SRI. N.N. RAJ URS v. SRI. SHIVANNA, LEELAVATHI S R

defendants contested the suit. The Trial Court passed the impugned judgment and decree partly decreeing the suit in a sum - 3 - NC: 2024:KHC:17463 RFA No. 538 of 2021 of Rs.8,50,000/- together with interest @ 8% p.a. and dismissed the suit of the appellant – plaintiff in relation to Rs.6,50,000/-.

3. The respondent No.1 – defendant No.1 preferred RFA.CROB.09/2022 and the same came to be dismissed by this Court pursuant to the order dated 31.01.2023.

4. Aggrieved by the impugned judgment and decree rejecting his claim for recovery of Rs.6,50,000/- together with interest, appellant – plaintiff is before this Court by way of the present appeal.

5. Heard the appellant / party-in-person and learned counsel for respondent No.1 – defendant No.1 and perused the material on record. The respondent No.2 – defendant No.2 has been served and has chosen to remain unrepresented and has not contested the appeal.

6. For the purpose of convenience, the parties are referred to by their respective ranks before the Trial Court.

7. The material on record discloses that the plaintiff contended that defendants 1 and 2 entered into an agreement to sell dated 30.07.2014 with one Dr.T.Narayana to purchase property - 4 - NC: 2024:KHC:17463 RFA No. 538 of 2021 bearing No.1496 as described in paragraph 2 of the plaint for a total sale consideration of Rs.2,94,00,000/-. It was contended that subsequently, the defendants approached the plaintiff and expressed their desire to alienate the said property in his favour for Rs.3 Crores with additional Rs.6 Lakhs being their profit. Pursuant thereto, the plaintiff paid a sum of Rs.15 Lakhs to the defendants, who executed a receipt dated 18.08.2014 and agreed to get the sale deed executed in favour of the plaintiff through the original owner Narayana on or before 30.10.2014. It was also contended that out of the aforesaid sum of Rs.15 Lakhs paid by the plaintiff to the defendants, a sum of Rs.8,50,000/- was paid by cheque dated

18.08.2014 and the remaining sum of Rs.6,50,000/- was paid by the plaintiff to the defendants by way of cash and acknowledged by them by executing a receipt dated 18.08.2014.

8. The plaintiff contended that he repeatedly called upon the defendants to get the sale deed executed in his favour through the aforesaid Narayana and since they did not do so, he got issued a legal notice dated 18.11.2014 to the defendants calling upon them to either get the sale deed executed or repay a sum of Rs.15 Lakhs back to the plaintiff together with interest. It was contended that - 5 - NC: 2024:KHC:17463 RFA No. 538 of 2021 the defendants did not send any reply to the said legal notice. Subsequently, on enquiries, the plaintiff learnt that the aforesaid property bearing No.1496 had already been sold by Narayana on

07.11.2014 itself. It was further contended that subsequently the plaintiff got issued one more legal notice dated 03.03.2015 and called upon the defendants to repay Rs.15 Lakhs together with interest. While the 1st defendant sent a false and untenable reply dated 13.04.2015, to which the plaintiff issued a rejoinder dated

18.04.2015, the 2nd defendant did not issue any reply and since neither of the defendants repaid the aforesaid sum of Rs.15 Lakhs together with interest back to the plaintiff, he instituted the instant suit for recovery and other reliefs.

9. The 1st defendant filed his written statement disputing and denying the various contentions urged by the plaintiff. The 1st defendant denied having received Rs.15 Lakhs from the plaintiff towards the sale transaction with Narayana and also denied execution of the alleged receipt dated 18.08.2014 in favour of the plaintiff. It was contended that the plaintiff’s wife purchased property bearing No.172/A-1 as described in paragraph 5 of the written statement vide registered sale deed dated 16.06.2014. It - 6 - NC: 2024:KHC:17463 RFA No. 538 of 2021 was contended that this sale transaction was mediated by both the defendants between the owner and the plaintiff and his wife culminating in the said sale deed in favour of the plaintiff’s wife and in this regard, the plaintiff paid a sum of Rs.8,50,000/- to the defendants by way of commission towards the said sale transaction. It was also contended that at that time, the plaintiff and 1st defendant being family friends, the plaintiff requested the defendants to put their signatures on blank papers comprising of Rs.2/- document sheet for the purpose of showing the aforesaid commission amount of Rs.8,50,000/- in his income tax returns. Believing the words of the plaintiff, the defendants affixed their signatures on the blank Rs.2/- document sheet and it subsequently transpired that the plaintiff has fabricated the alleged receipt dated

18.08.2014. It was therefore contended that while the defendants are entitled to Rs.8,50,000/- received by them by way of commission from the plaintiff towards purchase of the property in the name of his wife, since the plaintiff did not pay the alleged remaining balance of Rs.6,50,000/- as alleged by them, the question of defendants refunding / repaying any amount back to the plaintiff does not arise and that the suit was liable to be dismissed. - 7 - NC: 2024:KHC:17463 RFA No. 538 of 2021

10. The 2nd defendant filed a separate written statement and put forth an identical defence as that of the 1st defendant. He reiterated that the defendants received Rs.8,50,000/- from the plaintiff by way of commission towards the sale deed dated

16.06.2014 executed in favour of his wife and contended that the defendants did not receive Rs.6,50,000/- by way of cash as alleged by the plaintiff. The 2nd defendant also disputed and denied the alleged receipt dated 18.08.2014 produced by the plaintiff and contended that there was no merit in the suit and that the same was liable to be dismissed.

