(1) The plaintiffs in the lower Court are the appellants in this appeal. The suit has been filed by them to establish their title to the suit property, house and ground No. 12, New St., Nungambakkam, Madras, against the first defendant who claims rights over the same in pursuance of an agreement alleged to have been entered into between the plaintiffs and the first defendant to sell the suit property to the latter. The brief facts which led up to the appeal may be stated.
(2) The property was purchased under Ex. A-1 on 29-8-1948 by the first plaintiff from one Pachai Pillai and Purushotham for a sum of Rs. 6,500. The parties are near relatives and their relationship can be stated with reference to Kullammal to whom frequent reference will have to be made in the course of this judgment. Kullammal's daughter is the first plaintiff and her husband is the second plaintiff. Pachai Pillai and Purushotham from whom the first plaintiff purchased the suit property under Ex. A-1 are the sons of Kullammal's sister. Janaki, the first defendant, is Kullammal's sister's daughter. One Kanna Pillai to whom again reference will have to be made is the brother of the first defendant Janaki. Janaki's sister's husband is one Damodar. Kullammal being a near relative was living with the plaintiffs till about 1953-55. There is controversy between the parties as to when exactly Kullammal separated from the plaintiffs but it is unnecessary to find out when exactly Kullammal left the family of the plaintiffs. Under Ex. A-20 dated 25-4-1949, the first plaintiff purchased a house No. 3, Abbu Naicken Street, from one Gopalakrishnan for a sum of Rs. 10,000. The case of the first defendant is that at that time the plaintiffs required money for paying the price for the house in Abbu Naicken Street, that in connection therewith the first plaintiff entered into an agreement sometime in April 1949 to sell the suit property to the first defendant for a sum of Rs. 6,500, that at the time of the agreement she paid a sum of Rs. 3,500 to the plaintiff and that the arrangement between the parties was that within two or three months thereafter the balance of Rs. 3,000 would be paid by the first plaintiff, and the sale transaction completed.
It is the further case of the first defendant that as the first plaintiff was anxious to complete the transaction under Ex. A-20 even earlier, the first plaintiff desired the first defendant to pay the balance of Rs. 3,000 much earlier than the time stipulated under the previous agreement and that for that purpose it was agreed between the parties that the first plaintiff should be enabled to raise money, namely, Rs. 3,000 by mortgaging the suit property to the second defendant. The further case of the first defendant is that in pursuance of that arrangement the first plaintiff executed a mortgage Ex. A-2, dated 2-5-1949 in favour of the second defendant and raised the sum of Rs. 3,000 which was utilised for completing the transaction under Ex. A-20. In 1953 a house bearing door No. 42, Village Road, was purchased by Kullammal and between 1953 and 1955 open hostility and misunderstandings arose between the plaintiffs and Kullammal in respect of properties purchased by the plaintiffs in which Kullammal claimed certain rights. As a result of these misunderstandings between the plaintiffs and Kullammal, the latter filed a suit in November 1955, O.P. No. 9 of 1956, which ultimately was numbered as O.S. 645 of 1957 in which Kullammal claimed certain rights as against the present plaintiffs. That suit was hotly contested. I am referring to this even at the threshold to indicate whether it was in 1953 or 1956 pronounced hostility existed between the plaintiffs on the one hand and Kullammal on the other.
(3) Meanwhile notices passed between the plaintiffs and defendants through their lawyers. In 1956 on behalf of the plaintiffs notices were issued to the tenants as well as to the defendants in which it was claimed that the defendants in which it was claimed that the defendants were relying on some agreement, alleged to have been signed by the plaintiffs. It was also alleged in those notices that in the alleged agreement their (plaintiffs) signatures were obtained by Kullammal by fraudulent mis-representation and that it would not bind their interests. The final reply notice which was sent on behalf of the first defendant is Ex. A-17 dated 4-4-1957 and the present suit has been filed in July 1957.
