T.G. Pongiannan v. K.M. Natarajan & Ors

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 02.04.2009Coram:THE HONOURABLE MR.JUSTICE G.RAJASURIAS.A.No.1175 of 2008T.G.Pongiannan... Appellant/Respondent/Plaintiffvs.1.K.M.Natarajan2.N.Eswari... Respondents/Appellants/DefendantsThis second appeal is filed U/sec.100 of CPC against thejudgement and decree dated 30.6.2008 passed in A.S.No.30 of 2008 bythe Additional District Court/Fast Track Court No.IV, Bhavani,reversing the judgement and decree dated 30.11.2007 passed by theSub Court, Bhavani, in O.S.No.246 of 2000. For Appellant : Mr.N.ManokaranFor Respondents : Mr.T.MurugamanickamJUDGMENTThis second appeal is focussed by the plaintiff, animadvertingupon the judgement and decree dated 30.6.2008 passed in A.S.No.30 of2008 by the Additional District Court/Fast Track Court No.IV,Bhavani, reversing the judgement and decree dated 30.11.2007 passedby the Sub Court, Bhavani, in O.S.No.246 of 2000, which was filed forspecific performance of the agreement to sell. For the sake ofconvenience, the parties are referred to here under according totheir litigative status before the trial Court. 2. A summation and summarisation of the relevant facts, whichare absolutely necessary and germane for the disposal of this secondappeal, would run thus:The appellant/plaintiff filed the suit O.S.No.246 of 2000 ofbefore the Subordinate Judge, Bhavani, seeking specific performanceof the agreement to sell, which was decreed. However, the firstappellate Court reversed the judgement and decree of the trial Courtfor specific performance, by allowing the first appeal A.S.No.30 of2008, but by ordering refund of the amount paid by the plaintiff tothe defendants with interest. https://hcservices.ecourts.gov.in/hcservices/

3. Being disconcerted and aggrieved by the said judgement anddecree of the first appellate Court, the plaintiff filed this secondappeal on various grounds and also suggesting some substantialquestions of law. 4. After hearing for some time the arguments on both sides, thisCourt felt that with the consent of both sides, this matter could bedisposed of finally by framing the following substantial questions oflaw"1. Whether the First Appellate Court was justified inignoring Ex.A1, which is a registered agreement to sell andwhether such view of the First Appellate Court is againstSection 91 and 92 of the Indian Evidence Act?2. Whether the First Appellate Court was justified inreversing the Judgment of the Trial Court in regard toordering specific performance on mere probabilities?"5. The learned counsel for the plaintiff would submit that eventhough there is no prayer alternis visibus for refund of the amountpaid by the plaintiff to the defendants, the first appellate Court,on its own accord, ordered refund, without even creating charge overthe suit property; the defendants, who entered into a registeredagreement to sell with the plaintiff, cannot, as per Sections 91 and92 of the Indian Evidence Act, veer round and take pleas quiteantithetical to what they committed themselves in black and white byhaving a volte face; absolutely there is no indication, as per theirown plea, that they paid interest for the alleged loan amount; theappellate Court, on improbabilities, assuming as though there areprobabilities, reversed the reasoned judgement of the trial Court andaccordingly prayed for setting aside the judgement and decree of thefirst appellate Court.6. Remonstrating and refuting the arguments of the learnedcounsel for the plaintiff, the learned counsel for the defendantswould advance his argument, the gist and kernal, the pith and marrowof it could be portrayed to the effect that it is not as though thefirst appellate Court was unable to see the wood for tree or withoutau fait with law or au courant with facts, simply reversed thejudgement of the trial Court; the reality involved in the transactionwas seen by the first appellate Court, which the trial Court failedto delve deep into the factual and evidentiary aspect and cull outthe truth.7. Indubitably and indisputably, incontrovertibly andunassailably Ex.A1 is the registered agreement to sell dated30.8.1999, which emerged between the plaintiff and the defendants, https://hcservices.ecourts.gov.in/hcservices/ whereby the latter agreed to sell in favour of the former the suitproperty 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 amountwas utilised for discharging the mortgage loan created by thedefendants, relating to the suit property, in favour of the bankconcerned on 30.8.1999 itself, the Bank mortgage dues were paid bythe defendants. D1 is the husband of D2, who is the real owner of thesuit property. Nevertheless, both D1 and D2 were parties to theagreement to sell, as proposed sellers of it.8. The learned counsel for the defendants would submit thatEx.A1 contemplates two years' period for performance and that isindicative of the fact that it was only