Bombay High Court
Premchand Lakichand Jain Died Lrs. ... vs Bansilal Manikchand Jain Died Lrs. ... on 29 November, 2023
Author: S.G. Mehare
Bench: S.G. Mehare
2023:BHC-AUG:25120
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(1)
`
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
SECOND APPEAL NO.30 OF 2023
WITH CA/8839/2023
Premchand Lakichand Jain
Died through his L.Rs.
1. Nirmalabai Premchand Jain
Age : 65 years, Occu : Household,
R/o : Nirmala Peth, Pachora Road,
at Post. Jamner, Tal. Jamner,
Dist. Jalgaon
2. Mahendra Premchand Jain
Age : 45 years, Occu : Business,
R/o : Mount World, IInd A-wing,
Flat No.45, PASHAMUS Road,
Pune.
3. Urmila D/o Premchand Jain
Age : 47 years, Occu : Household,
4. Kalpana D/o Premchand Jain
Age : 39 years, Occu : Household,
5. Arpana D/o Premchand Jain
Age : 40 years, Occu : Household,
6. Sadhan D/o Premchand Jain
Age : 38 years, Occu : Household,
Appellant No.3 to 6 R/o : Harsh-villa, 361,
Tilak Nagar Men,
Shwetambar Jain Mandir Galli,
Indore, Tal. & Dist. Indore (M.P.) ...Appellants
Versus
Bansilal Manikchand Jain
Since deceased through his Lrs.
1. Supdabai Bansilal Jain
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(2)
Age : 76 years, Occu : Household,
2. Anokchand s/o Bansilal Jain
Age : 33 years, Occu : Agril.,
Both R/o : At Post. Shahapur,
Tal. Jamner, Dist. Jalgaon.
3. Mangalabai Indarchand Zambad,
Died through her legal heirs,
3A. Dhanashree Ashish Pagariya
Age : 36 years, Occu : Household,
R/o : T-704, Madhumati Society,
Nanded City, Pune.
3B. Tejashree Mukesh Jain
Age : 34 years, Occu : Agril.,
R/o : T-203, Madhumati Society,
Nanded City, Pune.
4. Mandabai Rajendra Chhajed
Age : 37 years, Occu : Household,
R/o : Muthai Nagar, Jamner,
Tal. Jamner, Dist. Jalgaon ...Respondents
Mr. P.R. Katneshwarkar i/b Mr. Anuj Ajay Fulfagar, Advocate for
Appellants;
Mr. B.R. Kedar, Advocate for the Respondent Nos.1, 2, 3A, 3B & 4.
CORAM : S.G. MEHARE, J.
RESERVED ON : 13.09.2023
PRONOUNCED ON : 29.11.2023
JUDGMENT :
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1. The appellant, who was the original defendant, had
impugned the judgment and decree of the learned Civil Judge Junior
Division, Jamner, passed in R.C.S. No.27 of 1982,, dated 26.07.1988
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and of the learned District Judge-5, Jalgaon passed in R.C.A. No.256
of 1988, dated 30.06.2022.
2. The appellants would be referred to as the 'defendants',
and respondents as the 'plaintiffs'.
3. Both plaintiffs and defendants died and their legal
representatives continued the suit. This appeal is a second round of
litigation. Against the judgment and decree of the Trial Court, the first
appeal bearing R.C.A. No.256 of 1988 was preferred. It was decided
on 01.02.1993. Against the said judgment and decree of the First
Appellate Court, Second Appeal No.325 of 1993 was preferred. It was
decided on 09.09.2021. This Court had set aside the judgment and
decree of the First Appellate Court passed in R.C.A. No.256 of 1988
dated 01.02.1993 and relegated the matter to the First Appellate
Court for de novo consideration of the appeal with a direction to
frame appropriate points for determination in compliance with Order
XLI Rule 31 of the Civil Procedure Code and decide the matter on
merits. In view of the order of this Court, the First Appellate Court
framed in all 21 points for determination and passed the impugned
judgment and decree on 30.06.2022.
4. This Court, by order dated 25.07.2023 (Coram: Arun R.
Pednekar, J.), asked the learned counsel for the respondents how
questions of law formulated by this Court by order dated 05.09.2019
in the earlier round of litigation between the parties as questions of
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law at nos. A, B and C would not arise for consideration. It has been
further observed that the learned counsel submits that the same are
not dealt with by the First Appellate Court on remand. It was directed
to file a reply limited to that extent. The Court has perused the
submissions of the learned counsel for the plaintiff as per the above
order.
