M/S. Trinity Arcade Pvt. Ltd vs K.J. Paul on 17 September, 2025

[Cites 14, Cited by 0]

Kerala High Court

M/S. Trinity Arcade Pvt. Ltd vs K.J. Paul on 17 September, 2025

The present company appeal is directed at the instance of the Company named M/s.Trinity Arcade Pvt.Ltd., Respondent No.1 before the Company Law Board in Company Application No.125 of 2011 in Company Petition No.91 of 2010, against the order dated 11.10.2012 in the aforementioned Company Application, whereby the Company Application aforementioned filed by the applicant - respondent No.1 herein, has been allowed and the respondent Company - appellant herein, has been directed to implement the terms and conditions of the settlement on or before 10.11.2012 and file a memo of compliance within a period of ten(10) days.

2. Succinctly the facts in brief for adjudication of the lis are summarized hereinbelow:

Company Petition No.91 of 2010 was filed before CO.APPEAL NO. 22 OF 2012 -4- 2025:KER:61716 the Company Law Board claiming various reliefs against the appellant - respondent Company. Both the parties to the lis entered into a settlement agreement dated 12.11.2010 and on the basis of the affidavits filed by the parties, Company Law Board (CLB) disposed of the Company Petition vide order dated 19.11.2010 as settled and the settlement agreement ibid was ordered to be part and parcel of the order, much less liberty was also granted to seek the enforcement. The broad terms and conditions; Clause No.8, relied upon by the appellant -

respondent and Clause No.6 relied by the respondent No.1 - applicant before the CLB, which are relevant for adjudication of the lis are extracted hereinbelow:

".......8. PARTY No.3, the Company in the Company Petition NO.91/2010 along with PARTY Nos.2, 4, 5 and 6 hereby irrecoverably and unconditionally agrees, endorse, approve that PARTY No.3, the Company owns 17.197 cents of land covered in Survey No.61/3D2, 61/3A4, 61/3D2 in Edappally Village, Kanayannur Taluk in Ernakulam District and CO.APPEAL NO. 22 OF 2012 -5- 2025:KER:61716 they hereby irrevocably and unconditionally agree that the Company will sell and transfer by absolute Conveyance the aforesaid land to PARTY No.1 at an agreed consideration of Rs.30,00,000/-. The Company will issue necessary Receipt/acknowledgment for receipt of the consideration.

.....6. In consideration of the covenants contained hereunder Parties absolutely agree to transfer their shareholdings in the manner sset out below and resign their respective directorships as set out hereunder.

a. The PARTY No.1 is holding 2,00,000 fully paid up equity shares of Rs.10/- each in the share capital of PARTY No.1 hereby irrevocably and unconditionally agrees to transfer and hereby transfers 2,00,000/- (Two Lakhs) equally in favour of each of the PARTY Nos.2, 4, 5 and 6 such that each of PARTY Nos.2,4,5 and 6 purchase 50,000 [Fifty Thousand] Fully Paid up Shares in PARTY No.3 for a total agreed consideration of Rs.40,00,000/- [Rupees Forty Lakhs only] at the rate of Rs.10,00,000/- [Rupees Ten Lakhs only] for every 50,000 fully paid up equity shares in CO.APPEAL NO. 22 OF 2012 -6- 2025:KER:61716 the capital of PARTY No.3 hereby transferred to each of the PARTY Nos.2, 4, 5 and 6 and each of the PARTY Nos.2, 4, 5 and 6 hereby agree, undertake and hereby pay to PARTY No.1 a sum of Rs.10,00,000/- [Rupees Ten Lakhs only].

