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S.K. Panchaksharam Mudaliar (Died) and ors. Vs. T.V. Kanniah Naidu and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Case NumberAppeal No. 199 of 1977
Judge
Reported inAIR1986Mad156
ActsSpecific Relief Act, 1963 - Sections 20
AppellantS.K. Panchaksharam Mudaliar (Died) and ors.
RespondentT.V. Kanniah Naidu and ors.
Appellant AdvocateT.R. Rajagopalan, Adv.
Respondent AdvocateR. Shanmugham, Adv.
Cases ReferredKalianna Gounder v. Palani Gounder
Excerpt:
.....fourth defendant after which event alone sale can be concluded - plaintiff cannot enforce right on suit agreement - plaintiff had come forward with false case as suit agreement contains a clause regarding eviction of fourth defendant which was categorically found to be material alteration - no evidence on record to show that second defendant was bona fide purchaser and was aware of suit agreement - no merit in appeal and dismissed. - - if really as admitted by the first defendant in the evidence that the understanding between the parties was that if the sale was to be completed delivery of possession could be had from the 4th defendant as well, it cannot be held that the case put forth by the plaintiff was a false case. ' we have very clearly examined the document ourselves. the..........aforesaid for the the second defendant was a bona fide purchaser for value without notice of the suit agreement. on these pleadings the following issues came to be framed -(1) whether time was the essence of the agreement for sale as contended by the defendants? (2) was there an agreement to deliver khas possession as contended by the plaintiff? (3) was plaintiff ready and willing to perform his part of the contract? (4) was the first defendant in default in this regard? (5) whether the second defendant is a bona fide transferee for value without notice? (6) whether the plaintiff is entitled for specific performance? (7) to what relief is the plaintiff entitled? on issues 1 to 4, and 6, the learned subordinate judge came to the conclusion that there was a material alteration by reason.....
Judgment:

Mohan, J.

1. The plaintiff having lost in his suit O. S. No. 55 of 1975 on the file of the Sub-Court, Tirupattur, North Arcot has come up by way of this appeal. The suit was for specific performance of the agreement dt. 26-2-1974, Ex. At between the plaintiff and the first defendant. The suit properties consisted of several parcels of land. Item No. 1, 1 acre 11 cents, item No. 2, 1 acre 95 cents, item No. 3, 6 cents, item No. 4, 61 cents and item No. 5, 58 cents. The consideration for sale was fixed at Rs. 42500 of which Rs. 2500 was paid as advance on the date of agreement. Four months time was stipulated. It is common case that the fourth defendant was a tenant under the first defendant, the owner of the property, regarding item No. 1. The plaintiff claims in his plaint that he was the tenant of items Nos. 2 to 5. It may be stated even at t is stage that we are not called upon to decide the character of his possession in the suit for specific performance. It is also necessary to state that as regards suit item 1, the mother of the first defendant namely the third defendant has a life estate with the vested remainder in favour of the first defendant. Under Ex. A2 dt. 4-7-1974, the first defendant wrote a letter to the plaintiff calling upon him to complete the sale transactions since he was in urgent need of money which he had to pay to his (D 1's) brother. To this a reply was issued by the plaintiff under Ex. Bl, dt. 9-7-1974, wherein it was stated by him that the fourth defendant was in enjoyment of the property and that it looked as if he is not going to vacate the property and, therefore, he had to think about registration. However, it was added that soon after he obtains the necessary funds within a week thereof, he would meet him in person. There was further exchange of letters under Ex. A2 dt. 11-7-1975 and Ex. A5 dt. 11-7-1975. Under Ex. B4 dt. 15-7-1.975 the first defendant and the third defendant jointly executed a sale of the properties in favour of the second defendant for a sum of Rs. 45000. Thereupon, under Ex. A6 dt. 16-7-1975 a suit notice was issued by the plaintiff to which replies were issued under Exs. A7 and A8 by the contesting defendants namely the first and second defendants. It was under these circumstances, the suit came to be filed as aforesaid for the relief of specific performance.

2. In defence, inter alia, it was contended that a material alteration has been made by the plaintiff in the suit. agreement regarding evicting the fourth defendant and executing the sale. The plaintiff was never ready and willing to perform his part of the contract. In any event the suit came to be filed as aforesaid for the the second defendant was a bona fide purchaser for value without notice of the suit agreement. On these pleadings the following issues came to be framed -

(1) Whether time was the essence of the agreement for sale as contended by the defendants?

