Madras High Court
A. Subramaniyan vs Lakshmi on 10 August, 2018
Author: T.Ravindran
Bench: T.Ravindran
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 17.07.2018
PRONOUNCED ON : 10.08.2018
CORAM
THE HONOURABLE MR. JUSTICE T.RAVINDRAN
S. A.No.719 of 2005
1. A. Subramaniyan
2. Madhammal
3. Saravanan
4. Sivamani
5. Minor Sanker
6. Minor Bhuvaneswari ...Appellants
Minors 5 & 6 are represented by their
next friend mother Sivamani
Vs.
1. Lakshmi
2. Krishnammal ...Respondents
Prayer: Second Appeal filed under Section 100 of Civil Procedure Code, against the judgment and decree of the Principal District Judge's Court at Salem dated 08.12.2004 in A.S. No.69 of 2004 confirming the judgement and decree of the Subordinate Judge's Court at Salem dated 23.10.2003 in O.S. No.131 of 2000.
For Appellants : Mrs. Mythili Suresh
for M/s. Sarvabhauman Associates
For Respondents : Mr. N. Damodaran
*****
JUDGMENT
Challenge in this second appeal is made to the judgment and decree dated 08.12.2004 passed in A.S. No.69 of 2004 on the file of the Principal District Court, Salem, confirming the judgement and decree dated 23.10.2003 passed in O.S. No.131 of 2000 on the file of the Subordinate Court, Mettur.
2. Parties are referred to as per their rankings in the trial Court.
3. Suit for specific performance and possession.
4. The case of the plaintiffs, in brief, is that the second defendant is the wife of the first defendant and the defendants 3 and 4 are the sons of the defendants 1 and 2 and the suit property belongs to the first defendant and all the defendants agreed to sell the suit property to the plaintiffs for a sum of Rs.1,50,000/- and in this connection, a registered sale agreement was entered into between the plaintiffs and the defendants on 19.11.1991 and on the date of the sale agreement, the plaintiffs paid an advance of Rs.1,40,000/- and the balance of Rs.10,000/- was agreed to be paid by the plaintiffs to the defendants within a period of 8 months from the date of sale agreement and on such payment, the defendants are bound to execute a registered sale deed in respect of the suit property and deliver possession of the same to the plaintiffs. The time of 8 months was granted for completing the sale transaction as the defendants wanted time to find alternative accommodation for shifting their place and accordingly, though the plaintiffs had always been ready and willing to perform their part of the contract by paying the balance sale consideration, the defendants have been taking time to seek alternative accommodation and thereby postponing the completion of the sale transaction one way or the other and the defendants, with a view to delay the execution of the sale deed in favour of the plaintiffs and with a view to defraud the plaintiffs, gave a notice on 30.04.1992, through their Advocate, as if the sale agreement had been entered into on account of the alleged threats held out by one Subramanian, who is working as a police constable in Mettur police station and that the sale agreement had been entered only as a security for the alleged amount due by the third defendant and in the circumstances set out in the notice and the defendants have also pleaded a false panchayat between the parties concerned for taking the sale agreement as a security deed and accordingly, it is the case of the plaintiffs that all the averments in the abovesaid notice are false and untenable and on the other hand, it is stated that the sale agreement is a true and genuine document and accordingly, the plaintiffs sent a reply on 11.06.1992, repudiating the false allegations contained in the notice and also offered to pay the balance sale price and demanded the execution of the sale deed. As the defendants still failed to comply with the demands of the plaintiffs, according to the plaintiffs, they had been necessitated to lay the suit for appropriate reliefs.
5. It is stated that pending suit, the third defendant had died and the defendants 5 to 7 had been added as the legal representatives of the deceased third defendant.
