Madras High Court
Luisa @ Luvisa [Died vs Prakasam Ammal
Author: S.S.Sundar
Bench: S.S.Sundar
S.A.No.329/2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON: 29.04.2022
DELIVERED ON: 18.10.2022
CORAM
THE HONOURABLE MR.JUSTICE S.S.SUNDAR
S.A.No329/2017 & CMP.No.7808/2017
1.Luisa @ Luvisa [Died]
2.Maria Doss @ Maria Raj : Appellant /
Defendant
**2nd appellant brought on record as
LR of the deceased sole appellant
viz Luisa @ Luvisa vide order dated
23.11.2021 in CMP.No.3667/2021 in
SA.No.329/2017
vs.
Prakasam Ammal : Respondent / Plaintiff
Prayer: Second Appeal filed under Section 100 of Civil Procedure Code, to
set side the judgment and decree made in AS.No.6/2014 dated 04.06.2016
by the learned I Additional District and Sessions Judge, Vellore, Vellore
District dismissing the appeal filed by the appellant with cost and the decree
and judgment passed by the learned Subordinate Judge, Vellore, Vellore
District dated 28.11.2012 in OSNo.159/2004.
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S.A.No.329/2017
For Appellant : Mr.P.Jegadeesan
For Respondent : Mr.P.Chandrasekar
JUDGMENT
(1)The defendant in the suit is the appellant herein. During the pendency of the Second Appeal, the appellant died and the 2 nd appellant was brought on record as the legal representative of the deceased sole appellant. (2)The respondent in this Second Appeal, as plaintiff, filed a suit in OS.NO.159/2004 on the file of the Sub Court, Vellore, for Specific Performance of an Agreement of Sale stated to have been executed by the husband of the defendant on 20.09.2001.
(3)The case of the respondent/plaintiff is as follows:-
(4)The husband of the defendant Thiru.Devadoss entered into an agreement with the plaintiff for sale of the suit property in favour of the plaintiff for a total consideration of Rs.2 Lakhs. The said Agreement of Sale was duly registered before the Sub Registrar, Vellore, as Doc.No.5803/2001. The husband of the defendant acknowledged the receipt of a sum of Rs.1,50,000/- towards part of the sale consideration and had agreed to get 2 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 the balance of sale consideration namely, Rs.50,000/- within three years from the date of agreement and to execute the Sale Deed in terms of the agreement in favour of the plaintiff.
(5)The defendant signed as a witness in the said Agreement of Sale dated 20.09.2001 and she was fully aware of the Agreement of Sale executed by her husband. The said Devadoss, husband of the defendant died on 25.02.2003 leaving behind him, the defendant as the sole legal heir to succeed to his estate. The plaintiff met the defendant on various occasions after the death of the defendant's husband and requested the defendant to execute the Sale Deed as per the terms of Agreement and the defendant was evading under some false pretext. The plaintiff caused a Legal Notice dated 23.06.2003 calling upon the defendant to execute the Sale Deed as per the agreement after receiving the balance of Rs.50,000/-.
The defendant, after the receipt of the Legal Notice on 02.07.2003, sent a false reply denying the Agreement of Sale. Stating that the plaintiff was always ready and willing to perform her part of contract of sale and she was prepared to deposit the balance of sale consideration, the suit for specific performance was laid by her.
3 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 (6)The suit was contested by the defendant by filing a written statement denying the suit Agreement. Though every allegations and averments in the plaint was denied, it is the specific case of the defendant that the property in question was worth more than Rs.5 lakhs even at the time of the Agreement and that, it is the only residential house belonging to the husband of the defendant Devadoss. It is stated that the defendant and her husband Devadoss never intended to sell the property to the plaintiff or anyone, that too, for a paltry sum. It was contended that the suit agreement is only a loan transaction and that the Sale Agreement was executed at the instance of plaintiff as a security for the said loan transaction. In other words, in the written statement, it was contended by the defendant that her husband Devadoss was suffering from some ailments and to meet the medical expenses, he was in need of money and so, he approached the plaintiff and her husband who wanted security for the loan from her husband who agreed to execute a registered Mortgage Deed. The defendant gave some particulars in the written statement about how the plaintiff obtained the signature of the defendant under 4 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 the pretext that the document is a Mortgage Deed for a sum of Rs.1,50,000/-. It is also alleged that the defendant has no other house and her husband never ventured to sell the house. (7)Before the Trial Court, the plaintiff examined herself as PW1 and examined one Tr.V.P.Thirugnanasamandam as PW2. The plaintiff marked Exs.A1 to A4 whereas the defendant did not produce any document. The defendant examined herself as DW1 and examined one other witness by name Thiru Seeli Sabastian as DW2 whose name was also referred to in the written statement.
(8)The Trial Court on the basis of Ex.A1-Agreement of Sale and the admission of its execution by the defendant, came to the conclusion that the suit Agreement is proved. Since the defendant admitted the execution of Ex.A1-Agreement of Sale and pleaded that her husband and herself signed the document believing that it was a Mortgage Deed, the Trial Court held that the burden lies on the defendant to prove that the document – Ex.A1 was signed by the defendant and her husband on the belief that it is a Deed of Mortgage. Since the defendant and her husband are not illiterate persons, the Trial Court held that the defendant's 5 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 husband executed Ex.A1 only for sale of the suit property in favour of the plaintiff and the contention of the defendant that the plaintiff obtained a Sale Agreement in stead of Mortgage Deed is not believable. Since the plaintiff has proved the transaction as Sale Agreement, the Trial Court granted a decree in favour of the plaintiff by directing the defendant to execute the Sale Deed upon receipt of the balance of sale consideration of Rs.50,000/- within two months.