emerged relating to a loantransaction and not an agreement to sell in stricto sensu.9. Whereas the learned counsel for the plaintiff would submitthat the plaintiff is not a professional money lender and after partwith such a huge sum of Rs.1,00,000/-, he could not raise a sum ofRs.25,000/- immediately and furthermore, for the purpose of securingback the original document from the bank, so as to complete the saletransaction, time was needed.10. The defendants having entered into a registered agreement tosell with their wide open eye and voluntarily and volitionally,cannot expect the Court to assume and presume that the time grantedin the agreement to sell was indicative of the fact that it was aloan transaction. It is not the case of the defendants that fraud,coercion or undue influence and such like acts, as contemplated underthe provisos to Section 92 of the Indian Evidence Act, wereperpetrated by the plaintiff as against the defendants.11. At this juncture, my mind is reminiscent and redolent of thefollowing decision of the Honourable Supreme Court:2007 (3) SCC 163-BHANDARI CONSTRUCTION CO VS. NARAYAN GOPALUPADHYE, an excerpt from it would run thus:- "15. When the terms of the transaction are reduced towriting, it is impossible to lead evidence to contradictits terms in view of Section 91 of the Evidence Act. Thereis no case that any of the proviso to Section 92 of the Actare attracted in this case. . . . . . . . . "12. The learned counsel for the plaintiff also cited thefollowing decisions of this Court.(i) (2003)1 M.L.J 694- M.RAMALINGAM (DIED) AND OTHERS VS.V.SUBRAMANYAM (DIED) AND OTHERS, an excerpt from it would run thus:"10 . . . . When the defendant came with a plea https://hcservices.ecourts.gov.in/hcservices/ stating that the intention of the parties was only to treatthe same as a loan transaction, and it was never intendedto be acted upon, which is inconsistent with the terms ofthe document, a duty is cast upon the defendant to strictlyprove that it was a different transaction altogether, andwhat was recorded in the document was intended to be of noconsequence whatsoever. No doubt, the defendant who camewith such a plea, can well adduce evidence to show thatEx.A-1 agreement though executed by him, was never intendedto be operated as an agreement for sale, but only for aloan transaction, which was not recorded in the document.After careful consideration of the available materials, theCourt may hasten to say that the appellants have miserablyfailed to prove that it was a loan transaction, and theagreement was never intended to be acted upon. Thedefendant has not examined any independent witness or theattestors to the document, nor has he placed acceptablematerials to hold so. Except the interested testimony ofthe defendant, nothing more is available on record."(ii) 2003(2) CTC 264 – RAMACHANDRAN VS. Y.THEVA NESOM AMMAL,certain excerpts from it would run thus:"13. The counsel appearing for either side advancedarguments about the applicability and non-applicability ofSection 92 of the Indian Evidence Act to the facts andcircumstance of the case. Section 92 and sub-clause 4 ofSection 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 otherdisposition of property, or any matter required by law tobe reduced to the form of a document, have been provedaccording to the last section, no evidence of any oralagreement or statement shall be admitted, as between theparties to any such instrument or their representatives ininterest, for the purpose of contradicting, varying,adding to, or subtracting from, its terms:Proviso(4) – The existence of any distinct subsequentoral agreement to rescind or modify any such contract,grant or disposition of property, may be proved, except incases in which such contract, grant or disposition ofproperty is by law required to be in writing, or has beenregistered according to the law in force for the timebeing as to the registration of documents.Section 92 contemplates that when terms of any contract,grant or other disposition of the property or any matterrequired by law to be reduced in the form of writtendocuments have been proved, no evidence of an oral https://hcservices.ecourts.gov.in/hcservices/ agreement or statement is permissible for the purpose ofcontradicting, varying, adding or subtracting the saidwritten document.The pith and substance of sub-clause 4 of Section 92of Indian Evidence Act is, if a party has entered into acontract which is not required to be reduced in writing,but such a contract has been reduced in writing or it isoral, in such situation, it is always open to the partiesto the contract to modify its terms and even substitute anew by oral contract and it can be substituted by paroleevidence.14. In terms of Section 92, I proceed to examine thecase on hand. Ex.A1 is a registered sale deed. Parties tothe document cannot be permitted to let in evidence forthe purpose of contradicting, varying, adding orsubtracting from its terms the said document.15. It is the case of the respondent that the suit hasbeen laid based on Ex.A2, pronote which was rejected asinvalid by the appellate Court, which was not challengedby the respondent either by cross appeal or crossobjection. Hence, the substantial questions of law 1, 3and 4 are answered in favour of the appellant herein."