Angamuthu vs R. Radhakrishnan and M. Gajalakshmi

R. Mala, J.—The Second Appeal is filed by the second defendant against the judgment and decree dated 25.11.2002 in A.S. No. 66 of

2002 on the file of the Principal District Court, Villupuram, reversing the judgment and decree dated 21.12.2001 in O.S. No. 206 of 1999 on the

file of the Second Additional Sub-Court, Villupuram.

The averments in the plaint are as follows:

The suit property belongs to the defendants. The plaintiff entered a sale agreement with the defendants on 14.8.1997. The sale price has been fixed

at Rs. 2,50,000/-. Rs. 2 lakhs has been paid as advance on the date of execution of sale agreement. Balance Rs. 50,000/- is to be paid within two

years from the date of agreement of sale and to obtain the sale deed from the defendants. The plaintiff is always ready and willing to perform his

part of the contract. But the defendants are postponing the same, even though time is not the essence of the contract. The plaintiff came to know

that the defendants are making attempt to alienate the suit property and hence, he issued notice through his counsel on 3.8.1999. He received reply

notice with a false and untenable allegations. Hence, he is constrained to file the suit for specific performance, or in the alternative, to pay Rs.

2,49,399.96/- as damages, i.e. advance amount and interest @ 12% from the date of sale agreement till the date of filing the suit. He prayed for a

decree.

The gist and essence of the written statement filed by the first defendant are as follows:

There is no privity of contract between the plaintiff and the first defendant. The genuineness of the document is disputed. The first defendant never

received any advance as alleged in the plaint. The first defendant has no intention to sell the property. The value of the property is worth several

times. The suit agreement came into existence on the following facts:

The second defendant''s husband was running a lorry. The plaintiff seems to have advanced some amount to the husband of the second defendant

for maintenance of the lorry. Since the second defendant''s husband did not repay the instalments regularly, the plaintiff arranged to sell the said

lorry and has released his dues by selling the lorry for Rs. 4,50,000/- for himself. Only towards the security for the abovesaid dues, the plaintiff

took the suit agreement from the defendants. After the discharge of the plaintiff''s dues as aforesaid, the defendants sought for return of the

document. The plaintiff under some pretext or the other, evaded to return the same. In order to make a capital gain out of the situation, the plaintiff

has filed the suit for specific performance. The suit property was never intended to be sold to the plaintiff. The suit document was taken by

coercion without any consideration as recited therein and it is unenforceable in law. The plaintiff has not come to Court with clean hands. There is

no cause of action for the suit. Hence, he prayed for dismissal of the suit.

The trial Court, after considering the averments both in the plaint and in the written statement, has framed three issues and considering the oral

evidence of P.W.1, D.W.1 and Exs.A-1 to A-5, dismissed the suit, stating that Ex.A-1 has come into existence as alleged by the defendants.

Against that, the plaintiff preferred appeal and the first appellate Court, after hearing the arguments of both the counsel, had framed four points for

determination and came to the conclusion that Ex.A-1 is the sale agreement and since the first defendant is not performing his part of the contract

and the appellant-plaintiff is always ready to perform his part of the contract, the first appellate Court has granted the decree for specific

performance, allowed the appeal and set aside the judgment and decree passed by the trial Court. Against that, the present Second Appeal has

been preferred by the first defendant.

At the time of admission of the Second Appeal, the following substantial questions of law were framed for consideration:

(i) Whether on the facts and in the circumstances of the case, the lower appellate Court was right in holding that the appellant has not established

the loan transaction of his son-in-law when it was admitted by the first respondent in his evidence to shift the burden of proof of contents of

Ex.A1?

(ii) Whether on the facts and in the circumstances of the case, the lower appellate Court was right in holding that the first respondent/plaintiff is

entitled for specific performance of contract?

(iii) Whether the lower appellate Court can grant the relief of specific performance when the first respondent/plaintiff had not established that he

had been ready and willing to perform his part of the contract?

(iv) Whether the lower appellate Court can grant the relief of specific performance without considering various circumstances as stated u/s 20(2) of

the Specific Relief Act?

The first respondent as plaintiff filed the suit for specific performance, stating that Ex.A-1 has been executed by the appellant herein. Since he

refused to execute the sale deed, he has come forward with the suit for specific performance.

The appellant herein, as first defendant, resisted the suit stating that Ex.A-1 is executed only as security for the loan availed of by his son-in-law.

