Prayer: This Second Appeal is filed under Section 100 of the Civil Procedure Code, against the judgment and decree of the learned III Additional District Judge, Dharmapuri at Krishnagiri, dated 24.11.2000 in A.S No. 8 of 1999 reversing the judgment and decree of the learned Subordinate Judge of Hosur, dated 27.10.1998 in O.S No. 491 of 1996.
JUDGMENT
1. The Defendant, who was successful in the Trial Court and lost in the 1st Appellate Court is the Appellant.
2. The Respondent/Plaintiff filed a Suit for specific performance of an Agreement of Sale, dated 30.5.1994 executed by the Appellant/Defendant in favour of the Respondent/Plaintiff.
3. The specific case of the Respondent/Plaintiff was that the suit property belongs to the Appellant/Defendant and on 30.5.1994, the Appellant/Defendant agreed to sell the suit property for a consideration of Rs. 70,000/- and a sum of Rs. 60,000/- was paid as advance and an Agreement of Sale was also executed on the same day wherein the payment of advance was also mentioned and the Defendant agreed to execute a Sale Deed on receipt of the balance sale consideration from the Respondent/Plaintiff and a period of three years was fixed in the Agreement of Sale and the Respondent/Plaintiff offered to pay the amount and called upon the Defendant/Appellant to come and execute the Sale Deed by receiving the balance sale consideration and as the Appellant/Defendant refused to execute the Sale Deed, a notice was sent on 5.5.1995 by the Respondent/Plaintiff to the Defendant and even after the receipt of the said notice, the Appellant/Defendant did not come forward to execute the Sale Deed, the Suit was filed for Specific Performance of an Agreement of Sale, dated 30.5.1994
4. The Appellant/Defendant contested the suit stating that an Agreement of Sale, dated 30.5.1994 was not executed for the purpose of conveying the suit property to the Respondent/Plaintiff and the husband of the Appellant and the husband of the Respondent were known to each other and for the purpose of constructing the first floor in the suit property, the Appellant borrowed money from the husband of the Respondent/Plaintiff and earlier to 30.5.1994, a sum of Rs. 60,000/- was borrowed and as a security for the amount, a document was sought to be executed and when he went to the Registrar office for creating a mortgage it was found that expenses will be more and having regard to the nature of the relationship between the parties viz., the husband of both the parties are friends, it was agreed to write an Agreement of Sale and it was not intended to be considered as an Agreement of Sale and the said document was executed only as a security for the amount borrowed by the Defendant/Appellant and even after the execution of the said agreement, the Appellant/Defendant borrowed various sums and including the sum of Rs. 60,000/-, a total sum of Rs. 1,50,000/- was borrowed by the Defendant/Appellant and the Plaintiff was allowed to occupy a portion of the first floor in lieu of interest and a Muchalica was also executed by the Defendant in favour of the Respondent/Plaintiff, wherein it has been stated that the Respondent/Plaintiff is allowed to be in possession of the property in lieu of interest for the loan availed by the Appellant/Defendant and the Appellant/Defendant had repaid a sum of Rs. 1,35,000/- on various dates to the Respondent/Plaintiff and a sum of Rs. 15,000/- alone was yet to be paid and the Appellant/Defendant put up a construction over the suit property and the nature of the construction was made with the knowledge of the Respondent/Plaintiff and the Agreement of Sale was not intended to be acted upon as such and if the Appellant had agreed to sell the property, as per the Agreement of Sale, she would not have put up construction on the suit property, after entering into an Agreement of Sale with the Respondent/Plaintiff as alleged and considering all these aspects, the document, dated 30.5.1994 was not intended to be acted upon as an Agreement of Sale and it was executed only as a security for the amount borrowed by the Plaintiff and suppressing all these facts, a Suit has been filed by the Plaintiff/Appellant and the Plaintiff is not entitled to the relief as prayed for.
