Madras High Court
Nanjappa Gounder vs Ashok Kumar on 18 December, 2012
Author: P.R.Shivakumar
Bench: P.R.Shivakumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 18.12.2012
Coram :
THE HON'BLE MR. JUSTICE P.R.SHIVAKUMAR
S.A. No. 1259 of 2012
and
M.P. No. 1 of 2012
1. Nanjappa gounder
2. Ramasamy ... Appellants
..vs..
Ashok Kumar ... Respondent
PRAYER: Second Appeal filed under Section 100 of Civil Procedure Code against the Judgment and Decree dated 31.01.2011 made in A.S. No. 35 of 2010 on the file of the learned Sub Court, Sathyamangalam confirming the Judgment and Decree dated 05.04.2010 made in O.S. No. 190 of 2004 on the file of the learned District Munsif Court, Sathyamangalam.
For Appellants ... Mr. N. Manokaran
For Respondent ... Mr. A.K. Kumarasamy
J U D G E M E N T
The defendants in the original suit are the appellants in the Second Appeal. The suit O.S. No. 190 of 2004 was filed on the file of the learned District Munsif, Sathyamangalam for the relief of specific performance of an agreement for sale dated 17.04.2002. The suit was decreed by the trial court. On appeal the decree of the trial court was confirmed. Hence, the appellants/ defendants are before this Court with the present Second Appeal.
2. The respondent herein filed the suit praying for the relief of specific performance directing execution of sale deed and for delivery of possession of suit property, based on the following averments made in the plaint:-
The appellants/ defendants who are the owners of the suit property, came forward to sell the same for a sum of Rs.60,000/-, received a sum of Rs.5000/- as advance and executed an agreement for sale on 17.04.2002, agreeing to execute a sale deed on payment of the balance sale consideration of Rs.55,000/- within six months from the date of agreement. They also held out that there was no encumbrance on the property. Subsequently, the appellants/ defendants requested a further advance of Rs.15,000/- and the said amount was paid on 13.09.2002 for which the second appellant/ second defendant issued a receipt. Thus, the balance amount of consideration to be paid after 13.09.2002 was only Rs.40,000/-. Though the respondent/ plaintiff offered to pay the said amount and requested the appellants/ defendants to execute the sale deed within the time stipulated in the agreement, they were evading performance. Later on the respondent/ plaintiff came to know that the suit property along with the other properties had been mortgaged by the second appellant/ second defendant and obtained a loan of Rs.1,00,000/- from an Agricultural Co-operative Bank. When questioned about the encumbrance the appellants/ defendants promised to clear the encumbrance, but did not take effective steps to do the same before the due date. Hence, the respondent/ plaintiff had to issue a lawyer's notice on 10.10.2002 calling upon the appellants/ defendants to execute a sale deed and get it registered authorising the appellants/ defendants to pay the balance sale consideration of Rs.40,000/- towards the discharge of the debt due to the Agricultural Cooperative Bank. But the appellants/ defendants issued a reply notice dated 24.10.2002 containing false and untenable allegations. The respondent/ plaintiff was always ready and willing to perform his part of the contract. In case the court would so direct, instead of making payment of the balance sale consideration to the Agricultural Cooperative Bank, the respondent/ plaintiff would deposit the said amount into the court to be applied towards the discharge of the mortgage. In such circumstances, the respondent/ plaintiff was constrained to file the suit for specific performance.
