OSA/280/2021 of C.DAKSHINAMURTHY (DECEASED) Vs M/S.CONYBIO HEALTH CARE (INDIA) PVT. LTD. on 5 October 2026

COMMON JUDGMENT

(Judgment of the Court was delivered by N.Sathish Kumar J.) Challenging the common judgment of the learned Single Judge dismissing the suit filed by the plaintiffs in C.S.No.741 of 2004 and partly decreeing the suit in C.S.No.972 of 2004, the present two appeals are filed by the unsuccessful party to the lis.

2. The plaintiffs in C.S.No.741 of 2004 have filed the suit for damages, permanent injunction and other reliefs and the suit in C.S.No.972 of 2004 has been filed by the plaintiff-M/s.CONYBIO HEALTH CARE (INDIA) Pvt. Ltd., for recovery of money. Since, both parties are same and common issues are involved in both the suits, common evidence was recorded and both the suits were disposed of by way of the common judgment. For the sake of convenience, the appellants are hereby referred to as “Plaintiffs” and the respondent is hereby referred to as “Defendant”

3. It is the case of the plaintiffs that they are are the absolute owners of the suit property, measuring an extent of 5,750 sq.ft, by virtue of sale deeds dated 22.02.1990 registered as Document Nos.873 and 874 of 1990 in the Office of the Sub Registrar, Kodambakkam. The plaintiffs have also borrowed a sum of Rs.35,00,000/- on 27.07.2000 from REPCO Bank, T.Nagar, for constructing the building in the schedule mentioned property. The plaintiffs have been searching for the prospective tenants for letting out the remaining vacant portions of the aforesaid property and the defendant had approached the plaintiffs to take the premises on lease and requested the plaintiffs to demolish the existing structures after evicting the tenants and put up new construction, viz., an Office complex consisting of basement, ground and two floors with an open terrace measuring an extent of 13,000 sq.ft or thereabout, as per the design provided by the defendant to suit their business requirements and convenience. In this regard, the plaintiffs had entered into a Loan Agreement with the defendant at Chennai on 14.04.2001 and in and by which, the defendant had advanced a sum of Rs.15,00,000/- to the plaintiffs as interest free loan and agreed to treat the sum of Rs.10,00,000/- as Refundable Security Deposit with interest and to take the entire premises excluding northern part of Ground Floor measuring an extent of 1,300 sq.ft. on lease for a period of 5 years with an option to renew the same for a further period of 5 years. The rental was fixed for the entire premises excluding the northern part of the Ground Floor measuring an extent of 1,300 sq.ft or thereabout, shall be around Rs.1,05,000/- per month, excluding power consumption charges for a period of first five years and on completion of the tenancy period, a part of the advance amount of Rs.10,00,000/- advanced by the defendant under the said Loan Agreement dated 14.04.2001 shall be treated as Security Deposit for the lease contemplated and the same shall be refunded to the defendant, while vacating the premises and the balance amount of Rs.5,00,000/- shall be adjusted at the rate of Rs.50,000/- in the first 10 months from and out of the rents payable by the defendant. The actual amount payable by way of rent by the defendant for the first 10 months for its occupation had been determined at the rate of Rs.55,000/- per month, excluding power consumption charges and the rent shall be payable as and when the complex is completed and occupied by the defendant.

4. The defendant had entered into a contract with the plaintiffs on 14.04.2001 incorporating the various terms and conditions which shall govern the rights and obligations of both the parties. Pursuant to the contract, the plaintiffs with very great difficulties, had vacated the tenants, viz., S.R.Agency,

