T.G Pongiannan v. K.M Natarajan 2. N. Eswari S

Prayer: This Second Appeal is filed against the judgment and decree dated 30.6.2008 passed in A.S No. 30 of 2008 by the Additional District Court/Fast Track Court No. IV, Bhavani, reversing the judgment and decree dated 30.11.2007 passed by the Sub-Court, Bhavani, in O.S No. 246 of 2000.

JUDGMENT

1. This Second Appeal is focussed by the Plaintiff, animadverting upon the judgment and decree dated 30.6.2008 passed in A.S No. 30 of 2008 by the Additional District Court/Fast Track Court No. IV, Bhavani, reversing the judgment and decree dated 30.11.2007 passed by the Sub Court, Bhavani, in O.S No. 246 of 2000, which was filed for Specific Performance of the agreement to sell. For the sake of convenience, the parties are referred to here under according to their litigative status before the Trial Court.

2. A summation and summarisation of the relevant facts, which are absolutely necessary and germane for the disposal of this Second Appeal, would run thus:

The Appellant/Plaintiff filed the Suit O.S No. 246 of 2000 of before the Subordinate Judge, Bhavani, seeking specific performance of the agreement to sell, which was decreed. However, the First Appellate Court reversed the judgment and decree of the Trial Court for Specific Performance, by allowing the First Appeal A.S No. 30 of 2008, but by ordering refund of the amount paid by the Plaintiff to the Defendants with interest.

3. Being disconcerted and aggrieved by the said judgment and decree of the First Appellate Court, the Plaintiff filed this Second Appeal on various grounds and also suggesting some substantial questions of law.

4. After hearing for some time the arguments on both sides, this Court felt that with the consent of both sides, this matter could be disposed of finally by framing the following substantial questions of law

“1. Whether the First Appellate Court was justified in ignoring Ex.A1, which is a registered Agreement to Sell and whether such view of the First Appellate Court is against Sections 91 and 92 of the Indian Evidence Act?

2. Whether the First Appellate Court was justified in reversing the Judgment of the Trial Court in regard to ordering specific performance on mere probabilities?”

5. The learned Counsel for the Plaintiff would submit that even though there is no prayer alternis visibus for refund of the amount paid by the Plaintiff to the Defendants, the First Appellate Court, on its own accord, ordered refund, without even creating charge over the suit property; the Defendants, who entered into a registered agreement to sell with the Plaintiff, cannot, as per Sections 91 and 92 of the Indian Evidence Act, veer round and take pleas quite antithetical to what they committed themselves in black and white by having a volte face; absolutely there is no indication, as per their own plea, that they paid interest for the alleged loan amount; the Appellate Court, on improbabilities, assuming as though there are probabilities, reversed the reasoned judgment of the Trial Court and accordingly prayed for setting aside the judgment and decree of the First Appellate Court.

6. Remonstrating and refuting the arguments of the learned Counsel for the Plaintiff, the learned Counsel for the Defendants would advance his argument, the gist and kernal, the pith and marrow of it could be portrayed to the effect that it is not as though the First Appellate Court was unable to see the wood for tree or without au fait with law or au courant with facts, simply reversed the judgment of the Trial Court; the reality involved in the transaction was seen by the First Appellate Court, which the Trial Court failed to delve deep into the factual and evidentiary aspect and cull out the truth.

7. Indubitably and indisputably, incontrovertibly and unassailably Ex.A1 is the registered agreement to sell dated 30.8.1999, which emerged between the Plaintiff and the Defendants, whereby the latter agreed to sell in favour of the former the suit property for a total consideration of Rs. 1,25,000/- and out of which, Rs. 1,00,000/- was paid on 30.8.1999 itself and part of that amount was utilised for discharging the mortgage loan created by the Defendants, relating to the suit property, in favour of the Bank concerned on 30.8.1999 itself, the Bank mortgage dues were paid by the Defendants. D1 is the husband of D2, who is the real owner of the suit property. Nevertheless, both D1 and D2 were parties to the agreement to sell, as proposed sellers of it.

8. The learned Counsel for the Defendants would submit that Ex.A1 contemplates two years' period for performance and that is indicative of the fact that it was only emerged relating to a loan transaction and not an agreement to sell in stricto sensu.

9. Whereas the learned Counsel for the Plaintiff would submit that the Plaintiff is not a professional money lender and after part with such a huge sum of Rs. 1,00,000/-, he could not raise a sum of Rs. 25,000/- immediately and furthermore, for the purpose of securing back the original document from the Bank, so as to complete the sale transaction, time was needed.