(iii) (2008) 3 MLJ 951(SC) – SILVEY AND OTHERS V. ARUN VARGHESEAND ANOTHER, an excerpt from it would run thus:"13. . . . The plea stated in the written statementwas abandoned in evidence. In Lourdu Mari David and Othersv. Louis Chinnaya Arogiaswamy and Others AIR 996 SC 2814 :(1996) 5 SCC 589, it was noted that the conduct of thedefendant cannot be ignored while weighing the question ofexercise of discretion for decreeing or denying a decreefor specific performance. The High Court has, afteranalyzing the factual position, come to the conclusion thatthe defendants were really not ready to perform theirobligation in terms of the contract and had taken a falseplea in the written statement."All the above decisions would exemplify and demonstrate that theplaintiff's right to get specific performance cannot simply beignored on the mere plea of the defendants that it was not intendedto be an agreement to sell, but it was only to secure repayment ofthe loan.13. The conduct of the defendants should be taken note of. Eventhough the registered agreement to sell Ex.A1 emerged as early as30.8.1999, the defendants have not chosen to, as per their ownversion, repay the loan or send any notice calling upon the plaintiff https://hcservices.ecourts.gov.in/hcservices/ 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 thatany interest was paid by them to plaintiff towards the alleged loan.As such, this Court can only treat their plea as a false one. Hadreally D.W.1 (D1), as claimed in his Chief Examination Affidavit,paid 18% interest for the sum of Rs.75,000/- or so, then therewould have been at least some passbook or note book or any chit,evidencing the same. The relevant portion in the Chief ExaminationAffidavit of D1 is extracted here under:@/ / / / 30/8/1999 njjp thjp U:/75.000= fld; bfhLf;f xg;g[f; bfhz;lhh;/eh';fs; tHf;Fr; brhj;jpd; kPJ mlkhdk; vGjpf; bfhs;Sk; go nfl;Lf;bfhz;nlhk;/ Mdhy; thjp mlkhdk; vGjpdhy; bryt[ mjpfkhFk; vd;Wk;tpf;fpua xg;ge;jk; vGjpf; bfhz;lhy; bryt[ FiwthFk; vd;Wk; Twpdhh;/mt;tpjk; mUzhryK;k; Twpdhh;/ U:/75.000-= flDf;F 18% tPjk; tl;ongrg;gl;lJ/ eh';fs; tptrhapfs; vd;gjhy; 18% tPjk; tl;o ePjpkd;wj;jpy;tH';Ftjpy;iy vd;gjhy; mry; U:/1.00.000/00 bfhLf;fg;gl;ljhfvGjg;gl;lJ/ eh';fs; thjpf;F 30/10/2000 njjp Koa U:/75.000-=f;F 18%tPjk; tl;o brYj;jpa[s;nshk;/@(emphasis supplied).15. The above excerpt would clearly exemplify and display thatin fact, even though in the registered sale agreement there is aclear acknowledgement that a sum of Rs.1,00,000/- was received fromthe plaintiff by the defendants, the latter have chosen to contend asthough only a sum of Rs.75,000/- was paid to them and thatanticipating 18% interest p.a. it was specified as one lakh. Thisagain is a total variation from the registered deed, prohibited underSections 91 and 92 of the Indian Evidence Act. 16. The defendants would state that one Arunachalam aloneintroduced them to the plaintiff and he only arranged for the loantransaction. If that be so, the said Arunachalam should have beenexamined on the side of the defendants. At least, the defendantsshould have taken necessary steps to summon him as a witness to beexamined before the Court. But they have not chosen to do so.17. Even though the defendants contended that the saleconsideration of Rs.1,25,000/- is not the real value of the propertyand that the plaintiff is trying to purchase the suit property for asong, nonetheless there is nothing to indicate or evince that thesuit property was sought to be purchased by the plaintiff for abysmallow price. https://hcservices.ecourts.gov.in/hcservices/

18. It is a trite proposition of law that the adequacy ofconsideration is not germane for deciding the specific performanceof an agreement to sell. Only if there is a prima facie case thatfraud has been committed by one party as against the other, in suchan event alone inadequacy of consideration would arise. 19. To the risk of repetition without being tautologous, I wouldlike to highlight that none of the ingredients contemplated underthe provisos to Section 92 of the Indian Evidence Act, has been foundexemplified or evinced in the case of the defendants.20. It is the case of the defendants that they, understandingthe real nature of the transaction, entered into the said agreementto 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 registrationand stamp duty. As an after thought, if any plea is dished out so asto wriggle out of a registered document, it is not for the Court torender judicial help to him and that too when he never acted in afair manner. 