A.C. Puttaswamy and Others vs Srinivasaiah and Others

Ravi V. Malimath, J.—The case of the plaintiff is that land bearing survey No. 13/2, measuring 10 guntas, originally belonged to the plaintiff. The defendant wanted to purchase and the plaintiff wanted to sell, about 3 guntas of the said property.

In view of the prohibition under the Karnataka Prevention of Fragmentation And Consolidation of Holdings, Act, 1966 (hereinafter referred to as ''Fragmentation Act''), it was not possible to sell 3 guntas of land without attracting the provisions of the said Act. Therefore, the parties agreed and the plaintiff executed a sale deed to the full extent of 10 guntas in favour of the defendant for a sale consideration of Rs. 10,000/-. On the same day, an agreement to sell 3 guntas of land was executed by the defendant in favour of the plaintiff for a sale consideration of Rs. 3,000/- on 28.11.1990.

The defendant also executed a General Power of Attorney, authorizing the plaintiff to enjoy the suit schedule property as the owner. The entire sale consideration of Rs. 3,000/- was received by the defendant. After the Act was repealed, the plaintiff demanded the defendant to execute the sale deed. The defendant went on postponing it. Thereafter, a legal notice was issued to the defendant. He replied to the same denying the same. Hence, the instant suit was filed seeking for a decree of specific performance, based on the agreement to sell dated 28.11.1990.

On service of suit summons, the defendant entered appearance. His case was that he purchased the said land for a sale consideration of Rs. 10,000/- and paid the full consideration as detailed in the sale deed. That on the date of purchase, he was put in possession of the land and he was enjoying the said guntas as owner in possession thereof. The sale was mediated and decided by one Mayigegowda and Shivanna, who are the attestors. That the defendant is illiterate and he cannot hear. He acted as per the dictum of the plaintiff and signed on the documents. That there was no intention of executing the agreement to sell or the Power of Attorney in favour of the plaintiff. That the plaintiff has created these two false documents. That the defendant has paid the full consideration of Rs. 9,000/-. Now the plaintiff wants to cheat the defendant. Hence, he pleads that the document is a fraud.

Based on the pleadings, the trial court framed the following issues and additional issues:

"1. Whether the plaintiff prove that the defendant executed agreement of sale dated 28.11.1990 and received consideration of Rs. 3,000/-?

Whether the defendant proves that he has purchased 10 guntas of land in sy. No. 13/2 for a total consideration of Rs. 9,000/-?

What decree or order?

Additional Issues:

Whether the plaintiff proves that he has been ready and willing to perform his part of the contract?

Whether the defendant proves that the alleged sale of agreement and power of attorney are concocted documents by the plaintiff as contended by him in para-7 of his written statement?"

The plaintiff was examined as PW-1 and examined another witness and marked 4 documents. The defendant was examined as DW-1 along with another witness and marked 9 documents. Issue No. 1 and additional issue No. 1 were held in the affirmative. Issue No. 2 and additional issue No. 2 were held in the negative. The suit of the plaintiff was decreed. The defendant was directed to execute the registered sale deed. Aggrieved by the same, the defendant filed an appeal. The appellate court allowed the appeal and set-aside the judgment and decree of the trial court and dismissed the suit of the plaintiff. Hence, the present second appeal by the plaintiff.

By the order dated 07.12.2009, the appeal was admitted to consider the following substantial question of law:

"Whether on the pleadings and materials brought on record by the plaintiffs, the First Appellate Court was right in holding that the plaintiffs did not prove the execution of Exhibits - P1 and P2 and the suit was liable to be dismissed, more so, when such finding was arrived at in reversal of the findings of the Trial Court?"

Smt. M.P. Geetha Devi, learned counsel for the appellant-plaintiff contends that the impugned judgment and decree of the first appellate court is erroneous. That the findings recorded by the first appellate court are imaginary. That the plea of the defendant on fraud has not been established by him either through appropriate averments or through adequate evidence. That the trial court has wrongly held in favour of the defendant. It has created a new case, than what was pleaded by the defendant. That the defendant having failed to establish fraud, the first appellate court committed an error in dismissing the suit.

On the other hand, Shri. B.K. Chandrashekar, learned counsel for the respondent-defendant, defends the impugned order. He contends that the first appellate court has rightly reversed the finding of the trial court. That the dismissal of the suit was imminent. That the signatures were taken on blank papers. That the first appellate court had no hesitation to hold that the documents were created under doubtful circumstances. Hence, he pleads that the substantial question of law be answered in favour of the defendant by confirming the order of the first appellate court.

Heard learned counsels.

