Madras High Court
Muthuvel vs / on 10 September, 2024
Author: S.Srimathy
Bench: S.Srimathy
S.A.(MD).No.346 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 31.07.2024
PRONOUNCED ON : 10.09.2024
CORAM:
THE HONOURABLE MRS.JUSTICE S.SRIMATHY
S.A.(MD).No.346 of 2023
Muthuvel ... Appellant
/Vs./
1.M.Ibramsha
2.M.Arabu Abdulraheem ...Respondents
PRAYER: Second Appeal filed under Section 100 of the Civil Procedure Code,
against the Judgment and Decree passed in A.S.No.3 of 2020, dated 07.07.2021,
on the file of the Principal District Judge, Dindigul, reversing the Judgment and
Decree made in O.S.No.196 of 2012 on the file of the Subordinate Court,
Vedasandur, Dindigul District, dated 30.09.2013.
For Appellant : Mr.S.Gokul Raj
For Respondents : Mr.S.Arunnithy
*****
JUDGMENT
The present second appeal is preferred by plaintiff against the
Judgment and Decree dated 07.07.2021 passed in A.S.No.3 of 2020 on the file of
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the Principal District Judge, Dindigul, reversing the Judgment and Decree dated
30.09.2013 passed in O.S.No.196 of 2012 on the file of the Subordinate Court,
Vedasandur, Dindigul District.
2. The plaintiff is the appellant herein and the defendants are
respondents herein. For the sake of convenience, the parties shall be referred as
Plaintiff and Defendant as per the ranking in the suit.
3. The suit is filed for specific performance. Originally one Amjith
Ibrahim and Kathusha Bivi were the owners of the suit properties, subsequently
through settlement dated 07.12.1987 the defendants became the owners of the
property. The contention of the plaintiff is that the plaintiff and the defendants had
entered into registered sale agreement dated 26.04.2010 by paying an advance
amount of Rs.2,00,000/- and agreed to pay the balance amount of Rs.2,90,000/-
within a period of three months. In the said sale agreement, it has also been
mentioned that the defendant had borrowed Rs.60,000/- from one Murugesan son
of Ramasamy Gounder of Vadasandur Taluk and had mortgaged the suit property
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05.04.2006. The plaintiff had accepted to settle the amount along with interest and
the said advance amount of Rs.2,00,000/- is inclusive of the said principal amount
of Rs.60,000/- and the interest for the said amount and the receipt is marked as
Ex.A-3. Based on the said sale agreement the plaintiff was ready and willing to
pay the balance amount of Rs.2,90,000/- within a period of three months and
within the said three months the defendant had agreed that he would vacate the
order of “attachment before judgment” (ABJ order) and clear all encumbrances.
Thereafter the plaintiff had verified the encumbrance, which indicated that the
agreed sale amount would not be sufficient to clear the balance debt. Hence, the
plaintiff had requested the defendant to clear all encumbrance and executed the
sale deed in favour of the plaintiff but the defendants were not coming forward to
execute the sale deed. Hence, the plaintiff had intended to deposit the balance
amount of Rs.2,90,000/- before the Court and the plaintiff is not having any
objection to clear the other debts from the balance amount of Rs.2,90,000/-. In
spite of the same, the defendants were not coming forward to execute sale deed.
Hence, lawyer notice, dated 04.08.2010, was issued and the same was replied by
the defendants on 14.08.2010 stating false case. Hence, the present suit is filed for
specific performance.
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4. The defendants had filed written statement stating that their
grandparents (mother’s parents) namely Amjith Ibrahim and Kathusha Bivi had
executed a settlement deed, dated 07.12.1987 and settled the suit property when
they were minors. After attaining majority, they are in possession and enjoyment
of the suit scheduled property. But denied the execution of the alleged sale
agreement dated 26.04.2010 by accepting the advance amount of Rs.2,00,000/-
and also denied the contents of the of the sale agreement and also denied the
entire contents of the plaint. And stated that the facts remains that the defendants
had approached the plaintiff for loan to the tune of Rs.2,00,000/- and the same
was granted by the plaintiff with interest at the rate of Rs.2/- for Rs.1,000/- per
month, thereby the defendants ought to pay Rs.4,000/- as interest per month. For
such loan transaction the alleged sale agreement was executed as security for
repayment. The defendants had paid Rs.4,000/- regularly per month as interest
until the suit was filed. If the case of the defendants is true, the plaintiff would
have approached the defendants for completing the sale agreement within three
months from 26.04.2010. But after the lapse of three months, on 04.08.2010, the
plaintiff had issued legal notice and the same was suitably replied. Further, the
defendants are ready and willing to repay the loan amount of Rs.2,00,000/- along
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with agreed rate of interest. Hence, the defendants prayed to dismiss the second
appeal.