5. The Trial Court declined to grant the relief of specific performance and granted a decree for a sum of Rs. 70,000/- in favour of the Respondent. Aggrieved by the same, the Plaintiff filed the 1st Appeal in A.S No. 8 of 1999 and the learned 1st Appellate Judge allowed the 1st Appeal holding that Ex.A1 viz., the alleged Agreement of Sale was a genuine one and it was intended to be acted upon as a sale agreement and the Plaintiff/Respondent has proved his willingness and readiness to act, as per terms of the agreement and therefore, he is entitled to the relief of specific performance and decreed the Suit as prayed for. Hence, this Second Appeal.
6. The following substantial questions of law were framed at the time of admission in the Second Appeal:
1. When the Suit agreement is admittedly in respect of the ground floor only and that the Defendant has constructed the second floor after the said agreement with the knowledge of the Plaintiff and as such the agreement in respect of the ground floor as such could not be enforced and thus, it stands frustrated, whether the Lower Appellate Court is correct in granting a decree for specific performance which is not capable of being performed?
2. When the Plaintiff omitted to give the full and correct facts of the case and thus has not come to the Court with clean hands, whether the Plaintiff is entitled to the discretionary relief of specific performance?
7. Mr. V. Nicholas, the learned Counsel appearing for the Appellant submitted that the learned First Appellate Court without properly appreciating the law of specific performance, erred in allowing the Appeal and decreed the Suit.
8. According to the learned Counsel appearing for the Appellant, admittedly, as per the Agreement of Sale, Ex.A1 land as well as the building constructed thereon was agreed to be sold for a sum of Rs. 70,000/- and Rs. 60,000/- was received as advance. It is admitted that after the execution of the Agreement of Sale, the Appellant/Defendant was permitted to put up a superstructure over the suit property and finance was provided by the Respondent/Plaintiff for the same and if really Ex.A1 was intended to be acted upon as an Agreement of Sale between the parties, the Appellant/Defendant would not have constructed the first and second floor on the suit property and the Respondent/Plaintiff also would not have allowed the Appellant/Defendant to put up the construction over the suit property, having agreed to purchase the ground floor with the construction originally put up by the Defendant in the suit property.
9. The learned Counsel appearing for the Appellant further submitted that the First Appellate Court erred in holding that the case of the Appellant/Defendant that the document was not intended to be acted upon as an Agreement of Sale and it was only a document given as a security for the loan received by the Appellant/Defendant cannot be accepted in view of Sections 91 & 92 of the Evidence Act, without properly appreciating the law laid down by the Hon'ble Supreme Court in respect of Sections 91 & 92 of the Evidence Act.
10. According to the learned Counsel appearing for the Appellant, Sections 91 & 92 of the Act do not prohibit letting of oral evidence to the effect that the document was not intended to be acted upon and the party intended to have the document for a different purpose and relied upon the judgment reported in in the case of Parvinder Singh v. Renu Gautam, 2004 (4) SCC 794; and in the case of Kamireddi Sattiaraju v. Kandamuri Boolaeswari, 2007 (1) LW 309.
11. The learned Counsel appearing for the Appellant further submitted that the relief of specific performance being discretionary relief, the Court is not bound to grant the relief merely because the Plaintiff is entitled to the same, when the Plaintiff is guilty of fraud and has suppressed certain facts and did not come to the Court with clean hands. He further submitted that in this case, it is admitted that the Appellant/Respondent borrowed money from the Respondent/Plaintiff for the purpose of further construction in the suit property and the Respondent/Plaintiff was allowed to be in possession of the property and a Muchalika was also written in favour of the Respondent/Plaintiff by the Appellant and the Respondent/Plaintiff also claimed that the Appellant/Defendant orally agreed to sell the first and second floor of the suit property, but did not produce the Muchalika executed by the Appellant/Defendant in favour of the Respondent/Plaintiff and also did not file a suit for specific performance in respect of the 1st and 2nd floor and these facts would prove that the Respondent/Plaintiff has not come to the Court with clean hands and she is guilty of suppression of facts and therefore, she is not entitled to the discretionary relief of specific performance.
