Madras High Court
Kannan vs Venkatesan on 4 June, 2025
2025:MHC:1257
S.A.No.489 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
JUDGMENT RESERVED ON : 24 / 10 / 2024
JUDGMENT PRONOUNCED ON : 04 / 06 / 2025
CORAM:
THE HONOURABLE MR. JUSTICE R.SAKTHIVEL
S.A.NO.489 OF 2019
AND
CMP NO.8148 OF 2019
Kannan ... Appellant / Respondent /
Plaintiff
Vs.
Venkatesan ... Respondent / Appellant /
Defendant
PRAYER: Second Appeal filed under Section 100 of the Code of Civil
Procedure, 1908, praying to set aside the Judgment and Decree dated
October 30, 2018 made in A.S.No.26 of 2016 on the file of the learned
Additional District Judge (Fast Track Court) Villupuram, reversing the
Judgment and Decree dated December 22, 2015 made in O.S.No.36 of
2012 on the file of the 1st Additional Sub Judge, Villupuram.
For Appellant : Mr.N.Suresh
For Respondent : Mr.S.Sriram
for Mr.K.Govi Ganesan
Page No.1 of 18
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S.A.No.489 of 2019
JUDGMENT
This Second Appeal is directed against the Judgment and
Decree dated October 30, 2018 passed in A.S.No.26 of 2016 by the
'Additional District Court (Fast Track Court) Villupuram' ['First Appellate
Court' for brevity], whereby the Judgment and Decree dated December
22, 2015 passed in O.S.No.36 of 2012 by the '1st Additional Sub Court,
Villupuram' ['Trial Court' for brevity] was set aside and alternate remedy
of return of advance money was granted.
2. For the sake of convenience, hereinafter, the parties will be
referred to as per their array in the Original Suit.
PLAINTIFF'S CASE
3. The Suit property was owned and possessed by the
defendant. On November 1, 2010, both parties entered into a Sale
Agreement, wherein the plaintiff agreed to purchase the Suit Property for
Rs.1,86,000/- and the defendant accepted an advance of Rs.1,00,000/-.
The remaining Rs.86,000/- was to be paid within 40 days, after which the
defendant was to execute the Sale Deed in the plaintiff's name. The Sale
Agreement was properly executed with signatures from both parties,
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witnesses and the scribe. The plaintiff was always ready and willing to
perform his part of the contract and repeatedly requested the defendant to
execute the sale deed, but the defendant delayed under various pretexts.
The plaintiff issued a legal notice on December 1, 2010 demanding
performance, but the defendant responded with a false reply notice,
claiming the amount was a loan alleging coercion in obtaining blank
promissory notes and other documents. The plaintiff denied these
allegations and asserted that the agreement was genuine and the advance
was paid in the presence of the defendant’s wife. Since the defendant
failed to execute the Sale Deed, the plaintiff has no option but to file the
Suit for specific performance of the agreement and for the alternate relief
of return of advance amount.
DEFENDANT'S CASE
4. The defendant asserts that the suit is vexatious,
unsustainable in law and should be dismissed with costs. The defendant
denied the alleged Sale Agreement dated November 1, 2010, the agreed
sale price of Rs.1,86,000/- and the receipt of Rs.1,00,000/- as advance,
and contended that the plaintiff is put to strict proof of the same. The
defendant never intended to sell the Suit Property and did not execute any
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such agreement. The Suit Property’s total value is at Rs.4,18,500/- which
contradicts the claimed sale price, showing no consensus ad idem. The
defendant states that the plaintiff has suppressed the true facts and filed a
false case. The defendant never intended to sell the Suit Property to the
plaintiff. On October 28, 2010, he sought a loan from the plaintiff, who
demanded a photo copy of the Sale Deed pertaining to the Suit Property.
On November 1, 2010, the plaintiff obtained the copy as well as the
defendant’s signatures in a Rs.20/- stamped paper, a green paper, and two
blank promissory notes. It was all intended for the purpose of money
transaction and not any Sale Agreement. The plaintiff fabricated the Sale
Agreement. The defendant was ready to repay the loan of Rs.1,00,000/-
with interest from October 28, 2010, but the plaintiff refused to
acknowledge it. The defendant sent a legal Notice on November 30, 2010,
but the plaintiff, with an ulterior motive, responded on December 1, 2010
without referring to the defendant’s notice. Hence, the plaintiff is
disqualified from seeking specific performance or alternative relief.
