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CDJ 2025 Ker HC 1724 print Preview print print
Court : High Court of Kerala
Case No : RFA No. 648 of 2016
Judges: THE HONOURABLE MR. JUSTICE SATHISH NINAN & THE HONOURABLE MR. JUSTICE P. KRISHNA KUMAR
Parties : M/s. Paramount Apartments, Kochi, Represented By Its Partner K. Paul Joseph Versus Marykutty Baby & Others
Appearing Advocates : For the Appellant: Mathew B. Kurian, K.T. Thomas, Advocates. For the Respondents: Dinesh R. Shenoy, A.R. Dileep, Ebin Mathew, George Varghese, K.K. Jyothilakshmy, A. Joseph George, P.J. Joe Paul, Manu Sebastian, Advocates.
Date of Judgment : 04-12-2025
Head Note :-
Limitation Act of 1963 - Article 62, Article 64 - Transfer of Property Act - Section 55(6)(b) - What is the nature of agreement - Who committed breach of agreement - Is the plaintiff entitled for recovery of possession on the strength of prior possession - Is the plaintiff entitled for return of the advance amount paid under agreement - Is the plaintiff entitled to recover the value of the 'B' schedule- improvements in the plaint 'A' schedule property –

Court held - agreement contains reciprocal agreements to sell, along with the liability on the plaintiff to construct an apartment building in the property and to share its profits - There is no material to find that the plaintiff was evicted from the property as claimed by them - After the alleged eviction, the defendants constructed a building in the property and alienated the same to the strangers - Still no steps were taken by the plaintiff alleging illegal eviction - There is no proof of damages having suffered by the defendant - plaintiff is entitled to get back the advance sale consideration of ₹ 30 lakhs with interest - it cannot be said that the plaintiff has improperly declined to accept the performance of the agreement for sale - plaintiff will be entitled for a statutory charge for the advance consideration paid - Coming to the claim for the value of the works done by the plaintiff in the property, evidently the claim is barred by limitation - circumstances would probabilise that the plaintiff had abandoned the site - plaintiff is not entitled for recovery of possession - Plaintiff is entitled to reasonable interest on the advance amount - appeal is allowed in part.

(Para:15,19,30,33,35)

Cases Relied:
Crompton Greaves Limited, Rep. By Its Managing Director And Another v. Icon Integrated Industries And Software Ltd. (2021 (3) KLT 377).

Comparative Citation:
2025 KER 93695,
Judgment :-

Sathish Ninan, J.

1. The unsuccessful plaintiff in a suit for declaration of prior possession and for recovery of possession, with an alternate prayer for recovery of money, is the appellant.

2. An extent of 30 cents of property belongs to the first defendant. The first defendant had an agreement for sale in her favour in respect of another 8 cents of property lying adjacent to the 30 cents. The total 38 cents is described as the plaint 'A' schedule. Plaint 'C' schedule is a pathway leading to the 'A' schedule.

3. On 09.05.1995, the plaintiff, which is a partnership firm, entered into Ext.A4 agreement with the first defendant. As per Ext.A4, the first defendant agreed to convey to the plaintiff or its nominees the 'A' schedule property or portions thereof. The consideration fixed was ₹ 2 lakhs per cent. For access through the 'C' schedule pathway a consideration of ₹ 2 lakhs was fixed. The plaintiff was to construct an apartment complex in the scheduled property. After construction, the plaintiff was to give to the first defendant 30% of the profits obtained by the sale of the apartments. Pursuant to Ext.A4 the plaintiff started construction. The plaint 'B' schedule is the portion of the building constructed by the plaintiff. An amount of ₹ 30 lakhs was paid by the plaintiff to the first defendant on various dates towards advance sale consideration. As per Ext.A4, the entire consideration payable for the land was to be paid before 31.05.1996. The period for completion of the construction was 31.05.1997.

4. The plaintiff alleges that, due to non-co-operation by the first defendant the work could not be completed. There were various litigations between the parties. It is also contended that, on 18.02.2002, the plaintiff was forcibly evicted from the property. The plaintiff seeks for restoration of possession on the strength of prior possession. An alternate prayer is incorporated seeking return of the advance sale consideration and also payment of the value of the 'B' schedule construction effected by the plaintiff.

5. The second defendant is the husband of the first defendant. The second defendant died pending the suit and defendants 3 and 4 who are his children were impleaded. The 5th defendant is a company formed by the defendants.

6. The defendants contended that Ext.A4 represents a joint venture agreement for construction of an apartment complex, for the sale of the same, and for sharing of profits. Exclusive possession of the property was not given to the plaintiff. The plaintiff abandoned the project and the defendants completed the same through the 5th defendant. It was contended that the plaintiff is not entitled for any relief. A plea of limitation was also raised.