(ii) A.K.Auto Parts, (iii) Venkateswara Medicals, (iv) Beauty Saloon, (v) STD Booth and (vi) Beetle-nut shop, except M/s.Murugan Stores, who had agreed to be shifted to the northern wing of the Ground Floor of the new premises to be constructed and in the process of vacating the tenants, the plaintiffs had incurred a substantial expenditure, amounting to Rs.5,35,000/-. Pursuant to the agreement, the plaintiffs had applied to the Corporation of Chennai for demolition plan and also for Planning Permission and permit for re-construction of the proposed complex as per the design provided by the defendant, and accordingly obtained Planning Permission and permission from the Corporation of Chennai and Chennai Metropolitan Development Authority for putting up the complex and completed basement ground floor and first floor in the suit property. The property is assessed to Property Tax and the plaintiffs have also remitted the necessary fees and charges. After evicting the above tenants and shifting M/s.Murugan Stores to the northern wing of the ground floor premises, the plaintiffs have duly demolished the existing building as per the demolition plan obtained by them from the Corporation of Chennai. Since the plaintiffs have committed for construction of new complex in accordance with the terms and conditions of the Loan Agreement/contract dated 14.04.2001 for the occupation of the defendant within the stipulated time, they engaged the services of the competent Architect-cum-Civil Engineer for commencement of the construction activities and to meet all the above expenses, the plaintiffs have incurred a sum of Rs.3,00,000/- on this account alone.

5. In anticipation of the expenses to be incurred for the completion of the building project, the plaintiffs have availed loans to the tune of Rs.35,00,000/- from M/s.REPCO Bank, Usman Road Branch, T.Nagar, Chennai and Rs.10,00,000/- from M/s.TNSC Bank, Triplicane Branch, Chennai, besides borrowing monies from other private agencies for completion of the building, for which the plaintiffs have been paying the interest periodically. Pursuant to the contract dated 14.04.2001, the plaintiffs secured the demolition plan and a valid planning permission and permission from the statutory authorities for reconstruction of the building and to facilitate the commencement of the proposed complex, demolished the existing structures in the aforesaid premises measuring an extent of 2,500 sq.ft, which is roughly valued at Rs.10,00,000/- even though the actual value may be much more than that. In addition to that, certain structural alterations for housing the lift on the rear side of the premises, the plaintiffs have incurred a sum of Rs.4,00,000/- for making provision for fixing the lift in the said building complex. The second plaintiff had sold her property situate at No.266/1, Triplicane High Road, Triplicane, Chennai-600 005 and invested the sale proceeds of Rs.5,00,000/- realized by them in the proposed building to be erected in the suit schedule property and as such, the plaintiffs have incurred an expenditure of Rs.55,00,000/- for putting up new construction in the above premises to the suit the business convenience of the defendant as per the contract dated 14.04.2001 reached between them.

6. The defendant had agreed to take the entire premises, excluding a portion occupied by M/s.Murugan Stores on the northern wing of the premises, on a monthly rent of Rs.1,05,000/- excluding power consumption charges on lease, for a period of 10 years, for reasons best known to them, the defendant have deliberately and willfully flouted the terms of the contract dated 14.04.2001 entered into with the plaintiffs at Chennai and expressed their inability to take the premises orally for their use and occupation as originally agreed upon and there was no written communication regarding termination of the contract from the defendant till date in this regard. In order to complete the project on time to enable the defendant to occupy the same, the plaintiffs have availed loans from the financial institutions and invested the same into the above project thereby incurring interest charges alone so far to the tune of Rs.17,85,000/- on the borrowed amount and the plaintiffs have been deprived of the rental income of Rs.12,500/- per month, (excluding power consumption charges) from the existing tenants for several months from April 2001 onwards, which is tentatively valued at Rs.5,19,500/-. Out of the total advance of Rs.15,00,000/- paid by the defendant, the plaintiffs have repaid a sum of Rs.1,50,000/- without prejudice to their rights and contentions. While so, ignoring the terms of contract, the defendant has committed breach of essential terms of the contract, which has resulted in pecuniary damages to the plaintiffs. When such being the case, the defendant has chosen to send a legal notice dated 12.04.2004, by demanding refund of Rs.15,00,000/- which has been paid by them as Security Deposit to the plaintiffs and which have been allegedly covered by dishonour of three cheques by the plaintiffs and threatened that consequential proceedings will be taken as against the plaintiffs if they fail to comply with the unjustified and unreasonable demands of the defendant for repayment of the amount. According to the plaintiffs, they have taken much efforts to vacate the existing tenants and demolished the existing building and constructed the building as per the plan, design and specification of the defendant, however, the defendant has deliberately flouted the terms of the

contract dated 14.04.2021 and expressed their inability to take the premises and there was no written communication regarding termination of the contract. As the defendant has failed to honour their obligations and did not occupy the premises, the plaintiff has filed the suit for damages, permanent injunction and other reliefs.

