Prasanna vs Sreedharan and Others

B.N. Patnaik, J.—Both the appeals are filed against the judgment rendered in O.S. No. 406 of 1982 6n the file of the court of the Sub Judge, Tellicherry. The first defendant in the suit is the appellant in A.S. No. 147 of 1987 and the plaintiffs in the suit are the appellants in A.S. No. 303 of 1987. This common judgment is being passed in both the appeals. The suit was filed for specific performance of contract and in the alternative for recovery of a sum of Rs. 2,10,391/- paid in advance at the time of entering into an agreement of sale of the suit property and for damages. Plaint A and B Schedule properties of the plaint, consisting of a Cinema Theatre known as Prabhat Cinema at Cannanore with all appurtenances, equipments, furniture, and other buildings and movables, belong to defendants. These properties originally belonged to the husband of the first defendant and his brothers. There was a suit for partition of this property. Finally a decree was passed on compromise. Execution Petitions, bearing No.19 and 27 of 1981, were filed by the brothers of the first defendant''s husband for their share. Since the defendants were not able to pay the decree amount, the plaint schedule property was sold for a sum of Rs. 5,44,000/- on 24.06.1982 by the Court. In the meantime, the first defendant''s husband died. The defendants, however, wanted to save the property for themselves. Thereafter, the litigation was being conducted by the brother of the first defendant. The first defendant and her brother Premarajan approached the first plaintiff and offered to sell the plaint schedule properties. Although the first plaintiff was initially reluctant, he ultimately agreed to purchase the same at a cost of Rs. 7,44,000/-. He paid a sum of Rs. 2,10,391 as advance. The first defendant for herself and on behalf of her minor son (second defendant) executed and registered Ext. A1 agreement dated 21.7.1982, wherein it was stipulated that the plaint schedule properties belonging to both of them in half shares would be transferred for a sum of Rs. 7,44,000/- in favour of the plaintiffs after obtaining necessary permission from the competent court for sale of the share of the minor (2nd defendant). After the deposit of the amount in court, the court sale was set aside. But the defendants avoided to execute the sale deed, although the plaintiffs were ready and willing to pay the balance amount. The plaintiffs sent a notice on 4-10-1982 calling upon the defendants to execute the sale deed. But, they failed to execute the sale deed as per the agreement Ext. A1.

The defendants, in their written statement, have contended that the first defendant was persuaded by her brother to sign on the document (Ext. A1) without the contents thereof being explained. She never intended to execute any such agreement. After the death of the husband of the first defendant there was no one to help her and her minor child except her brother. Her brother approached the first plaintiff and intimated the first defendant that he succeeded in getting the required amount and the same was paid in court by him and got the auction sale set aside. She was made to believe that she was signing a document of security for the money advanced by the first plaintiff. The first defendant''s brother died some time thereafter. The first defendant came to know about Ext. A1 agreement for the first time on receipt of a letter dated 2.9.1982 (Ext. A5) sent by the plaintiffs demanding for execution of the sale deed on receipt of balance consideration. The property in question is worth more than rupees 40 lakhs. The property could not have been agreed to be sold for an inadequate consideration of Rs. 7,44,000/-. Moreover, it is contended that the share belonging to the second defendant, who was then a minor, could not have been transferred by her. The second defendant is not bound by the contract.

Learned Sub Judge, on a consideration of the oral and documentary evidence on record, held that the first defendant executed Ext. A1 agreement by fully knowing its contents and agreed to sell the properties to the plaintiff''s. The first defendant has got half share in the properties and no permission was obtained from the court to alienate the share of the minor (second defendant) and as such specific performance cannot be ordered in respect of the minors share. The plaintiffs are entitled to specific performance of Ext. A1 contract in respect of the share of the first defendant. No hardship will be caused to the first defendant if specific performance of contract is ordered only in respect of her share. Accordingly, learned Sub Judge decreed the suit with a direction to the first defendant to execute a sale deed in respect of her share in the properties on receiving the balance consideration of Rs. 1,61,690/-.

Learned counsel for the appellant/first defendant in A.S. No. 147/87 contended that the appellant never intended to sell the properties to a third party. The situation in which she was placed when the money was advanced and Ext. A1 agreement was got executed and registered would go to show that the contract gave the plaintiffs an unfair advantage in as much as the parties were not placed on equal bargaining positions at the time of contract. The contract, therefore, is unenforceable.

Learned counsel for the appellants/plaintiffs in A.S. No. 303 of 1987 has contended that the finding of the lower court that the contract is void as against the second defendant for want of permission from the District Court at the time of entering into the contract (Ext. A1) or subsequently, is not legally sustainable. The second defendant is bound by the contract. He was also benefitted by the transaction entered into by his mother guardian, the first defendant.