b.The PARTY No.1 is holding 10,000 fully paid up equity shares of Rs.100/- each in the share capital of PARTY Nos.1,2,4,5,6 [Five individuals] hold 10,000 [Ten Thousand] Fully Paid up Equity Shares of Rs.100/- each in Party No.7 PARTY No.1 hereby irrevocably and unconditionally agrees to transfer and hereby transfers 10,000 (Ten Thousand) equally in favour of each of the PARTY Nos.2,4,5 and 6 such that each of PARTY Nos.2,4,5 and 6 purchase 2,500 [Two Thousand Five Hundred] Fully Paid up Shares in PARTY No.7 for a total consideration of Rs.30,00,000/-[Rupees Thirty Lakhs only] at the rate of rs.7,50,000/- [Rupees Seven Lakhs Fifty Thousand only] for every 2,500 equity shares in the capital of PARTY No.7 hereby transferred to each of the PARTY Nos.2,4,5 and 6 and each of the PARTY Nos.2,4,5 and 6 hereby agree, undertake and hereby pay to PARTY No.1 CO.APPEAL NO. 22 OF 2012 -7- 2025:KER:61716 Rs.7,50,000/- [Rupees Seven Lakh Fifty Thousand only]. As a result PARTY Nos.2,4,5 and 6 are the shareholders of PARTY No.7 and PARTY No.1 does not have any shares at all in the capital of PARTY No.7.

The PARTY No.2, 4, 5 and 6 are holding 10,000 fully paid up equity shares of Rs. 100/- each in the share capital of Party No.8. Each of the PARTY Nos.2, 5 and 6 hereby irrevocably and unconditionally agree to transfer and hereby transfer all their shareholding in the capital of PARTY No.8 entirely in favour PARTY No.1 such that each of PARTY Nos.2, 4, 5 and 6 transfer, sell 10,00 [Ten Thousand] Fully Paid up Shares each one holds in the capital of PART No.8 for a total consideration of Rs.40,00,000/- [Rupees Forty Lakhs only] the rate of Rs.10,00,000/- [Rupees Ten Lakhs only] for every 10,000 equity shares in the capital of PARTY No.8 hereby transferred by each of the PART Nos.2, 4, 5, and 6 to and in favour of PARTY No.1 and each of the PART Nos.2, 4, 5 and 6 hereby acknowledge the receipt of the entire consideration from PARTY No.1. As a CO.APPEAL NO. 22 OF 2012 -8- 2025:KER:61716 result PARTY No. 1 becomes the owner of 100% of the capital of PARTY No.8."

3. The applicant - first respondent herein was party No.1, whereas Party No.3, the company in the Company Petition along with Party Nos.2, 4, 5 and 6 had irrevocably and unconditionally agreed to sell 17.197 cents of land owned by the Company bearing Survey Nos.61/3D-2, 61/3A4, 61/3D2 in Edappally Village, Kanayannur Taluk, Ernakulam District and transferred by absolute conveyance to party No.1 i.e., the respondent No.1 herein and applicant before the CLB, at an agreed consideration of Rs.30,00,000/- (Rupees Thirty lakhs only). In lieu thereof the company had undertaken to issue necessary receipt on acknowledgment of receipt of the consideration. Besides the aforementioned Act, there was certain other compliances as indicated in paragraph No.6 of the settlement agreement which had already been undertaken by the parties.

4. On 10.01.2011 appellant Company wrote CO.APPEAL NO. 22 OF 2012 -9- 2025:KER:61716 a letter to respondent No.1 that for compliance of paragraph No.8 of the settlement whereby the company had agreed to sell the land measuring 17.19 cents mentioned above for an agreed consideration of Rs.30,00,000/- (Rupees Thirty lakhs only), but respondent No.1 had not taken any steps to get the land registered in his name. The said letter was duly replied by respondent No.1 vide communication dated 19.01.2011. The contents of both the letters are extracted hereinbelow:

"Letter dated 10.01.2011 Sub:-Settlement agreement dated 12.11.2010 in case of Trinity Arcade Pvt.Ltd.

Please refer to the above as per paragraph 8 of the agreement the land measuring 17.19 cents, survey number 61/3D in Edappally Village is to be transferred to you for an agreed consideration of 30,00,000/- but you have not so far taken any steps to get the land registered in your name. Please do the needful immediately after paying the amount.