Accordingly, the defendant sought to dismiss the Suit.
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TRIAL COURT
5. At trial, plaintiff was examined as P.W.1 and one
Sivakumar was examined as P.W.2 and Ex-A.1 to Ex-A.7 were marked on
the side of the plaintiff. The defendant was examined as D.W.1 and one
Ramani was examined as D.W.2 and the plaintiff’s signature found in the
photo copy of the unregistered Suit Sale Agreement was marked as Ex-
B.1.
6. After hearing both sides and after full-fledged trial, the
Trial Court concluded that Ex-A.1 – Suit Sale Agreement is a true and
valid document executed by the defendant in favour of the plaintiff; that
the plaintiff is ready and willing to perform his part of the contract; that,
hence, he is entitled to the relief of specific performance. Accordingly, the
Trial Court granted the main relief of specific performance with costs.
FIRST APPELLATE COURT
7. Feeling aggrieved, the defendant preferred an appeal
before the First Appellate Court, which, after hearing both sides,
concluded that Ex-A.1 – Suit Sale Agreement was never intended to be
acted upon, the plaintiff did not approach the Court with clean hands, the
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plaintiff has made a material alteration in Ex-A.1 – Suit Sale Agreement.
Accordingly, it allowed the appeal set aside the Judgment and Decree of
the Trial Court and granted the alternate relief of return of advance money
with interest.
SECOND APPEAL
8. Feeling aggrieved, the plaintiff has preferred the present
Second Appeal under Section 100 of the Code of Civil Procedure, 1908.
The Second Appeal was admitted on September 6, 2024 on the following
Substantial Questions of Law:
“(i) Whether the Court below is right in refusing to grant the relief
of specific performance without taking into consideration the
valid admission made by D.W.1 that he had signed the
document after seeing the corrections made therein and she
[sic] did not object to the same?
(ii) Whether the Court below is right in reversing the decree and
judgment of the Trial Court when the defendant has admitted
that he had signed Ex-A.1?
(iii) Whether the Court below is right in disallowing the relief of
specific performance in the face of the mutually contradictory
evidence adduced by the defendant relating to the execution of
Ex A.1 in chief examination and in cross examination? ”
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ARGUMENTS
9. Mr.M.Suresh, learned Counsel for the appellant / plaintiff
would argue that the First Appellate Court failed to appreciate the
evidence available on record; that the defendant himself has admitted in
his evidence that at the time of preparing Ex-A.1, some typographical
error crept in and the same were rectified by the document writer / P.W.2.
Further, Ex-A.1 reveals that the per Cent cost of Suit Property is
Rs.2,000/- and also that the total sale price for the Suit Property which is
of an extent of 93 Cents is Rs.1,86,000/-. Both are consistent with each
other. Further, the First Appellate Court without adverting to the above
evidence wrongly concluded that the plaintiff altered Ex-A.1 – Sale
Agreement. Further, the First Appellate Court concluded that the plaintiff
had not taken due care to protect his rights and interest and the same is
erroneous. There is no legal bar against purchasing a mortgaged property.
Further, the plaintiff has paid more than half of the sale price as advance
money and the plaintiff is ready and willing to perform his part of the
contract. The defendant with a view to wriggle out of the contract falsely
sent Ex-A.2 - Notice during the subsistence of the period of performance
itself. Hence, after exchange of Notices, the plaintiff filed the Suit. The
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Trial Court rightly appreciated the evidence and decreed the Suit. The
First Appellate Court without considering the evidence available on
record in the right perspective, erroneously allowed the appeal and
dismissed the Suit qua main relief and granted the alternate relief. The
same is liable to be set aside. Accordingly, he would pray to allow the
Second Appeal, set aside the Judgment and Decree of First Appellate
Court, and confirm the Judgment and Decree of the Trial Court.