7. It is the case of the defendant that the plaintiffs committed breach of the conditions of the Agreement and put up a totally different constructions contrary to the agreed specifications and in violation of sanctioned plan. The plaintiffs have not constructed the building as per the design of the defendant, whereas, construction was put up to the specifications of the plaintiffs to suit the purpose of letting them on rent to other third parties. The plaintiffs later on let the premises out to new tenants and are earning substantial rent, which is in total violation of the agreement entered into between the plaintiffs and the defendant. On finding that the work is not to the specification of the defendants as stipulated in the agreement, and the handing over the premises not in sight, they were compelled to move to alternate premises. The defendant’s decision to move to alternate premises for a much higher rent was taken only because the plaintiffs failed to honour their promise of handing over the completed premises within the stipulated time in the agreement.

8. The averment of the plaintiffs that they availed loans from the REPCO Bank to the tune of Rs.35,00,000/- and borrowed moneys from the private agencies for completion of the building and that they have been paying interest periodically also has nothing to do with the defendant. The defendant had sent a letter dated 12.04.2004 to the first plaintiff that he has not adhered to the agreement entered into between the defendant and the plaintiffs, by not handing over the completed office premises for occupation and that the defendant is invoking Clause 8 of the agreement, pertaining to payment of penalty and the plaintiffs are to pay a sum of Rs.75,000/- within 10 days being penalty for delay in handing over the completed premises by 5 months beyond the stipulated period and the plaintiffs were also informed that failure to pay, penalty would result in the presenting of cheque issued by them for the repayment of the loan amount. The plaintiffs on receipt of the above letter, sent a Demand Draft No.680013, dated 23.04.2003 for Rs.25,000/- towards penalty and a receipt No.007638, dated 23.04.2003 was issued by the defendant. The plaintiffs then promised to give a repayment schedule for the penalty amounts, which they failed. The plaintiffs have paid a further sum of Rs.25,000/- on 28.07.2003 and Rs.1,00,000/- on 08.12.2003 by Demand Draft. A sum of Rs.50,000/- was adjusted towards the penalty as per Clause 8 and remaining was adjusted towards interest. The plaintiffs have failed to honour the agreement in handing over completed premises as stipulated in the agreement and thus, they committed breach of contract and are not eligible for the interest free loan given for the sole purpose of constructing the office premises as per the specification of the defendant. Thus, the total amount of Rs.1,50,000/- received from the plaintiffs have been partly adjusted towards penalty (Rs.75,000/-) and in rest

(Rs.75,000/-) towards part of interest on the amount loan of Rs.15,00,000/- given by the defendant to the plaintiffs.

9. As per Clause 8 of the Agreement, the defendant was entitled to present the 3 cheques of Rs.5,00,000/- each dated 18.03.2004 totalling Rs.15,00,000/-, if the plaintiffs failed to deliver vacant possession of the premises as agreed in the agreement and enumerated in Clause 5 of the agreement. However, when the cheques were deposited for encashment, they were returned with the remarks “insufficient funds“. Therefore, the defendant is entitled to interest at 24% per annum compounded quarterly, however, the plaintiff confines it to claim interest at 12% per annum from 15.02.2002 in view of the promissory note. Only due to the breach committed by the plaintiffs, the defendant was forced to take on lease, an other premises to an extent of about 13,000 sq.ft and the lease was taken on a higher rate at the rate of Rs.14.73 per sq.feet per month, therefore, the defendant, for the new premises paid a monthly rent of Rs.1,91,490/- and if the plaintiff fulfilled their obligations, the defendant would have been able to occupy the premises of 13,000 sq.ft for a monthly rent of Rs.1,05,000/-. Thus, the defendant had suffered an expense/damage in the monthly rent to an extent of Rs.86,490/- per month for the past 29 months as on date and therefore, prayed for dismissal of the suit in C.S.No.741 of 2004 and for direction to the plaintiffs to pay a sum of Rs.30,08,210/- together with future interest at 18% per annum from the date of the counter-claim till the date of realization.