CO.APPEAL NO. 22 OF 2012 -10-

2025:KER:61716 As per terms of settlement you had returned the property agreements with Sri.C.K.Hameed and Smt.Rahmathunnissa, which you had unauthorisedly removed from company's office premises. However you have not returned the connected papers thereof please return these papers immediately in compliance with the agreements falling which you will be held liable for any loss that the company may occur on account of the non availability of these papers."

Letter dated 19.01.2011 "It is true that the land measuring 17.19 cents in Edappally Village is to be transferred to me for an agreed consideration of Rs.30 lakhs. But it is incorrect to state that I have not taken any steps to get the above land registered. I was always ready and willing to execute the sale deed, but on the other hand you were not. I am ready to execute the sale agreement and complete the formalities of registration on 28.1.2011. You may contact me and confirm the date and time.

It is not correct to say that as per the terms of settlement, I had returned the property agreements with Sri.C.K.Hameed and Smt.Rahmathunniza, which I had unauthorizedly removed from the company's CO.APPEAL NO. 22 OF 2012 -11- 2025:KER:61716 office premises. First of all Sri.C.K.Hameed and Smt.Rahmathunniza were not parties to the Settlement Agreement, dated 12.11.2010 and there is no clause regarding return of the said document. But however, I returned the said agreement as the entire liabilities and disputes were settled by the said agreement.

Documents which were in may possession were returned to Mr.Roy Joseph, Managing Director, M/s.Trinity Arcade (P)Ltd. Against proper receipts, which are maintained by me. At no point of time, the connected papers, if any relating to that property agreement were in my possession. Therefore, there is no basis for your claim on that count."

5. On perusal of the reply of the respondent, it is evident that the respondent, applicant before the CLB, had shown the willingness to execute the sale deed for an agreed consideration of Rupees thirty lakhs and requested the company to conduct and confirm the date and time. Besides the aforementioned clause, there are certain other points raised, which are not relevant for adjudication as it is not germane to the CO.APPEAL NO. 22 OF 2012 -12- 2025:KER:61716 litigation in land.

6. Vide another communication dated 24.01.2011 appellant company wrote a letter to respondent No.1 expressing the silence about the payment of the sale consideration of Rs.30,00,000/- (Rupees Thirty lakhs only), referred to in the letter dated 10.01.2011 (supra) and requested to appear before the Registrar at 11a.m. on 28.01.2011. Contents of letter dated 24.01.2011 reads as under:

"Please refer to the above, you are silent about payment of sale consideration of Rs.30 lakhs mentioned in our letter dated 10.01.2011. The narration in the draft document that the vendor have already received the consideration in cash cannot be incorporated unless you make the payment there of either by DD or in cash. We will be present in the S.R.O.at 11.00 AM on 28.01.2011 in case there is any change in the programme please let me know in advance.

2. Your statement that you had returned the two agreements is correct. However you have withheld that other connected papers the most important one being the sale deed in CO.APPEAL NO. 22 OF 2012 -13- 2025:KER:61716 favour of Rahmathunissa. The statement given by Sri.Tom Jose while leaving the services of the Company is ample proof of the fact that he had handed over all the connected papers to you. I find that presently he is under your employment. Copy of the same is enclosed herewith for immediate action.

Please handover the above paper also at the time of registration of document on 26.01.2011."

7. The aforementioned letter was followed by another letter dated 28.01.2011 intimating that the representative of the Company had represented before the Sub-Registrar, Edappally at 11 a.m., but nobody from the side of the respondent came forward for execution of the document. On enquiry from the deed writer, Mr.Sankaran Narayanan, it surfaced that respondent had collected the draft of the sale deed about a week back, but stamp papers had not been purchased and after waiting for one hour, returned by 12 noon; with instructions to the said deed CO.APPEAL NO. 22 OF 2012 -14- 2025:KER:61716 writer to inform the representative company, if anybody appeared from respondent side.