11. Based on the above pleading, the Trial Court framed the following issues: “1. Whether the plaintiff proves that both the defendants received a sum of Rs.15 Lakhs and executed receipt dt.18.8.2014 and agreed to execute sale deed through original owner Dr.T Narayana on or before

30.10.2014?

2. Whether the plaintiff further proves that on

18.2.2015 when he applied for Encumbrance certificate, to his utter shock, the property in question was sold through Dr.T.Narayana on 07.11.2014 itself, as alleged in the plaint? - 8 - NC: 2024:KHC:17463 RFA No. 538 of 2021

3. Whether the plaintiff is entitled for relief claimed?

4. What order or decree?”

12. The plaintiff examined himself as PW-1 and documentary evidence at Exs.P-1 to P-36 were marked. The 1st defendant examined himself as DW-1 and Exs.D-1 to D-8 were marked. The 2nd defendant did not adduce any oral or documentary evidence.

13. After hearing the parties, the Trial Court partly upheld the claim of the plaintiff and decreed the suit only to the extent of Rs.8,50,000/- paid by way of cheque by him to the defendants together with interest @ 8% p.a. from the date of payment till repayment. However, the suit insofar as it related to Rs.6,50,000/- said to have been paid by cash by the plaintiff to the defendants was dismissed by the Trial Court.

14. As stated supra, the 2nd defendant has not only chosen to remain absent before this Court in the present appeal but has also not challenged the impugned judgment and decree. So also, the cross objections – in RFA.CROB.No.09/2022 filed by the respondent No.1 – defendant No.1 has been dismissed by this Court. It is therefore clear that the present appeal preferred by the appellant – plaintiff is restricted to the impugned judgment and - 9 - NC: 2024:KHC:17463 RFA No. 538 of 2021 decree insofar as it relates to rejection of his claim Rs.6,50,000/- said to have been paid by him by way of cash to the defendants.

15. The following points arise for consideration in the present appeal: (i) Whether the Trial Court was justified in dismissing the suit of the plaintiff for recovery of Rs.6,50,000/- together with interest from the defendants? (ii) Whether the impugned judgment and decree passed by the Trial Court in this regard warrants interference in the present appeal? Re: Point Nos. 1 and 2:- Since both these points are inter-linked, they are taken up together for consideration.

16. It is the specific contention of the plaintiff that the defendants had entered into a sale agreement with Dr.T.Narayana in respect of site bearing No.1496 for a total sale consideration of Rs.2,94,00,000/- and they agreed to get the sale deed in respect of the said property executed in favour of the plaintiff for Rs.3 Crores - 10 - NC: 2024:KHC:17463 RFA No. 538 of 2021 and in pursuance thereof, the defendants received a sum of Rs.15 Lakhs from the plaintiff and executed a receipt dated 18.08.2014 acknowledging having received Rs.8,50,000/- by cheque and Rs.6,50,000/- by way of cash from the plaintiff and also agreed to get the sale deed executed by the said Narayana in favour of the plaintiff on or before 30.10.2014. It was also contended that since the said Narayana had already sold the said site in favour of 3rd parties on 07.11.2014 itself, the plaintiff was entitled to recover the said sum of Rs.15 Lakhs paid by him together with interest from the defendants.

16.1 Per contra, the defendants admitted that they had received Rs.8,50,000/- from the plaintiff by way of cheque. The defendants also admitted that they had affixed their signatures to the receipt dated 18.08.2014 marked as Ex.P-1 in the suit; however the receipt of additional sum of Rs.6,50,000/- from the plaintiff by way of cash was disputed and denied by the defendants. They also disputed and denied that Rs.8,50,000/- was paid by the plaintiff towards sale transaction in respect of site No.1496 owned by the said Narayana; on the other hand, defendants contended that they were real estate brokers / mediators who had got the sale deed dated 16.06.2014 executed in respect of site No.172/A-1 in - 11 - NC: 2024:KHC:17463 RFA No. 538 of 2021 favour of the plaintiff’s wife and in this regard, the plaintiff paid Rs.8,50,000/- to the defendants by way of commission towards the said sale deed.

