Dr. P. Vijaykumar - Appellant @HASH M.N. Baig

N. Kumar, J. - This is a defendant''s regular first appeal against the judgment and decree dated 5-11-2013 in O.S. No. 4439 of 2006 on the file of XIX Additional City Civil and Sessions Judge, Bangalore, decreeing the suit of the plaintiff directing the defendant to refund a sum of Rs. 13,50,000/- with interest at 24% p.a. from 28-4-2003 till the date of filing of the suit and to pay the future interest at 12% p.a. from the date of filing of the suit till the date of repayment of Rs. 13,50,000/-.

For the purpose of convenience, the parties are referred to as they are referred to in the original suit.

The plaintiff is a Civil Engineer having construction related business. Defendant is a Doctor by profession. The defendant is the owner of the properties bearing Corporation Nos. 27 and 27/1 situated at Stephen''s Road, Frazer Town, Bangalore-5, which is more particularly described in the schedule to the plaint (hereinafter referred to as the "schedule properties"). On a representation by the defendant that the suit schedule properties are free from all encumbrances and there is no Court proceedings in respect of the same and that he has acquired title to the same under a valid partition deed, the plaintiff entered into an agreement to purchase the schedule properties for Rs. 28,00,000/- and Rs. 15,00,000/- was agreed to be paid as earnest money. For the sake of convenience, the parties entered into two agreements on the same day with respect to 50% of the suit schedule properties. Thus, the defendant executed an agreement of sale on 13-5-2003 for Rs. 14,00,000/- each. But plaintiff paid Rs. 5,00,000/- under each agreement i.e., totally Rs. 10,00,000/-. The said payments were made by way of cheques, which are duly acknowledged and encashed by the defendant. As per the terms of the agreement another sum of Rs. 2,50,000/- each has to be paid under the two agreements within three months from the date of the agreement. The remaining amount was to be paid within nine months from the date of payment of Rs. 2,50,000/-.

The case of the plaintiff is that he paid Rs. 2,50,000/- on 13-8-2002 and another two cheques for Rs. 1,00,000/-, dated 13-8-2002 and Rs. 2,50,000/- dated 5-12-2002 and thus he paid in all Rs. 6,00,000/-. Thus, totally, a sum of Rs. 16,00,000/- is paid i.e., Rs. 1,00,000/- is paid in excess of the terms of the agreement. The defendant assured the plaintiff that the plaintiff could go on making construction or any improvement on the suit schedule properties and he has no objection for the same. The defendant also executed a General Power of Attorney to enable the plaintiff to obtain the amalgamated katha. The defendant agreed to bear the expenses. Subsequently, the defendant has revoked the said GPA. The last payment was made on 5-12-2002 and the defendant assured that he would supply all the title deeds of the schedule properties. He also agreed to execute a registered sale deed after payment of the balance consideration. The defendant kept quiet for four months from the date of last payment of consideration and dragged on the matter for few months.

The further case of the plaintiff is that he came to know that the defendant executed the Joint Development Agreement with one Mr. Kudrolli of Mangalore for the development of the suit schedule property, instead of executing the sale deed in his favour. The said Joint Development Agreement was executed on 28-4-2003. Thereafter, the plaintiff requested the defendant to refund the amount along with interest and nominal damages as per Clause 9(2) of both the agreements. The plaintiff also came to know that the sister of the defendant has filed a suit in O.S. No. 2351 of 1995 and the said suit was pending on the file of City Civil Judge, Bangalore, against the defendant in respect of the suit schedule properties. Though the defendant filed written statement on 30-1-1996, he had not disclosed the said fact of pendency of the suit and he deliberately suppressed the same. Thereafter, the plaintiff filed P.C.R. No. 11664 of 2003 on the file of the 4th A.C.M.M., Bangalore, which was registered as C.C. No. 24631 of 2004 on the file of the 11th A.C.M.M., Bangalore for the offence punishable under Section 420 of IPC. The plaintiff tried for amicable settlement of the dispute. But the defendant did not heed to the request of the plaintiff. The defendant is liable to pay the principal amount of Rs. 16,00,000/- and he is also liable to pay interest at 24% p.a. on Rs. 10,00.000/- till the date of filing of the suit to the tune of Rs. 9,60,000/- and is liable to pay interest on Rs. 2,25,000/- paid by defendant from 13-8-2002 till the date of filing of the suit i.e., 29-5-2006. He is liable to pay interest of Rs. 86,000/- on damages of Rs. 1,00,000/- from 14-8-2002 till the date of filing of the suit. He is also liable to pay interest on Rs. 2,50,000/- from 5-12-2002 till the date of filing of the suit. Tine defendant is also liable to pay damages as shown in the agreement to the tune of Rs. 50,000/- for each agreement totally to the tune of Rs. 1,00,000/-. Hence, the plaintiff claimed a sum of Rs. 31,76,000/- with interest at 24% p.a. from the date of suit till realisation.

