Sankarasubban, J.:— Plaintiff is the appellant. Suit was filed for specific performance of an agreement to sale the plaint schedule property or in the alternative for return of the amount advanced. The case of the plaintiff is as follows:—
2. The plaint schedule property belongs to defendants 1 and 2. Defendants 1 and 2 agreed to sale the plaint schedule property to the plaintiff for a total consideration of Rs. 10 lakhs. The agreement was executed on 16-9-1988 and an advance amount of Rs. 1 lakh was given to the defendants. As per the agreement, the defendants agreed to execute the sale deed and put the plaintiff in possession of the property within one year.
3. The defendants did not execute the sale deed. The defendants violated the terms and conditions of the agreement. Ultimately, the plaintiff sent lawyer notice on 5-1-1991 calling upon the defendants to execute the sale deed. A reply was given by the defendants stating false and baseless matters. The defendants are liable and bound to execute the sale deed in respect of the plaint schedule property. The plaintiff is entitled to get the sale deed executed. If for some reason the execution of the sale deed becomes impossible, the plaintiff is entitled to get a decree in his favour of realisation of Rs. 1 lakh.
4. A joint written statement was filed by defendants 1 and 2. In the written statement it was denied that they executed Ext. A1 document agreeing to sell the property. According to the defendants, they were in dire need of money. Hence, they approached the plaintiff to give them a loan of Rs. 1 lakh. The plaintiff agreed to give them a loan, if certain documents were executed. The defendants were asked to sign on stamp paper and they signed on the stamp paper. The plaintiff also wanted copies of the title deeds. After taking Rs. 10,000/- towards interest, Rs. 90,000/- was given to the defendants. On the same day, the plaintiff wanted the defendants to give security of the car bearing Registration No. KCT 3593, belonging to the defendants in favour of the plaintiff's son stating that the car has been sold to his son Anil Kumar.
5. According to the plaintiff, the subject matter of the suit, viz., Nandavanam Tourist Home, contains a number of rooms, both residential and non-residential. The rooms have been rented out to various tenants. The tenants did not pay arrears of rent for the last so many years. Hence, the defendants were in great difficulty. It was in such circumstance that they approached the plaintiff for a loan. It was further stated that since the car was not given possession to the plaintiffs son a complaint was filed against the defendants for cheating. A suit for injunction was also filed by the plaintiff from alienating the plaint schedule property. It was further contended that valuation of the property will be more than Rs. 1 crore. This itself shows that there was no intention on the mind of the parties to execute the sale deed in favour of the plaintiff. Further it is contended that the amount received by them has been discharged and there is no balance amount to be paid. According to the defendants, the plaintiff has not come with clean hand before court and that he is not entitled to specific performance.
6. On the basis of the above pleadings, the court below raised six issues. On behalf of the plaintiff, Exts. A1 to A7 were marked and on behalf of the defendants, Exts. B1 to B12 were marked. The plaintiff was examined as PW 1 and two other witnesses were examined as PWs 2 and 3. The first defendant was examined as DW 1. The court below found that the agreement dated 16-9-1988 was executed by defendants 1 and 2 in favour of the plaintiff. It also found that on the date of the agreement, an amount of Rs. 1 lakh was paid to the defendants. So far as the discharge pleaded by the defendants, it was found against the defendants. Issue No. 4 was whether the plaintiffs was entitled to get the sale deed executed. While considering this issue the court appreciated the evidence given by the plaintiff and defendants and also the circumstances of the case. The court below took into account the delay in filing the suit. It also found discrepancies in the evidence of PWs 1 and 3. It found that the plaintiff was a money lender and it further found that at the relevant time, the schedule of property, viz., Nandavanam Tourist Home was occupied by different tenants. What is stated in Ext. A1 is that the sale deed will be executed after evicting the tenants and that too within one year. It took into account the fact that the plaintiff did not make any enquiry regarding the title of the property and whether the property is encumbered or not. Taking all these circumstances into account, the court below took the view that it is not necessary to grant specific performance in favour of the plaintiff. But since it found that the defendants had received Rs. 1 lakh, it ordered to return of the amount with interest at 12% per annum from the date of suit till date of realisation. Thus, the prayer for execution of the sale deed was dismissed, but the alternative prayer for recovery of the advance was decreed. It is against the above judgment and decree that this appeal is filed.