16.2 The said rival contentions as regards to whether Rs.8,50,000/- undisputedly paid by the plaintiff to the defendants by way of cheque represented the advance amount for purchase of site No.1496 owned by Narayana as contended by the plaintiff or whether the said sum represented the commission amount paid by the plaintiff to the defendants towards the sale deed dated

16.06.2014 in favour of the plaintiff’s wife in respect of site No.172/A-1 were considered by the Trial Court while dealing with issues 1 and 3 and additional issue No.1; after considering the pleadings and evidence of the parties, the Trial Court recorded a categorical finding of fact that the said amount of Rs.8,50,000/- was paid by the plaintiff to the defendants by way of cheque towards the sale transaction in respect of site No.1496 owned by Narayana and accepted the claim of the plaintiff in this regard and rejected the defence of the defendants; the trial Court also declined to accept the contention of the defendants that the said sum of Rs.8,50,000/- was the commission amount paid by the plaintiff to the defendants - 12 - NC: 2024:KHC:17463 RFA No. 538 of 2021 towards the sale deed dated 16.06.2014 executed in respect of site No.172/A-1 in favour of the plaintiff’s wife.

16.3 In this context, a perusal of the impugned judgment and decree will clearly indicate that the Trial Court has come to the definite conclusion that Rs.8,50,000/- undisputedly paid by the plaintiff to the defendants represented the amount paid by him towards the sale transaction with Narayana and not by way of commission towards the sale deed in the name of the plaintiff’s wife. As stated supra, the said findings recorded by the Trial Court in favour of the plaintiff and against the defendants have attained finality and become conclusive and binding upon the respondents – defendants, particularly when RFA.CROB No.09/2022 filed by the 1st respondent – 1st defendant stands dismissed by this Court. It follows the plaintiff paid the said sum of Rs.8,50,000/- to the defendants towards the sale transaction with Narayana and not by way of commission amount towards the sale deed in the name of his wife and the said findings cannot be reopened by this Court in the present appeal.

16.4 In view of the aforesaid facts and circumstances, the only question that would arise for consideration is, whether the plaintiff paid a sum of Rs.6,50,000/- to the defendants by way of - 13 - NC: 2024:KHC:17463 RFA No. 538 of 2021 cash and executed the receipt at Ex.P-1 dated 18.08.2014 in his favour. In this context, it is significant to note that the defendants, in their pleadings as well as in the evidence of the 1st defendant (DW-1) have categorically admitted that they had affixed their signatures to the receipt at Ex.P-1 dated 18.08.2014; having admitted their signatures, the defendants put forth a specious plea that their signatures were obtained on blank document sheets by the plaintiff; it is needless to state that this plea put forth by the defendants having admitted their signatures on Ex.P-1 is clearly a plea of fraudulent misrepresentation by contending that the said receipt at Ex.P-1 was signed by them after having received the commission amount of Rs.8,50,000/- from the plaintiff towards the sale deed dated 16.06.2014 in favour of his wife.

16.5 It is well settled that the burden of proving the plea of fraud, misrepresentation or fraudulent misrepresentation rests heavily upon the defendants who have to discharge the said burden by adducing legal and acceptable evidence in this regard as held in various judgments by the Apex Court and this Court including the case of Kuppuswami Chettiar Vs. Arumugam Chettiar – AIR 1967 SC 1395. In the instant case, apart from the fact that the 2nd defendant did not step into the witness box nor - 14 - NC: 2024:KHC:17463 RFA No. 538 of 2021 adduce evidence to substantiate his defence, the self-serving testimony of the 1st defendant (DW-1) including the various admissions, inconsistencies, discrepancies and contradictions in his evidence and pleadings is sufficient to come to the conclusion that the defendants had clearly failed to establish and substantiate the plea of fraudulent misrepresentation put forth by them in relation to Ex.P-1, receipt dated 18.08.2014, especially when they admitted their signatures on the said receipt. In other words, in the absence of legal or acceptable evidence to prove or establish the plea of fraudulent misrepresentation put forth by the defendants, I am of the view that the Trial Court clearly fell in error in coming to the conclusion that the plaintiff had not proved that he had paid Rs.6,50,000/- by way of cash to the defendants, who were liable to repay the said amount to the plaintiff.

16.6 A perusal of the impugned judgement and decree will indicate that as stated supra, the contention of the plaintiff that the payment made by him to the defendants was towards the sale transaction in relation to site No.1496 owned by Narayana and not in relation to the sale deed dated 16.06.2014 in favour of the plaintiff’s wife as contended by the defendants was accepted and upheld by the trial Court which rejected the defence of the - 15 - NC: 2024:KHC:17463 RFA No. 538 of 2021 defendants in this regard. While arriving at the said conclusion, the trial Court recorded a categorical finding of fact that no amount was paid by the plaintiff to the defendants by way of commission towards the sale deed dated 16.06.2014 executed in favour of his wife. The said sale deed has been produced as Ex.D-4 and there is nothing to show any connection or nexus between defendants and the said sale deed or that Rs.8,50,000/- was paid by the plaintiff to the defendants by way of commission. In fact, the said sale deed having been executed for Rs.72 Lakhs, it is highly improbable the plaintiff or his wife would have paid Rs.8,50,000/- by way of commission towards the said sale deed as rightly held by the Trial Court.