In view of the above contentions, the following points arise for consideration :

1) Whether the first defendant executed Ext. A1 (agreement of sale) after

knowing and understanding the contents thereof fully?

2) Whether the first defendant could enter into an agreement on behalf of her minor son (2nd defendant) as his mother guardian to sell his share of the property?

3) Whether the agreement (Ext. A 1) has resulted in unfair advantage to the plaintiffs and whether it would be just and proper to direct the defendants to execute a sale deed in favour of the plaintiffs?

Point No. 1 : There is no dispute that the suit property was sold in court auction in O.S. No. 56/80 in pursuance of an Execution Petition. The sale could be set aside only by deposit of Rs. 2,10,391/- on behalf of the defendants. There is also no dispute, at this stage, that the amount deposited in court for setting aside the sale on 21-7-1982 was the money given by the plaintiffs to the defendants.

Ext. A 7 is a letter dated 18-9-1982 sent by the first defendant to the first plaintiff acknowledging the receipt of the letter dated 2-9-1982 (Ext. A 5), while expressing her gratitude for the help given by the plaintiffs to save their theatre from being sold in public auction. The first defendant does not disown the letter nor her signature appearing thereon. There is no dispute that the first plaintiff being a rich person was in a position to give the monetary help.

The defendants have contended that Sri. Premarajan, brother of the first defendant, managed to get a loan from the plaintiffs to save the property from confirmation of sale. The first defendant was not informed that the amount was paid by the plaintiffs as advance in pursuance of the agreement for sale of the suit properties. It is also contended by the first defendant that her brother duped her and she never obtained any advance money from the plaintiffs in pursuance of Ext. A1 document and for the first time she came to know of Ext. A1 on receipt of Ext. A 5 letter.

But, this contention has no force. There is no case of the defendants nor is there any evidence to show that on the date of execution of Ext. A1 agreement the first defendant put her signature on a blank paper and that subsequently it was converted into an agreement by the plaintiffs. In this context, it may be stated that the first defendant had no other source of income to raise the money required to get the sale set aside by depositing the said amount. From the evidence of DW 2 (husband of the sister of the 1st defendant), it appears that neither he nor any of the relatives of the defendants were in a position to help them in lending the amount. The first defendant, as DW1, has stated that Sri. Premarajan, her brother, had no independent source of income and he was not having any avocation. He was doing whatever he was asked to do by her and her father. She has clearly stated in her evidence that she had utmost faith in him and he had never cheated or defrauded her till his death. There is no evidence to show that Sri. Premarajan, brother of the first defendant, colluded with the first plaintiff in creating Ext. A1 agreement. No case is made out that he was in a dominant position and the first defendant has admitted her signatures and that of others appearing on Ext. A1. The first defendant has studied up to 10th standard and she admits that she knows well how to read and write. It is evident from the plaint averments and the deposition of PW 1 that he was never anxious to purchase the plaint schedule property. He agreed to purchase the same with a view to help the defendants in order to set aside the court sale and to give the benefit of excess amount of rupees two lakhs. It is no where stated by DW1 in her evidence that either the plaintiffs or anybody else had occasion to exercise any undue influence on her to execute the document. There is also no evidence that the plaintiffs were at any time hostile to the defendants or her family. In these circumstances, there is no reason why the evidence of PW 1 (first, plaintiff); PW 2 (the typist who typed the document (Ext. A 1) and PW 3 (Manager of the plaintiffs'' business) should not be believed. PW 1 - first plaintiff - states that the first defendant and her brother came to him on the 29th day after the auction. They proposed to sell the property to him if a sum of Rs. two lakhs in excess of the court sale price is paid. He agreed. An agreement was drafted on the next day. The first defendant and her brother came on the next day morning. He along with them came to Advocate Sreedharan and drafted the copy of the agreement. The draft was prepared by the advocate. Then they went to the typist (PW 2). After typing the agreement the first defendant and her brother read it. They signed it at the office of the typist. The first defendant signed it initially and then others. In the cross examination, he also made it clear that the draft agreement was read out to the first defendant.

PW 2, who typed Ext. A1 agreement, states that after typing it he gave Ext. A1 to the first defendant. She went through it. The first defendant signed the document in her individual capacity and as guardian of the minor. Thereafter, the first plaintiff and his Manager put their signatures. In the cross examination, PW 2 also makes it clear that the first defendant came to the office of the advocate. The witnesses to the agreement signed in his office. The matter was read over to her after making the corrections. PW 3 has similarly deposed that he saw the first defendant signing Ext. A1 agreement.

The first defendant was examined as DW 1. She deposed that the signature in Ext. A1 is her signature which she signed before the Registrar. She also states that she had admitted the fact of execution of Ext. A1 before the Sub Registrar. Of course, she states that she made this admission on the instruction of her brother and further she states that the Sub Registrar did not explain her the contents of the document. As has been said above, she never acted on the advice.