9.1. He would rely on the following decisions in support of
his contentions:
(i) K.Prakash’s Case - Judgment of Hon'ble Supreme Court in
K.Prakash Vs- B.R.Sampathkumar, reported in (2015) 1 SCC
597;
(ii) Zarina Siddiqi’s Case - Judgment of Hon'ble Supreme Court in
Zarina Siddiqui -vs- A.Ramalingam, reported in (2015) 1
SCC 705.
10. Per contra, Mr.S.Sriram for K.Kovi Ganesan, learned
Counsel for the respondent / defendant would argue that no ordinary
prudent man would purchase a property which is subject to a mortgage
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and without verifying the encumbrance particulars. The plaintiff is a
money lender and the defendant borrowed Rs.1,00,000/- for his son’s
educational expenses and signed a blank Twenty Rupees Stamp Paper,
two green papers and two blank Promissory Notes. The unsigned Stamp
Paper has been misused and fabricated into a Sale Agreement. Further, the
Suit Property is worth more than Rs.4,500/- per Cent, even as per the Suit
Sale Agreement – Ex-B.1. However, the defendant came to know after
filing of the Suit that, the price of the Suit Property has been fraudulently
modified and reduced to Rs.2,000/- per Cent in Ex-A.1. The First
Appellate Court appreciated the evidence in the right perspective and
allowed the appeal granting the alternate relief. There is no reason to
interfere with the same. Accordingly, he would pray to dismiss the Second
Appeal, and confirm the Judgment and Decree of First Appellate Court.
10.1. He would rely on the following decisions in support of
his contentions:
(i) Baskaran’s Case - Judgment of this Court in J.Baskaran Vs.
T.Pappa, reported in 2012 SCC OnLine Mad 1277;
(ii) Arokiadoss’s Case - Judgment of this Court in T. Arokiadoss
Vs. P.John Philip, reported in 2023 (1) MWN (Civil) 230.
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DISCUSSION:
11. This Court has heard on either side and perused the
materials available on record in light of the Substantial Questions of Law.
12. This Court has perused Ex-A.1 – Original Unregistered
Suit Sale Agreement. It is mentioned in Ex-A.1 that the Suit Property
admeasures an extent of 93 Cents and that the sale was price was fixed at
Rs.2,000/- per Cent. Calculation of the total sale price would result in
Rs.1,86,000/-. The total sale price recorded in Ex-A.1 is also
Rs.1,86,000/- and it has been recorded in both figure and words. The
defendant’s contention is that originally only Rs.4,500/- per Cent (both
figure and words) was recorded as the sale price of the Suit Property,
however, the same has been altered and reduced to Rs.2,000/- (both
figure and words), knowledge of which was gained by the defendant only
after filing of the Suit. To be noted, the defendant does not deny or
contradict the total sale price of Rs.1,86,000/- mentioned in Ex-A.1 - Suit
Sale Agreement. P.W.2 who is the document writer / scribe to Ex-A.1, has
deposed that there had crept in a typographical error in the sale price per
Cent (both figure and words) in Ex-A.1 and that he later rectified the
same (both figure and words). Notably, D.W.1 has deposed that Ex-A.1
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had correction and that he did not make any enquiry about with the
document writer. Relevant extract of the evidence of D.W.1 reads thus:
'th.rh.M.1 fpiua xg;ge;jj;jpy; jpUj;jk;
,Ue;jJ. jpUj;jk; ,Ug;gjhy; mij gw;wp
ehd; xg;ge;jj;ij jl;lr;R bra;jthplk; ehd;
nfl;ftpy;iy. mth; bgah; rptf;Fkhhpd;
mYtyfk; M";rpneah; nfhapy; mUfpy;
cs;sJ. mth; mYtyfj;jpw;F ehDk; vd;
kidtpa[k; brd;nwhk;. jl;lr;R bra;a[k;
nghJ ehDk; vd; kidtpa[k; m';F ,y;iy.
jl;lr;R bra;jJ vdf;F bjhpahJ. vdf;Fk;
jl;lr;R bra;j rptf;FkhUf;Fk; ve;j tpj
tpnuhjKk; fpilahJ. rptf;Fkhh; gj;jpuk;
vGJgth;jhd;. 2010y; fpiua xg;ge;jk;
nghLk; fhyj;jpy; brhj;jpd; kjpg;g[ 1/86/000
vd;why; mJ gw;wp vdf;F bjhpahJ. ehd;
mf;fphpbkz;l; vGjp bfhLf;ftpy;iy. . . .'
13. In view of the evidence of P.W.2 – Scribe as well as the
admission of D.W.1, it is clear that some change has been effected.
Nonetheless, there has been material change in consequence of the
changes. Only the per Cent price of the Suit Property has been reduced
from Rs.4,500/- to Rs.2,000/-, not the Total Sale Price and the modified
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per Cent Sale Price recorded in Ex-A.1 continues to be Rs.1,86,000/- even
after the modification. Hence, no material alteration can be said to be
made to Ex-A.1. The Trial Court correctly held that there was no material
alteration while the First Appellate Court without appreciating the
evidence of P.W.2 & D.W.1, and without properly perusing Ex-A.1,
erroneously concluded that Ex-A.1 – Suit Sale Agreement is not bona fide
and that the plaintiff failed to approach this Court with clean hands.
14. As regards the execution of Ex-A.1, the defendant
admitted the signature found in Ex-A.1. He has deposed as D.W.1 that he
signed blank stamped and unstamped papers for the purpose of loan from
the plaintiff. He further admits that he borrowed / received a sum of
Rs.1,00,000/-. The plaintiff’s case is that the said Rs.1,00,000/- is an
advance towards the Sale under Ex-A.1 - Suit Sale Agreement. The
plaintiff in his evidence has deposed that after deciding to purchase the
Suit Property, he did not check for encumbrances even at the time of Ex-
A.1 and the time of institution of Suit. He has further deposed that he is
unaware of the fact that the defendant has mortgaged the Suit Property in
Central Bank. He further deposes that the defendant agreed to sell the Suit
Property for meeting out his son’s educational expenses. But the
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defendant contends that it was only a loan and nothing more than a money
transaction. According to the defendant, Ex-A.1 was never intended for
Sale. To be noted, in Ex-A.1, the defendant’s wife has been signed as one
of the witnesses. Both the first defendant / D.W.1 as well as his wife /
D.W.2 have not denied their signatures in Ex-A.1. Ex-A.1 is not a
compulsory attestable document and the plaintiff examined the scribe as
P.W.2 who has deposed clearly about the execution of Ex-A.1. Thus,
execution of Ex-A.1 has been proved.
15. The date of Ex-A.1 – Sale Agreement is November 1,
2010. Date of Ex-A.2 - Notice caused by the defendant is November 30,
2010, and in Ex-A.2 the defendant has categorically stated that he along
with his wife signed two blank Promissory Notes as well as pre-typed
Rs.20 Stamp papers along with one green paper. To be noted, Ex-A.1 is
recorded in a Rs.20 Stamp papers and one green paper only. The
defendant in Ex-A.2, has initially stated that he along with his wife signed
pre-typed Stamp papers and green papers, but after filing of the Suit, he
has contradicted his earlier stand by stating that he along with his wife
signed in blank Rs.20 Stamp papers and green paper. Relevant extract of
Ex-A.2 is hereunder:
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'3. 01-11-2010 md;W j';fis kPz;Lk;
mDfpa vdJ fl;rpf;fhuhplk; +.1/00/000/-
(+gha; xU ,yl;rk;) fld; bfhLf;f
jahuhfpa jh';fs; nkw;go fld; bjhiff;F
khjh khjk; +.1000/- (+gha; Mapuk;) tl;o
ju ntz;Lk; vdf; Twp/ epug;gg;glhj btw;W
gpuhk;rhp nehl; ,uz;oy;/ !;lhk;g; xl;o
(Revenue Stamp) bkhj;jkhf ehd;F
ifbahg;gKk;/ nkYk; +.20/- gj;jpuk; kw;Wk;
gr;ir ngg;ghpy; Vw;fdnt jh';fs; jl;lr;R
bra;J jahh; epiyapy; itj;jpUe;j
lhf;Fbkz;oy; ifbahg;g';fSk; bgw;Wf;
bfhz;Lk;/ rhl;rpf;F vdf;Twp/ vdJ
fl;rpf;fhuhpd; kidtp ukzp vd;gthplk; xU
ifbahg;gKk; bgw;Wf; bfhz;L/ nkw;go
fldhf +.1/00/000/- (+gha; xU ,yl;rk;)
bfhLj;jjhft[k; vdJ fl;rpf;fhuh;
jpl;ltl;lkhf bjhptpf;fpwhh;.'
