NATARAJAN AND ORS. Vs. C. S. LOGANATHAN (DEACEASED) AND ORS.

JUDGEMENT

(1.) This suit is filed for the recovery of Rs. 88,400 together with interest at six per cent. per annum on Rs. 80,000 from the date of the institution of the suit to the date of realisation for the defendants.

(2.) The plaintiffs entered into an agreement dated 6th March, 1967 with the first defendant (since dead) regarding the sale of 7000 Nos. of equity shares in the capital of the company called "Nadukani Plantations Private Limited " standing on that date in the names of the first defendant and one Thiru A.C. Murali and his family members. The plaintiffs paid Rs. 80,000 towards part payment of the total purchase amount on various dates, including the earnest money of Rs. 10,000 paid on 6th March, 1967. Since the contract fell through, the plaintiffs are suing the defendants to recover the amount paid. During the pendency of the suit, the first defendant died and so his legal representatives have been brought on record as defendants 2 to 6 as per order of Court dated 15th February, 1972 in Application No. 2734 of 1971.

(3.) The case of the plaintiffs is that the plaintiffs and the first defendant, (since dead) entered into an agreement dated 6th March, 1967, whereby the first defendant agreed to sell 7000 Nos. of equity shares in the capital of the company viz., Nadukani Plantations Private Ltd., standing in the names of the first defendant and one Thiru A.C. Murali and his family members. The shares belonging to A.C. Murali and his family members were pledged with the first defendant. The agreed price of Rs. 2,05,000 was to be paid by the plaintiffs to the first defendant in three instalments viz., Rs. 10,000 to be paid on 6th March, 1967, the date of the execution of the letter of agreement; Rs. 90,000 by 6th April, 1967 and the balance within six months from the date of the agreement. It was further agreed between the parties that on payment of the second instalment, the plaintiffs would be put in possession of the estate by the first defendant. As agreed, the plaintiffs paid Rs. 10,000 on 6th March, 1967, a sum of Rs. 20,000 on 3rd April, 1967 and another sum of Rs. 50,000 on 9th June, 1967, i.e., in all the plaintiffs have paid Rs. 80,000. The plaintiffs further aver that when they tendered a sum of Rs. 45,000 on 12th June, 1967 as asked, the first defendant pleaded his inability to put the plaintiffs in possession of the estate and sought further time for the performance of his obligations. In spite of several demands made by the plaintiffs, the first defendant was not able to perform his obligation and so the plaintiffs did not make the said payment of Rs. 45,000. The first defendant agreed to return the amount of Rs. 80,000 as settled by the parties; but, curiously enough, the first defendant wrote a letter on 7th July, 1967 (vide Exhibit P -3) to the plaintiffs, stating that the entire sum of Rs. 80,000" had been forfeited. As it was never the intention of the parties that time was of the essence of the contract, the first defendant cannot withhold the payment made. Hence, after issuing a notice of demand on 18th July, 1967, followed by a notice through their lawyer on 5th October, 1967, the plaintiffs have filed this suit, for the recovery of Rs. 80,000 with interest at six per cent. per annum from 5th October,. 1967.