(4) The points which arise for decision in this case are (1) whether factually there was an agreement of sale entered into between the plaintiffs and the first defendant; (2) whether that agreement was in writing and whether the first defendant who relies upon the agreement has satisfactorily accounted for the non-production of the same; (3) as the agreement was admittedly unstampted whether any relief can be granted to the first defendant on the basis be granted to the first defendant on the basis of such an agreement; and (4) whether the alleged agreement of sale satisfies the requirements of the stringent conditions of S. 53A of the Transfer of Property Act; and (5) Is it open to the first defendant to invoke the doctrine of part performance when all the conditions and terms of the agreement of sale are not embodied in writing, i.e., some terms are in writing while some are essential terms are oral.
(5) The point for decision arise in a short compass and both the learned Judge and the parties in the lower Court have disagreed and have not focussed their attention on certain clinching and decisive features in this case evidenced by documents which clearly go to show that the alleged agreement of sale is not true and as any rate, it was not reduced to writing and that the first defendant has totally failed to explain the non-production of the same.
(6) We shall first take up for consideration the question about the truth of the agreement and whether it was in writing. As both the points overlap and cannot be separately dealt with, they may be conveniently dealt with together..............There are certain artificial features in this case which in our opinion show that such an agreement for sale could not have been entered into between the parties............ (After discussing the evidence his Lordship proceeded) It is unnecessary to refer to the oral evidence on the side of the plaintiffs, as we are satisfied that the documentary evidence and the oral evidence adduced on the side of the defendants totally fail to establish (a) that there was an agreement of sale, (b) that the agreement of sale was evidenced by writing, and (c) that the same had been handed over to the first plaintiff.
(7) In view of our findings it may not be necessary to express our opinion as to whether the first defendant could be awarded any relief on the basis of the secondary evidence consisting of the admissions alleged to have been made by the plaintiffs in the notice issued on their behalf or on the basis of the oral evidence adduced by D.W. 1 and D.W. 2 in the case. In the first place, it has to be mentioned that in the notices, which were issued on behalf of the first plaintiff, there is no clear and unqualified admission about the agreement of sale. The averment in the relevant notices had to be taken as a whole and it is clear that the first plaintiff has not admitted that she had executed an agreement of sale. Her case is that the alleged agreement of sale was a fraudulent transaction and that her signature was obtained as a result of fraud and misrepresentation by Kullammal. There is no unqualified or unequivocal admission of the execution of an agreement of sale. Secondly, the terms and conditions of the agreement of sale are not referred to in those notices. Those notices cannot be regarded as containing any secondary evidence of the admission of the contents and terms of the alleged agreement of sale.
(8) So far as the oral evidence is concerned, the evidence is not precise. The time for performance is stated as two or three months, and all the terms are not spoken to in the evidence.
(9) Mr. M.S. Venkatarama Aiyar, learned counsel for the appellants, urged that even assuming that
the secondary evidence relied upon by the first defendant covered the terms and conditions of the sale, no relief could be granted to the first defendant on the basis of the same in view of the mandatory provisions of S. 35 of the Stamp Act. Learned counsel urged that as the alleged agreement of sale is admittedly unstamped, S. 35 prohibits that the document shall not be acted upon by the Court in any manner. He urges that awarding relief to the first defendant on the basis of the secondary evidence would be acting upon the secondary evidence would be acting upon the unstamped instrument coming within the prohibition of S. 35 of the Stamp Act. We see considerable substance in this argument, which is supported by ample authorities. This is clear from the express terms of the section. The importance of the significant words "No instrument chargeable with duty shall be admitted in evidence for any purpose by any person, etc., or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped" in S. 35 of the Indian Stamp Act has come up for consideration in striking contrast to the provisions in S. 49 of the Indian Registration Act, particularly in the context of the contesting party admitting the execution of an unstamped or unregistered agreement, as the case may be.
