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Piramu Chellamma of Kuzhivilakathu Veedu Vs. Ramachandran Pillai and ors. - Court Judgment

LegalCrystal Citation
SubjectContract;Limitation
CourtKerala High Court
Decided On
Case NumberA.S. No. 408 of 1958
Judge
Reported inAIR1963Ker247
ActsContract Act, 1872 - Sections 56, 73 and 74; Limitation Act, 1908 - Schedule - Articles 97 and 116; Code of Civil Procedure (CPC) , 1908 - Sections 34
AppellantPiramu Chellamma of Kuzhivilakathu Veedu
RespondentRamachandran Pillai and ors.
Appellant Advocate P. Krishnamoorthy, Adv. for; T.S. Krishnamoorthy Iyer, Adv.
Respondent Advocate K. Sukumaran, Adv.
Excerpt:
.....purview of article 116 of the limitation act and, being within six years of the date of ext. the circumstance of this case justifies well the award of interest from date of suit to date of payment......1st defendant under a contract for sale which was not carried out. ext. p-i is the contract for sale dated 29-3-1123 in which the 1st defendant undertook to discharge a mortgage then subsisting on the property and to convey the property free of encumbrance within a month of the contract. ext. d-2 is a notice dated 22-4-1123 issued by the 1st defendant after redeeming the aforesaid mortgage on 13-4-1123. the endorsement of service by the postman shows that it was refused by the plaintiff. however, on 10-5-1123 the plaintiff in his torn issued a notice to the 1st defendant demanding specific performance of the contract. but no reply thereto was given by the 1st defendant. parties seem to have remained quiet till 11-9-1124 when the 1st defendant executed a mortgage (ext. p-3) of the.....
Judgment:

M. Madhavan Nair, J.

1. The 3rd defendant, who is one of the legal representatives of the 1st defendant, has preferred this appeal against the decree allowing return of the advance paid by the plaintiff to the 1st defendant under a contract for sale which was not carried out. Ext. P-I is the contract for sale dated 29-3-1123 in which the 1st defendant undertook to discharge a mortgage then subsisting on the property and to convey the property free of encumbrance within a month of the contract. Ext. D-2 is a notice dated 22-4-1123 issued by the 1st defendant after redeeming the aforesaid mortgage on 13-4-1123. The endorsement of service by the postman shows that it was refused by the plaintiff. However, on 10-5-1123 the plaintiff in his torn issued a notice to the 1st defendant demanding specific performance of the contract. But no reply thereto was given by the 1st defendant. Parties seem to have remained quiet till 11-9-1124 when the 1st defendant executed a mortgage (Ext. P-3) of the property for Rs. 5000/- in favour of her son-in-law. Thereafter on 1-12-1124 the plaintiff demanded specific performance of the contract again by a notice, Ex. D-4, to which the 1st defendant replied by Ext. P-4 on 23-12-1124 expressing her readiness to execute the conveyance. Nothing was mentioned is Ext. P-4 of her having executed the mortgage in favour of her son-in-law. The matter was again allowed to lie over till 27-6-1951 when the 1st defendant gifted the property to the 3rd defendant. This suit was instituted on 14-11-1953 corresponding to 29th Thulam 1129, for refund of the amount of Rs. 3000/- advanced under Ext. P-I, with interest from' date of the contract till date of payment. The 1st defendant contended that the plaintiff was entitled only to insist on specific performance of the contract and not to claim refund of the advance paid by him, and that the amount advanced under Ext. P-I was of the nature of an earnest not liable to be refunded. The Court below has decreed the suit.

2. As the contract has fallen through, and the consideration for which the payment was made at the time of the contract for sale has failed totally, the 1st defendant had no right to retain the amount any further with her. Admittedly, the 1st defendant had gifted the property to the 3rd defendant and made it impossible on her part to convey it to the plaintiff as per the contract, even though in the written statement, perhaps seeing that the suit was not for specific performance of the contract, she had stated that a claim for specific performance was the sole remedy of the plaintiff. To test the bona fides of her plea I suggested to counsel for the plaintiff to accept the conveyance of the property as per the contract and asked the appellant if she can convey the property to plaintiff. Counsel for the appellant-defendant expressed inability to do so.

3. That the amount advanced under Ext. P-1 was earnest money is not borne out by the terms and recitals of Ext. P-1. There is no clause in Ext. P-1 for forfeiture of the advance paid in case-the contract fell through by the fault or, default of the plaintiff. In the absence of an express provision to that effect, the amount can only be part of the sale consideration and when the sale became impossible by the act of the defendant she ought to refund the same forthwith.

4. It was contended on behalf of the appellant that the suit instituted in 1129 for refund of the money is out of time under Article 97, Limitation Act. Counsel for the plaintiff claims the suit to be governed by Article 116 of the Limitation Act, which lays down for suit for compensation for breach of a registered contract a period of six years. It is not disputed that if Article 116 applies the suit is within time. The contention of the appellant is that the suit, being for refund of advance paid, is not one for 'compensation' for breach of a contract and is therefore outside the purview of Article 116. 'Compensation' Salmond points out in his well known book on Jurisprudence, 'may be of two kinds (if restitution, which means return or restoration of the benefit received from the plaintiff under the contract and (2) penal redress which denotes payment of damages for the loss suffered by the plaintiff on account of the non-performance of the contract'. The suit thus comes straight within the purview of Article 116 of the Limitation Act and, being within six years of the date of Ext. P-i, is in time.

5. The Court below has awarded interest at 6 per cent on the amount both before and after the .date of the suit. As there was no agreement to pay interest, nor a demand for return of the amount before the institution of the suit, the plain-tiff is not entitled to interest on the amount for any period before suit- Interest after suit is in the discretion of the Court under Section 34 C. P. C. The circumstance of this case justifies well the award of interest from date of suit to date of payment.

6. In the result, the plaintiff's claim for interest, on the principal sum of Rs. 3000/- for periodbefore date of suit is disallowed. The decree ofthe Court below will be modified accordingly. Thedecree is affirmed in other respects. The plaintiffIst respondent will have his costs in this Court.


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