(9)The Judgment and decree of the Trial Court was challenged by the defendant in AS.No.6/2014 on the file of the learned I Additional District and Sessions Judge, Vellore. The Lower Appellate Court also rendered a finding that Ex.A1-Agreement is a Sale Agreement as the defendant/appellant has not discharged her burden that the Sale Agreement was executed by misrepresentation or that it was a security for the loan transaction. The Lower Appellate Court relying upon the judgment of this Court in K.Muthusamy and Another Vs. V.K.Subramaniam reported in 2011-2-LW-289, came to the conclusion that no sufficient evidence is adduced by the appellant/defendant to prove the case of loan transaction, particularly pointing out that the defendant 6 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 and her husband could have very well executed a Promissory Note or Mortgage Deed and that there was no need to execute an Agreement of Sale if the contention of the defendant is true. (10)The Lower Appellate Court mainly relying upon the evidence of DW1 and DW2, admitting the receipt of amount and the execution of the document-Ex.A1 held that the appellant/defendant executed the Sale Agreement knowing that she and her husband are entering into a Sale Agreement. It is further held that the evidence of DW1 and DW2 are not sufficient to prove their case that the transaction under Sale Agreement is only a loan transaction and the parties never intended to enter into a Sale Agreement. Aggrieved by the judgment and decree of the Lower Appellate Court confirming the judgment and decree of the Trial Court granting decree for specific performance, the above Second Appeal is preferred by the defendant.
(11)As stated earlier, the appellant/defendant died during the pendency of the Second Appeal, the 2nd appellant herein, is impleaded as the sole Legal Representative of the deceased sole appellant/defendant. 7 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 (12)The Second Appeal was admitted on the following substantial questions of law :-
(1)Whether the Courts below are right in holding that the Sale Agreement is a genuine transaction without relying on the terms particularly the clause in the agreement which clearly indicate that the sale agreement is only a security for loan transaction?
(2)Whether the plaintiff is entitled to the discretionary relief of specific performance?
(13)After referring to the pleadings and the questions of law framed by this Court, learned counsel for appellant relied upon the terms of the Agreement. It is relevant to extract the operative portion of the Agreement which are in the following lines:-
@/////Mf nkw;go tpjkha; 2 yf;fkpl;ltUf;F
ghj;jpag;gl;L mDgtpj;J tUk; ,jd; fPH;
brhj;J tptuj;jpy; fz;l brhj;ij 2
yf;fkpl;lth; ,d;W njjpapy; ek;kpy; 1
yf;fkpl;ltUf;F U:gha; 2.00.000-= (vGj;jhy;
U:gha; ,uz;L yl;rj;jpw;F) fpiuak;
bra;Jf;bfhLf;f ngrp Kot[ bra;J ,d;W
ek;kpy; 1 yf;fkpl;lthplkpUe;J ek;kpy; 2
8
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S.A.No.329/2017
yf;fkpl;lth; ml;thd;!; bjhifahf
buhf;fkhfg; bgw;Wf;bfhz;l bjhif U:gha;
1.50.000-= (vGj;jhy; U:gha; xU yl;rj;J
Ik;gJ Mapuk; kl;Lk;) ,Jnghf kPhp
fpiuaj; bjhifia ek;kpy; 1 yf;fkpl;lth;
,d;W Kjy; K:d;W tUl fhy jtizf;Fs;
ek;kpy; 2 yf;fkpl;lthplk; buhf;fkhf
bfhLj;J ek;kpy; 1 yf;fkpl;lth; brhe;j
brytpy; gjpt[ bra;Jbfhs;s ntz;oaJ/
jtwpdhy; 1 yf;fkpl;lth; nkw;go ml;thd;!;
bjhifia ,He;J tpl ntz;oaJ/ nkw;go
tha;jhfhy jtizf;Fs; ek;kpy;
1yf;fkpl;lth; kPjp fpiuaj;bjhifia
bfhLf;ft[k;. fpiuag;gj;jpuk; gjpt[
bra;Jf;bfhs;s jahuha; ,Ue;Jk; ek;kpy; 2
yf;fkpl;lth; fPHf
; z;l brhj;ij ek;kpy; 1
yf;fkpl;ltUf;F fpiuak; bra;Jf;bfhLf;f
jtwpdhy;. ek;kpy; 1 yf;fkpl;lth; kPjp
fpiuaj;bjhifia nfhh;l;oy; brYj;jp
rl;lg;go eltof;if vLj;J fpiuak;
bgw;Wf;bfhs;s 1 yf;fkpl;ltUf;F
chpika[zL
; vd 2 yf;fkpl;lth;
rk;kjpf;fpwhh;////@/
(14)The suit property is a residential house with a land measuring an extent of 877 ½ sq.ft., and the residential building consisting of a tiled house 9 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 with electricity service connection and drinking water connection. The property is situated within the jurisdiction of Vellore Municipality. From the nature of Agreement, the first impression of this Court about the document-Ex.A1 is that the document contains similar recitals when a Sale Agreement is obtained by money lenders as security for the loan transaction. After paying 75% of the consideration at the time of entering into the Sale Agreement, three years period is specified for the plaintiff/respondent to pay the balance of Rs.50,000/-. The forfeiture clause in the agreement reads as if the plaintiff/respondent has to forfeit the entire sum of Rs.1,50,000/- in case she fails to pay the balance amount within the period of three years. Similarly, the respondent/plaintiff was given an opportunity to enforce the Agreement by depositing the money in Court in case the appellant's husband fails to execute the Sale Deed when the respondent/plaintiff is ready to get the Sale Deed upon paying the balance of sale consideration. (15)When it is specifically pleaded by the defendant that the value of the suit property at the time of