In the case of an unregistered document, it has been held that if the contesting party admits the document in the pleadings thereafter there is no necessity for further proof of the facts admitted, and, therefore, there is no occasion for the parties to adduce evidence so as to attract the applicability of S. 49 of the Registration Act. But in the case of an unstamped document it has been held that as the prohibition contained in S. 35 of the Stamp Act is wide and absolute, even though in the pleadings the contesting party may admit the execution of the unstamped document, no relief could be granted on the basis of the admission, as it would amount to acting upon the unstamped document. Reference may be made to the observations of the Full Bench in Mallappa v. Natam Naga Chetty, ILR 42 Mad 41 = (AIR 1919 Mad 833), where a subsequent oral agreement modifying the terms of a registered mortgage bond was relied upon and the same was admitted in the written statement. In that case it was held that S. 49 of the Registration Act was not a bar inasmuch as the subsequent oral agreement had been admitted in the pleadings under S. 58 of the Evidence Act. The learned Chief Justice, Wallis, C. J., put the matter thus at p. 48 (of ILR Mad) = (at p. 833 of AIR):
"Under S. 58 of this chapter, among the facts which need not be proved, are facts admitted in the pleadings such as the subsequent agreement now in question. Evidence is tendered in proof of facts in issue; and no question of the admissibility of evidence, oral or documentary, arises when proof is dispenses with in consequence of an admission in the pleadings, either under S. 58 or under the provisions of the Civil Procedure Code. Whereas in Chenbasappa v. Lakshman Ramchandra, (1894) ILR 18 Bom 369, the Legislature had enacted "not only that an unstamped promissory note should not be receivable in evidence, but also that it should not be 'acted on', it was held that the Court was precluded from acting on the note by giving a decree on it, even though execution was admitted."
The leading decision referred to is the decision in (1894) ILR 18 Bom 369, where Sargent, C. J., delivering the judgment of the Bench held that even though the execution of the hundis in question was admitted in the pleadings, no decree could be passed upon such an admission which would amount to acting upon an unstamped document within the meaning of S. 35 of the Indian Stamp Act. The principle of this decision was followed and applied in Achutaramana v. Jagannadham, 64 Mad LJ 79 = (AIR 1933 Mad 117) in which it was held that despite an admission in the pleading under Section 58 of the Indian Evidence Act, the bar under Section 35 would apply. The attention of the learned Judge was drawn to the decision in Alimane Sahiba v. Subbarayudu, 63 Mad LJ 303 = (AIR 1932 Mad 693), in which a contrary view was taken. But it was held that the decision in 63 Mad LJ 303 = (AIR 1932 Mad 693) did not consider the true effect of the language of S. 35 of the Stamp Act. The attention of the learned Judge was also drawn attention of the learned Judge was also drawn to the leading decision in (1894) ILR 18 Bom 369. The significant difference in the language of the Stamp Act and the Registration Act came up for discussion before the Privy Council in Ram Rattan v. Parma Nand, ILR (1946) 27 Lah 63 = (AIR 1946 PC 51). Indeed the Privy Council held that having regard to the use of the language of the words 'for any purpose' in S. 35 of the Stamp Act, an unstamped partition deed cannot be looked at even for the collateral purpose of proving a formal division in status. At p. 68 (of ILR Lah) = (at p. 52 of AIR), the Privy Council had adverted to the significance of the language and of the wider prohibition contained in the Stamp Act in contrast to the language in Ss. 49 and 17 of the Registration Act.
It is necessary to refer to the decision in Ponnuswami Chettiar v. Kailasam Chettiar, 1947-2 Mad LJ 116 = (AIR 1947 Mad 422), where Rajamannar, J. (as he then was), has followed the earlier decision in 63 Mad LJ 303=(AIR 1932 Mad 693) and passed a decree in favour of the plaintiff based upon the admission of the execution of the unstamped promissory note contained in the written statement of the defendant. The attention of the learned Judge does not appear to have been drawn to the several decisions referred to earlier and in particular to the observations of the Privy Council about the significant language of S. 35 of the Stamp Act. The attention of the learned Judge was also not drawn to the fact that in the latter decision in Achutaramana v. Jagannadham, 64 Mad LJ 79 = (AIR 1933 Mad 117), the earlier decision in 63 Mad LJ 303 = (AIR 1932 Mad 693) was not followed. With great respect to the learned Judges, the view taken in 63 Mad LJ 303 = (AIR 1932 Mad 693) and 1947-2 Mad LJ 116 = (AIR 1947 Mad 422) is not correct and is opposed to the plain language of Section 35 of the Stamp Act (vide also Mullah's criticism in Mullah's Stamp Act at p. 126).
