K.Pushpavalli vs R.Parthasarathy
2021 Latest Caselaw 17256 Mad

                                                                                   A.S.(MD)No.28 of 2011


                          BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                                   DATED : 24.08.2021

                                                        CORAM

                            THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN

                                               A.S.(MD)No.28 of 2011
                                                       and
                                               M.P.(MD)No.1 of 2011
                1.K.Pushpavalli
                2.Muralidharan
                3.Anandharaman                                        ... Appellants
                (A2 and A3 are brought on record as LRs of
                the deceased sole appellant vide order dated
                08.06.2018 made in C.M.P.(MD)No.3954 of
                2018 in A.S.(MD)No.28 of 2011 by MSJ)

                                                           Vs.

                1.R.Parthasarathy
                2.T.K.Ramesh                                          ... Respondents


                Prayer : Appeal Suit filed under Section 96 of Civil Procedure Code, against

                the judgment and decree of the Additional District Court (Fast Track Court),

                Thanjavur, passed in O.S.No.95 of 2006 on 23.12.2009.

                                  For Appellants     : Mr.P.Sesusbalan Raj
                                  For Respondents : Mr.P.Vadivel for R1
                                                      No appearance for R2


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                                                                                 A.S.(MD)No.28 of 2011


                                                   JUDGEMENT

This appeal is directed against the judgment and decree dated 23.12.2009

passed in O.S.No.95 of 2006 on the file of the learned Additional District Judge

(Fast Track Court), Thanjavur. The first defendant is the appellant herein. It

was a suit for specific performance filed by the first respondent herein. During

the pendency of this appeal, the sole appellant passed away and her legal

representatives have come on record. The case of the plaintiff is that the

appellant herein entered into the suit sale agreement dated 23.12.2005 with him

and the same was also registered as Document No.5160 of 2005 on the of the

Joint Registrar No.I, Thanjavur. The sale consideration was fixed at

Rs.10,00,000/-. A sum of Rs.5,50,000/- was already paid by the plaintiff to the

first appellant as advance. On the date of sale agreement, a further sum of

Rs.4,00,000/- was paid. The first appellant also executed a registered power of

attorney in favour of the second defendant authorizing him to execute the

registered sale deed in favour of the plaintiff as per the suit sale agreement

dated 23.12.2005. The specific stand of the plaintiff is that the first appellant

did not come forward to conclude the transaction and was postponing it for

some pretax or other. Therefore, the plaintiff caused to issue notice dated

10.06.2006 (Ex.A3). The appellant received the same and gave a reply on

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A.S.(MD)No.28 of 2011

15.07.2006 (Ex.A4). Since the appellant did not come forward to execute the

sale deed, left with no other option, the plaintiff filed O.S.No.95 of 2006.

2.The first appellant filed her written statement controverting the plaint

averments. The stand of the first appellant was that Ex.A1 was only a sham

and nominal document. The suit property was mortgaged as a collateral

security to secure the loan availed by the first appellant's son with Indian bank,

Eswari Nager Branch. The bank had taken action to bring the property to sale.

Therefore, the second defendant approached the plaintiff for availing a loan of

Rs.4,00,000/-. The plaintiff and the second defendant were acting in tandem.

Taking advantage of the financial stress, which the first appellant's family was

facing, she was made to execute the suit sale agreement as well as general

power of attorney in favour of the second defendant. The first appellant

contended that the suit sale agreement was executed more as security. The first

appellant never intended to sell the property to the plaintiff. Ex.A1 was

executed purely for security purposes. The first appellant pressed for dismissal

of the suit. Based on the rival pleadings, the trial Court framed the necessary

issues.

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A.S.(MD)No.28 of 2011

3.The plaintiff examined himself as P.W.1. Dharmaraj, the attestor of

Ex.A1 was examined as P.W.2. Exs.A1 to A5 were marked. The first appellant

herein examined herself as D.W.1, her son was examined as D.W.2 and three

other witnesses were also examined on her side. Exs.B1 to B4 were marked.

4.After consideration of the evidence on record, by the impugned

judgment and decree dated 23.12.2009, the trial Court decreed the suit as

prayed for and the first appellant was directed to execute the sale deed in terms

of Ex.A1/sale agreement dated 23.12.2005. Aggrieved by the same, this appeal

suit came to be filed.

5.The learned counsel for the appellant reiterated all the contentions set

out in the memorandum of grounds. His foremost contention is that the suit

sale agreement is a sham and nominal document, which was executed under

coercive circumstances for security purposes. The first appellant had been

contending from the outset that her son/Muralidharan along with four other

partners was running a dying manufacturing plant in the name and style of

Jemtexs Industries at SICO Campus, Thanjavur. He had taken loan from Indian

bank to start the factory. The business ran into loss and the account became a

non performing asset. The bank took steps to auction the property offered as

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A.S.(MD)No.28 of 2011

security. The suit property had also been mortgaged in favour of the bank. The

first appellant's son after selling the unit had paid a sum of Rs.10,75,000/- to

Indian bank. Still a sum of Rs.3,80,000/- remained to be paid. In order to

mobilise this amount, the first appellant and her son had approached the

plaintiff through the second defendant.

