Crux:
These two appeals on certificates arise out of the execution petition on the file of the Subordinate Judge, Trichur, filed by P. Meriappa Gounder to execute the decree of the Supreme Court.
Bench:
Hon'ble Justice R. S. Sarkaria, Hon'ble Justice V. D. Tulzapurkar and Hon'ble Justice A. P. Sen
Appellant:
Lucy Kochuvareed
Respondent:
P Mariappa Gounder
Issue
Whether the suit property was in possession of Defendant 1?
Facts
- The plaintiff filed a suit for specific performance of an agreement, made by Soliappa Chettiar (Defendant 1) to sell a factory, "Sivakami Tiles Works", for a consideration of Rs. 90,003/-.
- The plaintiff made an advance payment on that very date of a sum of Rs. 5,003/- to Defendant 1. It was provided with that out of the balance of sale consideration, Rs. 50,000/- would be paid by the plaintiff at the time of the registration, and for the remaining Rupees 35,000/-, the plaintiff was to execute a mortgage of the suit property to be redeemed.
- It was agreed that on payment of Rs. 50,000/- at the time of registration, the plaintiff would be put in possession of the suit property.
- The plaintiff stated that he was ready and willing to perform his part of the agreement, but came to know that Defendant 1 was trying to evade his obligation under the agreement.
- Accordingly, the plaintiff sent a registered notice to Defendant 1, to which the latter replied on the same day, that the factory was in possession of one Neelkanta Iyer as lessee, who had refused to give up possession and therefore, it was impossible to give effect to the agreement to sell the factory, as giving possession to the plaintiff was a condition precedent to the execution of the sale deed.
Appellant’s Contention
- The plaintiff pleaded that the suit property was really in possession of Defendant 1.
- The plaintiff also alleged that the lease in favour of Neelkanta Iyer was a sham transaction and a device to evade payment of income-tax, and hence Defendant 1 was bound to carry out the terms of the agreement to sell.
Respondent’s Contention
- It was pleaded that although there was an agreement to sell the suit property, it was clear at the time when negotiation for sale was going on, that the factory was in the possession of Neelkanta Iyer as lessee.
- It was a condition precedent to the sale that Neelkanta Iyer would surrender his right under the lease and give up possession and that if he refused to do so, the agreement to sell would not be given effect to.
Relevant paragraphs ( 44, 46, 55 and 59 of the original judgment )
- The argument is clever, yet it is invalid since it is based on false premises. The three-year term indicated in Sub-Clause (iii) of Clause (c) of Rule 12(1) begins on the date of this Court's decree, i.e. on April 22, 1958, and ends on the day on which the defendant's ownership was transferred or relinquished in favour of the decree-holder pursuant to that decree.
- Mr. Ramamurthy also claimed that the lower courts had incorrectly denied interest deduction on the Rs. 50,000/- deposit that the plaintiff had withdrawn on August 19, 1953 and redeposited on February 9, 1959. In all fairness, it appears to us that the defendant is entitled to a deduction for interest on the sum of Rs. 50,000/- from August 19, 1953 to February 9, 1959, which, after deducting the interest for the period during which the property was under the management of the Receiver, comes to Rs. 50,000/-.
- The Trial Court had evaluated mesne profits at a rate of 6% per year and had granted interest at that amount. The High Court decreased the rate to 4%, stating that given all of the facts of the case, including the fact that the plaintiff had use of the sum of Rs. 85,000/- that he was supposed to contribute toward the property's price, a rate of 4% per year would be reasonable and just.
- It failed to notice that interest on an amount of Rs. 30,000/- was being claimed as restitution under Section 144 of the CPC. In words, Section 144 states that the Court may make any orders for the purpose of restitution, including orders for the payment of interest, damages, compensation, and mesne profits that are legitimately consequential on the variation or reversal of the decree.
Final Decision
The plaintiff's appeal was partly allowed, with appropriate costs. To the degree mentioned above, we partially grant the plaintiff's appeal, with corresponding expenses. We will dismiss the defendant's appeal except to the extent that he will be permitted a setoff of Rs. 14,000/-, which is the interest on the sum of Rs. 50,000/- from August 19, 1953 until the day when he redeposited it.
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