Mandas vs Manabai

S.P. Bhargava, J.

This second appeal by the plaintiff is before us for disposal under the order dated 5-10-1970 made by the learned Chief Justice.

The material facts are these. The plaintiff instituted a suit claiming possession of three acres of land situated at village Acholi, tahsil Balodabazar, against, the defendant on the basis of a registered sale deed dated 12-7-1960 executed by the defendant for a consideration of Rs 400/-. The plaintiff urged in the plaint that he was not given possession of the land purchased by him by the defendant and whenever the plaintiff went to cultivate the said land, the defendant did not allow him to do so. He, therefore, instituted the suit as stated above for possession of the said land and in the alternative for the return of consideration of Rs. 400/- and interest thereon.

The trial Court decreed the plaintiff''s claim for possession of the land. On appeal, the learned First Additional District Judge, Raipur, took the view that the sale deed, though executed by the defendant, had been nominally executed without there being any intention of the parties to give effect to the same. It was held that the sale deed had been nominally executed to serve as a collateral security. So far as the alternative relief was concerned, the lower appellate Court held that the suit having been instituted more than three years after the date of the sale deed, it was barred by time under Article 19 of the Limitation Act which prescribes a period of three years for the institution of a suit for the recovery of a loan from the date of loan.

The first question raised in the appeal by the learned counsel for the plaintiff is that the defendant was not entitled to adduce evidence to show that the sale deed was not intended to be acted union and the real nature of the transaction was that it was merely a loan. In the written-statement the defendant pleaded that "the true facts are that the plaintiff advanced a loan of Rs. 400/- at Rs. 3/2/- per cent p. m. as interest and inasmuch as the plaintiff wanted the defendant to execute a nominal sale deed in favour of the plaintiff, the deed dated 12-7-1960 purporting to be sale deed was in good faith executed in favour of the plaintiff with explicit understanding that the same will not be acted upon as a sale." Ii was also stated in the written-statement that ''''the parties had further agreed that on repayment of the loan with interest the sale deed would be returned to the defendant by the plaintiff." The said plea clearly goes to show that the defendant''s plea was that the sale deed was fictitious and no interest in the property passed to the plaintiff in any manner under the said sale deed. In our opinion, in such a situation, the defendant was entitled to give evidence to show that the sale deed was never agreed to be acted upon. If there was a stipulation between the parties that the contract would not be enforced or that it would not be acted upon ab initio, oral evidence in support of such a plea may be given. If the document is signed with the express intention that it should not be an agreement, the other party is not entitled to fix the document as an agreement upon those who execute the document. It is true that under sections 91 and 92 of the Evidence Act when the terms of a contract have been reduced to writing, extrinsic evidence as to what transpired subsequent to the contract is not admissible for ascertaining the terms and no oral agreement or statement is admissible between the parties to any instrument or their representatives-in-interest for the purpose of contradicting, varying, adding to or subtracting from its terms. If the language employed in the document is ambiguous, the question of the admissibility or otherwise of extraneous evidence would be regulated by the provisions of sections 93 to 98 of the Evidence Act see Belapur Co. Ltd. Vs. Maharashtra State Farming Corporation, but nevertheless evidence to show that there was no agreement between the parties is admissible. In Shrinarayan v. Bhaskar 1954 NLJ 64 : AIR 1954 Nag. 193 this view was taken that section 92 of the Evidence Act excludes oral evidence to vary the terms of the written contract, but has no reference to the question whether the parties agreed to contract on the terms set forth in the document. If the validity of a document is impeached, the Court is not bound by what has been described as the paper expression of the parties and is not precluded from entering into the real nature of the transaction between them see Beni Madhab Dass v. Sadasook Kotary AIR 1938 Nag. 335 at p. 342 FB]. Section 92 of the Evidence Act does not preclude a party from showing that the writing is not really a contract between the parties but was only a fictitious or colorable device which cloaked something else see Asaram v. Ludheshwar and Bai Hira Devi and Others Vs. The Official Assignee of Bombay, Oral evidence has been held to be admissible to show that an agreement was only a sham or nominal transaction and was not intended to be acted upon see AIR 1936 70 (Privy Council)

In our opinion, the plea advanced by the defendant is simply to the effect that the sale was merely fictitious. The plea of the defendant is not to the effect that the transaction was a mortgage or that it was a sale with a condition of repurchase when the amount of Rs. 400/- was paid back by the defendant, and so the plea advanced by the defendant is neither barred u/s 58(c) of the Transfer of Property Act nor by sections 91 and 92 of the Evidence Act, In Kashiram v. Abdul Jabbar Second Appeal No. 443/59, decided on the 7th April 1961 : 1961 MPLJ 127, Shrivastava J. held:

The plaintiffs had not alleged that the transaction was a mortgage or that it was a sale with a condition of repurchase. Had he set up such a case, oral evidence might have been inadmissible as that would amount to variation of the terms. Further under proviso to section 58(c) of the Transfer of Property Act, the plaintiff could not prove an agreement to recovery if it was not incorporated in the same document However, that aspect did not arise are all that the plaintiff staid was that there WAS no agreement to sell at any time and the document did not incorporate the contract between the parties. Evidence to prove that fact wa3 admissible.