21. The first appellate Court in para 9 assumed and presumedcertain improbabilities as probabilities and rendered its judgement.In fact, the appellate Court's assumption was that no man having headover shoulder would sell away his property for the purpose ofredeeming his mortgage from the Bank, is quite contrary to thereality obtaining among people in debts. 22. It is a sheer common sense that hundreds and thousands ofmortgagors are in the habit of selling their property, so as todischarge their loan transaction at their instance and get themselvesdisencumbered of the same. 23. Here the mortgage executed by the defendants in favour ofthe Bank concerned was Rs.78,740/- as revealed by Ex.B1 and it is inevidence that out of the advance amount received from the plaintiffthe defendants paid only a sum of Rs.75,000/- As such, it is crystalclear that the sale price as contemplated in Ex.A1 is much higherthan their liability to discharge the loan. Put simply, the firstappellate Court was wrong in its assumption at paragraph 9 of itsjudgement. 24. The first appellate Court once again fell into error inassuming at paragraph 10 of its judgement that no one would ventureto purchase property, which is already under mortgage. This again isagainst legal and common sense approach. As such on wrong anduntenable assumptions and presumptions, without applying soundreasons, the first appellate Court unjustifiably upset the reasonedjudgement of the trial Court. https://hcservices.ecourts.gov.in/hcservices/

25. The learned counsel for the defendants cited the decision ofthis Court reported in (2008) 3 M.L.J. 796 – P.SAMPOORNAM AND OTHERSVS. L.T.SOMASUNDARAM AND OTHERS, an excerpt from it would run thus:-"15. In the judgement in 2003(6) SCC 505, in paragraph 22,the Supreme Court has stated that legal position as regardsthe substantive part of Section 92 of the Indian EvidenceAct in the following words:"22. This Court in Gangabai v. Chhabubai AIR 1982 SC20: (1982) 1 SCC 4 : (1982) 94 L.W.15 and 138 S.N. AndIshwar Dass Jain v. Sohan Lan AIR 2000 SC 426: (2000) 1 SCC434: 2000-1-L.@.425 with reference to Section 92(1) heldthat it is permissible to a party to a deed to contend thatthe deed was not in tended to be acted upon but was only asham document. The bar arises only when the document isrelied upon and its terms are sought to be varied andcontradicted. Oral evidence is admissible to show thatdocument executed was never intended to operate as anagreement bu that some other agreement altogether, notrecorded in the document, was entered into between theparties".16. In the decision in (2004) 4 SCC 794: 2004-4-L.W.53, theSupreme Court has held as under in paragraph 9:"......An enquiry into reality of transaction is notexcluded merely by availability of writing reciting thetransaction. Tyagaraja Mudaliyar v. Vedathani AIR 1936 PC70: 64 1A 126: ( 1936) 43 L.W.271 is an authority for theproposition that the oral evidence in departure from theterms of a written deed is admissible to show that what ismentioned in the deed was not the real transaction betweenthe parties but it was something different....."17. From the above ratio laid down by the SupremeCourt, when we analyse the stand of the parties, accordingto the appellants, irrespective of the fact that Exhibit A-1 came into being, it was contended that deed was neverintended to be acted up and that it was a sham document.When said stand is probed into further, as held by theSupreme Court, the bar under Section 92 of the IndianEvidence Act vis-a-vis Exhibit A-1 would operate if onlythe appellants attempt to rely upon Exhibit A-1 agreementand simultaneously sought to vary and contradict its terms.The appellants are not attempting to contend that the termcontained therein are to be varied of that the evidence letin on their side was to contradict the terms containedtherein. According to the appellants, the entire evidencelet in both oral and documentary, was only to demonstratethat in spite of existence of Exhibit A-1, it will have tobe held that the parties had a different contract https://hcservices.ecourts.gov.in/hcservices/ altogether and Exhibit A-1 was never intended to be actedupon. At the risk of repetition, we state that applyingthe ratio laid down by the Supreme Court, such a stand ofthe appellants was certainly not prohibited under Section92 of the Indian Evidence Act."21. As I have already held, in a suit for specificperformance, the discretionary relief could be granted onlyif the plaintiffs make out a case, that too a strong casefor exercising the discretion by the Courts. Since I am ofthe opinion that the plaintiffs have not come out with atrue facts, they are not entitled for the discretionaryrelief."26. In the judgement cited supra this Court clearly held ascorrect the defendants' plea that the plaintiff fabricated a falseendorsement and approached the Court for specific performance and therelevant excerpt from paragraph 16 of it would run thus:-"16. . . . . It is to be noted that though thedefendants admitted their signatures under Exhibit A-11,they have specifically pleaded that at the time of signingon the reverse of Exhibit A-1 agreement of sale, nothingwas filled up. The said fact clearly probalises the caseof the defendants that the said endorsement is createdlater by the plaintiffs."