7. The trial court found that Ext.A4 represents a joint venture between the plaintiff-builder and the first defendant-the owner of the property. It was found that the plaintiff failed to perform his obligations under the agreement. The claim of the plaintiff with regard to the construction of the plaint 'B' schedule was also negatived. The suit was held to be barred by limitation. Accordingly, the suit was dismissed.

8. We have heard the learned counsel Sri.K.T.Thomas on behalf of the appellant-plaintiff, Sri.Dinesh R. Shenoy and Sri.George Varghese (Perumpallikuttiyil) on behalf of the respondents-defendants.

9. The points that arise for determination in this appeal are :-

                  (i)       What is the nature of Ext.A4 agreement?

                  (ii)      Who committed breach of Ext.A4 agreement?

                  (iii)     Is the plaintiff entitled for recovery of possession on the strength of prior possession?

                  (iv)     Is the plaintiff entitled for return of the advance amount paid under Ext.A4?

                  (v)      Is the plaintiff entitled to recover the value of the 'B' schedule- improvements in the plaint 'A' schedule property?

10. Under Ext.A4 agreement, 38 cents of property described in schedule 'A' and 'B' thereto along with the right of access over the 'C' schedule is agreed to be conveyed by the first defendant to the plaintiff. The purpose of such conveyance is specified as, for construction of apartments. Clause (1) of the agreement reads thus: -

                  “1. In consideration of the covenants herein below contained, the Owner hereby agree to sell/transfer to the Builders or their nominees the property described in the schedule A and B hereto together with the right of passage over the property described in the schedule 'C' @ Rs.2,00,000/- per cent as well as the share of profits to be calculated @ 30% by the sale of residential/commercial flats, free of all encumbrances in full satisfaction of their rights, claims and demands in the land described in the schedule A to C hereto and do further agree that the Owner shall have no manner of right, title or interest in the property described in the schedule hereto, after satisfying the consideration in the manner indicated herein above.”

                  The consideration for the agreement is under three heads-(i) land value at ₹ 2 lakhs per cent, (ii) 30% of the share of profits obtained by sale of apartments, and (iii) ₹ 2 lakhs for the right of way over the 'C' schedule.

11. Clause 6 of the agreement provides that the entire cost of the land is to be paid to the first defendant on or before 31.05.1996. As per clause 23, the construction was to be completed on or before 31.05.1997. Clause 7 of Ext.A4 provides that the share of profit stipulated is to be paid within three months from the date of handing over of the entire 100% of the built up area to the respective allottees. Therefore, Ext.A4 is specific that, the land value was to be paid on or before 31.05.1996, construction to be completed by 31.05.1997, and the share of profits is payable only after sale of the entire apartments. Consideration for the right of way over the 'C' schedule was also to be paid before 31.05.1996.

12. Clause 21 of the agreement provides that on payment of the entire land value, the first defendant shall be bound to execute and register sale deed to the plaintiff or nominees. The clause reads thus,

                  “That the Owner shall at the request and cost of the Builder execute and register sale deeds for the transfer of property to the builder or to their nominees, on receipt of the sale consideration of the land in full clause 'A' supra by way of undivided interest or otherwise.”

13. As per clause 22 of the agreement, the first defendant shall be entitled to purchase two apartments in the floor of her choice at ₹ 975/- per sq.ft.

14. Clauses (1),(6),(7) and (21) referred to above indicate that Ext.A4 is an umbrella agreement which takes in its fold three other agreements. They are, (i) Agreement to sell the land and right of way to the plaintiff, the land value being payable before 31.05.1996; (ii) Agreement to construct an apartment building in the property by the plaintiff and to share its profits with the first defendant on its sale; (iii) Agreement for sale of two apartments to the 1st defendant at ₹ 975/- per sq.ft.

15. Ext.A4 takes within its sweep two agreements for sale; one in favour of the plaintiff, and the other in favour of the first defendant. Evidently, Ext.A4 is a composite agreement with mutual rights and liabilities. We do not think it necessary to consider the exact nature of Ext.A4 agreement, whether it is a joint venture agreement in the strict sense or not. Sufficient to notice that, Ext.A4 contains reciprocal agreements to sell, along with the liability on the plaintiff to construct an apartment building in the property and to share its profits.

16. Before we proceed further we need to notice one thing. The payment under the agreement for sale of land is to be made before 31.05.1996, and on such payment the plaintiff is entitled to demand conveyance of the land. The construction is to be completed only by 31.05.1997, and the sharing of 30% is to be only after sale of the entire apartments.

17. With the above in mind we will consider the claims of the plaintiff. The reliefs claimed in the plaint read thus:-

                  “A) To declare plaintiff's possession over Plaint A schedule property and grant decree of recovery of possession of plaint A schedule property.