6.According to the appellants, the plaintiff agreed to make available the

said funds on condition that the first appellant executed sale agreement apart

from executing the general power of attorney. The specific stand of the

appellants is that a sum of Rs.4,00,000/- was alone received but in the suit sale

agreement, a recital was incorporated as if the first appellant had already

received a sum of Rs.5,50,000/-. Even though this was a false recital, the first

appellant had no option but to meekly sign on the dotted lines.

7.The learned counsel for the appellants pointed out that an endorsement

has been made in Ex.A1 that it was the first appellant, who paid the stamp duty

of Rs.9,600/-. He would point out that in any sale transaction, it is only the

purchaser who pays the stamp duty and it is inconceivable that the seller would

pay the stamp duty. In the case on hand, the first appellant was obviously

under severe financial stress. Therefore, by no stretch of imagination, it is

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A.S.(MD)No.28 of 2011

possible that the first appellant would have paid the stamp duty, if really she

was the vendor. The learned counsel for the appellants would state that Indian

Bank was paid a sum of Rs.3,80,000/- and the balance amount was spent

towards registering the suit sale agreement.

8.He also would point out that when the total sale consideration was

fixed only at Rs.10,00,000/-, it is again inconceivable that after paying a sum of

Rs.9,50,000/-, the plaintiff would have rested content with taking a mere sale

agreement. Nothing stopped the plaintiff from taking a perfect sale deed on the

said date itself. He also pointed out that there is absolutely no document to

show that a sum of Rs.5,50,000/- was paid prior to the sale agreement. There is

evidence only to show that a sum of Rs.4,00,000/- was paid before the Joint

Registrar No.I, Thanjavur. The learned counsel for the appellants would point

out that the overall conduct of the plaintiff is not consistent with that of a

genuine purchaser. During the course of the cross examination, the plaintiff

was also questioned as to his capacity to lend the said amount. Even though,

the plaintiff claimed that he is an income tax assessee, there is nothing on

record to show that the suit transaction was reflected in the income tax returns.

9.The learned counsel for the appellants placed reliance on the following

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A.S.(MD)No.28 of 2011

decisions:-

“(i) Jayakantham and Others Vs. Abaykumar reported in CDJ 2017 SC 178

(ii) Pappammal @ T.Pappa Vs. P.Ramasamy reported in CDJ 2012 MHC 1867

(iii) S.Palanivel and Another Vs. P.Natesan and Others reported in CDJ 2018 MHC 362

(iv) Anandan Vs. Dr.T.Balamukunda Rao (died) and Others reported in CDJ 2002 MHC 681”

10.The learned counsel for the appellants finally submitted that the

appellants can only be called upon to repay a sum of Rs.4,00,000/- with interest

at the rate 12% per annum to be repaid within a reasonable period as may be

stipulated by this Court. Since the trial court did not take into account all these

material aspects, he called for setting aside the impugned judgment and decree

and for allowing this appeal.

11.Per contra, the learned counsel for the plaintiff submitted that the

impugned judgment and decree do not call for any interference. He first

submitted that Ex.A1 is a very much a sale agreement and that it was not

executed for security purposes as claimed by the learned counsel for the

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A.S.(MD)No.28 of 2011

appellants. When the appellants' counsel contended that Ex.A1 was executed

only for security purposes, the burden of proof lay entirely on the appellant to

prove the same. In this regard, the learned counsel for the plaintiff relied on

the judgment of this Court reported in M.Ramalinga (died) and Others V.

V.Subramanyam (died) and Others reported in (2003) 1 M.L.J. 694. He also

would state that the second defendant is none other than a close relative of the

appellants. The first appellant is an aged lady and was suffering from

ill-health. Admittedly the suit property had been mortgaged with Indian bank,

Eswari Nagar Branch. Since lot of leg work had to be carried out, the first

appellant on her own had voluntarily executed a general power of attorney in

favour of her relative namely., the second defendant.

12.Only to effectuate the sale agreement/Ex.A1, Ex.B2/general power of

attorney was executed by the first appellant in favour of the second defendant.