After service of suit summons, the defendant entered appearance and filed written statement. He admitted his title to the suit properties. He also admitted the execution of the agreements of sale dated 13-5-2002, two in numbers. He also admitted that he had agreed to sell the schedule properties for a sum of Rs. 14,00,000/- under each agreement and that he had received Rs. 10,00,000/- under both the agreements. He also admitted the receipt of Rs. 6,00,000/- as contended in para 9 of the pleadings. It is his specific case that the plaintiff with the oblique motive and fraudulent intention got executed an unregistered revocable Power of Attorney under the guise of raising sufficient funds from the Financial Institutions, Banks, private persons in order to pay the balance sale consideration. The defendant bona fidely believing the assurance of the plaintiff executed the GPA and subsequently, the defendant revoked the same as the plaintiff was misusing the same. The defendant denied that the plaintiff was always ready and willing to perform his part of contract and that he had sufficient funds to get the sale deed executed. The allegation that the defendant kept mum for a period of four months after the last payment of consideration was denied. The defendant himself got issued a notice through R.P. A.D. and UCP on 29-8-2003. The said notice is not replied to by the plaintiff. The plaintiff himself had brought one Mr. Kudrolli of Mangalore and got executed the Joint Development Agreement. The plaintiff had taken back Rs. 2,50,000/- on the ground that he was in need of the money and that he would pay the same at the time of registration of the sale deed. The said amount was paid through cheque drawn on State Bank of India from the account of the wife of the defendant. The alleged GPA executed in favour of Mr. Kudrolli is not an admissible document as no proper stamp duty is paid on the same. The plaintiff in connivance with his father-in-law, had got executed the said Joint Development Agreement. The plaintiff was close with the sister of the defendant, by name Smt. Dhanalakshmi and the plaintiff got filed the said jiminal case on the file of the 11th A.C.M.M., Bangalore, in order to harass tie defendant. He denied the issuance of notice and therefore, he sought for dismissal of the suit. The defendant also contended that the suit is barred by law of limitation. The defendant also has filed a counter-claim and set off under Order 8, Rules 6 and 6-A of Civil Procedure Code, 1908. The defendant claimed that Rs. 2,50,000/- paid by him through the cheque of his wife is to be adjusted against the suit claim. He further submitted that the plaintiff requested the defendant to vacate the schedule properties and plaintiff was ready to put up construction as per the sanctioned plan and defendant vacated the schedule properties though legal possession remains with the defendant. But the plaintiff had demolished some portion of the schedule properties. The plaintiff himself came along with his father-in-law and got executed the Joint Development Agreement. Therefore, the plaintiff has violated the terms and conditions of both the agreements. Hence, the plaintiff is liable to pay Rs. 50,000/- on each agreement totally to the tune of Rs. 1,00,000/- and interest at 9% on the said amount. The defendant was deprived of the rent of Rs. 10,000/- per month and therefore, he has claimed rentals of 3 years previous to the filing of the suit at the rate of Rs. 10,000/- per month amounting to Rs. 3,60,000/-. He also claimed interest at 9% on damages to the tune of Rs. 43,200/-. The defendant has constructed some portion of the building on the suit schedule properties by violating Building Rules and therefore, the BBMP Authorities were harassing the defendant to demolish the building and it requires Rs. 50,000/-. The plaintiff has sought Rs. 7,00,000/- for constructing 8 square building on the suit schedule properties. As the plaintiff had demolished the portion of the building, the defendant has claimed Rs. 13,20,700/-. On these grounds, the defendant put forth his counter-claim of Rs. 13,20,700/-.

The plaintiff filed a written statement to the counter-claim denying all the allegations. He denied having entered into a Joint Development Agreement in collusion with his father-in-law Kudrolli. He denied that he is liable to pay rentals at Rs. 10,000/- per month for three years amounting to Rs. 3,60,000/-. He also denied the liability to pay interest on damages of Rs. 1,00,000/-. He also denied the liability to pay Rs. 50,000/- for demolition of the building constructed on the schedule properties. He also denied that he is liable to pay Rs. 7,00,000/- for the construction of 8 squares building over the schedule properties. Therefore, he sought for dismissal of the counter-claim made by the defendant.

