Rakhee Raya Borkar Alias vs Kishan Maruti Savant

VIDE agreement dated 31 -03 -2010, the petitioner, owner of a plot bearing No.15 admeasuring 337 sq. mtr. at village Curti in Sub -District Ponda of District North Goa, agreed to sell one flat in the building which the petitioners were to construct on the aforesaid plot, to the respondent/complainant, for a total consideration of Rs.19,00,000/ -. The said agreement to the extent it is relevant reads as under: "1. That by this agreement the Vendors have agreed to sell to the purchaser the flat S -1 situated on the second floor of a built up area of 80.75 sq. meters which includes the incidence of the staircase, balcony and passage of the building known as ''ARYAN COMPLEX'' more particularly described in the schedule herein below and also shown in the plan hereto annexed, together with the right to the undivided land occupied by the said flat as also the right to the common amenities annexed to the said building for the total consideration or price of Rs.19,00,000/ - out of which amount the purchaser has paid a sum of Rs.1,00,000/ - as and by way of earnest money and part of the price which amount the Vendor hereby admit of having received from the purchaser and give to the purchaser the necessary receipt and discharge of the same and the balance sum of Rs.18,00,000/ - shall be paid within a period of one month from the signing of this agreement and on payment of the full amount due sale deed shall be executed in favour of the purchaser before the Sub -Registrar office of Ponda.

Failure to pay the above sum or sums as agreed by the purchaser the vendors shall give 30 days notice in writing to the purchaser requiring the purchaser to effect the payment within the above period with interest @15% p.a. failing which the agreement entered herein at the option of the Vendor without prejudice to the other rights and claims, come to an end and the allotment of the above mentioned flat of the purchaser shall be treated as cancelled forfeiting the earnest money and money paid at the time of executing this agreement and other installments if paid shall be refunded to the purchaser without any interest, and the purchaser shall have no right to the said flat or any part thereof and the Vendor/Developer shall be free to dispose off the same to any third party of his choice without the further say of the purchaser.

UPON possession of the said flat being delivered by the Vendors to the Purchaser, the Purchaser shall be entitled to get the deed of sale of the said flat duly executed in favour of the Purchaser at the cost and expense of the Purchaser. The Purchaser shall be free to inspect the work being carried on by the Vendor as also check the materials used at the time of the construction work, and thereafter on possession the Purchaser shall not claim against the Vendor in respect of any item or work in the said flat which may be alleged not to have been carried out or completed. 20. The Vendor herein state that the said plot wherein the present building is being erected is free from any and all encumbrances, charges, liens, burdens or any other responsibilities and therefore the Vendor hereby undertake to answer and to stand by the purchaser in case of any claims raised by any third parties."

The complainant having paid only a sum of Rs.3,90,000/ - to the petitioners, a notice dated 19 -03 -2012 was sent by the petitioner to the complainant through counsel. The said notice to the extent it is relevant reads as under:

"2. My client further states that as per the said agreement you had agreed to pay to my client an amount of Rs.19,00,000/ - as total consideration of the said flat and out of the said amount Rs.3,90,000/ - was paid as earnest money towards the purchase of said flat to my client at the time of signing of the said agreement and further it was agreed that the balance shall be paid towards my client within one after receiving/issuing release letter from the banker of my client.

My client states that inspite of learning the fact that the said release letter has been issued by the Banker to my client, even after three months from the date of issue, you have neglected and failed to pay the balance amount of Rs.17,60,000/ - to my client.

My client states that this act of yours have constrained my client to get sent this legal notice thereby reminding you of the terms and conditions agreed by you with my client in the said agreement and further to make it clear that if you fail to pay the balance amount within eight days from the receipt of this legal notice, my client will be free to deal with the said flat with third parties and your agreement with my client will stand cancelled and terminated for all legal effects."

THE complainant responded to the aforesaid notice of the petitioner vide reply dated 30 -03 -2012 stating inter alia as under: "4. My client further says that, upon continuous visits and several requests to your client, Deed of release was executed on 13 -01 -2012, thereby releasing Flat No.S -1 along with proportionate undivided share in the land and plain copy of the said document was submitted to my client. Upon perusing the said copy it transpired that on page 3 the Survey number of the flat along with undivided share in land released is Survey No.138/0 Village Curti. However, as per the documents it transpires that correct Survey No.135/0 Village Curti. The said fact is noticed by the banker of my client and they have refused to grant Housing Loan unless the mistake is rectified. Needless to add here that for the execution of Deed of Release your client charged a sum of Rs.5,000/ - and got the Deed drafted by advocate of your client. Thus, your client harassed my client in all the ways and restrained my client to proceed with Deed of Sale.

My client further says that a sum of Rs.3,90,000/ - has been paid by my client and balance remains is of Rs.15,10,000/ - which my client is ready to pay within 15 days from the submission of registered deed of release from your client and on execution of Deed of Sale by your client along with the necessary parties in favour of my client."

The petitioners responded to the said reply vide counter reply dated 17 -04 -2012 which to the extent it is relevant reads as under: "2. W/r to the contents of para No.3, my client states that the release letter was duly issued by the banker of my client and it was been issued after releasing the property after payment of the entire mortgage amount was paid to the bank, to whom the said flat was mortgaged.

W/r to the contents of para No.4, my client states that after releasing the property being entire was repaid by my client, the Bank has executed a Deed of Release on 13 -01 -2012 and not on the requests of your client. It is further stated by my client that a Deed of Rectification with respect to correction of survey number was executed on 17 -11 -2009 and if the same mistake continues to reflect on the Deed of Release, it was the sole responsibility of the Bank and not of my client. My client further states that the charges mentioned by you are usual charges/fees to be paid to the advocate and no advocate performs free of cost; and hence harassment as alleged by you is false."

