Solaman S/o Kubeliyo Raju v. Vincent, Vincy and Francis

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR & THE HONOURABLE SMT. JUSTICE P.V.ASHA** **MONDAY, THE 7TH DAY OF JULY 2014/16TH ASHADHA, 1936** **RFA.No. 779 of 2011 ( ) ------------------------** **AGAINST THE JUDGMENT IN OS 490/2009 of ADDL.SUB COURT, IRINJALAKUDA DATED 30-06-2011** ## **APPELLANT/PLAINTIFF:** **--------------------------------------------** **SOLAMAN S/O.KUBELIYO RAJU, PORITHISSERY VILLAGE PORITHISSERY DESOM, MUKUNDAPURAM TALUK THRISSUR-680121.** **BY ADVS.SRI.MURALI PURUSHOTHAMAN** **RESPONDENTS/DEFENDANTS:** **--------------------------------------------------** **1. VINCENT, AGED 54 YEARS S/O.PUTHUKKADAN DEVASSYKUTTY, KOMBARA DESOM MANAVALASSERY VILLAGE, MUKUNDAPURAM TALUK THRISSUR-680121.** **2. VINCY, AGED 46 YEARS, W/O.PUTHUKKADAN VINCENT, KOMBARA DESOM MANAVALASSERY VILLAGE, MUKUNDAPURAM TALUK THRISSUR-680121.** **3. FRANCIS, AGED 65 YEARS, S/O.PUTHUKKADAN LONAPPAN, IRINJALAKUDA VILLAGE IRINJALAKUDA DESOM, MUKUNDAPURAM TALUK THRISSUR-680121.** **R1 & 2 BY ADV. SRI.C.P.PEETHAMBARAN** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 07-07-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **T.R.RAMACHANDRAN NAIR & P.V.ASHA, JJ.** - - - - - - - - - - - - - - - - - - - - - ## **R.F.A.No.779 OF 2011** - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 7[th] day of July, 2014 ## **JUDGMENT** ## Ramachandran Nair, J. This appeal is from the judgment and decree in O.S.No.490/2009 on the file of the Additional Sub Court, Irinjalakkuda. The appellant is the plaintiff. The suit was one for return of advance money from the defendants 1 and 2. The suit was decreed and the court below granted a decree directing the defendants 1 and 2 to pay a sum of ` 35 lakhs with interest @ 6% per annum from the date of filing of the suit till the date of realization. It is also held that no charge can be created on the plaint schedule property since it was sold in favour of the third defendant. To the extent to which the court below rejected claim for interest from the date of payment of advance money till the date of suit and held that no charge can be created, this appeal is filed by the plaintiff. 2. We heard the learned counsel for the appellant Sri.Deepu R.F.A.No.779/2011 2 Lal Mohan and the learned counsel for the defendants 1 and 2 Sri.C.P.Peethambaran. The learned counsel for the appellant submitted that in the light of Section 55 (6) (b) of the Transfer of Property Act, there is a statutory charge and the same will not be lost merely because the property has been transferred. It is also stated that in the light of the specific provision therein, the court is entitled to grant interest on the advance money received. 3. He also relied upon the decision of the Apex Court in **Delhi** **Development Authority v. Skipper Construction Co.(P) Ltd. And others** (2000 (1) SCC 130). The learned counsel for the respondents/ defendants Sri.C.Peethambaran submitted that the plaintiff is not entitled to statutory charge and payment of interest as the plaintiff has improperly refused to accept delivery of the property which is clear from the oral evidence of the plaintiff, namely in the cross examination. It is submitted that therein he admitted that he did not file a suit for specific performance as he was not having sufficient money. The learned counsel also relies on the decision of the Division Bench of this court in **Peter Cherian v. Abraham (2007 (4) KLT 680)** to contend R.F.A.No.779/2011 3 for the position that when the plaintiff is in default, he is not entitled to statutory charge and for payment of interest. 4. As far as the issues raised in this appeal is concerned, the following points arises for consideration : _1) Whether the appellant/plaintiff is entitled for statutory charge under Section 55(6)(b) of the Act and interest for the advance amount paid from the respective dates of payment._ _2) Whether the plea of the defendants is acceptable or not._ 5. Going by the facts of the case, the agreement was executed on 23.05.2008 on which date `25 lakhs was paid as advance by the plaintiff. Another amount of ` 10 lakhs was paid on 21.11.2008. The period fixed in the agreement initially was six months which was extended to 23.02.2009 when the second instalment of advance money was received. The property was sold to the third defendant who is the uncle of the defendants on 23.05.2008. This is the factual background of the case. 6. It is clear from Section 55(6)(b) that the section provides R.F.A.No.779/2011 4 for a statutory charge for the amount of any purchase money properly paid by the buyer in anticipation of the delivery and for interest on such amount. It is conditioned by a term “ unless he has improperly declined to accept delivery of the property.” He is entitled for such a charge as against the seller and all persons claiming under him. In the light of the above statutory provision, the view taken by the court below that since the property has been sold, there will not be statutory charge is not correct. In **Delhi Development Authority v. Skipper Construction Co.