Sale Agreement is more than Rs.5 lakhs, the respondent/plaintiff has not come forward during her chief examination 10 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 denying the value of the property at the time of suit Agreement. Though the Sale Agreement is not required to be registered when the Agreement was executed, the same has been registered. It is the usual practice of financiers who obtain Sale Agreement as a security for loan transaction to insist registration of the Sale Agreement at the cost of the owner. The defendant in her written statement has given some more information about the circumstances under which the defendant's husband approached the plaintiff for loan and the disbursement of the amount as stated in the Sale Agreement. Though the respondent/plaintiff denied the suggestions put to her, she has admitted that she has an independent house of her own and her house is located just ten houses from the suit property. She has spoken to the fact that the parties agreed for a consideration of Rs.2 lakhs and a sum of Rs.1.5 lakhs was handed over to the seller and that the Sale Agreement was prepared by referring to the contents of a Release Deed dated 17.04.1996. During cross-examination, PW2 admits that he knew about the payment of advance amount and the total sale consideration only from the parties. He has also stated as follows: ''jhth brhj;J v';Fs;sJ vd;W vdf;F bjhpahJ/ 11 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 brhj;J tptuj;ij jhth brhj;jpw;F U:gha; 2.00.000-= kjpg;g[ fhl;oaJ mth;fs; brhy;yp jhd; vGjg;gl;lJ/ mf;hpbkz;l; njjpapy; brhj;jpd; kjpg;g[ U:/10 yl;rk;
vd;why; vdf;F bjhpahJ/ bghJthf mf;hpbkz;l;
ghf;fpj;bjhif brYj;j bghJthf 2 khjk; my;yJ 6 khjk; vd;W nghLthh;fs;/ Mdhy; jhth mf;hpbkz;l;oy;
ghf;fpj;bjhif brYj;j 3 tUlk; fhy mtfhrk;
bfhLf;fg;gl;Ls;sJ/ ghf;fpj;bjhif U:gha; 50 Mapuk;
jhd;/ Vd; mt;tst[ fhy mtfhrk;
bfhLf;fg;gl;Ls;sbjd;W mjpy; vGjtpy;iy///''. (16)The scribe of the document appears to be a professional document writer and his evidence does not support the case of the plaintiff/respondent that the defendant signed the document with an intention to sell the property. From the evidence of PW1 and PW2, the specific case of the defendant that the value of the suit property is few times more than the price mentioned is not disputed. There is no explanation from PW1 and PW2 as to why three years period was specified in the Agreement [Ex.A1] for paying the balance amount of 12 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 Rs.50,000/-. Though there is no direct evidence to hold that the plaintiff or her husband is a money lender, the fact that three years period was given to the plaintiff/respondent to pay the balance amount and the forfeiture clause in the terms of Agreement and the registration of Ex.A1 gives an indication that the respondent/plaintiff and her husband took a special care and got Ex.A1 registered so as to avoid unnecessary hurdles in establishing the nature of transaction. There appears to be a professional consultation for drafting Ex.A1. (17)The suggestion put to the respondent/plaintiff for specifying the period of three years was to the effect that a longer time of three years was insisted by the defendant and her husband as he wanted time to vacate the suit property. This is apparently false as the suit notice was issued within one year and nine months.
(18)DW2 has specifically stated in the chief examination as well as in the cross examination that the plaintiff/respondent had agreed to hand over the Sale Deed upon payment of the entire amount which was advanced to the defendant's husband at the time of Ex.A1. She also stated that the defendant's husband and herself had approached the plaintiff for getting 13 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 the loan of Rs.2 lakhs for interest. It was also her specific case that the amount of Rs.1,50,000/- was not directly given to the defendant's husband as portion of the amounts were given to settle the loan of the defendant's husband. She also deposed to the effect that some amounts were paid by the defendant's husband towards interest. (19)This Court though is not expected to reappreciate the evidence, is convinced that the Courts below have failed to appreciate the evidence of witnesses in full especially when the issue that arose for consideration before the Courts below was whether the Sale Agreement [Ex.A1] is intended to be acted upon as a Sale Agreement or it was executed as a security for the loan transaction. In this connection, the terms of Agreement and the nature of oral evidence are very much important and such a defence is permissible in law as per judicial pronouncements. (20)It is well settled that it is permissible to a party to a Deed to contend that the Deed was not intended to be acted upon but was for a different purpose. The principle was extended to a case of this nature where the defendant pleaded that the Agreement of Sale [Ex.A1] was never intended to be acted upon as a Sale Agreement at the time of execution and that it 14 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 was only a security for the loan transaction.
