R. Satheesh S/o Vasudevan Pillai v. Renu Joy Mathews, Reggi Mathew, V. Joy Mathews

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **&** **THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN** **WEDNESDAY, THE 22[ND] DAY OF FEBRUARY 2023 / 3RD PHALGUNA, 1944** **RFA NO. 43 OF 2011** **AGAINST THE ORDER/JUDGMENTOS 927/2008 OF I ADDITIONAL SUB** **COURT,ERNAKULAM** ## **APPELLANT/PLAINTIFF:** R.SATHEESH S/O.VASUDEVAN PILLAI, AGED 45 YEARS,, RESIDING AT 168, JAWAHAR NAGAR,, ERNAKULAM VILLAGE, KANAYANNOOR TALUK,, KADAVANTHARA, KOCHI-682 020. BY ADVS. SRI.G.S.REGHUNATH SRI.K.S.SAJEEV KUMAR ## **RESPONDENTS/DEFENDANTS:** 1 SRI. RENU JOY MATHEwS S/O.V.JOY MATHEWS, AGED 39 YEARS,, C-6 HIG APARTMENTS, GANDHI NAGAR,, ELAMKULAM VILLAGE, KANAYANNOOR TALUK, KADAVANTHRA, KOCHI-682 020. 2 REGGI MATHEW S/O.V.JOY MATHEWS, AGED 40 YEARS,, C-6 HIG APARTMENTS, GANDHI NAGAR,, ELAMKULAM VILLAGE, KANAYANNOOR TALUK, KADAVANTHRA, KOCHI-682 020. 3 V.JOY MATHEWS S/O.NOT KNOWN TO THE APPLLANT,, AGED ABOUT 70 YEARS,, C-6 HIG APARTMENTS, GANDHI NAGAR,, ELAMKULAM VILLAGE, KANAYANNOOR TALUK, KADAVANTHRA, KOCHI-682 020. BY ADVS. VIJAYAKUMARI SANGEETH T.S. THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 22.02.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: RFA No.43/2011 **- 2 -** **K. Vinod Chandran & C.Jayachandran, JJ. ---------------- ------------------------------------RFA No.43 of 2011** **----------------------------------------------------Dated, this the 22[nd] February, 2023** ## **J U D G M E N T** ## **K.Vinod Chandran, J.** A suit for specific performance was amended and converted to a simple suit for recovery of money, paid as advance and part consideration, in pursuance to an agreement for sale. The trial court decreed the suit permitting realization of an amount of Rs.1,85, 00,000/- from defendants 1 and 2 with future interest at the rate of 9% per annum from the date of judgment till realization. The trial court declined _pendente lite_ interest & the costs of the suit. _Pendente lite_ interest was declined on the ground that the breach was occasioned by the plaintiff, the proposed purchaser, and the defendants, the proposed seller, having established the legal injury, is entitled to reasonable compensation under S. 74 of the Contract Act, 1872, which compensation was fixed as the interest _pendente lite_ . Cost was declined also for reason of the plaintiff having improperly RFA No.43/2011 **- 3 -** declined to take delivery of the property. The appeal is only against the refusal to grant _pendente lite_ interest and costs of the suit. 2. The trial court framed two issues; (i) whether the advance consideration was liable to be returned with interest, by the defendants to the plaintiff and (ii) the relief and costs entitled to the plaintiff. The agreement was admitted and so was the amount of Rs.1, 85,00000/- paid in the course of the period of two months stipulated in the agreement. Admittedly, the proprieties were mortgaged to the Bank as security for a loan amount of Rs.25 lakhs and the title deeds were not with the defendants. The trial court found, considering the testimony of DW1, that the plaintiff was aware of the defendants having taken loan mortgaging one or other of their properties and was also aware of the fact that the the title deed would be released and substituted with another security as and when the plaintiff is ready with the money. It was found, since the plaintiff unofficially expressed inability to show the entire sale consideration, the case of the defendants is more probable. It RFA No.43/2011 **- 4 -** was found that looking at the total sale consideration; the loan amount of Rs.25 lakhs was only a meager amount. Hence, the release of the documents from the bank was not a difficult task for the defendants and in any event, nobody would pay an amount of Rs.1,85,00000/- without knowing the details of the tile deed. It was held that defendants were aware of the mortgage made to the bank. The testimony of DW1 that the title deeds would be released as and when the plaintiff was ready with the money was also accepted. Despite the absence of a proper sketch, which would have evidenced the measurement carried out, it was again opined that nobody would part with such a huge amount without getting the details of the extent of the property. The court also deprecated the conduct of the plaintiff, when the defendants had offered to sell the property on appearance in the suit. The plaintiff only produced stamp paper purchased earlier on 3.9.2007, worth Rs.20,000/-, which was handed over only in the evening of 6.11.2008. It was found that the plaintiff was not ready and willing to perform his part of the contract since sufficient stamp paper was not produced in Court. RFA No.43/2011 **- 5 -** The plaintiff's contention that the defendants had demanded a higher price for execution of the sale deed was not substantiated by any document. It was categorically held that the breach of the contract was committed by the plaintiff. It was also found, based also on precedents, that going by S.74 of the Contract Act, irrespective of the amount stipulated in the contract as liquidated damages or by way of penalty, the party complaining of breach is entitled to get reasonable compensation subject to the maximum of the amount stipulated. There was no necessity to plead or prove the actual damages or loss. And even _de hors_ any specific pleading or proof of loss, the Court can grant compensation, which in the above case was fixed to the extent of the _pendente lite_ interest. In any case the plaintiff was not entitled to _pendente lite_ interest and even the costs of the suit since the plaintiff had improperly declined delivery of the property. 