(emphasis supplied)27. It is axiomatic that ratio decidendi of a case alone wouldact as a binding precedent. In the judgement cited supra, this Courtrejected the prayer of specific performance on the ground that theplaintiff committed virtually fraud on the Court. As such, the saidjudgement cited on the side of the defendants is not applicable tothe facts and circumstances of this case. Wherefore it is pellucidlyand palpably, glaringly and plainly clear that the defendants, onwhom the burden of proof lies to prove that Ex.A1 is not actually anagreement to sell, but it was only a document intended to be asecurity for repayment of loan transaction, did not discharge theirburden.28. The learned counsel for the defendants would submit that thetrial Court did not look into the factum of readiness and willingnesson the part of the plaintiff to perform his part of the contract andthe first appellate Court also did not apply its mind on thataspect.Obviously, the first appellate Court thought fit to set sidethe judgement of the lower Court on the ground that the very Ex.A1itself was not intended to be an agreement to sell.29. Alternis visibus, the argument of the learned counsel forthe defendants would be to the effect that in the event of this Court https://hcservices.ecourts.gov.in/hcservices/ finding fault with the judgement of the first appellate Court, thematter has to be remitted back to the first appellate Court forconsidering as to whether the plaintiff was ready and willing toperform his part of the contract.30. At this juncture, I would like to point out that such analternative argument failed to hold water or carry conviction withthis Court, for the reason that it is not the case of the defendantsanywhere either in the reply to the pre-suit notice or in the writtenstatement that the plaintiff was not ready and willing to perform hispart of the contract. On the contrary, the stand of the defendantswas that the plaintiff and the defendants did not enter into anagreement to sell at all. Whereas, the plaintiff in his plaint, incommensurate with Section 16 (c) of the Specific Relief Act, 1963clearly and categorically, unambiguously and unequivocally pointedout that he has been ready and willing to perform his part of thecontract. 31. Trite the proposition of law is that in the absence of anyplea on the part of the defendants, they cannot expect the Court toconcentrate on a point on its own accord. 32. The pleadings and the evidence available on the plaintiff'sside would demonstrate and expatiate that the plaintiff has beenwilling to perform his part of the contract by paying the remainingsale consideration of Rs.25,000/- and get the sale deed executed inhis favour. The pre suit notice Ex.A1 dated 16.11.2000 would revealthe same. Even though two years time was contemplated in Ex.A1, muchearlier to it, the plaintiff, after financially equipping himselfwith the remaining part of the sale consideration, called upon thedefendants to receive the remaining part of the sale consideration toexecute the sale deed. Whereas, the defendants would dish out adifferent plea as stated supra. In such a case, the question ofremitting the matter back to the first appellate Court to consider asto whether the plaintiff was ready and willing to perform his part ofthe contract does not arise. Accordingly, the substantial questionof law (1) is decided to the effect that Ex.A1 is a registered validagreement to sell, capable of being enforced and the view taken bythe first appellate Court is quite antithetical to the provisions ofSections 91 and 92 of the Indian Evidence Act.33. As regards substantial question of law (2) is concerned, thefirst appellate Court, without au fait with law and au courant withfacts upset the reasoned judgement of the lower Court.34. In view of the ratiocination adhered to above in decidingthe substantial questions of law, the second appeal is allowed,setting aside the judgement and decree of the first appellate Courtdated 30.6.2008 passed by the Additional District Court/Fast Track https://hcservices.ecourts.gov.in/hcservices/ Court No.IV, Bhavani, in A.S.No.30 of 2008 and the judgement anddecree of the trial Court is restored in decreeing the suit. Nocosts. Sd/Asst.Registrar/true copy/Sub Asst.Registrar To1.The Additional District Judge/Fast Track Court No.IV, Bhavani,2.The Sub Judge, Bhavani.Copy toThe Record Keeper,VR Section, High Court,Madras.+1cc to Mr.N.Manokaran, Advocate Sr 11879+1cc to Mr.T.Murugamanikkam,Advocate Sr 11524SSN(CO)km/22.4. S.A.No.1175 of 2008