(2) Was there an agreement to deliver khas possession as contended by the plaintiff?

(3) Was plaintiff ready and willing to perform his part of the contract?

(4) Was the first defendant in default in this regard?

(5) Whether the second defendant is a bona fide transferee for value without notice?

(6) Whether the plaintiff is entitled for specific performance?

(7) To what relief is the plaintiff entitled?

On issues 1 to 4, and 6, the learned Subordinate Judge came to the conclusion that there was a material alteration by reason of a subsequent interpolation, and the plaintiff was never ready and willing to perform his part of the contract. On issue No. 5, he answered that the second defendant was a bona fide transferee for value without notice. On issue No. 7 in view of his earlier finding, he dismissed the suit for specific performance. Thus, the appeal.

3. Mr. T. R. Rajagopalan, teamed counsel for the appellant, urges the following for our consideration. The alterations made in Ex. A1 is not a material alteration at all so as to prejudice the rights of the parties. In support of the said contention, reliance is placed on two rulings of the Supreme Court in Kalianna Gounder v. Palani Gounder, : [1970]2SCR455 and Loonkaran Sethia v. Ivan E. John, : [1977]1SCR853 . In so far as there is clear and cogent evidence from PWs 2 to 4 that the condition as to evicting the fourth defendant was there even before the party subscribing signature to Ex. Al, there is no justification for rejecting their evidence. There was not even a plea in the written statement that there was an interpolation. Therefore the finding that there was material alteration cannot be supported.

4. As regards readiness and willingness, all that was stated in Ex. A3 was that soon after funds were obtained by sale of jaggery the plaintiff would meet the first defendant. It is not necessary that he must have the money ready at all material times. It is enough if he expressed unequivocally readiness and willingness to perform the contract. Therefore, to read something more in Ex. A3 as was done by the Court below is incorrect. To deny the equitable relief of specific performance on the ground that the plaintiff had put up a false cas6 is again wrong. If really as admitted by the first defendant in the evidence that the understanding between the parties was that if the sale was to be completed delivery of possession could be had from the 4th defendant as well, it cannot be held that the case put forth by the plaintiff was a false case.

5. The finding that the second defendant was a bona fide purchaser for value without notice is totally opposed to the evidence on record. It is impossible to believe that wet lands which formed the subject-matter of the suit remained fallow for the second defendant to walk in and take possession. For all these reasons it is prayed that the dismissal of the suit be set aside and a decree be passed for specific performance.

6. Mr. R. Shanmugham, learned counsel for the second defendant (second respondent herein), states that this is a clear case of material alteration. The 4th defendant-tenant has a statutory right to remain in possession under the Tamil Nadu Cultivating Tenants Protection Act. If that right is sought to be taken away by an interpolation so as to impose an obligation on the first defendant, to evict him which eviction is impossible except according to law, it does prejudice the rights of parties. Looked at from that point of view, the ruling in Kalianna Gounder v. Palani Gounder, : [1970]2SCR455 has no application. Besides, the very ruling in Loonkaran Sethia v. Ivan E. John, : [1977]1SCR853 , states that if there is a material alteration of a document so as to prejudice the rights of the parties, undoubtedly reliance cannot be placed on such a document; nor can rights be enforced on the basis of such an alteration. Therefore, it is submitted that the finding can easily be upheld.

7. As regards readiness and willingness, in Ex. A3 it is categorically admitted by the plaintiff that he had to think about the registration in view of the obstacle placed by the fourth defendant. It is in that context the tenor of the letter has to be understood. He cannot put a rider and yet say that he was willing to perform his part of the contract. Undoubtedly, the plaintiff came forward with a false case having materially altered the suit agreement, Ex. Al. Therefore, he not having come with clean hands, is not entitled to obtain equitable relief of specific performance. As far as the second defendant is concerned, he is a bona fide purchaser for value. He had nothing to do with either of the parties; nor is it the case of the plaintiff that he was ever informed of the suit agreement. When the second defendant wanted to obtain possession by then the 4th defendant had vacated and, therefore, he could easily obtain possession. However, on that score the bona fides cannot be denied. Thus none of the findings calls for interference.

8. Having regard to the above submissions, the following points arise for determination :-

(1) Is there a material alteration of Ex. A1 so as to prejudice the rights of parties?

(2) Was the plaintiff always ready and willing to perform the contract?

(3) Can the denial of equitable relief to the plaintiff be upheld?