5. After perusing the pleadings, the documentary evidence and the
deposition the Trial Court had allowed the suit. Aggrieved over the same,
defendants had filed First Appeal and the same was allowed. Aggrieved over the
same, plaintiff has preferred the present second appeal raising the following
substantial questions of law:
“i. Have not the First Appellate Court erred in reversing the Judgment and
decree of the Trial Court?
ii. Whether the First Appellate Court is right in holding that the appellant
is not entitled for the relief of specific performance is correct, when the
agreement entered between the parties is not prohibited any law or
opposed to the public policy?
iii. Whether the First Appellate Court is right in holding that in the sale
agreement executed by the 1st respondent is for security purpose, when the
1st respondent himself admitted that he had executed a sale agreement?
iv. Whether the First Appellate Court is right in holding that the appellant
is not entitled for the relief sought for, when the 1st defendant failed to
prove that the agreement entered between them is not by mistake or fraud
and the defendants had not taken any steps to lift the attachment, thereby
the defendants are trying to usurp the right of the plaintiff?
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v. Whether the First Appellate Court is right in holding that the agreement
ended between the parties by mentioning the court attachment is prohibited
and cannot be entered?
vi. Whether the First Appellate Court is right in holding that the sale
agreement is for loan transaction, when such contention raised by the 1st
respondent is hit by Sections 91 and 92 of Indian Evidence Act?
vii. Is it not the First Appellate Court erred in ignoring the provisions
under Section 58 of Indian Evidence Act, when the 1st respondent itself
categorically admitted that he executed a sale agreement?”
6. As far as the substantial questions of law (i), (ii), (iii) and (vii) are
concerned, the Section 58 states that the facts admitted need not be proved. The
contention of the plaintiff is that the defendants had admitted the execution of the
sale agreement and hence the same need not be proved. On perusing the written
statement, the defendants had denied the execution of agreement as “sale
agreement”. But had admitted that there was loan transaction and for repayment
the sale agreement is executed for security purpose. Further the defendants had
stated that they approached the plaintiff for obtaining loan and it is the plaintiff
who had forced the defendants to execute the sale agreement for security purpose.
Further the defendants had stated that the plaintiff is doing pawn business under
the name “Nalamtharum Vinayaga Adagu Kadai” and the said fact was not denied
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by the plaintiff. This would indicate that the transaction between the plaintiff and
defendants ought to be only a loan transaction and there was no intention to the
defendants to sell the property and there was no intention to the plaintiff to
purchase the property. Infact the parties had entered into the alleged sale
agreement in order to secure the repayment of the loan. If the defendants fail to
repay the amount, based on the sale agreement, the same would be converted as a
sale. Further this kind of practice is prevailing among the money lenders for
several years. In such circumstances, the contention of the defendants is
convincing and the same would be more convincing based on the fact the plaintiff
is running pawn business. Therefore, this Court is of the considered opinion that
the said section is not applicable to the facts of the case and the substantial
questions of law (i), (ii), (iii) and (vii) are held against the plaintiff / appellants.
7. As far as the substantial questions of law (iv), (v) and (vi) are
concerned, the contention of the plaintiff is that there is no plea in the written
statement by the defendants that the alleged sale agreement is by mistake, fraud or
the plaintiff is trying to usurp the property and hence the written agreement for
sale cannot be denied as it would be against Sections 91 and 92 of the Indian
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Evidence Act, hence the finding of the Appellate Court in based on incorrect facts.
In order to consider these substantial questions of law, this Court perused the
transaction between the parties. The defendants had already mortgaged the suit
property to one Murugasen and was facing civil case. In the said case already the
suit property was under attachment through the interim order. The defendants
were under tremendous pressure to pay the amount in order to save the property.
