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Kerala HC Partly Allows Petition for Specific Performance of Contract for Sale

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On 16th December 2020, The Kerala High Court involving a single bench judge of the Honourable Mr. Justice T.V. Anil Kumar heard the case of Antony v. Jenson.

Facts of the Case

It is an admitted fact that the appellant agreed to sell plaint schedule 93 cents of land to the plaintiff on receiving total sale consideration of Rs.1,28,000/- per cent on or before 19.09.2012.  He had received a total advance amount of Rs.25, 00,000/- on two occasions. During the currency of the agreement, disputes arose between the neighboring landowners and appellant following encroachment into a portion of the plaint property which resulted in appellant instituting before Munsiff Court, Kochi. The nature of the dispute between parties was related to the boundaries of properties. The suit is still pending and it is yet to be decided. Following the Institution, the appellant agreed to execute the sale deed after clearing the boundary disputes. The boundary dispute being the subject matter has not yet been cleared. It was during the pendency of the respondent filed suit for specific performance after sending suit notice. 

The appellant opposed the suit contending that the plaintiff was not ready and willing to perform his part of the contract.  The court below on a consideration of entire evidence brought on record held that plaintiff failed to prove that he was ready and willing to perform his part of the contract. It was also found that the appellant/defendant did not commit any breach of contract. However, the court below was of the opinion that the respondent/plaintiff was entitled to get back Rs.25, 00,000/- paid as the advance amount, and accordingly, the impugned decree was passed ordering payment of the amount with interest.

Petitioner’s Argument

The contention raised by the learned counsel for the appellant is that after the court below having found that the plaintiff was not ready and willing to perform his part of the contract, erred in granting a charged decree in respect of plaint property. The petitioner also contended that Section 55(6) (b) of the Transfer of Property Act, 1882 that a buyer who improperly declined to accept delivery of property is not entitled to get charge for the prepaid purchase-money. The appellant submitted that the decree of the court below imposing cost is also bad under law. It is contended that having suit for specific performance been dismissed, it was quite unjustifiable on the part of the court below to have ordered cost which cannot be justified under any circumstances. To a limited extent alone this argument could be upheld. 

Respondent’s Arguments

According to the respondent, he had enough reason to have declined to accept the delivery inasmuch as the appellant/seller was not in a position to convey marketable title free of defects in title. This is because the property was admittedly the subject matter of a pending suit between the appellant and third parties. A dispute as to boundaries of the property with third parties was being adjudged, Munsiff Court, Kochi.

Court’s Observation

The court observed that it remains a fact that the appellant could not have been in the position of delivering the unimpeachable marketable title to the respondent. The court also observed that far as a decree for refund of advance money is concerned, the appellant does not have a serious dispute. The decree amount was deposited in the court below pursuant to a direction issued by this Court in the course of granting an interim stay of execution of the decree. The deposit was ordered to be made unconditionally so that the respondent could withdraw the amount at his choice. The plaintiff succeeded in the suit partially and therefore, in my opinion, is entitled to costs to the extent he succeeded in getting the reliefs granted in the suit. 

The court also observed that working out the taxable items and quantifying the cost shall proceed, as if the suit filed was for recovery of Rs.25, 00,000/- with interest. Except to this extent, the impugned judgment and decree are not liable to be interfered with at all. The court also observed into Section 55(6) (b) of the Transfer of Property Act, 1882.

Court’s Decision

The court said that with the deposit of Rs.25,00,000/- in the court below and permission granted by this Court to respondent to withdraw the amount, the court does not think that a charged decree is any longer necessary to be maintained in respect of that amount. The charged decree, therefore, could be confined to only to that part of the liability of the defendant concerning payment of interest as ordered by the court below.  

As a result, the appeal succeeds in part. The impugned charged decree is limited to recovery of the amount of interest. The decree of the court below is also slightly modified limiting the liability of the appellant to payment of costs in the suit only to the extent of relief for recovery of the advance amount of Rs.25, 00,000/- with interest. The appellant will suffer cost in the appeal.

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