10. The Defendants having entered into a registered Agreement to Sell with their wide open eye and voluntarily and volitionally, cannot expect the Court to assume and presume that the time granted in the Agreement to Sell was indicative of the fact that it was a loan transaction. It is not the case of the Defendants that fraud, coercion or undue influence and such like acts, as contemplated under the provisos to Section 92 of the Indian Evidence Act, were perpetrated by the Plaintiff as against the Defendants.

11. At this juncture, my mind is reminiscent and redolent of the following decision of the Honourable Supreme Court:

Bhandari Construction Co. v. Narayan Gopal Upadhye, 2007 (3) SCC 163, an excerpt from it would run thus:

“15. When the terms of the transaction are reduced to writing, it is impossible to lead evidence to contradict its terms in view of Section 91 of the Evidence Act. There is no case that any of the Proviso to Section 92 of the Act are attracted in this case… … … “

12. The learned Counsel for the Plaintiff also cited the following decisions of this Court:

(i) M. Ramalingam (Died) v. V. Subramanyam (Died), 2003 (1) MLJ 694, an excerpt from it would run thus:

“10. … When the Defendant came with a plea stating that the intention of the parties was only to treat the same as a loan transaction, and it was never intended to be acted upon, which is inconsistent with the terms of the document, a duty is cast upon the Defendant to strictly prove that it was a different transaction altogether, and what was recorded in the document was intended to be of no consequence whatsoever. No doubt, the Defendant who came with such a plea, can well adduce evidence to show that Ex.A-1 agreement though executed by him, was never intended to be operated as an Agreement for Sale, but only for a loan transaction, which was not recorded in the document. After careful consideration of the available materials, the Court may hasten to say that the Appellants have miserably failed to prove that it was a loan transaction, and the agreement was never intended to be acted upon. The Defendant has not examined any independent witness or the attestors to the document, nor has he placed acceptable materials to hold so. Except the interested testimony of the Defendant, nothing more is available on record.”

(ii) Ramachandran v. Y. Theva Nesom Ammal, 2003 (2) CTC 264, certain excerpts from it would run thus:

“13. The Counsel appearing for either side advanced arguments about the applicability and non-applicability of Section 92 of the Indian Evidence Act to the facts and circumstance of the case. Section 92 and sub-clause (4) of Section 92 of Indian Evidence Act runs as follows:

Section 92. Exclusion of evidence or oral agreement.— 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 representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms:

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.

Section 92 contemplates that when terms of any contract, grant or other disposition of the property or any matter required by law to be reduced in the form of written documents have been proved, no evidence of an oral agreement or statement is permissible for the purpose of contradicting, varying, adding or subtracting the said written document.

The pith and substance of sub-clause () of Section 92 of Indian Evidence Act is, if a party has entered into a contract which is not required to be reduced in writing, but such a contract has been reduced in writing or it is oral, in such situation, it is always open to the parties to the contract to modify its terms and even substitute a new by oral contract and it can be substituted by parole evidence.

14. In terms of Section 92, I proceed to examine the case on hand. Ex.A1 is a registered Sale Deed. Parties to the document cannot be permitted to let in evidence for the purpose of contradicting, varying, adding or subtracting from its terms the said document.

15. It is the case of the Respondent that the Suit has been laid based on Ex.A2, pronote which was rejected as invalid by the Appellate Court, which was not challenged by the Respondent either by Cross-Appeal or Cross-Objection. Hence, the substantial questions of law 1, 3 and 4 are answered in favour of the Appellant herein.”

(iii) Silvey v. Arun Varghese, 2008 (3) MLJ 951 (SC), an excerpt from it would run thus:

“13. … The plea stated in the Written Statement was abandoned in evidence. In Lourdu Mari David v. Louis Chinnaya Arogiaswamy, AIR 996 SC 2814 : 1996 (5) SCC 589, it was noted that the conduct of the Defendant cannot be ignored while weighing the question of exercise of discretion for decreeing or denying a decree for specific performance. The High Court has, after analyzing the factual position, come to the conclusion that the Defendants were really not ready to perform their obligation in terms of the contract and had taken a false plea in the Written Statement.”

All the above decisions would exemplify and demonstrate that the Plaintiff's right to get Specific Performance cannot simply be ignored on the mere plea of the Defendants that it was not intended to be an agreement to sell, but it was only to secure repayment of the loan.

