of the Court to add interest, which need not be exceeded 6% p.a. unless, as per the Proviso to sub-section (1), any contractual rate of interest is agreed to be paid. – Court find that the rate of interest at 18% p.a. ordered by the Trial Court seems to be exorbitant and this has not been agreed upon by the Respondents/Defendants. – Since the interest at the rate of 18% per annum is not a contractual rate, Court find that the interest at the rate of 6% p.a. would be very much reasonable. – Therefore, the Appellants/Defendants are directed to refund the advance amount of Rs. 30,33,000 to the Respondents/Plaintiffs with interest at the rate of 6% p.a. from the date of the Plaint till the date of realisation. – Appeal Partly Allowed
T. Mathivanan, J.
1. Challenging the Judgment and Decree dated 12.2.2013 made in O.S. No. 44 of 2009 on the file of the learned Principal District Judge, Vellore, this Memorandum of regular Appeal has been preferred by the Defendants in the Suit. The Respondents 1 & 2 herein are the Plaintiffs. The Respondents 1 & 2 have filed the above Suit as against the Appellants seeking the following relief's:
1. To direct the Defendants to pay a sum of Rs. 46,26,335 to the Plaintiffs with future interest at the rate of 24% per annum till payment is made in full.
2. To direct the Defendants to pay the cost of the Suit.
3. Granting other relief's, which may deem fit and proper.
2. The Defendants have contested the Suit by filing their Written Statements. However, on appreciation of the evidences, both oral and documentary, available on record, the Trial Court has proceeded to Decree the Suit, directing the Defendants to refund the advance of Rs. 30,33,000 to the Plaintiffs with interest at the rate of 18% from the date of Sale Agreement i.e., 29.01.2007 till the date of filing of Suit, i.e., 6.4.2009 and thereafter at 6% per annum on the advance amount of Rs. 30,33,000, till the date of realisation.
3. Having been aggrieved by the Judgment of the Trial Court dated 12.2.2013, the Defendants stand before this Court with this Appeal.
4. For the sake of convenience and easy reference, the Respondents herein may hereinafter be referred to as Plaintiffs and the Appellants be referred to as Defendants, wherever the context so requires.
5. The Defendants are the real estate owners and doing business in real estate. They used to take the registered Agreement of Sale in their favour from the owners of the land and offer to sell the same to the Third Parties, based on the Agreement that may be entered into between them.
6. In so far as this case is concerned, when the Plaintiffs were looking for lands for the purpose of purchase, the Defendants had offered the schedule mentioned property to sell at the rate of Rs. 17,000 per cent. The Plaintiffs had agreed to purchase the property at the rate of Rs. 17,000 per cent. The extent of the property comes to nearly 10 acres.
7. In accordance with this arrangement, both the Plaintiffs and Defendants had entered into an Agreement of Sale on 29.1.2007 and thereby the Defendants had agreed to sell the land and get the Sale Deed, which might be executed by the respective owners and then get it registered in favour of Plaintiffs. On the date of Agreement of Sale, the Plaintiffs had paid a sum of Rs. 30,33,000 to the Defendants towards advance. It was also decided that the remaining balance of Sale Consideration should be paid at the time of conveyance, after calculating the exact extent to be sold by the respective owners.
8. It was also agreed between both the parties that the Contract of Sale shall have to be completed within a period of five months i.e., on or before 29.6.2007.
9. According to the Plaintiffs, the time is the essence of contract, but the Defendants had been evading and not come forward to execute the Sale Deed as agreed by them.
10. Thereafter, the Plaintiffs were put to understand that after receiving the advance amount of Rs. 30,33,000 from them, the Defendants had started acquiring the property in their names and also started creating Sale Deeds in respect of some portion of the property, specified in the Schedule and nearly five acres of land was sold out by them in favour of third parties and not to the Plaintiffs.
11. The conduct of the Defendants would go to show that they were not willing to get the documents in favour of the Plaintiffs. Under this circumstance, the Plaintiffs had thought that it was not safe for them to pay the remaining balance of Sale Consideration and they had therefore decided to get the amount refunded, which was paid as advance to the Defendants.
12. Notice were exchanged between the Plaintiffs and Defendants.
13. Since the Defendants had been evading to perform their
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