High Court of KeralaSingle Judge2011-12-01Dismissed

Ramakrishnan v. Sebastian and others

Case / Petition Number:RSA No. 499/09

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: M. L. Joseph Francis
Judgment Date: 2011-12-01
Court Decision / Holding: Second Appeal dismissed; the plaintiff/applicant is entitled to return of the advance amount with interest and costs; no interference with lower court decrees; the defendants’ breach is upheld.
Final Disposition: Dismissed

Parties to the Case

Appellants / Petitioners

Ramakrishnan, S/o. Kuttan
Thankamani, W/o. Ramakrishnan

Respondents

Sebastian, S/o. Abraham
V.V. Joseph, Vazhappillil House, Kurichithanam, Kottayam District
Marykutty, W/o. V.V. Joseph

Legal Representation & Advocates

Counsels for Petitioners

• T. V. George
• Jimmy George (Thadathil)

Counsels for Respondents

• N. K. Mohanlal (for caveator)

Case Synopsis & Summary

This Regular Second Appeal arises from O.S.29/2001, Thodupuzha, in which the plaintiff (Ramakrishnan) sought to recover advance money paid under an agreement for sale of plaint schedule property for Rs. 3,25,000, with an advance of Rs. 40,000 on 27.11.1999 and a further Rs. 25,000 on 28.02.2000, along with an extension of the period by 90 days. The original agreement earmarked a sale by 1.3.2000, but the plaintiff claimed that the period was extended and sought to recover the balance after breach by the defendants (1 and 2). The defendants acknowledged receipt of the advance but asserted that Rs. 40,000 was security, not a true advance, and contended that the 90-day extension (endorsement Ext. A1) was either not endorsed or fabricated; they claimed the extension was only three weeks and that the plaintiff failed to perform, prompting them to sell to others. The trial court decreed return of Rs. 65,000 with 12% interest, then 6% thereafter, plus costs, for breach of contract, and the appellate court affirmed. In the second appeal, the defendants argued non-endorsement and lack of extension; the plaintiff argued the endorsement and extension were genuine. The High Court relied on Lakshmipathy A.K. and affirmed that time is not necessarily the essence of a contract in the sale of immovable property unless a contrary intention is shown, upholding the concurrent findings of breach by the defendants and entitlement to return of the advance money with interest and costs. The appeal is dismissed with costs.

Legal Doctrines & Maxims

Time is the essence of the contract
Presumption that time is not the essence of contract in sale of immovable property unless contrary intention is expressed

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellants contend that the endorsement on Ext. A1 extending the period is fabricated and cannot be read as an extension for three months. They submit that the original period was three weeks and that the plaintiff did not timely perform, hence there was no valid extension. They argue that the plaintiff withdrew or failed to comply, and that the suit for return of advance money should fail since time was the essence of the contract. They challenge the genuineness of PW2’s testimony regarding endorsement and signatures, and assert that the defendants were in urgent need of money, prompting sale to third parties only after proof of breach. They claim that the plaintiff’s conduct amounts to breach and that the defendants suffered loss, hence the decree should be set aside.

