Cheriyathu Mathai vs Thomas and Others

Koshi, C.J.—This is a Plaintiff''s appeal. His suit to recover possession of the plaint schedule property with profits thereof has been dismissed ''in limine'' by the learned District Judge of Kottayam on the ground that the agreement sought, to be proved in support of the claim was inadmissible in evidence as it sought to contradict the terms of a written instrument, to wit, a sale deed.

On 7-10-1107 the Plaintiff executed a sale deed In respect of the said property in favour of one Thomas, the father of Defendants 1 to 4 and the husband of Defendant 5, reserving the consideration therefor, namely, Rs. 1900 to be paid to him, when he got the property released from the charges due to Kizhakae Madom, Mankombu and the Commercial Bank Ltd., Changanacherry, under mortgages executed by him to those creditors.

According to the Plaintiff, though ''ex facie'', the said deed evidenced an outright and unconditional sale, it was really not intended to be sale, but was brought Into existence as the result of an arrangement he had come to with the ostensible vendee for the purpose of liquidating a debt the owed to St. Marry''s Model Co. Ltd., (hereinafter referred to as the Company) under a promissory note executed by him to the Company. The said Thomas Thomas was the chief promoter and the Director of the Company.

The plaint went on to state that pursuant to the sale deed Thomas Thomas was put in possession of the property, on the understanding that with the profits thereof he will discharge the debt due to the Company and that after the debt was discharged the property will be ''returned'' to the Plaintiff. The debt due to the Company was originally incurred in 1104, it was renewed first in 1106, then in 1112 and lastly in 1118. Thomas Thomas died in Vrischigom 1124 without making any payment to the Company towards the liquidation of the Plaintiff''s debt.

Not only that, before his death he had instituted a suit against the Plaintiff in O.S. No. 144 of 1124 for recovery of the amounts due to the Company as per the Plaintiff''s last promissory note of 1118. According to the Plaintiff this conduct was in violation of the agreement between the parties and he therefore brought the present; suit to recover the property with the profits thereof for the eighteen years that had elapsed since the execution of the sale deed.

The plaint stated that the Plaintiff was willing to have the Company''s debt paid oil out of the profits and that in case the Defendants would discharge that debt a decree need be given in his favour only for the balance profits. The suit was instituted in Makaram 1125, some two months after Thomas Thomas passed away. The plaint claim in O.S. No. 144 of 1124 amounted very nearly to Rs. 11,000 and in the present plaint Rs. 17,000 odd were claimed towards past profits.

The suit was contested by Defendants 1 to 4. Defendant 1, the eldest son of Thomas Thomas, filing one written statement and Defendants 2 to 4 - all minors - Anr. through their guardian. According to the contesting Defendants, the sale deed was intended to operate as such and the agreement set up in the plaint was not only nor true but was also inadmissible in evidence as it sought, to contradict or vary the terms of the written grant.

The Plaintiff filed a replication reiterating the terms of the agreement set up in the plaint and also suggesting that the document was executed benami and that the ostensible vendee was only a trustee for him. However, these latter plea would seem to have been left unnoticed at the time of raising the issues for trial. After the settlement of the issues Defendant 1 moved the court to have issues 1 and 2 tried as preliminary issues. Those issues were as follows.

(i) Was the sale deed dated 7-10-1107 of the paint items executed by Plaintiff to the deceased Thomas, subject, to the conditions mentioned in paras 5 and 6 of the plaint?

(ii) If so, could the fame be pleaded or allowed to be proved by evidence?

The court acceded to the prayer of Defendant 1 and after hearing both sides disposed of those issues by the order quoted below:

The, suit arises out of a sale deed executed by the Plaintiff in favour of one Thomas Thomas the father of Defendants 1 to 4 and the husband of the 5th Defendant. His case is, that the deed was really not a sale deed, but was an arrangement by which Thomas Thomas was put in possession of the properties of an understanding to repay a, debt due from the Plaintiff to a bank, of which the former was the managing director, out of the usufruct. It was admitted in the plaint, that in pursuance of the deed, Thomas Thomas was put in possession of the properties. An objection having to been raised, that evidence cannot be adduced to prove this contention, issue (ii) was raised and was directed to be heard as a preliminary point.