10. Based on the above pleadings and documents filed by both parties and submission made by both the Counsel, the following issues have been framed by this Court on 19.12.2007:- C.S.No.741 of 2004 “1. Whether the plaintiffs failed to construct the building to the agreed specifications as per the Loan Agreement dated 14.04.2001 entered into with the defendant?

2. Whether the termination of the Agreement by the defendant is valid in the eye of law?

3. Whether the plaintiffs have committed breach of contract and liable to pay the damages demanded by the defendant in the counterclaim?

4. Whether the plaintiffs are entitled for a declaration that the instruments, mentioned in Schedule II appended to the plaint, handed over to the defendant by the plaintiffs are illegal, unenforceable and not binding upon the plaintiffs?

5. Whether the plaintiffs are entitled for recovery of a sum of Rs.46,89,500/- from the defendant with interest at 18% per annum?

6. Whether the plaintiffs are entitled for an injunction restraining the defendant from enforcing or claiming any right on the basis of the instruments mentioned in schedule II?

7. Whether the plaintiffs are entitled for an injunction restraining the defendant from interfering with their peaceful possession and enjoyment of the suit property?

8. To what reliefs the parties are entitled to? C.S.No.972 of 2004 “1. Whether the plaintiffs/defendants constructed the premises as per the specifications of the defendant/plaintiff?

2. Whether the termination of the Agreement dated 14.04.2001 by the defendant is valid or not?

3. Whether the defendant/plaintiff is entitled for the suit claim with further interest at 12% per annum?

4. To what other further reliefs the parties are entitled to?“

11. After framing of issues, in both the suits in C.S.No.741 of 2004 and C.S.No.972 of 2004, common evidences were recorded. On the side of the plaintiffs, three witnesses were examined as P.W.1 to P.W.3 and 32 documents were marked as Exs.P1 to P32. On the side of the defendant, one Subashree Ramesh was examined as D.W.1 and 11 documents were marked as Exs.D1 to D11.

12. Based on the evidences and materials available on record, the learned Single Judge after analysing the entire evidence dismissed the suit filed by the plaintiffs claiming damages and partly decreed the suit filed by the defendant in C.S.No.972 of 2004 directing the plaintiffs to pay a sum of Rs.13,50,000/- to the defendant within 12% interest from the date of filing of the suit and till the date of judgment and from the date of judgment, till the realisation, 6% interest.

13. Challenging the dismissal of the suit filed by the plaintiffs and partly decreeing the suit filed by the defendant, these present appeals are filed.

14. Mr.R.Thiagarajan, learned counsel for the appellants submitted the loan agreement executed between the plaintiffs and defendant dated 14.04.2001 that the defendant has agreed to advance a sum of Rs.15,00,000/- as interest free loan to the plaintiffs and stipulated various conditions. The main condition is that the plaintiff has to demolish the existing construction and construct office premises consisting of a basement, ground floor, first floor, second floor with an open terrace all admeasuring 13000 sq.ft., to suit the needs of the defendant which is also agreed upon by the plaintiff by completing the entire construction within 10 months as prescribed in the agreement. Hence, it is the contention of the plaintiff that the plaintiff has in fact applied permission for demolition and reconstruction and accordingly, he has constructed the building. Once the building has been constructed and ready for occupation, the defendant has failed to take the building as agreed in the loan agreement.

15. Furthermore, it is agreed by the defendant that they will pay a sum of Rs.1,05,000/- per month excluding power consumption charges for a period of first five years and on completion of tenancy period, a part of the advance amount of Rs.10,00,000/- advanced by the defendant shall be treated as Security Deposit and the remaining Rs.5,00,000/- shall be adjusted at the rate of Rs.50,000/- in the first 10 months from and out of the rents payable by the defendant. Hence, it is the contention that once the plaintiffs have clearly established that he has applied for permission and completed constructions, the defendant without any reasons has failed to adhere the conditions and not taken the building for lease.