13. The conduct of the Defendants should be taken note of. Even though the registered Agreement to Sell-Ex.A1 emerged as early as 30.8.1999, the Defendants have not chosen to, as per their own version, repay the loan or send any notice calling upon the Plaintiff to return Ex.A1

14. The Defendants have not proved by any shard or shred, scintilla or pint-sized, iota or molecule extent of evidence that any interest was paid by them to Plaintiff towards the alleged loan. As such, this Court can only treat their plea as a false one. Had really D.W.1 (D1), as claimed in his Chief Examination Affidavit, paid 18% interest for the sum of Rs. 75,000/- or so, then there would have been at least some passbook or note book or any chit, evidencing the same. The relevant portion in the chief-examination, Affidavit of D1 is extracted hereunder:

(emphasis supplied)

15. The above excerpt would clearly exemplify and display that in fact, even though in the registered sale agreement there is a clear acknowledgement that a sum of Rs. 1,00,000/- was received from the Plaintiff by the Defendants, the latter have chosen to contend as though only a sum of Rs. 75,000/- was paid to them and that anticipating 18% interest p.a it was specified as one lakh. This again is a total variation from the registered deed, prohibited under Sections 91 and 92 of the Indian Evidence Act.

16. The Defendants would state that one Arunachalam alone introduced them to the Plaintiff and he only arranged for the loan transaction. If that be so, the said Arunachalam should have been examined on the side of the Defendants. At least, the Defendants should have taken necessary steps to summon him as a witness to be examined before the Court. But they have not chosen to do so.

17. Even though the Defendants contended that the sale consideration of Rs. 1,25,000/- is not the real value of the property and that the Plaintiff is trying to purchase the suit property for a song, nonetheless there is nothing to indicate or evince that the suit property was sought to be purchased by the Plaintiff for abysmal low price.

18. It is a trite proposition of law that the adequacy of consideration is not germane for deciding the specific performance of an agreement to sell. Only if there is a prima facie case that fraud has been committed by one party as against the other, in such an event alone inadequacy of consideration would arise.

19. To the risk of repetition without being tautologous, I would like to highlight that none of the ingredients contemplated under the provisos to Section 92 of the Indian Evidence Act, has been found exemplified or evinced in the case of the Defendants.

20. It is the case of the Defendants that they, understanding the real nature of the transaction, entered into the said agreement to sell Ex.A1 However, they would contend that it was the Plaintiff, who persuaded them to enter into such a transaction under Ex.A1, instead of a mortgage transaction, to avoid the cost of registration and stamp duty. As an after thought, if any plea is dished out so as to wriggle out of a registered document, it is not for the Court to render judicial help to him and that too when he never acted in a fair manner.

21. The First Appellate Court in para 9 assumed and presumed certain improbabilities as probabilities and rendered its judgment. In fact, the Appellate Court's assumption was that no man having head over shoulder would sell away his property for the purpose of redeeming his mortgage from the Bank, is quite contrary to the reality obtaining among people in debts.

22. It is a sheer common sense that hundreds and thousands of mortgagors are in the habit of selling their property, so as to discharge their loan transaction at their instance and get themselves disencumbered of the same.

23. Here the mortgage executed by the Defendants in favour of the Bank concerned was Rs. 78,740/- as revealed by Ex.B1 and it is in evidence that out of the advance amount received from the Plaintiff the Defendants paid only a sum of Rs. 75,000/- As such, it is crystal clear that the sale price as contemplated in Ex.A1 is much higher than their liability to discharge the loan. Put simply, the First Appellate Court was wrong in its assumption at paragraph 9 of its judgment.

24. The First Appellate Court once again fell into error in assuming at paragraph 10 of its judgment that no one would venture to purchase property, which is already under mortgage. This again is against legal and common sense approach. As such on wrong and untenable assumptions and presumptions, without applying sound reasons, the First Appellate Court unjustifiably upset the reasoned judgment of the Trial Court.

25. The learned Counsel for the Defendants cited the decision of this Court P. Sampoornam v. L.T. Somasundaram, 2008 (2) CTC 382 : 2008 (3) MLJ 796, an excerpt from it would run thus:

“15. In the judgment in 2003 (6) SCC 505, in paragraph 22, the Supreme Court has stated that 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, AIR 1982 SC 20 : 1982 (1) SCC 4 : 1982 (94) LW 15 and 138 S.N and Ishwar Dass Jain v. Sohan Lan, AIR 2000 SC 426 : 2000 (1) SCC 434 : 2000 (1) L.W 425 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 in 2004 (4) SCC 794 : 2004 (4) LW 53, 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. Vedathani, AIR 1936 PC 70 : 64 1A 126 : 1936 (43) LW 271, 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 Exhibit A-1 came into being, it was contended that deed was never intended to be acted up and that it was a sham document. When 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 Exhibit A-1 would operate if only the Appellants attempt to rely upon Exhibit A-1 agreement and simultaneously sought to vary and contradict its terms. The Appellants are not attempting to contend that the term contained therein are to be varied of 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 in spite of existence of Exhibit A-1, it will have to be held that the parties had a different contract altogether and Exhibit 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.