8. The contents of the aforementioned letter dated 28.01.2011 reads as under:

"...We had presented ourselves in the office of Sub Registrar, Edappally at 11.00 a.m. today. But nobody from your dside came prepared to execute the document. On enquiry with Sri.Sankaran Nair, document writer it was told that you had collected the draft of the sale deed about a week back; but no steps had been taken from your side to purchase the stamp paper. There after we had returned by about 12.00 noon with instructions to Sankaran Nair to inform us if any body appears from your side.

In future if you intend to register the property as already suggested by you, you may bring the document to be executed to our office along with Cash/DD and we will be executing the same and present it through our presentant."

9. The aforementioned letter was duly replied by the first respondent wherein it was stated that there was no confirmation of the date for appearance CO.APPEAL NO. 22 OF 2012 -15- 2025:KER:61716 before the Registrar Office and the enquiry from the deed writer and collecting of the draft sale deed from him was seriously rebutted and refuted, and for the first time, raised the dispute with regard to the consideration either by cash or Demand Draft to be covered under the terms of the settlement agreement executed on 12.11.2010 and requested the company to fix a convenient date for registration at the Sub Registrar's Office. Contents of letter dated 03.02.2011 written by the first respondent reads as under:

"You may recall that in our letter dated 24.01.2011 addressed to you, I had asked you to confirm the date of appearance as 28th January, 2011 at the Sub Registrar Office. It is strange without confirming the said date, you now state that you were present at the Sub Registrar Office, Edappally on 28.01.2011. I never asked to you to be present there on that day. Your story that you had contacted Sri. Sankaran Nair, Document Writer and he told you that I had collected the draft of the sale deed about a week back is unbelievable. You CO.APPEAL NO. 22 OF 2012 -16- 2025:KER:61716 may take note that I have not appointed Sri.Sankaran Nair as my agent for the transaction and there was no such incident of collecting in the draft of the sale deed. Instead of contacting, Sri. Sankarar Nair, what you should have done was to contact me in straight away on receipt of my letter to confirm the date of presentation before the Registrar's Office on 28.01.2011 or any other day. I repeat that I have never asked to you to be present at the Sub Registrar's Office on 28.01.2011.

You may take note that regarding the consideration/cash/DD in respect of the above said transaction. It is all covered under the terms of the settlement agreement executed between us on 12.11.2010, which forms part of the Company Law Board's Order dated 18.11.2010 in C.P. No. 91/2010. You are aware that it is also your obligation to execute the deed and complete the sale transaction. Therefore, on receipt of this letter you may contact me and fix a convenient date for registration at the Sub Registrar's Office, Edappally giving five days' notice."

10. The aforementioned letter was replied by the company vide communication dated 09.02.2011 CO.APPEAL NO. 22 OF 2012 -17- 2025:KER:61716 informing to discontinue writing letters in the personal name of the Chairman of the Company and clarified that the intimation of appearance before the Registrar was indicated in the letter dated 24.01.2011 and as far as the consideration of Rs.30,00,000/- (Rupees Thirty lakh only), it was mentioned that it has to be paid on transfer of the land and denied that the consideration had already been passed. The communication was followed by legal notices entailing into filing of the Company Application No.125 of 2011 in C.P.No.91 of 2010 seeking enforcement of the sale deed.

11. Learned Company Law Board vide impugned order dated 11.10.2012 allowed the aforementioned application No.125 of 2011 by taking aid of Clause 6 of the settlement agreement referring to certain financial transaction for which the parties had agreed mutually. It is in that context present appeal has been filed.

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12. At the time of admission of the appeal, this Court vide order dated 27.05.2013, on the basis of the contentions made by the appellant and recording the submissions regarding the execution of the sale deed in respect of the land mentioned in Clause 8 of the settlement as well as the undertaking of the counsel for the respondent that in case this Court finds that the first respondent is liable to pay Rs.30,00,000/- will pay the same, ordered for execution of the sale deed. It is a matter of record that the sale deed has been executed under the order of the Court, but consideration of Rupees thirty lakhs is the core question to be adjudicated by this Court in the pending appeal.