3. Sri.G.S. Reghunath, learned counsel for the appellant, at the outset pointed out that there was no counter claim raised by the defendant in the written statement or court RFA No.43/2011 **- 6 -** fees paid. The learned counsel took us through the agreement produced, Ext.A1, as also the endorsements made overleaf on the 1[st] and 2[nd] pages; where the future payments were acknowledged and an extension of time provided. Within the two months specified in the contract and within the extended period, the defendants failed to satisfy the plaintiff about the exact extent of the property, by carrying out a measurement and also failed to produce the title deeds and convince the plaintiff that there is absolutely no charge on the properties; which is a specific condition as per the agreement. Both the plaintiff and the defendants had issued notices on the same day, the plaintiff pointing out the specific default caused by the defendants by Ext.A2 notice. Ext.A3 notice issued by the Counsel for the defendants blamed the plaintiff for not having made payments; quite unfairly and incorrectly. The plaintiff had paid substantial part of the consideration and it was the defendants who committed the breach. The various pleadings in the written statement and in the testimony of DW1 remained unsubstantiated; which ought to have been rejected as self RFA No.43/2011 **- 7 -** serving statements. The trial court erred egregiously in having accepted the case of the defendants on mere probabilities, while the plaintiff's case stood on a better footing, based on the facts coming out from the records of the case. While rejecting the plaintiff's case for want of sufficient documentary proof, every statement made by the defendants and their witness, DW1, was swallowed without any substantive evidence. While stiffly opposing the right to compensation found by the court below and its grant, it is also pointed out that the amount granted would be far in excess of that stipulated in the contract. There is no legal injury pleaded or proved by the defendants and hence there cannot be any compensation under S.74. The _pendente lite_ interest is due to the plaintiff especially since there is no question of having improperly declined delivery, since the offer made for sale by the defendants was not accepted by the plaintiff. The suit was also amended and the prayer was confined to return of advance amount with interest and costs of the suit. The plaintiff is entitled to both _pendente lite_ interest and costs of the suit. The learned counsel relied on **Videocon Properties** RFA No.43/2011 ## **- 8 -** ## **Ltd., v. Dr.Bhalchandra Laboratories and Others** **[(2004) 3 SCC 711]** to canvass for the interest payable, based on S.55(6) of the Transfer of Property Act. S.3 of the Interest Act, 1978 and the definition of ' _current rate of interest_ ' in that enactment was pointed out to impress upon us the necessity to grant interest at the rate that is applicable as on the date of the contract. 4. Smt.Vijayakumari the learned counsel appearing for the respondents, argued that the documents were shown before court when the interrogatories were answered through an affidavit filed. It is pointed out that an adjacent property owned by the defendants was purchased by the plaintiff earlier and the plaintiff was aware of the mortgage made by the defendants, which they often do, to pump funds into their business. The plaintiff had been shown the title deeds from the bank in which it was mortgaged. Measurement was also carried out and the extension of the period was only on the insistence of the plaintiff, as is clearly indicated from the recitals on the overleaf of page 2 of Ext.A1. In fact, there was a condition that the RFA No.43/2011 **- 9 -** plaintiff would pay Rs. 50 Lakhs before 10.10.2010, which was not complied and if paid, the plaintiff could have released the mortgage and handed over the title deeds. It is argued that the defendants were always ready and willing to execute the sale deed in favour of the plaintiff and it was the plaintiff who failed to comply with his part of the contract. The breach being on the plaintiff, the defendants are entitled to compensation, which was claimed in the written statement. It is also pointed out that Ext.A1 agreement enabled the defendants to retain 10% of the advance amount if the agreement did not fructify for reason of the breach committed by the plaintiff. The trial court had rightly granted reasonable compensation, which on computation would only be lesser than 10% of the total amounts advanced. Breach on the part of the plaintiff is very evident and the legal injury caused to the defendant is also imaginable, especially since even now the property is under attachment. It is argued that the plaintiff is not entitled to the _pendente lite_ interest or the costs which were declined by the trial court. Even if the plaintiff is found entitled to interest it can only be lesser than 9%. The RFA No.43/2011 **- 10 -** decisions in **Srinivas Ram Kumar v. Mahabir Prasad (1964 SC 136)** , **U.N.Krishnamurthy v. A.M.Krishnamurthy (Civil Appeal No.4703 of 2022 arising out of SLP(C).19463 of 2018)** , are proffered to reduce the interest if granted to less than 6%. 5. Before we look at the facts we have to notice a very relevant aspect considering the claim of costs. The carbon copy of the judgment produced along with the appeal before us indicates in the relief portion that the court has specifically held that _“The plaintiff is not entitled to realize the costs...”._ This is also in consonance with the finding in the previous paragraph that the plaintiff improperly declined delivery of the property which dis-entitles him from being granted the costs of the suit. The learned counsel for the defendant however handed over to us a copy of the judgment which under relief portion reads so, “The _Plaintiff is also (not- struck off) entitled to realize the costs...”