Contentions of Respondents

The respondents argue that the agreement was extended by 90 days with additional consideration, evidenced by Ext. A1 and the testimony of PW2, who stated he wrote the endorsement and that the parties signed in his presence. They maintain the plaintiff failed to perform within the extended period and that the defendants were compelled to sell to others, resulting in damages and loss. They rely on the original breach by the plaintiff, and contend that the trial court’s decree for return of the advance amount with interest and costs, plus damages, was correct and should be maintained on appeal.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Lakshmipathy A.K. (dead) and others v. Rai Saheb Pannalal H., Lahoti Charitable Trust and others	2010 KHC 6012 (S.C.)	Positive	Cited to support the proposition that time may not be the essence of a contract in sale of immovable property unless there is contrary intention.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS THURSDAY, THE 1ST DECEMBER 2011 / 10TH AGRAHAYANA 1933 RSA.No. 499 of 2009() --------------------AS.37/2005 of SUB COURT,THODUPUZHA OS.29/2001 of MUNCIFF COURT,THODUPUZHA .................... 1. RAMAKRISHNAN, S/O. KUTTAN, AGED 72 YEARS, ELAMTHANATHU HOUSE, UDUMPANNUR KARA, UDUMPANNUR VILLAGE, THODUPUZHA TALUK. 2. THANKAMANI, W/O. RAMAKRISHNAN, AGED 69 YEARS, -DO- BY ADV. SRI.T.V.GEORGE SRI.JIMMY GEORGE (THADATHIL) ## RESPONDENT(S): RESPONDENTS 1. SEBASTIAN, S/O. ABRAHAM, - AGED ABOUT 46 YEARS, KARIKKAVAYALIL HOUSE, VELLAMTHANAM KARA, UDUMPANNUR VILLAGE, THODUPUZHA TALUK. 2. V.V. JOSEPH, VAZHAPPILLIL HOUSE, KURICHITHANAM, KOTTAYAM DISTRICT. 3. MARYKUTTY, W/O. V.V. JOSEPH, -DO- ADV. SRI.N.K.MOHANLAL FOR CAVEATOR THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 29/11/2011, THE COURT ON 1.12.2011 PASSED THE ## **M.L.JOSEPH FRANCIS, J. ----------------------------------------------R.S.A. No.499 of 2009 ----------------------------------------------Dated 1st December, 2011.** ## **J U D G M E N T** This appeal is filed by the defendants 1 and 2 in O.S.29/01 on the file of the Munsiff Court, Thodupuzha. The first respondent herein was the plaintiff in that suit, which was filed by him for return of advance amount due under an agreement for sale. Respondents 2 and 3 herein were the defendants 3 and 4 in that suit. 2. The case of the plaintiff is briefly as follows : The plaintiff and defendants 1 and 2 entered into an agreement for sale whereby the plaintiff agreed to purchase and the defendants 1 and 2 agreed to sell the plaint schedule property to the plaintiff for a total sale consideration of Rs.3,25,000/- and received an advance sale consideration of Rs.40,000/- on 27.11.1999. The sale was to be effected by 1.3.2000. On 28.2.2000 defendants 1 and 2 accepted a further sale consideration of Rs.25,000/- agreeing to extend the period of contract by a further period of 90 days and the same has been endorsed on the agreement. In breach of the agreement, on 25.3.2000, the defendants 1 and 2 issued a lawyer notice RSA 499/09 2 alleging that they were present in the SRO on 1.3.2000, ready to execute sale deed and when the plaintiff failed to turn up with balance sale consideration, the period was extended by 3 weeks more at the request of the plaintiff and that too was expired. The plaintiff was called upon to pay the balance sale consideration of Rs.2,60,000/- in 7 days and on his failure he would be liable for damages to the tune of Rs.75,000/-. Plaintiff issued a reply notice detailing the circumstances and intimated that the agreement was extended not by three weeks but by 3 months and the plaintiff also affirmed his willingness to pay the balance before 31.5.2000. In the last week of March, 2000, the plaintiff was informed through his friend that the plaintiff is free to rescind from contract. Plaintiff refused to oblige. On 10.5.2000 plaintiff learnt that the plaint schedule property was purchased by defendants 3 and 4 for a total sale consideration of Rs.3,80,000/- as per document No.1762/00 of Karikode SRO. Defendants 1 and 2 committed breach of contract and the plaintiff is entitled to get back the advance sale consideration with interest and costs and also damages to the tune of Rs.10,000/-. RSA 499/09 3 3. Defendants 1 and 2 in their written statements admitted the execution of the agreement and also the receipt of Rs.40,000/-. According to defendants 1 and 2 Rs.40,000/was advanced as security and it is not an advance payment. The period of agreement was agreed to be the essence of contract. On the date of expiry of the agreement on 1.3.2000 defendants visited SRO Karikkode and prepared to execute the sale deed. But the plaintiff did not turn up and he was not ready and willing to perform his part of contract. On 7.3.2000, plaintiff approached them and pleaded for extension of time for raising funds. Accordingly the period was extended by 3 weeks by receiving a sum of Rs.25,000/-. It is not correct to say that the same was endorsed on the agreement and defendants 1 and 2 subscribed their signature upon the same. The endorsement has been fabricated for the purpose of the suit. On 25.3.2000 they issued a notice to the plaintiff. Since the plaintiff was not willing to perform the contract even within the extended period, the property was sold at a loss. Defendants 1 and 2 sustained heavy loss due to the breach of contract by the plaintiff. Therefore, the plaintiff lost the security amount of RSA 499/09 4 Rs.40,000/-. Defendants have paid a sum of Rs.15,000/- as brokerage for the agreement dated 27.11.1999. On account of the reduction in the sale consideration also they sustained heavy loss. Defendants have sustained a loss of Rs.1,00,000/for which the plaintiff alone is liable. Defendants have limited their claim at Rs.25,000/- and that has been set off. With the above contentions, defendants 1 and 2 prayed for dismissal of the suit. 4. Defendants 3 and 4 in their written statement contended that they are bonafide purchasers for valuable consideration without notice. They have effected mutation and is in absolute possession and enjoyment of the property. If at all plaintiff is entitled to any relief, that is to be realised from defendants 1 and 2 only and the plaintiff is not entitled for a charged decree. 