(Prayer in A.S.: Appeal Suit filed under Section 96 of CPC to set aside the judgment and decree dated 23.06.2017 made in O.S.No.149 of 2014 on the file of the III Additional District Court, Salem.

In CMP: To grant an interim stay of the judgment and decree dated 23.06.2017 in O.S.No.149 of 2014 on the file of the learned District Judge, Salem.)

1. This First Appeal, filed by the appellant/defendant under Section 96 of the Code of Civil Procedure, is directed against the judgment and decree passed in O.S. No.149 of 2014 by the III Additional District Court, Salem, whereby the suit filed by the respondent/plaintiff for recovery of money was decreed and the counter-claim of the defendant was dismissed.

2. For the sake of convenience, the parties shall be referred to in the same rank as they stood before the Trial Court.

3. The Plaintiff’s case in brief: The plaintiff is a partnership concern carrying on business under the name “M/s. Jay Computer & Communications”. The plaintiff asserted that the defendant had earlier sold Plot Nos.63, 64, 65 and 66, situated in Salem West Registration District, Omalur Sub-Registration District, Omalur Taluk, Karuppur Village, in favour of the partners of the plaintiff. Thereafter, the plaintiff’s concern itself agreed to purchase Plot Nos.61 and 62.

4. The plaintiff, towards the sale transaction of Plot Nos.61 and 62, paid a total sum of Rs.17,17,250/- through cheques to the defendant. The defendant failed to complete the sale in favour of the plaintiff and instead sold Plot Nos.61 and 62 to third parties.

5. The plaintiff issued notices dated 24.01.2014 and a reminder dated 08.02.2014 to the defendant demanding refund of the advance amount. The defendant did not respond to the said notices. Thereafter, the plaintiff sent a legal notice dated 11.03.2014 demanding repayment with interest. The defendant sent a false reply through his advocate on 28.03.2014, wherein the land referred to in the reply notice was in no way connected with Plot Nos.61 and 62.

6. The defendant paid a sum of Rs.50,000/- towards the purchase of materials from the plaintiff’s concern, and the said transaction is in no way connected with the amount paid by the plaintiff towards the plots.

7. The Defendant’s case in brief: The defendant admitted ownership and development of lands into house sites and also admitted the sale of Plot Nos.63, 64, 65 and 66 to the partners of plaintiff. The plaintiff denied that the amount of Rs.17,17,250/- was received as sale consideration for Plot Nos.61 and 62.

8. According to the defendant, the said amount of Rs.17,17,250/- was received towards the sale of another property owned by him measuring 10,000 sq.ft. at Saral Village, Alagapuram, Nagarmalai Adivaram, as per an agreement dated 26.04.2012, under which the sale was to be completed on or before 26.10.2012. It was further stated that if the sale was not completed, the advance amount would stand forfeited. As per the said arrangement, since the sale was not completed, the amount was forfeited.

9. After receiving the notices, the defendant contacted the plaintiff and enquired about the same, to which the plaintiff allegedly replied that the notices were sent only to show the bank and asked the defendant not to take them seriously. Believing the said version, the defendant did not send any reply. The defendant further stated that at the request of the plaintiff he paid a sum of Rs.50,000/-, which amount is still due.

10. Brief facts of the additional written statement-cum-counterclaim: The defendant stated that the plaintiff had agreed to purchase 10,000 sq.ft. of land at Saral Village, Alagapuram, Nagarmalai Adivaram, and the price was fixed at Rs.1,600 per sq.ft. Due to the failure of the plaintiff, the defendant sustained a loss of nearly Rs.50,00,000/-. The plaintiff failed to adhere to the oral terms and conditions, where time was the essence of the contract, thereby committing breach of contract. The defendant claimed that he suffered loss of reputation and financial loss of more than Rs.50,00,000/-. However, the counter-claim was restricted to Rs.20,00,000/-, for which court fee of Rs.1,50,000/- was paid.

11. Reply of the plaintiff to the counter-claim: The plaintiff contended that PW-1 was examined on 06.04.2015 and thereafter the suit was posted for cross-examination. At that stage, the defendant filed an application under Order VIII Rule 9 CPC for receiving an additional written statement and along with it filed a counter-claim for Rs.20,00,000/-. As per Order VIII Rule 6-A CPC, a counter-claim must be made at the time of filing the written statement or before the time limited for filing the same. The written statement was filed on 27.11.2014 and hence the counter-claim is not maintainable either in law or on facts. The defendant’s remedy, if any, is only to file a separate suit. The plaintiff prayed for dismissal of the counter-claim with compensatory costs.

12. The Trial Court framed the following issues in the suit:

                     (i) Whether the plaintiff is entitled to recover the suit amount?

                     (ii) To what other relief?

The following issues were framed on the counter-claim:

                     (i) Whether the defendant is entitled to compensation of Rs.20,00,000/- as claimed?

                     (ii) To what other relief is the defendant entitled?

13. On the side of the plaintiff, PW-1 was examined and Exs.A1 to A11 were marked. On the side of the defendant, DW-1 was examined and Exs.B1 to B4 were marked. The Trial Court decreed the suit and dismissed the counter-claim.

14. The aggrieved defendant filed the present appeal against the decree in the suit but did not prefer any appeal against the dismissal of the counter-claim. The appeal has been valued only on the decretal amount and court fee has been paid accordingly. No court fee has been paid with respect to the counter-claim, which shows that the appeal is confined only to the decree passed in the suit.