._ We see that a Division Bench, which considered the matter, had by order dated 26.5.2015 found the discrepancy and directed the Principal District Judge to conduct an enquiry. The RFA No.43/2011 ## **- 11 -** result of the enquiry is also placed before us. Based on the enquiry report of the Principal Sub Judge, Ernakulam, the Principal District Judge had found that the correction, by striking the word _“not”_ and inserting the word _“also”_ was carried out in the fair copy of the judgment and the decree also is prepared to the effect that the plaintiff is entitled to recover the costs of the suit. The Decree Clerk of the Sub Court, Ernakulam was found responsible for making unauthorized correction in the judgment. We see from the copy of the decree available in the records that the plaintiff has filed a memo of costs within the time provided and the same has been included in the decree, which is drawn up after the judgment and the filing of the memo of costs. The plaintiff has also filed the appeal from the judgment, the body of which judgment indicates that cost has been specifically declined. In the above circumstances, we proceed to consider the appeal both on the question of interest and also on the question of costs. 6. Admittedly the plaintiff and defendants 1 and 2 entered into an agreement on 09.07.2008 which was produced RFA No.43/2011 **- 12 -** as Ext.A1. The 3[rd] defendant is the father of defendants 1 and 2 and was impleaded in the suit, for reason of the power of attorney executed by the defendants 1 and 2 in his favour since both of them were abroad. The 3[rd] respondent had accepted the amounts paid after the initial payment of Rs.50 lakhs which payments are admitted by defendants 1 and 2. The 3[rd] respondent also on behalf of the 2[nd] respondent signed on the overleaf of the second page of Ext.A1 which was a supplemental agreement extending the period to 31.10.2008, with further stipulation for payment of another Rs.50 lakhs and execution of sale deed of one of the properties, on or before 10.10.2008. 7. By Ext.A1, the 1[st] defendant agreed to sell 6 cents of property in Sy.No.437/3 in Elamkulam village covered by sale deed No.1979/2002 of Ernakulam SRO. The 2[nd] defendant likewise agreed to sell 9.629 cents in the very same survey number and Village covered by sale deed No.760/2002 of the very same SRO. The properties were lying contiguous and the sale consideration was fixed at Rs.18 lakhs per cent. The period of the agreement was stipulated as 2 months within which time RFA No.43/2011 **- 13 -** the property had to be measured and the extent found correct as per the title deed and village records. The plaintiff described as the 2[nd] party to Ext.A1, paid Rs.50 lakhs as advance to the 1[st] party. The 1[st] party, defendants 1 and 2, were to satisfy the 2[nd] party on the following aspects: original title deeds, photocopies of prior deeds covering 15 years, encumbrance for 13 years, village sketch, possession certificate and location certificate. As per clause (6) the 1[st] party assured, in the nature of an undertaking and promise, that the property is free from mortgage, charge, lien etc. and also from proceedings under the various specified enactments. The promise made at the time of agreement was to the effect that there was no encumbrance on the property or impediment in its purchase. Both the parties were obliged to carry out their part of the contract and on failure of the 1[st] party, the 2[nd] party was entitled to seek specific performance, after deposit of balance of sale consideration before court. However, if the agreement does not fructify by reason of the default of the 2[nd] party, the 1[st] party had the right to appropriate 10% of the advance amounts towards damages. RFA No.43/2011 **- 14 -** After the initial payment of advance amounts the plaintiff had paid substantial portion of the balance consideration, on various dates. As seen on the overleaf to the first page of A1, on 6.9.2008 an amount of Rs.15 lakhs, on 12.7.2008, Rs.50 lakhs, on 2.8.2008, Rs.15 lakhs , on 19.08.2008, Rs.5 lakhs and last, on 26.09.2008, Rs.50 lakhs was paid. Hence as on 26.09.2008, within the period of the agreement an amount of Rs.1,35,00,000/- and on the date of the supplemental agreement an amount of Rs.50,000/- was paid; thus a total of Rs.1,85,00,000/- as against the total consideration of Rs.2,81,32,200/- @ Rs.18 lakhs per cent for a total extent of 15.629 cents. The advance amounts paid as also the part payments made have been acknowledged by the defendants and admitted in the written statement. 8. On the overleaf of page 2 of Ext.A1 the supplemental agreement has been entered into on 26.09.2008 between the parties to Ext.A1. The terms of this supplemental agreement are that the plaintiff would make payment of a further amount of Rs.50 lakhs within 10.10.2008 and the period of agreement RFA No.43/2011 ## **- 15 -** would stand extended to 31.10.2008; which extension was specifically stated to be on the request of the plaintiff. It was also stipulated that registration of 9.629 cents will be made on or before 10[th] of October 2008 on payment of the Rs.50 lakhs stipulated in the first clause. 9. The plaintiff, by a notice dated 15.10.2008, Ext.A2, informed the defendants that he has not obtained the land registered in his name and the defendants have not forwarded the required original title deeds and other documents. He also expressed his readiness and willingness to carry out his part of the contract by Ext.A2 notice. On 15.10.2008 itself the defendants issued a notice to the plaintiff, Ext.A3, specifically contending that the defendants had agreed to the price fixed in the agreement which is lower than the market value, due to the urgent requirement of funds and therefore time is the essence of contract. The defendant claimed that despite reciprocal obligations having been complied with, the funds required was not made available before the last day of performance. The defendant alleged substantial loss caused to them due to the RFA No.43/2011 **- 16 -** breach committed by the plaintiff and terminated the contract which according to the defendants was due to the plaintiff's failure to comply with his part of the obligations. The defendants also offered the advance amounts paid to them, after forfeiture of 10% of such amounts. In reply to Ext.A3 notice, the plaintiff's through his lawyers, issued Ext.A4 notice specifically contending that the documents as required under the agreement was not produced before the plaintiff nor were steps taken to measure out the actual extent of the property by the village authorities. While, again asserting the