Sohan Lal v. Mohan Lal

JORA SINGH, J.

Sohan Lal-appellant/defendant filed this Regular Second Appeal, to challenge the judgment and decree of the Ist Appellate Court dated 9.6.2009, whereby appeal filed by the appellant-defendant against the judgment and decree dated 9.1.2008, passed by the learned Additional Civil Judge (Senior Division), Balachaur, in Civil Suit No. 35 of 2006, was dismissed.

Mohan-respondent/plaintiff filed main suit for specific performance of the agreement to sell dated 5.8.2005, with a request that the appellant-defendant be restrained from alienating the property in dispute and in the alternative suit for recovery of Rs. 80,000/- with interest @1% per month.

Allegation of the respondent-plaintiff is that appellant-defendant had executed an agreement to sell dated 5.8.2005 qua his pucca house situated within the revenue estate of village Chankoya, Tehsil Balachaur. Sale deed was to be executed on or before 5.1.2006, in the sum of Rs. 90,000/-. Rs. 80,000/- was paid as earnest money at the time of execution of the agreement to sell and remaining payment of Rs. 10,000/- out of the sale consideration was to be made at the time of registration of the sale deed and after that possession was to be delivered to the respondent. Respondent-plaintiff was ready and willing to perform his part of the contract but the appellant-defendant failed to perform his part of contract.

Case of the appellant as per written statement is that suit is not maintainable in the present form. In fact suit for possession should have been filed. Agreement in question is the result of fraud, forgery, mis-representation of facts and active concealment. Agreement was forged by the respondent-plaintiff with the connivance of marginal witnesses and the Scribe. In fact the appellant had taken a loan of Rs. 35,000/- from the respondent and respondent got the pronote and receipt executed regarding the said loan transaction in favour of his brother-in-law (Sandu). Payment borrowed was returned by the appellant and the answering respondent asked the appellant to make a writing in his favour regarding return of payment then thumb impressions of the appellant were obtained fraudulently on certain blank papers. Later on, agreement in question was forged. Appellant is illiterate and a simpleton. The house in question is the only property of the appellant measuring 4 marlas worth more than Rs. 6 lacs.

From the pleadings of the parties following issues were framed:

“1. Whether on 5.8.2005, defendant entered into an agreement with plaintiff for sale of pucca house, detailed in heading of the plaint, for a sum of Rs. 90,000/- and received Rs. 80,000/- as earnest money? OPP

2. If issue No. 1 is proved, whether plaintiff is entitled to specific performance of contract dated 5.8.2005? OPP

3. Whether the suit is not maintainable in the present form? OPD

4. Whether alleged agreement to sell is forged and fabricated document and is result of fraud, forgery and mis-representation? OPD

5. Whether plaintiff has not approached this Court with clean hands? OPD

6. Whether the plaintiff is stopped from filing present suit by his own act and conduct? OPD

7. Relief.”

After evidence of both the parties, all the issues were decided against the appellant-defendant. Judgment and decree dated 9.1.2008, passed by the trial Court was upheld by the Ist Appellate Court, vide judgment dated 9.6.2009

I have heard learned counsel for the appellant, respondent and have carefully gone through the file.

Learned counsel for the appellant argued that agreement in question dated 5.8.2005, was not executed in favour of the respondent-plaintiff. Agreement in question is the result of fraud, forgery, misrepresentation of facts and active concealment. In fact the appellant had borrowed Rs. 35,000/- from the respondent. One pronote and receipt were got executed from the appellant by the respondent in favour of his brother-in-law. Payment borrowed was returned by the appellant. At the time of return of payment thumb impressions of the appellant were obtained on certain blank papers fraudulently. Pronote and receipt were not returned by the respondent-plaintiff. House going to be sold measuring 4 marlas is the only house of the appellant for residential purposes. Value of the house was more than Rs. 6 lacs. There was no idea to alienate the house in the sum of Rs. 90,000/-. As per agreement to sell, Rs. 80,000/- was paid as earnest money and the remaining Rs. 10,000/- of the sale consideration was to be paid at the time of registration of the sale deed and after that possession was to be delivered to the respondent. Payment of Rs. 80,000/- without getting possession of the house shows that agreement in question is not a genuine document. Respondent is the resident of village Simbal Majra whereas the house in question is situated in the revenue estate of village Chankoya. Without getting possession of the house situated in village Chankoya there was no reason to pay Rs. 80,000/- as earnest money. If intention of the respondent was to purchase a residential house then Rs. 5000/- or Rs. 10,000/- could be paid as earnest money. No issue was framed as to whether respondent was ready and willing to perform his part of the contract In the alternative, request of the respondent is to recover the earnest money with interest.

