Madras High Court
P.Kuppusamy vs V.Ramalingam on 6 January, 2022
SA NO.587 OF 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 06.01.2022
CORAM
THE HON'BLE MR.JUSTICE M.GOVINDARAJ
SA NO.587 OF 2018
P.Kuppusamy ... Appellant
VS.
1.V.Ramalingam
2.R.Vijaya
3.R.Priya
4.R.Ramya
5.Minor R.Venkatesh
6.Minor R.Karthik
7.Minor R.Sathishkumar
Respondents 5 to 7 are minors
Rep. by their next friend / father
the 1st respondent V.Ramalingam
8.S.Murugan ... Respondents
PRAYER: Second Appeal filed under Section 100 of the Civil Procedure
Code against the judgment and decree passed in A.S.No.82 of 2016 on
the file of the 1st Additional District Judge, Salem, dated 06.07.2018
reversing the judgment and decree passed in O.S.No.191 of 2015 on the
file of the Principal Subordinate Judge, Salem, dated 18.04.2016.
For Appellant : Mr.Parthasarathy
Senior Counsel
for Mr.Adithya Varadarajan
For Respondents : Mr.N.Umapathi
1 to 7
1/10
https://www.mhc.tn.gov.in/judis
SA NO.587 OF 2018
JUDGMENT
The Assignee is the appellant in the above Second Appeal.
Eighth respondent is the plaintiff and respondents 1 to 7 are the
defendants. Aggrieved over the reversal of the decree granted by the Trial
Court by the First Appellate Court, the present Second Appeal has been
preferred by the Assignee.
2.The plaintiff and the defendants entered into an agreement
for sale on 31.12.2014 to purchase 1.25 acres of land for a sale
consideration of Rs.5,00,000/-. He paid an advance of a sum of
Rs.1,00,000/- on the date of the agreement. The said agreement is a
registered agreement and subsequent to the agreement, on 28.01.2015, he
paid another sum of Rs.1,00,000/- to which the defendants have executed
a receipt. Thereafter, he was ready and willing to purchase the property at
all time and he approached the defendants. But the defendants have
evaded to execute the sale deed. Hence, he issued a legal notice on
23.02.2015 calling upon the defendants to execute the sale deed in his
favour after receiving the balance sale consideration and the defendants
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SA NO.587 OF 2018
have issued a reply notice with false statement that the sale agreement
was made as a security document towards the loan transaction and not
for the purpose of sale of the property. The plaintiff has sufficient means
to purchase the property and he learnt that from the first week of
Febturary 2015, the defendants are attempting to create encumbrance
over the property to defeat the legitimate right of the plaintiff. Hence, he
filed a suit for specific performance.
3.In the written statement, the defendants admitted the
execution of sale agreement, but contended that it was not executed with
an intention to sell the property, but as a security to the loan amount of
Rs.1,00,000/-, which was borrowed from the plaintiff. Apart from this
agreement, the plaintiff have taken signatures in the blank stamp papers
and blank papers. The defendants have not received Rs.1,00,000/- from
the plaintiff on 28.01.2015 as alleged. After receipt of legal notice dated
23.02.2015 only, he came to know about the unregistered sale agreement
in the name of P.Kuppuswamy and also the General Power of Attorney in
the name of the plaintiff from the signatures obtained in the blank papers
at the time of borrowing. The plaintiff has not come to the Court with
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SA NO.587 OF 2018
clean hands and is not entitled to the discretionary relief of specific
performance.
4.The Trial Court framed appropriate issues and decreed the
Suit in favour of the plaintiff. Aggrieved over the same, the defendants
preferred an appeal. The First Appellate Court set aside the decree and
judgment of the Trial Court and dismissed the suit. Against the decree
and judgment of the First Appellate Court, the present Second Appeal is
filed.
5.Heard the submissions made on either side.
