Karnataka High Court
Barikara Bharmappa Dead By Lrs vs Gowdra Ajjappa on 4 June, 2013
Author: Jawad Rahim
Bench: Jawad Rahim
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 04TH DAY OF JUNE 2013
BEFORE
THE HON'BLE Dr.JUSTICE JAWAD RAHIM
REGULAR SECOND APPEAL NO.91 OF 2005
BETWEEN
BARIKARA BHARMAPPA
DEAD BY LRS.
1.a) SMT. VIJAYALAKSHMI,
W/O BARIKARA BHARMAPPA,
b) MANJUNATH
S/O BARIAKARA BHARMAPPA,
26 YEARS, C/O JINDAL FACTORY,
R/O.TORANGAL, SANDUR TQ.
c) B. SATHISHA,
S/O BARIAKARA BHARMAPPA
23 YEARS
d) B. SUMITHA,
D/O BARIAKARA BHARMAPPA
22 YEARS
e) B. KAVITHA,
D/O BARIAKARA BHARMAPPA,
20 YEARS
(a) (c) to (e) ARE R/O NEELAGUNDA,
HARAPANAHALLI TALUK.
...... APPELLANTS
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[BY SRI.JAYAVITTAL RAO KOLAR, ADV., FOR KOLAR &
KOLAR]
AND
GOWDRA AJJAPPA,
S/O VIRUPAKSHAPPA,
52 YEARS, AGRICULTURIST,
R/O NEELAGUNDA,
HARAPANAHALLI TALUK
1.a) SMT. SUSHEELAMMA,
W/O LATE GOWDRA AJJAPPA,
AGED 51 YEARS,
NEELAGUNDA POST,
HARAPANAHALLI TALUK,
DAVANGERE DISTRICT.
1.b) SMT.CHENNAMMA,
D/O GOWDRA AJJAPPA
AGED 36 YEARS,
NEELAGUNDA POST,
HARAPPANAHALLI TALUK,
DAVANGERE DISTRICT.
1.c) SMT.MANJULA,
D/O GOWDRA AJJAPPA
AGED 34 YEARS,
NEELAGUNDA POST,
HARAPANAHALLI TALUK,
DAVANGERE DISTRICT
1.d) VIRUPAKSHI
S/O GOWDRA AJJAPPA
AGED 32 YEARS, NEELAGUNDA POST,
HARAPANAHALLI TALUK,
DAVANGERE DISTRICT
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1.e) SMT.REKHA
D/O GOWDRA AJJAPPA,
AGED 30 YEARS
NEELAGUNDA POST,
HARAPANAHALLI TALUK,
DAVANGERE DISTRICT.
...... RESPONDENTS
[BY SRI.B.G. NANDISH, ADV., FOR SRI.R.B.SADASIVAPPA,
ADV., FOR R1(a-e)]
THIS R.S.A. IS FILED UNDER SECTION 100 R/W
ORDER 42 R.1, CPC AGAINST THE JUDGEMENT AND
DECREE DATED:04.11.2004 PASSED IN RA.NO.326/2002
ON THE FILE OF THE CIVIL JUDGE (SR.DN.),
DAVANAGERE, ALLOWING THE APPEAL AND SETTING
ASIDE THE JUDGMENT AND DECREE DATED:16.07.2002
PASSED IN OS.NO.174/98 ON THE FILE OF CIVIL JUDGE
(JR.DN) AND JMFC., HARAPANAHALLI.
THIS R.S.A COMING ON FOR HEARING THIS DAY,
THE COURT MADE THE FOLLOWING:
JUDGMENT
The legal representatives of defendant are in appeal against the judgment in RA No.326/2002 reversing the finding of the Trial Court in OS No.174/1998 and decreeing the suit directing specific performance of the agreement for sale against the defendants.
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2. Heard learned counsel Sri.Jayavittal Rao Kolar for appellants and Sri.Satish for the respondent - plaintiff. Perused records in supplemented thereto.
3. It reveals, the plaintiff Gowdra Ajjappa filed a suit in OS No.174/1998 against Barikara Barmappa seeking decree to enforce the specific performance of an agreement dated 30.06.1997 alleged to have been executed in his favour to sell unto him the property described in schedule for a sale consideration of Rs.40,000/-.
4. In support of the relief so sought, he averred defendant who is the owner of the schedule property approached him offering to sell the schedule property for valid sale consideration, expressing urgent need of money for education of children. He accepted the offer and after negotiation, sale price was fixed at Rs.40,000/- out of which he paid Rs.35,000/- as part of sale consideration. In acknowledgment of which the defendant executed an 5 agreement dated 30.06.1997 and it was registered in the office of the Sub-Registrar.