3. The first appellant/ first defendant filed a written statement and the same was adopted by the second appellant/ second defendant. The averments contained therein, in brief are as follows :-
Even on the date of agreement the respondent/ plaintiff was fully aware that the property was subject to a mortgage created in favour of the Agricultural Cooperative Bank. On the date of agreement itself the value of the property was more than Rs.1,00,000/-. With the specific understanding that the respondent/ plaintiff should discharge the mortgage loan, the suit agreement was entered into. In other words, the respondent/ plaintiff agreed to purchase the suit property subject to the mortgage and not free from the said mortgage. The value of the property as fixed in the agreement was Rs.1,05,000/- and Rs.5000/- was paid to the appellants/ defendants on the date of agreement. The sale price agreed was not Rs.60,000/-. At the time of entering into the agreement, the Agricultural Co-operative Bank had announced certain concessions provided the payment was made within a certain date. The respondent/ plaintiff who had undertaken to discharge the mortgage deed and get the sale deed executed failed to do so. The plaint averment that a sum of Rs.15,000/- was paid on 13.09.2002 as further advance is false. No such payment was made either on 13.09.2002 or on any subsequent date. On a representation that he would clear the debt due to the Cooperative Bank, the respondent/ plaintiff obtained the signature of the second appellant Ramaswamy in a blank paper for writing a receipt for payment of the balance amount of Rs.55,000/-. When the first appellant was approached to get his signature also, he informed the respondent/ plaintiff that he should discharge the mortgage at the first instance and then get his signature. The other allegations regarding the readiness and willingness on the part of the respondent/ plaintiff are not true. For the legal notice issued by the respondent/ plaintiff, proper reply was issued stating the true and correct facts. Since the respondent/ plaintiff was not ready and willing to perform his part of the contract, the suit for specific performance filed by him should be dismissed with cost.
4. The learned trial Judge, after trial, accepted the case of the plaintiff in full and disbelieved the defence case of the defendants and consequently decreed the suit as prayed for with cost. On appeal, in A.S. No. 35 of 2010 on the file of the Sub Court, Sathyamangalam, the learned Subordinate Judge agreed with the findings of the trial court and dismissed the appeal confirming the decree passed by the trial Court. Hence, the present second appeal has been filed by the appellants/ defendants.
5. Mr. N. Manoharan, learned counsel for the appellant during his argument made the following submissions:-
1) Though the execution of the agreement and the receipt of Rs.5000/- as advance on the date of agreement was admitted by the appellants/ defendants, their contention that a lesser amount than the actual sale price has been quoted in the agreement for the purpose of reduction of stamp duty in case of execution of the sale deed was not properly considered by the courts below.
2) A plausible explanation for the receipt produced by the respondent/ plaintiff, as a receipt for payment of a further advance of Rs.15,000/- on 13.09.2002 had been made by the appellants/defendants, but the said explanation was erroneously rejected by the courts below.
3) The courts below have also failed to consider the contention of the appellants/ defendants that the respondent/ plaintiff agreed to purchase the property not free from encumbrances and on the other hand he undertook to discharge the mortgage debt due to the Agricultural Co-operative Bank.
4) Though there is an averment in the plaint that the respondent/ plaintiff was ever ready and willing to perform his part of the contract was not proved by showing the financial position of the respondent/ plaintiff and in view of the same the courts below should have held him not entitled to the relief of specific performance.
Based on the above said contentions, learned counsel for the appellants/ defendants in the Second Appeal argued that the decree of the trial court as confirmed by the lower Appellate court should be set aside and the suit should be dismissed.
6. The appellants have formulated the following questions and incorporated the same in the memorandum of second appeal as substantial questions of law involved in the Second appeal:-
(a) Whether the courts below have committed an error in decreeing the suit for specific performance notwithstanding the fact that the plaintiff has failed to prove the genuineness of the transaction, particularly when the suit has been used as an oppression to have unfair advantage against the defendants ?
(b) Whether the courts below erred in law in not drawing adverse inference against the plaintiff for non productuion of the encumbrance certificate, especially when the suit property was the subject matter under mortgage before the Agricultural Cooperative Bank ?
(c) Whether the courts below have committed an error in not considering the conduct on the part of the plaintiff who has miserably failed to prove his readiness and willingness throughout to get the equitable relief of specific performance ?
7. We have to consider whether the said questions have arisen in the second appeal and whether any one can be taken as a substantial question of law. The question projected as the first substantial question of law is couched in such a way to show that the respondent/ plaintiff failed to prove the genuineness of the transaction and the suit had been filed as an oppression to have unfair advantage over the appellants/ defendants. In this regard, learned counsel for the appellants/ defendants would refer to the clauses found in the agreement and the defence plea made by the defendants regarding the actual amount agreed to be the sale consideration.