Firstly, agreement in question is the result of fraud, forgery, mis-representation of facts and active concealment and if the Court is of the opinion that agreement to sell was executed by the appellant then the appellant is ready to return the earnest money with interest. Respondent was the best witness to appear to state on oath that he is ready and willing to perform his part of contract but he failed to appear in Court. Attorney of the respondent appeared but he was not present at the time of execution of agreement to sell. Respondent is hail and hearty and was present in his house. He was doing agricultural work but failed to appear to state on oath that as per agreement to sell, he is ready and willing to perform his part of the contract but the appellant failed to appear before the Sub Registrar to perform his part of the contract and the following substantial questions of law are involved for the decision:

i) Whether the relief of specific performance of agreement could be granted even without framing any issue regarding readiness and willingness of the plaintiff and without recording any findings in that respect?

ii) Whether adverse inference ought to have been drawn against the respondent for failing to appear in the witness-box to face cross-examination?

iii) Whether the learned Court below is justified in declining the plea of hardship in the facts of the present case merely by referring to the statement of PW-2 Hem Raj?

iv) Whether the plea of hardship deserves to be accepted in view of the specific statement of the appellant remaining un-rebutted on record?

v) Whether the special power of attorney was competent to depose in support of the execution of the agreement without even being a signatory to the same?

vi) Whether the impugned decisions are erroneous, perverse, against law and contrary to the evidence on record?

Learned counsel for the appellant placed reliance upon (i) 2006 (2) Civil Court Cases 621, “Channayya v. Annapurna”, (ii) 2009 (3) RCR (Civil) 609, “Bhajan Kaur v. Tarlok Singh”, (iii) 2010 (2) RCR (Civil) 697, “Radhey Shyam… v. Raj Kumar….” (iv) 2008 (2) RCR (Civil) 732, “Bal Krishna v. Bhagwan Dass (Dead)” (v) 2005 (4) JT 292, “Umabai v. Nilkanth Dhondiba Chavan (Dead) by Lrs”, (vi) 2001 (4) RCR (Civil), 109 “AC Arulappan v. Smt. Ahalya Naik”, (vii) AIR 1999 Madras 213, Rajjah Nadav v. Manonmani Ammal, (viii) 1997 (1) RCR (Civil) 567, “Revappa Gurusiddappa v. Thakubai Madhavarao Patil”, (ix) 2005 (2) Civil Court Cases 324, “Janki Vashdeo Bhojwani v. Indusind Bank Ltd.” and (x) 1999 (1) Civil Court Cases, “Kareemsaheb Nabeesaheb Nadaf v. Basavantappa Shankarappa Pattanshetti (deceased) by LRs”.

Learned counsel for the respondent argued that agreement in question is a genuine document. Marginal witnesses appeared in Court and stated that appellant has executed an agreement to sell to alienate his residential house. Marginal witnesses had no enmity with the appellant, so, there was no idea to depose against the appellant. Allegation of the appellant is that Rs. 35,000/- was borrowed as per pronote and receipt. Pronote and receipt were executed in favour of the brother-in-law of the respondent. Payment was returned and at that time thumb impressions of the appellant were obtained on blank papers but allegation of the appellant is not correct one. Regarding payment of Rs. 35,000/- as per pronote and receipt there is no oral or documentary evidence on file. If the appellant had borrowed Rs. 35,000/- then marginal witnesses of the pronote could easily be produced to state that appellant had borrowed Rs. 35,000/- from the respondent and after that appellant had executed a pronote and receipt in favour of the brother-inlaw of the respondent. According to the appellant, payment was returned to the respondent but pronote and receipt were not obtained. If the appellant had returned the principal amount with interest then receipt was required to be executed by the respondent and not by the appellant. While returning the payment, there was not idea for the appellant to thumb mark the blank papers. Without receipt of pronote and receipt, no question of return of payment and if payment was returned then appellant was not expected to thumb mark the blank papers because appellant required receipt regarding return of payment from the respondent. Payment of Rs. 80,000/- as earnest money without getting possession then agreement is not to be ignored. In a civil suit, parties need not to appear as their own witnesses. Attorney can appear on behalf of the party and statement of the attorney is to be treated as statement of the party. Party is bound by the statement of the attorney. When the appellant had denied the execution of agreement to sell then appellant cannot argue that respondent was not ready and willing to perform his part of the contract. After the execution of agreement to sell, appellant was right to argue that as per agreement to sell he was ready and willing to perform his part of the contract, in fact the second party is at fault, who was not ready and willing to perform his part of the contract. Once the appellant has denied execution of the agreement then Courts below rightly observed that respondent is entitled to decree for specific performance of agreement to sell.