6. The case of the defendants, in brief, is that the suit laid by the plaintiffs is not maintainable either in law or on facts. After denying the plaint averments as regards the execution of the sale agreement and payment of advance amount, etc., and also the claim of the plaintiffs that they had been always ready and willing to perform their part of the contract, according to the defendants, the third defendant Manoharan was in charge of the small saving scheme subscribed by 115 members of the locality and each member has to pay Rs.300/- per month and every month, three of the members will be successful bidders and the amounts would be given to them and out of 115 members, 94 members had been paid. As a number of members had wilfully defaulted in paying the monthly subscription, there had been inordinate delay in the payment of amount to 21 subscribers and the first plaintiff's sister's husband is one Subramanian, a police constable working at Mettur Police Station and he caused threat to the defendants stating that he would put all the defendants under the Goondas Act, if the amount is not paid to his sister-in-law, the first plaintiff and in the said circumstances, the matter was referred to a panchayat and N.K. Komarasamy gounder, the chief of the panchayat decided that the entire amount to be paid by the third defendant to the 21 members within a period of 8 months and to bind the said decision, the defendants should execute a document in the form of sale agreement as a security for the due payable by the third defendant and as per the panchayat decision, the agreement of sale dated 19.11.1991 was brought into existence and the abovesaid agreement was never intended to be the real sale agreement and not intended to be acted upon a real sale agreement and therefore, it is false on the part of the plaintiffs to contend that they had paid a sum of Rs.1,40,000/- as an advance to the defendants by way of the abovesaid sale agreement and the second plaintiff is a coolie and she has no means to enter into a sale agreement for purchasing the defendants' property and the defendants had entrusted the original documents executed by them to the chief of the panchayat and only the xerox copy of the said document was given to the defendants and the matter could not be proceeded further as the subscribers did not contribute their subscription in time. Accordingly, it is stated that the registered notice had been sent by the defendants on 30.4.1992 setting out the true facts and meanwhile, a complaint had also been lodged with the higher police officials against the police constable Subramanian and he was transferred to Edapadi police station and thereafter, despite the notice sent by the defendants, the plaintiffs were able to secure the original document from the panchayat chief in connivance with the above police constable and accordingly, chosen to send a belated reply notice containing false allegations and when the defendants questioned the panchayat chief, he gave only evasive replies and excepting the third defendant, the other defendants are not involved in the abovesaid monetary transaction. The property involved is the self acquired property of the first defendant and there was no necessity to sell the same to the plaintiffs or to anybody as claimed in the plaint. The value of the suit property is on the higher side and hence, it is stated that the plaintiffs have no cause of action to lay the suit and not entitled to the reliefs sought for and therefore, the suit is liable to be dismissed.
7. In support of the plaintiffs case PW1 was examined, Exs.A1 to A4 were marked and on the side of the defendants, DWs 1 and 2 were examined, and no document has been marked.
8. On a consideration of the oral and documentary evidence adduced by the respective parties and the submissions made, the Courts below were pleased to accept the plaintiff's case and accordingly, granted the reliefs in favour of the plaintiffs as prayed for. Impugning the same, the present second appeal has been laid.
9. At the time of admission of the second appeal, the following substantial question of law was formulated for consideration:
(a) When Ex.A1 agreement dated 19.11.1991 was admittedly executed for the purpose of securing a loan, whether the Courts below are justified in law in holding the Ex.A1 is the sale agreement by employing Sections 91 & 92 of the Evidence Act, 1872 against the appellants?
(b) When the admission made by the 1st respondent examined as P.W.1 would clinchingly prove that Ex.A1 is not a sale agreement, whether the courts below are right in overlooking the evidence of P.W.1 particularly when it is axiomatic that the admission of the opposite party is the best evidence?
(c) When the evidence of D.W.2 the attestor to Ex.A1 would clearly establish that it is a document executed for a loan transaction, whether the courts below are correct in law in not considering the evidence of D.W.2?
(d) whether the courts below have exercised their discretion as to decreeing specific performance in accordance with Section 20 of the Specific Relief Act, 1963, especially when the conduct of the parties would operate against the grant of decree for specific performance?
10. The suit has been laid by the plaintiffs seeking the relief of specific performance based on the sale agreement dated 19.11.1991 and according to the plaintiffs, the defendants 1 to 4, by way of the abovesaid sale agreement had agreed to convey the suit property in their favour for a sum of Rs.1,50,000/- and pursuant to the abovesaid sale agreement, it is stated by the plaintiffs that they had paid a sum of Rs.1,40,000/- as advance to the defendants and it is further stated that the parties had agreed that the balance sale consideration of Rs.10,000/- is to be paid by the plaintiffs within a period of 8 months from the date of sale agreement and on such payment, the defendants are bound to convey the suit property in favour of the plaintiffs by executing the sale deed with reference to the same.