16. It is the further contention that before construction of new portion, existing tenants were vacated by the plaintiff while one of the tenants has to be shifted to northern wing of the Ground Floor of the new premises, thus, when all the conditions have been satisfied by the plaintiffs, the defendant without any reasons has not adhered to the conditions. Hence, according to him, anticipating the continuous rents of period of 5 years payable by the defendant, the plaintiff has availed loan and incurred various expenditure towards construction of the premises, therefore, plaintiffs are certainly entitled to claim damages for breach of conditions by the defendant. Therefore, would submit

that the learned Single Judge without going into the documents filed by the plaintiffs had mechanically dismissed the suit. In support of his submissions, he placed relied on the judgment of the Madhya Pradesh High Court in the case of Food Corporation of India, Bhopal and Others vs. M/s.Babulal Agarwal, Bhopal reported in I.L.R [1996] M.P., 423

17. Whereas, the learned counsel for the respondent submitted that absolutely there is no evidence to show that the plaintiffs have completed the construction within a period of 10 months as agreed and no documents have been filed to show that construction has been put up as per the specification of the defendant. Though it is originally agreed to take on lease of the entire premises measuring 13000 sq.ft.,, the plaintiff has never constructed to such extent. The evidence of plaintiff clearly shows that he has constructed only small portion to suit the convenience of the plaintiffs to let out the same to third parties. According to the defendant, the plaintiffs have let out four portion to third parties, which have been clearly admitted by the plaintiffs. Absolutely there is no evidence to show that the plaintiff has fulfilled their obligations as stipulated in the agreement. Therefore, since the plaintiff has already put up lesser area of construction and let it to third parties, claiming damages is without any basis and the learned Single Judge has considered this aspect and rightly dismissed the suit.

18. Admittedly, interest fee loan of Rs.15,00,000/- was paid to the plaintiffs by the defendant and a sum of Rs.1,50,000/- was repaid by the plaintiffs to the defendant. As the plaintiffs have not repaid the entire amount and the cheques issued by the plaintiffs have also been presented as per law, only after when the notice was issued by the defendant, the suit came to be filed by the plainiffs seeking for damages, hence, would submit that the there is no evidence to show that the plaintiff has suffered any damages and seeks for dismissal of the appeals.

19. In light of the above, now the following points arise for consideration in these appeals are as follows:-

(i) Whether the defendant in the main suit has committed breach of agreement dated 14.04.2001? If so, whether the plaintiffs are entitled to damages for such breach?

(ii) Whether the defendant is entitled to recovery of interest free loan amount paid under the agreement dated 14.04.2001? Point (i)

20. It is not disputed that plaintiffs are the owner of the suit schedule property measuring an extent of 5750 sq.ft., as per the Exs.P1 and P2. Much has been emphasised that the plaintiff has availed the loan from M/s.REPCO Bank to the tune of Rs.35,00,000/- on 27.07.2020 for construction of the building. In this regard, Exs.P4 and P5 are filed. It is relevant to note that these transactions are much prior to the loan agreement entered between the parties. Admittedly, Ex.P6 loan agreement between the plaintiffs and defendant came into existence only on 14.04.2001, therefore, any previous loan availed by the plaintiffs for construction of their own building have no relevance at all to the agreement entered between the plaintiffs and defendant. Thus, the plaintiffs cannot seek any damages with regard to the loan availed by them prior to the agreement.