                  B)       Grant a decree of mandatory injunction directing the defendants to remove plaint C schedule property from plaint B schedule property.

                  C)       Alternatively to allow the plaintiff to realize an amount of Rs.1,62,34,424/- together with interest @ 12% per annum from the date of suit till the date of realization charged upon the plaint A schedule properties.

                  D)      To allow the plaintiff to realize mesne profits @ 7.5 lakhs per year of any other amount, which the court deems fit from the defendants from the date of suit till the date of realisation.

                  E)       To allow the plaintiff to recover the cost of the suit from the defendants.”

18. Plaintiff claims to have been put in possession under Ext.A4 for carrying out the construction. It is alleged that they were forcibly evicted on 18.02.2002. Defending the claim for recovery of possession, the defendants would contend that the plaintiff had in fact abandoned the project and left the site. They deny the allegation of forceful eviction. The fact that under Ext.A4 agreement the plaintiff was put in possession of the property is beyond dispute. This is so in the light of clause 10 of the agreement obliging the first defendant to hand over vacant possession of the property to the plaintiff on the execution of the agreement, coupled with the statements in Ext.A20 notice issued by the first defendant to the plaintiff acknowledging of having put the plaintiff in possession of the property for the purpose of construction. That pursuant to Ext.A4 agreement the plaintiff had been put in possession of the property and had started constructions is further reinforced by the institution of the suit as OS 526/1996, by the first defendant against the plaintiff to rescind Ext.A4 and to restrain the plaintiff from proceeding with the construction in the property. Further, IOP 17/2000 was filed by the first defendant against the plaintiff seeking specific performance of Ext.A4 agreement or for recovery of possession. The very prayer in the suit implies that the plaintiff had possession of the property. Therefore, the attempted argument of the defendant that the plaintiff did not have possession of the property cannot hold good. But the fact remains that possession of the property was only to carry out the construction activity in the property. It was limited for that purpose. Could it be considered to be exclusive possession or was it only the possession as licensee is a question that could crop up. However, in the light of the further facts being adverted hereunder, the said question becomes insignificant and hence we are refraining from further delving into it as unnecessary.

19. Admittedly, the defendants constructed a building in the property. The construction was not through the plaintiff. The clam is that the construction was through the fifth defendant. Though the plaintiff alleges that they were evicted from the property on 18.02.2002, the suit is filed only on 18.07.2005. In spite of the alleged forceful eviction, there is no material to find that they had moved their little finger against such action, before police or any authority or in a court of law. There is no material to find that the plaintiff was evicted from the property in the year 2002 as claimed by them. PW3 is the architect of the plaintiff. His evidence indicates that even the address of the plaintiff was not known to him probabilising the defendants version that the plaintiff had abandoned the project and left the place. After the alleged eviction, admittedly, the defendants constructed a building in the property and alienated the same to the strangers. Still no steps were taken by the plaintiff alleging illegal eviction, except filing of the present suit after 3½ years. We find that the claim of abandonment is, in the circumstances probable.

20. As contended by the learned counsel for the first defendant, Article 64 of the Limitation Act of 1963, refers to the act of dispossession from the property. This is a stark difference from the earlier Limitation Act of 1908 whereunder even voluntary giving away of possession was also contemplated. We, having found that the plea of abandonment urged by the defendant is probable, the relief for recovery fails.

21. Now coming to the relief for recovery of money, the claim is under two heads-(i) return of the advance sale consideration of ₹ 30 lakhs paid to the first defendant under Ext.A4 agreement, and (ii) the cost of the construction effected by the plaintiff in the property.

22. It is not in dispute that pursuant to Ext.A4 agreement an amount of ₹ 30 lakhs was paid by the plaintiff to the first defendant towards advance sale consideration and towards the value of the land. As was noticed earlier, clause-6 of Ext.A1 agreement stipulated for payment of the land value on or before 31.05.1996. Clause 21 of the agreement entitled the plaintiff for conveyance of the land on payment of the land value.

23. It is the defendant's case that, after execution of Ext.A4 agreement, the plaintiff did not proceed with the construction of the building in the property. According to them the plaintiff wanted assignment of the land without going ahead with the construction of the apartment building. At the same time, it is the plaintiff's case that 69 piles were already constructed and that Ext.A4 having stipulated the time for payment of the land value, the plaintiff was in terms of Ext.A4 entitled to pay the land value and get assignment of the land.

24. Ext.A20 is the letter dated 29.02.1996, issued by the first defendant to the plaintiff. It was not served on the plaintiff since the plaintiff’s address had changed. The same was forwarded to the plaintiff along with a subsequent letter Ext.A19. Ext.A19 was sent by the first defendant to the plaintiff in reply to Ext.A18 letter by the plaintiff to the defendant dated 30.03.1996, requiring handing over of the possession certificate, income tax certificate and other documents. This was to enable the execution of sale deed. The contents of Ext.A20 reveals that, therein the defendant's allegation was that, without paying the land value the plaintiff is proceeding with the construction of the building. This is quite contrary to their stand adopted in the suit.