The material on record would indicate that 10 guntas was sold in favour of the defendant in terms of Exhibit-D1 and on the same day, an agreement to sell in terms of Exhibit-P1 was executed. These documents came into being in view of the provisions of Fragmentation Act. In terms whereof, no sale could be validated if the sale results in fragmentation. Three guntas of land constitutes a fragment. Therefore, the sale could have been hit by the provisions of the Act. Both the parties having understood the Act, have entered into these two documents. The first document is the sale deed executed in favour of the defendant for 10 guntas and the subsequent agreement of sale in favour of the plaintiff to an extent of 3 guntas. The sale deed for 3 guntas could not have been executed on the same day, since the same would attract the provisions of Fragmentation Act. Therefore, an agreement to sell was entered into to be executed on the repeal of the Fragmentation Act. Under these circumstances, the trial court in my considered view was justified in decreeing the suit of the plaintiff.

The plea of the defendant with regard to fraud was negated by the trial court. That the defendant has not placed adequate evidence to establish the case of fraud. That nothing worth-while has been elicited in the evidence of the plaintiff to disbelieve his case. Therefore, no circumstances were brought about by the defendant to accept his case of fraud.

On the other hand, the first appellate court allowed the appeal and dismissed the suit on the finding recorded quite contrary to the one of the trial court. One of the reasons assigned by the first appellate court was that the signature was obtained on blank papers. Even though there was a veiled reference in the written statement that the plaintiff might have created and concocted some spurious documents in connivance with the attesting witnesses, the appellate court holds that the same should be considered as that the signatures were taken on blank papers. In fact, it is not the case of the defendant that the signatures were obtained on blank papers. In terms of the written statement as well as the evidence, the documents are admitted and the signatures are also admitted. The defense is one of fraud. It is the specific case that fraud has been committed by the plaintiff. Therefore, to give a totally new reason that the documents were executed on blank papers runs contrary to the plea of the defendant himself.

The further reason is that even assuming both the documents are to be accepted, the manner in which they were executed is doubtful. That the agreement of sale should have indicated the reference of the sale deed executed by the plaintiff in favour of the defendant. This would have clarified the position. Since the agreement to sell does not indicate the previous sale that has taken place, the case of the defendant requires to be accepted, that the document is fraudulent.

I'' am of the considered view that the reasoning assigned by the first appellate court is erroneous. Only because there is no mention of the previous sale deed, cannot constitute a ground that would lead to a presumption of one of fraud. There was no need to indicate as to how and in what manner the previous sale deed was executed. The suit is based on an agreement to sell. The contents whereof has to be proved by the plaintiff and whether such an agreement was lawfully executed or not. Reference to the earlier sale deed therefore becomes irrelevant.

The further reasoning of the first appellate court is that there is no reason assigned in the agreement to sell, as to why the property is sought to be sold. Therefore, this leads to a presumption of fraud. Here too, I'' am unable to accept the reasons of the first appellate court. No sale deed or agreement needs to be specific about the reasons for sale. It is not necessary that every document has to specify as to why it is being executed. Since, there is no mention of a reason to sell, that by itself cannot lead to a conclusion that a fraud has been committed. There is no nexus between the non-mentioning of reason in an agreement to sell, to the plea of the fraud as raised by the defendant. Hence, none of the reasons adopted by the first appellate court in reversing the judgment and decree of the trial court are sustainable.

Even otherwise, the trial court while recording its finding only goes to an extent of holding that, the case of the defendant may be acceptable. In a case where a fraud has been alleged, the court would have to definitely record a finding whether there is a fraud or not. It cannot proceed on an assumption or a presumption. There is no definite finding by the first appellate court that fraud has been played on the defendant. It is only a doubt that the first appellate court has stated in its judgment. Therefore, a doubt cannot be a conclusion, that a fraud has been committed.

Under these circumstances, the substantial question of law is answered by holding that the judgment and decree of the first appellate court is perverse in holding that the plaintiff has failed to prove the execution of Exhibits-P1 and P2. That the first appellate court committed an error in reversing the findings of the trial court. That the findings recorded by the first appellate court are unsustainable.

On answering the substantial question of law, the appeal is allowed. The judgment and decree of the first appellate court in R.A. No. 56/2005, dated 20.08.2007, passed by the Civil Judge (Senior Division), Ramanagaram is set-aside. The judgment and decree in O.S. No. 269/1993, dated 31.03.2005 passed by the Civil Judge (Junior Division) And JMFC, Chennapatna stands restored.

The respondent - defendant to execute the sale deed within a period of three months from the date of receipt of copy of this order, failing which, the appellants are at liberty to initiate proceedings to get it registered through Court.

No Costs.