Case of the appellant is that agreement to sell Ex. P-3 dated 5.8.2005, was not executed in favour of the respondent. In fact the appellant had borrowed Rs. 35,000/- from the respondent. Pronote and receipt were executed in favour of the brother-in-law of the respondent. When payment was returned then thumb impressions of the appellant were obtained on blank papers without returning the original pronote and receipt. Agreement in question is the result of fraud, forgery, mis-representation of facts and active concealment whereas case of the respondent is that agreement in question was executed by the appellant but as per agreement to sell appellant failed to perform his part of the contract.

Ex. P-3 is the agreement to sell dated 5.8.2005 Agreement was executed in the presence of Santokh Singh and Hem Raj. Santokh Singh was not examined by the respondent. Hem Raj, second marginal witness appeared as PW-2 and has supported the version of the respondent by saying that this agreement to sell was executed by the appellant in favour of the respondent to alienate his residential house situated in village Chankoya. Rs. 80,000/- was paid as earnest money. Agreement was read over and explained to the appellant who had thumb marked the same in token on its correctness. No suggestion was put to him that he is inimical towards the appellant and due to enmity he has forged and fabricated the agreement in question with the connivance of the respondent. Kulbhushan Dutt, PW-3 is the scribe of the agreement in question. He has also supported the version of the respondent. Stamp paper was purchased by the appellant and agreement to sell was got scribed by the parties from Kulbhushan Dutt. Agreement was witnessed by Santokh Singh and Hem Raj. No suggestion to Hem Raj that appellant had borrowed Rs. 35,000/- from the respondent as per pronote and receipt. While borrowing payment appellant had executed the pronote and receipt in favour of brother-in-law of the respondent. When payment was returned then thumb impressions of the appellant were obtained on blank papers. In case, agreement in question is the result of fraud, forgery, mis-representation of facts and active concealment then second marginal witness could easily be produced by the appellant but he was not examined. No explanation by the appellant as to why second marginal witness was not examined and why stamp paper was purchased from the Deed-writer.

As discussed earlier, case of the appellant is that Rs. 35,000/- was borrowed from the respondent then respondent got executed a pronote and receipt in favour of his brother-in-law. The said payment was returned by the appellant and at that time his thumb impressions were obtained on blank papers but submission of the learned counsel for the appellant is without any evidentiary value. In case, the appellant did not execute the agreement in question Ex. P-3 then why he purchased stamp papers from the Deed Writer. If Rs. 35,000/- was borrowed by the appellant then he was required to execute pronote and receipt in favour of the respondent. No case of the appellant that Rs. 35,000/- was paid by the brother-in-law of the respondent and due to this reason pronote and receipt were executed in favour of brother-inlaw of the respondent.

Suppose appellant had borrowed Rs. 35,000/- from the respondent and had executed pronote and receipt in favour of the brother-in-law of the respondent then at the time of return of payment with interest appellant had no occasion to thumb mark the blank papers because while received the principal amount with interest as per pronote and receipt, respondent was to execute receipt in favour of the appellant. When payment was returned by the appellant then appellant was not to execute the receipt. Marginal witnesses of the receipt were not produced to state as to whether there was a payment of Rs. 35,000/- by the appellant and after receipt of the payment, appellant had executed a pronote and receipt in favour of the brother-in-law of the respondent. Story regarding payment of Rs. 35,000/- as per pronote and receipt is an afterthought. No doubt, appellant is illiterate but he is the resident of village Chankoya whereas respondent is the resident of village Simbal Majra. Before the present controversy appellant had no enmity with the respondent, so, there was no idea for the respondent to obtain the thumb impressions of the appellant on blank papers. In case, respondent had failed to return pronote and receipt on receipt of payment then appellant should have sent complaints to different authorities but till today no complaint to any authority. In view of evidence on file both the Courts' below rightly observed that agreement to sell was rightly executed by the appellant in favour of the respondent on receipt of payment of Rs. 80,000/- and as per agreement to sell (Ex. P-3), sale deed was to be executed on 5.1.2006