readiness and willingness of the plaintiff it was alleged that the defendants were resorting to dilatory tactics and even the supplemental agreement entered on 26.09.2008 was at the insistence of the defendants who also insisted upon the extension being made, to be shown as one made on the request of the plaintiff. It was further asserted that the plaintiff was ready with Rs.50 lakhs on 10.10.2008 and he was ready to get the sale deed executed for the extent of 9.629 cents, if the defendants had satisfied him regarding the title of the property with necessary documents and original title deeds. RFA No.43/2011 **- 17 -** The plaintiff also alleged that the defendants were seeking higher price for the land and required the defendants to perform their part of the contract within a period of three days from the date of receipt of the notice, which was dated 18.10.2008, failing which appropriate legal proceedings were threatened. 10. The defendants issued a reply dated nil which was marked as Ext.A5. In Ext.A5 it was stated that the relevant documents required for satisfaction, was shown to the plaintiff, along with photocopies and the originals were retained by the defendants. The original could only be handed over after confirmation of the readiness of the plaintiff to pay the balance consideration. Again breach was alleged on the part of the plaintiff for reasons assumed of paucity of funds and reiterating the contents of the earlier notice, the termination of the contract as stated in the prior notice was reaffirmed. 11. Admittedly, the defendant on appearance in the suit had agreed to sell the property as per Ext.A1 sale deed. The plaintiff is said to have handed over two stamp papers worth Rs.20,000/-, which was admitted by the plaintiff, who was RFA No.43/2011 **- 18 -** examined as PW1. Subsequently the plaintiff withdrew from the agreement and amended the suit deleting the prayer for specific performance. The plaintiff also carried out necessary amendments to confine the prayer to the return of the part-sale consideration paid to the defendants, of Rs.1,85,00,000/-, with interest @18% from the date of agreement as also the costs of the suit. The trial court had found that there was an improper refusal of delivery, which dis- entitles the plaintiff from claiming _pendente lite_ interest or costs in the suit. We do not find any improper refusal to take delivery of the property especially since the plaintiff had confined the prayer to the return of the advance amounts. We also have to observe that the conduct of the plaintiff in not having accepted the offer of the defendant, could at best result in the claim of specific performance being declined; which in any event, the plaintiff did not press by virtue of the amendment. By the said conduct alone the plaintiff cannot be held to have failed to comply with his obligation as per the terms of the contract, the period of which was over before the offer was made by the defendants in the suit and declined by the plaintiff. RFA No.43/2011 **- 19 -** 12. We have to notice that there is no appeal from the decree permitting realization of the amounts paid by the plaintiff to the defendants and the appeal filed by the plaintiff is only with respect to the interest and cost. The trial court has proceeded to decline interest on two grounds, the dis-entitlement of the plaintiff to claim such interest since the breach occurred by the default of the plaintiff and he improperly declined to take delivery of the property, even after repeated offers from the side of the defendant. We are hence called upon to first decide on who committed the breach, whether it be the plaintiff or the defendant. 13. In the plaint, the plaintiff repeated his contentions in the notice that the defendants failed to comply with their part of the obligations, unnecessarily indulged in dilatory tactics and forced him to an extension, which though not at his instance was shown as requested by him. It was also stated that when dilatory tactics were adopted by the defendants he came to know of a mortgage having been made with the bank for an amount of Rs.25lakhs which triggered the notice dated 15.10.2008. Though RFA No.43/2011 **- 20 -** the plaintiff expected a favourable reply the defendants illegally terminated the contract. The defendants filed written statement admitting that the agreement was entered into only because they urgently needed funds and the plaintiff having not performed his part of the contract in the time stipulated, the defendants were not able to meet their financial commitments. In the written statement the defendants, contrary to their notice, stated that the plaintiff was aware of the mortgage and had entered into the contract despite that. The defendants never wanted an extension which was only at the instance of the plaintiff and plaintiff had failed to comply with the condition of payment on 10.10.2008 which resulted in the termination of the contract. It is on these pleadings that the case went for trial. While the plaintiff marked Ext.A1 agreement and the notices issued to both the parties as Exts. A2 to A5, the defendant did not mark any documents in proof of their contention that the title deed, the copies of prior deeds, encumbrance certificates, possession and location certificates were in fact available with them and shown to the plaintiff, to convince him of the title, possession and absence of RFA No.43/2011 **- 21 -** any encumbrance. 