V. LAKSHMANAN Vs. B.R. MANGALAGIRI

JUDGEMENT

(1.) THIS appeal by special leave arises from the judgment of the Division Bench of the High Court of Madras dated November 3, 1983 made in Appeal No.911/77. The appellant/plaintiff had entered into an agreement with respondents on August 23, 1972 to purchase their 6 acres 76 cents of the land situated in Bhavani Village for a consideration of Rs. 2,75,000/ - and paid Rs. 50,000/ - as earnest money (stated as advance in the agreement). He undertook to have the sale deed registered within six months i.e. on/or before February 23, 1973. Time is, thereby, the essence of the agreement. The appellant had taken possession of the land and levelled the land and applied for permission for sanction of layout. The Gram Panchayat, Bhavani, refused to grant sanction. Thereafter, the appellant got issued a notice on February 20, 1973, calling upon the respondents to return the earnest money of Rs. 50,000/ - and also Rs. 15,000/ - said to be the expenditure incurred by them towards development which liability was denied by the respondents in their reply notice wherein they also claimed to have forfeited the earnest money for default committed by the appellant in the performance of their part of the agreement. The appellant laid O.S. No. 108/73 on the file of the Add1. Subordinate Judge, Erode, on March 13, 1973 which the trial Court decreed on April 30, 1977. On appeal, as stated earlier, the High Court reversed the decree and dismissed the suit.

(2.) IT is contended by Shri Balakrishnan, learned counsel for the appellant, that, admittedly, respondent No.3 - B.R. Srinivasan was a minor on the date of the agreement of sale. When the appellant orally had asked the 4th respondent guardian to obtain permission from the Court for effectuating the sale deed, the mother as natural guardian ofthe3rd respondent had refused to obtain permission on the ground that it was not necessary to obtain the permission of the Court.

(3.) THE facts of the case and the conduct of the appellant lead us to conclude that the appellant is not justified in seeking to nor is he entitled to recover from the respondents Rs. 50,000/ - paid by him. No doubt in the agreement it was stated that the amount was advance and not earnest money. Earnest money is a part of the purchase price. The nomenclature or label given in the agreement as advance is not either decisive or immutable. The appellant, after he had entered into the agreement, admittedly, had taken possession of the land and levelled the land for the purpose of making it into plots for sale to the third parties, in terms of the agreement. Admittedly, the appellant failed to obtain the sanction of the layout plan as the Gram Panchayat refused to sanction it. Thereafter, the appellant having found it difficult to effectuate the sales to third parties, he invented an excuse to get over the agreement and pitched upon the plea of oral request said to have been made to the respondents to obtain sanction of the Court to alienate the share of the minor and of their refusal. Thereby, they were not willing to perform their part of the agreement and had refused to execute the sale deed. There is no truth in it. The agreement of sale fell through due to the default committed by the appellant. It is not the case that the appellant had issued notice to the guardian to obtain sanction of the Court and that the mother had refused to get it nor is she willing to execute the sale deed. The amount paid is only by way of earnest money as part of the sale transaction and that the appellant failed to perform his part of the contract.