The trial Court, after framing necessary issues and considering the oral and documentary evidence, dismissed the suit, stating that Ex.A-1 was

executed as security for the loan obtained by the son-in-law. Against that, the first respondent-plaintiff preferred appeal and the first appellate

Court has set aside the judgment and decree of the trial Court and came to the conclusion that Ex.A-1 is the sale agreement and the first

respondent-plaintiff was always ready and willing to perform his part of the contract. Since the appellant-first defendant has evaded to execute the

sale deed, the first appellate Court decreed the suit. Against that, the Second Appeal has been preferred by the appellant- first defendant.

Learned Counsel for the appellant-first defendant would submit that Ex.A-1 was executed only as security for the loan obtained by his son-in-

law, who is none other than the husband of the second defendant. He availed of the loan for maintaining the lorry in the financial firm and that the

first respondent-plaintiff himself is one of the partners of the financial firm and since subsequently, the vehicle has been seized, the amount has been

recovered. He further submits that the value of the suit property is several times more than what was stated in Ex.A-1. So, the intention of the

parties is necessary while considering the suit for specific performance. He relied upon the decision of a Division Bench of this Court reported in

2007 (1) LW 309 (Kamireddi Sattiaraju and Anr. v. Kandamuri Boolaeswari) and the decision of a Division Bench of this Court reported in P.

Retnaswamy Vs. A. Raja and Venkatasubramaniam, . He further submits that the appellant is having the suit property only and hence, there is no

need for the appellant-first defendant to enter into a sale agreement. He prayed for allowing this Second Appeal and to set aside the judgment and

decree passed by the first appellate Court and to restore the judgment and decree of the trial Court.

Per contra, learned Senior Counsel for the first respondent-plaintiff would contend that the suit property is absolutely belonging to the

appellant-first defendant. The second defendant is the daughter of the appellant-first defendant. If Ex.A-1 is only given as security for the loan

obtained by his son-in-law, he has not filed any single document to show that he obtained the loan and repaid the same. Moreover, as soon as the

loan amount has been paid, he has not issued any notice for return of the sale agreement. On the date of sale agreement, the appellant-first

defendant has received Rs. 2 lakhs. The decisions relied upon by the learned Counsel for the appellant are not relevant. Learned Senior Counsel

for the first respondent-plaintiff relied upon the decision of a Division Bench of this Court reported in 2009 (7) M.L.J. 640 (S. Andal v. K.

Chinnasamy) and stated that the first appellate Court has considered the evidence of both sides and documents and came to the correct

conclusion. So, there is no material irregularity or perversity in the judgment and decree passed by the first appellate Court. Hence, she prayed for

dismissal of the Second Appeal.

Substantial question of law (i):

It is admitted fact that the suit property belong to the appellant-first defendant. The second appellant is his daughter. The appellant-first

defendant is a Teacher by profession. The first and foremost question to be decided is whether Ex.A-1 is sale agreement or it was created as

security for the loan amount obtained by his son-in-law who is none other than the husband of the second respondent-second defendant.

It is relevant to consider the defence raised by the appellant-first defendant. In his defence, in paragraph 4 of the written statement, he has

stated that, ""...The suit document was taken by coercion, without any consideration as recited therein and it is unenforceable in law...."" Since he

has pleaded coercion, as per Order 6 Rule 4 C.P.C., he must furnish the particulars to be given as to who, when and how, coerced him for

obtaining Ex.A-1. It is pertinent to note that except one sentence in the written statement, i.e. ""... document was taken by coercion, without any

consideration as recited therein and it is unenforceable in law .."", nothing has been averred or pleaded in the written statement.

At this juncture, it is appropriate to consider the reply notice given by the appellant in Ex.A-5. In paragraph 4 of the reply notice, he has

pleaded that since Murugan has not repaid the amount, and the vehicle stands in the name of the second defendant and so, at that time, the

appellant-first defendant threatened and obtained the document. So, the sale agreement is not true. It is stated as follows in Ex.A-5:

VERNACULAR (TAMIL) PORTION DELETED

While considering the deposition, in the chief examination, D.W.1 has not stated that the document has been obtained either by coercion or by

threat. In that, he has stated that his son-in-law has obtained loan from the plaintiff and he has not paid the same and hence, he stood as surety.

One more peculiar circumstance is that the attestor of Ex.A-1 is his son-in-law Murugan. He was not examined before the Court.