11. The defendants have taken a plea that the abovesaid sale agreement was not intended to be acted upon as an agreement of sale but, it had come to be executed only as a security for the chit transaction run by the third defendant and accordingly, it is stated that the plaintiffs are not entitled to seek the discretionary relief of specific performance based on the abovesaid sale agreement. In this connection, it is stated that the third defendant Manoharan was in charge of running a chit transaction with a strength of 115 subscribers and accordingly, he had paid the amount to 94 members and on account of the default committed by the members in paying the subscription promptly, the other 21 members could not be paid the amount due to them. Accordingly, it is stated that the first plaintiff, who is also one among the 21 members, with the help of her sister's husband one Subramanian, the police constable, working at Mettur police station had threatened the defendants with dire consequences and accordingly, it is stated by the defendants that the matter was referred to a panchayat under the chairmanship of one N.K.Komarasamy gounder and accordingly, it has been decided in the said panchayat that the third defendant, Manoharan, should pay the amount due to the 21 members within a period of 8 months and accordingly, in order to bind Manoharan to the abovesaid direction/undertaking, it is stated that the defendants were constrained to execute the document in the form of a sale agreement as security for the due payment of the amount by the third defendant to the 21 members and accordingly, it is stated that the abovesaid sale agreement had come to be executed and hence, it is contended that the sale agreement was not intended to be acted upon as a sale agreement and on the other hand, it has been executed only as a security for the abovesaid chit transaction.
12. In the light of the abovesaid defence projected by the defendants, the defendants having admitted that the sale agreement abovestated and marked as Ex.A1, contains their signatures and accordingly, it is the defendants who have to establish that the said document had come to be executed in the manner as projected by them. In this connection, the defendants have examined one of the attestors to the sale agreement as DW2. DW2, Murthy, in his evidence, during the course of chief examination would state that it is false to state that the defendants 1 to 4 had executed the sale agreement Ex.A1 in favour of the plaintiff agreeing to convey the suit property for a sum of Rs.1,50,000/- and that pursuant to the same, the plaintiffs had paid an advance amount of Rs.1,40,000/- to the defendants and that the parties had agreed that the balance sum of Rs.10,000/- should be paid within a period of 8 months, etc. According to him, as deposed during the course of chief examination, Ex.A1 document has come to be executed only in connection with the chit transaction and he does not know about the chit transaction, however, would state that the chit was conducted by Manoharan and accordingly, the plaintiffs who had subscribed to the abovesaid chit picked up quarrel with Manoharan for not paying the amount due to them and further, according to DW2, in this connection, a panchayat was convened under the chairmanship of N.K. Komarasamy gounder and as per the decision of the panchayat, the defendants were directed to execute a deed of mortgage in respect of the suit property belonging to them and accordingly, it is his case that the document has come to be executed and the said document had been entrusted to the chief of the panchayat, namely, N.K. Komarasamy gounder and according to him, as he has also participated in the said panchayat, he had signed as an attestor to the abovesaid document. Accordingly, it is found from the evidence of DW2 that the document marked as Ex.A1 had come to be executed only with reference to the chit transaction for ensuring that the third defendant pays the amount due to the plaintiffs with reference to the chit within a particular period of time. No doubt, during the course of cross examination, when DW2 was confronted with the recitals as available in Ex.A1 sale agreement, accordingly, left with no other alternative, DW2 was necessitated to admit the contents of Ex.A1 as such and accordingly, thereby, it cannot be held that DW2 has admitted the document Ex.A1 as if it is a valid sale agreement as sought to be projected by the plaintiffs. DW2, being the attestor to Ex.A1 sale agreement and accordingly on being questioned during the course of cross examination whether the recitals as stated therein are found in the document, accordingly, DW2 had agreed to the same and by way of the abovesaid elicitation in the cross examination, it cannot be contended that DW2 has in toto supported the plaintiffs' case and disowned his version as adduced during the course of chief examination. On the other hand, as rightly put forth by the plaintiff's counsel, the evidence of a witness should be read in toto. Accordingly, when the evidence of DW2 is read in toto, it is found that DW2, as such, has not admitted the case of the plaintiffs. On the other hand, he had only stated as to how come the document Ex.A1 has come to be executed i.e., the same having been executed with reference to the chit transaction and as a security for the same. In such view of the matter, as rightly put forth, it is found that the Courts below seem to have proceeded as if DW2 has supported the plaintiffs' version and not the defendants' version and for the said conclusion, considering only his evidence as adduced during the course of cross examination.