14. As pointed out by the learned Counsel for the plaintiff, the 3[rd] defendant, on behalf of the other defendants filed an affidavit dated 12.08.2009 in reply to the interrogatories served on the defendants. In the affidavit it was specifically stated that the original sale deeds of the two items of property were mortgaged with Federal Bank Ltd., Panampilly Nagar Branch and the mortgage was made on 26.05.2007. We have to immediately notice that in Ext.A1 executed on 09.7.2008, the specific undertaking and promise made by the defendants was that the properties are free of any encumbrances, including that of a mortgage. The possession certificate, as per the affidavit in reply was obtained in February 2007 with respect to the 9.629 cents and with respect to 6 cents, obtained on 12.08.2008. The first of such possession certificate was obviously long prior to Ext.A1 agreement. The encumbrance certificate of 6 cents is said to have been obtained on 16.10.2008 and that of 9.629 cents received on 08.08.2008. The said documents were not marked by the 1[st] defendant who was examined as DW1. There is a laconic RFA No.43/2011 ## **- 22 -** statement in the reply affidavit dated 12.08.2009 that the documents are with their counsel who presented the same in open court for perusal; but we do not see any such documents having been perused by the Court, as discernible from the proceedings or marked in evidence by the defendants at the time of trial. 15. The defendants contended that on their appearance before court they consented to sell the property as per the agreement, but it is not seen from the counter-affidavit dated 30.10.2008 filed before the trial court. On the narration of the facts, as per the counter-affidavit, the defendants state that the plaintiff appeared with a friend on 06.09.2008, paid some money and assured to confirm availability of the balance by at least 08.10.2008. There is no payment made by the plaintiff as on 06.09.2008; as stated by the plaintiff or evidenced from the agreement. The counter- affidavit proceeds on the basis that the title deeds were still in deposit with the Bank and that if the readiness and willingness of the plaintiff were proved, then arrangements were made to substitute the collateral security and get release of the title deeds. It is pertinent that even on RFA No.43/2011 **- 23 -** 30.10.2008 when the defendants claim that they offered sale of the property as per Ext.A1 agreement, before court, the title deeds were still in deposit with the bank and admittedly the documents were released only on 01.11.2008. In this context, we have to observe that even the release as on 01.11.2008 has not been proved by the defendants before court. Further it is also relevant that on 26.09.2008 an amount of Rs.50 lakhs was paid by the plaintiff and the mortgage was for a facility of Rs.25 lakhs and no explanation is offered as to why the release of the title deeds were not effected despite Rs.50 lakhs having been obtained on 26.09.2008, on which date the defendants also agreed to sell one of the properties to the plaintiff, with the further condition of a payment of another Rs.50 lakhs on 10.10.2008. It was incumbent on the defendants to at least get release of one of the title deeds; of the property agreed to be sold on 10.10.2008 and satisfy the plaintiff about the title to that property and carry out the measurement to convince the plaintiff of the extent, before the plaintiff is called upon to make the further payment. It is pertinent that in the counter affidavit RFA No.43/2011 ## **- 24 -** there is no offer made to sell the property in accordance with Ext.A1 agreement and the only expression is the readiness and willingness to return the amounts paid by the plaintiff, after deduction of the damages to be adjudicated by the court. Here we reiterate that the plaintiff being aware of the deposit of title deeds, or the mortgage itself, was never spoken of in the notices issued by the defendants and the claim was always that the originals were shown and copies handed over, after due verification with the original. 16. One other ground highlighted by the court to find breach on the plaintiff was the fact of only two stamp papers of Rs.20,000/- having been entrusted with the defendant's counsel that too purchased at an earlier date; ie: on 03.09.2007. Both, the insufficiency of the stamp papers and the date on which they were purchased, were highlighted by the Court to allege an unfair refusal to take delivery of the property in court. At first it has to be observed that if the stamp papers are valid, there is no requirement for purchasing fresh stamp papers for the purpose of preparing a sale deed. The insufficiency of stamp papers RFA No.43/2011 **- 25 -** though at first blush seems to be a valid ground, it is to be noticed that the submission of the stamp papers was not for the purpose of drafting the sale deed for execution. It was for the purpose of getting the photograph and thumb impression of the real owners of the property, the first and second defendants, who were admittedly residing abroad and the sale deed was intended to be executed by the 3rd defendant, their father and power of attorney. In this context we have to refer to the notifications issued by the Inspector General of Registration bearing No. RR4/5448 of 2008 dtd 04.05.2007 and 09.05.2007. The Registration Department, to curb evasion of duty, in consecutive conveyances, on the strength of the very same power of attorney, brought out a stipulation that the photograph of the real owners along with the thumb impression should be affixed on the first page of the sale deed. In the present case, Ext.A1 concerns two separate properties owned separately by the two defendants and normally there would be two separate sale deeds executed by the different owners. The fact that the said stamp papers were resubmitted to the court by the defendants without carrying out RFA No.43/2011 **- 26 -** the required affixture, is evidenced by an order of the Court in an application filed by the plaintiff seeking for return of the stamp papers for revalidation. The order passed in I.A.No.9240 of 2008 dated 19.12.2008 was in the following manner: “Respondent produced two stamp papers Nos.49530 and 495470 of denomination of Rs.20,000/- each containing the thumb impression of first respondent in one of the document. Stamp paper is directly given to the petitioner for revalidation”. The reference to the thumb impression of the 1st respondent on one of the stamp papers validates the reference to the notifications issued to curb duty evasion. 