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IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. SATHISH KUMAR, J.
K.Savithiri and others – Appellants
Vs.
L.Ramasamy and others – Respondents
A.S.No.538 of 2012
Decided On : 03-05-2017
Limitation Act - Article 62 -Transfer of Property Act -Section 55(6)(b) - Partnership Act - Bona fide - Executed agreement -sake of convenience - Recovery of advance amount - Defendants 1 to 6 and 9 to 11 and one husband of the 7th defendant and father of the 8th defendant, agreed to sell the suit properties in favour of the plaintiffs for a total consideration and executed agreement and received a sum amount as advance - It is further agreed between the parties that the transaction shall be completed within six months from the date of agreement. The plaintiffs are always ready and willing to perform their part of contract from the date of agreement itself - But the defendants neglected to perform their part of the contract by giving evasive replies - Held, Court expresses its anguish about the unfairness on the part of the counsel in dealing with the matter - Suit for recovery of money cannot be maintainable in view of the fact that statutory charge created for the price money has been lost due to plaintiffs own default. Accordingly these points are answered - Trial Court holding limitation to enforce charge is for three years is hereby set aside, the appeal is dismissed and the judgment and decree of trial Court dismissing the suit is hereby confirmed on the aforesaid factual aspects - Connected miscellaneous petition is closed
Certainly. Based on the provided legal document, the key points are as follows:
The dispute involves an agreement for sale of property, where the plaintiffs paid an advance amount but the sale was not completed within the stipulated time frame. The agreement explicitly stated that the transaction should be completed within six months, and failure to do so would result in forfeiture of the advance (!) (!) .
The plaintiffs contend that the advance payment created a statutory charge over the property, which should continue until the sale is finalized or the charge is otherwise lost due to the default of the buyer. They argue that this charge is governed by applicable law and that the suit for recovery of the advance should be within the limitation period prescribed for enforcing such a charge (!) (!) .
The defendants admit to the agreement and receipt of the advance but claim it was only towards earnest money, which would be forfeited if the sale was not completed within the agreed period. They contend that the agreement's terms and subsequent conduct indicate that the right to enforce the charge was lost due to the plaintiffs’ default and delay in taking steps to perform their obligations (!) (!) (!) .
The legal position clarifies that a statutory charge created under the law attaches to the property at the time of payment and continues unless the buyer defaults or improperly refuses delivery. The charge is a statutory right that lasts for a specified period, often 12 years, unless lost due to the buyer’s default or other conduct (!) (!) (!) .
The conduct of the plaintiffs, including their failure to perform their part of the contract within the stipulated time and their delay in asserting their rights, led to the conclusion that they effectively abandoned or waived their claim to enforce the charge. Their inaction resulted in the loss of the statutory charge over the property (!) (!) .
The court emphasized that the plaintiffs’ own default, including their delay and failure to act, caused the loss of the statutory charge. Consequently, their suit for recovery of the advance amount was barred by limitation and also lacked legal enforceability due to their conduct (!) (!) .
The appeal was dismissed, and the judgment of the trial court was upheld, confirming that the plaintiffs could not recover the advance amount because the statutory charge had been lost due to their default. The court also noted that the suit was filed beyond the permissible limitation period and that the conduct of the plaintiffs was inconsistent with their claim (!) .
The court expressed disapproval of the conduct of the legal representatives involved, highlighting that improper conduct and conflict of interest could undermine the integrity of legal proceedings, although this did not directly affect the substantive outcome of the case (!) .
These points summarize the core legal principles, factual findings, and conclusions of the case as reflected in the document.
Aggrieved over the dismissal of the suit, which has been filed for recovery of the advance amount paid pursuant to the agreement dated 28.11.1995, the present appeal came to be filed by the plaintiffs.
2. For the sake of convenience, the parties are referred to, as per their ranking before the trial Court.
3. Facts and circumstances giving rise to this appeal are:
(i) The defendants 1 to 6 and 9 to 11 and one Palanisamy, husband of the 7th defendant and father of the 8th defendant, agreed to sell the suit properties in favour of the plaintiffs for a total consideration of Rs.18,13,500/- (Rupees Eighteen lakhs Thirteen Thousand and Five Hundred only) and executed agreement dated 28.11.1995 and received a sum of Rs.5,00,000/- as advance. It is further agreed between the parties that the transaction shall be completed within six months from the date of agreement. The plaintiffs are always ready and willing to perform their part of contract from the date of the agreement itself. But the defendants neglected to perform their part of the contract by giving evasive replies.
(ii) Subsequently, the plaintiffs came to know that the defendants 1 to 11 have executed a sale deed in favour of the 12th defendant for a sum of Rs. 3,29,700/- which is grossly in adequate. The execution of the aforesaid sale was a fraudulent act of the defendants 1 to 12. Therefore, the plaintiffs issued a legal notice dated 30.06.2005 to the defendants 1 to 12 calling upon to pay the advance amount with interest at the rate of 12% p.a. However, the defendants sent a reply with false allegations for which the plaintiffs also sent a rejoinder dated 26.8.2005. Again on 15.9.2005, the 12th defendant sold the property in favour of 13th defendant. Thereafter, on 25.10.2007, the 13th defendant have executed the sale in favour of 14th and 15th defendant. According to the plaintiffs all the sale deeds are sham and nominal. The plaintiffs are entitled to recover a sum of Rs. 5,00,000/- (Ruppes Five lakhs only) which was paid towards advance from the defendants. Therefore, they issued a legal notice to the defendants. Since no steps have been taken by the defendants to pay the aforesaid amount, the instant suit has been filed by the plaintiffs.
(iii) The defendants 1 to 9 filed a written statement admitting the agreement of sale in favour of the plaintiffs on 28.11.1995 and also receipt of amount of Rs.5,00,000/- on the date of agreement. But according to the defendants, the said amount was received towards earnest deposit and not towards sale consideration as alleged by the plaintiffs. Denying the allegation that the plaintiffs were always ready and willing to perform their part of contract, it is stated that time is the essence of contract and since the same expired on 25.9.1996, the contract became unenforceable. Due to subsequent fall in value of the suit properties, the defendants sold the properties in favour 12th defendant for fixed value. Non performance of the contract by the plaintiffs caused much loss to the defendants. In the additional written statement filed by the 9th defendant, it is stated that the suit is barred under Section 69 of the Partnership Act. Hence, the defendants 1 to 9 prayed for dismissal of the suit.
(iv) Defendants 10 and 11, while adopting the statement filed by the other defendants, contended that the suit is barred by limitation as the same ought to have been filed within three years from the date of agreement.
(v) The defendants 14 and 15 also contended that they purchased the property on 25.10.2007 from 13th defendant after giving due publication and that they are the bona fide purchasers and after the said purchase they made some improvements. Hence, they prayed for dismissal of the suit.
4. In view of the above pleadings, the following issues were framed by the trial Court:
1. Whether the suit is barred by limitation?
2. Whether the plaintiffs have failed to perform their contract within the time?
3. Whether the defendants 14 and 15
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