Hence the defendants had approached the plaintiff who is doing pawn business.
The defendants had stated that the same in his reply notice, in his written
statement and had also deposed the same during cross examination. Further a
practice is prevailing in the society that all loan transactions are shown as sale
agreement, once the loan is not paid, the suit for specific performance is filed.
Therefore, it is incumbent on the plaintiff to prove that the sale agreement was
executed only to purchase the property and not for loan transaction. Moreover, it
is evident from the facts that one Murugesan had given loan to the defendants
who had filed civil case before Sub Court, Dindigul and the property of the
defendants are already under attachment from 10.03.1995. Therefore, the First
Appellate Court has held that it is strange that the plaintiff intended to purchase a
property which was under mortgage and also under attachment. Further, it is seen
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from the records that the defendants have discharged the mortgage loan on
26.04.2010 to the Murugesan and the Murugesan has issued receipt under Exhibit
A3. On perusal of Ex.A-2 which is the alleged sale agreement and Ex.A-3 which
is the receipt issued by the said Murugesan, it is seen that both were executed on
the same date, i.e., on 26.04.2010 and the attesting witnesses were also the same.
Therefore, the plea of the plaintiff that it is a sale agreement is not believable and
it is only a loan transaction. Hence, the First Appellate Court is right in coming to
the conclusion that the alleged sale agreement is only loan transaction and had
declined the relief of specific performance.
8. The contention of the plaintiff that the section 91 and 92 is against
the defendants’ plea. The section 91 states of evidence of terms of contracts,
grants and other dispositions of property reduced to form of document and section
92 states of exclusion of evidence of oral agreement. The said two sections
elaborately states of when the oral evidence can be adduced even if there is
written agreement with several illustrations. On perusal of the illustrations, it is
seen if the agreement is entered based on some verbal warranty, then the verbal
warranty may be proved through oral evidence. Likewise, if the contract is entered
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into based on happening of certain contingency, then the same may be proved.
The relevant illustrations are extracted hereunder:
“(g) A sells B a horse and verbally warrants him sound. A gives B a paper
in these words: "Bought of A a horse for Rs. 500". B may prove the verbal
warrantly
(j) A and B make a contract in writing to take effect upon the happening of
a certain contingency. The writing is left with B, who sues A upon it. A may
show the circumstances under which it was delivered.”
In the present case even though the contract is agreement to sell the property but
the same is obtained as loan by the defendants which is stated in the Ex.A2 sale
agreement. Further the Ex.A3 receipt is issued by the said Murugesan
acknowledging the settling the debt. The illustrations, as the nomenclature itself
suggest it is only instances, and the same is not exhaustive, hence the illustrations
(g) and (j) would be applicable. Based on the said illustrations the defendant is
entitled to state under what circumstances the sale agreement was entered into and
hence in such circumstances the oral evidence is admissible. Therefore, the said
sections 91 and 92 is supporting the case of the defendants rather than the case of
the plaintiffs. For the reasons stated above the substantial questions of law (iv),
(v) and (vi) are held against the plaintiff / appellants.
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9. It is seen that the First Appellate Court had directed the defendants
to repay Rs.2,00,000/- with 9% interest per annum from the date of sale agreement
till the date of realization. When it is only a loan transaction, the First Appellate
Court is right in directing the defendants to repay the loan. And also the First
Appellate Court is right in declining the specific performance based on the alleged
sale deed which is only executed for the loan transaction. The defendants shall
pay the same within a period of two months from the date of receipt of the copy of
the judgment and decree.
10. For the reasons stated supra, this Court is of the considered
opinion that the plaintiff has not raised any legally sustainable grounds. Hence,
the second appeal is dismissed. No costs.
10.09.2024
Index : Yes / No
NCC : Yes / No
Tmg
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TO:
1. Principal District Judge, Dindigul.
2. Subordinate Court,
Vedasandur, Dindigul District.
3.The Section Officer,
VR Section,
Madurai Bench of Madras High Court,
Madurai.
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S.SRIMATHY, J.
Tmg
Judgment made in
Dated:
10.09.2024
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