5. Both learned counsels agreed for final hearing at the
admission stage. Hence, the appeal was admitted and heard finally by
consent, as the original suit was filed in 1982. The following
substantial questions of law have been formulated:
(a) Whether the document in question about the filed survey
no. 278/3 was a sale deed or deed of mortgage by conditional
sale.
(b) Whether oral evidence would prevail over documentary
evidence?
(c) Whether defendants/present appellants are entitled to
specific performance of the field survey no.278/1?
(d) Whether there was a delay and laches in claiming the
specific performance?
(e) Whether the defendant was ready and willing to perform
his part of the contract?
6. The plaintiff had a case that he intended to purchase
adjoining land bearing field Survey No. 278/1. However, he had no
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money. He knew that the defendant does money lending. Hence, he
approached the defendant and asked for money. The defendant asked
him to give something in writing or pledge something. He also asked
for 2% interest per month on the loan amount. He executed the sale
deeds of the field against the loan of Rs. 6000 and the house property
against the loan of Rs. 3000 on 21.1.1971. The sale deeds were
executed as security against the loan. It was agreed that the
possession of the house would not be delivered to the defendant, but
the possession of the agricultural field Survey No.278/3 would be
delivered and the defendant would maintain the account of the
income fetched from the field, and it would be appropriated against
the loan amount and the interest. From the loan taken from the
defendant, the plaintiff purchased field Survey No. 278/1 on
15.4.1971. Instead of producing the account, in May of 1974, the
defendant started demanding the loan amount. The plaintiff had no
money. The defendant took advantage of the situation, took
possession of field Survey No. 278/1 and obtained an agreement to
sell. He did not receive any earnest money. In 1975, the plaintiff could
arrange for Rs. 3000/-. He paid it to the defendant and by his
application to the Village Panchayat, again a entry was taken in the
Village Panchayat records. The defendant fetched heavy income from
both fields, and the loan and interest amount was appropriated. But
he was greedy to get more interest. Hence, he refused to redeem the
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mortgage. It was prayed that the fields be redeemed, possession be
delivered to him, it be declared that the loan and interest are
appropriated, the defendant be directed to take the accounts of the
income fetched from both fields and costs be imposed upon him.
7. The defendant denied that he does illegal money lending.
He denied the plaintiff's case. It was purely a sale transaction and not
a mortgage. He let the plaintiff reside in the suit house as a licensee.
He asked him for many times to vacate the house, but the plaintiff
avoided it. He had a clear intention to sell; hence, he agreed to sell
field Survey No. 278/1 and received Rs. 2000 as the earnest amount.
He agreed to bring the necessary permission from the competent
authority as, at that time, the Consolidation scheme was implemented
in their village. He did not get permission and avoided to execute a
sale deed. He, by way of counter-claim, prayed for the specific
performance of the contract. The plaintiff, in reply to the counter-
claim, came up with the same case.
8. Learned counsel for the appellants has vehemently
argued that the plaintiff had no case that he was in dire need of
money to repay the debt or had to spend on his family. In such facts,
the plaintiff's case of borrowing the loan and executing two sale deeds
on the same day as security against the loan appears not genuine. He
did the transactions voluntarily. It was not a mortgage. There were no
recitals of retransfer of the suit properties on repayment of the loan
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borrowed from the defendant. It is a precondition to prove that it was
a mortgage by a conditional sale. No evidence of any type,
particularly oral evidence could be led against the document which is
required by law to be reduced to writing. The terms of the sale deed
and agreement to sell were unambiguous; therefore also no other
evidence to prove the nature of the transactions was allowed. Though
it has been tried to point out that it was not a mortgage, the plaint
averments are in the form of a mortgage. To avoid the legal burden to
prove the mortgage, a new words of 'security against the loan' have
been used. The meaning of the words used by the plaintiff ultimately
pertains to the mortgage. The security against the loan is also the
mortgage. Hence, he could not escape from the burden of proving
that it was not a sale and agreement but a nominal transaction.