7. Sri Umayanelloor S. Sivasankara Pillai appeared for the appellants and Sri. T.M Abdul Lathiff appeared for the respondents.
8. Sri. Umayanelloor S. Sivasankara Pillai contended that the court below was not correct in holding that the document was executed as security for loan. According to him, once it is found that Ext. A1 document has been executed by the defendants, the terms in Ext. A1 have to be enforced. He further argued that under Section 92 of the Indian Evidence Act, no oral evidence can be given against the terms of the agreement. He highlighted the conduct of the defendants in denying the execution of the agreement and also in contending that the amount has been discharged. He further contended that so far as Ext. B3 is concerned, that cannot be taken into account. Further he contended that if there was inadequacy of consideration, it was not relevant. Counsel also cited decisions to show that no oral evidence can be given to vary the terms of the contract.
9. Sri Abdul Lathiff appearing for the respondents contended that here it is a case where the defendants were in poor financial position. The subject matter of the suit, viz, Nandavanam Tourist Home has been rented out to tenants. The defendants were not getting any rent from the tenants. Hence, it was necessary for the defendants to approach the plaintiff for some money as loan. He contended that the oral evidence can be adduced to show that Ext. A1 was intended to be acted upon for the purpose of security of the loan. He also highlighted the execution of Ext. A7, which shows that on the same day, the car KCT 3593 belonging to the second defendant was sold to the plaintiffs son for Rs. 1 lakh. Even though the inadequacy of consideration is not a ground for refusing specific relief, learned counsel, as a matter of fact, contended that it can be taken note of at the time of exercising the discretion. Counsel further contended that while PW 2 would say that he met PW 1 on 14-9-1988 and PW 1 decided to purchase the property on 15-9-1988, the stamp paper shows that it was purchased on 13-9-1988. Further he also brought to our notice the discrepancies in the evidence of PWs 1 to 3, which all showed that the case set up by the plaintiff is not correct. Hence, he submitted that the discretion should not be exercised in favour of the plaintiff and the judgment and decree of the court below should be upheld.
10. On the basis of the finding of the court below, the following facts are admitted. Ext. A1 was executed by defendants 1 and 2 in favour of the plaintiff. By that document, they agreed to sell their property, viz., Nandavanam Tourist Home for a consideration of Rs. 10 lakhs within a period of one year. The document mentions that an amount of Rs. 1 lakh was received on the date of the agreement. It further says that the buildings were occupied by tenants and the defendants agreed to give vacant possession of the building.
11. Sri. Umayanelloor S. Sivasankara Pillai contended that when once the agreement says that the defendants agreed to execute sale deed, no evidence can be let in to show that it was only executed for the purpose of security for loan. He relied on Sections 91 and 92 of the Indian Evidence Act and various decisions to show that oral evidence cannot be given to vary the terms of the contract. It is true that no oral evidence can be given to vary the terms of the contract. But there are decisions to show that even though the terms of the contract were reduced in writing, the intention can be proved by oral evidence. This was the decision in Thyagaraja v. Vedathannim, AIR 1936 Privy Council 70, wherein it was held that the oral evidence can be given to show that the contract was not intended to be acted upon. In the above decision, the Privy Council observed thus:
“Section 92 only excludes oral evidence to vary the terms of the written contract, and has no reference to the question whether the parties had agreed to contract on the terms set forth in the document. So also S. 91 only excludes oral evidence as to the terms of a written contract. Oral evidence is admissible therefore to show that a document executed by a person was never intended to operate as an agreement, but was brought into existence solely for the purpose of creating evidence about some other matter”.