13. As rightly put forth by the defendants' counsel, considering the evidence of the first plaintiff examined as PW1, it is found that she has more or less supported the defence version and in such view of the matter, it is seen that the defendants need not place any material in support of their defence as regards their plea of execution of Ex.A1 only as a security for the chit transaction.
14. In this connection, it has to be noted that according to the plaintiffs, they had jointly entered into the sale agreement with the defendants for the purchase of the suit property. Admittedly, the plaintiffs are not related to each other. This has been admitted by PW1. Further, according to PW1, the first plaintiff, in respect of the tender of the advance amount of Rs.1,40,000/-, it is her version that she had parted with a sum of Rs.1,00,000/- and the second plaintiff had parted with a sum of Rs.40,000/- and accordingly, it is her case that they had decided to take the suit property jointly and the recitals with reference to the same are contained in the sale agreement. On a reading of recitals found in the sale agreement Ex.A1, there is no mentioning about the first plaintiff paying a sum of Rs.1,00,000/- and the second plaintiff paying a sum of Rs.40,000/- separately towards the advance amount and there is only the averment as such that the plaintiffs had agreed to take the suit property jointly. Be that as it may, it is to be noted at this juncture, according to the defendants, the second plaintiff has no means at all to pay the sale consideration. Even assuming for the sake of arguments that Ex.A1 is a true sale agreement and on such being the position, to establish that the second plaintiff was a person of sufficient means, there is no material forthcoming on the side of the plaintiffs. According to the defendants, the second plaintiff is only a coolie, despite the same, the plaintiffs had not endeavoured to examine the second plaintiff to establish that she was also a purchaser to the intended sale under Ex.A1 sale agreement and that she had also parted with a sum of Rs.40,000/- towards the advance amount as recited therein and as deposed by PW1.
15. Further, according to the plaintiffs' case, the sale price had been fixed at Rs.1,50,000/-. It is their further case that they had paid a sum of Rs.1,40,000/- as advance on the date of sale agreement and if that be so, if really the plaintiffs had the sufficient means and capable of paying the remaining sale consideration immediately for accomplishing the sale transaction, as rightly put forth, the plaintiffs would have endeavoured to part with the balance sale consideration immediately and proceeded to get the sale deed executed from the defendants. However, it is noted that as per the plaintiffs' case, for paying the balance sum of Rs.10,000/-, the parties had agreed to fix a time limit of 8 months from the date of sale agreement. The abovesaid factor seems unnatural. When the plaintiffs had projected a case as if they had paid almost the entire sale consideration on the date of sale agreement, except a paltry sum of Rs.10,000/-, and if really Ex.A1 is intended to be a sale agreement, it is found that there is no need for fixing the outer limit of 8 months for paying the said amount for completing the sale transaction. It is thus seen that the long period of 8 months fixed for paying the balance sum of Rs.10,000/- seems out of context vis-a-vis the other recitals found in the sale agreement. However, according to the plaint averments, it is stated that inasmuch as the defendants pleaded time for finding alternative accommodation in order to shift their place, it is stated that the parties had agreed to fix 8 months period for completing the sale transaction. However, with reference to the abovesaid case of the plaintiffs, there is no recital contained in Ex.A1 sale agreement. Further, quite contrary to the abovesaid reasoning given in the plaint, PW1, during the course of cross examination has stated that, it is only they who had sought for 8 months period for paying the balance sale amount of Rs.10,000/- as they could not arrange the said amount and further, according to her, the said reason had been averred by her in the plaint for fixing the 8 months period time for completing the sale transaction. Further, she had also averred that defendants did not seek for 8 months period for finding alternative accommodation to shift their place and she had also reiterated that it is only they who had sought for 8 months time for completing the sale transaction. Thus, it is found that the plaintiffs had come forward with an inconsistent case even as regards the period agreed to be fixed for completing the sale transaction. It is thus found that inasmuch as Ex.A1 is not intended to be a real sale agreement as such and accordingly, the same had been executed only as a security for the chit transaction, with a view to enable the third defendant to arrange the amount for paying the same to 21 subscribers including the plaintiffs, accordingly, it is found that the period of 8 months had been agreed to be incorporated in the sale agreement and thus it is found that the abovesaid factor also only lends support to the defence version and not to the plaintiffs' case.