9. He further argued that the plaintiff failed to get
permission for sale of the Survey No. 278/1. Hence, he delayed the
execution of its sale deed. The defendant never denied to perform his
part of the contract. Both the plaintiff and the defendants were
distant relatives. Therefore, the plaintiff was allowed to reside in the
house. The plaintiff told the defendant that his family is annoyed, he
should fix the consideration of Rs. 11,000/ for Survey No. 278/1 and
execute the sale deed of house, so he could get the permission for sale
of that field. Hence, he agreed to transfer the house property in the
village Panchayat record. He applied for the transfer of house in his
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name, believing the plaintiff that he would get the permission from
competent authority to complete sale transaction of Survey No.278/1.
In the peculiar circumstances, the said application was moved. It does
not prove that the defendant was engaged in illegal money lending.
10. He also argued that both Courts erred in relying on the
oral evidence of the plaintiff and his witnesses against the registered
document of sale. Such evidence was excluded in view of Section 92
of the Indian Evidence Act. He would also argue that the sale deed
Exhibit-83 was not properly proved by examining the witnesses.
Therefore, Section 68 of the Indian Evidence Act has to be considered.
He also argued that unless the term of reconveyance or resell was
embodied in the documents as provided under proviso to Section
58(c) of the Transfer of Property Act, such document shall not be
deemed to be a mortgage by conditional sale. No conditions as such
were embodied in the sale deeds of the agricultural field and the
house. There was nothing on record to prove that it was agreed
between the plaintiff and the defendant that the plaintiff would resell
the field and the house property on settling the account of income
fetched and that would be appropriated towards the loan amount. He
would submit that both Courts did not consider the legal propositions
of law in proper perception and erroneously held that the defendant
was engaged in the illegal money lending business and the
transactions were the outcome of the money lending transaction.
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11. He further argued that the possession of another field
survey no.278/1 was handed over to the defendant against the part
consideration and the plaintiff agreed to execute the sale deed on
getting permission from the competent authority. The plaintiff failed
to perform his part of the contract. Since the possession was handed
over in part performance of the contract, the possession of the
defendant over survey no.278/1 was protected under Section 53-A of
the Transfer of Property Act. He prayed to allow the appeal and set
aside the impugned judgments and decrees.
12. The learned counsel for the appellant relied on the case
of Mangla Waman Karandikar Vs. Prakash Damodar Ranade, AIR
2021 SC 2272, in which it has been held that once the parties have
accepted the recitals and the contract the respondents could not have
adduced contrary extrinsic parole evidence unless he portraits
ambiguity in the language. Therefore, the Court below erred in
appreciating the oral evidence against the document taking the aid of
Section 92 of the Indian Evidence Act. He further relied on Kamta
Singh Vs. Chaturbhuj Singh, 1934 BCI (0) 17 . This case is
distinguishable on fact and would not assist the defendant. He further
relied on Mateen Khan s/o. Maksud Khan Pathan Vs. Mannan Khan
s/o. Aadam Khan Pathan and Others, 2023 DGLS (Bom.) 1897 . In
this case, Section 59 of the Transfer of Property Act makes it
mandatory to effect mortgage to secure principal amount of Rs.100 or
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more, except in case of mortgage by deposit of title deeds, only by
registered instrument. Oral mortgage is not permissible under the
provisions of the Act, for security of Rs.100 of more principal amount.
He further relied on the case of Bachhaj Nahar Vs. Nilima Mandal and
Another, (2008) 17 SCC 491. The ratio laid down in this case that no
amount of evidence can be looked into, upon the plea which was
never put forward in the pleading, is a settled law therefore, needs no
discussion.
13. Per contra, learned counsel Mr. Kedar for the respondents
has vehemently argued that there are two concurrent judgments on
the facts; hence, they need not be disturbed by this Court. He would
vehemently argue that it was not a mortgage but a security against
borrowed money. He also argued that the transaction was never a
mortgage by conditional sale. It was a usufructuary mortgage. The
possession of Survey No. 278/3 was delivered to the defendant with a
right to receive rent and profit for adusting the loan and interest. He
had gained the profit from the said field sufficient to recover the
amount of loan and the interest. The sale deed did not recite about
the mortgage. However, the oral evidence could be given to prove the
real nature of the transaction. Such evidence against the document is
permissible under Section 92 of the Indian Evidence Act. Section 92
(1) of the Indian Evidence Act would not apply when it is a case of
the plaintiff that the transaction recorded in the document in question
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was never intended to be acted upon and that document is a sham.
