A vendor cannot retain an advance payment without a specific clause for forfeiture, even if the buyer does not complete the contract, as per the Transfer of Property Act.

JUDGMENT

Asha, J.

Appellants are the defendants in a suit for realisation of money paid in furtherance of a contract for sale, challenging the judgement and decree of the Court of Additional Sub Judge, Kottayam declaring the plaintiffs entitlement to realise a sum of Rs. 2 lakhs with interest from the date of the suit.

2. The facts leading to the case as projected by the plaintiff in the court below are as follows. An agreement was entered into between the plaintiff and first defendant on 18.10.1996, by which the first defendant agreed to sell 12.7205 cents of property in Chingavanam for a sale consideration at the rate of Rs.30,000/- per cent, receiving a sum of Rs.2 lakhs towards consideration on 18.10.1996. The period stipulated for executing sale deed was one and a half months. Plaintiff alleged that though the first defendant promised to measure and fix the boundary of the property, to execute the sale deed, she left for Bangalore and then to the ship of merchant Navy, where the second defendant is working and did not return during the period of contract for sale. He was ready and willing to get the sale deed executed within the period stipulated; but the defendants were postponing the matter on lame excuses. On realising that they rescinded the contract, a lawyer notice was sent to the defendants on 17.7.1998 demanding execution of sale deed. The defendants in the reply notice issued on 22.7.1998 informed the plaintiff that a civil case was pending in respect of the property. The plaintiff therefore rescinded the contract as the defendants cheated him. Suit is filed thereupon for refund of advance money paid, stating that he did not commit any breach of contract and was always ready and willing to perform his part.

3. The defendants one and two, in the written statement denied the allegations and stated that they were always ready and willing to perform their part and it was the plaintiff who committed breach of contract. They stated that they were in station and the plaintiff did not turn up with the balance sale consideration or the draft sale deed in terms of the agreement for sale. It was also alleged that the agreement was for sale of her right of the one half of the undivided share in 25 cents and 441 square links of property and there was no provision in the agreement to measure out or demarcate the boundaries. It was also alleged that the agreement was to get the sale deed executed and registered as and when the plaintiff comes forward with balance consideration and draft sale deed, which the plaintiff did not do. There was no suit pending in respect of the property within the period of contract and that the suit filed-O.S 937/1996 was dismissed on 11.9.1998. The plaintiff turned up with the demand only in the year 1998, much after the expiry of the period of contract, without performing his part, when the suit was pending. However the defendants by their reply notice informed that they were ready to sell the property to the plaintiff. They never cheated the plaintiff, but only informed the factual circumstances. But the plaintiff filed a criminal complaint against the defendants alleging that the defendants cheated him and Crime Number 91/1998 was registered against them, under Sections 415 and 420 of IPC, in the Police Station, Vakathanam which caused serious harassment and humiliation and damage to their reputation in addition to incurring of huge expenditure, as they were compelled to approach the High Court seeking anticipatory bail. The defendants alleged that huge loss was caused to them on account of the breach of contract committed by the plaintiff and they had to sell the property to the additional third defendant for a nominal cost of Rs. 2 lakhs, sustaining a loss of Rs. 1,81,000/-. The defendants raised a counter claim for a decree for realisation of a sum of Rs.2 lakhs along with interest towards the loss caused to them and damages.

4. The plaint schedule property was sold during the pendency of the suit