16. Not stopping there, as regards the chit transaction projected by the defendants, PW1, during the course of cross examination, has admitted that the deceased Manoharan, namely the third defendant had been conducting chit in the locality and it is also admitted by her that she along with the second plaintiff conducted the chit and it is a monthly chit with a subscription of Rs.300/- per month and she had also admitted that every month, 3 members would be paid the amount and the amount of Rs.11,500/- will be paid and according to PW1, she does not know whether 94 members had been paid and she has further admitted that, Subrmanian, the police constable is her sister's husband and further, she has also admitted that she does not remember when she had received the chit amount, though, she at the first instance would state that no panchayat had been conducted with reference to the chit transaction, however, later she has admitted that she knew N.K. Komarasamy gounder and it is true that the panchayat was held under his chairmanship, however, according to PW1, no decision was taken in the panchayat and no document was executed pursuant to the panchayat, however, she would also state that only after the panchayat, she had paid the amount under the sale agreement and subsequently, she has also admitted that only in connection with the chit transaction, the panchayat was conducted and in the said panchayat, she, the second plaintiff and about 20 persons participated and she would however state that she does not remember as to the decision taken in the said panchayat and also would aver that she does not remember whether the defendants had executed a sale agreement on 19.11.1991 pursuant to the decision of the panchayat and after the execution of the agreement the same has been entrusted with N.K.Komarasamy gounder and the xerox copy has been given to the defendants and she would also state that she does not know whether the panchayatars had decided to grant time to the defendants to arrange the amount for paying to the subscribers and later she has also admitted that she has received the sale agreement only from N.K.Komarasamy gounder about 12 years ago and she has also admitted that it is correct to state that the defendants put forth objections to N.K. Komarasamy gounder not to part with the sale agreement to her and further she has also admitted that inasmuch as she was not having the custody of the sale agreement, she had not sent the notice to the plaintiffs immediately and could only send the notice belatedly and she has also further admitted that with reference to the ownership of the suit property, she did not peruse any parent title deeds, however, would state that the title deed was in the name of Subramanian and also would state that she does not know the value of the suit property on the date of sale agreement and not verified any encumbrance certificate. Thus, it is found that, on a cumulative analysis of the evidence of PW1, as adduced by her, during the course of cross examination, it is evident that as putforth by the defendants, the third defendant had been running a chit transaction, in which the plaintiffs and others were the subscribers and it is further seen that in respect of the abovesaid chit transaction, the third defendant was unable to pay the amount to about 21 subscribers and accordingly, it is seen that in respect of the above said transaction, the panchayat had been convened under the chairmanship of N.K. Komarasamy gounder and only pursuant to the panchayat decision, it is seen that the sale agreement in question had come to be executed by the defendants and accordingly, it is seen that only thereafter the plaintiffs were able to secure the original agreement from N.K.Komarasamy gounder, with whom the said document had been entrusted and further it is seen that accordingly, the plaintiffs at the first instance were unable to proceed further with the sale agreement as the same was not available in their custody and in this case, it is found that only after the issuance of the notice by the defendants on 30.04.1992, the plaintiffs had come forward with the reply notice and thus, it is found that on a proper scanning of the evidence of PW1, it is seen that as rightly put forth, the document Ex.A1 had not come to be executed as a pucca sale agreement with the intention to convey the suit property to the plaintiffs and on the other hand as the third defendant was due to pay some amount to the members of the chit transaction, pursuant to the determination of the panchayat, the abovesaid document had come to be executed as a security and such being the position, from the evidence of PW1 alone, it is seen that the defendants are able to substantiate their defence version and in such view of the matter, the failure of the defendants in placing the documents for evidencing the chit transaction does not loom large and accordingly, it is seen that the Courts below had failed to appreciate the abovesaid evidence of PW1 in the right perspective and on the other hand, the Courts below placing reliance upon Section 92 of the Indian Evidence Act and thereby held that the defendants are precluded from putting forth the case contrary to the terms of the sale agreement and accordingly, on that premise, appears to have accepted the plaintiffs case.