(21)The judgment of the Privy Council in Tyagaraja Mudaliyar V. Vedathanni reported in AIR 1936 PC 70 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. The plaintiff has fairly conceded the receipt of consideration of Rs.1.5 lakhs. However, it was the earnest effort of the appellant/defendant that the transaction was never intended to be a Sale Agreement and that it was only a loan transaction.
(22)As pointed out earlier, 75% of the Sale Consideration was paid under Ex.A1 and for the balance of Rs.50,000/- [25%], three years period was given. This Court has already found that there was no acceptable explanation as to why three years period was specified in the Sale Agreement for paying just 25% of the total sale consideration. It is stated by the respondent/plaintiff that money was borrowed for the medical expenses of the defendant's husband.
15 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 (23)The following are some of the judgments where the issue whether the Sale Agreement is a security for the loan transaction or executed for the sale of property, has been considered particularly with reference to the terms of Agreement.
(24)In the case of K.Muthusamy and Another Vs. K.V.K.Subramaniam [cited supra], a learned Single Judge of this Court has observed that granting three years time for paying substantial portion of the sale consideration under the Agreement is one of the circumstances to hold that the Sale Agreement is executed as a security for the loan amount. (25)The learned counsel appearing for the respondent relied upon a judgment of this Court in the case of K.Manoharan Vs. T.Janaki Ammal reported in 2012 [3] CTC 205. The question arose for consideration was entirely different. This Court is unable to get any support to the argument of the learned counsel for the respondent.
(26)The Hon'ble Supreme Court in the case of Tejram Vs. Patirambhau reported in AIR 1997 SC 2702 has dealt with a similar case. That was also a case where substantial part of sale consideration was acknowledged as advance under the Sale Agreement and very long time 16 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 for completion of transaction by paying balance of sale consideration was considered. After finding that there was no explanation for giving a few years time for payment of balance, the Hon'ble Supreme Court held that the Agreement for Sale was not purported to be a sale in truth and reality. Though there were other circumstances, the Hon'ble Supreme Court considered giving unreasonably a longer time without proper reasons as a strong circumstance to indicate that the Sale Agreement is not real and accepted the case of defendant that the agreement must be taken as a security for loan transaction.
(27)A learned Single Judge of this Court in the case of Pappammal @ T.Pappa Vs. P.Ramasamy reported in 2012 [4] CTC 100 has opined that the Sale Agreement must have been executed only as security or as a loan transaction since out of total sale consideration of Rs.40,000/-, a sum of Rs.30,000/- was paid as advance and for the payment of balance of Rs.10,000/-, five year period was prescribed. (28)In yet another case, where out of total consideration of Rs.2,00,000/- a sum of Rs.1,65,000/- was paid as advance and three years period was fixed for the payment of balance of sale consideration, this Court in the 17 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 Rajammal and Another V. M.Shenbagam reported in 2016 [6] CTC 225 held that in the absence of proper explanation for prescribing longer period, the Sale Agreement is not a bona fide agreement but obtained as a security to loan transaction.
(29)This Court vide judgment dated 01.03.2017 made in SA.No.469/2011 in the case of Muthamizh Selvi Vs. Lakshmanan, considered similar situation and allowed the appeal filed by the defendant in the suit for specific performance. It is useful to refer to the following paragraphs in the said judgment:-
''16.As pointed out earlier, the suit agreement provides for a longer time to pay the balance of sale consideration which is less than 1/20th of the total sale consideration. Normally, it is the tendency of every purchaser to get the sale deed immediately within a reasonable time after paying the entire sale consideration. In this case, three years period was given to the purchaser to pay the balance of Rs.10,000/- The conduct of parties by entering into the agreement under Ex.A1 does not appear to be a bona fide sale agreement. As indicated in the judgment of the Hon'ble Supreme Court, the long time 18 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 specified in the agreement is only the outer limit within which the owner of the property has to repay the entire amount received as loan with interest. The third point on the genuineness of the agreement of sale is also relevant. P.W.2 has been examined to prove the document Ex.A1. He also admitted that he is a broker. He admitted that the plaintiff wanted a house for a sum between Rs.2,00,000/- to Rs.2,50,000/-. Consciously, he admitted that he has not enquired about any encumbrance over the suit property. Though according to him, the plaintiff enquired about the parent document of title deed, and it was replied by the defendant that the property was mortgaged to LIC, he says that both plaintiff and himself did not enquire the defendant as to the amount of money borrowed by the defendant from LIC by mortgaging the property. P.W.2 also admits that the entire transaction under Ex.A1 was completed without proper enquiry within a day. The evidence of P.W.3 is contrary to his own evidence in chief examination with regard to the preparation of draft sale deed. It is his specific evidence in the cross examination that the xerox copy of the sale deed or the original parent 19 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 document were not given to him at the time of preparing the draft sale deed. The draft sale deed according to him was written only in a stamp paper of the value of Rs.20/-. It is surprising to note that a sale deed can be drafted in a stamp paper of Rs.20/-. The document Ex.A7 is a unregistered and unstamped sale deed drafted by P.W.3. This document appears to have been created for the purpose of proving that the plaintiff is ready and willing to perform his part of the contract by making the sale deed prepared when he issued notice. A draft sale deed need not be written in stamp paper. For drafting the sale deed, the plaintiff is required to purchase stamp papers in tune with the total consideration. Hence, the plaintiff has called upon P.W.3 to speak something which is again unnatural. The evidence of P.W.3 would only indicate that the plaintiff has neither come forward with clean hands nor has pleaded the truth.