17. It was subsequently, that the plaintiff filed I.A.No.644/2009 withdrawing the offer to purchase the property and sought for amendment of the suit. The said amendment was allowed by an order dated 19.02.2009. The petitioner's prayer to give up the claim of specific performance and to seek only return of the amounts paid was allowed by order dated 19.02.2009 finding that this would not in any manner change the character of the suit. On the same day in I.A.No.645/2009, there was an attachment of the properties to secure the plaint amounts. Pertinent is the fact that before the plaintiff withdrew from the RFA No.43/2011 **- 27 -** offer to purchase the properties and sought amendment by giving up the prayer for specific performance, the title deeds or the other documents to prove no encumbrance on the properties were not produced before court. They are said to have been produced only by an affidavit dated 12.08.2009, much later; which production is also suspect. 18. The order permitting amendment was challenged by the defendants before this court. A learned Single Judge of this court in W.P.(C) No.14494 of 2009 by judgment dated 09.07.2009 dismissed the Writ Petition. The learned Single Judge noticed the various equitable remedies available under the Specific Relief Act and found that an aggrieved party could either seek enforcement of the agreement or repudiate the same, to seek refund of the sum advanced to the opposite party or claim damages. A party seeking the remedy of enforcement under Section 22 of the Act, can also in the alternative, seek for refund of the amounts advanced; which, if not sought for, cannot be granted. Noticing that such relief could be claimed at any stage of the suit it was found that in the present case the plaintiff had RFA No.43/2011 **- 28 -** sought for specific performance, as also the alternative prayer for refund. The impugned order was in an application for giving up the relief of specific performance, which was held to be not an abandonment of the suit itself. It was found that there would be multiple reasons for rendering impracticable the performance of a contract, after institution of the suit and the plaintiff would not be precluded from seeking an amendment confining his relief to the refund of the amounts advanced as per the agreement of sale. This was held to be not an abandonment of the suit as contemplated order XXIII Rule 1 of the CPC. It was held that where the law provides the party to a contract to avail one or more reliefs, both legally enforceable; confining his claim to one relief does not amount to an abandonment, but is only non pursuing of the other relief, for one reason or the other. From the above facts, we find that the trial court egregiously erred in finding the plaintiff to have unfairly refused delivery of the property; which stage in any event according to us had not reached in the present suit. The mere refusal of the party to purchase the property in terms of the agreement after the RFA No.43/2011 **- 29 -** institution of the suit cannot be in any manner be a breach of the specific agreement; the time stipulated in which was already over. In the present case at the risk of repetition, we have to notice that even at the stage when the offer was said to have been made in court the title deeds were still in deposit with the Bank pursuant to a mortgage, entered into long before the agreement itself. 19. On almost identical facts of the proposed vendor having received substantial portion of the sale consideration and a mortgage having not been released the Hon'ble Supreme Court held so in _**P. D'Souza v. Shondrilo Naidu**_ **, (2004) 6 SCC 649.** 19. It is indisputable that in a suit for specific performance of contract the plaintiff must establish his readiness and willingness to perform his part of contract. The question as to whether the onus was discharged by the plaintiff or not will depend upon the facts and circumstances of each case. No straitjacket formula can be laid down in this behalf. 20. The High Court upon consideration of the materials on record had arrived at a finding of fact that the plaintiffs had all along been ready and willing to perform their part of contract. The said findings are binding upon this Court as it had not been shown that while arriving at the said finding the High Court had taken into consideration any irrelevant fact or failed to take into consideration any relevant fact. 21. It is not a case where the plaintiff had not made the requisite averments in the plaint. The readiness and willingness on the part of the plaintiff to perform his part of contract would also depend RFA No.43/2011 **- 30 -** upon the question as to whether the defendant did everything which was required of him to be done in terms of the agreement for sale. The plaintiff was a tenant of the defendant. 22. It is not disputed that the defendant by a letter dated 29-111980 requested the plaintiff to enhance the rent from Rs 440 to Rs 500. Therein she further assumed that the sale deed would be executed and registered by 31-12-1981 which earlier could not be done for unavoidable reasons. The fact that the plaintiff had paid different amounts to the defendant from time to time which were accepted by him stands admitted. 23. It appears from the records that the defendant himself did not produce the original documents nor redeemed the mortgage. If the mortgage was not redeemed and the original documents were not produced, the sale deed could not have been executed and in that view of the matter, the question of the plaintiff's readiness and willingness to perform her part of contract would not arise. 