17. However, as rightly put forth by the defendants' counsel, as per the proviso (1) to Section 92 of the Indian Evidence Act, it is found that any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating there to, such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, want of failure of consideration or mistake in fact or law. Accordingly, it is contended by the defendants' counsel, the abovesaid position of law has been failed to be noted by the courts below and on the other hand, they had erred in upholding the plaintiff's case on the footing that the defendants are prevented from presenting any case contrary to the terms of the sale agreement. In this connection, reliance is placed upon the decision reported in 2017(1) MWN (Civil) 187 (P.Vaidyanathan Vs. K. Sundaram) , wherein, it has been held, following the decision of the Apex court and the decision of the other High Courts that the adduction of evidence that the agreement was not intended to be acted upon is not barred under Section 92 of the Indian Evidence Act and it has been held that the bar under the said provision of law arises only when the document is relied upon and its terms are sought to be contradicted and varied and it has been further held that the Defendants in a suit for Specific Performance are entitled to raise the plea that Agreement was not intended to be acted upon as an Agreement of Sale but was executed as Security for the Loan transaction. Accordingly held that, an invalidating circumstance would fall within the exception to Section 92 of Indian Evidence Act. For arriving at the abovesaid conclusion, the reasonings had been given in the said decision in the following manner:-
EVIDENCE ACT, 1872 (1 of 1872), Section 92 Suit for Specific Performance Plea that Agreement was not intended to be acted upon Whether barred Bar under provision arises when document is relied upon and its terms are sought to be contradicted and varied Defendant, in Suit for Specific Performance, entitled to raise plea that Agreement was not intended to be acted upon as an Agreement of Sale but was executed as Security for Loan transaction Said plea, held, an invalidating circumstance and would fall within exception to Section 92.
8. Mr.R.Gururaj, learned counsel appearing for the appellant would contend that the Trial Court erred in rejecting the claim for specific performance. According to the learned counsel for the plaintiff, the plaintiff has done whatever he could do as a plaintiff and the Trial Court on extraneous reasons rejected the claim for specific performance. The learned counsel would point out that the plaintiff has examined PW.1 to PW6, who had spoken about the execution of the agreements. He would also contend that Section 92 of the Indian Evidence Act imposed a bar on the defendant from letting evidence varying the recitals of written documents. In support of his contention, the learned counsel would rely upon the judgment of the Hon'ble Supreme Court in Sahu Madho Das and others v. Mukand Ram and another reported in AIR 1955 S.C. 481, wherein the Hon'ble Supreme Court had observed that Estoppal is a rule of evidence which prevents a party from alleging and proving the truth. Laying emphasis on the said observation of the Hon'ble Supreme Court, the learned counsel would submit that the defendant cannot be allowed to plead that the agreements were intended to be acted upon for some other purposes.
9. The learned counsel would also invite my attention to the observation in paragraph 20 of the judgement of the Hon'ble Supreme Court in M/s.Raval and Co. v. K.G.Ramachandran and others reported in AIR 1974 SC 818 wherein it was held that the tenant can not be allowed to plead that the rent that was payable was different from the rent that was fixed under a written contract.
10. The learned counsel would draw my attention to the judgement of the Division Bench of this Court in Kalianna Gounder and others vs. A.Kalianna Gounder and others reported in 1986 (2) MLJ 470 DB, wherein it was that all the arrangements or agreements contrary to terms of the written registered instrument cannot be pleaded as it would be opposed to Clause-4 of Section 92 of the Indian Evidence Act. He would also rely upon a judgement of a Division Bench of this Court in Nanjammal (died) and another v. Palaniammal reported in 1993 (2) LW 205, wherein it was observed, the normal Rule is that once the truth of the agreement is made out the Court shall enforce it unless there are circumstances which would prove that equity will suffer by enforcing the agreement for sale. The Division Bench also held that it is not open to the defendant to raise the plea that the terms of the agreement should be ignored and that the real purpose was to secure the loan transaction. The defendant is barred from raising such a plea by Section 92 of the Indian Evidence Act.
