SUBRAN Vs. NARAYANA MENON

JUDGEMENT

(1.) The respondent sued principally for the return of a sum of Rs. 150/- advanced by him under an agreement to buy 5 candies of coir from the appellant first defendant, and the second defendant who is no party to this appeal. It has been found by the Additional District Judge in appeal, negativing the contentions of the appellant and differing from the Munsiff, that the agreement was in fact entered into by the respondent and not by one Avara, Pw. 2, on behalf of an undisclosed principal. This finding is amply supported by the evidence of Pws. 1 and 2, which I see no reason to reject. I also believe, that the appellant accepted payment of Rs. 35/- directly. The case that Avara agreed, that the sum of Rs. 150/- may be appropriated towards damages stands wholly unproved. The concurrent findings of the courts below, that the respondent committed breach of the agreement must of course stand and it is on them, that the respondent's right to recover must be adjudged.

(2.) The contention of learned counsel for the appellant that every payment made under, or in connection with, an agreement for sale is in law a deposit, or earnest money as it is called, is wholly untenable. In 1964 KLT 546 I had occasion to observe, that what distinguishes a deposit or earnest money is the underlying objector intention of the buyer to assure the seller by the deposit he makes, that he is in earnest or is sincere in the deal and that he guarantees due performance of the agreement on his part. The law in England is stated thus in Halsbury's Laws of England, 3rd Edition, volume 34, page 118, S.189:

(3.) In Desu Battamma v. Kakaranarthi Krishna Murthi AIR 1928 Mad. 326 it was held, that where the vendor neither alleges nor proves that the advance is earnest money it is to be treated as mere purchase money. This decision lays down the rule as to burden of proof in such cases. The following passage from Mayne and Mogregor on Damages, 12th edition, page 236 affords the principle on which the rule is based: