(Prayer: This second appeal has been filed under Section 100 C.P.C., against the Judgment and Decree of the learned Principal District Judge, Namakkal made in A.S.No.40 of 2013 dated 28.11.2014 thereby confirming the judgment and decree of the learned Subordinate Judge, Rasipuram made in O.S.No.45 of 2011 dated 12.04.2013.)
1. The appellants are the defendants 2 and 4 in a suit for specific performance of an agreement of sale. The trial court decreed the suit as prayed for and the appeal preferred by the defendants 2 and 4 came to be dismissed.
2. The defendants 1 and 3 died during the pendency of the suit leaving the defendants 2 and 4 as their legal heirs.
3. The case of the plaintiff is as follows:
The suit property belonged to the first defendant. The second defendant is the wife and the defendants 3 and 4 are the children of the defendants 1 and 2. On 25.06.2003, the defendants entered into a registered agreement for sale with the plaintiff agreeing to sell the suit property for total sale consideration of Rs.2 lakhs and received a sum of Rs.1,65,000/- towards advance on the same day. For the payment of balance amount and execution of sale deed, three years time was fixed. Possession of the suit property was entrusted to the plaintiff on the date of agreement. Though the plaintiff was ready and willing to perform her part of the contract, the defendants evaded to perform their obligation. The plaintiff issued a legal notice on 16.05.2005, calling upon the first defendant to execute the sale deed . However, the defendants did not execute the sale deed. Therefore, the present suit is filed seeking for the relief of specific performance.
4. The defendants contested the suit as follows:
The suit agreement was not executed with an intention to sell the suit property. The defendants approached the brother of the plaintiff by name one Venkatachalam for availing loan, who in turn insisted the defendants to execute a registered sale agreement. The defendants have borrowed a sum of Rs.1,65,000/- only as a loan. Possession was not actually handed over to the plaintiff as recited in the agreement. On the other hand, the possession is with the defendants and they have been cultivating the suit property all along. The value of the suit property is more than Rs.10,00,000/- per acre and there is no necessity for these defendants to sell the same for the meagre sum of Rs.2,00,000/-. The defendants are ready to repay Rs.1,65,000/- with interest. After receipt of the legal notice, when the defendants approached the plaintiff and her brother and expressed their willingness to settle the loan amount with interest, the plaintiff assured that she will not pursue legal action. Believing the words of the plaintiff, the defendants did not reply to the legal notice. The plaintiff's brother is doing money lending business with whom, the defendants have already entered into an agreement of sale in respect of the suit property, which was subsequently cancelled and that for settling the amount to the plaintiff's brother, the present suit agreement was executed.
5. The plaintiff examined herself as PW1 and examined other three independent witnesses as Pws.2, 3 and 4. Exs.A1 to A20 were marked on her side. The fourth defendant examined himself as DW1 and three independent witnesses viz., Dws.2, 3 and 4 were examined. Exs.B1 to B11 were marked on the side of the defendants. Three certified copies of the sale deeds were marked as court documents as Exs.X1, X2 and X3.
6. After considering the pleadings of the respective parties and the evidence let in by them, the trial court decreed the suit as prayed for. The Appellate Court confirmed the findings of the trial court and thus, dismissed the appeal. Hence, the present appeal.
7. This Court while admitting the appeal, raised the following substantial questions of law:
i) Whether the First Appellate Court was right in holding that the defendants are de-barred from pleading against the sale agreement, purportedly, by the bar emanated under Section 92 of the Indian Evidence Act?
ii) Whether the First Appellate Court was right in ignoring the legal position that when fraud is alleged, Section 92 of the Indian Evidence Act is not a bar for the person who alleges so to lead evidence against the contents of the document?
iii) Whether the courts below were right in holding that the intention of the parties could not be gathered in the absence of any documentary evidence?
8. Mr.I.Abrar Md. Abdullah, learned counsel appearing for the appellants submitted as follows:
The suit agreement was not intended to be acted upon, as it was executed only as security towards repayment of the loan. The brother of the plaintiff is a money lender from whom the defendants borrowed money on several occasions and on each occasion, he insisted to execute a sale agreement of the suit property for securing the loan amount. Exs.B1 to B6 and A12 would show that every time an agreement of sale was executed and cancelled later on repayment of loan. As it is a purely money transaction between the parties, the courts below ought not to have granted the decree for specific performance. The courts below erroneously applied Section 92 of the Indian Evidence Act, as though the defendants are contradicting or varying the terms of the agreement. The defendants are entitled to contend that their actual intention was not to alienate the suit property, even though they admitted the execution of the suit agreement. Even otherwise, the plaintiff was not ready and willing to perform her part of the contract which the courts below miserably failed to consider.
9. In support of the above submissions, the learned counsel relied on the following decisions:
i) 2011(5) CTC 543, Lakshmamma vs Rathinamma;
ii) 2007(1) LW 309, Kamireddi Sattiaraju vs Kandamuri Boolaeswari;
iii) 2003(6) SCC 595, Roop Kumar vs Mohan Thedani;
10. Per contra, Mr.R.Margabandhu, learned counsel appearing for the respondent submitted as follows:
The concurrent findings rendered by the courts below do not require an interference by this court. The suit agreement is admitted by the defendants and therefore, they cannot repudiate the same by setting up other intention contra to the recitals made in the suit agreement. Therefore, their defense is hit by Section 92 of the Indian Evidence Act. The plaintiff has proved the suit agreement as required under law. The defendants did not reply to the legal notice. The plaintiff has complied with the statutory requirementof Section 16(c) of the Specific Relief Act showing her readiness and willingness.
11. In support of his submission, the learned counsel for the respondent relied on the decisions reported in 2012 (8) MLJ 177, A.M.Adhil Badusha vs Sucharitha and 2007 (4) MLJ 442, Rajeswari vs K.M.Kumarasamy.
12. Heard the learned counsel for the appellants and the learned counsel for the respondent and perused the materials placed before this court.
13. The respondent as the plaintiff sought the relief based on an agreement of sale dated 25.06.2003 marked as Ex.A1. The total sale consideration shown in the said agreement was Rs.2,00,000/- out of which, the plaintiff claimed to have paid Rs.1,65,000/- as advance on the date of execution of the agreement. For payment of balance sale consideration of Rs.35,000/- and to get the sale deed executed, three years time limit was fixed in the agreement. The appellants did not dispute the execution of the agreement but they contended that it was not intended to be acted upon for the actual sale of the suit property and on the other hand, it was executed as a security towards a loan transaction. Both the courts below found that the sale agreement was intended for the purpose of sale of the suit property and consequently, decreed the suit. It is also found by the courts below that the defendants cannot raise the defense contra to the terms of the agreement, having admitted its execution, as such defense is hit by Section 92 of the Indian Evidence Act. In so far as the readiness and willingness issue is concerned, both the courts below found that by issuing a notice on 16.05.2005, marked as Ex.A2,, within three years time fixed in the agreement, the plaintiff proved and established her readiness and willingness.
14. The defendants in order to establish their contention that the suit agreement was executed only in support of the loan transaction, relied on Exs.B1 to B6 and A12. These are the documents pertaining to similar agreement of sale and cancellation of such agreement periodically entered into between the defendants on one side and one Venkatachalam, on the other side, who is none else than the brother of the plaintiff. It is also not in dispute that the said Venkatachalam is a money lender with whom, the defendants had some money transaction. It is stated that the attesting witnesses and the scribe in all these documents as well as the suit agreement Ex.A1 are one and the same. It is also to be noted at this juncture that execution of Ex.A1 agreement and cancellation of another agreement entered into with the said Venkatachalam by the defendants marked as Ex.A12, came to be executed on one and the same day. These are all the factors which could certainly lead to a probable and reasonable presumption in favour of the defendants regarding the intention of the parties to Ex.A1. If at all, the defendants want to sell the property with the bonafide intention, there was no necessity for executing an agreement of sale with the brother of the plaintiff under Ex.B1 and cancelling the same under Ex.B3; again executing another agreement under Ex.B4 with him and cancelling the same under Ex.B5; further executing another agreement under Ex.B6 and cancelling the same under Ex.A12. These periodical execution and cancellation would only show that the above referred agreements of sale under Exs.B1, B4 and B6 were entered into only as security towards the loan transaction and not with a real intention to sell the property. Therefore the same presumption that would arise in respect of the suit agreement as well cannot be ruled out in toto, owing to the past conduct of the parties.
15. It is true that the defendants admitted the execution of sale agreement. Hence, the question that would arise next is as to whether the defendants, having admitted the execution of the sale agreement, can take such defense and whether such defense is not hit by Section 92 of the Indian Evidence Act?
16. The above question is answered by the Apex Court in a decision reported in 2003(6) SCC 595, Roop Kumar vs Mohan Thedani, wherein at paragraph No. 22, it has been observed as follows:
22. This Court in Smt. Gangabai v. Smt. Chhabubai (AIR 1982 SC 20) and Ishwar Dass Jain v. Sohan Lal (AIR 2000 SC 426) with reference to Section 92(1) held that it is permissible to a party to a deed to contend that the deed was not intended to be acted upon, but was only a sham document. The bar arises only when the document is relied upon and its terms are sought to be varied and contradicted. Oral evidence is admissible to show that document executed was never intended to operate as an agreement but that some other agreement altogether, not recorded in the document, was entered into between the parties.
17. The above decision of the Apex Court was followed by a Division Bench of this Court in a decision reported in 2007(1) LW 309, Kamireddi Sattiaraju vs. Kandamuri Boolaeswari, wherein at paragraphs 15, 16 and 17, it has been observed as follows:
15. In the judgment reported in 2003 (6) SCC 595, in paragraph 22, the Supreme Court has stated the legal position as regards the substantive part of Section 92 of the Indian Evidence Act in the following words:
22. This Court in Gangabai v. Chhabubai (1982(1) SCC 4:AIR 1982 SC 20 = (1982)95 L.W.15 and 138 S.N.) and Ishwar Dass Jain v. Sohan Lal (2000(1)SCC 434 : AIR 2000 SC 426 = 2000-1-L.W.425) with reference to Section 92(1) held that it is permissible to a party to a deed to contend that the deed was not intended to be acted upon but was only a sham document. The bar arises only when the document is relied upon and its terms are sought to be varied and contradicted. Oral evidence is admissible to show that document executed was never intended to operate as an agreement but that some other agreement altogether, not recorded in the document, was entered into between the parties.
16. In the decision reported in 2004(4)SCC 794 = 2004-4-L.W.53, the Supreme Court has held as under in paragraph 9:
...An enquiry into reality of transaction is not excluded merely by availability of writing reciting the transaction. Tyagaraja Mudaliyar vs. Vedathanni (AIR 1936 PC 70:64 IA 126 = (1936)43 L.W.271) is an authority for the proposition that the oral evidence in departure from the terms of a written deed is admissible to show that what is mentioned in the deed was not the real transaction between the parties but it was something different...
17. From the above ratio laid down by the Supreme Court, when we analyse the stand of the parties, according to the appellants, irrespective of the fact that Ex.A-1 came into being, it was contended that the deed was never intended to be acted upon and that it was a sham document. When the said stand is probed into further, as held by the Supreme Court, the bar under Section 92 of the Indian Evidence Act vis-a-vis Ex.A-1 would operate if only the appellants attempt to rely upon Ex.A-1 agreement and simultaneously sought to vary and contradict its terms. Such is not the case of the appellants. The appellants are not attempting to contend that the terms contained therein are to be varied or that the evidence let in on their side was to contradict the terms contained therein. According to the appellants, the entire evidence let in both oral and documentary, was only to demonstrate that inspite of existence of Ex.A-1, it will have to be held that the parties had a different contract altogether and Ex.A-1 was never intended to be acted upon. At the risk of repetition, we state that applying the ratio laid down by the Supreme Court, such a stand of the appellants was certainly not prohibited under Section 92 of the Indian Evidence Act.
18. A learned Single Judge of this Court by following another decision of the Apex Court in Pravindar Singh's case reported in 2004 (4) SCC 794 and the above decision of the Division Bench of this court, held in a decision reported in 2011(5) CTC 543, Lakshmamma vs Rathinamma at paragraph No.19 as follows:
Therefore, having regard to the Supreme Court judgments relied upon in the judgment reported in the case of Kamireddi Sattiaraju and another vs. Kandamuri Boolaeswari, 2007 (1) LW 309, the appellant is entitled to plead that Ex.A1 was not intended to be acted upon as an agreement of sale and it was executed only as a security and Sections 91 and 92 are not bar for letting in any such evidence.
19. From the above categorical pronouncements made by the Apex Court as well as by this court, there cannot be any doubt as to the entitlement of the defendants to dispute with regard to the actual intention of the agreement and raise such defense, though they admit its execution. In other words, as observed by the Apex Court in Roop Kumar's case, though the defendants admit the execution of the agreement, they are entitled to contend that it was not intended to be acted upon and on the other hand, the same was executed in support of the loan transaction. Only when the defendants sought to rely upon the agreement, they cannot contradict or vary the terms of such agreement and only under such circumstances, the bar under Section 92 would come into operation. Otherwise, there is no legal bar or impediment for the defendants to raise the plea with regard to the actual intention of the parties to the agreement. Therefore, I am of the view that both the courts below are erred in law in holding that the defense raised by the defendants in this aspect is hit by Section 92 of the Indian Evidence Act. On the other hand, as discussed supra, it is not so.
20. I have already pointed out the various transactions that took place between the defendants and the plaintiff's brother by way of executing similar agreement and the cancellation of the same marked as Ex.B1 to B6 and A12. I have also pointed out that cancellation of Ex.B6 and execution of Ex.A1 came to be done on one and the same day. It is also not disputed that the attesting witness and the scribe of all these documents are one and the same persons. Further, it is seen that the plaintiff's brother is a money lender and the plaintiff being the sister of such money lender. All these facts and circumstances would support the case of the defendants that the present suit agreement is also one such agreement executed towards a loan transaction.
21. At this juncture, it is to be noted that even if there is little doubt in the mind of the court with regard to the genuineness and the nature of transaction entered between the parties, great restrain must be shown in granting the relief of specific performance more particularly, when such relief is discretionary in nature.
22. Even otherwise assuming that the suit agreement is intended to be acted upon, the plaintiff is not entitled to the relief automatically unless she crosses the hurdle of pleading and proving the readiness and willingness. Now, the question that would arise is whether the plaintiff has discharged such statutory obligation of pleading, proving and establishing her readiness and willingness? Such mandatory requirement under Section 16(c) of the Specific Relief Act is to be complied with by the plaintiff, even in the absence of any objection or question raised by the defendants in their pleading.
23. In this case, the total sale consideration fixed was Rs.2,00,000/-. Admittedly, the plaintiff paid Rs.1,65,000/- as advance on the same day of date of execution of the agreement. There is no convincing reason stated as to why the plaintiff sought for three years time for paying the balance sum of Rs.35,000/- and to get the sale deed executed, more particularly, when the fact remains that her brother is a money lender. Let us assume that there was some reason for fixing such three years time. It is to be noted at this juncture that right to pay the balance amount and claim for execution of sale deed does not arise for the plaintiff at the eleventh hour of the third year and on the other hand, such right commences even from the date of the execution of the agreement. In other words, the plaintiff should plead and prove her readiness and willingness right from the date of agreement till the decree is passed. This court already considered such issue and held in a decision reported in 2016(4) CTC 643, S.Mallika v. R.Saravanan that the time limit fixed in an agreement is only an upper time limit not the exact time to perform the contract. In this case, admittedly the suit notice came to be issued only on 16.05.2005 i.e., after nearly two years from the date of the agreement. What prevented the plaintiff from paying the balance amount and seeking for execution of the sale deed all these two years, is not explained. Therefore, it is evident from the conduct of the plaintiff that she was not ready and willing to perform her part of the contract, as contemplated under section 16(c) of the Specific Relief Act from the date of the agreement, even though the balance amount payable is a small portion of the total sale consideration.
24. No doubt, the suit is filed within the period of limitation. For the purpose of considering as to whether the suit is filed within time, the issuance of the notice and the date of filing the suit may be relevant. But for considering the issue regarding the readiness and willingness, filing of the suit within the time of limitation cannot be the answer. In this aspect, this court's decision reported in 2016(4) CTC 152, Johnson vs. E.Pushpavalli, would apply to the present case as well.
25. Learned counsel for the respondent relied on the decision of this court reported in and 2007 (4) MLJ 442, Rajeswari vs K.M.Kumarasamy in support of his contention that defence taken by the defendants is hit by Section 92 of the Indian Evidence Act. I have already referred to the decision of the Apex Court in Roop Kumar's case as well as the division Bench of this court in Kamireddy Satiaraju's case dealing with this aspect. When such being the settled position of law, I do not think that the above decision of the learned Single Judge would help the respondent in any manner.
26. Another decision of the learned Single Judge reported in 2012 (8) MLJ 177, A.M.Adhil Badusha vs Sucharitha is cited by the learned counsel for the respondent to contend that the conduct of not replying to the pre suit notice sent by the plaintiff should be held against the defendants. In the very decision itself, the learned Judge has pointed out that the conduct of the parties should be taken note of for deciding cases where the defendants did not give any reply notice. In this case, it is contended by the defendants that after receiving such legal notice, they approached the plaintiff and her brother and expressed their willingness to settle the loan amount and that the plaintiff assured that she will not pursue legal action. Therefore, it is contended by the defendants that they did not give reply to the legal notice, believing her words. Whether such contention is proved or not, when this court has found that the very agreement entered between the parties itself was in respect of the loan transaction and not with an intention to sell the suit property, not replying to the suit notice may not have much significance or relevance. Even otherwise, as this court has also found that the plaintiff has failed to discharge her onus of proving the mandatory requirement of law under section 16(c) of the Specific Relief Act, the above decision, again, is not helping the respondent in any manner.
27. Right to seek the relief of specific performance is one thing, whereas pleading and proving the readiness and willingness to seek such relief is another thing. Mere right to sue within time is not enough to get the relief of specific performance automatically even in the case of an admitted agreement, unless the plaintiff pleads and establishes the readiness and willingness in a manner known to law. In this case, I found that the plaintiff miserably failed to prove such readiness and willingness, even assuming that the suit agreement was intended to be acted upon. This aspect has not been considered by the courts below in a proper and perspective manner. Therefore, the findings rendered by the courts below, even though concurrently in favour of the plaintiff, are to be held as perverse.
28. Considering all these facts and circumstances, I am of the view that the appellants are entitled to succeed and the substantial questions of law raised in this appeal are to be answered in favour of the appellants. Accordingly, they are answered. Consequently, the second appeal is allowed and the judgment and decree of both the courts below are set aside and the suit filed by the respondent in O.S.No.45 of 2011 on the file of the Sub Court, Rasipuram is dismissed. No costs. The connected miscellaneous petition is closed.