The same view has been consistently taken by the this Court in many other cases of which Saraswatibai v. P.L. Ramchandralal Second Appeal No. 397/58 decided on the 17th October 1960 - 1962 MPLJ 199 Ramlal Kashtha v. Brijkishore 1972 M PLJ 108 : 1963 JLJ 605 and Pura v. Dwarkadas Second Appeal No. 43/63, decided on the 9th February 1968 may be cited as examples. We, therefore, hold that the defendant-respondent was entitled to prove by adducing evidence that the sale was merely nominal and no interest passed to the plaintiff under the sale deed dated 12-7-1960.

At this stage, we would like to stress that on any such defence being taken by the defendant, it is required to be proved that in fact the document was signed with the express intention that it should not be acted upon and such a defence should be accepted only with great caution, for, a registered document is obtained with the intention that it represents a bona fide transaction and is intended to be acted upon and it would be valueless if it can be gone behind in every case by mere assertion that that which was stated at the time before the Registrar was untrue. The onus in such a case would be clearly on the defendant see All Khan Bahadur v. Indar Parshad and another ILR 23 Cal. 950.]

The further question for consideration is as to whether the evidence adduced by the defendant proves the sale deed dated 12-7-1960 to be nominal. It is pertinent to note that three acres of land has been sold under the sale deed for the amount of Rs. 400/- only. It is also pertinent to note that the plaintiff, before the institution of the suit, did not take any steps to get his name mutated in the revenue record and his evidence to the effect that he went to cultivate the said land on many occasions and was prevented by the defendant on the face of it does not appear to be true. It does not bear scrutiny. No report to the police was made by the plaintiff on a single occasion about the defendant having prevented him from taking possession. It is pertinent to note that the defendant is an old lady of about 60 years of age. In the plaint it has been asserted that she resisted the plaintiff from taking possession though in the statement in Court the plaintiff added that he had done so along with her son-in-law. This statement of the plaintiff, in our opinion, does not merit belief. It is thus clear that at no time before the institution of the suit any attempt was made by the plaintiff to get possession of the suit land and the very fact that for a period of over three years no such attempt was made goes a long way to show that the sale deed was not intended to be acted upon as a sale. The relevant evidence has been considered by the lower appellate Court in paragraphs 7 and 8 of the judgment. We are in agreement with the conclusion reached by the learned Additional District Judge to the effect that the sale deed dated 12-7-1960 was executed only nominally The Additional District Judge has used the expression that the "said sale deed had been executed to serve as a collateral security for repayment of the loan. We are unable to read anything in the document of sale which goes to show that any such term was agreed upon between the parties which would make the document dated 12-7-1960 a collateral security. Possibility the plaintiff got the sale deed executed only with the view that he may be able to exercise some pressure on the defendant for recovering the amount of loan at the promised time, but this is a different thing altogether than saying that the sale deed was "to serve as a collateral security for repayment thereof." The sale deed, therefore, in our opinion, did not operate to effect transfer of any interest in the land to the plaintiff.

The last contention raised by the learned counsel is that in the alternative the lower appellate Court should have decreed the plaintiff''s claim for refund of the consideration and should not have dismissed it holding it to be barred by time. Realizing that the suit had been instituted more than three years after the sale deed, the learned counsel urged that as the sale deed was a registered document, the suit fell within the purview of Article 116 of the Limitation Act, 1908, which provides for six years limitation for compensation for the breach of a contract in writing registered. It was urged that as the new Limitation Act came in force from 1-1-1964, before six years had elapsed from the date of the sale deed, the suit must be held to be within time under the provisions contained in section 30(a) of the new Limitation Act. In our opinion, this argument is entirely misconceived. We have already held that the sale deed was entirely fictitious and no title passed under it to the plaintiff. It follows that no question could arise for compensation for the breach of a contract contained in the sale deed dated 12-7-1960. The sale deed being fictitious, no legal right or remedy could be claimed on the basis of the non-compliance cf any condition of the said fictitious document It was For the plaintiff to sue independently of the said document for the recovery of the amount of loan which he had advanced to the defendant. That suit should have been instituted within three years of the date of loan. That not having been done, we are of the view that the lower appellate Court was right in holding that the suit was barred by limitation.

It appears to have been urged strenuously before the learned Chief Justice that the plaintiff was entitled to this relief that a decree for possession in his favour should be passed subject to the condition that the decree would be discharged on payment of the amount of consideration by the defendant. It was urged before us that the plaintiff is entitled to this relief on the ground of equity. To our opinion, the plaintiff is not entitled to any such relief also. The plaintiff''s suit for recovery of the loan being barred by time, equity cannot be invoked in his favour to grant him a decree pertaining to a time barred claim.

In the view that we have taken, this appeal fails and is dismissed with costs. Counsel''s fee according to schedule, if certified.