Madras High Court
V.Baskar vs Shanmugam on 28 September, 2021
S.A.No.148 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 28.09.2021
CORAM:
THE HONOURABLE MR.JUSTICE M.GOVINDARAJ
S.A.No.148 of 2017
and CMP No.3150 of 2017
and 3202 of 2019
V.Baskar ... Appellant
Vs.
1. Shanmugam
2. Kadirvel
(R1 and R2 are represented by
Power agent Ranganathan)
3. Ranganathan ... Respondents
PRAYER: The Second Appeal filed under Section 100 of the Civil Procedure
Code against the judgment and decree, dated 08.11.2016 in A.S.No.16 of 2016
on the file of the I Additional District and Sessions Court, Vellore District,
confirming the Judgment and Decree dated 30.11.2015 in O.S.No.24 of 2008
on the file of the Subordinate Court, Gudiyatham, Vellore District.
For Appellant : Mr.V.M.G.Ramakkannan
For Respondents : Mr.S.T.Dhanyakumar
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1/14
https://www.mhc.tn.gov.in/judis
S.A.No.148 of 2017
JUDGMENT
The plaintiff in O.S.No.24 of 2008 on the file of the Subordinate
Judge, Gudiyatham whose suit for specific performance was dismissed by the
trial Court, upon its affirmation by the appellate Court, has come up with this
Second appeal.
2. The plaintiff is the appellant herein. According to the plaintiff, he
entered into an agreement of sale with the 1 st and 2nd defendants through their
power agent, the 3rd defendant herein. The total sale consideration was fixed at
Rs.1,10,000/-, out of which the plaintiff paid a sum of Rs. 1 lakh towards part
of sale consideration and got a registered sale agreement to that effect on
04.10.2006. A period of 18 months was fixed for payment of balance sale
consideration and execution of sale deed i.e. on or before 03.04.2008. The
plaintiff was always ready and willing to perform his part of the contract. But
the defendants were postponing to perform their part of contract under some
pretext or the other. Hence, the plaintiff had issued a legal notice on
24.03.2008, requiring the defendants to be present at the Sub-Registrar Office,
Gudiyatham for receiving the balance sale consideration and to execute the Sale
deed. But, there was no reply from the defendants to the said legal notice.
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S.A.No.148 of 2017
Since the defendants did not come forward to execute the Sale Deed, the
plaintiff sued them for specific performance. During the pendency of the suit,
on 28.05.2008, the 3rd defendant, Power of Attorney got the sale deed executed
in his favour and therefore he was impleaded as a party respondent to the suit in
his individual capacity.
3. The suit was resisted by the defendants contending that they did
not enter into an agreement of sale with the plaintiff and the alleged transaction
was a loan transaction. The value of the property was more than 5 lakhs and
there was no need to sell the property for a meager price of Rs.1,10,000/-. The
mountain of difference between the sale price stated in the agreement and the
actual price of the property at the time of agreement, would clearly falsify the
case of the plaintiff. The plaintiff is a money lender and he is famous for
Kanthu vaddi business and that it is only a transaction between the plaintiff and
the Power Agent. There is no intention for the defendants to sell the property.
It is the custom prevailing among money lenders to obtain sale agreement as
security for the loan given by them. Similarly, the plaintiff has obtained the suit
document through their power agent. On the above contentions, the defendants
sought for dismissal of the suit.
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S.A.No.148 of 2017
4. During trial, the plaintiff examined himself as P.W.1 and one
K.Palani was examined as P.W.2. On the side of the defendants, the 3rd
defendant has examined himself as D.W.1 and two other witnesses were
examined as D.W.2 and D.W.3. The plaintiff marked Exs.A1 to A5, the
defendants marked Exs.B1 and B2.
5. The trial Court after framing appropriate issues and upon
consideration of the evidence on record, came to a conclusion that the suit
agreement was not intended to be acted upon as a agreement of sale and
dismissed the suit. Aggrieved, the plaintiff preferred an appeal in A.S.No.16 of
2016. The lower Appellate Court on re-consideration of the evidence on record,
agreed with the finding of the trial Court and dismissed the appeal.
6. Aggrieved over the concurrent findings of the Courts below, the
plaintiff has come forward with the second appeal. The following substantial
questions of law were framed by this Court at the time of admission on
06.03.2017:
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S.A.No.148 of 2017
i. Whether the Courts below are correct in law in having
failed to appreciate the settled legal proposition that no
oral evidence could be relied upon so as to vary or deny
the recitals of the document which was reduced in writing
by the parties to such document as envisaged under
Sections 91 and 92 of the Indian Evidence Act?
ii. Whether the Courts below are correct in law in having
failed to consider the legal position that the defendants 1
and 2 who were originally parties to the suit and who sold
the Suit lands to their power agent – the 3rd defendant
pending the suit, had not chosen to get into box to depose
evidence to establish their defense that the sale
consideration was received by them only as loan and the
sale agreement was meant only for a security and that they
did not intend to sell the lands?