(4) Is the second defendant a bona fide purchaser for value without notice of the suit agreement?

Ex. A. 1 is the suit agreement. The requirement as to evicting Perumal (4th defendant) in the suit agreement undoubtedly has come to be written in a different ink. The learned Subordinate Judge in para 9 of his judgment, after referring to the relevant portion in Tamil states as follows -

'The disputed two lines are underlined by me. A careful scrutiny of Ex. Al makes it abundantly clear that the disputed two lines at the end of the first page of Ex. Al are out of sequence. The spacing is narrow. I do not accept the evidence of P.Ws. 1 to 4, that the disputed two lines were written in continuation of the previous lines in the first page and that they were not written after the first defendant signing Ex. Al. There is no force in the contention of the learned counsel for the plaintiff that the case of the first defendant is liable to be rejected. The way in which the disputed two lines were written, the close writing which is visible to the naked eye, the efforts taken in writing the same and the different shade in ink give the impression that these recitals should have been written up after Ex. Al was signed by the first defendant.'

We have very clearly examined the document ourselves. We find absolutely no difficulty in concurring with the finding of the learned Subordinate Judge, which we have stated above. The text as originally written alone will fit in with the succeeding line occurring in page 3 of the document. The interpolation concerning evicting Perumal and thereafter executing the sale does not fit in at all in that context, leave alone the manner in which it is written, which is clearly suggestive of subsequent writing after the document had come to be executed. When the document is so clear, it is not necessary at all to deal with the evidence of P.Ws. 2 to 4. Even otherwise, we have not the slightest hesitation in rejecting their evidence as false contrary to the tenor of the document as it is visible even for a casual look. As to the law of material alteration, we need only refer to the decision in Loonkaran Sethia v. Ivan E. John, : [1977]1SCR853 . At page 347 it is stated -

Question No. 5 :- Before proceeding to determine this question, it would be well to advert to the legal position bearing on the matter. As aptly stated in para 378 of Vol. 12 of Halsbury's Laws of England, 4th Edn., 'if an alteration (by erasure, interlineation or otherwise) is made in a material part of a deed, after its execution, by or with the consent of any party to or person entitled under it, but without the consent of the party or parties liable under it, the deed is rendered void from the time of the alteration so as to prevent the person who had made or authorised the alteration, and those claiming under him, from putting the deed in suit to enforce against any party bound by it, who did not consent to the alteration, any obligation, covenant or promise thereby undertaken or made.

A material alteration, according to this authoritative work, is one which varies the rights, liabilities, or legal position of the parties as ascertained by the deed in its original state, or otherwise varies the legal effect of the instrument as originally expressed, or reduces to certainty some provision which was originally unascertained and as such void, or which may otherwise prejudice the party bound by the deed as originally executed.

The effect of making such an alteration without the consent of the party bound is exactly the same as that of cancelling the deed.'

To the same effect are the observations made by the Privy Council in Nathulal v. Mt. Goniti .

In that case, after referring to the material alterations made in the document, the matter was concluded thus -

'As the above mentioned alterations substantially vary the rights and liabilities as also the legal position of the parties, they cannot be held to be anything but material alterations and since they have been made without the consent of the defendants first set, they have the effect of cancelling the deed.'

As examined, this is a material alteration since the right of the first defendant is affected. In the State of Tamil Nadu we have the Tamil Nadu Cultivating Tenants Protection Act 25 of 1955. Under S. 3 of that Act, no tenant can be evicted even in execution of a decree or otherwise except on the grounds stated in the Act. Therefore the right of a tenant is a statutory right. If no obligation is cast on the first defendant that only when the statutory tenant is evicted the sale could be executed, that acts prejudicially to the first defendant. It has to be noted in this connection that the agreement stipulated a period of four months for completion of the transaction. Therefore, only with a view to avoid his liability under the contract such a condition had come to be incorporated as stated above after the execution of the document. In such a case, no doubt this cannot but be a material alteration. In Kalianna Gounder v. Palani Gounder, : [1970]2SCR455 , the position was entirely different. There the interpolation was 'to clear the debts and execute the sale deed free from encumbrances'. That undoubtedly is a statutory duty cast upon every vendor under S. 55 of the T.P. Act. Therefore their Lordships of the Supreme Court held that it cannot be regarded as a material alteration. But here there is a great difference in that the statutory right of the 4th defendant had to be abrogated by requiring the first defendant to evict him and then alone complete the sale. We may now extract the headnote of Kalianna Gounder v. Palani Gounder : [1970]2SCR455 to highlight our point -

' A material alteration is one which varies the rights, liabilities or legal position of the parties as ascertained by the deed in its original state, or otherwise varies the legal effect of the instrument as originally executed, or reduces to certainty some provision which originally was unascertained and as such void or may otherwise prejudice the party bound by the deed as originally executed.

