AI Structured Summary
Not yet generated for this judgment
Judgment
S.V. Gangapurwala, J.—Both the appeals involve common question of law and as such are decided together. The Respondents in both these appeals had instituted suit for specific performance of contract or in alternative for refund of the amount paid pursuant to agreement of sale. The Respondents in their respective suits have contended that the Appellants herein had entered into two separate agreement for sale dated 11.4.2002, thereby agreeing to sell their separate lands to the Respondents herein. The price fixed was Rs. 35,000/-(Rupees thirty five thousand) per acre. It is the case of the Respondents that on the date of the execution of the agreement, the Respondents paid a sum of Rs. 5,00,000/-(Rupees five lacs) as earnest money tithe Appellants. The Respondents further contended that as the names of the female members of the family of the Appellants were appearing in the revenue record, the Appellants agreed tore move those names before execution of the sale deed. As according to the Appellants, the female members of the family have relinquished their share in the suit lands. The Respondents further contended that if for any reason, the decree for specific performance can not be passed in their favor then the earnest amount of Rs. 5,00,000/-(Rupees five lacs) be refunded along with compensation and interest thereon.
The present Appellants in their written statement in each suit contended that they had taken hand loan of Rs. 2,00,000/-(Rupees two lacs) from the present Respondents to clear up their debts and the said agreement was executed as a security for the loan. The price of the land in the said locality was more than Rs. 1,00,000/-(Rupees one lac) per acre but since it was a transaction of loan, the price of the suit lands was stated as Rs. 35,000/-(Rupees thirty-five thousand) per acre in the agreement. The amount of Rs. 5,00,000/-(Rupees five lacs)mentioned in the agreement is inclusive of the principal sum of Rs. 2,00,000/-(Rupees two lacs)received by them along with interest to be paid in future.
The trial Court did not grant the relief of specific performance to the Plaintiffs i.e. the present Respondents. The trial Court came to the conclusion that the Appellants have received Rs. 5,00,000/-(Rupees five lacs) but the same was not as an earnest amount but as a hand loan and the agreement of sale in favor of the Respondents was only as a security for loan. The trial Court vide its judgment and decree dated 8.5.2009, directed the present Appellants/original Defendants to pay the present Respondents a sum of Rs. 5,00,000/-(Rupees five lacs) with interest at the rate of Rs. 6% p.a.from the date of suit till realisation of the decretal amount.
The Defendants in the said suit/present Appellants being aggrieved by the said judgment and decree have assailed the same in the present appeals.
Mr. Nandode, learned Counsel holding for Mr. Amol Sawant, advocate for the Appellants strenuously put forth following propositions:
(i) The trial Court erroneously disbelieved the case of the Appellants that in fact, the Appellants had received only Rs. 2,00,000/-(Rupees two lacs). The witnesses to the agreement have also substantiated the case of the Appellants. There was no reason to discard their testimony.
(ii) The Respondents have not proved the payment of Rs. 5,00,000/-(Rupees five lacs) by any cogent evidence nor their witnesses have been believed by the Court. In such circumstances thecae of the Appellants that only Rs. 2,00,000/-(Rupees two lacs were paid should have been relied.
(iii) The suit was for specific performance of contract or in alternate the refund of the earnest amount. Once the Court has come to the conclusion that the said agreement was not an agreement to sell the immovable property and the same was as a security of loan advanced by the Respondents then in such a suit the Court could not have passed an order of refund of the amount. The Plaintiffs are required to file a separate suit for recovery of the hand loan amount.
(iv) Section 22 of the Specific Relief Act, would not be applicable to grant the relief to the Plaintiffs/Respondents inasmuch as Section 22 of the Specific Relief Act, can be applied only if the Court comes to the conclusion that the agreement in question is an agreement of sale then only u/s 22(b) of the Specific Relief Act, relief for refund of earnest money can be granted. In such circumstances, the decree impugned could not have been passed.
Mr. S.P. Brahme, learned Counsel for the Respondents/original Plaintiffs submitted that:
(i) The Court has rightly come to the conclusion that an amount of Rs. 5,00,000/-(Rupees five lacs) was paid by the Respondents to the Appellants. The agreement in question contains the said recital. Even the Plaintiffs and Defendants are close relatives. If the said amount would not have been paid, the same would not have been mentioned in the agreement. The Courts have properly appreciated the evidence and has rightly come to the conclusion that Rs. 5,00,000/- (Rupees five lacs) was paid.