Since there was a specific oral agreement of reconveyance as the
transaction was against the security of the loan, the oral evidence of
the witnesses would prevail over. He applied for deleting his name
from the Village Panchayat records about the house property which
was sold to him as a security for loan after paying the amount of
Rs.3,000/-. His conduct strengthens the case of executing a sale deed
as security against the loan.
14. He further argued that the defendant was engaged in
illegal money lending. Similar cases were filed by the other villagers
against the defendant. The necessary evidence is also produced. The
witnesses also proved that it was a money lending transaction. The
defendant charged the interest. Illegal money lending is prohibited.
Hence, the case was governed under Section 13-B of the Bombay
Money Lenders Act, 1947. The evidence clearly establish that the
appellant/defendant was engaged in illegal money lending
transaction which can be inferred from his conduct.
15. He also submitted that the plaintiff had no intention to
sell the survey no.278/1. However, he could not pay the borrowed
amount and, therefore, a nominal agreement to sale was executed to
assure the defendant for his money. The possession of the said field
was handed over to him for recovering the loan amount. The said
agreement was never intended to be acted upon. The defendant knew
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the real transaction. Hence, he did not seek specific performance.
That apart, he was ever not ready and willing to perform his part of
contract. Therefore, both Courts have correctly held that the
defendant is not entitled to specific performance to get the sale deed
of survey no.278/1 executed. Since the defendant did not perform his
part of contract in pursuance of the alleged agreement to sell, both
Courts have correctly held that he is not entitled to protection under
Section 53-A of the Transfer of Property Act.
16. The learned counsel for the plaintiff relied on the case of
Ram Kumar Agarwal and another Vs. Thawar Das (Dead) through
Lrs, (1999) 7 SCC 303, in which it has been held that the plea under
Section 53-A of the Transfer of Property Act involves a mixed question
of law and fact, therefore, cannot be permitted to be urged for the
first time at the stage of second appeal. That apart, performance or
willingness to perform his part of contract is one of the essential
ingredients of the plea of the part performance. He would argue that
the defendant failed to perform the part performance; hence, not
entitled to protection under Section 53-A of the Transfer of Property
Act.
17. He also relied on the case of Shankarlal Ganulal
Khandelwal since deceased through L.R. Ramchandra Shankarlal
Khandelwal Vs. Balmukund Surajmal Bharuka since deceased through
L.Rs. Anil Balmukund Bharuka and others, 1999 (Supp) Bom.C.R.
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816 (Bombay High Court). The facts reveals from the judgment were
that the learned Court of first instance decreed the suit holding that
the sale deed dated 23.11.1972 was nominal and in a nature of
simple mortgage. The first appellate Court had reversed the judgment
of the Court of first instance and held that it was out and out sale.
The plaintiff approached this Court. On the facts, this Court held that
oral evidence is admissible to show that the document executed never
intended to operate as agreement but that some other agreement
altogether not recorded in the document was entered into between
the parties. Bar imposed by section 92(1) of the Evidence Act applies
only when a party seeks to rely upon document embodying terms of
transaction. In this case the case of Smt. Gangabai W/o Rambilas
Gilda V Smt Chhabubai w/o Pukraj Gandhi, (1982) 1 SCC 4 which
the learned counsel for the plaintiff relied upon was also considered.
18. He further relied on the case of Placido Francisco Pinto
Vs. Jose Francisco Pinto and Another. 2021 DGLS (SC) 547 . In this
case the plaintiff had filed a suit for possession and accounts from
younger brother, the defendant. The defendant had filed another suit
against the plaintiff for declaration that the sale deed of southern half
portion of the suit property as it was never executed and they did not
receive the consideration. The learned Court of first instance decreed
the suit of the plaintiff. The first appellate Court allowed the appeal of
the defendant and dismissed the plaintiff's suit. On the basis of
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evidence and case of the respective parties, the High Court affirmed
the findings of the first appellate Court. The Hon'ble Supreme Court
held that the findings of the First Appellate Court affirmed by the
High Court are clearly erroneous. The Hon'ble Supreme Court also
discussed the ratio laid in the case of Smt Gangabai (supra).