13. Mr.Paulose C.Abraham, learned counsel appearing on behalf of the appellant submitted that order of the CLB is not sustainable in law, much less on the facts and circumstances of the case as, Clause 8 of the settlement is clear and unambiguous and do not CO.APPEAL NO. 22 OF 2012 -19- 2025:KER:61716 require any interpretation or was related to any other clauses of the settlement as erroneously found by the Board for, both the parties to the lis had agreed to sell and purchase the land mentioned therein at the agreed consideration of Rs.30,00,000/-, if at all the payment of Rs.30,00,000/- mentioned in Clause 8 was to be adjusted as per the findings of the Tribunal in terms of the transaction of other paid up capital shares contained in Clause 6, Clause 8 would not have been referred to and the property would have been included in Clause 6.

14. Clause 6 of the settlement dealt with the exchange or surrendering of the share capital and payment of its price by transferring the share capital of other company. It was a barter system and had no connection remotely with independent transaction or sale of the land referred to in Clause 8 of the settlement.

15. In support of the contentions relied on the following judgments:

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(i) Commissioner of Income - tax, Andhra Pradesh v. M/s. Motors and General Stores (P) Ltd., (AIR 1968 SC 200) to contend that sale is provided under Section 54 of the Transfer of Property Act and similarly Section 118 of the Transfer of Property Act is not limited to an immovable property, but it also extends to barter of goods. Thus, both under the Sale of Goods Act as well as the Transfer of Property Act, sale is a transfer of property of the goods or of the ownership of immovable property for a money consideration, whereas in exchange, there is a reciprocal transfer of interest in immovable property, and the corresponding transfer of interest in movable property is denoted as barter. For all intends and purposes, the difference between the sale and exchange is that in the former, the price is paid whereas in the latter it is paid in goods by way of barter.

(ii) Sir Chunilal V. Mehta and sons Ltd. v.

Century Spinning and Manufacturing Co. Ltd. (AIR CO.APPEAL NO. 22 OF 2012 -21- 2025:KER:61716 1962 SC 1314) to overcome the objection of maintainability of the appeal, which is prescribed to be only on a question of law, the ratio decidendi culled out is that the interpretation of the documents itself is a question of law. Interpretation and construction of a document of title or of a document, which is the foundation of the rights of parties is a question of law.

(iii) Basalingava Revanshiddappa v. Chinnava Karibasappa and another (AIR 1932 Bombay 247) on similar lines.

16. Per contra learned Senior Counsel Mr.Joseph Kodiyanthra assisted by Mr.V.Abraham Markos opposed the aforementioned contentions by submitting that the appeal is not maintainable as no question of law arises much less the order of the Company Law Board is based upon the plain and simple reading of the terms and conditions of the settlement, which do not require any interpretation or construction CO.APPEAL NO. 22 OF 2012 -22- 2025:KER:61716 giving rise to a question of law for the purpose of entertainment and decision on the appeal. In other words, the appeal is not maintainable and liable to be dismissed in the absence of any question of law involved, as, on perusal of the entire settlement agreement, both the parties clearly acknowledged the receipt of the consideration from one party to other and agreed for conveying the aforementioned land as irrevocable and unconditional.

17. In support of the contention relied upon the judgment of Supreme Court in V.S.Krishnan v. Westfort Hi-Tech Hospital Ltd. (2008 (3) SCC 363), paragraph No.16 of the same reads as under:

"It is clear that Section 10F permits an appeal to the High Court from an order of the Company Law Board only on a question of law i.e., the Company Law Board is the final authority on facts unless such findings are perverse, based on no evidence or are otherwise arbitrary. Therefore, the jurisdiction of the appellate Court under Section 10F is CO.APPEAL NO. 22 OF 2012 -23- 2025:KER:61716 restricted to the question as to whether on the facts as noticed by the Company Law Board and has placed before it, an inference could reasonably be arrived at that such conduct was against probity and good conduct or was mala fide or for a collateral purpose or was burdensome, harsh or wrongful. The only other basis on which the appellate Court would interfere under Section 10F was if such conclusion was (a) against law or (b) arose from consideration of irrelevant material or (c) omission to construe relevant materials."