20. The proof affidavit of DW1 was dated 30.10.2010 and there is no reference to the documents including the title deeds in the deposition. In any event, the title deeds were deposited in the Federal Bank as on the date of the agreement which was not available with the defendants for the purpose of satisfying the plaintiff. It is also pertinent that the undertaking made by the defendants in the agreement regarding, the absence of a mortgage on the property, was also false and incorrect. The defendants admit in their notice and in the written statement that they had urgent requirement of finance for reason of which Ext.A1 agreement was entered into. It is also very pertinent that RFA No.43/2011 **- 31 -** despite the two months time specified in the agreement for each party to carry out their respective obligations, the plaintiff' had advanced considerable amounts to the defendants. This in fact probabilise the case of the plaintiff that after receipt of a major portion of the consideration the defendants resorted to dilatory tactics; which according to the plaintiff was on the demand of a higher price. In this context, it is to be noticed that without discounting the fact that the defendant's had given an untruthful undertaking, that there was no encumbrance at all on the property, including a mortgage, there was a subsisting mortgage. The amounts received by them pursuant to Ext.A1 far exceeds the amount for which the properties were mortgaged with a Bank. It is also very pertinent to notice that in the affidavit in reply to the interrogatories, the 3[rd] defendant admitted that the original sale deeds were released from the Federal Bank Ltd. on 01.11.2008, obviously after the last date of Ext.A1 agreement, as extended the which fell on by supplemental agreement, 31.10.2008. The date of release also falls after the date on which the suit was filed which was on 29.10.2008 on which day itself, RFA No.43/2011 **- 32 -** defendants appeared since a caveat had been filed, as admitted by the defendants in the written statement. The defendants also filed a counter affidavit on 30.10.2008, after which the title deeds were released from the Bank. DW1 in his deposition admitted to the above facts and in cross examination stated that the title deeds were released by the Bank on clearing the mortgage, after the suit was filed. Considering the above facts, no credence can be placed on the submission of the defendants that the original of the title deeds were shown to the plaintiff and the copies were handed over to him; as stated in the notice. Before court this version was changed and in the counteraffidavit to the I.A for injunction from alienation, the written statement and in the testimony, the case was that the plaintiff knew about the mortgage; which also has not been established; in the context of the specific denial by the plaintiff. 21. The defendant's Counsel before us had an additional argument; which we do not find to have been raised before the trial court, that the documents were shown to the plaintiff from the Bank in which the title deeds were deposited, RFA No.43/2011 **- 33 -** pursuant to the mortgage. In the testimony of DW1 it was stated that the plaintiff was offered to be shown the title deeds from the Bank. In any event if in fact the title deeds were shown from the Bank, it was incumbent upon the defendants to prove the said fact at least by the examination of the Branch Manager, without whose junction the same would not have been possible. But as we noticed above, there was not even such a contention raised before the lower court. Further, but for the self serving testimony that the documents were released from the Bank, the title deeds have not been produced before court or marked in evidence. There is also no evidence led as to when the title deeds were released from the Bank and as far as we can infer from the evidence led, it could be under mortgage and remaining with the Bank, even now. Similarly the other documents required; which were the encumbrance certificate, the original title deed, the copies of the prior deeds, the possession and location certificates also were not produced or marked in evidence; though referred to in the affidavit in reply to the interrogatories. 22. The failure on the part of the defendants to RFA No.43/2011 ## **- 34 -** comply with their part of the obligation; specifically the requirement to satisfy the plaintiff of their title in the property and the exact extent by production of the various documents including the original title deeds and the measurement carried out with reference to such title deeds, was stated at the first instance by the plaintiff, when a notice was issued on 10.10.2008. We are quite conscious of the fact that the plaintiff was obliged to pay an amount of Rs.50 lakhs as per the supplementary agreement entered on 26.09.2008, which was admittedly not paid by the plaintiff. However, the obligation to pay cannot be considered in isolation, especially when the supplemental agreement also required the defendants to execute the sale deed and carry out registration of 9.629 cents in favour of the plaintiff, on fulfilling the condition of payment of Rs.50 lakhs on or before 10.10.2008. Definitely the obligation to so make the payment would accrue on the plaintiff only on the defendants satisfying the plaintiff about their title and exact extent of the property with reference to the title deed. Admittedly, the title deed even as on 10.10.1998 was with the RFA No.43/2011 **- 35 -** Bank where the defendants had mortgaged it contrary to which the defendants had falsely undertaken in Ext.A1 that there was no encumbrance on the property. It is pertinent to observe that even as per the agreement and the rate fixed per cent, the total consideration for 9.629 cents comes to Rs.1,73,32,200/-; in excess of which the plaintiff had already paid the defendants. The plaintiff in the above circumstances had absolutely no obligation to pay the further amounts stipulated in the supplemental agreement on 26.09.2010 without being satisfied about the title and extent of the properties, as also the absence of any encumbrance on the property. 23. We are satisfied that the breach was on the part of the defendants and that the plaintiff had paid a major part of the consideration long before the extended date and the defendants failed to comply with their part of the obligation. The defendants as on the date of expiry of the period stipulated in Ext. A1 and that extended by the supplemental agreement was not in possession of the title deeds; which admittedly were deposited in a Bank. The release of title deeds from the Bank having been RFA No.43/2011 **- 36 -** effected even after the extended period as per the supplemental agreement makes it amply clear that the defendants had not attempted to clear the mortgage and get release of the title deeds before the period of the agreement or at least before 10.10.2008, thus failing to comply with their part of the obligation. 