Thus, it can be shown that actually the transaction was intended as a loan transaction and not an agreement for sale as Ext. A1 appears to be.
12. The evidence of PWs. 1 to 3 does not in still confidence in the mind of this Court to conclude that the defendants agreed for sale of the property in favour of the plaintiff. PW 2 appears to be a middle man. In his evidence, he does not say that he has got any dealing with the defendants. On the other hand, he says that when he came to know that the plaint schedule property was to be sold, he informed the plaintiff on the 14th and on the 15th, the plaintiff agreed and on the 16th, the agreement was signed. Normally, one would have thought that a person who intends to purchase the property to have an inspection of the property, especially when a major portion of the property consists of buildings and is tenanted. Further before a person agrees for purchasing the property, surely, he at least would enquire regarding the title of the vendor towards the property. The evidence of PW 1 clearly shows that he has not made any enquiry. According to him, he has not seen the property itself. The amount that was being invested is Rs. 10,00,000/-. It is most surprising to note that the plaintiff did not want to see the property which he had proposed to purchase for Rs. 10 lakhs. Another salient feature is that the original sale deed was retained with the plaintiff. When an agreement for sale is executed, person who wants to purchase the property will have to see whether there is clear title for the vendor. It is not necessary for the due performance of the agreement for sale to keep in custody the title deed to the property. Normally, the title deed of the property is handed over when there is absolute assignment or when the property is given as security for loan. In the present case, since the original document is handed over, we are inclined to say that the transaction was intended as loan transaction.
13. Another circumstance which stands in the way of the plaintiff is that on the same day on which the Ext. A1 was executed, the car, KCT 3593, belongs to the second defendants was sold to the plaintiff's son for an amount of Rs. 1 lakh. PW 1 in his evidence, says that only Rs. 65,000/- was given by his son and the balance was given by him. This transaction also takes place on the same day, viz. 16-9-1988. The version of the defendants is that this deed was also executed as security. In fact, the plaintiff's son filed a criminal complaint against the second defendant for not effecting the transaction on the ground of cheating. But the criminal complaint ended in failure to the plaintiffs son. It is also seen that the plaintiff filed an injunction suit restraining the second defendant from alienating the property. Finally he withdraws the suit. It is not seen for what purpose the injunction suit was filed.
14. Another circumstance, which goes against the case of the plaintiff is that the plaintiff submitted that the agreement for sale was taken by the Income-tax Officials when there was a raid and that the Department returned the document to her. No evidence has been adduced to show when this document was taken and when this document was returned. The plaintiff admitted that it was with him when the injunction suit was filed. The other circumstance, which goes against the plaintiff is the inconsistent statements made by him before the Magistrate Court and in the suit for injunction. There is evidence adduced by the defendants to show that their financial position was not good inasmuch as the tenants of the buildings were not paying rent to them. The defendants also stated that there was necessity for them to get a loan. They also informed the court about the litigation pending between them and the tenants of the building. Plaintiff did not deny when the cross examination that he was confronted with Ext. B3 and asked whether the value of the building and the property will not come to Rs. 1 crore. This also shows that the value was not fixed for the purpose of sale.
15. As already stated, granting of the decree for specific performance is not absolute. It is discretionary. The Supreme Court in the decision reported in A.C Arulappan v. Ahalya Naik (Smt)., AIR 2001 SC 2783, observed as follows (Para 7):
“The jurisdiction to decree specific relief is discretionary and the Court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, the Court need not grant the order for specific relief, but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in S. 20(2) of the Specific Relief Act, 1963 as to under what circumstances the Court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement. If it is inequitable to grant specific relief, then also the Court would desist from granting as decree to the plaintiff.”
The delay in filing the suit, non-enquiry regarding the property that was to be sold and the non-inspection of the same are all matters which go on a long run to show that the plaintiff is not entitled to specific performance.
In the above circumstance, we agree with the Court below and dismiss the appeal.
Appeal dismissed.