(2) The learned Counsel for the Plaintiff was not, able to bring his case within any of the provisos to Section 92, Evidence Act. There is clear authority for the position taken by the Defendants, that "a sale deed was not intended to be a sale deed'' cannot be proved, in the case of - ''Thatha Rao v. Jummarlal Dhanji'' AIR 1953 AP 179 ( v. 40) (A), Counsel for the Plaintiff relied on certain observations of Ramakrishna Iyer, J. in - ''Annach Muthu Iyer v. Kumara Velu Panicker'' 29 KER LJ 1099 (B). The facts of that case were somewhat similar to those of the present case, and both Their lordships who decided the case concurred in over rulling the evidence.

But Ramakrishna Iyer, J, observed, inter alia, that at such evidence n ay be admissible, where the Plaintiff is case is that no consideration passed and no beneficial interest was conveyed: Even than principle has ho application to this case, as it was freely admitted here, that possession passed to Thomas Thomas, but the plea was, that this took place on certain terms and conditions, which are contrary to those set forth in the written instrument. I consider, that Section 92 is a bar to such evidence being admitted. I find on issue (ii), that these contentions cannot be raised, and cannot be allowed to be proved.

After this finding was recorded the case was posted for evidence on other issues, such as those relating to quantum of profits, etc. The Plaintiff at that stage filed a petition seeking to have certain additional issues raised relating to the benami character of the document and the theory of trusteeship referred to in his replication statement.

The court, however, took the view that it was only an attempt to circumvent its order disposing at the preliminary issues and refused to raise any new issues. Thereafter the Plaintiff offered no evidence on the other issues for trial. Giving effect to the finding on the preliminary issues the court, therefore, dismissed the suit with costs.

Mr. N.K. Job, who appeared before us in support of the appeal, strenuously contended that the learned District Judge went wrong in refusing to admit oral evidence to prove the allegations in the plaint. We regret we are unable to accede to the argument.

Reading the plaint as a whole, together with the replication statement, it is difficult to hold that what the Plaintiff sought to establish by oral evidence was not that, though in its language the written instrument evidenced an outright and unconditional sale, it was only intended as a mortgage or a trust deed. If this would not amount to contradiction, variation, addition or subtraction from the written grant we fail to see what else would?

Authorities are uniform that Section 92, Evidence Act forbids extraneous evidence to be let in to prove a different intention of the parties than, what they reduced into writing in a deed executed between them. For the purpose of this rule it is immaterial whether the extraneous evidence consisted of oral evidence or evidence as to the act and conduct of the parties-see - ''Balkisen Das v. Legge'' 22 All 149 (PC) (C); ''Maung Kyin v. Ma Shwe La AIR 1917 PC 207 ( v. 4) (D), and (1933) 1 ITR 219 (Privy Council) .

The Plaintiff has no contention that notwithstanding the execution of the sale deed the parties did not intend to make any contract but what he states is that the real contract was something different from what the document set out. In other words, he has no case that the document, is a mere sham or that it was brought into existence solely for the purpose of creating evidence about some other matter. - AIR 1936 70 (Privy Council) and ''George v. Mathai 40 KER LR 25 (G). Nor does he set up any collateral agreement to reconvey the property back to him after the lapse of any definite period or on the happening of a specified event - AIR 1949 32 (Privy Council)

Though the case of benami was attempted to be set out in the replication, that case was belied by the admission in the plaint hat pursuant to, the deed possession of the property was transferred to the vendee and by the other allegation therein to the effect that the vendee was to remain in beneficial enjoyment of the same, though for a specified purpose and only till the fullfilment of Unit purpose.

The Plaintiff''s definite case was that the document was intended to create a right in the Defendant with respect to the plaint schedule property, but that the nature of the right intended to be created was not what the language of the document expressly stated. As noticed earlier, authorities are clear that the Plaintiff was precluded by the rules of evidence from putting forward or proving such a case.