IT would, thus, be seen that the petitioners had mortgaged the plot owned by them with a society known as Lok Manya Multipurpose Cooperative Society and the complainant was under a contractual obligation to repay the loan taken by the petitioners, to the extent the loan pertained to the flat purchased by him. Though it is not known exactly how much amount out of the loan taken by the petitioners can be apportioned to the flat which they had agreed to sell to the complainant, the learned counsel for the petitioners states that the total loan taken by them from the society was to the extent of Rs.18,75,000/ -. The learned counsel for the complainant states that in this building four flats and three shops have been constructed. Since the complainant had admittedly paid a sum of Rs.3,90,000/ - to the petitioners it would be difficult for us to accept the case of the petitioners that he had not paid the loan amount to the extent it pertained to the flat purchased by them. It would also be pertinent to note here that at no stage the petitioners conveyed any specific amount to the complainant to be paid to the society, as the loan component apportionable to the flat purchased by them. Therefore, we find no merit in the contention that the complainant had failed to repay the loan to the extent it pertained to the flat purchased by him.

IT would be noticed from a perusal of the agreement that out of the total sale consideration of Rs.19,00,000/ -, Rs.1,00,000/ - was paid as earnest money and the balance amount of Rs.18,00,000/ - was payable within 1 month from the signing of the agreement. The said amount, therefore, became payable on 30 -04 -2010. Admittedly, the payment in terms of the aforesaid schedule was not made by the complainant.

THE case of the complainant is that he did not make payment of the balance amount to the petitioners for the reason that the plot in question having been mortgaged with Lok Manya Multipurpose Cooperative Society they did not have a clear title to the property. We, however, find no merit in this contention for the simple reason that (i) the factum of mortgage of the plot with the society was disclosed to the complainant in the agreement itself and (ii) the payment of the balance amount of Rs.14,00,000/ - to the petitioners was not in any manner linked to the aforesaid mortgage. In other words, there was no agreement between the parties that the balance sale consideration of Rs.18,00,000/ - shall be paid to the petitioners only after they had got the plot released from the society which had financed the petitioners.

IT is next contended by the learned counsel for the complainant that a misrepresentation was made to them in clause 20 of the agreement that the property was free from any kind of encumbrances, charges, etc., since admittedly the plot had been mortgaged with Lok Manya Multipurpose Cooperative Society. Again, we find no merit in the contention since the mortgage of the plot with the society was expressly disclosed to the complainant in the agreement itself. Hence, it cannot be said that the complainant was misled on account of the aforesaid clause contained in the agreement. There seems to be an apparent contradiction between what is expressly stated in the recitals/preamble to the agreement and clause 20 of the agreement. The said contradiction in our view occured because terms such as clause 20 of the agreement is a general term which is incorporated in almost all agreements for sale of immovable property and it appears to us that the deed writer inserted the aforesaid clause in the agreement, in routine, without taking note of the fact that the mortgage with the society had been expressly disclosed to the purchaser in the preamble/recital to the agreement. Therefore, it cannot be said the complainant was not aware of the fact that the plot on which construction was to be raised by the petitioners had already been mortgaged by them with the said society. Despite having known the said mortgage, the complainant agreed to pay the balance sale consideration of Rs.18,00,000/ - to the petitioners without in any manner linking the said payment to the redemption of the mortgage. Therefore, even if the petitioners had not got the aforesaid plot released from mortgage, within one month of the agreement dated 31 -03 -2010, the complainant was under a contractual obligation to make payment of the balance amount of Rs.18,00,000/ - to them. Of course, the sale deed in favour of the complainant could not have been executed without the plot being first released from the mortgage but that would be a subsequent stage and had nothing to do either with the payment of the balance sale consideration or with the handing over of the possession of the flat to the complainant. Had the complainant made payment of the balance sale consideration of Rs.18,00,000/ - to the petitioners they would have been under a contractual obligation to handover possession of the flat to him, even without waiting for the plot to be released from the mortgage.

IT has come in the reply of the complainant dated 30 -03 -2012 that there was a mistake in the release deed executed by the society on 30 -01 -2012 since survey number had been recorded as 138/0 though the correct survey No. was 135/0. Since the balance payment of Rs.18,00,000/ - by the complainant was not in any manner linked to the release of the plot from the mortgage, the aforesaid mistake committed by the society in the release deed, for which the petitioners cannot be held responsible, could not have come in the way of the complainant making balance payment of Rs.18,00,000/ - to the petitioners.

NON only that the complainant did not make payment of the balance sale consideration within one month of the date of the agreement he failed to make the payment even on receipt of the legal notice dated 19 -03 -2012 and rejoinder notice/counter reply dated 17 -04 -2012 from them. In fact, the complainant was informed by way of the counter reply dated 17 -04 -2012 that a deed of rectification had already been executed on 17 -11 -2009, thereby correcting the survey number in the release deed. 10. In these circumstances when the complainant failed to perform his contractual obligation of making payment of the balance amount of Rs.18,00,000/ - to the complainant and he went to the extent of postponing the said payment on wholly untenable grounds such as the plot being mortgaged with the society and there being an error in the survey number indicated in the release deed, the petitioners in our view were entitled in law not to perform his part of the contract and deny possession of the flat to him.

FOR the reasons stated hereinabove, the impugned order is set aside and the complaint is dismissed. We, however, direct the petitioners to refund Rs.3,90,000/ - paid to them by the complainant within four weeks from today along with interest on that amount at the rate of 12% per annum, with effect from the date of receipt of the payment, till the date it is refunded to him. The money which the petitioner had deposited with this Commission be refunded to them along with interest which may have accrued on that amount, if any.