17.Regarding the value of the property, the evidence of P.W.2 is contrary to the evidence of P.W.1. While P.W.1 admits that the value of the property demanded by the defendant was more than Rs.5,00,000/-, the evidence of P.W.2 is that the 20 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 defendant quoted Rs.2,50,000/- as price. Though the agreement is for a sum of Rs.2,10,000/- it was stated by P.W.2 that the amount demanded by the defendant was Rs.2,50,000/-. Hence, the evidence of P.W.1 and P.W.2 are mutually contradictory. Even with regard to the payment of a sum of Rs.2,00,000/- as advance, P.W.2 says in his proof affidavit that the said sum of Rs.2,00,000/- was paid at the Sub Registrar Office. Whereas, the document writer who was examined as P.W.4 says that the plaintiff paid the sum of Rs.2,00,000/- when the parties were in his office. The evidence of P.W.3 and P.W.4 are brought in to prove the genuineness of the sale agreement as the plaintiff expected that he would be confronted with Ex.A1 as a document to support the loan transaction.
18.From the reading of the evidence, I find that the Courts below have not considered the relevant circumstances and the evidence of plaintiff's witnesses in a proper perspective. When the witnesses examined on the side of the plaintiff have given different versions, their credibility ought to have been considered before accepting their evidence. Secondly, having regard to the nature of case pleaded by the 21 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 parties, the Court should appreciate the evidence with little more care and caution so as to give a definite finding. In the present case, I am of the firm view that the findings of the Courts below are perverse......'' (30)Learned counsel for the respondent submitted that having pleaded that the defendant and her husband agreed to execute Mortgage Deed and signed the Agreement under Ex.A1, the burden of proof lies on the defendant to prove the nature of transaction especially when the plaintiff has discharged her burden. The defendant did not deny the execution of the document Ex.A1-Sale Agreement. However, it is contended that her husband approached the plaintiff for a loan and the Sale Agreement was obtained as a security for loan transaction. May be there is some discrepancy in the pleading. The learned counsel for the respondent relied upon a judgment of a Division Bench of this Court in N.Venugopal and another Vs. N.D.Sukumar and Others reported in 2017 [7] MLJ 513 for the proposition that the conduct of defendant should also be considered while exercising discretion for ecreeing or denying a decree for specific performance.
(31)Learned counsel relied upon the judgment of the a Division Bench of 22 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 this Court in K.Manoharan Vs.T.Janaki Ammal and Others reported in 2012 [3] CTC 205, wherein it is held as follows:-
''25. In all those cases, defence plea was that the real transaction was a loan transaction by way of security for repayment of loans. Since the defence urged was contradictory to the nature of transaction, in all those decisions, Court held that Defendants cannot lead evidence to contradict the terms of written agreement. Those decisions may not be applicable to the case on hand, since in the present case Defendants 1 to 3 have adduced evidence regarding the oral agreement supplemented to Ex. A1- Agreement of Sale.
26. When the terms of transaction which reduced into writing, it is not possible to lead evidence to contradict its terms in view of Section 91 of Indian Evidence Act. As per Section 92 of Indian Evidence Act, extrinsic parol evidence contradicting, varying adding to or subtracting from the terms of a solemn written instrument is inadmissible. This is because the parties have reduced into writing their agreement, it must be presumed that they have put into writing all that they considered necessary to give full expression to their meaning yard intention. As between parties to an instrument oral of intention is not admissible for the purpose either of construing deeds or of proving the intention of the parties.
27. Even though no extrinsic evidence is admissible in substitution for the written document, there are exceptions to the 23 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 Rule in Section 92 of Indian, Evidence Act. Proviso (2) to Section 92 of Indian Evidence Act reads as under: Proviso (2), - The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this Proviso applies, the Court shall have regard to the degree of formality of the document. Thu as per Proviso (2) to Section 92 of Indian Evidence Act, if there is contemporaneous nor prior separate oral agreement as to any matter which is not inconsistent with its terms may be proved. The separate-agreement should be on a distinct collateral matter although it may form part of the same transactions, the test being that it should not vary or contradict the terms of the written contract.