8. According to the appellants/ defendants, though the agreement recites Rs.60,000/- as the sale consideration, the actual agreed amount was Rs.1,05,000/-. The suit sale agreement has been produced and marked as Exh.A-1. It is a registered agreement. The total sale consideration quoted in the agreement is Rs.60,000/- and not Rs.1,05,000/- as contended by the appellants/ defendants. The clause regarding the amount of consideration is an essential term/ condition of the contract of agreement for sale. When the agreement is in writing, that too in the form of a registered document, under Section 92 of the Indian Evidence Act, a party to the agreement shall not be permitted to lead oral evidence to vary the terms of the contract incorporated in the written and registered document. Applying the said principle, the courts below have rightly come to the conclusion that the plea of the appellants/ defendants that the agreed sale consideration was Rs.1,05,000/- and not Rs.60,000/- as reflected in Ex.A1 Agreement, is bound to be rejected as untenable.
9. Even assuming that a party to the agreement can be allowed to lead oral evidence to contend that the amount agreed to be paid was different from the amount quoted in the agreement, on facts the contention of the appellants/ defendants is bound to be rejected. The reason for quoting a lesser amount than the actual amount, according to the appellants/ defendants, is to reduce the liability towards payment of stamp duty while executing a sale deed in accordance with the agreement for sale. Eventhough an agreement would have preceded the execution of the sale deed, the parties shall be at liberty to cancel the said agreement and get a sale deed executed without any reference to the agreement for sale. Stamp duty leviable for the agreement for sale is only a fixed one unless possession is delivered in part performance of the agreement. Therefore, the contention of the appellants/ defendants that a lesser amount has been quoted in the agreement in order to avoid heavier stamp duty cannot be countenanced. The difference between the amount quoted in Ex.A1 sale agreement and the amount cited by the appellants/ defendants or the actual sale price is taken into consideration, is only Rs.45,000/- attracting a stamp duty of a meager amount of Rs.3600/-. Hence, the contention raised by the appellants/ defendants that a lesser amount was quoted in the agreement as sale consideration keeping in mind the stamp duty to be payable at the time of execution of the sale deed, cannot be accepted as a tenable one. No prudent man will enter into an agreement citing a lesser amount as sale consideration because it shall be a potential danger for him to loose his property for such a lesser amount in case the opposite party wants to enforce the agreement through a court of law. On that ground also, the contention of the learned counsel for the appellants/ defendants is found to be dis-countenanced.
10. The appellants/ defendants themselves have clearly and candidly admitted in their written statement that the suit property and other properties had been mortgaged in favour of the Agricultural Cooperative Bank. But, they have not stated what was the amount borrowed from the said bank. They have made a plea in the written statement that the plaint allegation to the effect that the suit property along with other properties had already been mortgaged with the Agricultural Cooperative Bank for a loan of Rs.1,00,000/- by the second appellant/ second defendant was very vague. In fact the best person to furnish the particulars of the loan were the appellants and instead of furnishing the particulars they have made a vague plea of defence claiming that the plea made in the plaint is vague. If at all the respondent/ plaintiff has promised to clear the loan they should have furnished the particulars regarding the loan and they would have produced the encumbrance certificate to show that the mortgage loan was cleared. Instead of doing it, the appellants/ defendants are trying to find fault with the respondent/ plaintiff for the non-production of the encumbrance certificate. When there is an admission by the appellants/ defendants regarding the existence of the mortgage in favour of the Agricultural Cooperative Bank, the respondent/ plaintiff cannot be found fault with for not producing the encumbrance certificate. On the other hand the appellants/ defendants are to be blamed for the non-production of the same. Even in the written statement they have not stated that the debt due to the Agricultural Cooperative Bank had been totally wiped off. They have simply stated that the Agricultural Cooperative Bank had announced certain concessions for repayment of the debt due to it, provided the amount was paid within a certain date. It is not their stand that the amount was paid and the mortgage was discharged before the filing of the suit. Hence, the questions (a) and (b) projected as substantial questions of law cannot be accepted as substantial questions of law involved in this second appeal.