16.7 It is significant to note that the defence / plea of fraudulent misrepresentation of the defendants with regard to obtaining their signatures on blank document sheets which has been produced as Ex.P-1 is inter-linked / inter-twined with the alleged payment of Rs.8,50,000/- by way of commission to them. The said plea of payment of commission amount by the plaintiff to the defendants having been rejected by the Trial Court, the sole inference / conclusion to be drawn from the said circumstance is sufficient to come to the conclusion that the defence / plea of - 16 - NC: 2024:KHC:17463 RFA No. 538 of 2021 fraudulent misrepresentation which has not been established by any legal or acceptable evidence would have to be rejected; to put it differently in the light of the findings recorded by the trial court rejecting the plea / defence of fraudulent misrepresentation put forth by the defendants by contending that Rs.8,50,000/- paid by the plaintiff towards the commission amount, it necessarily follows there from that the plaintiff paid Rs.6,50,000/- by way of cash as evidenced by the receipt at Ex.P-1 dated 18.08.2014 which contains the undisputed signatures of the defendants.

16.8 A perusal of the impugned judgment and decree will indicate that the Trial Court has in fact come to the conclusion that Ex.P-1 established that advance amount of Rs.15 Lakhs was received by the defendants from the plaintiff in relation to the sale of site No.1496 owned by Narayana. The Trial Court proceeds further to consider and appreciate the pleadings and evidence of the parties, in particular, the 1st defendant – DW-1 with regard to the sale transaction with Narayana and upholds the claim of the plaintiff and rejects the defence of the defendants. Despite having recorded positive findings in favour of the plaintiffs at paragraphs 11 to 18 of the impugned judgment and decree by holding that the contention of the defendants that they had affixed their signatures - 17 - NC: 2024:KHC:17463 RFA No. 538 of 2021 on blank document sheets at the instance of the plaintiff cannot be accepted, the Trial Court clearly misdirected itself in recording a diametrically opposite finding to the effect that the plaintiff had not proved payment of Rs.6,50,000/- by way of cash to the defendants. In fact, the Trial Court comes to the conclusion that the receipt at Ex.P-1 dated 18.08.2014 had been proved by the plaintiff, but strangely and interestingly refuses to accept the contents of Ex.P-1 which clearly established the defendants received Rs.6,50,000/- from the plaintiff by way of cash. Under these circumstances, it is clear that the Trial Court committed an error in holding that the plaintiff has failed to prove that Rs.6,50,000/- paid by him by way of cash to the defendants. Upon re-appreciation, re- evaluation and re-consideration of the entire material on record, I am of the considered opinion that the impugned judgment and decree passed by the Trial Court rejecting the claim of the plaintiff for repayment of Rs.6,50,000/- is capricious, perverse and contrary to the material on record warranting interference by this Court in the present appeal.

16.9 Accordingly, both Points 1 and 2 are answered in favour of the appellant against the respondents and consequently, the impugned judgment and decree passed by the Trial Court - 18 - NC: 2024:KHC:17463 RFA No. 538 of 2021 insofar as it relates to dismissing the suit for Rs.6,50,000/- deserves to be set aside and the suit in respect of this amount also deserves to be decreed in favour of the appellant – plaintiff by directing the defendants – respondents to repay the said sum of Rs.6,50,000/- back to the plaintiff together with interest @ 8% p.a. from the date of suit till the date of payment.

17. In the result, I pass the following: ORDER (i) The appeal is hereby allowed, * with costs throughout. (ii) The impugned judgment and decree insofar as it relates to rejecting the appellant – plaintiff’s claim / prayer / relief of recovery of Rs.6,50,000/- together with interest from the respondents – defendants is hereby set aside. (iii) The respondents – defendants are hereby directed to pay a sum of Rs.6,50,000/- together with interest at 8% p.a. from the date of suit till date of payment to the appellant – plaintiff. (iv) In view of dismissal of RFA.CROB.No.09/2022, the impugned judgment and decree decreeing the suit for a sum of Rs.8,50,000/- together with interest at 8% p.a. in favour of the * Corrected/inserted vide Chamber order dated: 20.03.2025. - 19 - NC: 2024:KHC:17463 RFA No. 538 of 2021 appellant – plaintiff against the respondents – defendants stand confirmed. Sd/- JUDGE SV / DHA List No.: 2 Sl No.: 1