7. Heard the learned counsel appearing on either side and perused the
materials placed before this Court.
8. It is the case of the plaintiff that he agreed to purchase the suit
property for a total sale consideration of Rs.1,10,000/- and entered into an
registered agreement of sale and paid a sum of Rs.1 lakh towards part of sale
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S.A.No.148 of 2017
consideration. The balance amount was agreed to be paid on or before
03.04.2008. This was the main suspicion in the minds of the Courts below as
to why a long time was fixed for execution of the Sale deed, which does not
admittedly mean that the said transaction is a loan transaction. The defendants
have categorically pleaded that the plaintiff is a money lender and he is famous
for Kanthu Vaddi and the defendants have obtained money only for the purpose
of security. Even assuming that it was only a loan transaction, it is pertinent to
note the entry found in Ex.A1, which specifically states that it was a sale
agreement entered between the plaintiff and the 3rd defendant, power of
Attorney of the defendants 1 and 2. Even though, the defendants have taken a
stand in the written statement that it is a loan transaction and the plaintiff is a
money lender, there is no absolute evidence on the side of the defendants to
prove the same. Curiously, the 1st and 2nd defendants who are the principals of
the sale agreement have failed to enter into the box to prove that they have not
intended to sell the property and sale agreement was sham and nominal. It is
relevant to note that the sale deed entered into between the defendants 1 and 2
and the 3rd defendant who is their power of attorney, reveals the property was
sold for a consideration of Rs.2,09,000/-. As stated in the written statement, the
value of the property is about Rs.5 lakhs, while so, the property would not have
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S.A.No.148 of 2017
been sold for a sum of Rs.2,09,000/-. In this regard, there is no evidence let in
by the defendants 1 and 2 to clarify that the sale deed was registered as per the
market value, in favour of the 3rd defendant. Consequently, the recitals in the
sale deed registered in favour of the 3rd defendant, would clearly go to show that
the suit property was in possession of the defendants 1 and 2 till the date of sale
and the possession was handed over to the 3rd defendant on the date of
registration of the Sale deed. In that event, the pleading that the 3rd defendant
was a cultivating tenant for over 30 years and he did not have money to
purchase the stamp papers and hence he obtained a registered power of
attorney, appears to be false. It is stated that the power agent alone is the owner
of the property. Even assuming that the statement is true, burden is cast upon
the defendants to clarify as to whether the third respondent in the capacity of
the owner or on behalf of his principals, as agent, had entered into the sale
agreement. There is absolutely no evidence to justify the position of the parties
and the nature of transaction. Hence, it is obvious that the defendants have not
come forward with clean hands and failed to prove that they have not clarified
the aspect as to what purpose they borrowed the amount and that entered into
the sale agreement with an intention to sell.
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S.A.No.148 of 2017
9. It is also imperative to note that after filing of the suit, the 1st and
2nd defendants have sold the property to the 3 rd defendant for a sale
consideration of Rs.2,09,000/-. From this transaction, it is made clear that
either the 1st and 2nd defendants should have got money from the 3rd defendant
or the 3rd defendant was in a sound financial position to pay the sale
consideration. If it is assumed that the sale agreement entered into between the
plaintiff and the defendants 1 and 2, is a loan transaction, the parties would
have repaid the sum of Rs.1 lakh along with interest to the plaintiff. However,
there is no explanation as to why the loan was not discharged and there should
be a specific pleading as to why interest was not charged on the money and
what was the period, within which the amount to be repaid, the number of
installments and what was the amount to be payable for every installment.
Apart from the above, they should have furnished the details regarding the
amount paid till the demand made by the lender and the balance amount due to
the lender. Without any such specific details, a bald averment that it is a loan
transaction, will not satisfy the requirements of the pleadings in a suit for
specific performance and it will construed as a false defense taken by the
defendants to prejudice the minds of the Court.