It is not open to the Plaintiff to contend that the document he executed was intended to have an operation different from that what the language of the document clearly stated and which lie intended that the document should state. The document is not sought to be invalidated on any of the grounds mentioned in Provisos 1 to 5 of Section 92 nor did the Plaintiff seek to bring his case under Proviso 6 with a view to explain the language of the document.

The Hyderabad and the Travancore cases referred to by the learned District Judge in his order fully support the position set out in the foregoing paragraph. The attempt Mr. Job made to distinguish the Hyderabad case, cannot, succeed. There the learned Judges found that the case of the Plaintiff that the document had to be invalidated oil the ground of fraud cannot succeed on the evidence and they then categorically held that, the Plaintiff cannot be allowed to prove that a contract different from what is written in the sale deed was entered into by the parties.

As in the lower Court an attempt was made before us to rely upon certain observations of Ramakrishna Iyer, J. in the case in 29 KER LJ 1009 (B), but we do not consider that that learned Judge''s observations are in any way helpful to the Plaintiff. If we may say so with respect, given below the learned Judge summarises the legal position very correctly:

The prohibition u/s 92 is only in respect of the proof as to the terms of a contract, etc., but when it is pleaded that there was no contract or disposition at all and no beneficial interest was in fact conveyed and that a document inform a sale deed was merely a blind brought into existence for some ulterior purpose, Section 92 is no bar to the reception of evidence of facts and circumstances proving such a plea.

In other words, if in respect of a sale deed it is admitted that some beneficial interest was intended to be conveyed, it would not be permissible for a party to the deed to prove by oral evidence that the beneficial interest which was really conveyed by the deed was something different from the beneficial interest which the document ''or facie'' conveys.

It would however be open to one of the parties to the deed to show that no beneficial interest was convoyed at all and that, the whole beneficial Interest remained in the vendor in spite of the sale deed. Section 81, Trusts Act appears to deal with such cases and it is provided that in such cases, the vendee holds for the benefit of the real owner. Under this class would come conveyances without consideration, where the law would raise a presumption of a resulting trust.

The matter would present no difficulty at all in a case where a conveyance or a sale is found to be supported by no consideration at all, when the parties would be allowed to prove that no beneficial interest was intended to be conveyed. The class of cases known as benami transactions under which conveyances are made in favour of third parties comes under this category.

In - ''George v. Mathai 40 KER LR 1 (FB) (I), in a judgment delivered on 16-8-1948, one of us had occasion to review the more important cases then available on the point under discussion. The conclusion reached there is in agreement with the view the Hyderabad and the Travancore cases cited by the learned Judge below enunciated. We do not think that any useful purpose will be served by traversing grounds covered there over again here.

It may, however, be pointed out that the judgment of the Madras High Court in - ''Achuthara maraju v. Subbaraju 25 Mad 7 (J), and the judgment of the Bombay High Court in - ''Dattoo v. Ramchandra'' 30 Bom 119 (K), both of which were approved by the Privy Council in a case already cited AIR 1917 PC 207 ( v. 4) (D), furnish very instructive and interesting reading.

One of the points decided in the above Cochin case, namely, that an oral agreement to reconvey made simultaneously with a written agreement to convey out and out is inadmissible in evidence under the provisions of Section 92, Evidence Act may however, require reconsideration in the light of the decision in AIR 1949 32 (Privy Council) , which'' though decided earlier happened to be reported later.

In the Cochin case, regard being had to the line of decisions of the Cochin High Court on the point which are all referred to in the judgment, the point was not disputed at all: see para 4 of the judgment.

No decision of the Indian Courts which ''in any sense'' militates against the view set out in 40 Cochin Law Reports 1 (FB) (1) on the point we are immediately concerned with in this case, has been brought to our notice, nor have we been able to come across any ourselves. We have however to refer to the decisions to which Mr. Job invited our attention.