21. Now, in light of the above, when we look at Ex.P6/loan agreement, admittedly, the loan agreement was entered into between the parties on 14.04.2001, wherein, the plaintiffs have borrowed a sum of Rs.15,00,000/- interest fee loan for the purpose of building of the office premises as per the designs and specifications of the lender. The plaintiffs have agreed to demolish the existing constructions and construct an office complex comprising of a basement, ground floor, first floor and second floor with an open terrace, totally measuring approximate 130000 sq.ft., to suit the needs of the lender and it is specially agreed to complete the entire construction of the premises as per the designs given by the lender within 10 months from the date of the agreement. It is further agreed between the parties that on completion of the entire premises, the rent of Rs.1,05,0000/- per month will be payable by the defendant excluding the electricity charges. The lease would be executed for a period of 5 years and Rs.10,00,000/- advanced by the defendant shall be treated as security deposit and the remaining Rs.5,00,000/- will be adjusted in the first 10 monthly rent

22. The primary condition in the loan agreement is that the plaintiff has to construct approximately 13,000 sq.ft., within a period of 10 months and subject to a maximum extension of 5 months beyond the stipulated 10 months completion period as per clause 8 of the loan agreement. Therefore, the obligation agreed by the plaintiffs is that they shall complete the construction to an extent of 13,000 sq.ft., as per the specification given by the defendant. It is also specifically agreed that at any event, construction shall be completed within a period of 15 months, of course, with some penalty payable by the plaintiffs for such delay. When the specific agreement is entered in this regard, now, it has to be seen whether the plaintiff has constructed the entire 13,000 sq.ft., to contend that the defendant has failed to take the entire premises on lease and therefore, they have committed breach of agreement.

23. In the cross examination of PW1, he has stated that in September 2001, he started demolishing the existing structure. He has stated that the building was constructed as per the plan under Ex.P9 but there may be certain deviations. According to the plaintiff, plan under Ex.P9 was drawn as per the specification of the defendant, however, his cross examination clearly shows that the plan was sanctioned for construction of 4646 sq.ft., only. In this regard, Ex.P9 plan is filed. It is specifically admitted that except Exs.P8 & P9, no other plan was obtained, therefore, when the plaintiffs evidence itself clearly show that they have not constructed the entire 13000 sq.ft., and have obtained plan only for 4646 sq.ft.,. Now it cannot be said by the plaintiffs that they have completed the entire construction as per the designs given by the defendant. Ex.P10/Valuation Report by Engineer has been filed. On perusal of Ex.P10, it is only an assessment of cost of demolition of entire superstructure by the plaintiffs, that document will not help the plaintiffs in any manner to show that as agreed 13,000 sq.ft., has been built up by them within the time stipulated in the loan agreement.

24. Ex.P14 shows that the defendant has issued legal notice on 12.04.2004 for recovery of Rs.15,00,000/- and only thereafter, the alleged damages theory has come in by way of Ex.P15. Be that as it may, when the plan itself is obtained for 4646 sq.ft., it is hard to believe that the plaintiff has constructed 13,000 sq.ft., and further, absolutely there is no completion certificate to prove that 13,000 sq.ft.,, has been constructed. The plaintiffs have also not sought for any appointment of advocate commissioner to note down the physical feature to show that the building has been constructed and further, absolutely there is no evidence to show when the building was constructed. Therefore, now, the appellantt cannot contend that they have constructed the entire 13,000 sq.ft., His evidence further indicates that on the date of filing the suit on 14.09.2004, there were three tenants in the building. Therefore, in the absence of any evidence to show that only the defendant has breached the conditions, as a matter of fact, the plaintiffs cannot claim damages including the loan availed by them for putting up construction. As already pointed above, loan availed by the plaintiffs from Repco Bank was even prior to the agreement entered into between the parties, therefore, this amount could have been used to suit the needs of the plaintiff. As long as the plaintiff seeks for damages, he has to establish that he has fulfilled his obligation within a period of 10 months and further delay of 5 months as stipulated in the agreement, however, absolutely, there is no evidence to show that the building was completed in the entire area of 13,000 sq.ft., within a period as agreed between the parties, whereas, the plan was obtained only for 4646 sq.ft., Such being the position, without establishing the fulfilment of his obligations, merely on the basis of some oral submissions, the plaintiffs cannot seek damages.