5. In the trial court, PW1 to PW3 and DW1 were examined and Exts.A1 to A4 and Exts.B1 to B4 series were marked. The learned Munsiff, on considering the evidence decreed to the suit, allowing the plaintiff to realise a sum of Rs.83,027/- with interest on a sum of Rs.65,000/- at the rate of RSA 499/09 5 12% per annum from the date of the suit till date of decree and thereafter, at the rate of 6% till realization together with costs from defendants 1 and 2 and charged on the plaint schedule property. Against that judgment and decree, the defendants 1 and 2 filed an appeal as A.S.37/05 before the Sub Court, Thodupuzha, which was dismissed by that court, confirming the judgment and decree of the trial court. Against that judgment and decree, the appellants/defendants 1 and 2 filed this Second Appeal. 6. Heard the learned counsel for the appellants and the learned counsel for the first respondent. 7. At the time of hearing, the leaned counsel for the appellants raised the following arguments : The courts below failed to appreciate the fact that the first respondent/ plaintiff could not raise the balance sale consideration and as such he sought for extension of the agreements for 3 weeks time orally by paying a paltry amount of Rs.25,000/- to the appellants. Even after the expiry of 3 weeks time, he could not raise the required amount. Hence, he fabricated the endorsement on the foot of the agreement as if the period has been extended for a RSA 499/09 6 period of 3 months and fabricated/forged the signatures of appellants also in connivance with PW2, who is his close aid. The endorsement on the foot of Ext.A1 cannot be read as an extension for three months time. The courts below failed to appreciate the fact that the appellants were badly in need of money and as such they have agreed to sell their property to the first respondent/plaintiff and in such a situation, there is no chance or possibility by no stretch of imagination to allow three months period more for execution of sale deed. The courts below failed to appreciate the fact that the time was the essence of the contract and as such the plaintiff has committed the breach of contract and he cannot claim return of the advance amount. Learned counsel for the first respondent/plaintiff supported the judgments of the courts below. 8. During the pendency of this appeal, the appellants filed I.A.No.1194/2009 to receive additional documents. That petition cannot be allowed, as nothing is mentioned by the appellants about those documents in the appeal memo or in the written statement. Therefore, that RSA 499/09 7 petition is dismissed. 9. In the decision reported in **Lakshmipathy A.K. (dead) and others v. Rai Saheb Pannalal H., Lahoti Charitable Trust and others** [2010 KHC 6012 (S.C.)], it was held that the presumption is that time is not to be of the essence of contract in case of sale of immovable property, unless contrary intention is expressed. 10. When the plaintiff was examined as PW1, he deposed that the contract dated 27.11.99 for purchase of the plaint schedule property was valid upto 1.3.2000. He had paid an amount of Rs.40,000/- to the appellant towards the advance of sale consideration. PW1 gave evidence that the agreement was again extended by 90 days paying a further consideration of Rs.25,000/- on 28.2.2000. PW2 and PW3 are independent witnesses examined on the side of the first respondent. PW2 gave evidence that he wrote the endorsement in Ext.A1 showing the receipt of Rs.25,000/- on 28.2.2000 and the extension of the period of agreement by 90 days. He gave evidence to the effect that the parties put their signatures in his presence. He has tendered his signature also to Ext.A1. PW3 RSA 499/09 8 gave evidence to the effect that at the instance of the appellants he persuaded 1[st] respondent to withdraw from the contract as the appellants had a better deal, but his attempt did not succeed. 11. When the first defendant was examined as DW1, he admitted the payments, but denied the endorsement on Ext.A1. Execution of Ext.A1 agreement and the payment of the amount on 27.11.1999 as well as on 28.2.2000 is not disputed. The only dispute is with regard to the endorsement in Ext.A1 whereby the period was extended by 3 months. The contention of the appellant is that the period was extended only by 3 weeks and the endorsement on Ext.A1 is fabricated. But the above contention of the appellants cannot be accepted in view of the testimony of PW2. PW2 categorically deposed before the lower court that it is he who wrote the endorsement and the parties signed the same in his presence and he has also affixed his signature in the document. Even though PW2 was cross examined nothing has been brought out to discredit his version. 12. It has come out in evidence that the defendants 1 and 2 sold the properties to defendants 2 and 4 before the RSA 499/09 9 expiry of the extended period. Since the trial court and the appellate court concurrently found on the basis of the evidence on record that the defendant 1 and 2 committed breach of contract and that the plaintiff is entitled to get return of advance amount together with reasonable compensation of Rs.10,000/-, I find no reason to interfere with the judgment and decree of the courts below, in this Second Appeal. Accordingly, this Second Appeal is dismissed as it is without any merits. The parties are directed to suffer their respective costs in this Second Appeal. Sd/- ## **M.L.JOSEPH FRANCIS, JUDGE.** tgs (True copy) P.S. to Judge.