18. We have heard learned counsel for the parties and appraised the paper book.

19. The reasoning assigned in paragraph No.9 by the Company Law Board in allowing the application is worth extraction. The same reads as under:

"...9. On perusal of the entire Settlement Agreement, it clearly acknowledges receipt of consideration from one party to other party. The parties also had agreed for conveying the aforementioned land. This clause has been mutually agreed upon as irrevocable and CO.APPEAL NO. 22 OF 2012 -24- 2025:KER:61716 unconditional. Having irrevocably and unconditionally agreed, inter alia, that the company will sell and transfer by absolute conveyance the aforesaid land to the applicant at an agreed consideration of Rs.30,00,000/-, the company and the respondents herein cannot wriggle out of irrecoverable and unconditional obligations. The perusal of Clause 6 of the Settlement Agreement refers to certain financial transactions for which the parties agreed mutually, though the parties have not in fact exchanged the actual consideration specified by way of any specific financial transactions i.e., by way of cheque demand draft, RTGS or any internet banking mode. It is not out of place to mention that the Settlement Agreement also mentions payment of Rs.70,00,000/- to the applicant and no proof, whatsoever, had been placed on record by the respondents for such payment. However, the act of the respondents, in trying to rely upon the terms of Settlement Agreement (SA) and show that as if the applicant had given his acknowledgment or such receipt as he had received the consideration, is completely incorrect. That being the case, the R1 company cannot resort to take a plea that in the absence of physical payment of the agreed sum the CO.APPEAL NO. 22 OF 2012 -25- 2025:KER:61716 property cannot be transferred in favour of the applicant."

20. As far as the objections regarding the maintainability of the appeal is concerned, we overrule the objections raised by the Senior Counsel on the premise that it is settled law that the interpretation and construction of the document is the substantial question of law to be decided and in support rely upon the findings of paragraph No.2 of the judgment in Sir Chunilal V. Mehta and sons Ltd., Century Spinning and Manufacturing Co. Ltd. (AIR 1962 Supreme Court 1314).

"2. It is not disputed before us that the question raised by the appellant in the appeal is one of law because what the appellant is challenging is the interpretation placed upon certain clauses of the managing agency agreement which are the foundation of the claim in suit. Indeed it is well settled that the construction of a document of title or of a document which is the foundation of the rights of parties necessarily raises a question of law.

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21. From the judgment of the Company Law Board, it is discerned that there has not been any discussion to the contents of the letters, particularly dated 10th of January 2011, of the appellant and reply of the first respondent dated 19.01.2011 and subsequent correspondences. The contents of the letter dated 10.01.2011 had been unambiguous and candid regarding the act of performance by both the parties for executing the sale deed on receipt of consideration of Rs.30,00,000/- and the said averments have not been rebutted by the respondent in the reply dated 09.01.2011. The grievance of adjustment of the price was raised for the first time only in the subsequent letter dated 28.01.2011. On close perusal of the terms and conditions of clause No.6 of the settlement, heavily relied upon by the company Law Board in favour of the respondent by allowing the application, pertained to exchanging of the value of the paid up share capital CO.APPEAL NO. 22 OF 2012 -27- 2025:KER:61716 owned by the party No.1 and its value was transferred in the shape of share holdings. If at all the value of the share holdings agreed to be given in lieu of the shares of the company taken in the name of the party has to be transferred, the said fact would have been mentioned and clarified whereas, clause 8 is an independent clause where the appellant company had agreed to execute the sale deed in respect of land measuring 17.193 cents of land against the sale consideration of Rs.30,00,000/-. Such type of transactions have been duly recognized in view of the ratio decidendi culled out in the judgment in Commissioner of Income - tax, Andhra Pradesh (supra) in the following paragraphs:

"Section 10(2)(vii) of the Income-tax Act', 1922 provides as follows :

"10. Business. (2) Such profits or gains shall be computed after making the following allowances, namely -

(vii) in respect of any such building, machinery or plant which has been sold or CO.APPEAL NO. 22 OF 2012 -28- 2025:KER:61716 discarded or demolished or destroyed, the amount by which the written down value thereof exceeds the amount for which the building, machinery or plant, as the case may be, is actually sold or its scrap value :

Provided that such amount is actually written off in the books of the assessee :

879.