19. The Hon'ble Supreme Court in the case of Nazir
Mohamed Vs. J. Kamala, (2020) 19 SCC 57 has clarified the criteria
for entertaining the second appeals under Section 100 of the Civil
Procedure Code, 1908 (C.P.C.), that a substantial question of law must
be involved affecting the party's rights and not covered by specific
legal provision or settled precedents. The interference of the High
Court in second appeal is limited. The law is also well settled that in
second appeal, normally the Court should not re-appreciate the
evidence unless the judgments and decrees impugned before the
Court are perverse and not considered the facts in proper perception
or considered illegally
20. Bearing in mind the scope of Section 100 of the Civil
Procedure Code and considering the substantial questions of law
involved in the case, the Court proceeded with the appeal.
21. The rival contention of both parties revolve around the
nature or type of the mortgage. The defendant argued that it was a
case of mortgage by a conditional sale. As against this, the plaintiff
argues that it was a usufructuary mortgage. Having regard to the
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arguments advanced above, first it is to be answered what type of the
transaction was between the parties.
22. Under Section 58 of the Transfer of property Act ("T.P.
Act" for short) a conditional mortgage, the right transfer is, in the
form of, a transfer of right of ownership subject to a condition that on
default of payment of mortgage money on a certain debt, the sale
shall become absolute or on a condition that on such payment being
made, the sale shall become void, or on a condition that on such
payment being made, the buyer shall transfer the property to the
seller. However, such conditions shall be embodied in the document
itself. If no such conditions have been embodied in the document, it
would not be a mortgage by conditional sale.
23. In a usufructuary mortgage, what is transferred is a right
of possession and enjoyment of usufruct. The mortgager delivers the
possession or expressly or by implication binds himself to deliver the
possession of the mortgaged property to the mortgagee, and
authorizes him to retain such possession until the payment of the
mortgage money, and to receive the rents and profits accruing from
the property or any part of such rents or profits and to appropriate the
same in view of interest or in payment of mortgage money, or partly
in lieu of interest or partly in payment of the mortgage money.
24. The learned counsel for the plaintiff tried to argue that
the security against the loan is not a mortgage of any type. He wanted
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to say that it is a different concept and has no concern with a
mortgage. However, the definition of the term 'Mortgage' under
section 58 of the T.P. Act with plaint averments would give the correct
answer to the interpretation of the learned counsel for the plaintiff. It
has been defined that "a mortgage is the transfer of an interest in
specific immovable property for the purpose of securing the payment
of money advanced or to be advanced by way of loan, an existing or
future debt, or the performance of an engagement which may give
rise to a pecuniary liability". The definition is specific that any interest
in the immovable property transferred against the loan is a mortgage.
The type of mortgage depends upon the terms of the contract. A
transaction between the parties, if indicates that the interest in
immovable property on agreed condition is transferred against the
loan whatever the local terms are, it is a mortgage. The plaint
averments are clear that it was usufructuary mortgage. Hence, the
plaintiff cannot escape from the rules of mortgage, rights and
liabilities arising therefrom. Admittedly, the condition of
reconveyance in both documents on payment of the amount raised as
a loan was not embodied in the sale deeds Exhibits-83 and 84. In the
absence of any such condition embodied in the sale deeds, it could be
said that the transaction was a mortgage by conditional sale.
25. Admittedly, there was no mortgage deed in writing.
Therefore, there is no question of its registration. The plaintiff has a
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oral case of mortgage that too in contradistinction with a document of
registered sale deed. As against the claim of the plaintiff, the
defendant has a case that it was not a transaction of mortgage but out
and out sale. He also denied that he never engaged in illegal money
lending business.
26. To prove the sale was a nominal document of sale against
the loan, the plaintiff relied on the extrinsic evidence of two witnesses
to establish that the sale deed Exh.82 was never intended to be acted
upon and it was executed by way of security of the loan. The plaintiff
took the shelter of Section 92 of the Indian Evidence Act and the case
law to establish his case. He would argue that in the nature of
transaction the oral evidence would prevail as the documents were
silent. The plaintiff did not rely upon the sale deeds to prove his
claim as no terms were embodied therein.
27. It is evident that the possession of the field survey
nos.278/3, and survey No.278/1 was parted with the defendant;
however, the possession of the house property was not parted. The
defendant was enjoying the suit fields from the date of delivery of the
possession.