The plaintiff would state that the first appellant wanted some more time to

vacate the property. The original title deeds were also lying with the bank and

it would take some time to retrieve them. It was for those reasons that even

though, 90% of the sale consideration was paid, still only a sale agreement was

obtained from the first appellant herein. The learned counsel for the plaintiff

would state that Ex.B2/general power of attorney was subsequently cancelled

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A.S.(MD)No.28 of 2011

behind the back of the plaintiff by the first appellant by executing Ex.B1 dated

13.02.2006. If really the recitals in Ex.B2 were false, nothing prevented the

first appellant from saying so while executing the cancellation deed/Ex.B1. He

also pointed out that it was the plaintiff who issued the suit notice dated

10.06.2006 (Ex.A3). The appellant did not even respond immediately. Only

on 15.07.2006, the reply was sent denying the notice averments. The learned

counsel would point out that during the relevant time, the appellants' family

was indebted not only to Indian bank but also Repco bank. Therefore, the first

appellant was really in need of a sum much more than Rs.3,80,000/-. The

appellants had initially suppressed that they were indebted to Repco bank also.

It was the plaintiff, who marked Ex.A5, a publication made by Repco bank.

The learned counsel submitted that Ex.A1 is a registered document. Therefore,

under Section 92 of the Indian Evidence Act, the appellant was clearly barred

from denying the terms of the same. He would also point out that the

appellants had obtained encumbrance certificates. The encumbrance

certificates were obtained in November 2005 itself. Though there is substantial

time gap between the date of encumbrance certificates and sale agreement, the

learned counsel for the plaintiff/first respondent herein would state that the

time gap of one month is quite reasonable. He submitted that the trial Court

had correctly appreciated the evidence on record and rightly decreed the suit.

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A.S.(MD)No.28 of 2011

According to him, the impugned judgment and decree do not call for any

interference.

13.I carefully considered the rival contentions and went through the

evidence on record.

14.The points for consideration in this appeal are follows:-

“(i) Whether Ex.A1/sale agreement dated 23.12.2005 was really a sale agreement executed by the first appellant only or it was executed for security purposes to secure a loan transaction? and

(ii) Whether the plaintiff had really paid a sum of Rs.5,50,000/- as advance amount even before the execution of Ex.A1 or whether only a sum of Rs.4,00,000/- was received in all by the first appellant?”

15.There is no dispute that the suit property belongs to the appellants.

The first appellant had executed Ex.A1 dated 23.12.2005 in favour of the

plaintiff. It is a registered document. The only question that calls for

consideration is whether it is a sale agreement in the real sense of the term. It

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A.S.(MD)No.28 of 2011

is open to the executant to demonstrate that it is vitiated by undue influence

and Section 92 of the Indian Evidence Act will not come in the way. As rightly

pointed out by the learned counsel for the plaintiff and as laid down by the

Hon'ble Division Bench of this Court in M.Ramalinga (died) and Others V.

V.Subramanyam (died) and Others reported in (2003) 1 M.L.J. 694, the

burden to prove that the sale agreement is not a sale agreement but only a

document executed to secure a loan transaction is on the appellants. The

question is whether the first appellant discharged said burden cast on her. I

may straight away observe that there are certain weaknesses in the defence put

forth by the first appellant. If really Ex.A1 was obtained under coercive

circumstances, nothing stopped the first appellant from sending a formal

communication to the plaintiff seeking its cancellation. When the first

appellant could cancel Ex.B2/general power of attorney by executing a

cancellation deed/Ex.B1 on 13.02.2006, in the same breath, the first appellant

could have written a letter to the plaintiff demanding cancellation of Ex.A1

dated 23.12.2005. It was the plaintiff, who fired the first shot by issuing the

suit notice dated 10.06.2006. The first appellant did not even immediately

respond. She took some 35 days to send the reply notice dated 15.07.2006. As

pointed out by the learned counsel for the plaintiff, the suit was even allowed to

be decreed ex-parte. Based on the same, the plaintiff even deposited the

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A.S.(MD)No.28 of 2011

balance amount of Rs.50,000/-. Only thereafter the first appellant is said to

have filed a set aside petition.

16.There is again no merit in the contention of the appellants' counsel

that the plaintiff lacked the wherewithal to make the payment. The first

appellant and her son have admitted in their testimonies that the plaintiff is

running jewel business and he is financially well to do. Therefore, the capacity

of the plaintiff to lend the amount in question cannot be in doubt.

17.There cannot be any dispute that a sum of Rs.4,00,000/- was paid by

the plaintiff to the first appellant on 23.12.2005. In Ex.A1, the registering

authority had made an endorsement that in his presence a sum of Rs.4,00,000/-

was paid by the plaintiff to the first appellant. But in the very same agreement,

there is a further statement that the first appellant had received a sum of

Rs.5,50,000/- earlier. I wanted to know as to when the sum of

Rs.5,50,000/- mentioned in Ex.A1 was paid by the plaintiff to the first

appellant. In the suit notice dated 10.06.2006, no specific date is mentioned.