It is also pertinent to note that Ex.A-1 is a registered document. The appellant-first defendant is a Teacher by profession. In his cross-

examination, he has stated that the document has been registered, that his son-in-law also was one of the attestors. One Sudarson is also one of

the attestors. The appellant-first defendant fairly conceded in his written statement that his son-in-law has obtained loan from the plaintiff and in his

evidence also, he conceded that his son-in-law obtained loan from the plaintiff, but he does not know as to when he obtained loan. Considering the

fact that the appellant is a teacher by profession, and gone to the Registration Department and registered the document, now, he turned back and

pleaded that the document has come into existence only as security for the loan obtained by his son-in-law. Now, the appellant-first defendant as

D.W.1 has categorically admitted the execution of Ex.A-1. But he has mentioned as to in what circumstances, it came into existence. Hence, the

onus is heavily upon him to prove that under what circumstances Ex.A-1 has come into existence. But to prove the same, he has not examined his

son-in-law, who has obtained loan from the financial company in which the first respondent-plaintiff is one of the partners. He has not filed any

scrap of paper before the Court to show that his son-in-law has obtained loan and repaid the same by way of seizing the vehicle.

In the above circumstances, there is no evidence to show as to when the loan has been discharged. Even if the loan has been discharged, it is

not known as to what prevented him to issue notice to the first respondent-plaintiff to seek for return and cancellation of the document Ex.A-1. But

the appellant-first defendant has not produced any document to substantiate the same. He has not given any reason for non-examination of his son-

in-law Murugan, who is one of the attestors to Ex.A-1.

Considering all the above aspects, I am of the opinion that Ex.A-1 has come into existence as sale agreement and not as security for the

alleged loan.

Learned Counsel for the appellant-first defendant relied upon the decision of a Division Bench of this Court reported in 2007 (1) L.W. 309

(cited supra) and urged that in the light of the evidence available on record, both oral and documentary evidence as well as application of Section

92 of the Indian Evidence Act, there is no scope to permit the appellant-first defendant to contradict or subtract the terms containing in Ex.A-1

agreement. According to the appellant, the entire evidence let in both oral and documentary, was only to demonstrate that inspite of existence of

Ex.A-1, it will have to be held that the parties had a different contract altogether and Ex.A-1 was never intended to be acted upon. Relevant

portion of the said judgment reads as follows:

....

At the outset, it will have to be stated that existence of Ex.A-1 agreement was never in dispute. As far as application of Section 92 of the Indian

Evidence Act is concerned, by virtue of Section 91, and having regard to the existence of Ex.A-1 agreement, the terms contained in Ex.A-1 are to

be considered without any reference to any other oral evidence insofar as it related to the terms contained therein. In that respect, Sections 91 and

92 of the Indian Evidence Act are inter-dependent. In the light of the evidence available on record, both oral and documentary, as well as the

application of Section 92 of the Indian Evidence Act, there is no scope to permit the appellants to contradict, vary or subtract the terms contained

in Ex.A-1 agreement. Therefore, even taking Ex.A-1 agreement on its face value, what has to be considered is whether the contention put forward

on behalf of the appellants that it was never intended to be acted upon, requires consideration. On this aspect, we find that the decisions relied on

by learned Counsel for the appellants Mr. R. Subramanian as reported in Roop Kumar Vs. Mohan Thedani, and Parvinder Singh Vs. Renu

Gautam and Others, (supra) fully support his contention.

In the judgment reported in Roop Kumar Vs. Mohan Thedani, , the Supreme Court has stated that the legal position as regards the substantive

part of Section 92 of the Indian Evidence Act in the following words:

This Court in Smt. Gangabai Gilda Vs. Smt. Chhabubai Gandhi, and Ishwar Dass Jain (Dead) Thr. Lrs. Vs. Sohan Lal (Dead) By Lrs., with

reference to Section 92(1) held that it is permissible to a party to a deed to contend that the deed was not intended to be acted upon but was only

a sham document. The bar arises only when the document is relied upon and its terms are sought to be varied and contradicted. Oral evidence is

admissible to show that document executed was never intended to operate as an agreement but that some other agreement altogether, not

recorded in the document, was entered into between the parties.

In the decision reported in Parvinder Singh Vs. Renu Gautam and Others, , the Supreme Court has held as under in paragraph 9:

...An enquiry into reality of transaction is not excluded merely by availability of writing reciting the transaction. AIR 1936 70 (Privy Council) is an

authority for the proposition that the oral evidence in departure from the terms of a written deed is admissible to show that what is mentioned in the

deed was not the real transaction between the parties but it was something different....