24. We find that the trial court has proceeded on mere surmises and conjectures. We are afraid that the probability aspects taken stock of by the trial court does not stand to reason; especially in the context of absolutely no evidence having been led to prove the case of the defendants as to their part of the obligation having been complied with. In fact, the records in the case as also the testimony of DW1 with respect to the release of title deeds having been obtained after 31.10.2008, clearly establishes the failure on the part of the defendants to comply with their part of the obligation to satisfy the plaintiff, the proposed purchaser, as to their absolute title & possession over the property, the exact extent with reference to the title deeds and the village records, as also absence of any encumbrance on the property. Having found the breach of Ext.A1 to be that of the RFA No.43/2011 **- 37 -** defendants, we do not find any reason to uphold the order of the trial court regarding compensation. 25. Despite our finding on breach, we notice that the trial court was correct in having found compensation under Section 74 to be enabled even without proof of loss of damages. However, that does not preclude the party who alleges breach from pleading such loss and damages and also establishing a legal injury as has been held in _**Fateh Chand v. Balkishan Dass [**_ **AIR 1963 SC 1405]** . It is also pertinent to observe that such reasonable compensation can only be to the extent of the stipulated liquidated damages or penalty, as per the agreement. In the present case, Ext.A1 agreement stipulated for appropriation of 10% of the advance amounts, if the agreement failed to fructify by reason of the failure of the proposed purchaser to comply with his part of the obligations. The advance amount as per Ext.A1 agreement was only Rs.50 lakhs, 10% of which is Rs.5 lakhs. The further amounts paid as per the endorsements made in Ext.A1 are part-payments towards the total consideration agreed upon and not in the nature of an RFA No.43/2011 **- 38 -** advance. The supplemental agreement entered into after the subsequent payments did not have a forfeiture or penalty clause and there is absolutely no question of any forfeiture or appropriation from the subsequent payments towards consideration. We have, in examining this aspect, further exposed the fallacy in the trial court's findings regarding compensation; for completeness and without in any manner deviating from our earlier finding regarding the breach and the total dis-entitlement of the defendants from claiming any compensation. 26. We are hence of the opinion that the plaintiff is entitled to return of the entire amounts paid with interest from the defendants. In _**Videocon Properties Ltd.**_ (supra) the Hon'ble Supreme Court was concerned with the interest liability under Section 55(6)(b) of the Transfer of Property Act, which the defaulting vendor argued, cannot attach itself to the earnest money paid as distinguished from purchase-money. The Hon'ble Supreme Court on the terms of the contract held the payment of earnest money to be in effect the purchase-money. Here there is RFA No.43/2011 ## **- 39 -** no such dispute and admittedly the amounts paid as advance and the substantial payments made thereafter were part payments of the total consideration and hence definitely purchase-money. As far as the rate of interest, we notice that Section 3 and the definition of current interest as has been pointed out from the Interest Act, 1978; requiring the courts to fix the rate in accordance with the rate that would be applicable as on the period of the written instrument. The trial court has fixed 9% future interest which presumably is the interest rate, current at the time of the agreement and the disposal of the suit which occurred within a span of 2 years. We find no reason to reduce the rate of interest. Even going by the various decisions placed before us by the learned Counsel for the defendants, the rate has been fixed in the nature of a discretion based on the facts and circumstances coming out in those cases. In the present case we fix the _pendente lite_ interest at the rate of 9%. 27. We are also convinced that the plaintiff is entitled to the costs throughout and that there is no question of the plaintiff having unfairly declined delivery of the property. Even RFA No.43/2011 **- 40 -** at the point when the defendants purportedly made the offer of sale to the plaintiff before court on 30.10.2008, the properties were mortgaged to the Bank and the title deeds were with the Bank. We find absolutely no _bona fides_ in the offer made before court and the plaintiff is entitled to the cost through out, in the suit and in the present appeal. As far as the cost entitled in the suit we see from the judgment that while the body of the judgment declined cost; in the relief, it was granted by an unauthorized interpolation, based on which the decree was drawn up. The decree, as seen from the records also indicate the memo of costs having been filed by the plaintiff. Hence, while reversing the findings in the judgment regarding the disentitlement of the plaintiff to the costs in the suit, we award the cost throughout. The memo of costs already filed by the plaintiff and specifically noted in the decree shall survive, insofar as the costs in the suit. As far as the costs in the appeal the plaintiff shall file the necessary memo of costs within the time stipulated. We allow the appeal and modify the judgment of the trial court allowing the plaintiff to recover from the defendants 1 RFA No.43/2011 **- 41 -** & 2 the plaint claim in full with interest _pendente lite_ and till realization at the rate of 9% per annum as also the costs through out; in the suit and in appeal . Sd/- **K.Vinod Chandran, Judge** Sd/- **C. Jayachandran, Judge** jma/mrcs/SMA