11. The next point projected by the appellants/ defendants is that the respondent/ plaintiff failed to comply with the mandatory requirement of Section 16(c) of the Specific Relief Act, 1963 which deals with the pleading and proof of readiness and willingness on the part of the plaintiff. The suit agreement was entered into 17.04.2002. Admittedly, an advance of Rs.5000/- was paid. The balance of Rs.55,000/- was agreed to be paid within six months. The respondent/ plaintiff made a specific plea that he was always ready and willing to make payment of the balance amount of consideration and get the sale deed registered in his name and that on the other hand the appellants/ defendants were evading performance of their obligation under the agreement. It is the further case of the respondent/ plaintiff that on 13.09.2002 as requested by the appellants/ defendants a further sum of Rs.15,000/- was paid, which was acknowledged by the second appellant/ second defendant by issuing Ex.A2 receipt. The appellants/ defendants did not dispute the signature of the second appellant found in Ex.A2 receipt. On the other hand, they have come forward with a story that the signature of the second appellant/ second defendant was obtained in a blank paper to be completed as a receipt for the balance amount of Rs.55,000/- on the assurance that the respondent/ plaintiff would discharge the debt due to the Agricultural Cooperative Bank; that when the signature of the first appellant was also sought to be obtained in the said paper the first appellant refused to do so informing the respondent/ plaintiff that he should discharge the mortgage debt at the first instance and then approach him for getting his signature in the receipt. Such a defence seems to be a far fetched story. If at all the signature of the second appellant had been obtained under such pretext and the attempt made to get the signature of the first appellant did fail, then the first and second appellants would have had discussions between them and they could have very well issued a notice to the respondent/ plaintiff informing that the signature of the second appellant had been obtained in a blank paper and the same should be returned.
12. There is nothing to show that the appellants/ defendants had authorised the respondent/ plaintiff to discharge the mortgage loan due to the Agricultural Cooperative Bank. Not even a reference is found in the Exh.A-1 Agreement. There is no other document, not even a scrap of paper, to show that there was such an understanding that the respondent/ plaintiff should discharge the mortgage debt due to the Agricultural Cooperative Bank, as a condition precedent for getting the sale deed executed as per the agreement. Under such circumstances, there is no reason to disbelieve the case of the respondent/ plaintiff that a sum of Rs.15,000/- was paid on 13.09.2002 and the same was acknowledged by the second appellant under Ex.A2 receipt. When an agreement was jointly executed by two or more vendors, any one of them can issue a valid receipt for the payment of advance or further advance, unless the purchaser under the agreement is put on notice that the shares of each vendors should be paid to them separately. It is not the case of the appellants/ defendants that the respondent/ plaintiff was put on such a notice. Further more, the appellants 1 and 2 had not parted with each other. On the other hand, they have chosen to contest the suit together. They have also chosen to file an appeal before the Lower Appellate Court jointly and the present Second Appeal has also been filed jointly by both of them. Admittedly they are brothers and the respondent/ plaintiff is also a relative of the appellants/ defendants. When that is so, the contention of the appellants/ defendants that no amount was paid on 13.09.2002 and the signature of the second appellant was obtained in blank paper under the pretext of discharging the mortgage due to the Agricultural Cooperative Bank seems to be a story which is unbelievable. Moreover, the second appellant/ second defendant, whose signature is found in Ex.A2, has not chosen to enter the box to depose as to the circumstances under which he was made to sign the blank paper. Had he entered the box, the respondent/ plaintiff would have got a chance to cross examine him and thereby elicit the fact that he had executed a full fledged receipt. Therefore, we cannot find any defect or infirmity in the finding of the courts below regarding the genuineness of Ex.A2.
