The plaintiff failed to establish the existence of a binding contract or prove payment of earnest money for specific performance, leading to the dismissal of his claims.

JUDGMENT :

K.SUJANA, J.

This appeal is filed by the appellant-plaintiff aggrieved by the judgment and decree dated 31.01.2014 passed in O.S.No.46 of 2006 on the file of I-Additional District Judge at Mahabubnagar. The suit in O.S.No.46 of 2006 was filed by the plaintiff seeking specific performance of a contract based on an agreement of sale dated 24.12.2002 and also claimed compensation/damages of Rs. 20,00,000/- with future interest at 18% per annum from the defendant. For the sake of convenience, the parties herein are referred to as arrayed in the suit.

2. The plaintiff claimed that the defendant was the owner and possessor of lands bearing Sy.Nos.441/AA, 487/AA, 489/AA, 490/AA, 492/AA, 491/AA, 553/AA, 485/AA, 486/AA, and 343/AA, admeasuring Ac.23.03.5 guntas, situated at Kishanagar Village, Farooqnagar Mandal, Mahabubnagar District. The defendant had purchased the said lands through a registered sale deed bearing Document No. 5702/2002. The defendant, in view of family and legal necessity, offered to sell the said lands and the plaintiff expressed his willingness to purchase the same and the sale consideration was settled at Rs.70,000/- per acre, amounting to a total of Rs.16,16,125/-. Accordingly, an agreement of sale was executed on 24.12.2002 between the parties, the plaintiff paid Rs.12,00,000/- as earnest money to the defendant at the time of agreement and the balance sale consideration to be paid on or before 31.08.2006, and the defendant would execute a registered sale deed in favour of the plaintiff.

3. The plaintiff further claimed that he was always ready and willing to pay the balance sale consideration even before the stipulated date and had offered the same to the defendant. However, the defendant allegedly avoided accepting the said amount without any valid reason. Thereafter the plaintiff came to know that the defendant had started negotiating with third parties for sale of the same lands and was planning to return the earnest money. The plaintiff contended that the defendant intended to back out of the agreement due to a rise in land prices. As such, to show his bonafides, plaintiff issued a legal notice dated 27.08.2006, calling upon the defendant to honour the agreement and informed him of his readiness to pay the balance sale consideration by 31.08.2006 and complete the registration of sale deed. However, the said notice was refused by the defendant and was returned with the endorsement "refused" on 29.08.2006. As such, the conduct of the defendant amounted to a refusal to perform his part of contract. The plaintiff reiterated his willingness to perform his part of the agreement, including paying the balance sale amount and completing registration. However, the defendant, on the other hand, allegedly offered to return the earnest money with mala fide intention and the plaintiff refused to accept the same and insisted for performance of the contract. The plaintiff claimed that the defendant had committed breach of contract and retained a substantial amount for over four years. Hence, plaintiff sought specific performance of the agreement of sale. In the alternative, he prayed for compensation/damages of Rs.20,00,000/- with interest, alleging financial loss and hardship caused by the defendant.

4. The defendant filed written statement in the suit admitting that he was the owner of the suit schedule property but denied that the plaintiff had entered into any agreement of sale on 24.12.2002 with him for a total sale consideration of Rs.16,16,125/-, or that the plaintiff had paid Rs.12,00,000/- as earnest money. The