15.1. From the above, it is discernible that Ex-A.1 was
executed by the defendant. The question is whether it was executed with
an intention to sell the Suit Property or intending the Suit Property as a
security for the loan he obtained from the plaintiff. Ordinarily, if a person
is intending to purchase a property, he ought to be prudent and proactive
to verify the original records, revenue records, encumbrance certificate
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and such other documents, and gained knowledge about the encumbrance,
if any, either at the time of Sale Agreement or during the currency of the
Sale Agreement. There is no legal bar against sale or purchase of
mortgaged property. If really a property was mortgaged, the same would
be mentioned in the Sale Agreement inter alia whether the sale is to be
made subject to the mortgage or after the vendor clears the same, if so
within what time period. In this case, the plaintiff himself has deposed
that he did not make any enquiry into the encumbrances of the Suit
Property and there is no whisper of any mortgage in Ex-A.1 – Suit Sale
Agreement. These facts makes the defence theory that Ex-A.1 was
executed for the purpose of loan transaction and that the defendant was
prepared to repay and clear the debts along with the interest, a plausible
one. To be noted, in Ex-A.2 – Notice itself, which was issued on
November 30, 2010 i.e., 10 days before the expiration of the alleged
prescribed time period for performance the defendant has expressed his
readiness and willingness to repay the debt of Rs.1,00,000/- along with
interest. Hence, this Court is of the view that the plaintiff is not entitled to
the equitable relief of specific performance. However, he is entitled to the
alternate prayer of return of advance amount of Rs.1,00,000/- along with
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12% interest per annum from the date of Suit till the date of realisation.
As regards interest, the First Appellate Court had granted Pre-Suit interest
from the date of Ex-A.1 - Suit Sale Agreement at 12% per annum, Post
Suit interest at the rate of 9% and Post Decree interest at the rate of 6 %,
which in the considered opinion of this Court is not just, fair and proper
considering the facts and circumstances of this case.
16. To be noted, the relief of specific performance is an
equitable relief. As per Section 20 of the Specific Relief Act, 1963, as it
stood before the amendment made vide Specific Performance
(Amendment) Act, 2018, the Court is not bound to grant the relief of
specific performance, merely because it is lawful to do so. At the same
time, the discretion of the Court shall be sound, reasonable, not arbitrary
and guided by judicial principles. Now Section 20 has been removed.
However, the 2018 amendment is prospective in nature and cannot be
applied to the present case which was instituted in the year 2010.
17. Hence, though this Court is in disagreement with the First
Appellate Court’s reasons for its decision, this Court is in concurrence
with its ultimate decision that the plaintiff is entitled to the alternate relief.
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The Trial Court without considering the evidence as well as the facts and
circumstances of the case, decreed the Suit for specific performance
which is incorrect. Substantial Questions of Law are answered
accordingly. No quarrel with the rulings relied on by either side. They lay
down general principals of law and need not be referred to in this case, in
the considered opinion of this Court.
CONCLUSION:
18. Resultantly, the Second Appeal stands partly-allowed.
The First Appellate Court Judgment and Decree is modified qua interest
alone. The plaintiff is entitled to Rs.1,00,000/- along with 12% interest
per annum from the date of Suit till the date of realisation. A charge under
Section 55 (6) (b) of the Transfer of Property Act, 1882 is created over
the Suit Property to enable the plaintiff to realise the aforesaid amount. In
view of the facts and circumstances of this case, the parties shall bear
their own costs. Connected Civil Miscellaneous petitions shall be closed.
04 / 06 / 2025
Index : Yes
Speaking Order : Yes
Neutral Citation : Yes
TK
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R. SAKTHIVEL, J.
TK
To
1.The Additional District Judge
(Fast Track Court)
Villupuram.
2.The 1st Additional Sub Judge
Villupuram.
3.The Section Officer
V.R. Section
Madras High Court
PRE-DELIVERY JUDGMENT MADE IN
S.A.NO.489 OF 2019
04 / 06 / 2025
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