(ii) Section 22 of the Specific Relief Act, can not be interpreted in a narrow compass. It would be within the powers of the Court to grant refund of the amount. Even if the agreement is void or the contract voidable, still, the Plaintiffs are entitled for refund of the amount. To buttress his submission, he relied on the judgments of the Apex Court in a case of Sri Tarsem Singh Vs. Sri Sukhminder Singh, , in a case of Ganesh Shet Vs. Dr. C.S.G.K. Setty and Others, . The learned Counsel also relied on the judgment of the learned Single Judge of this Court in a case of Maroti Shroba Sonder v. Balaprasad Govardhan das and Ors. decided on 10.7.1981. The learned Counsel laid much stress on the judgment of the Apex Court in a case of Srinivas Ram Kumar Vs. Mahabir Prasad and Others, . The Courts can grant the relief for refund of the amount even U/o 7 Rule 7 of the Code of Civil Procedure
With the assistance of the learned Counsels for the respective parties, I have gone through the judgments, the pleadings and the evidence on record. Before I proceed to deal with the arguments and the legal propositions canvassed by them, it would be appropriate to refer to the relevant provisions:
Section 22 of the Specific Relief Act
Power to grant relief for possession, partition, refund of earnest money, etc. -
(1)Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908 (5 of 1908),any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for -
(a) possession, or partition and separate possession, of the property, in addition to such performance; or
(b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or (made by) him, incase his claim for specific performance is refused.
(2) No relief under Clause (a)or Clause (b) of Sub-section (1)shall be granted by the Court unless it has been specifically claimed:
Provided that where the Plaintiff has not claimed any such relief in the plaint, the Court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.
(3) The power of the Court to grant relief under Clause (b) of Sub-section (1) shall be without prejudice to its powers to award compensation u/s 21.
Order VII Rule 7.
Rule 7. Relief to be specifically stated.-Every plaint shall state specifically the relief which the Plaintiff claims either simply or in the alternative, and it shall not be necessary to ask for general or other relief which may always be given as the Court may think just to the same extent as if it had been asked for. And the same rule shall apply to any relief claimed by the Defendant in his written statement.
The finding that the Appellants pursuant to the agreement of sale in question did not intend to sell the property and the said document was in fact, as a security for the loan advanced by the Respondents to the Appellants hasn''t been assailed by the present Respondents either by filing a cross-objection nor any arguments on that count have been advanced. The limited controversy to be adjudicated in the present appeal is:
(i) Whether the Appellants have received Rs. 5,00,000/-(Rupees five lacs) pursuant to the agreement or only Rs. 2,00,000/- (Rupees two lacs)?
(ii) Once having come to the conclusion that the agreement in question was as a security for the amount advanced by the Respondents to the Appellants then whether in a suit for specific performance of contract, refund of the said amount can be awarded.?
Regarding the finding of the trial Court that Defendants have received Rs. 5,00,000/-(Rupees five lacs) pursuant to the agreement is concerned, the trial Court has given reasons for the same. The parties are in near relations to each other. The Defendants had also issued a cheque for Rs. 5,00,000/-(Rupees five lacs) as per Section 118 of the Negotiable Instruments Act, carries with a presumption about the consideration. There is no reason to disbelieve the recital in the agreement to be incorrect. The Court below has properly appreciated the oral and documentary evidence in that regard and has arrived at a possible and plausible conclusion that the Defendant has received Rs. 5,00,000/-(Rupees five lacs).
This leads to the main controversy regarding the powers of the Court to grant the refund of the amount after having come to the conclusion that the transaction in question wasn''t an agreement of sale but as security for the amount of loan advanced.