12. On the other hand, the learned Counsel appearing for the Respondent, Mr. P. Mani submitted that the Lower Appellate Court has rightly held that the oral evidence contrary to the Agreement of Sale cannot be allowed in view of the provisions of Sections 91 & 92 of the Evidence Act and therefore, having regard to the terms of contract viz., the Agreement of Sale viz., Ex.A1, the Plaintiff is entitled to the relief of specific performance and admittedly, a sum of Rs. 60,000/- was paid and the Plaintiff was also ready to pay the balance amount of Rs. 10,000/- and as per the Agreement of Sale, three years time was provided for the completion of the sale agreement and within a period of year, the Plaintiff/Respondent called upon the Appellant/Defendant to receive the balance sale consideration and execute the Sale Deed and it is not the case of the Appellant/Plaintiff that the Plaintiff does not have money to pay the balance amount. Admittedly, the Defendant borrowed money from the Plaintiff to the tune of Rs. 1,50,000/- and considering all these aspects, the Trial Court has rightly decreed the Suit.
13. In support of his contention, he relied upon the following judgments:
1. In the case of R. Subbu v. B.S Kolandaisamy, CDJ 2007 MHC 1913;
2. In the case of T.G. Pongiannan v. K.M. Natarajan, 2009 (6) CTC 301 : CDJ 2009 MHC 2025;
3. In the case of Vimal Chand Ghevarchand Jain v. Ramakant Eknath Jajoo, 2009 (2) CTC 858 (SC) : 2009 AIR SCW 3624; and
4. In the case of M. Ramalingam (died) v. V. Subramanyam (died), 2003 (1) MLJ 694.
14. Heard both sides.
15. As per the Agreement of Sale, Ex.A1, the Appellant/Defendant agreed to sell the property viz., Plot No. 8 with a building constructed on the land having an extent of 1305 sq.feet for a sum of Rs. 70,000/- and Rs. 60,000/- was received as advance and three years time was provided for the completion of the sale agreement.
16. It is the specific case of the Appellant that the said document was not intended to be acted upon the Agreement of Sale and it was executed as a security and the 1st Appellate Court, after relying upon the judgment reported in the case of Nanjammal (died) v. Palaniammal, 1993 (2) LW 205, held that the oral evidence contrary to the terms of Agreement of Sale cannot be permitted in view of the provisions of Sections 91 & 92 of the Evidence Act and therefore, the Agreement of Sale has to be taken as such and decreed the Suit as prayed for.
17. Therefore, we will have to see whether the oral evidence regarding the nature of transaction is permissible under law in view of Sections 91 & 92 of the Evidence Act.
18. In the judgment reported in the case of Pravinder Singh v. Renu Gautam, 2004 (4) SCC 794, the Hon'ble Supreme Court has held that:
“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 : 63 IA 126 is an authority for the proposition that 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.”
19. Following the above Supreme Court judgment and also the other judgments of the Supreme Court, the Division Bench of this Court held in the judgment reported in the case of Kamireddi Sattiaraju v. Kandamuri Boolaeswari, 2007 (1) LW 309, held as follows:
“15. In the judgment reported in 2003 (6) SCC 595, 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, 1982 (1) SCC 4 : AIR 1982 SC 20 : 1982 (95) LW 15 & 138 S.N and Ishwar Dass Jain v. Sohan Lal, 2000 (1) SCC 434 : AIR 2000 SC 426 : 2000 (1) LW 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 reported 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. Vedathanni, AIR 1936 PC 70 : 64 IA 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 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.”
Therefore, having regard to the Supreme Court judgments relied upon in the judgment reported in the case of Kamireddi Sattiaraju v. Kandamuri Boolaeswari, 2007 (1) LW 309, the Appellant is entitled to plead that Ex.A1 was not intended to be acted upon as an Agreement of Sale and it was executed only as a security and Sections 91 & 92 are not bar for letting in any such evidence.