On this portion of the argument it was urged on behalf of the respondent by Mr. Dorairaj, that this plea would not be open to the plaintiffs, who are in possession of the unstamped agreement. Learned counsel urged that the plaintiffs are wrong-doers and if the plaintiffs had produced the agreement of sale, even though unstamped, his client would have got the document admitted in evidence on payment of the requisite stamp duty and penalty, and a party who prevents the aggrieved party from validating the transaction by payment of stamp duty and levy of penalty cannot take advantage of the fact that the document is unstamped. In support of this contention learned counsel relied upon the judgment of Krishnaswami Nayudu, J. in Karthikeya v. Singaram, AIR 1956 Mad 693. It is true that the decision supports the contention urged on behalf of the respondent. There the defendant relied upon the written agreement of lease while involving the doctrine of part performance under S. 53A of the Transfer of Property Act. On the facts it was found that the alleged agreement of lease was unstamped and the plaintiff who was resisting the claim was in possession of the same. The defendant's claim was in possession of the same. The defendant's claim was upheld on the basis of the admission by the plaintiff, of the terms of the written agreement of lease though unstamped, and by reason of the fact that plaintiff was responsible for the suppression of the unstamped documents.
A perusal of the judgment shows that where a party is placed in such a predicament of not being able to validate a document by payment of penalty, he could nevertheless be awarded relief if the unstamped document was in the possession of the other side. With respect, we are unable to agree with this view. In the first place, as observed earlier, Sec. 35 of the Indian Stamp Act operates as a clear bar and even the admission of the defendant cannot be relied upon by the plaintiff to award any relief to him. The attention of the learned Judge does not appear to have been drawn to an earlier decision in Subbiah Pillai v. Muthathal Achi, 1946-1 Mad LJ 308 = (AIR 1946 Mad 457) in which it was held that even if the contesting party was in wrongful possession of an unstamped document, relief could not be given to the other side. Chandrasekhara Aiyar J. who delivered the judgment took the view that the prohibition contained in Section 35 of the Stamp Act was absolute, i.e., the document could not be acted upon for any purpose whatever and the fact that the document was being wrongfully retained by the other side would not make any difference. The learned Judge observed that once it was conceded that the document in question was unstamped, the suppression by the defendant of the document would not render the position for the plaintiff any the better, as the prohibition in S. 35 would be attracted and would come into play.
(10) Our attention was also drawn to some relevant decisions in England in which the view has uniformly been taken that, if the document is unstamped no relief could be granted, even though the document is in the hands of the contesting party, who is wrong-doer. In Rippiner v. Wright (1819) 106 ER 440, the agreement was unstamped and the contesting party took the document from the other side and destroyed it. Still, it was held that no relief could be granted, as the document was unstamped. It was held that consideration of equity would not come into play in the face of the express provisions of the statute and that the statute required the parties to take care that when a document was executed it should be properly stamped and that one of the risks attendant upon an omission to do this would be that if an accident happened and the agreement was not produced, there would be no remedy upon it whatsoever.
In Smith v. Henley, (1844) 41 ER 680, the same view was taken that a Court of Equity could not any more than a Court of Law receive parol evidence of the contents of a written agreement which appeared never to have been stamped, even where it was proved to have been fraudulently destroyed by the party against whom it was sought to be enforced. The argument, that just as in the case of Statute of Frauds, which was founded on public policy, relief could be awarded though against the express words of the revenue laws in the case of fraud was not accepted. The Lord Chancellor held that the Stamp Act was passed for the protection of the revenue and it expressly provided that the instrument should not be proved in evidence unless properly stamped and that in the face of the statute the Court had no power under any circumstances to dispense with that condition. It is unnecessary to refer to the other decisions on the point. The first defendant cannot be awarded any relief even assuming that the agreement is in writing and it is wrongfully withheld by the first plaintiff.