5. He alleged, despite his readiness and willingness to perform his part of the obligation to pay balance sale consideration of Rs.5,000/-, the defendant failed to fulfill his obligation and from his conduct, it became evident that he is not interested in complying with the conditions in the agreement. Consequently, he issued a notice on 17.06.1998 requiring completing the transactions which was acknowledged on 28.06.1998.
6. He neither complied with the demand made in the notice, nor sent any reply, necessitating filing of the suit.
7. In the suit, the defendant entered contest, denying all averments in the plaint and has specifically pleaded that the document described in the complaint was in fact an agreement to secure the loan of Rs.35,000/- 6 borrowed by him. He traversed averments in all the paragraphs of the plaint denying there was any transaction of sale and also brought in certain facts which according to him reveal the true transaction. In that, the defendant pleaded that he had financial difficulties consequent to which he required loan and approached the plaintiff. The plaintiff-appellant advanced loan and insisted that an agreement be executed by him. In good faith he executed an agreement referred to above, which infact was only a transaction to secure the loan of Rs.35,000/- and not a sale transaction. He also pleaded financial difficulties and the circumstances in which he is placed as additional circumstances to be taken into consideration by the Court.
8. Based on the material propositions in the pleadings, the learned Trial Judge framed six issues for consideration and in the enquiry, the plaintiff tendered evidence as PW1 and examined a witness Chennappa as PW2 to prove the execution of the agreement Ex.P1 by the 7 defendant. The defendant in negation of such evidence of the plaintiff, examined himself and placed reliance on evidence of three witnesses but produced no document.
9. The learned Trial Judge analyzing the evidence, opined the plaintiff had failed to prove Ex.P1 was agreement of sale and consequently, declared it to be a document evidencing only payment of Rs.35,000/- to the defendant as loan. Consequently, while dismissing the suit, declined to grant decree of specific performance, but the Trial Court directed the defendant to refund balance of Rs.18.000/- with interest to the plaintiff.
10. Aggrieved by it, the plaintiff was in appeal before the First Appellate Court who, on re-appraisal of the reasons of Trial Court, set aside the judgment of the trial court and directed specific performance of the agreement against which the defendant is in appeal.
11. While adverting to the factual matrix, learned counsel Sri.Jayavittal Rao Kolar would submit, learned 8 Appellate Judge has seriously erred in misapplying the provision of Section 92 of the Indian Evidence Act consequent to which, it has resulted in unjust finding that the defendant could not have lead any oral evidence to establish his case that the agreement Ex.P1 was not an agreement of sale, but a document only to secure the transaction of loan. He placed reliance on the following two decisions.
i) Smt.Gangabai Vs. Smt.Chhabubai
(AIR 1982 SC 20)
ii) Ishwar Dass Jain Vs. Sohan Lal
(AIR 2000 SC 426)
12. He would further submit, even on facts it could be noticed Channappa-PW2, a witness examined as PW2 has, in unequivocal terms, deposed that defendant (appellant herein) had repaid Rs.17,000/- to the plaintiff out of the amount received; this statement would prove that such payment was in discharge of the loan received by him as acknowledged in the agreement-Ex.P1. He would submit, if as alleged by the plaintiff, the agreement 9 was an agreement of sale simpliciter, plaintiff would not have received any amount having paid towards sale consideration. That by itself would show plaintiff is guilty of suppressing material facts relating to the transaction between the parties, of money lending and styling it as an agreement of sale to unjustifiably make unlawful gain.
13. He would submit, learned appellate judge has failed to assign sufficient reasons for reversing the finding of the trial judge who had appreciated the evidence in the correct perspective. Learned appellate judge failed to exercise jurisdiction conferred on him consequent to which an erroneous finding is recorded, decreeing the suit of the respondent-plaintiff.
14. He therefore seeks to set aside the judgment impugned of the appellate court and to sustain the judgment of the trial court.
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15. In negation of all grounds urged by the learned counsel, Sri Jaivittal Rao Kolar and in support of the judgment of the appellate court, learned counsel for the respondent submits, Ex.P1-agreement of sale relied by the plaintiff is not disputed by the defendant. Appellant- defendant has admitted execution of Ex.P1 which would establish the transaction of sale. He submits, the agreement is not only in writing, but it is registered. Thus it is primary evidence as envisaged under Section 91 of the Evidence Act. He submits, learned trial judge had erroneously eschewed such documentary evidence placed by the plaintiff and has given more emphasis to the ocular testimony of the defendant which is not permissible, as held by the appellate judge in view of Section 92, Evidence Act. He submits, learned appellate judge has exercised appellate jurisdiction to re-appraise the evidence on record and has justifiably reached a logical conclusion that Ex.P1 is enforceable and the defendant has failed to establish it to be a transaction of loan. Lastly he would submit 11 defendant having admitted execution of the agreement, plaintiff's burden to prove the document had stood discharged. He would further rely on the evidence of the defendant to show appellant-defendant had admitted receipt of Rs.35,000/- from the plaintiff and no further evidence was required to establish execution and enforceability of Ex.P1 as an agreement of sale.