21. As I have already held, in a Suit for Specific Performance, the discretionary relief could be granted only if the Plaintiffs make out a case, that too a strong case for exercising the discretion by the Courts. Since I am of the opinion that the Plaintiffs have not come out with a true facts, they are not entitled for the discretionary relief.”

26. In the judgment cited supra this Court clearly held as correct the Defendants' plea that the Plaintiff fabricated a false endorsement and approached the Court for specific performance and the relevant excerpt from paragraph 16 of it would run thus:

“16. …. It is to be noted that though the Defendants admitted their signatures under Exhibit A-11, they have specifically pleaded that at the time of signing on the reverse of Exhibit A-1-Agreement of Sale, nothing was filled up. The said fact clearly probalises the case of the Defendants that the said endorsement is created later by the Plaintiffs.”

(emphasis supplied)

27. It is axiomatic that ratio decidendi of a case alone would act as a binding precedent. In the judgment cited supra, this Court rejected the prayer of specific performance on the ground that the Plaintiff committed virtually fraud on the Court. As such, the said judgment cited on the side of the Defendants is not applicable to the facts and circumstances of this case. Wherefore it is pellucidly and palpably, glaringly and plainly clear that the Defendants, on whom the burden of proof lies to prove that Ex.A1 is not actually an agreement to sell, but it was only a document intended to be a security for repayment of loan transaction, did not discharge their burden.

28. The learned Counsel for the Defendants would submit that the Trial Court did not look into the factum of readiness and willingness on the part of the Plaintiff to perform his part of the contract and the First Appellate Court also did not apply its mind on that aspect. Obviously, the First Appellate Court thought fit to set side the judgment of the lower Court on the ground that the very Ex.A1 itself was not intended to be an Agreement to Sell.

29. Alternis visibus, the argument of the learned Counsel for the Defendants would be to the effect that in the event of this Court finding fault with the judgment of the First Appellate Court, the matter has to be remitted back to the First Appellate Court for considering as to whether the Plaintiff was ready and willing to perform his part of the contract.

30. At this juncture, I would like to point out that such an alternative argument failed to hold water or carry conviction with this Court, for the reason that it is not the case of the Defendants anywhere either in the reply to the pre-suit notice or in the Written Statement that the Plaintiff was not ready and willing to perform his part of the contract. On the contrary, the stand of the Defendants was that the Plaintiff and the Defendants did not enter into an agreement to sell at all. Whereas, the Plaintiff in his Plaint, in commensurate with Section 16(c) of the Specific Relief Act, 1963 clearly and categorically, unambiguously and unequivocally pointed out that he has been ready and willing to perform his part of the contract.

31. Trite the proposition of law is that in the absence of any plea on the part of the Defendants, they cannot expect the Court to concentrate on a point on its own accord.

32. The pleadings and the evidence available on the Plaintiff's side would demonstrate and expatiate that the Plaintiff has been willing to perform his part of the contract by paying the remaining sale consideration of Rs. 25,000/- and get the Sale Deed executed in his favour. The pre-suit notice Ex.A1 dated 16.11.2000 would reveal the same. Even though two years time was contemplated in Ex.A1, much earlier to it, the Plaintiff, after financially equipping himself with the remaining part of the sale consideration, called upon the Defendants to receive the remaining part of the sale consideration to execute the Sale Deed. Whereas, the Defendants would dish out a different plea as stated supra. In such a case, the question of remitting the matter back to the First Appellate Court to consider as to whether the Plaintiff was ready and willing to perform his part of the contract does not arise. Accordingly, the substantial question of law (1) is decided to the effect that Ex.A1 is a registered valid agreement to sell, capable of being enforced and the view taken by the First Appellate Courtis quite antithetical to the provisions of Sections 91 and 92 of the Indian Evidence Act.

33. As regards substantial question of law No.(2) is concerned, the First Appellate Court, without au fait with law and au courant with facts upset the reasoned judgment of the lower Court.

34. In view of the ratiocination adhered to above in deciding the substantial questions of law, the Second Appeal is allowed, setting aside the judgment and decree of the First Appellate Court dated 30.6.2008 passed by the Additional District Court/Fast Track Court No. IV, Bhavani, in A.S No. 30 of 2008 and the judgment and decree of the Trial Court is restored in decreeing the Suit. No costs.