15. Grounds urged in the appeal: The defendant contended that the Trial Court wrongly treated the plaintiff’s case as if a sale transaction existed for immovable property, despite there being no written agreement. The plaintiff failed to prove the essential facts of any alleged oral agreement. The Trial Court failed to appreciate that the plaintiff did not prove that the payment was made for the specific plots.

16. The defendant further contended that in the legal notice dated 11.03.2014, the amount was described as “advance”, whereas in the plaint it was stated as “entire sale consideration”. The Trial Court wrongly shifted the burden of proof onto the defendant. The defendant also highlighted discrepancies regarding sale consideration and comparative pricing of adjacent plots. According to the defendant, the amount related to a different transaction at Saral Village, and the plaintiff deliberately withheld the agreement relating to the said property.

17. The defendant also raised a plea under Section 69 of the Indian Partnership Act, 1932, contending that the suit was not maintainable.

18. The defendant further contended that even if the counter-claim failed, the plaintiff must independently prove its case, and that the counterclaim cannot validate the plaintiff’s claim.

19. Points for determination:

                     (i) Whether the suit instituted by the plaintiff partnership firm is hit by Section 69 of the Indian Partnership Act, 1932?

                     (ii) Whether the amount of Rs.17,17,259/- was paid by the plaintiff towards purchase of Plot Nos.61 and 62 at Karuppur Village?

                     (iii) Whether the judgment and decree of the Trial Court call for interference?

Point No.(i) :

20. Though the defendant did not raise the plea under Section 69 before the Trial Court, being a question of law, it is permitted to be raised. Ex. A1 shows that the plaintiff firm is registered and the name of the partner representing the firm appears in the certificate. The non-production of a reconstitution deed does not affect the registration. In the absence of any material to show deletion of the partner’s name, the suit is held to be validly instituted.

Point No.(ii):

21. The core issue under this point is not the receipt of money but the purpose for which the amount of Rs.17,17,259/- was paid. It is not in dispute that the defendant was the owner of Plot Nos.61 and 62 situated at Karuppur Village. It is also categorically admitted by the defendant that the plaintiff partnership firm paid the said sum to him in three instalments and that the defendant received the same. Thus, the factum of payment and receipt stands conclusively proved and admitted, leaving only the nature of the transaction in controversy.

22. Admittedly, there is no written agreement of sale between the parties in respect of either Plot Nos.61 and 62 at Karuppur Village or the alleged property at Saral Village. In the absence of a written contract, the Court is required to adjudicate the issue based on surrounding circumstances, conduct of parties, contemporaneous correspondence, and probabilities arising from the evidence on record.

23. The plaintiff’s consistent case is that the amount was paid towards purchase of Plot Nos.61 and 62 at Karuppur Village. In support of this contention, the plaintiff relies upon Ex. A4 letter and Ex. A5 reminder sent prior to the institution of the suit. In both these documents, the plaintiff has specifically and unequivocally mentioned that the amount was paid towards purchase of Plot Nos.61 and 62 at Karuppur Village. These documents are prior in point of time to the dispute and therefore carry substantial evidentiary value.

24. Significantly, the defendant did not issue any reply to either Ex. A4 or Ex. A5 disputing the purpose of payment or asserting that the amount related to Saral Village land. The explanation offered by the defendant-that he personally met the plaintiff and was told that the letters were sent only for banking purposes is not supported by any independent evidence. No document, witness, or contemporaneous record has been produced to substantiate this version. Such an explanation, in the opinion of this Court, is unnatural and improbable, particularly when the defendant claims to have received a substantial sum exceeding Rs.17 lakhs.

25. The defendant has attempted to point out a discrepancy by contending that in Ex. A4 the amount is referred to as “advance”, whereas in the plaint it is described as payment towards “entire sale consideration”. This Court is of the considered view that such a semantic variation does not affect the substratum of the plaintiff’s case. In both the pre-suit correspondence and the plaint, the identity of the property namely Plot Nos.61 and 62 at Karuppur Village-remains consistent. The dispute is not with regard to the property but only with regard to the terminology used for the payment. Such minor inconsistency cannot override the clear and consistent assertion regarding the purpose of payment.

26. On the contrary, the defendant’s plea that the amount related to a different property at Saral Village is weakened by the absence of any contemporaneous written agreement, receipt, or correspondence supporting such transaction. Though the defendant asserts existence of an agreement dated 26.04.2012, no such document has been produced. The defendant’s contention that the agreement is in the custody of the plaintiff also remains unsubstantiated, as no steps were taken to summon or prove the same in accordance with law.

27. Further, the fact that the defendant subsequently alienated Plot Nos.61 and 62 to third parties lends additional support to the plaintiff’s version that negotiations and payment had indeed taken place in respect of those plots. The defendant’s conduct, when examined cumulatively with Exs.A4 and A5 and the admitted receipt of money, tilts the balance of probabilities decisively in favour of the plaintiff.

28. Therefore, on a holistic appreciation of the oral and documentary evidence, surrounding circumstances, and conduct of parties, this Court has no hesitation in holding that the amount of Rs.17,17,259/- was paid by the plaintiff partnership firm towards purchase of Plot Nos.61 and 62 at Karuppur Village and not for any other transaction. Accordingly, Point No.2 is answered in favour of the plaintiff and against the defendant.

29. The counter-claim was dismissed and no appeal was filed against the same. The finding therein operates as res judicata. Therefore, the decree passed by the Trial Court does not call for interference.

30. In the result, the judgment and decree dated 23.06.2017 passed in O.S. No.149 of 2014 are confirmed. The appeal is dismissed with costs. Consequently, all connected miscellaneous applications are closed.