A.R. Navkar, J.
1. This is a revision under Section 25 of the Provincial Small Cause Courts Act against the judgment and decree dated 6-5-1978, passed by the Fourth Additional District Judge, Gwalior who is invested with Small Cause Courts Powers, in case No. 24 of 1976, Small Cause Suit.
2. The facts of the case are that one Ram Swarup, who is now dead, was the plaintiff. He filed a suit against the defendant in the Court of Small Causes, Gwalior, for refund of earnest money of Rs. 500/- along with the interest thereon at the rate of 1 per cent per month, amounting to Rs. 183/-. In all, he claimed Rs. 683/-.
3. The plaintiffs claim was that the applicant (defendant) entered into a eon-tract of sale of the house located at Morar on 12-1-1968, for Rupees 20,000/-only and obtained Rs. 500/- from the plaintiff as earnest money and executed an agreement of sale in his favour. The defendant promised to execute the sale-deed by 31-3-1968. The defendant, however, is avoiding the sale. While in the meantime, it was discovered by the plaintiff that one Kesrimal has put his lock on one of the inner rooms, which is in the property to be sold to the plaintiff. Seeing this that the possession of the whole of the property will not be given to the plaintiff a notice was issued by the plaintiff to the defendant on 18-3-1968 to come to him and decide the matter regarding the possession and execute a registered sale-deed. The plaintiff also insisted that the possession should be handed over to him. The defendant replied by notice dated 20-3-1968 but he did not execute the sale-deed as agreed. After this, one more notice was given to the defendant, but he kept silent. As to the inner room on which somebody else's lock was there, the defendant stated that this room is already in the tenancy of the plaintiff from the beginning and as such, there is no question of handing over possession of that room to the plaintiff. On these facts, the plaintiff alleged in the plaint that as the defendant has committed a breach of contract, the plaintiff is entitled to refund of his earnest money along with interest which amounted to Rs. 683/- in all.
4. To these plaint allegations, the defendant replied that one house belonging to the defendant including that of Raghuraj Singh, Jagdish Singh, Laxman Narain Singh and Dinesh Kumar was located at Morar which consisted of two shops and out of which one shop consists of one shop and one room therein. The plaintiff is the tenant of these two rooms. Not only the outer room is in the tenancy of the plaintiff, but the inner room and outer room together are tenanted to the plaintiff (who) did not want to purchase the house as agreed and, therefore, he has made out a false theory of a lock put by one Kesrimal on the inner room. As the plaintiff has not paid the money as agreed upon, the earnest money with the defendant is forfeited and as such, the plaintiff is not entitled to refund of the said money and also for the interest. On the contrary, the defendant had to transfer the property for Rs. 8,000/- to one Ashok Kumar and he has suffered a loss of Rs. 12,000/-. Further, the defendant submitted that he was always ready and willing to perform his part of the contract and it is the plaintiff who did not get the sale-deed registered by or up to the 31st March, 1968 and as such, the suit of the plaintiff is false and it should be dismissed.
5. The trial court after taking evidence, came to the conclusion that the defendant was not in a position to hand over possession of the property which was agreed to be sold and that one Kesrimal was in possession of one room as alleged by the plaintiff and, therefore, decreed the suit of the plaintiff, holding that the amount of Rs. 500/- cannot be kept by the defendant and it cannot be forfeited as submitted by the defendant and he should return the amount to the plaintiff along with interest. Against that decree and judgment, this revision is filed.
6. The first submission made by the learned counsel before me is that there is no condition in the agreement to sell the property that actual possession will be given to the plaintiff at the time of registration of the document. He should have filed a suit for specific performance and if he failed to get the possession of the whole of the property, he could have filed a suit for damages and cancellation of the agreement to sell.
7. The other point submitted by the learned counsel is that Kesrimal was not produced in evidence by the plaintiff to show that he is in possession of the disputed shop. As he was the material witness and as the plaintiff has not produced him, an adverse inference should be drawn against the plaintiff.
8. The third submission made before me is that the plaintiff was in possession of the shop and the adjoining room on which, it is alleged that Kesrimal had put his lock, then, in fact, that plaintiff was in actual possession of the property sold and the dispute raised by the plaintiff was a false one and just to avoid agreement to sell.
9. There is no dispute that Kesrimal was not examined by the plaintiff, but when he was not examined by the plaintiff, the defendant could have well examined Kesrimal to show that the plaintiff's claim is false. But neither the plaintiff, nor the defendant has examined Kesrimal. Therefore, the finding given by the learned lower Court that the possession over the room adjacent to the shop was that of Kesrimal and the defendant was not in a position to hand over the possession of the property agreed to be sold, will have to be accepted and I do it.
10. The next point is whether the plaintiff can claim the amount of Rupees 500/- back by repudiating the con-tract. I think there was no need of filing a suit for specific performance against the defendant on the basis of the agreement and then to claim damages for nondelivery of possession of the room alleged to be in possession of Kesrimal by the plaintiff against the defendant. I may refer to two rulings in which this point was considered. The first is Vuddandam v. Venkatakameswara Rao (AIR 1951 Mad 470). The relevant observations from this case run as under (at p. 471):--
'When the vendor is not in a position to give possession of the property agreed to be sold by him to the purchaser the purchaser will be entitled by virtue of Section 55, Sub-clause (1) (f), T. P. Act and Section 39, Contract Act, to rescind the contract and claim the advance that has been paid to him.' The other case I may refer is Anandilal v. Abdul Hussain (AIR 1964 Raj 240). The relevant observations from this judgment are as under (at p. 241) :--
'Since the defendant had refused to deliver possession of the property agreed to be sold to the plaintiffs, the plaintiffs were entitled to rescind the contract, and claim refund of the sale money which they had paid to the defendant in advance. In my opinion this appeal must succeed on this ground alone. The plaintiffs have also claimed interest on Rs. 3,500/- at the rate of 12% p. a. from 29-5-1954 but actually they had demanded this money from the defendant on 11-7-1955. They are, therefore, entitled to recover interest from that date only. The amount of interest from 11th July, 1955 to the date of the suit comes to Rupees 17/- only. Relying on these two judgments. I am of the opinion that as the defendant has refused to deliver possession of the property agreed to be sold by him to the plaintiff, the plaintiff can rescind the contract and ask back the earnest which he has paid under the agreement to sell. Therefore, the finding of the learned lower court that the defendant committed the breach of the contract and as such he is not entitled to keep Rs. 500/- paid to him by way of advance or earnest is correct and I accept the same.
11. It was argued before me that the nature of the amount of Rs. 500/- is not considered by the trial court. As it is held by the trial court that the breach is committed by the defendant and in my opinion correctly, the nature of the amount of Rs. 500/- as to whether it is an earnest or an advance is not of much importance. If the defendant is held liable for committing the breach of the contract of sale. I need not decide as to the nature of the amount of Rs. 500/-paid to the defendant. As to interest, the Court below was correct in awarding the interest at the rate of 6 per cent per annum. That finding is also correct.
12. The result, therefore, is that I see no merit in the revision petition and it is dismissed with costs. Counsel's fee, Rs. 50/-, if certified.