(11) Lastly, learned counsel for the appellants urged that, as the further case of the first defendant is that subsequent to the alleged written agreement of sale, there was an alternation of a material condition of the contract, namely, that the first defendant need not pay the balance of Rs. 3,000 within two or three months after the agreement of sale but can take his own time to discharge the mortgage in favour of the second defendant, which in this case took place in 1956, the first defendant is not entitled to invoke the doctrine of part performance. In a recent decision of the Supreme Court in Ramachandrayya v. Satyanarayana, , it has been pointed out that the doctrine of equity of part performance has been introduced in the Transfer of Property Act only in a limited form and that the strict conditions and the requirements of S. 53A of the Transfer of Property Act should be satisfied before granting relief to the parties concerned on the basis of the doctrine. In other words, even while granting relief to the party concerned on principles of the equitable doctrine of part performance, there cannot be any equity apart from the limits prescribed by S. 53A of the Act.
Sri Venkatarama Aiyar drew our attention to the statement of law in 8, Halsbury's Laws of England, 3rd Edn., Vol. 8, at p. 154, para 264, where it is stated that if the contract is one which is required by law to be made in writing, it cannot be varied by a new oral agreement even if the variation relates only to a part of the contract, which, if it is stood by itself, would not be required to be in writing. Learned counsel also invited our attention to some of the decisions dealing with this aspect including the decision in Vezey v. Rashleigh, 1904-1 Ch D. 634, in which it was held that parole evidence was not admissible to prove a subsequent agreement to vary the terms of a contract in writing and by law required to be in writing, although it could be admitted to prove rescission of such a contract. It is unnecessary to refer to the several other decisions on the point, as the principle is clear, namely, after the agreed variation or modification of some of the terms of the contract, the original written contract is not contract which binds the parties and the only contract which binds is the written contract along with the subsequent terms modified orally and, therefore, there is no written contract governing completely the rights and obligations of the parties as required by law. Under S. 53A the party who invokes the doctrine of part performance must have the document reduced to writing containing all the terms and conditions. Once it is found that the material portion, particularly the time for payment of the price, has been orally varied or modified, it is clear that there is no written agreement of sale containing all the terms of the agreement satisfying the requirements of S. 53A of the Transfer of Property Act. It has therefore to be held that the first defendant on her own showing is not entitled to invoke S. 53A of the Transfer of Property Act.
(12) In the view we have taken about the agreement of sale, it is unnecessary to refer to the other aspects of the matter. We are satisfied that on the evidence the first defendant obtained possession of the property in pursuance of the agreement of sale. There is great discrepancy in the evidence about the payments made to the mortgagee, when and by whom they were made and in what instalments. The account books of the mortgagee and the entries of receipt of payments do not tally with the evidence adduced in the case. We are also not satisfied with the evidence adduced on the side of the defendants as to the collection of rents made by either Kanna Pillai or the first defendant. The result, therefore, is that the first defendant has totally failed to make out the agreement of sale set up by her.
(13) In the result, the judgment of the learned City Civil Judge is set aside and the plaintiff's suit is decreed as prayed for, with costs both here and in the trial Court. It is needless to observe, that the first defendant shall be entitled to pursue her own remedies against the plaintiffs if she is entitled to any in respect of moneys alleged to have been paid either by her or on her behalf to the mortgagee, the second defendant, in the suit. Nothing said in this judgment should be understood as our expressing any final opinion as to who collected and received the rents and as to who exactly paid the moneys to the mortgagee, whether it was the plaintiffs or the first defendant, and whether as between them there is any claim for reimbursement. These are all matters which have to be agitated and considered in appropriate proceedings. The mesne profits due to the plaintiffs shall be enquired into and determined by the trial Court.
(14) Appeal allowed.