L PRAMMA DIED Vs. KALAKONDA SHANKER

JUDGEMENT

(1.) The appeal is brought by the defendants against the judgment and decree of the V Additional Judge, City Civil Court, Hyderabad, in OS No.318 of 1981, dated 21-4-1986, decreeing the suit.

(2.) The appeal arises in the following circumstances: The respondent-plaintiff was allotted the suit schedule house situate at West Maredpalli, Secunderabad, under A.P. Housing Board Low Income Group Scheme under hire purchase system. As the respondent was in need of money, he approached the 2nd appellant (D2) for advancing loan and the 2nd respondent agreed to lend money in the name of the 1st appellant, who is his widowed sister, on the security of the suit schedule house. Originally, an amount of Rs.1,000.00 was advanced and an agreement of sale was obtained from the respondent on 9-10-1975 instead of a document of loan. It was stipulated in the document that a further sum of Rs.28,000.00 would be advanced on giving vacant possession of the house, as security. Accordingly the 2nd appellant paid another sum of Rs.28,000.00 on 6-5-1976 and obtained the suit agreement on the same date in the name of the 1st appellant, as if it was a sale transaction. It is, however, an agreement of sale, even though it was purely a loan transaction. It was, however, agreed that the house would be redelivered to the respondent on repayment of the loan. It was stipulated in the agreement that the remaining amount of Rs.9,500.00 will be paid to the respondent at the time of registration of sale deed. It was also stipulated that the sale deed would be executed in favour of the 1st appellant within one month from the date of registration of title deed in favour of the respondent by the Housing Board. The respondent has given vacant possession of the suit house to the 2nd appellant on 6-5-1976 itself. It was also mentioned in the agreement that in default of either party the advanced amount will be refunded after deducting nominal penalty of Rs.500.00 only towards liquidated damages and the house will be redelivered to the respondent. In any event there was no stipulation for sale of the suit house by the respondent to the appellants for the total consideration of Rs.38,500.00, as the value of the house was very high. The appellants, though were aware of the execution of the sale deed in favour of the respondent by the Housing Board on 14-4-1977, never demanded for execution of the sale deed in favour of the 1st appellant, as the transaction was only a loan transaction. The respondent was always ready and willing to repay the amount advanced by the appellant and requested the appellants to receive the same and to deliver vacant possession of the suit house. But the appellants declined to do so. On the other hand they had let out the house on a monthly rent of Rs.350.00 p.m., which was not lawful for them and hence the appellants are liable to account for the rents and profits received by them. The respondent was also entitled for liquidated damages at the rate of Rs.500.00 per month from 1-10-1977, as the appellants did not deliver the house and also for future mesne profits at the same rate. The respondent also claimed that the appellants have to adjust the loan amount from the amounts due and payable to the respondent. The respondent, therefore, filed the instant suit to redeliver the vacant possession of the suit house declaring the suit agreement as null and void and for mesne profits at the rate of Rs.500.00 p.m. from July, 1977 till redelivery of the vacant possession of the suit house.

(3.) The 2nd appellant remained ex parte. The case of the 1st appellant is that the suit transaction is purely an agreement of sale and not money lending transaction. The respondent and the 1st appellant entered into a sale agreement and the appellant paid Rs.29,000.00to the respondent as part of the sale consideration and the balance of Rs.9,500.00was payable at the time of registration. There was no agreement to redeliver the possession of the suit house or to repay the amount. The 1st appellant admitted taking vacant possession of the suit house. Ever since the date of sale agreement, the appellant was willing and ready to perform her part of agreement, but it was the respondent who evaded to execute the sale deed. It was also stated that as per the terms and conditions of the contract, if bom the parties wanted to dissolve the agreement and if it is at the first instance of the respondent, he has to pay to the appellant a sum of Rs.500.00along with the earnest money paid to him and similarly if it is at the instance of the appellant she has to forfeit Rs.500.00 out of the earnest money paid and refund the balance to her. If there is no consensus between the parties to cancel the agreement, the forfeiture clause of sale agreement has no effect. It was averred in the written statement that the appellant was not aware of the registration of title deed dated 14-4-1977 by the Housing Board in favour of the respondent. Inspite of enquiries, the respondent did not disclose the same to the appellant. She was always ready and willing to perform her part of the agreement.