Provided further that where the amount for which any such building, machinery or plant is sold, whether during the continuance of the business or after the cessation thereof, exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written down value shall be deemed to be profits of the previous year in which the sale took place:

It is only if there is a sale of the cinema house and the other assets that the taxable profits and gains are to be computed in the present case under s. 10(2) (vii) as the amount by which the written down value exceeds the amount for which the assets are actually sold. The words "sale" or "sold" have not been defined in the Income-tax Act, 1922. Consequently, these words have to be CO.APPEAL NO. 22 OF 2012 -29- 2025:KER:61716 construed by reference to other enactments. Section 54 of the Transfer of Property Act defines 'sale' as a transfer of ownership. in exchange for a price paid or promised or part paid and part promised. Section 54 of the Transfer of Property Act reads as. follows :

"Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised."

There is no definition of the word 'price' in this Act. But it is, well-settled that the word 'price' is used in the same sense in this section as in s. 4 of the Sale of Goods Act, 1930 (Act III of 1930) (See the decision of a Full Bench of the Madras High Court in Madam Pillai v. Badrakali Ammal) (1). Section 4 of the Sale of Goods Act reads as follows :

(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another. (2)A contract of sale may be absolute or conditional.

(3)Where under a contract of sale the property in the goods is transferred from the CO.APPEAL NO. 22 OF 2012 -30- 2025:KER:61716 seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.

(4)An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred."

(1) I.L.R. 45. Madras, 612.

Section 2(10) of the Sale of Goods Act defines "price" as meaning the money consideration for a sale of goods. The presence of money consideration is therefore an essential element in a transaction of sale. If the consideration is not money but some other valuable consideration it may be an exchange or barter but not -a sale. Section 118 of the Transfer of Property Act defines .exchange' as follows:

"When two persons mutually transfer the owner- ship of one thing for the ownership of another, neither thing, or both things being money only, the transaction is called an 'exchange'.

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2025:KER:61716 A transfer of property in completion of an exchange can be made only in manner provided for the transfer of such property by sale."

Section 119 provides :

"If any party to an exchange or any person claiming through or under such party is by reason of any defect in the title of the other party deprived of the thing or any part of the thing received by him in exchange, then, unless a contrary intention appears from the terms of the exchange, such other party is liable to him or any person claiming through or under him for loss caused thereby, or at the option of the person so deprived, for the return of the thing transferred, if still in the possession of such other party or his legal representative or a transferee, from him without consideration."

The definition of exchange in s. 118 of the Transfer of Property Act is not limited to immovable property but it extends also to barter of goods. It is clear therefore that both under the Sale of ,Goods Act and the Transfer of Property Act, sale is a transfer of property in the goods or of the ownership in immovable property for a money consideration. But in CO.APPEAL NO. 22 OF 2012 -32- 2025:KER:61716 exchange there is a reciprocal transfer of interest in the immovable property, the corresponding transfer of interest in the movable property being denoted by the word 'barter'. "The difference between a sale and an exchange is this, that in the former the price is paid in money, whilst in the latter it is paid in goods by way of barter." (Chitty on Contracts 22nd Edn., Vol. II page 582)."

22. Similarly in Basalingava Revanshiddappa (supra) it has been laid as under:

"There is a distinction between a sale where the consideration is intended to be paid and is not paid, and where the consideration is not intended by both parties to be paid at all. In the former case the title would pass to the purchaser and in the latter case though the vendor was tricked into going through the form of execution and registration of the document, the sale deed would be void as a colourable transaction."

