Friday, 21 August 2020

Whether court can grant refund of earnest amount to plaintiff in absence of pleading?

In so far as refund of earnest money is concerned, it is to be stated here that though the trial Court has held that the agreement dated 21.11.1988-Ex. P1 has been proved, the first appellate Court has come to a conclusion that the agreement has come into existence in suspicious circumstances. Be that as it may. Section 22 of the Specific Relief Act, 1963 ('Act' for short) provides for the power of the Court to grant relief for possession, partition, refund of earnest money etc. Sub-section (2) of Section 22 states that no relief under clause (a) or clause (b) of sub-section (1) shall be granted by the Court unless it has been specifically claimed. The proviso states that where the plaintiff has not claimed any such relief in the plaint, the Court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.

10. In the instant case, the plaintiff has not claimed refund of' earnest money nor has he made an application either before the trial Court or before the first appellate Court or atleast in this appeal for amendment of the prayer so as to include the refund of earnest money Therefore, question of refund of earnest money without there being a pleading does not arise. Section 24 of the Act states that the dismissal of a suit for specific performance of a contract or part thereof shall bar the plaintiffs right to sue for compensation for the breach of such contract or part, as the case may be, but shall not bar his right to sue for any other relief to which he may be entitled, by reach of such breach. It is clear from this provision that if the plaintiff is entitled for refund of the earnest money, he is not barred from filing a fresh suit for the said relief. Therefore, he is entitled to file a Civil suit for refund of the earnest money in accordance with law.

IN THE HIGH COURT OF KARNATAKA AT BANGALORE

Regular Second Appeal No. 753/2006 (SP)

Decided On: 19.11.2012

 M. Chowdappa  Vs.  Venkatarayappa

Hon'ble Judges/Coram:
S. Abdul Nazeer,J.
Citation: MANU/KA/1720/2012



1. This appeal is directed against the judgment and decree in R.A. No. 73/2000 dated 7.12.2005 on the file of the Civil Judge (Sr. Dn.)., Chintamani, confirming the judgment and decree in O.S. No. 461/1991 dated 28.8.2000 on the file of the Principal Civil Judge (Jr. Dn.) & JMFC, Sidlaghatta. The appellant is the plaintiff in the suit and the respondents are the defendants. The plaintiff filed the above suit for specific performance of the agreement dated 21.11.1988. The contention of the plaintiff is that the defendants are the owners of the suit schedule property. They have entered into an agreement dated 21.11.1988 to sell the suit schedule property for a sale consideration of Rs. 5,000/- after receiving a sum of Rs. 4,500/- towards earnest money. Since the defendants failed to execute and register the sale deed, he has issued a notice dated 28.6.1991 calling upon the defendants to execute the sale deed by receiving the balance of Rs. 500/-

2. On being served with the suit summons, the defendants have entered appearance and have filed their written statement denying the plaint averments. They have also denied the execution of the agreement of sale in favour of the plaintiff.

3. on the basis of the rival pleadings of the parties, the trial Court has framed the relevant issues. The plaintiff got himself' examined as P.W1 and three witnesses were examined as P.W2 to P.W4. Documents Ex. P1 to Ex. P3 were marked in then evidence. On behalf of the defendants, Smt. Sowbhagya, the legal representative of the deceased defendant-Venkatarayappa was examined as D.W1 and three other witnesses were examined on their behalf and documents Ex. D1 to Ex. D4 were marked in their 'evidence. On appreciation of the materials on record, the trial Court has dismissed the suit. Feeling aggrieved, the plaintiff filed an appeal in R.A. No. 73/2000 on the file of the Civil Judge (Sr. Dn.) & JMFC, Chintamani. The first appellate Court on re-appreciation of the oral and documentary evidence on record has dismissed the appeal.

4. At the time of admission, this Court has framed the following substantial question of law:

In view of the finding recorded by the trial Court that the deceased defendant was a signatory to the agreement of sale and in the wake of the evidence of the witnesses P.Ws.1 to 4, whether the courts below were justified in negativing the alternative prayer made for payment for payment of compensation or atleast for refund of the advance amount paid?
5. The submission made on behalf of the learned Counsel for the appellant/plaintiff is that plaintiff has sought for compensation addition to the specific performance of the agreement referred to above. The courts below ought to have granted compensation. It is his further submission that since the suit has been dismissed, a direction ought to have been issued to the defendants to refund the earnest money paid by the plaintiff in a sum of Rs. 4,500/-.

6. On the other hand, learned Counsel appearing for the respondent/defendants submits that the plaintiff has not laid the foundation in the plaint for payment of compensation nor has he let in any evidence. In so far as refund of the earnest money is concerned, the plaintiff has not sought the said relief He has not even amended the plaint to that effect.

7. I have carefully considered the arguments of the learned Counsel made at the Bar and perused the materials placed on record.

8. A perusal of the plaint would disclose that the plaintiff has not laid foundation in the pleadings for payment of compensation. In the relief column, he has sought for payment of compensation in a sum of Rs. 15,000/-. The plaintiff has not even paid court fee on the said relief. The plaintiff has not pleaded nor has he let in any evidence on this aspect. The plaintiff has not even urged this point before the trial Court or before the first appellate Court. Therefore, question of grant of compensation does not arise.

9. In so far as refund of earnest money is concerned, it is to be stated here that though the trial Court has held that the agreement dated 21.11.1988-Ex. P1 has been proved, the first appellate Court has come to a conclusion that the agreement has come into existence in suspicious circumstances. Be that as it may. Section 22 of the Specific Relief Act, 1963 ('Act' for short) provides for the power of the Court to grant relief for possession, partition, refund of earnest money etc. Sub-section (2) of Section 22 states that no relief under clause (a) or clause (b) of sub-section (1) shall be granted by the Court unless it has been specifically claimed. The proviso states that where the plaintiff has not claimed any such relief in the plaint, the Court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.

10. In the instant case, the plaintiff has not claimed refund of' earnest money nor has he made an application either before the trial Court or before the first appellate Court or atleast in this appeal for amendment of the prayer so as to include the refund of earnest money Therefore, question of refund of earnest money without there being a pleading does not arise. Section 24 of the Act states that the dismissal of a suit for specific performance of a contract or part thereof shall bar the plaintiffs right to sue for compensation for the breach of such contract or part, as the case may be, but shall not bar his right to sue for any other relief to which he may be entitled, by reach of such breach. It is clear from this provision that if the plaintiff is entitled for refund of the earnest money, he is not barred from filing a fresh suit for the said relief. Therefore, he is entitled to file a Civil suit for refund of the earnest money in accordance with law. The substantial question of law framed as above is answered accordingly. No other contentions have been urged by the learned Counsel for the appellant while arguing the appeal. There is no merit in this appeal. It is accordingly dismissed. No costs.


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