Next submission of the learned counsel for the appellant is that respondent appeared as his own witness and after recording his examination-in-chief, his cross-examination was deferred. After that respondent failed to appear in Court for cross-examination. Attorney of the respondent appeared as PW-5 but he was not present at the time of execution of agreement to sell or before the office of Sub Registrar, either on 4.1.2006 or 6.1.2006, when sale deed was to be executed by the appellant as per agreement to sell Ex. P-3, then respondent was to state on oath that he was ready and willing to perform his part of the contract. In the absence of respondent, both the Courts' below were not right to opine that respondent was ready and willing to perform his part of the contract. Issue was not framed by the trial Court as to whether respondent was ready and willing to perform his part of the contract. House measuring 4 marlas is the only house with the appellant, so, appellant had not necessity to alienate the house in question. If the intention of the respondent was to purchase the house then after payment of earnest money of Rs. 80,000/-, respondent should have taken possession of the house. Argued that either the case be remanded back to the trial Court with a direction to frame the issue as to whether the respondent was ready and willing to perform his part of the contract or the appellant be directed to return the earnest money with interest because in the alternative respondent requested for the return of earnest money with interest.

Learned counsel for the respondent argued that as per pleadings of the parties issues were framed by the trial Court and if the Court failed to frame the issue regarding readiness and willingness of the respondent then the respondent is not be non-suited.

Ex. P-3 is the agreement to sell dated 5.8.2005, executed by the appellant in favour of the respondent. As per agreement to sell, Rs. 80,000/- was paid as earnest money but possession was not delivered to the respondent. Payment of Rs. 80,000/- as earnest money without getting possession shows that intention was not to purchase the property. Respondent is the resident of village Simbal Majra whereas the house in question is situated in the revenue estate of village Chankoya. No allegation of the respondent that after purchasing the house, he want to shift from his house at Simbal Majra to the house situated in Chankoya. Except the house in question there is no other residential house of the appellant. There is one line in the statement of Hem Raj that appellant is owning other house but that house is in possession of Kashmiri Lal. Kashmiri Lal was not produced by the respondent to state that appellant is owning another house and that house is under his possession. Number of the house and area is not clear. Appellant has categorically stated that he has no other residential house except the disputed one which is going to be sold as per agreement to sell. So, mere one line in the statement of Hem Raj is not sufficient to opine that appellant is owning another house and if we presume that appellant is owning another house then the second house in under the occupation of Kashmiri Lal.

In Bal Krishna (supra) Hon'ble Supreme Court, held that in a suit for specific perfomance of contract under Section 20, readiness and willingness of the plaintiff to perform the essential part of the contract would be required to be demonstrated by him from the institution of the suit till it is culminated into decree of the Court. Court will grant decree if it is equitable. No specific performance of contract can be granted if it would give an unfair advantage to the plaintiff and where the performance of the contract would involve some hardship on the defendant, which he did not foresee. The Court's discretion to grant specific performance is not exercised if the contract is not equal and faire, although the contract is not void.

In Umabai (supra) Hon'ble Supreme Court observed that while passing decree for specific performance of contract attending circumstances are to be taken into consideration. The plaintiff must plead that he has been and still is ready and willing specifically to perform the agreement on his part. Deposit of any amount in court at the appellate stage by itself would not establish the ‘readiness and willingness’ to perform their part of contract.

In AC Arulappan (supra) it was observed that jurisdiction to grant order for specific relief is discretionary. If under terms of contract plaintiff get an unfair advantage over defendant then court may not exercise its discretion in favour of the plaintiff. Specific relief may not be granted if defendant could 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 court could desist from granting decree to the plaintiff.

In the present case also, as per agreement to sell Rs. 80,000/- was paid as earnest money without getting possession whereas case of the appellant is that he had borrowed Rs. 35,000/- and pronote and receipt were executed in favour of the brother-in-law of the respondent but in support of this allegation no evidence on the file why respondent failed to appear to state on oath that he was ready and willing to perform his part of the contract. Attorney of the respondent appeared as PW-5 but he was not present at the time of execution of agreement to sell. While appearing in Court as PW-5 attorney of the respondent stated that he was present at the time of execution of agreement to sell and before the office of Sub Registrar with the respondent to get the execution of sale deed but this statement of the attorney is not correct one. If attorney was present at the time of agreement to sell then he should sign or thumb mark the agreement to sell and if on 4.1.2006 or 6.1.2006 attorney of the respondent was present before the office of Sub Registrar, to get the sale deed executed then attorney should have identified the deponent i.e the respondent when his affidavits Ex. P-4 and P-5 were got attested on 4.1.2006 or 6.1.2006 respectively. Ex. P-4 is the affidavit of the respondent dated 4.1.2006 whereas Ex. P-5 is the affidavit of the respondent dated 6.1.2006, showing that the respondent was present before the office of Sub Registrar to perform his part of the contract. Respondent was the best witness to state on oath that he was present before the Sub Registrar and at that time his attorney Gurcharan Singh was also present with him? Regarding presence of Gurcharan Singh at the time of execution of agreement to sell or in the office of Registrar on two dates there is no cogent and convincing evidence on the file except the statement of the attorney that he was present with the respondent on 4.1.2006 or 6.1.2006 Attorney is very much interested in the success of this case. In the absence of any documentary proof, not safe to opine that attorney was present at the time of execution of agreement to sell or on 4.1.2006 or 6.1.2006 before the office of Sub Registrar.