11. Relying upon the aforesaid judgements, the learned counsel would submit that the Trial Court erred in accepting the plea of the defendant that agreements are not intended to be acted upon but were executed only as security for a loan transaction and not otherwise. Per contra, Mr.N.Suresh, the learned counsel appearing for the respondent would submit that what is prohibited under Section 92 of the Evidence Act, is only the attempt to vary the terms of the contract and the defendant can always establish any invalidating circumstance, that would establish that the contract itself was a sham transaction. In support of his contention, the learned counsel rely upon a judgement of the Hon'ble Supreme Court in Ishwar Dass Jain v. Sohan Lal reported in AIR 2000 SC 426. The learned counsel draws my attention to para 16 of the judgement where the Hon'ble Supreme Court after referring the earlier decision in Gangabai v. Chhabubai reported in AIR 1982 SC 20 observed that it is permissible for a party to contend that the deed was not intended to be acted upon but was only a sham document. The bar arises only when the document is relied upon and its terms are sought to be varied and contradicted. He also invites my attention to the observations of the Division Bench in Kamireddi Sattiaraju vs. Kandamurai Boolaeswari reported in 2007 1 MLJ 499. It was also a suit for specific performance with similar plea to the effect that agreement was not intended to be acted upon but was executed only as security for a loan transaction. After reviewing the entire case law, the Division Bench has held as follows:
15. In the judgment , in paragraph 22, the Supreme Court has stated the legal position as regards the substantive part of Section 92 of the Indian Evidence Act in the following words:
22. This Court in Gangabai v. Chhabubai and Ishwar Dass Jain v. Sohan Lal with reference to Section 92(1) held that it is permissible to a party to a deed to contend that the deed was not intended to be acted upon but was only a sham document. The bar arises only when the document is relied upon and its terms are sought to be varied and contradicted. Oral evidence is admissible to show that document executed was never intended to operate as an agreement but that some other agreement altogether, not recorded in the document, was entered into between the parties.
16. In the decision , the Supreme Court has held as under in paragraph 9:
An enquiry into reality of transaction is not excluded merely by availability of writing reciting the transaction. Tyagaraja Mudaliyar v. Vedathanni AIR 1936 PC 70 : 64 IA 126 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.
17. From the above ratio laid down by the Supreme Court, when we analyse the stand of the parties, according to the appellants, irrespective of the fact that Ex. A-1 came into being, it was contended that the deed was never intended to be acted upon and that it was a sham document. When the said stand is probed into further, as held by the Supreme Court, the bar under Section 92 of the Indian Evidence Act vis-a-vis Ex. A-1 would operate if only the appellants attempt to rely upon Ex. A-1 agreement and simultaneously sought to vary and contradict its terms. Such is not the case of the appellants. The appellants are not attempting to contend that the terms contained therein are to be varied or that the evidence let in on their side was to contradict the terms contained therein. According to the appellants, the entire evidence let in both oral and documentary, was only to demonstrate that inspite of existence of Ex. A-1, it will have to be held that the parties had a different contract altogether and Ex. A-1 was never intended to be acted upon. At the risk of repetition, we state that applying the ratio laid down by the Supreme Court, such a stand of the appellants was certainly not prohibited under Section 92 of the Indian Evidence Act.
12. The learned counsel would also draw my attention to the judgement of this Court in Pappammal @ T.Pappa vs. P.Ramasamy reported in 2012 4 CTC 100 wherein also, the Hon'ble single judge had followed the Division Bench judgement referred to above and held that it is open to the defendant in the suit for specific performance to plead that the contract was not intended to be an agreement of sale. Recently in the judgement in Rajammal and anotherl vs. M.Senbagam reported in 2016 (6) CTC 225, this Court held that the plea to the effect that the agreement was not intended to be acted upon can be entertained by the Courts. I have examined the facts of the case on hand, in the light of the law laid down by the precedents referred to at the Bar. I have no hesitation in coming to the conclusion that the defendant cannot be precluded from taking the plea that the agreement was not intended to be acted upon as an agreement of sale, but it was executed for some other purposes namely, as security for loan transaction. Such plea would fall within the exceptions under Section 92 of the Evidence Act because, it is actually a invalidating circumstance which is pleaded before the Court of law and by pleading so, the defendant is not attempting to vary the terms of the contract. The actual attempt is to show that the contract is not one, which was intended to be acted upon. Therefore, in my considered opinion the argument that Section 92 of the Indian Evidence Act prevents the defendant from contending that the agreement was not intended to be acted upon cannot be countenanced, in view of the categorical judicial pronouncements referred to above.