25. The first defendant had filed a suit in June 1996 as OS 526/1996, against the plaintiff to rescind Ext.A4 agreement and to restrain the plaintiff from making constructions in the property. Though an interim injunction was sought, the same was refused by the Court. Though it was taken in appeal and up to this Court in CRP 1882/1996, the same ended in dismissal on 14.03.1997. Thereafter the suit was withdrawn.

26. Incidentally, it is relevant to note that Ext.A7 power of attorney dated 12.06.1995, was given by the first defendant to one Paul Joseph. K, who subsequently became a partner of the first defendant firm. The power of attorney was to enable construction by the plaintiff. Subsequently under Ext.A27 cancellation deed dated 04.06.1996, it was cancelled.

27. The first defendant had also filed a suit as IOP 17/2000 against the plaintiff seeking specific performance of Ext.A4 agreement or for recovery of possession. Subsequently, on 26.11.2001, as per Ext.A35 order, the suit was withdrawn.

28. It appears that the plaintiff wanted conveyance of the property whereas the defendants insisted on carrying out the construction prior to the conveyance. We have already noted that the agreement entitles the plaintiff to obtain sale deed on payment of the entire land value. Therefore, the demand by the plaintiff cannot be said to be not in consonance with Ext.A4 agreement. Admittedly the agreement did not go ahead. The advance amount paid is towards part of the land value payable in terms of the agreement for sale incorporated under Ext.A4. The agreement having fallen, in the absence of any proof of damages, if any suffered by the defendants, the plaintiff is entitled to get return of advance sale consideration paid.

29. Though the learned counsel for the 5th defendant would argue that the agreement itself is void since it does not mention the number of storeys of the building to be constructed, we find that there was no such pleading or contention before the trial court. Even if the agreement is void, the amount received thereunder could not be retained by the first defendant.

30. We have noticed that the materials are not sufficient enough to find as to who committed breach of the contract; it appears that the parties were under a misapprehension regarding the terms of Ext.A4 agreement. There is no proof of damages having suffered by the defendant. In Crompton Greaves Limited, Rep. By Its Managing Director And Another v. Icon Integrated Industries And Software Ltd. (2021 (3) KLT 377), a Division Bench of this Court held that even if the defendant has a case that damages has resulted consequent to the breach of contract, he ought to raise a counter claim for such adjudication. There is no counter claim in the suit. For all the reasons above, the plaintiff is entitled to get back the advance sale consideration of ₹ 30 lakhs with interest.

31. On the materials, it cannot be said that the plaintiff has improperly declined to accept the performance of the agreement for sale. The plaintiff will be entitled for a statutory charge in terms of Section 55(6)(b) of the Transfer of Property Act for the advance consideration paid. Therefore Article 62 of the Limitation Act applies and the suit is within time.

32. Coming to the claim for the value of the works done by the plaintiff in the property, evidently the claim is barred by limitation. Even according to the plaintiff they were forcefully evicted from the property on 18.02.2002. The suit was filed only on 18.07.2005. Thus the said claim is barred by limitation.

33. The plaintiff has a claim that the relief for recovery of possession on the basis of prior possession is moulded and a decree be granted for recovery of costs incurred for effecting improvements in the property. We have already noticed that the circumstances would probabilise that the plaintiff had abandoned the site. The plaintiff is not entitled for recovery of possession. Therefore, the question of moulding the relief does not arise.

34. With regard to the rate of interest, admittedly the first defendant had the advantage of enjoying the benefit of an amount of ₹ 30 lakhs which belonged to the plaintiff. There is no reason to assume that the amount of ₹ 30 lakhs advanced by the plaintiff was not utilized for the construction. Plaintiff is entitled to reasonable interest on the advance amount. Plaintiff has claimed interest at 12% p.a. from the date of payment. We are of the opinion that grant of interest at the rate of 9% per annum from the date of last payment till the date of decree, and at 6% per annum thereafter would be just and reasonable.

35. No other contentions are urged.

Resultantly, the appeal is allowed in part. The decree and judgment of the trial court are set aside. Plaintiff is granted a decree for realisation of an amount of ₹ 30 lakhs with interest at the rate of 9% per annum from the date of suit till date of decree and from 01.08.1995 (after the last payment) till date of suit, and thereafter also at the same rate till date of decree, and at the rate of 6% per annum from the date of decree till realisation, charged on the plaint 'A' schedule property. Plaintiff shall be entitled for proportionate costs throughout.

 
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