16. Keeping in mind the contentious issues of the learned counsel on both sides, I have examined the reasoning of the learned trial judge and learned appellate judge to decide the substantial question of law raised.
17. As could be seen from the contextual facts, plaintiff has filed suit for enforcement of Ex.P1 as an agreement of sale and sought a decree of specific performance on the assertive contention that he had accepted the offer of the defendant and agreed to purchase the schedule property for a sum of Rs.40,000/- and paid Rs.35,000/- as part payment of sale 12 consideration. He has pleaded he was ready and willing to perform his part of the obligation under Ex.P1 to pay the balance sale consideration of Rs.5,000/-, but the defendant refused to comply with his obligation and committed breach of the terms and conditions of the covenants. Necessarily in support of such material propositions, plaintiff had to establish Ex.P1 is an agreement of sale to which it purports, and secondly that it was enforceable against the defendant for specific performance. He had to substantiate that the transaction evidenced by Ex.P1 is an agreement of sale and not loan, as canvassed by the defendant. In this regard plaintiff has tendered evidence personally and examined a witness- Channappa as PW2. What the plaintiff and his witness have spoken is material in view of the specific defence the defendant that Ex.P1 though styled as an agreement of sale, is only to secure the loan transaction of Rs.35,000/-. 13
18. In a suit of this nature, even though the plaintiff may assert a particular fact, defendant has the right to rebut it and if he succeeds in probablizing his defense, then the court will undoubtedly record a finding of fact about the nature of transaction. Specially in a suit for specific performance, it would not be enough if the plaintiff proves the agreement of sale and also establishes it is lawful. The plaintiff has to proceed beyond and establish he is entitled to get the decree for specific performance and none of the restrictions imposed by Section 20 of the Specific Relief Act would operate. To appreciate this aspect, we need to examine the nature of evidence led by the plaintiff.
19. As recorded in paragraphs supra, plaintiff has in his ocular testimony and through PW2-Channappa, established that defendant executed Ex.P1 and in view of defendant not disputing such fact, we go on the premise that Ex.P1 has been executed by the defendant. The moot question is, whether it evidences a transaction of sale, or 14 as alleged by the defendant, it is an agreement to secure the loan transaction.
20. Sri Jaivittal Rao Kolar is right in pointing out from the evidence that PW2-Channappa on whose testimony plaintiff has relied, admits in cross-examination that plaintiff has received back Rs.17,000/- from the defendant after execution of Ex.P1. If as alleged by the plaintiff, the transaction is a sale transaction, plaintiff had to explain under what circumstances he received Rs.17,000/-. There can be only two circumstances in which the plaintiff has received part of the amount paid under the agreement: (i) either the agreement should have been rescinded terminating the contract, or (ii) the transaction would be not a sale, but to secure recovery of the amount.
21. In the instant case, Ex.P1 is in writing and is registered and therefore under Section 91 of the Evidence Act, that would be primary proof. However, Section 92 of 15 the Evidence Act to which learned appellate judge has referred, is also attracted.
22. The defendant on his part has, in support of his defense, categorically stated it is a transaction of loan and he had borrowed it to overcome his financial difficulties. After receiving Rs.35,000/- from the plaintiff, he has repaid Rs.17,000/- which fact is established on the basis of evidence referred to above. To establish that it evidences only a loan transaction he has led his oral evidence. Learned appellate judge has opined, when Ex.P1 is in writing and a registered document, no oral evidence could be led to the contrary. Such opinion is formed considering the provision of Section 92 of the Evidence Act which for convenience, needs to be extracted. It reads thus:
Section 92- Exclusion of evidence of oral:-
When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their 16 representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms:
Proviso (1) - Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want to due execution, want of capacity in any contracting party, [want or failure]of consideration, or mistake in fact or law:
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:
Proviso (3) - The existence of any separate oral agreement, constitution a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved Proviso (4) - The existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents:
Proviso (5) Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, may be proved:17
Provided that the annexing of such incident would not be repugnant to, or inconsistent with, the express terms of the contract:
It is material to note, tendering oral evidence against a written document is not totally barred. From the phraseology of Section 92, it could be noticed that in terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms. But it is material to note, proviso (1) of Section 92 spells out something different. It mandates, 'Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want to due execution, want of capacity in any 18 contracting party, [want or failure]of consideration, or mistake in fact or law.'