18. In the light of the abovesaid position, it is found that, considering the materials placed on record, in the present case, particularly, in the light of the evidence adduced by PW1, during the course of cross examination, as adverted to above and also the evidence of DW2 as discussed above, it is found that on a totality of the appreciation of their evidence, it is seen that Ex.A1 document had not been executed intended to be acted upon as a sale agreement and on the other hand, it is seen that the same had come to be executed only as a security for the chit transaction and accordingly, when the defendants are not barred to take such a plea for resisting the plaintiffs' suit of specific performance under Secion 92 of the Indian Evidence Act, accordingly, it has to be held that considering the abovesaid factors as brought out by the defendants in the matter, the document Ex.A1 is found to be not executed following any consensus ad idem between the parties for effecting the sale of the suit property as put forth by the plaintiffs and on the other hand, it is seen that the said document had come to be executed by the defendants only with reference to the chit transaction so as to enable the deceased third defendant, for arranging the amount to satisfy the unpaid subscribers of the chit transaction. Accordingly, it is found that the parties had agreed for fixing the outer time limit of 8 months in the Ex.A1 and accordingly, it is seen that the plaintiffs had also not evinced interest as such to pay the balance sum of Rs.10,000/- immediately to the defendants for completing the sale transaction and on the other hand, it is found that only after the defendants had chosen to send the notice on 30.04.1992, i.e., 5 months after the sale agreement, the plaintiffs, after obtaining the sale agreement from the panchayat chief N.K.Komarasamy gounder, had chosen to send a reply on 11.06.1992 and accordingly, it is seen that the plaintiffs have also miserably failed to establish their readiness and willingness to complete the sale transaction which is the basic requirement for obtaining the relief of specific performance. If really, Ex.A1 had been intended to be a pucca sale agreement as projected by the plaintiffs, as rightly put forth, after the execution of the said document, there is no need for the plaintiffs to wait for a period of 8 months to pay the sum of Rs.10,000/- for the purpose of completing the sale transaction. On the other hand, it is found that the plaintiffs had not shown any interest to pay the balance sum immediately, and on the other hand, they had chosen to express their willingness only after the defendants sending the notice marked as Ex.A2, i.e., that too, after two months from the notice. All these factors would only go to expose that the document Ex.A1 had never been intended to be acted upon as a sale agreement and on the other hand, the said document had come to be executed only as a security for the chit transaction run by the deceased third defendant, for the purpose of satisfying the unpaid subscribers of the chit transaction. Accordingly, it is seen that the pressure had been exerted upon the defendants by the plaintiffs as well as the other unpaid subscribers through the police constable Subramanian, who is admittedly related to the first plaintiff and following the issuance of the copy of Ex.A2 by the defendants to the higher officials of the police department, which is also admitted by PW1, it is seen that thereafter the abovesaid police constable Subramanian had been transferred to Edapadi police station and all these facts seen cumulatively would go to probabilise the defence version than the plaintiffs' case and thus found as rightly argued, the inescapable conclusion that could be arrived at, on the analysis of the materials above placed, it is seen that the document Ex.A1 had never been intended to be acted upon a sale agreement by the parties concerned and the same had been taken only as a security in respect of the chit transaction for the purpose of enabling the defendants to settle the amount to the unpaid subscribers of the chit transaction.
19. In the light of the abovesaid factors, the plaintiffs having failed to establish that the sale agreement had been really entered into between them and the defendants as projected by them and the plaintiffs also having failed to establish the crucial aspect of their readiness and willingness to complete the sale transaction, accordingly, it is seen that the relief of specific performance, being a discretionary relief and in the light of Section 20 of the Specific Relief Act 1963, when the Court is not bound to grant such relief merely because it is lawful to do so, but the discretion should be exercised by the Court not arbitrarily, but on sound and reasonable consideration guided by judicial principles and accordingly, applying the said principles to the facts of the case as above discussed, it has to held that the Courts below had erred in granting the discretionary relief in favour of the plaintiffs and in such view of the matter, the judgments and decrees of the courts below upholding the plaintiffs case have to be reversed. The substantial questions of law formulated in the second appeal are accordingly answered against the plaintiffs and in favour of the defendants.
20. Resultantly, the judgment and decree dated 08.12.2004 passed in A.S. No.69 of 2004 on the file of the Principal District Court, Salem, confirming the judgement and decree dated 23.10.2003 passed in O.S. No.131 of 2000 on the file of the Subordinate Court, Mettur are set-aside and accordingly, the suit laid by the plaintiffs in O.S. No.131 of 2000 is dismissed with costs. Accordingly, the second appeal is allowed with costs. Consequently, connected miscellaneous petition, if any, is closed.
10.08.2018 Index : Yes/No Internet:Yes/No bga T.RAVINDRAN,J.
bga Pre-delivery Judgment in S. A.No.719 of 2005 10.08.2018