In the plaint also, the date when the said amount of Rs.5,50,000/- was paid to

the first appellant is also not mentioned. Only in the chief examination of

P.W.1, he had stated that the advance amount was paid on 12.12.2005. This

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A.S.(MD)No.28 of 2011

date is being introduced for the first time only in the proof affidavit. If really

on 12.12.2005 a sum of Rs.5,50,000/- was paid by the plaintiff to the first

appellant, certainly the plaintiff would have taken a stamped receipt from the

first appellant. No such document was taken by the plaintiff. It is this that

casts serious doubt on his claim that he had really paid the said sum before the

execution of Ex.A1.

18.As rightly pointed out by the learned counsel for the appellants that

Ex.A1 contains an endorsement that it was the first appellant/Pushpavalli, who

paid a sum of Rs.9,600/- as stamp duty. Though there is no bar for the vendor

to pay the stamp duty, as a matter of practice, it is only the purchaser who pays

the stamp duty. It is evident that the first appellant/Pushpavalli was already

under financial distress. She was after all selling the property. Hence, it is in

conceivable that she could have paid a sum of Rs.9,600/- as stamp duty. On the

other hand, this is consistent with the theory that the first appellant/Pushpavalli

had borrowed a sum of Rs.4,00,000/- from the plaintiff. A sum of Rs.

3,80,000/- had gone towards settling the dues of Indian bank. A sum of Rs.

9,600/- was paid as stamp duty. The balance amount was also probably spent

towards incurring the other expenditures for entering into the loan transaction

and for executing the general power of attorney in favour of the second

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A.S.(MD)No.28 of 2011

defendant.

19.It is true that the second defendant is a close relative of the appellants.

I also believe it to be probable that it was the second defendant who brought

the first appellant to the plaintiff and who facilitated the entire transaction. It is

equally possible that the first appellant and the second defendant later turned

against the plaintiff and that led to execution of cancellation deed/Ex.B1. It is

true that in Ex.B1/cancellation deed, nothing is stated about the false recitals in

Ex.B1. But on that score, I do not want to disbelieve the defence projected by

the appellants.

20.The plaintiff claims to be income tax assessee. If that be so, he ought

to have filed the income tax returns in which, the suit transaction must have

been reflected. If in the plaintiff's income tax returns, it has been mentioned

that he paid a sum of Rs.9,50,000/-, then certainly the stand of the plaintiff

would have been probabalized. But the plaintiff had not filed income tax

returns.

21.It is true that the first appellant did not issue any notice demanding

cancellation of Ex.A1/sale agreement. Though there was no close relationship

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A.S.(MD)No.28 of 2011

between the first appellant and the plaintiff, the fact remains that the plaintiff

was really in a relatively stronger position. I refrain from using the the

expression “dominant position”. Merely because, the first appellant did not

issue any notice, on that score, her case cannot be disbelieved. The trial court

failed to take into account all the material circumstances. Therefore, the

finding of the trial Court in the suit sale agreement/Ex.A1 has to be necessarily

interfered with and the impugned judgment and decree are set aside. But the

appel cannot be allowed as such. The first appellant had admitted and it has

been established beyond doubt that she had received a sum of Rs.4,00,000/-

from the plaintiff on 23.12.2005. It was obviously a commercial transaction

but for the payment of said amount by the plaintiff, the first appellant's property

would have been auctioned. Therefore, interest of justice requires that the the

legal representatives of the deceased/first appellant are made to pay interest at

the rate of 18% per annum with effect from 23.12.2005 till date of payment.

The plaintiff had also deposited a sum of Rs.50,000/- to the credit of O.S.No.95

of 2006, on the file of Additional District Court (Fast Track Court), Thanjavur.

The plaintiff is permitted to withdraw the same together with accrued interest.

22.Therefore, this appeal is disposed of in the following terms:-

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A.S.(MD)No.28 of 2011

(a) The impugned judgment and decree dated 23.12.2009 passed in O.S.No.95 of 2006, on the file of the Additional District Court (Fast Track Court), Thanjavur is set aside.

(b) The legal representatives of the first appellant are directed to pay a sum of Rs.4,00,000/- with interest at the rate of 18% per annum with effect from 23.12.2005 till date of payment. Till then, there will be a charge on the suit property.

(c) The plaintiff is permitted to withdraw the amount of Rs. 50,000/- already deposited by him to the credit of O.S.No.95 of 2006, on the file of Principal District Court, Thanajvur together with accrued with interest. No costs. Consequently, connected miscellaneous petition is closed.

                                                                                    24.08.2021
                Index             : Yes / No
                Internet          : Yes/ No
                ias

Note :In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the advocate/litigant concerned.

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A.S.(MD)No.28 of 2011

To:

The Additional District Court, Fast Track Court, Thanjavur.

Copy to:

The Record Keeper, V.R. Section, Madurai Bench of Madras High Court, Madurai.

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A.S.(MD)No.28 of 2011

G.R.SWAMINATHAN, J.

ias

A.S.(MD)No.28 of 2011

24.08.2021

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