28. In the light of the above principles, we need to analyse the evidence of DWs. 1 & 2 and consider whether they would fall within the Proviso (2) to Section 92 of Indian Evidence Act. As pointed out earlier, DWs. 1 & 2 have stated that at the time of entering into an Agreement of Sale (Ex. A1), parties have agreed that Plaintiff has to allot six plots and on that understanding; the price was reduced to ' 13,500/- per cent. On such agreement between the parties, it was agreed at the time of entering into Ex. A1- Agreement of Sale. Evidence adduced as to the oral agreement between the parties for allotting six plots to the Defendants 1 to 3 is no way contradicting, varying the terms of Ex. A1-Agreement of Sale. Therefore, the evidence adduced to establish the oral agreement between the parties to allot six plots to the Defendants 1 to 3 by the Plaintiff is admissible in evidence and not hit under Sections 91 & 92 of Indian Evidence Act. 24
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29. The question thus falling for consideration is which of the six plots to be allotted to the Defendants. Though the layout plan [Amman Nagar-Kallakurichi] was stated to be attached with Ex. B1-Agreement of Sale entered by the Plaintiff with one Veerasamy, the same does not contain the layout plan.'' (32)This Court is unable to understand why this portion of the judgment of the Division Bench is cited. The factual content and the principles reiterated would only support the case of defendant. In all fairness, the above judgment has no application to the facts of this case. (33)The learned counsel for the respondent relied upon another judgment of the Hon'ble Supreme Court in Zarina Siddiqui Vs. A.Ramalingam @ R.Amarnathan reported in 2015 [1] SCC 705. The following paragraphs are highlighted and hence, the same are extracted:-
26. The Court of Chancery in Attorney General v. Wheate [(1757-59) 1 Eden 177 : 28 ER 652] followed Rooke's case [(1598) 5 Co Rep 99 b :
77 ER 209] and observed: (ER p. 666) “… the law is clear and courts of equity ought to follow it in their judgments concerning titles to equitable estates; otherwise great uncertainty and confusion would ensue. And though proceedings in equity are said to be secundum discretionem boni viri, 25 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 yet when it is asked, vir bonus est quis? The answer is, qui consulta patrum, qui leges, juraque servat. And as it is said in Rooke's case [(1598) 5 Co Rep 99 b : 77 ER 209] , that discretion is a science not to act arbitrarily according to men's will and private affection; so the discretion which is to be exercised here, is to be governed by rules of law and equity, which are not to oppose, but each in its turn to be subservient to the other. This discretion in some cases follows the law implicitly; in others assists it, and advances the remedy; in others, again, it relieves against the abuse, or allays the rigour of it, but in no case does it contradict or overturn the grounds or principles thereof, as has been sometimes ignorantly imputed to this Court. That is a discretionary power, which neither this, nor any other court, not even the highest, acting in a judicial capacity, is by the Constitution entrusted with.’ This description is full and judicious and what ought to be imprinted on the mind of every Judge.”
27. In Satya Jain v. Anis Ahmed Rushdie [(2013) 8 SCC 131 : (2013) 3 SCC (Civ) 738] this Court 26 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 observed: (SCC pp. 145-46, para 40) “40. The discretion to direct specific performance of an agreement and that too after elapse of a long period of time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles.
The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case, which features the experienced judicial mind can perceive without any real difficulty. It must however be emphasised that efflux of time and escalation of price of property, by itself, cannot be a valid ground to deny the relief of specific performance. Such a view has been consistently adopted by this Court. By way of illustration opinions rendered in P.S. Ranakrishna Reddy v. M.K. Bhagyalakshmi [(2007) 10 SCC 231] and more recently in Narinderjit Singh v. North Star Estate Promoters Ltd. [(2012) 5 SCC 712 : (2012) 3 SCC 27 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 (Civ) 379] may be usefully recapitulated.”
28. In Nirmala Anand v. Advent Corpn. (P) Ltd. [(2002) 8 SCC 146] , a three-Judge Bench of this Court on a similar issue held as under: (SCC p. 151, para 6) “6. It is true that grant of decree of specific performance lies in the discretion of the court and it is also well settled that it is not always necessary to grant specific performance simply for the reason that it is legal to do so. It is further well settled that the court in its discretion can impose any reasonable condition including payment of an additional amount by one party to the other while granting or refusing decree of specific performance. Whether the purchaser shall be directed to pay an additional amount to the seller or converse would depend upon the facts and circumstances of a case. Ordinarily, the plaintiff is not to be denied the relief of specific performance only on account of the phenomenal increase of price during the pendency of litigation. That may be, in a given case, one of the considerations besides many others to be taken into consideration for refusing the decree of specific performance. As a general rule, it cannot be 28 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 held that ordinarily the plaintiff cannot be allowed to have, for her alone, the entire benefit of phenomenal increase of the value of the property during the pendency of the litigation. While balancing the equities, one of the considerations to be kept in view is as to who is the defaulting party. It is also to be borne in mind whether a party is trying to take undue advantage over the other as also the hardship that may be caused to the defendant by directing specific performance. There may be other circumstances on which parties may not have any control. The totality of the circumstances is required to be seen.”
29. In V. Pechimuthu v. Gowrammal [(2001) 7 SCC 617] this Court held as under: (SCC p. 630, paras 25-
26) “25. Counsel for the respondent finally urged that specific performance should not be granted to the appellant now because the price of land had risen astronomically in the last few years and it would do injustice to the respondent to compel her to reconvey property at prices fixed in 1978.
26. The argument is specious. Where the court is considering whether or not to grant a decree for 29 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 specific performance for the first time, the rise in the price of the land agreed to be conveyed may be a relevant factor in denying the relief of specific performance. (See K.S. Vidyanadam v. Vairavan [K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1 : (1997) 1 SCR 993] .) But in this case, the decree for specific performance has already been passed by the trial court and affirmed by the first appellate court. The only question before us is whether the High Court in second appeal was correct in reversing the decree. Consequently the principle enunciated in K.S. Vidyanadam [K.S. Vidyanadam v. Vairavan, (1997) 3 SCC 1 : (1997) 1 SCR 993] will not apply.”