25. A party is entitled to receive damages in terms of money only, if he has actually suffered damage or loss on account of breach of contract of by the other party. But to claim such damages, it must be established that breach by other party has resulted in pecuniary loss to the plaintiff. Though assessment of damages can be made by actual proof of damages or loss suffered by venturing into, it is has to be established that only the defendant has breached the contract. Whereas, the evidence of the plaintiffs clearly shows that they have obtained plan only for 4646 sq.ft., and three tenants were already inducted. Such being the position, now, it cannot be said that he has completed the construction of 13000 sq.ft., and the defendant has failed to occupy the same, whereas, the defedant’s case is that since the plaintiff did not complete the building within the time agreed, they were forced to go for alternative building for their business purposes, the defendant’s stand is more probable than the plaintiffs, particularly in light of the admission of the plaintiff that they have obtained a plan only for 4646 sq.ft., and further absolutely, there is no evidence available on record to show that construction was completed within the agreed period as

per the agreement.

26. Considering the said aspect, we are of the view that the plaintiffs claim for damages has to necessarily fail. The learned Single Judge has rightly decided that issue. Point (ii)

27. Admittedly, the plaintiffs have borrowed a sum of Rs.15,00,000/- as interest free loan for construction of office premises to suit the needs of the defendant and cheques were also issued towards the said amount. It is agreed in the contract dated 14.04.2001 as follows:- “8.The Borrowers agree to pay a penalty of Rs.15,000/- (Rupees fifteen thousand only) per month for every month delay in completion or part thereof, beyond the agreed completion period of

(10) ten months from the date of this agreement and subject to a maximum extension of 5(five) months beyond the stipulated 10 (ten months) completion period. If the borrowers fail to complete the construction of the said premises within 15(fifteen) months from the date of this agreement, the lender shall revoke this agreement by presenting the security cheques as mentioned above.

28. As the building has not been constructed within the timeframe as specified in the above clause, the defendant has issued legal notice dated 12.04.2004 calling for initiation of proceedings under Section 138 of Negotiable Instruments Act for dishonour of cheques issued by the plaintiffs, thereafter, only the plaintiffs have come up with theory of damages. Once the issuance of cheques is admitted and dishonour is also established, we are of the view that there is no infirmity in the judgment passed by the learned Single Judge directing the payment of Rs.13,50,000/-. The learned Single Judge took note of the fact that the plaintiffs have repaid a sum of Rs.1,50,000/- towards the loan originally borrowed by them and considering the nature of the transaction which are commercial in nature, the learned Single Judge restricted the interest of 12% from the date of filing of the suit till the date of judgment and 6% interest from the date of judgment till the date of realisation. In such view of the matter, we do not find any merits in these appeals. Accordingly, these points are answered.

29. The reliance placed by the learned counsel for the appellants on the judgment of the Madhya Pradesh High Court in the case of Food Corporation of India, Bhopal and others vs. M/s.Babulal Agarwal reported in I.L.R [1996] M.P., 423 is inapplicable to the facts of the present case. In Babulal Agarwal, the owner had fully performed his part of the obligation by constructing the plinths in accordance with the specified guidelines within the agreed timeline, leading the Court to invoke the doctrine of promissory estoppel against the public body that prematurely resiled from the arrangement. On the other hand, in the present matter, the appellants committed a fundamental breach of contract by failing to construct the agreed 13,000 sq.ft., structure within the stipulated timeframe, having only obtained planning permission for 4,646 sq. ft. and subsequently inducted third-party tenants into the premises. It is a settled principle that a party who has failed to perform its essential contractual obligations cannot invoke equitable doctrines such as promissory estoppel nor claim damages for losses arising out of its own default. The financial liabilities incurred by the appellants herein is prior the agreement and has no any direct nexus between the alleged breach and the financial loss claimed. Consequently, the ratio in Babulal Agarwal does not help the appellants in any manner.

30. In view of the above, the judgment of the learned Single Judge stand confirmed and these original side appeals stand dismissed. No costs. Consequently, connected miscellaneous petition stands closed. (N.S.K.,J.) (G.K.M.,J.) 05-10-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No dhk

N.SATHISH KUMAR J. AND GK.MUTHUKUMAAR J. dhk OSA No. 280 of 2021 AND OSA NO. 281 OF 2021,CMP NO. 14091 OF 2021 05-10-2026