Agreement in question is in favour of the respondent and he was the best witness to state that as per agreement to sell he is ready and willing to perform his part of the contract but without any explanation failed to appear in Court particularly when he is hail and hearty and was doing agricultural work.

In Channayya (supra) suit for specific performance was instituted on the basis of agreement to sell but issue was not framed regarding readiness and willingness then it was observed that reasoning of lower Courts without framing issue or point for determination is erroneous. Decree passed for specific performance cannot be sustained. Matter remitted back to the trial Court for decision afresh.

In Bhajan Kaur (supra) suit for recovery on the basis of pronote and receipt but plaintiff failed to appear in Court. Attorney appeared on behalf of the plaintiff then Court observed that the plaintiff must prove the facts of his personal knowledge by himself appearing in the witness box. Statement of power of attorney qua such facts is not admissible in evidence.

In the present case also agreement to sell is in favour of the respondent and he was to state on oath whether he was ready and willing to perform his part of contract particularly when attorney was not present at the time of execution of agreement to sell and before the office of Sub Registrar on different dates with respondent for getting the sale deed executed.

In Radhey Shyam (supra) application for eviction of the tenant on the ground of personal necessity but landlord failed to appear in Court then Court observed that ground of personal necessity, statement of power of attorney cannot be substituted as statement of landlord himself. Adverse inference drawn against landlord for non-appearing in witness box. Eviction application refused.

In Rajjah Nadar (supra) suit for specific performance but plaintiff failed to appear in Court then Court observed that failure on the part of the plaintiff may amount to non-compliance of the requirements under Section 16(c) of the Specific Performance Act.

In Janki Vashdeo Bhojwani (supra) main suit for recovery was filed before the Debt Recovery Tribunal. Power of attorney holder deposing on behalf of the principal then Hon'ble Supreme Court held that if power of attorney holder has rendered some ‘acts’ in pursuance to power of attorney, he may depose for the principal in respect of such acts, but he cannot depose for the principal for the acts done by the principal and not by him and in respect of matter which only the principal has a personal knowledge and in respect of which the principal is liable to be cross-examined. In a civil dispute the conduct of parties is material. Co-owner claiming his share in residential property, exempt from sale. Ownership of property. By an order burden to prove ownership shifted upon the owner. Ownership cannot be proved by the power of attorney holder. Owner not entering in witness box. Held that owner has failed to establish that on the date of the decree he was the co-owner of the property and that he has any independent source of income and contributed for purchase of the property from his own independent income and has further failed to discharge the burden of proving that owner has a share in the property.

As per plaint, not a word that at the time of execution of agreement to sell attorney was present or on 4.1.2006 or 6.1.2006, attorney was present with the respondent for getting the sale deed executed but opposite party failed to appear to perform his part of the contract. When attorney was not present with the respondent at the time of agreement or in the office of Sub Registrar then attorney was not right to state that respondent is ready and willing to perform his part of contract. It was in the personal knowledge of the respondent that he is ready and willing to perform his part of contract.

In the absence of issue regarding readiness and willingness to perform his part of contract, matter can be remitted back to the trial Court to frame the above issue and for decision afresh but as per agreement to sell Rs. 80,000/- was paid as earnest money by the respondent to the appellant without getting possession. House going to be purchased is situated within the revenue estate of village Chankoya whereas respondent is the resident of village Simbal Majra. No case of the respondent that he wants to shift from Simbal Majra to village Chankoya and for that purpose he intends to purchase residential house. House going to be sold is measuring 4 marlas and is the only house with the appellant for residential purposes. Keeping in view the hardship faced by the appellant, I am of the view that appellant is entitled to alternative relief i.e recovery of earnest money with interest particularly when alternative suit for recovery of earnest money with interest at the rate of 1% per month instead of granting decree for specific performance of the contract. Appellant is directed to return the principal amount of Rs. 80,000/- with interest at the rate of 1% per month from the date of agreement till the decision of the trial Court and from the date of decision of the trial Court till the realization of payment at the rate of 6% per annum.

For the reasons recorded above, impugned judgment stands modified in the above said terms.