30. In a recent judgment dated 22-9-2014 in Civil Appeal No. 9047 of 2014 entitled K. Prakash v. B.R. Sampath Kumar [(2015) 1 SCC 597] , this Court observed that: (SCC p. 605 and paras 16 & 18-19) “16. The principles which can be enunciated are that where the plaintiff brings a suit for specific performance of contract for sale, the law insists a condition precedent to the grant of decree for specific performance: that the plaintiff must show his continued readiness and willingness to perform his 30 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 part of the contract in accordance with its terms from the date of contract to the date of hearing. Normally, when the trial court exercises its discretion in one way or other after appreciation of entire evidence and materials on record, the appellate court should not interfere unless it is established that the discretion has been exercised perversely, arbitrarily or against judicial principles. The appellate court should also not exercise its discretion against the grant of specific performance on extraneous considerations or sympathetic considerations. It is true, as contemplated under Section 20 of the Specific Relief Act, that a party is not entitled to get a decree for specific performance merely because it is lawful to do so. Nevertheless once an agreement to sell is legal and validly proved and further requirements for getting such a decree are established then the court has to exercise its discretion in favour of granting relief for specific performance. ***
18. Subsequent rise in price will not be treated as a hardship entailing refusal of the decree for specific performance. Rise in price is a normal change of circumstances and, therefore, on that ground a decree 31 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 for specific performance cannot be reversed.
19. However, the court may take notice of the fact that there has been an increase in the price of the property and considering the other facts and circumstances of the case, this Court while granting decree for specific performance can impose such condition which may to some extent compensate the defendant owner of the property. This aspect of the matter is considered by a three-Judge Bench of this Court in Nirmala Anand v. Advent Corpn. (P) Ltd. [(2002) 8 SCC 146] …”
31. In Vimaleshwar Nagappa Shet v. Noor Ahmed Shariff [(2011) 12 SCC 658 : (2012) 2 SCC (Civ) 785] , an agreement to sell a dwelling house was entered into by some of the co-sharers and the matter was ultimately compromised on payment of higher price. On those facts the Court held that since the value of the property escalates in urban areas very fast, it would not be equitable to grant relief of specific performance after the lapse of a long period of time. The said decision has no application in the present case.
32. Similarly, in K.S. Vidyanadam [K.S. 32 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 Vidyanadam v. Vairavan, (1997) 3 SCC 1 : (1997) 1 SCR 993] , this Court on facts found that there was a total lapse and negligence for a period of more than 2½ years from the side of the plaintiff in taking any step to perform his part of contract under the agreement and there was gross violation of the terms of the agreement which required him to pay the balance, purchase the stamp paper and then seek for execution of the sale deed. Further the delay was coupled with substantial rise in price, which brought about a situation where it would not be equitable to give the relief of specific performance to the plaintiff. With due respect, this decision is also not applicable in the facts of the present case.
33. The equitable discretion to grant or not to grant a relief for specific performance also depends upon the conduct of the parties. The necessary ingredient has to be proved and established by the plaintiff so that discretion would be exercised judiciously in favour of the plaintiff. At the same time, if the defendant does not come with clean hands and suppresses material facts and evidence and misleads the court then such discretion should not be exercised by refusing to grant 33 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 specific performance.
34. In the instant case, as noticed above, although Defendant 2 held a registered power of attorney on behalf of Defendant 1 to sell and dispose of the property, but the defendants not only made a false statement on affidavit that the power of attorney had authorised the second defendant only to look after and manage the property but also withheld the said power of attorney from the court in order to misguide the court from the truth of the facts. Further, by registered agreement the defendants agreed to sell the suit premises after receiving advance consideration but they denied the existence of the agreement in their pleading. Such conduct of the defendants in our opinion, disentitles them to ask the court for exercising discretion in their favour by refusing to grant a decree for specific performance. Further, if a party to a lis does not disclose all material facts truly and fairly but states them in distorted manner and misleads the court, the court has inherent power to exercise its discretionary jurisdiction in order to prevent abuse of process of law.