28. In the case of Smt. Gangabai w/o Rambilas Gilda Vs.
Smt. Chhabubai w/o Pukharajji Gandhi, (1982) 1 SCC 4 , the Hon'ble
Supreme Court laid down the law that the bar imposed by sub-section
(1) of Section 92 applies only when a party seeks to rely upon the
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document embodying the terms of the transaction and not when the
case of a party is that the transaction recorded in the document was
never intended to be acted upon at all between the parties and that
the document is a sham. Such a question arises when the party asserts
that there was a different transaction altogether and what is recorded
in the document was intended to be of no consequence whatever. For
that purpose oral evidence is admissible to show that the 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.
29. In the case of Mushir Mohammed Khan (Dead) By Lrs.
Vs. Smt Sajeda Bano and Ors, (2000) 3 SCC 536, the Hon'ble
Supreme Court in the middle of paragraph no.12 has observed that :
"12. The view expressed by this Court in Bhaskar case was
repeated in the same words in P.L. Bapuswami v. N. Pattay
Gounder :
"The question in each case is one of determination of the real
character of the transaction to be ascertained from the provisions
of the deed viewed in the light of surrounding circumstances. If
the language is plain and unambiguous it must in the light of the
evidence of surrounding circumstances be given its true legal
effec0t. If there is ambiguity in the language employed, the
intention may be ascertained from the contents of the deed with
such extrinsic evidence as may by law be permitted to be
adduced to show in what manner the language of the deed was
related to existing facts."
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30. Oral evidence of the intention is not admissible in
interpreting the covenants of the deed but evidence to explain or even
to contradict the recitals as distinguished from the terms of the
documents may of course be given. Evidence of contemporaneous
conduct is always admissible as a surrounding circumstance, but
evidence as to subsequent conduct of the parties is inadmissible.
31. The surrounding circumstances to prove the true
intention of the parties regarding the nature of the transaction, were
that the defendant on receiving Rs. 3000/-, which as per the plaintiff's
case was a loan against the nominal sale deed of house had applied to
the Village Panchayat for rerecording the name of plaintiff in record
of rights. The another surrounding circumstance was, the defendant
took the possession of survey no. 278/1 under an agreement to sell on
condition to get the requisite permission from the Competent
Authority on 1.11.1973. He produced an application for seeking the
permission on 7.11.1973. Though the burden was on the plaintiff to
get the permission for transfer, the said application came from his
custody. He never asked the plaintiff to get the permission from the
Competent Authority. The defendant explained that since the plaintiff
was not obtaining the permission from the competent authority to
complete the sale transaction of survey no.278/1, hence, he applied
to the gram panchayat to reenter the house property in the name of
the plaintiff. However, his explanation appears not satisfactory. His
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silence and retaining the application for permission, speaks a lot
about his knowledge of the nature of the transaction. The oral
evidence on the terms of real transaction of mortgage has not been
shattered to disbelieve the witnesses. Considering the plaintiff's case
the Court is of the view that the ratio laid in the case of Smt.
Gangabai and Shankarlal (supra) is squarely applicable to the case at
hand.
32. The defendant had filed the counter claim for the specific
performance of contract in pursuance of the agreement dated
01.11.1973 about survey no.278/1. He would submit that the date of
performance was not fixed in the agreement; therefore, part II of
Article 57 of the Limitation Act is applied in the case in hand. The
burden to bring the permission to complete the sale transaction of
survey no.278/1 was on the plaintiff. He also argued that the learned
Court of first instance incorrectly held that the defendant himself
failed to get the sale deed registered without there being any
appropriate reason.
33. The plaintiff opposed the specific performance of contract
contending that it was executed to satisfy the debt.
34. The agreement to sale placed on record is silent that it
was a document created to satisfy the debt. In the said agreement
Exh.90 terms were specific that the possession would be delivered at
the time of execution of the sale deed. The sale deed would be
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executed after obtaining the necessary permission and clearing the
encumbrances, if any. No date was fixed for performance of the
contract. Exh.90, as observed by the trial Court, was produced by the
defendant. This was an application to the Sub-Divisional Officer for
granting permission for sale under Section 43 of the Tenancy Act.