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S.A.No.148 of 2017
10. No doubt true, 18 months time was fixed for completion of sale
consideration. It is not the case of the defendants that the plaintiff was not
having money to perform the contract and he was not ready and willing to
perform the contract. On the other hand, an explanation has been given by the
plaintiff that the 3rd defendant approached the plaintiff for want of money,
entered into a registered sale agreement. The defendants have not stated any
reason for fixing 18 months time for execution of sale. On the other hand, as
mentioned above, the 1st and 2nd defendants have neither filed independent
written statement nor entered the witness box to establish their defense, but the
written statement was filed by the 3rd defendant only in the capacity of power of
attorney. It is also required to be noted that the 3rd defendant who was arrayed
as a party respondent in his individual capacity, after execution of the sale deed
in his favour, had not chosen to file written statement in his individual capacity
to explain as to how he got the sale deed executed in his favour, while Ex.A1,
sale agreement executed by him as power Agent in favour of the plaintiff, was
subsisting. It is also pertinent to note that as per the written statement, the case
of the 1st and 2nd defendants is that the 3rd defendant borrowed money from the
plaintiff for purchasing stamp papers. But there is no evidence on the side of
the 3rd defendant who deposed as DW1 to prove the said fact. But he would
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S.A.No.148 of 2017
depose that he has mobilized the money, purchased stamp papers and got the
property registered, the 1st and 2nd defendants discharged loan and cancelled the
sale agreement registered in favour of the plaintiff. Nevertheless, the averments
in the plaint are admitted. He admitted that on the strength of the power of
attorney, a sale agreement was registered for a sale consideration of
Rs.1,10,000/- for which, a sum of Rs.1,00,000/- was received as advance. As
per Ex.A2, the plaintiff had issued a legal notice, for which no reply was given
by the defendants. The 3rd defendant who was also aware of the fact that a suit
for specific performance has been filed on 02.04.2008, purchased the suit
property during the pendency of the suit and he has not disclosed this fact
before the trial Court in his chief examination. He also suppressed the fact of
registration of the Sale Deed, dated 28.05.2008 in his written statement filed on
behalf of his principals, dated 15.07.2008. Both these oral and documentary
evidences clearly prove the suppression of fact and dishonest conduct on the
part of the defendants. The Courts below have failed to note the conduct of the
defendants, in suppressing the facts, as well as, their ulterior move to defeat the
rights of the plaintiff. Though the Courts below had found in the suit that there
is suppression of fact, failure to appear before the Courts below to let in
evidence with an dishonest motive in executing the sale deed pending suit, I do
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S.A.No.148 of 2017
not find any evidence to show that the plaintiff is a money lender and the
transaction between the parties is a loan transaction. Therefore, the finding of
the Courts below are totally erroneous.
11. Insofar as the question of law 1 is concerned, Section 91 of the
Indian Evidence Act clearly mandates the parties not to go against the terms of
the registered instrument. As per Section 92 of the Indian Evidence Act, when
the terms of any contract, grant or other disposition of property, or any matter
required by law to be reduced to the form of a document, have been proved
according to the last section, no evidence of any oral agreement or statement
shall be admitted. It shall be proved in accordance with section 91 of the Indian
Evidence Act.
12. In the instant case on hand, the terms of the contract between the
parties clearly shows that it is an agreement of sale, for which the defendants 1
and 2 have received a major amount of sale consideration and agreed to execute
the sale deed within a period of 18 months i.e., on or before 03.04.2008. Now,
they cannot take a different stand that it was a loan transaction which is
contrary to their terms. Even though a stand is taken as discussed above, the
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S.A.No.148 of 2017
defendants have not discharged the onus of proving that the plaintiff is a money
lender and the agreement which has been entered with the plaintiff is illegal. In
that event, the first question of law answered in favour of the appellant/plaintiff.
13. Insofar as the second question of law is concerned, the 1 st and 2nd
defendants who are agreed to sell the property through their power of attorney,
have not chosen to get into the box to depose and to establish their defense that
it was only a loan transaction. The 3rd defendant who was later impleaded as
party to the suit, in his individual capacity as a subsequent purchaser, has also
not filed any written statement. In that event, the said sale transaction itself shall
be considered as malafide and it should be construed to be an act to defeat the
rights of the plaintiff. In any event, the defendants 1 and 2 or the 3 rd defendant
have not established the fact that they have borrowed money from the plaintiff
for their independent needs, and consequently failed to prove that it was a loan
transaction. In the absence of any evidence to prove that it is a loan transaction,
the 2nd question of law also answered in favour of the appellant/plaintiff.
14. In view of the discussions made above, the Judgment and Decree
passed in O.S.No.24 of 2008 on the file of the Subordinate Court, Gudiyattam
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S.A.No.148 of 2017
as confirmed in A.S.No.16 of 2016 on the file of the I Additional District and
Sessions Judge, Vellore, dated 08.11.2016 stand set aside and the suit is
decreed in favour of the appellant/plaintiff. The appellant/plaintiff is directed to
pay the balance sale consideration of Rs.10,000/-(Rupees Ten thousand only) to
the defendants within a period of one month form the date of receipt of a copy
of this order. The respondents/defendants are directed to execute the sale deed
in favour of the appellant / plaintiff within a period of three months thereafter.
15. In fine, the Second Appeal stands allowed. There shall be no order
as to costs. Consequently, connected Miscellaneous Petitions are closed.
28.09.2021
vum
Index : Yes/No
Internet : Yes/No
Speaking order / Non speaking order
https://www.mhc.tn.gov.in/judis
S.A.No.148 of 2017
M. GOVINDARAJ, J.
vum
To
1. The I Additional District and Sessions Court,
Vellore District.
2. The Subordinate Court, Gudiyatham,
Vellore District.
3. The Section Officer,
VR Section,
Madras High Court,
Chennai.
S.A.No.148 of 2017
and CMP No.3150 of 2017
and 3202 of 2019
28.09.2021
https://www.mhc.tn.gov.in/judis