23. In the instant case, the defendant has taken upon himself the burden of negating Ex.P1as an agreement of sale and to establish that the transaction was a loan. He has succeeded greatly in eliciting from the witness of the plaintiff that he (plaintiff) has received back Rs.17,000/- as referred to above which accrues to his benefit. It must further be noticed that the property involved is immovable property and Rs.40,000/- is shown as sale consideration. The mode of valuation is lacking and plaintiff failed to show it was a valid sale consideration. Learned trial judge had taken note of this fact and recorded the finding that plaintiff had failed to establish Ex.P1 is a sale agreement and has accepted the defense. But learned appellate judge has reversed that finding mainly on the ground ocular testimony of the 19 defendant was inadmissible under Section 92 of the Evidence Act.
24. The opinion that the defendant could have led oral evidence to contradict or disprove Ex.P1 has been considered in the case of GANGABAI VS. CHHABUBAI reported in AIR 1982 SC 20 and ISHWAR DASS JAIN VS. SOHAN LAL (AIR 2000 SC 426). In the first decision cited supra, the apex court referring to the scope of Section 92 of the Evidence Act, has observed thus:
'11. The next contention on behalf of the appellant is that sub-s.(1) of s. 92 of the Evidence Act bars the respondent from contending that there was no sale and, it is submitted, the respondent should not have been permitted to lead parole evidence in support of the contention. Section 91 of the Evidence Act provides that when the terms of contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself. Sub-s. (1) of s. 92 declares that when the terms of any contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no 20 evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms And the first proviso to s. 92 says that any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contradicting party, want or failure of consideration, or mistake in fact or law. It is clear to us that the bar imposed by sub-s. (1) of s. 92 applies only when a party seeks to rely upon the document embodying the terms of the transaction. In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms. The sub- section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham. Such a question arises when the party asserts that there was a different transaction altogether and what is recorded in the document was intended to be of no consequence whatever. For that purpose oral evidence is admissible to show that the 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. Tyagaraja Mudaliyar and another v. Vedathanni. The Trial Court was right in permitting the respondent to lead parole evidence in support of her plea that the sale deed dated January 7, 1953 was a sham document and never intended to be acted upon. It is not disputed that if the parole 21 evidence is admissible, the finding of the court below in favour of the respondent must be accepted. The second contention on behalf of the appellant must also fail.' From the opinion of the apex court referred to above, it could be seen that the bar created by proviso (1) of Section 92 for tendering oral evidence against a written document would apply only when a party seeks to rely upon the document embodying the terms of the transaction. In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms. Proviso (1) is attracted in a case where a party is disputing the transaction recorded in the agreement and intends to prove it was never intended to be acted upon at all between the parties and that the document is sham. Such a question arises when the party asserts that there was a different transaction altogether 22 and what is recorded in the document was intended to be of no consequence whatever. For that purpose oral evidence is admissible to show that the 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.
25. In the circumstances, I am satisfied the learned appellate judge has committed an error in eschewing the oral evidence being of the opinion that proviso (1) to Section 92 of the Evidence Act bars oral evidence against a document. Besides it must be kept in mind that in a suit for specific performance, the court would not grant a decree for specific performance merely because it is lawful to do so. The court is required to consider the circumstances enumerated in clauses (a), (b) and (c) of Section 20 (2) of the Specific Relief Act to decline grant of decree for specific performance. Clause (b) of Section 20(2) is attracted in this case as defendant had pleaded, 23 amongst other grounds, hardship also. He has pleaded specifically that due to financial difficulties he had to transact with the plaintiff to borrow the loan and reduced it into writing as per Ex.P1. Such pleading would undoubtedly attract clauses (b) and (c) of Section 20(2) of the Specific Relief Act which enumerates the circumstances in which the court would refuse a decree for specific performance.
26. Even this aspect has not been considered by the appellate court to grant the decree while reversing the judgment of the trial court. The appellate court has failed to take into consideration the mandate of Section 20 of the Specific Relief Act and has erred in ignoring the evidence of the plaintiff which proves he received back Rs.17,000/- out of Rs.35,000/- and failed to explain how the agreement would be enforceable even if it is considered to be a sale transaction.
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27. In the result, I am satisfied the impugned judgment of the appellate court is unsustainable. The question of law framed in this case is answered in favour of the appellant-defendant against the respondent-plaintiff. Consequently the judgment in R.A.326/02 passed by the Civil Judge (Senior Division), Davanagere, is set aside. The judgment in O.S.174/98 passed by the trial court is restored. In the circumstances, there is no order as to costs.
Sd/-
JUDGE GH/vgh*