(P) Ltd. And others** (2000(1) SCC 130) it was held that the charge is available against the seller and all persons claiming under him. It was also held that under Section 55(6)(b) buyer is entitled to interest on the amount of purchase money paid. The only question to be examined is whether the plaintiff has improperly declined to accept delivery of the property. 7. We have perused the written statement filed by the defendants 1 and 2. Actually the contention of the defendants was that the transaction between the parties is a loan transaction and the agreement was executed as security for payment of money. According R.F.A.No.779/2011 5 to the defendants, it was never intended as agreement for sale of the property. 8. These aspects were considered by the court below and it was found especially in the light of the admission made by the defendants also that it was not a loan transaction,but agreement for sale of the property in question. The above findings are clear from paragraphs 10 and 11 of the judgment. The court below therefore found that the agreement was executed as an agreement for sale of plaint schedule property itself. One independent witness PW2 was also examined, who was the attester to the agreement. We find no reason to disagree with the above finding. 9. The property was sold admittedly on 23.05.2008 and even thereafter on 21.11.2008 `10 lakhs was received from the plaintiff towards advance sale consideration. In the written statement, there is no plea that the plaintiff has improperly refused to accept delivery of the property. When the plaintiff was examined before the court below, to a question put in the cross examination, it was stated as follows “ I was not having money for enforcing specific performance and for filing R.F.A.No.779/2011 6 a case as per the agreement.” It was explained that after the period covered by the agreement is over `35 lakhs could not be made available immediately. Sri.C.P.Peethambaran submits that this amount to an admission of his own fault in performing that part of the agreement. 10. Herein the defendants admittedly have not demanded the plaintiff to be ready with the money for executing the document. At no point of time they had approached the plaintiff also in the matter. Therefore, the stray sentence in the cross examination cannot lead to the conclusion that throughout the period of agreement, the plaintiff was at fault or he had refused to accept delivery of the property. In the proof affidavit, he has stated that additional amount of `10 lakhs was paid and the period was extended as agreed to by the parties with a further understanding that the property will be measured and encumbrance certificate for 15 years will be made available along with the receipt for payment of property tax. Therefore it cannot be said that at any point of time the defendant had offered the plaintiff or demanded him to accept delivery of the property. In paragraph 14 of R.F.A.No.779/2011 7 the decision relied upon by the learned counsel for the defendant Sri.C.P.Peethambaran in Videocon Properties Ltd. v. Dr.Bhalchandra Laboratories & Ors. (2004 (3) SCC 711) it has been held as follows : “ _The charge will not be lost by merely accepting delivery of possession alone. It is lost only in the case of the purchaser's own fault or his improper refusal to accept delivery.”_ 11. Herein no evidence has been let in by the defendants to prove that it is due to the fault of the plaintiff that the transaction could not be gone through. To the contrary it is proved in evidence that the property was sold to the third defendant who is the uncle of the defendants. In that view of the matter, the conditions provided in Section 55 (6)(b) to deny statutory charge to the plaintiff are absent. Therefore we reject the said contention. 12. Amounts have been received by the defendants by way of advance on 23.05.2008 and 21.11.2008. No cogent reason is stated by the court below to deny the claim of interest prior to the date of the suit except by stating that there is no provision in the agreement. But R.F.A.No.779/2011 8 Sec.55(6)(b) entitles the plaintiff to claim interest. The absence of a clause in the contract will not deprive the plaintiff of the right to claim interest. In that view of the matter, on both grounds the appellant is entitled to succeed in the appeal. In the result, the appeal is allowed and the we hold that the appellant/plaintiff is entitled for statutory charge under Section 55(6) (b) on the plaint schedule property. The defendants are also liable to pay interest @ 6% from the respective dates of payment namely for the amount of `25 lakhs from 23.05.2008 and for the amount of `10 lakhs from 21.11.2008 per annum upto the date of suit and from the date of suit till realization at the same rate. The appeal is allowed with costs. ## **T.R.RAMACHANDRAN NAIR, JUDGE** ## **P.V.ASHA, JUDGE** sv. R.F.A.No.779/2011 9