In the course of our discussion we have already referred to some of the cases cited by him. but those not referred to yet are - ''Asaram v. Ludheshwar AIR 1938 Nag 335 ( v. 25) (PB) (L), ''Rakkivana. v. Chinnu AIR 1954 Mad 84 ( v. 41) (M), and ''Bhawanbhai v. Bai Vahali'' AIR 1955 Bom 320 ((S) v. 42) (N). In the Nagpur case, Mr. Job relied upon a passage in the judgment of Bose, J. (as he then was) that Section 92 does not preclude a party from showing that the writing was not really the contract between the parties but was only a fictitious or colourable device which cloaked something else.

We canno understand how this passage helps the Appellant. We have already pointed out that the, Plaintiffs case is something different from what that passage envisages. The judgment in A. Rakkiyana Gounder Vs. Chinnu Goundan and Another, cites some of the cases which we have already referred to and also some Ors. to show the limitations under which the rule relating to the exclusion of oral evidence u/s 92, Evidence Act has been applied'' and the judgment proceeds to state that if the Plaintiff there wished to establish an oral arrangement to reduce the out and .out sale into a trust so as to take away the right of the vendee to enjoy the properties it cannot but be said that such an agreement would be hit by Section 92.

The further discussion in the judgment la on the lines of Justice Ramakrishna Iyer''s observations with respect to a case of benami, a case which we have attempted to show that the Plaintiff in this case has not and cannot have on his plaint. The decision did not finally decide the rights of the parties but only sent back the case with a view to find out whether attendant circumstances connected with the sale would enable the Plaintiff to establish that the vendor did not intend to transfer the beneficial interest in the property to the vendee.

In other words, the learned Judges wanted it to be enquired whether the provisions of Section 81, Trusts Act could be invoked in Plaintiff''s favour. In the third case AIR 1955 Bom 320 ((S) v. 42)'', (N), the finding was that notwithstanding the execution of several sale deeds there was no contract between the parties and consequently no transfer either. The case of the Plaintiff there was that the various transfers were all benami and that case was concurrently found by the courts below. The Plaintiff Appellant cannot seek to support his case by reference to that decision.

On the whole, we are definitely of the view that the learned Judge below rightly disallowed evidence to contradict or vary the terms of the written instrument being let in and that his decision dismissing the suit is plainly right.

However, the predecessor-in-interest of the Defendants had obtained possession of the property as early as Edavom 1107. He, and after him, Defendants 1 to 5 have since then been in enjoyment of the same without paying anything to the vendor or to his creditors. No doubt the stipulation in the document was that the consideration therefore should be made good to the vendor himself when he got the property freed from the encumbrances over. it in favour of the two creditors mentioned earlier.

Admittedly the amounts due to them were.very large and the explanation given by the Defendants for non-payment was that the Plaintiff has not been able to get the property released from the charges existing thereon. All the same. In his written statement Defendant 1 expressed readiness on the part of the Defendants to pay the sale price to the Plaintiff on his securing releases of the encumbrances over the property.

Mr. K.K. Mathew, appearing for Respondent 1, told us that the Defendants were prepared to pay the consideration amount with simple interest thereon at 6 percent, per annum from the date of the document (7-10-1107) and that they were amenable to a decree being passed for the principal amount and interest as above in this suit itself. The only reservation asked for was that before the Plaintiff withdrew the money brought to the court by execution or otherwise, he should satisfy the execution court that the encumbrances on the plaint item were no longer subsisting or in the alternative," he should furnish security to the faction of the court to indemnify the Defendants from any loss that might fall on them on account, of his failure to discharge the encumbrances.

In all the circumstances of the case we consider this offer to be very reasonable. Though the Plaintiff expressed reluctance to close the litigation by accepting the offer, while holding that he cannot succeed in the suit on the plaint instituted by him we pass a decree in his favour against the estate of the deceased Thomas Thomas in the hands of the Defendants for Rs. 1,900/- and 6 percent, simple interest thereon from 7-10-1107 till payment. The Plaintiff will, however, be able to withdraw the money only on the terms referred to above. In the circumstances of case we direct both to bear their costs throughout.

The appeal will stand disposed of as above.