13. So far as compliance with the mandatory requirement stipulated in Section 16(c) of the Specific Relief Act is concerned, the learned counsel for the appellants/ defendants relies on the judgments of the Apex Court in Man Kaur (Dead) by LRS vs. Hartar Singh Sangha reported in (2010) 10 SCC 512 and J.P. Builders & anr. vs. A. Ramadas Rao & anr. reported in (2011) 1 SCC 429. Relying on those judgments, learned counsel for the appellants/ defendants submits that since the respondent/ plaintiff has not proved that he was having necessary funds from the date of agreement itself, it must be construed that he was not ready though willing to purchase the property. Ofcourse in those judgments the Apex Court has observed that readiness refers to financial capacity and willingness refers to the conduct of the plaintiff seeking specific performance. But in the very same judgment J.P. Builders & anr. vs. A. Ramadas Rao & anr. reported in (2011) 1 SCC 429 an observation made in an earlier judgment of the Apex Court in N.P. Thirugnanam vs. Dr. R. Jagan Mohan Rao at SCC para 5, this Court held: (SCC pp. 117-18) has been quoted with approval. It reads as follows :
23. In N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao at SCC para 5, this Court held: (SCC pp. 117-18) "5. Section 16(c) of the Act envisages that the plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the court must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract. A reading of the said passage and the entire judgment of the Apex Court cited by the learned counsel for the appellants/ defendants would show that it shall not be necessary to prove that the plaintiff seeking specific performance was having the necessary cash in his hands. What has been reiterated in those judgments is that the plaintiff must plead and prove his readiness and willingness.
Readiness refers to the financial position namely the capacity of the plaintiff to arrange the funds when called upon to make payment under the agreement and willingness means he has not done anything to make the agreement unenforceable or has not committed any breach of the agreement. If at all the contention of the learned counsel for the appellants/ defendants that the party entering into an agreement for purchasing a property should have the ready cash or the funds in his account from the date of agreement itself, is accepted then the very purpose of entering into an agreement as a prelude to the actual sale will be defeated. For example, a purchaser being a government servant may have to seek prior permission from the competent authority before purchasing immovable property. A purchaser may also inform the vendor that he will arrange funds for purchasing the property by availing a loan from a bank and he expects to get the loan sanctioned within a particular period. In such circumstances, we cannot find fault with him for not having the necessary funds in his hands from the date of agreement. What is expected of him is that he has done nothing to make the contract unenforceable and he was having the necessary capacity to raise funds to make payment when demanded by the opposite party to do so.
14. In this case, the respondent/ plaintiff has taken a clear plea that from day one he was ready to make the balance payment of consideration and take the sale deed in his favour, but, the appellants/ defendants were postponing the same, perhaps due to the fact that they had got a liability towards the Agricultural Cooperative Bank in respect of the mortgage loan. It has also been admitted that even prior to the agreement the suit property had been mortgaged with the Agricultural Cooperative Bank and the appellants/ defendants had not chosen to discharge the loan, paving the way for execution of the sale deed conveying the property free from encumbrances. Even within a period of six months stipulated in the agreement, the appellants/ defendants were called upon by a notice dated 10.10.2002 to execute the sale deed in terms of the agreement, for which the appellants/ defendants gave a reply on 24.10.2002. Copies of the notice and the reply has been produced in Ex.A3 and A4. Even in the plaint, the respondent/ plaintiff had stated that he was ready to pay the balance amount of sale consideration towards the discharge of the loan and take the sale deed in his favour. In addition, he had also taken a plea that he was ready to deposit the said amount into the court to the credit of the suit to be applied towards the discharge of the mortgage loan. Though the first appellant/ first defendant who figured as DW-1 would have stated that subsequently the entire loan was written off by the Government, excepting his oral testimony there is nothing to prove the same. Even otherwise that will have nothing to do with the question of readiness and willingness on the part of the respondent/ plaintiff which has been specifically pleaded and proved by him. The Courts below have arrived at a correct conclusion on proper appreciation of facts and on application of the correct principles of law. Hence, the finding regarding readiness and willingness on the part of the respondent/ plaintiff and the compliance with the mandatory requirement of Section 16(c) of the Specific Relief Act, cannot be termed either defective or infirm much less perverse. The third question (question No.c) projected as substantial question of law on behalf of the appellants/ defendants also is bound to be rejected as it has not arisen in the present second appeal.
15. For all the reasons stated above, this Court comes to the conclusion that there is no merit in the second appeal as no substantial question of law is proved to have arisen in the second appeal and the Second Appeal deserves to be dismissed at the threshold.
16. Accordingly, the Second Appeal is dismissed, with the result that the decree passed by the trial court which stands confirmed by the first appellate court shall be left in tact. However, there shall be no order as to costs. Consequently, the connected M.P. is closed.
avr To
1. The Sub Court, Sathyamangalam.
2. The District Munsif Court, Sathyamangalam