From the above ratio laid down by the Supreme Court, when we analyse the stand of the parties, according to the appellants, irrespective of

the fact that Ex.A-1 came into being, it was contended that the deed was never intended to be acted upon and that it was a sham document. When

the said stand is probed into further, as held by the Supreme Court, the bar u/s 92 of the Indian Evidence Act vis-a-vis Ex.A-1 would operate if

only the appellants attempt to rely upon Ex.A-1 agreement and simultaneously sought to vary and contradict its terms. Such is not the case of the

appellants. The appellants are not attempting to contend that the terms contained therein are to be varied or that the evidence let in on their side

was to contradict the terms contained therein. According to the appellants, the entire evidence let in both oral and documentary, was only to

demonstrate that inspite of existence of Ex.A-1, it will have to be held that the parties had a different contract altogether and Ex.A-1 was never

intended to be acted upon. At the risk of repetition, we state that applying the ratio laid down by the Supreme Court, such a stand of the appellants

was certainly not prohibited u/s 92 of the Indian Evidence Act.

Learned Counsel for the appellant-first defendant also relied upon the decision of a Division Bench of this Court reported in 2008 (3) CTC 1

(cited supra), wherein, in paragraphs 36 and 37, it was held as follows:

Moreover, the first respondent/first defendant in the said counter has also taken a categorical stand that it is true that he used to raise loans

through the appellant/plaintiff and repay the same through him, for which the appellant/plaintiff used to obtain his signatures on blank Non-judicial

Stamp Papers and Revenue Stamps as well as white papers and believing him, he used to issue such blank papers affixing his signatures and that

there is no evidence to prove that the appellant/plaintiff has paid a sum of Rs. 8,05,000/- (Rupees Eight Lakhs and Five thousand only) by cash in

lumpsum and that he has already disposed of his property in order to discharge his debts.

A perusal of Ex.P.1-Agreement dated 10.7.1996 indicates that there are three stamp papers of value Rs. 10/- each. There are two witnesses

mentioned in the last page of Ex.P.1-Sale Agreement. No one has been examined as witness on the side of appellant/plaintiff in the case. In fact,

the recitals found in Ex.P.1-Sale Agreement are in typed form. No doubt, in Ex.P.1-Agreement dated 10.07.1996 the signature of the first

respondent/first defendant finds a place. Even then, it is the burden of the appellant/plaintiff to prove that Ex.P.1-Agreement is a true and valid one

in the eye of law. The fact that no one witness, as seen in Ex.P-1-Agreement is examined in the case is a circumstance which certainly goes against

the appellant/plaintiff. In this connection, it is useful to refer to Ex.P.4, Lawyer Notice dated 06.07.1998 issued by the appellant/plaintiff''s counsel

addressed to the first respondent/defendant, wherein it is among other things stated that the first respondent/first defendant has approached the

appellant/plaintiff for a compromise offering to return a sum of Rs. 9,00,000/- (Rupees nine lakhs only) by issuing the nine cheques and out of these

nine cheques, two cheques serial Nos. 8 and 9 for Rs. 2,00,000/- are dated 15.08.1998 and 30.08.1998 and that the appellant/plaintiff is not

interested in getting back his amount given as part sale consideration in pursuance of the agreement dated 10.7.1996 and that the cheques were

received in order to establish the appellant/plaintiff''s case better in C.S. No. 80 of 1997.

The appellant-first defendant in the written statement has stated that he never executed the sale agreement and he executed the document only

as security for the loan obtained by his son-in-law Murugan, but Murugan has not been examined before the court. Hence, the above citations are

not relevant, because in the above citations, the executant himself has admitted the execution of sale agreement, but he reveals that there is no

intention to enforce the sale agreement. So, the abovesaid citations are not applicable to the facts of the case.

Learned Senior Counsel for the first respondent-plaintiff would rely upon the decision of a Division Bench of this Court reported in 2009 (7)

MLJ 640 (cited supra) and argued that when the appellant-first defendant pleaded that the sale agreement was entered only as security for the

loan, he failed to adduce the evidence to the effect and the transaction can only be taken as the sale transaction. Paragraph 22 of the said judgment

reads as follows:

Learned Counsel for the respondent argued that the amount of Rs. 4 lakhs has been borrowed for the purpose of discharging the loan to the

Bank as well as to others from whom the respondent borrowed money for the purpose of marriage of three daughters. Of course, a part of the

amount of Rs. 1,60,000/- has been established to be paid to the Bank by evidence. But in respect of the balance amount, there is no acceptable

evidence to support the contention. The respondent also has not established before the trial Court as well as before us when the daughters were

got married and what was the amount borrowed and what was the amount unpaid during the relevant period of time when Exhibit P-1 was

executed. Even assuming that the existence of the loan is true, the loan would have been paid back out of the sale consideration. We are of the

view that there is no material worth consideration made available to accept the contention of the respondent that the Exhibit A-1 agreement was

entered into with an intention not to act upon it and only for securing the loan borrowed.