An alteration made in a deed, after its execution, in some particular which is not material does not in any way affect the validity of the deed; an alteration is not material which does not vary the legal effect of the deed in its original state but merely expresses that which was implied in law in the deed as originally written, or which carries out the intention of the parties already apparent on the face of the deed, provided that the alteration does not otherwise prejudice the party liable thereunder. Nathulal v, Smt Gomti , Halsbury's Laws of England, 3rd Edn. Vol. II, Art. 599, page 368 and Art. 604, pages 370 and 371 referred to. The plaintiff on 4th July 1956 agreed to purchase the land of the defendant for Rs. 12000. A memorandum reciting that Rs. 2000 was paid as advance by the plaintiff to the defendant was executed by the parties. The defendant having resiled from the agreement, the plaintiff sued the defendant for specific performance of the agreement, depositing the balance consideration in court.

The defendant pleaded inter alia that the agreement was materially altered by the plaintiff without their consent after it was executed by the addition of the words 'clear debts and execute the sale deed free from encumbrance' and the suit therefore was not maintainable. These words occurred immediately before the schedule of property sold and after the covenants of the memorandum.

The Court held on the evidence that the words were there even in the original state and were not inserted later. It was admitted that there w as no discussion at the time of the writing and execution of the agreement about the encumbrances on the land, nor was any evidence let in to show that there were any encumbrances subsisting on the land.

Held : Ordinarily when property is agreed to be sold for a price, it would be the duty of the vendor to clear it of all encumbrances before executing the sale deed. Since the defendants were liable to clear the encumbrances, if any, subsisting on the land, assuming that the covenant was incorporated after the execution of the deed, it cannot be regarded as a material alteration on that account, as it did not alter the rights or liabilities of the parties or the legal effect of the document.'

For these reasons. we hold that the contention advanced on behalf of the appellant that this is not a material alteration has to be rejected. The fact that there was no plea in the written statement that there was an interpolation would not matter at all because even a casual look at the document is clearly suggestive of the material alteration. What D.W. 1 in evidence says is that the understanding between the parties was that after the completion of sale the first defendant was willing to obtain possession from the fourth defendant. But this cannot be construed as meaning that the first defendant would evict the 4th defendant after which event alone the sale can be concluded. For all these reasons we have not the slightest hesitation in holding that the interpolation is a material alteration acting to the prejudice of the first defendant and therefore the plaintiff cannot enforce his right on the suit agreement Ex A. 1.

9. As regards readiness and willingness, as rightly contended by the learned counsel for the second respondent it is not a mere innocuous statement that he will complete the sale by the funds received by sale of jaggery. On the contrary a reading of the entire letter clearly indicates the mind of the plaintiff. He states therein categorically that because of the difficulties encountered from the 4th defendant he had to think twice about registration. Therefore, he cannot put a rider as to the eviction of the 4th defendant and yet say that he was ready and willing to perform his part of the contract. Besides, at no point of time the plaintiff said that he was willing to purchase the property even though the fouth defendant was not evicted. Therefore, on this aspect also, we uphold the finding of the learned Subordinate Judge.

10. Having regard to the above finding it follows that the plaintiff had come forward with a false case as though the suit agreement contains a clause as to the eviction of the fourth defendant which we have categorically found to be a material alteration. By reason of the fact that he had come forward with a false case and unclean hands, he has denied himself the equitable relief of specific performance. Accordingly we answer question No. 3, that the equitable relief of specific performance has been rightly denied to him.

11. In view of the above it does not matter very much whether the second defendant is bona fide purchaser or not. However, there is no evidence on record to show that the second respondent was aware of the suit agreement, nor did plaintiff put him on notice of the same at any point of time. The fact that immediately after Ex. A. 5, Ex B. 4 sale in favour of the second defendant has taken place is not strong enough to hold that there are no bona fides on his part.

12. In view of the above, we conclude that there are no merits in the appeal and the same will stand dismissed with costs of the contesting second defendant.

13. Appeal dismissed.


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