On the basis of the aforesaid pleadings, the Trial Court framed the following issues:

Whether the plaintiff proves that defendant breached the condition of the sale agreement dated 13-5-2002?

Whether the plaintiff further proves that he was all along ready and willing to perform his part of obligation?

Whether plaintiff further proves that due to the breach of the agreement by the defendant, plaintiff sustained loss and he is entitled for damages?

Whether plaintiff proves cause of action?

Whether defendant proves that plaintiff was not ready and willing to perform his part of obligation under the agreement dated 13-5-2002?

Whether defendant proves that he is entitled for the counterclaim as pleaded in the written statement?

Whether the plaintiff is entitled for the decree sought?

What order or decree?

The plaintiff, in order to substantiate his claim examined himself as P.W. 1 and marked 10 documents as Exs. P. 1 to P. 10. On behalf of the defendants, the defendant was examined as D.W. 1 and three witnesses namely Venkatesh, L.S. Naryanan and Madukar M. Shetty as D.Ws. 2, 3 and 4 respectively. He also produced 20 documents, which are marked as Exs. P. 1 to P. 20.

The Trial Court, on appreciation of the oral and documentary evidence on record held that the plaintiff has established that the defendant breached the condition of the sale agreement dated 13-5-2002. The plaintiff also proved that he was always ready and willing to perform his part of the contract. The plaintiff has failed to prove any loss sustained by him on account of the breach and therefore held that he is not entitled to any damages. The defendant failed to prove that the plaintiff was not ready and willing to perform his part of the contract. The defendant also failed to establish the counter-claim put forth by him. Therefore, the Trial Court partly decreed the suit of the plaintiff for a sum of Rs. 13,50,000/- with interest at 24% p.a. from 28-4-2003 i.e., date of Joint Development Agreement till the date of filing of the suit on 29-5-2006 and also future interest at 12% p.a. from the date of filing of the suit till the date of realisation of Rs. 13,50,000/-.

Aggrieved by the said judgment and decree of the Trial Court, the defendant has filed the present appeal.

The learned Counsel appearing for the appellant/defendant contended that the suit is one for recovery of money. The suit is barred by time and hence, Article 23 of the Limitation Act is attracted. Though a specific plea was taken, no issue was framed and he submits that on that ground the judgment and decree of the Trial Court requires to be set aside and the plaintiff''s suit is liable to be dismissed. He also contended that it is the plaintiff, who committed breach of the terms of the agreement. Now he cannot turn around and put an end to the contract and seek for refund of the amount. He also contended that the Trial Court has not properly appreciated the entire oral and documentary evidence produced on record and thus committed a serious error in recording a finding against the defendant. He also contended that the counter-claim preferred by the defendant is unjustly rejected. The interest of 24% p.a. awarded is on the higher side though in the body of the judgment, the Court itself recorded a finding that the interest payable is only 12% p.a. For the aforesaid reasons, he wanted the judgment and decree of the Trial Court to be set aside.

Per contra, the learned Counsel for the plaintiff/respondent supported the impugned order.

In the light of the aforesaid rival contentions, the points that arise for our consideration is:

Whether the suit of the plaintiff is barred by law of limitation as contended by the defendant?

Whether the decree passed by the Trial Court for a sum of Rs. 13,50,000/- is vitiated on any ground?

Whether the plaintiff is entitled to interest at 24% p.a. on Rs. 13,50,000/- from the date of the Joint Development Agreement till the date of filing of the suit?

Whether the appellant/defendant is entitled to counter-claim?

Insofar as the counter-claim is concerned, the defendant has not preferred any separate appeal challenging the said finding. In this appeal what the defendant is challenging is, the decree passed against him and in favour of the plaintiff and therefore, the question of going into the correctness of the judgment of the Trial Court dismissing the counter-claim of the defendant would not arise.

The main argument of the learned Counsel for the appellant is, the suit is one for recovery of money payable to the plaintiff by the defendant. Article 23 of the Limitation Act prescribes three years as the period of limitation and the time begins to run when the money is paid. As the last payment of money is on 5-12-2002, the suit filed on 29-5-2006 is clearly barred by law of limitation. Though the plaintiff has claimed a decree for payment of money, it is not a suit filed for recovery of money, which is lent to the defendant. The suit is one for recovery of money under an agreement of sale. Therefore, in order to find out the limitation for filing such a suit, we have to look into the agreement of sale. The agreement of sale is dated 13-5-2002. Admittedly, on that day, a sum of Rs. 5,00,000/- was paid under both the agreements. Clause 2 of the said agreement deals with payment of price. It reads as under:

"2. Payment of Price. -

2.1 The purchaser has paid a sum of Rs. 5,00,000/- (Rupees Five Lakhs Only) vide Cheque bearing No. 299493, dated 13-5-2002, drawn on Andhra Bank, Cantonment Branch, Bangalore, drawn in favour of the vendor, as advance sale consideration in the presence of Witnesses attesting hereunder. The vendor hereby accepts and acknowledges the receipt of the said sum as advance from the purchaser.