23. In the instant case, the respondent has subsequently volte-faced from the commitment of CO.APPEAL NO. 22 OF 2012 -33- 2025:KER:61716 payment of Rs.30,00,000/-, for the first time by writing a letter in the month of February, 2011, whereas in reply letter dated 09.02.2011 did not deny the same.

24. Be that as it may. Admission and denial would not make any difference as the terms and conditions of the settlement deed as extracted above, in view of our findings, are very clear and unambiguous and do not require any different interpretation than the one as clause No.6 was disjunctive and not conjunction with Clause 8, which is in respect of the transaction of an immovable property. We, thus, set aside the order under challenge and allow the appeal, dismissing the application bearing No.125 of 2011 filed by the first respondent and hold that the first respondent is required to pay a sum of Rs.30,00,000/- as indicated in the order of this Court as extracted hereinbelow:

"Admit. Adv.Sri.Tom Thomas takes notice for respondents. Learned counsel for the appellant would submit that CO.APPEAL NO. 22 OF 2012 -34- 2025:KER:61716 appellant will execute sale deed in relation to 17.197 cents of land covered in Survey No.61/3D2, 61/3A4, 61/3D2 in Edappally Village, Kanayannur Taluk in Ernakulam District subject to the first respondent undertaking that if this Court finds that the first respondent is liable to pay sum of Rs.30 lakhs he will pay it. Ledarned senior counsel for the 1st respondent would submit that, the first respondent will indeed pay Rs.30 lakhs if this Court finds that the appeal is to be allowed and Rs.30 lakhs is in fact to be paid. We record the said submission. We also record the submission of the learned senior counsel for the 1st respondent that apart from that the first respondent will pay the stamp duty payable as per law."

25. The sale deed has already been executed. Respondent is given one month time from the date of receipt of the judgment to make the payment of Rs.30,00,000/-, failing which the appellant is at liberty to CO.APPEAL NO. 22 OF 2012 -35- 2025:KER:61716 take action by moving an appropriate application in accordance with law.

Appeal stands allowed.

Sd/-

AMIT RAWAL JUDGE Sd/-

P. V. BALAKRISHNAN JUDGE vv CO.APPEAL NO. 22 OF 2012 -36- 2025:KER:61716 APPENDIX OF CO.APPEAL 22/2012 PETITIONER ANNEXURES ANNEXURE -1 LIST OF RELEVANT DATES AND EVENTS ANNEXURE -2 COPY OF CA 125/2011 IN CP 91/2010 FILED BEFORE THE COMPANY LAW BOARD, CHENNAI BENCH ANNEXURE -3 COPY OF THE COUNTER AFFIDAVIT FILED IN CA 125/2011 IN CP 91/2010 ANNEXURE -4 COPY OF THE REJOINDER FILED IN CA 125/2011 IN CP 91/2010 ANNEXURE -5 COPY OF SUR-REJOINDER FILED IN CA 125/2011 IN CP 91/2010 ANNEXURE -6 COPY OF THE ORDER DATED 11.10.2012 OF THE COMPANY LAW BOARD, CHENNAI BENCH DISPOSING OF CA 125/2011 IN CP 91/2010 ANNEXURE -7 COPY OF THE ORDER DATED 27TH MAY 2013 OF THIS HONOURABLE COURT IN THE PRESENT COMPANY APPEAL RESPONDENT ANNEXURES ANNEXURE R1(A) TRUE COPY OF SALE DEED DATED 24.07.2013 BETWEEN THE APPELLANT AND THE 1ST RESPONDENT ANNEXURE R1(B) TRUE COPY OF AUDITED FINANCIAL ACCOUNTS OF THE APPELLANT FOR 2013-14 COPY OF PETITION COPY OF C.P. NO.91/2010 FILED BEFORE THE COMPANY LAW BOARD CHENNAI

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