35. However, it is noticed from the facts that the 34 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 registered agreement to sell was executed between the parties on 25-6-1979 and the suit for specific performance was filed by the appellant-plaintiff in January 1981. The suit was decreed by the trial court in November 1998. The respondent-defendant challenged the said decree before the High Court in April 1999. The High Court allowed the appeal by terms of the judgment dated 3-2-2004 [A. Ramalingam v. H. Siddiqui, RFA No. 265 of 1999, decided on 3-2-2004 (KAR)] and set aside the trial court's judgment and decree. The appellant-plaintiff preferred special leave petition, which was numbered as Civil Appeal No. 6956 of 2004. The civil appeal was finally decided on 4-3-2011 [H. Siddiqui v. A. Ramalingam, (2011) 4 SCC 240 : (2011) 2 SCC (Civ) 209] setting aside the High Court's judgment and remanding the matter back to the High Court to decide the appeal afresh. On remand, the learned Single Judge in terms of the order dated 1-3-2012 [A. Ramalingam v. H. Siddiqui, RFA No. 265 of 1999, decided on 1-3-2012 (KAR)] allowed the appeal and set aside the judgment and decree of the trial court. In this way, the matter remained pending before the High 35 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 Court and this Court for a number of years.'' (34)The facts of this case dealt by the Hon'ble Supreme Court was entirely different. It is to be noted that the learned counsel for the respondent has failed to focus the point that was argued by the learned counsel for the appellant. When it is permissible to one of the parties to the contract to plead that the nature of transaction is quite contrary to the terms of Agreement, the Court has to examine the issue more carefully so as to decide the real character of transaction. The plea that the defendant's husband approached the plaintiff for a loan is supported by evidence of DW2. Since the defendant's husband was already sick and he was in need of money for medical expenses and he died before filing suit, this Court cannot ignore the defence merely because the execution of Agreement is admitted. The value of the property as on the date of Agreement as pleaded by defendant in the written statement was not denied by plaintiff either by way of reply statement or in her evidence in chief. When people are not in a position to bargain due to their urgent need, they often fall to the prey of ruthless moneylenders or greedy neighbours. As pointed out by this Court earlier, the terms of Agreement 36 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 evidencing 75% of sale consideration under Agreement and giving three years time for payment of balance of consideration, without an explanation for giving such a long time is a material circumstance. Absolutely there is no pleading or evidence about any pre-negotiation which happens in every genuine sale transaction. The fact that the Agreement is registered, signature from the defendant [wife of executant] is also obtained as a witness and the forfeiture clause gives an indication that special care is taken by plaintiff to make the Agreement as a genuine sale transaction. The Courts below failed to consider several facts and circumstances particularly when the specific case that the value of property was more than Rs.5 lakhs as on the date of agreement, the consideration agreed was just Rs.2 lakhs. Keeping it in mind, after careful consideration of the terms of Ex.A1-Agreement, the pleadings, evidence and surrounding circumstances, this Court is of the view that there is no consensus ad-idom for the Sale Agreement and the case of the plaintiff that her husband executed the document-Ex.A1 as a security for the loan transaction is accepted and the findings of the Courts below without considering the pleadings, the nature of Agreement and material 37 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 evidence and circumstances are perverse.
(35)The learned counsel for the respondent/plaintiff submitted that the Courts below have specifically held that the suit Agreement is an Agreement of Sale and that the plaintiff is ready and willing to perform his part of the contract in terms of the Sale Agreement. Since both the Courts have concurrently held that the plaintiff is entitled to a decree for specific performance, this Court in Second Appeal may not interfere particularly in view of the scope of interference in terms of Section 100 of CPC. He relied on a few judgments of this Court which are not akin to the case on hand.
(36)This Court, normally may not interfere with the findings on facts when the Courts below have concurrently held against the defendant. In a suit for specific performance, the pleadings and the evidence should be carefully analysed as the relief is discretionary and equitable. The rigor of section 20 of the Specific Relief Act has now been changed, the provisions of Section 20 of the Specific Relief Act cannot be ignored in this litigation where the parties have entered into the agreement and the suit was laid long prior to the amendment. Having regard to the terms of 38 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 the Agreement and the evidence let in by both sides the Court cannot ignore the fact that the Courts below have failed to consider some of the relevant aspects which are germane to the issue raised for consideration in the suit for specific performance.
(37)Had the Courts below applied their mind with regard to the terms of Agreement which was considered by this Court and the Hon'ble Supreme Court in a few judgments above referred to., the findings would have been different and the failure to consider the recitals of the Agreement in full and the nature of evidence let in on the issue which can be considered by this Court under Section 100 of CPC.
(38)The suit property is an extent of 2 cents of land within the municipal limits of Vellore Town. More than the value of building, the value of the land would be high. This Court also accepts the plea that the sale price mentioned in Ex.A1 is far below the market value as on the date of the Sale Agreement. Considering these facts, this Court has no hesitation to hold that the plaintiff is not entitled to the equitable relief of specific performance especially when the findings of the Courts below without considering the material evidence and the recitals of the Sale Agreement, 39 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 cannot be sustained.
(39)In the result, the Second Appeal is allowed and the judgments and decrees of the Courts below are set aside.
(40)Since it is admitted that the defendant has received a sum of Rs.1,50,000/- by way of loan from the respondent/plaintiff under Ex.A1, the appellant is directed to repay the entire amount of Rs.1,50,000/-. Though it is stated that the defendant had paid some amount by way of interest, this Court is unable to deduct any amount paid by way of interest. Hence, the appellant is also liable to pay simple interest at the rate of 12% per annum to the respondent/plaintiff. (41)Hence, there shall be a simple money decree in favour of the respondent/plaintiff for a sum of Rs.1,50,000/- [Rupees One Lakh and Fifty Thousand only] with interest @ 12% per annum from the date of Agreement till the date of payment. No costs. Consequently, connected miscellaneous petition is closed.
18.10.2022
AP
Index : Yes / No
Internet : Yes
40
https://www.mhc.tn.gov.in/judis
S.A.No.329/2017
To
1.The 1st Additional District and Sessions Judge Vellore, Vellore District.
2.The Subordinate Judge Vellore, Vellore District.
3.The Section Officer VR Section, High Court Chennai.
41 https://www.mhc.tn.gov.in/judis S.A.No.329/2017 S.S.SUNDAR, J.
AP Judgment made in S.A.No.329/2017 18.10.2022 42 https://www.mhc.tn.gov.in/judis