While considering the citation in 2009 (7) MLJ 640, the fact that Ex.A-1 has been executed as security and it was obtained by coercion, has

not been proved by the appellant-first defendant. It is the duty of the person to plead in accordance with Order 6 Rule 4 C.P.C. and to prove the

same, the appellant-first defendant has not furnished the materials and he has not proved the same in accordance with law.

Moreover, the appellant-first defendant has pleaded that Ex.A-1 came into existence only as security for the loan obtained by his son-in-law

and in his cross-examination as D.W.1, he has stated that the loan has been obtained by his daughter''s husband, i.e. the second defendant''s

husband. As already stated, no scrap of paper has been placed before the Court to show as to who obtained loan, what is the amount due, when

the loan amount has been obtained, when it was discharged and how it was discharged and these facts have not been proved by the appellant-first

defendant.

Furthermore, the appellant-first defendant has fairly conceded in his oral evidence that his son-in-law is one of the attestors to Ex.A-1. But he

is the competent person to speak about, as to in what circumstances Ex.A-1 came into existence, whether it came into existence as security for the

loan and whether Ex.A-1 was obtained by coercion. But the best witness has been with-held by the appellant-first defendant. So, naturally,

adverse inference can be drawn u/s 114 of the Indian Evidence Act. Further, merely because the value of the suit property is more, he has come

forward with such a defence.

One more circumstance of the case is that Ex.A-1 is a registered document and till the first respondent-plaintiff issued notice under Ex.A-2, the

appellant-first defendant, who is none other than a teacher, has not raised any objection, even though he has stated that the entire loan amount has

been repaid and discharged and he has neither made the oral request, nor written request for return of Ex.A-1 sale agreement. After receipt of

notice under Ex.A-2, the appellant-first defendant issued a reply and put forward the defence.

In the abovesaid circumstances, the first appellate Court has considered all these aspects in proper perspective and came to the correct

conclusion. There is no material irregularity or perversity in the judgment rendered by the first appellate Court. Hence, I concur with the findings of

the first appellate Court in respect of Ex.A-1 which has been only a sale agreement and it has not been obtained as security for the loan availed of

by Murugan, the son-in-law of the appellant-first defendant. Substantial question of law No. (i) is answered accordingly.

Substantial questions of law-(ii), (iii) and (iv):

In view of the answer given in substantial question of law (i) that Ex.A-1 is the sale agreement and it has not been obtained by coercion and it is not

executed as security for the loan obtained by the appellant''s son-in-law Murugan, it is to be held that Ex.A-1 is true and genuine document.

Furthermore, it is a registered document. The first respondent-plaintiff is always ready and willing to perform his part of the contract. Since the

appellant-first defendant is not willing to execute the sale deed, the first respondent-plaintiff issued the notice under Ex.A-2 on 3.8.1999. He

received reply notice Ex.A-5 from the defendants'' counsel on 25.8.1999 and the first respondent-plaintiff filed the suit in time. In a suit for specific

performance, time is not the essence of the contract. In the abovesaid circumstances, the first appellate Court has come to the correct conclusion

that the first respondent-plaintiff is entitled for equitable relief of specific performance.

When once a person who is claiming equitable relief has come to Court with clean hands and since the appellant-first defendant refused to

execute the sale deed, the first respondent-plaintiff issued notice under Ex.A-2 and he filed the suit on 6.9.1999. As per Ex.A-1, two years'' time

has been given. Ex.A-3 Notice has been issued by the first respondent-plaintiff on 3.8.1999. Ex.A-1 sale agreement is dated 14.8.1997 and within

two years, notice has been issued. The defendants have received the notices on Ex.A-3 7.8.1999 and Ex.A-4 9.8.1999, respectively. They issued

reply notice under Ex.A-5 25.8.1999. The suit has been filed on 6.9.1999. So, I am of the opinion that the first respondent-plaintiff is entitled to a

decree for specific performance. Further, for the reasons stated above, as per Section 20(2) of the Specific Relief Act, the Court cannot deny the

decree for specific performance, since the first respondent-plaintiff has filed the suit on a registered sale agreement, even though the appellant-first

defendant raised a defence that the document has come into existence only as a security for the loan, which has not proved by him. The substantial

questions of law (ii), (iii) and (iv) are answered accordingly.

The first appellate Court considered all the aspects in proper perspective and came to the correct conclusion. I do not want to interfere with

the findings of the first appellate Court. The judgment and decree of the first appellate Court are liable to be confirmed. Time for execution of sale

deed is three months.

In fine, the Second Appeal is dismissed. The judgment and decree of the first appellate Court are confirmed. Time for execution of the sale

deed is three months. No costs.