The defendant had a case that in the year 1973, the consolidation
scheme was implemented in the Village. Hence, permission for
transfer was required. The plaintiff agreed to bring the permission. He
paid him Rs.2,000/- as an earnest money. Hence, the field was given
in his possession. The defendant, from time to time, requested the
plaintiff to bring the permission but he did not bring it. The plaintiff
was saying to him that the land was in his possession then why was
he afraid of ? In sum and substance, he said that as the plaintiff told
him that his family was angry, so house be transferred in his name
and the amount of Rs. 3000/- be adjusted at the time of executing the
sale deed. Hence, he applied for entering the name of the plaintiff in
the village panchayat records. From time to time, he asked the
plaintiff to bring the permission for execution of the sale deed, but he
avoided under one pretext or the other. Meantime, the plaintiff filed a
suit against him; hence, he was compelled to seek specific
performance of the contract. There were no specific pleading that the
defendant was ready and willing to perform his part of contract and
get the sale deed executed.
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35. It is evident that the defendant did not plead and prove
that he was ever ready and willing to perform his part of contract.
The explanation for applying for entering the name of the plaintiff in
record of rights also appears not natural. The learned Trial Court has
correctly observed that the defendant failed to plead and prove that
he was always ready and willing to perform the essential terms of the
contract, which were required to be performed by him.
36. The record reveals that in pursuance of the agreement
dated 01.11.1973, an application seeking permission was prepared on
07.11.1973. The said application came on record from the custody of
the defendant. So, it can be said that he impliedly accepted the
responsibility to obtain the permission. In the circumstances, he
cannot blame the plaintiff for failing to perform his part of contract.
Till the plaintiff filed the suit for redemption and possession of the
suit lands, he never whispered about the performance of the contract.
Such a conduct reflects that he was not interested in getting the sale
deed executed. The human conduct in relation to the relevant act
reflects the unspoken intention. His conduct was unnatural. Such a
conduct reflects that he was not interested in getting the sale deed
executed. In a natural course, such an application would not have
been in his custody. Therefore, the Court of first instance has
correctly raised a doubt on the defendant why he did not apply to the
proper Authorities for seeking permission from 1974 till filing the
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written statement. In the set of the facts, the learned Court of first
instance has correctly declined the specific performance of the
contract. That apart, the Court believed the plaintiff that it was an
usufructuary mortgage.
37. Learned counsel for the appellant has submitted that
both Courts erred in denying the alternate claim of refund of earnest
money.
38. The plaintiff denied that he received the earnest amount
of Rs.2,000/- towards the agreement to sell. The plaintiff never
opposed that the counter claim of the plaintiff for specific
performance of the contract was barred by limitation.
39. The question is whether on refusing the specific
performance of contract, the alternate relief of refund of earnest
money could be denied. The plaintiff had a defence that it was never
an agreement to sell, but the document created to repay the loan
amount by apportioning the rents and profits arising out of the
agricultural produce. The defendant specifically deposed that he had
paid Rs.2,000/- to the plaintiff towards the earnest money. However,
in cross-examination the plaintiff merely suggested that he did not
pay him Rs.2,000/- and his contention is false. Mere suggestion is not
a evidence. Hence, the defendant could not be disbelieved that he did
not pay the earnest money. The reasons for denying the refund of
earnest money appear not correct. The defendant, in alternate, is
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entitled to the refund of earnest amount as the law does not bar the
Court to deny the refund where it is proved that the other side had
received the earnest money and specific relief was refused for his
fault. The Court concludes that the defendant is entitled to refund of
earnest amount of Rs.2,000/- with a simple interest @ 8 % p.a. from
the date of the agreement to sell till its realization.
40. The defendant claimed that he could not be dispossessed
in view of Section 53-A of Transfer of Property Act. He sought the
protection, in view of the agreement to sell Exh.90. Though the
agreement to sell Exh.90 does not recite handing over of the
possession of survey no.278/1, the plaintiff admitted delivering the
possession of the said field to the defendant.
41. In the case of Nathulal Vs. Phoolchand, AIR 1970 SC 546, it
has been observed that the following postulates are sine qua non for
basing a claim on section 53-A of Transfer of Property Act.
(i) There must be a contract to transfer for consideration
any immovable property.
(ii) The contract must be in writing signed by the transferer
or by someone on his behalf.