2.2 The purchaser shall pay further advance sale consideration of a sum of Rs. 2,50,000/- (Rupees Two Lakhs and Fifty Thousand Only) to the Vendor, on or before 3 months from this date.

2.3 The purchaser shall pay the balance sale consideration of a sum of Rs. 6,50,000/- (Rupees Six Lakhs and Fifty Thousand Only) on or before nine months from the date of payment of sale consideration as per Clause 2.2."

Clause 3 deals with time for completion. It reads as under:

"3. Time For Completion. -

3.1 The sale shall be completed on the payment of entire sale consideration as aforesaid, on the vendor obtaining and furnishing the following documents:

(a) Original sale deed dated 27-6-1996, registered as Document No. 876/96-97, Volume 3898, Pages 111 to 116, Book I, registered before the Office of the Sub-Registrar, Shivajinagar, Bangalore, from its previous Owner Mr. P. Narayana Murthy.

(b) Duplicate of partition deed dated 27-9-1982, registered as Document No. 1913/82-83, Volume 2195, Pages 196 to 206, Book-I, registered before the Office of the Sub-Registrar, Shivajinagar, Bangalore.

(c) Amalgamated Katha Certificate in the name of the Vendor, issued by the Bangalore Mahanagara Palike, in respect of the Item I and Item II of Schedule Property.

(d) Tax paid receipt/s for the last 10 years, in respect of the Schedule Property.

(e) Encumbrance Certificate is respect of the Schedule Property from 1-4-1980 to up-to-date.

(f) Certified copy of all earlier title documents, in respect of the Schedule Property."

It is also not in dispute that after payment of Rs. 5,00,000/- under the agreement of sale, a sum of Rs. 2,50,000/- was to be paid on or before three months from the date of the said agreement i.e., 13-8-2002, The balance sale consideration is payable within nine months from 13-8-2002, which will be 13-5-2003. The balance sale consideration is payable subject to the defendant complying with the obligations stipulated in Clause 3 of the agreement. On the contrary, he entered into a Joint Development Agreement on 28-4-2003. He also cancelled the GPA given by him to the plaintiff. Thereafter, the plaintiff approached the jurisdictional Criminal Court for offences punishable under Section 420 of Indian Penal Code, 1860 against the defendant. These are all undisputed facts, which are borne out from the record. Clause 9.2 of the agreement provides for consequences of breach. It provides that in the event of breach being on the part of the vendor, i.e., the defendant, the plaintiff is entitled to seek a sum of Rs. 50,000/- as damages apart from refund of the advance sale consideration paid along with interest at the rate of 24% p.a. Therefore, it is clear that the defendant was not liable to refund the money received under the agreement of sale on the date of the sale, as sought to be contended by the plaintiff. Three years period is to be calculated from the date of breach. According to the defendant, he himself got issued a legal notice on 29-8-2003 and again on 6-6-2002, accusing the plaintiff of committing breach. The suit is filed within three years therefrom and therefore, the contention, the suit filed by the plaintiff is barred by law of limitation and Article 23 of the Limitation Act, 1963 is attracted, has no merit.

Admittedly, the plaintiff has received Rs. 16,00,000/- out of Rs. 28,00,000/- of the agreed sale price. A sum of Rs. 2,50,000/- is refunded by way of a cheque issued by his wife, which is not in dispute. Therefore, though the plaintiff claimed the entire amount of Rs. 16,00,000/- as the amount due under the agreement, the Trial Court rightly restricted the claim to Rs. 13,50,000/-. The denial of damages to the plaintiff is not challenged by the plaintiff and therefore, the said decree stands. Therefore, the Trial Court was justified in decreeing the suit for Rs. 13,50,000/-.

Insofar as the payment of interest is concerned, the Trial Court recorded a finding that both the parties were at fault and therefore, the plaintiff is not entitled for interest at 24% from the date of the suit till the date of realisation. Further, in view of Clause 9.2 of the agreement of sale, it awarded the interest at 24% p.a. from the date of execution of the Joint Development Agreement dated 28-4-2003 till the date of realisation. Therefore, the finding of the Trial Court regarding rate of interest is also just and proper. In that view of the matter, we do not see any merit in this appeal and therefore, the appeal is dismissed at the stage of admission.