6.The facts are admitted. From the materials placed before
this Court, it is noted that the registered sale agreement was entered
between the parties on 31.12.2014 which was marked as Ex.A2. There is
no doubt that both the plaintiff as well as the defendants have subscribed
the signatures. But the pertinent question is that whether it was executed
for the purpose of sale of the property or for the purpose of security
against lending of money. It is also pertinent to note that the defendants
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SA NO.587 OF 2018
5, 6, and 7 are minors. Their interest is also involved in the sale
agreement. Secondly, the very sale agreement was entered without
handing over possession of the properties. But a perusal of Ex.A3 which
is strongly relied on by the plaintiff shows that possession was handed
over in favour of the plaintiff. But contrary to the document dated
28.01.2015- Ex.A3, a legal notice dated 23.02.2015 which is marked as
Ex.A4, it is stated in para 3 that the defendants have evaded to execute
the sale agreement and sought extension of time for handing over
possession and that they are delaying the process of execution of sale
agreement as agreed. This contradiction clearly shows that possession
was not actually handed over to the plaintiff, as contended by them,
taking support of Ex.A3. Besides this, it is found that there was some
misunderstanding between the parties, which lead to quarrel and that a
police complaint was also registered. The police advised the parties to
settle the dispute amicably. But however, the said factum is not
mentioned in the plaint.
7.A perusal of the evidence on the plaintiff's side witness,
goes to show that the plaintiff is a person doing real estate business and
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SA NO.587 OF 2018
he has several partners. It is also elicited during cross examination that
the plaintiff's friend by name P.Kuppusamy has purchased the property
behind the lands of the defendants and that the purchase of the land from
the defendants will facilitate the access to their lands. The said
P.Kuppusamy also appeared for the enquiry by the police and has given
statement. Thus, it is clear that the plaintiff and his partners wanted to
adjoin the property of the plaintiff to augment their business. The further
evidence goes to show that the stamp paper for sale agreement was
purchased in the name of the plaintiff by his partners and it was prepared
by another partner. Therefore, the evidence of the first defendant that he
approached the said P.Kuppusamy who is a friend of the plaintiff for
borrowing a sum of Rs.1,00,000/- is probablised. Further, the evidence of
the defendant cogently proves that at the instruction of the said
P.Kuppusamy, he executed a sale agreement as a security to the loan
transaction. It is clearly established that the plaintiff and the present
appellant who is a partner of the original plaintiff are doing real estate
business. They are very well aware of the sale transaction and well versed
in getting endorsements/acknowledgements on additional papers. The
usual process is that without paying the additional amounts towards sale
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SA NO.587 OF 2018
consideration, an endorsement used to be obtained at the back of the sale
agreement itself. But curiously, a separate receipt was obtained and there
is no explanation as to why a separate receipt was framed. Further, it was
not witnessed by anybody and during trial, Ex.A3 was not proved by
sufficient evidence. The First Appellate Court has rightly found that
Ex.A3 was not proved and therefore, reliance cannot be placed on that.
8.Further, it is categorically held that on the suspicion that
arose on the transaction of the properties by real estate people, in which
the minors interest is involved and the suppression of material facts that
happened between the parties which lead to police enquiry, the
misstatement with regard to possession, dis-entitled the plaintiff from
getting the discretionary relief. The above finding of the First Appellate
Court, in the considered opinion of this Court is well founded and based
on sound reasons. The First Appellate Court has rightly refused to
exercise the discretionary relief of specific performance and ordered
refund of the amount received by the defendants with interest @ 9% per
annum.
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SA NO.587 OF 2018
9.However, it is seen that the transaction appears to be a real
estate transaction and in the nature of commercial transaction. Therefore,
the rate of interest awarded by the First Appellate Court is on the lower
side. Hence, the judgment of the First Appellate Court is modified to an
extent of awarding interest @ 15% per annum from the date of sale
agreement i.e., 31.12.2014 till the date of the deposit.
10.It is submitted that the appellant has already deposited
the balance sale consideration in Court. Therefore, he is permitted to
withdraw the same with accrued interest. The respondents are directed to
deposit the amount within a period of eight weeks from the date of receipt
of a copy of the this judgment.
11.In fine, the Second Appeal stands dismissed. No costs.
06.01.2022
Index : Yes/No
Internet : Yes/No
TK
https://www.mhc.tn.gov.in/judis
SA NO.587 OF 2018
To
1.The First Additional District Judge
The First Additional District Court
Salem.
2.The Principal Subordinate Judge
The Principal Subordinate Court
Salem.
https://www.mhc.tn.gov.in/judis
SA NO.587 OF 2018
M.GOVINDARAJ, J.
TK
SA NO.587 OF 2018
06.01.2022
https://www.mhc.tn.gov.in/judis