20. Having held that Sections 91 & 92 of the Evidence Act are not bar for letting in any such evidence, we will have to see the evidence adduced and admitted by both the parties. It is admitted by the Respondent/Plaintiff that the Appellant/Defendant after the execution of Ex.A1 borrowed various amounts from her for the purpose of putting up further construction in the suit property and also executed a muchalika in favour of the Respondent/Plaintiff for having received the said amount of Rs. 1,50,000/-. The case of the Appellant/Defendant was that including a sum of Rs. 60,000/- received earlier, a total sum to the tune of Rs. 1,50,000/- was borrowed from the Respondent/Plaintiff by the Appellant/Defendant and the Respondent/Plaintiff was allowed to be in possession of the property in the first floor in lieu of interest for the amount paid to the Appellant/Defendant and muchalika was also written in favour of the Appellant/Defendant by the Respondent/Plaintiff. The execution of Muchalika by the Appellant/Defendant in favour of the Respondent/Plaintiff is admitted and it is the case of the Appellant/Defendant that in the Muchalika, it has been specifically stated that a total sum of Rs. 1,50,000/- was borrowed and in lieu of interest, the Respondent/Plaintiff was allowed to be in possession of the property and according to the Respondent/Plaintiff, a Muchalika was executed by the Appellant/Defendant in favour of the Respondent/Plaintiff wherein the borrowal of Rs. 1,50,000/- for the construction of first floor and second floor was mentioned and Rs. 1,50,000/- was not inclusive of Rs. 60,000/- which was paid as advance by the Respondent/Plaintiff to the Appellant/Defendant. Unfortunately, the muchalika, which is in the possession of the Respondent/Plaintiff was not produced by the Plaintiff before the Court.
21. Further, as per Ex.A1, a land having an extent of 1305 sq. feet and a building constructed thereon was agreed to be sold and it is the specific case of the Appellant/Defendant that it was not intended to be acted upon and it was only given as a security for the amount received. If Ex.A1, was intended to be acted upon as an Agreement of Sale having regard to the subsequent conduct of the parties, the Appellant/Defendant would not have put up further construction over the suit property and the Respondent/Plaintiff would not have also allowed the Appellant to put up further construction, having agreed to purchase of land as well as the superstructure constructed thereon. Therefore, having regard to the conduct of the parties viz., permitting the Appellant to put up further construction over the suit property and the non-production of the muchalika executed by the Appellant in favour of the Respondent/Appellant, it is made clear that the parties never intended Ex.A1 to be used as an Agreement of Sale and it was only executed as a security for the amount received by the Appellant/Defendant.
22. Further, under Section 20(2) of the Specific Relief Act, the Court in its discretion not to decree specific performance, when the performance of the contract would involve some hardship on the Defendant which he did not foresee or whereas its non-performance would involve no such hardship on the Plaintiff and where the terms of the contract gives the Plaintiff an unfair advantage over the Defendant and it is inequitable to enforce specific performance.
23. Further, having regard to the fact that the Plaintiff/Respondent has suppressed the Muchalika which would throw light upon the transaction that was entered into between the parties and the Plaintiff having allowed the Appellant/Defendant to put up construction over the suit property, after having agreed to purchase the site as well as the ground floor construction the enforcement of specific performance of the contract would be inequitable and involve hardship on the Appellant/Defendant and the Respondent/Plaintiff would get an unfair advantage and hence, the contract cannot be specifically enforced. Further, the Plaintiff/Respondent has come to the Court with unclean hands by suppressing the muchalika and therefore, he is guilty of suppression of facts and hence, he is not entitled to the discretionary relief of specific performance.
24. I, therefore, hold that these substantial questions of law, are answered in favour of the Appellant/Defendant and the Plaintiff/Respondent is not entitled to the discretionary relief of specific performance, as he has come to the Court with unclean hands by suppressing the real contract between the parties and having regard to the fact that the Appellant was permitted to put up superstructure over the suit properties with the consent of the Plaintiff/Respondent, the Plaintiff is not entitled to the relief of specif performance of Agreement of Sale.
25. Hence, the judgment and decree of the First Appellate Court is set aside and the judgment and decree of the Trial Court is upheld and accordingly, the Second Appeal is allowed. No costs.
Comments