(iii) The writing must be in such words from which the terms
necessary to construe the transfer must be ascertained.
(iv) The transferee must be in part performance of the
contract take possession of the property, or of any part thereof.
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(v) The transferee must have done some act in furtherance
of contract.
(vi) The transferee must have performed or be willing to
perform his part of contract.
42. Section 53-A of the Transfer of Property Act provides for
a shield of protection to the proposed transferee to remain in
possession against the original owner who has agreed to sell to the
transferee, if the proposed transferee satisfies other conditions of
Section 53-A.
43. This Court has already held that the defendant did not
show due diligence in getting the permission from the Competent
Authority for sale and not ready and willing to perform his part of
contract. Hence, it can safely be said that the defendant had not done
the said act in furtherance of the contract. In view of the ratio laid
down in the case of Nathulal (supra), the Court is of the view that the
plaintiff is not entitled to seek the protection under Section 53-A of
the Transfer of Property Act and the plaintiff is not debarred from
enforcing the right to claim possession against the defendant. Both
courts have correctly recorded the finding on this issue; hence, does
not warrant interference.
44. The plaintiff has a specific case that the defendant was
engaged in an illegal money lending transaction. To prove the suit
claim he had produced certified copies of the other similar suits filed
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against the defendant. The defendant admitted filing of those two
suits. Besides those two suits, the evidence of the plaintiff's witnesses
was also appreciated about the money lending business of the
defendant.
45. Learned counsel for the appellant vehemently argued
that the evidence produced by the plaintiff to prove the illegal money
lending business was not sufficient. Barely filing a suit of similar
nature would not brand the defendant as illegal money lender. Per
contra, learned counsel for the respondent/plaintiff would submit
that the circumstances in which the transactions were done and the
modus operandi of the defendant proved that he does illegal money
lending transactions. Otherwise, there was no need to have a suit
against him on the similar allegations. The copies of the other suits
were placed on record. There shall be no direct evidence of illegal
money lending business. The money lenders dominates the person in
need of money and secure the documents like agreement to sell or the
sale deeds. They cleverly do not allow to mention the actual terms
and conditions of the transactions. The consistent transactions of the
similar nature is a sufficient evidence to believe that the defendant
was engaged in illegal money lending business. Therefore, whatever
the transactions the defendant had with the plaintiff were prohibited
under the Bombay Money Lenders Act, 1946.
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46. In order to prove the illegal money lending business, the
burden is on the person claiming the illegal money lending to prove
that there were series of transactions of similar nature. It was
incumbent upon the plaintiff to examine the person who had
borrowed the amount under illegal money lending.
47. Appreciating the material available on record and
admission of the defendant about the similar transactions without
explaining that he does the business of purchase and sell of the
property, the Court concludes that the plaintiff proved that the
defendant engaged in illegal money lending business. Both courts
appear to have correctly concluded that the defendant carries on
business of illegal money lending.
48. In view of the aforesaid discussion, the substantial
questions of law are answered as follows;
Question No.(a). The transaction was not a mortgage by
conditional sale, but it was usufructuary mortgage.
Question No.(b). In the facts and circumstances of the case, the
extrinsic evidence about the intention of the parties is
admissible. Hence, oral evidence prevailed over the
documentary evidence.
Question No.(c). The defendant is not entitled to specific
performance of the contract. However, he is entitled to refund
of the earnest amount with interest.
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Question No.(d). There was delay and laches in claiming the
specific performance.
Question No.(e). The present appellant, the defendant, was not
ready and willing to perform his part of contract.
49. The Court further concludes that the appeal deserves to
be partly allowed.
ORDER
(I) The appeal is partly allowed.
(II) The impugned Judgments and decrees denying the refund of
earnest money to the defendant are set aside.
(III) The defendant is entitled to recover Rs.2000/- with simple
interest @ 8% p. a. from the date of agreement to sell till its
realization.
(IV) The decree be modified accordingly.
(V) No orders as to costs.
(VI) Civil Application No. 8839/2023 stands disposed of.
(VII) The record and papers be returned to the learned Court of the
first instance.
(S.G. MEHARE, J.)
Mujaheed//
Signed by: Syed Mujaheed Naseer
Designation: PA To Honourable Judge
Date: 01/12/2023 17:34:40
