ignatious Dias Vs. Mario Francis Barretto and Others - Court Judgment

Oral Judgment:

1. Heard Mr. A. Kamat, learned counsel appearing for the appellant and Mr. D. Pangam, learned counsel appearing for the respondents.

2. The above appeal came to be admitted by an order dated 29.03.2007 on the following substantial questions of law:

(1) Whether in terms of Section 22 of the Specific Relief Act, 1963 the appellant is entitled for the refund of the earnest money paid to the respondents in terms of Agreement of Sale dated 16.07.1991, Exhibit PW1/B?

(2) Whether the Courts below had misinterpreted the agreement to hold that the amount of Rs.50,000/- was not by way of part of sale consideration?

(3) Whether upon reading of clause 2 and clause 7 of the agreement the only interpretation that can be drawn is that Rs.50,000/- was paid as part consideration?

(4) Whether Courts below were right in holding that the amount of Rs.50,000/- stands forfeited when there is no clause in the agreement providing for forfeiture?

3. During the course of the hearing of the above appeal, the learned counsel appearing for the appellant has pointed out that he restricts the challenge in the above appeal to the first substantial question of law but however, submits that the suit filed by the appellant is for specific performance of agreement and according to him the appellant is entitled for a decree for specific performance of the agreement. The learned counsel pointed out that towards the part of the consideration, the appellant had paid a sum of Rs.50,000/- and considering that the agreement has not been disputed, the appellant is entitled for the specific performance of the agreement. The learned counsel as such points out that the additional substantial question of law arises in the present appeal for consideration.

4. On the other hand, Mr. D. Pangam, learned counsel appearing for the respondents has disputed the said contention. The learned counsel has pointed out that the claim for specific performance was specifically given up by the appellant before the Appellate Court. The learned counsel has taken me through the points for determination framed by the learned Lower Appellate Court and pointed out that the only the point for consideration was whether the appellant was entitled for refund of Rs.50,000/-. The learned counsel further pointed out that in any event, whether the appellant was entitled for specific performance or not is a matter of appreciating the evidence on record which is not permissible by this Court under Section 100 of Civil Procedure Code.

5. I have considered the submissions of the learned counsel and I have also gone through the records. Considering that the prayer for specific performance was given up before the Trial Court, this point was not pressed before the learned Appellate Court. On perusal of the impugned judgment of the learned Lower Appellate Court, I find that there is no foundation laid by the appellant to claim specific performance and as such the question of framing an additional substantial question of law does not arise at all. In any event, the grant of specific performance is a discretion of the Court and this Court cannot re-appreciate the evidence in the present Second Appeal under Section 100 of Civil Procedure Code unless perversity or arbitrariness is shown in such findings. As such the request of the learned counsel appearing for the appellant to frame an additional substantial question of law on that count stands rejected.

6. With regard to the first substantial question of law framed by this Court, Section 22 of the Specific Relief Act provides thus:

œ22. Power to grant relief for possession, partition, refund of earnest money, etc.-

(1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908 (5 of 1908), any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for -

(a) possession, or partition and separate possession, of the property, in addition to such performance; or

(b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or  [made by] him, in case his claim for specific performance is refused.

(2) No relief under clause (a) or clause (b) of sub- section (1) shall be granted by the court unless it has been specifically claimed:

Provided that where the plaintiff has not claimed any such relief in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.

(3) The power of the court to grant relief under clause (b) of sub- section (1) shall be without prejudice to its powers to award compensation under section 21.?

7. On plain reading of the said provisions, it cannot be disputed that the person is entitled for the refund of the earnest money in case specific performance is refused in specific circumstance. In the present case, the material on record suggest that the appellant was not entitled for specific performance as the property which was agreed to be purchased also belongs in co-ownership with the respondent no.3. It is not in dispute that the respondent no.3 was not a party to the agreement and consequently, granting specific performance to the appellant would not arise.

8. Be that as it may, it cannot be disputed that in fact the appellant had paid a sum of Rs.50,000/- to the respondent no.1 and 2. On going through the agreement at Exhibit PW1/B the recitals therein suggest that respondent no.1 and 2 had not disclosed to the appellant that the property was also belong to the respondent no.3. Giving such representation and making the appellant to part with a sum of Rs.50,000/- itself entitled the appellant to get the refund of the said sum of Rs.50,000/- along with interest. In such circumstances, in view of the provisions of Section 22 of the Specific Relief Act, I find that the appellant is entitled for the refund of Rs.50,000/- which was paid as an earnest money to the respondent nos. 1 and 2.

9. At this stage, Mr. Kamat, learned counsel appearing for the appellant has pointed out that the said amount was paid in the year 1991 and even assuming that interest at the rate of 8% is considered, the amount works out to nearly Rs.1,50,000/-. Mr. D. Pangam, learned counsel appearing for the respondents has pointed out that the question of granting any interest would not arise.

10. Considering the facts and circumstances of the case and taking note of the fact that the amount was paid in the year 1991, I find it appropriate to direct the respondent nos. 1 and 2 to pay to the appellant an aggregate sum of

Rs.1,25,000/- in full and final settlement of the amount payable to the appellant toward refund of the said earnest money admittedly paid by the appellant to the respondent nos. 1 and 2. The substantial question of law is answered accordingly.

11. At this stage, Mr. D. Pangam, learned counsel appearing for the respondent nos. 1 and 2 upon instructions points out that the said amount would be paid within a period of 12 weeks from today.

12. In view of the above, I pass the following:

ORDER

(i) The appeal is partly allowed.

(ii) The impugned judgment of the learned Lower Appellate Court dated 12.04.2006 and the Trial Court dated 16.10.2004 are quashed and set aside.

(iii) The suit filed by the appellant is partly decreed.

(iv) The respondent nos. 1 and 2 are directed to pay an amount of Rs.1,25,000/- to the appellant within a period of 12 weeks from today. In case of the default in payment of the said amount or part thereof within the said period the amount would carry further interest at the rate of 10% per annum from the period of default.

(v) Decree to be drawn accordingly.

(vi) The appeal stands disposed of accordingly.