Once it is proved that the Defendant is the recipient of the amount of Rs. 5,00,000/-(Rupees five lacs) pursuant to the said agreement then even on the basis of the principle of unjust enrichment, the Defendants would be under obligation to pay back the said amount to the Plaintiffs. The doctrine of unjust enrichment is an equitable doctrine. The Apex Court in a case of Firm Sriniwas Ram Kumar v. Mahabir Prasad and Ors. referred supra has held thus:
As regards the other point, however, we are of the opinion that the decision of the trial Ct. was right and that the H.C. took an undoubtedly rigid and technical view in reversing this part of the decree at the Subordinate Judge. It is true that it was no part of the Plaintiff''s case as made in the plaint that the sum of Rs. 30,000/-was advanced by way of loan to the defts. second party. But it was certainly open to the plff. to make an alternative case to that effect and make a prayer in the alternative for a decree for money even if the allegations of the money being paid in pursuance of a contract of sale could not be established by evidence. The fact that such a prayer would have been inconsistent with the other prayer is not really material. A puff. may rely upon different rights alternatively and there is nothing in the Civil P.C. to prevent a party from making two or more inconsistent sets of allegations and claiming relief hereunder in the alternative. The question, however, arises whether, in the absence of any such alternative case in the plaint it is open to the Ct. to give him relief on that basis. The rule undoubtedly is that the Ct. can not grant relief to the puff. on a could have made, was not only admitted by the deft. in his written statement but was expressly put forward as an answer to the claim which the plff. made in the suit, there would be nothing improper in giving the puff. a decree upon the case which the deft. himself makes. A demand of the plff. based on the deft''s own plea cannot possibly be regarded with surprise by the latter and no question of adducing evidence on these facts would arise when they were expressly admitted by the deft. in his pleadings. In such circumstances when no injustice can possibly result to the deft., it may not be proper to drive the puff to file a separate suit.
In the present case the Defendants byway of answer to the case of the Plaintiffs themselves have stated the said agreement as a security document for the loan advanced and have admitted of having received some amount under the said agreement. It is held that Defendant/Appellant has received Rs. 5,00,000/-(Rupees five lacs) under the agreement. In such circumstances, it would be inappropriate to drive the Plaintiffs to file a separate suit.
Section 22 of the Specific Relief Act, read as it is, implies that the Court can grant the relief including the relief of refund of an earnest money or deposit. There is nothing in the Section which prohibits the Court from not granting the relief of refund of the amount. The Plaintiff had filed the suit for specific performance and in the said suit had asked for the alternate relief for refund of the amount paid pursuant to the agreement of sale. Simply because the Plaintiff has failed to prove that the said agreement is an agreement to sell and the Defendant has proved that by the said agreement the Defendant never intended to sell the property but the said agreement was as a security for the amount of loan received by him would not take away the case outside the ambit and purview of Clause (b) of Section 22 of the Specific Relief Act. The phraseology of the said Section would show that in addition to the relief of specific performance, the Plaintiffs can claim the other relief''s. Just because the words loan is not used that would not be sufficient to non-suit the Plaintiffs for recovery of the amount. Section 22 gives right to party to claim various relief so also lays down the power of the Court to grant suitable relief''s. Clause (b) of Section 22 of the said Act gives power to the Court to grant relief of refund of earnest money, deposit.
Clause (b) of Section 22(1) of the Specific Relief Act, 1963 is an enabling provision. It is not restricted to relief of refund of earnest amount or deposit but also gives power to grant" any other relief". There is subtle distinction between loan and deposit. The terms "Loan" and" Deposit" are not mutually exclusive terms. There are common features between the two. In as ensue a deposit is also a loan. Both are debts repayable. But when the repayment is to be made furnishes the real point of distinction between the two concepts.
Moreover, Clause (b) of Section 22(1) of the Act of 1963, empowers the Court to "grant any other relief to which he may be entitled". This phrase "grant any other relief" has wider connotation and import. It will take into its fold the relief of return of the amount received by the Defendants from the Plaintiffs.
The matter can be viewed from other perspective. The rule of equity and justice requires that if in fact, money has been paid by the Plaintiffs to the Defendants under an agreement, not otherwise unlawful, the Defendants should pay back the amount to the Plaintiffs even if for some reason the contract as such is not enforceable. The law safeguards against any unlawful enrichment at the cost of a party and provides for restitution in all such cases.
Unjust enrichment occurs when a person retains money or benefits which injustice, equity and good conscience belongs to some one else. The doctrine of "unjust enrichment" therefore, is that no person can be allowed to enrich himself inequitably at the expense of another. The principle of "unjust enrichment" proceeds on the basis that it would be unjust to allow one person to retain a benefit received at the expense of another person. It provides the theoretical foundation of the law governing restitution. A right of recovery under the doctrine of "unjust enrichment" arises where retention of benefit is considered contrary to justice or against equity.
The principle of Restitution in in tegrum will have to be applied in such cases i.e. the principle of restitution of the benefit.
Thus even on basis of the doctrine of unjust enrichment the Plaintiff would be entitled for refund of the amount.
In the result, the First Appeals are dismissed. However, there shall be no order as to costs.