1 IN THE HIGH COURT OF KARNATAKA, BANGALORE DATED THIS THE [SECTION]th DAY OF OCTOBER 2012 BEFORE THE HON'BLE MRS.JUSTICE B.S. INDRAKALA RSA.No.3[SECTION]0[SECTION]/2006 BETWEEN: Sri. [ENTITY], S/o.[ENTITY] Since dead by his L.Rs 1. Smt. [ENTITY] W/o.Late [ENTITY] Aged 60 years 2. Sri. [ENTITY], S/o.late [ENTITY] Aged 40 years 3. Smt. [ENTITY] D/o.late [ENTITY] Aged 37 years 4. Sri. [ENTITY] S/o.late [ENTITY] Aged 29 years [SECTION]. Sri. [ENTITY] S/o.late [ENTITY] Aged 24 years 2 6. Sri. [ENTITY] S/o.late [ENTITY] Aged 20 years 7. [ENTITY] D/o.late [ENTITY] Aged 18 years All are residents of Malleshwara Village Kasaba Hobli, Kadur Taluk Chikmagalur District-[SECTION]77 [SECTION]48 APPELLANTS (By Sri.[ENTITY], Advocate) AND: Sri. [ENTITY], 64 years S/o. Late [ENTITY] R/o.Kadur Town, Kadur-[SECTION]77 [SECTION]48 Chikmagalur District RESPONDENT (By Sri.[ENTITY], Advocate) -0-0-0-0- This RSA is filed under [SECTION] of [ACT] against the judgment and decree dated 21.4.2006 passed in R.A.No.7[SECTION]/20002 on the file of the Presiding Officer, Fast Track Court, Kadur, allowing the appeal and reversing the judgment and decree dated 21.10.2002 passed in [CASE NUMBER] on the file of the Addl. Civil Judge (Jr.Dn), Kadur. 3 This appeal coming on for hearing, the same having been heard and reserved for pronouncement of judgment, the Court delivered the following:- JUDGMENT
The appellant-plaintiff herein filed [CASE NUMBER] on the file of the Additional Civil Judge(Jr.Dn.), seeking a declaration that the sale deed executed by him dated 20.8.1984 is nominal, void, never acted upon and sought cancellation of the same and also for consequential relief of permanent injunction restraining the defendant from alienating the property mentioned in the schedule to the plaint.
2. The said suit was partly decreed holding that the sale deed executed by the plaintiff in favour of the defendant was nominal, void and never acted upon by the judgment dated 21.10.2002. Aggrieved by the said judgment, the defendant preferred R.A.No.7[SECTION]/02 on the file of the FTC, Kadur. The said appeal was allowed setting aside the judgment passed in the original suit thereby dismissing the said suit [CASE NUMBER].
3. Aggrieved by the said judgment passed in RA.No.7[SECTION]/02 the plaintiff since deceased represented by his legal representatives filed the present second appeal inter-alia contending amongst other grounds that the first appellate Court erred in not appreciating the evidence in proper perspective, has further contended that the substantial question of law involved in this appeal is as to whether the appreciation of evidence and documents by the first appellate Court is perverse and the whether first appellate Court was justified in reversing the judgment and decree of the trial Court etc.
4. For the sake of convenience, the parties herein are referred to by their respective rank as appellant- plaintiff and respondent-defendant as arrayed before the Court of the first instance.
[SECTION]. [CASE NUMBER] was filed by the plaintiff alleging that as his brother who was unemployed wanted to purchase a lorry during February 1984, he entered into an agreement with one [ENTITY] of Mangalore to purchase the lorry bearing Regn.No.CNX 6003 for sale consideration of Rs.2,00,000/-; he paid Rs.20,000/- as advance on the date of the agreement and took possession of the said lorry from him. Further, it is contended that the balance of sale consideration of Rs.40,000/-was to be paid by the end August 1984 and the remaining Rs.1,40,000/- to be paid by the plaintiff towards the loan installments of the hire purchase account with Canara Bank.
6. It is specifically alleged that the plaintiff was running short of money; after taking possession of the lorry, his brother was running the said lorry for hire and the defendant was using the said lorry for transportation of stone from the quarry. Further it is alleged that the plaintiff approached the defendant for a loan of Rs.2[SECTION],000/- on 30.7.1984 so as to pay the balance sale consideration of the sale price of the lorry to which the defendant agreed to advance Rs.2[SECTION],000/- and got executed an on demand promissory note from the plaintiff; it was further agreed between the parties that the defendant was entitled to adjust the lorry hire charges towards the said loan and the balance if any was to be paid by the plaintiff with interest at 18% per annum. Thereafter, the defendant deducted Rs.3[SECTION]0/- which was due by the plaintiff as hand loan and paid loan amount of Rs.24,6[SECTION]0/- to the loan amount of the plaintiff by issuing cheques drawn on SBM, dated 30.7.1984 and 10.8.1984 for a sum of Rs.17,400/- and Rs.7,2[SECTION]0/- respectively in favour of one [ENTITY], the brother of the said [ENTITY]. It is further stated that the said cheques were so issued at the instance of the plaintiff's request with regard to the loan amount of Rs.2[SECTION],000/- advanced by the defendant; however, on presentation of the said cheques, the same were bounced and when the defendant enquired the plaintiff as to why the said cheques were dishonoured the plaintiff told the defendant that he needs one and half months time to adjust the amount due to unforeseen financial restraints; the defendant demanded further security of the immovable property for the aforesaid loan on the ground that the amount was huge and he was not prepared to hand over the cheques unless the plaintiff furnishes adequate security of immovable property. Further it is contended that as demanded by the defendant, the plaintiff executed a registered sale deed with respect to the schedule property with an assurance by the defendant that the sale deed is only a nominal deed for the purpose of security and that he would reconvey the property as soon as the loan is cleared; thus, the plaintiff executed a nominal sale deed in favour of the defendant for the sale consideration of Rs.10,000/- on 20.8.1984, but, even subsequently the cheques were dishonoured and the plaintiff was unable to fulfill the conditions; as such the said [ENTITY] cancelled the agreement and took possession of the lorry from the plaintiff by forfeiting the initial advance paid. In the circumstances, the plaintiff requested the defendant to reconvey the schedule property as the loan consideration had failed; the defendant went on postponing the event by giving appeasing reply; On 4.12.1984 there was a panchayath and the defendant agreed to reconvey the property in favour of the plaintiff by executing two sale deeds, one in favour of the brother of the plaintiff [ENTITY] and another in favour of the wife of the plaintiff by name [ENTITY]; accordingly, stamp papers were purchased and sale deeds were also written on the stamp papers, but, the defendant who had promised to execute the sale deed never turned up and failed to execute the same for nearly six months; the plaintiff persisted and demanded the defendant to execute the sale deed, but, the defendant lodged a complaint with Kadur Police making false allegations; after investigation charge sheet was also filed in C.C.No.684/8[SECTION] on the file of the JMFC, Kadur. However, the said case ended in acquittal on 14.7.1987. In the circumstances, the plaintiff has filed the above suit seeking cancellation of the deed as stated supra.
7. As against the case of the plaintiff, the defendant amongst other grounds pleaded that by paying sale consideration he obtained the sale deed with regard to the suit schedule property and he is in possession; after execution of the sale deed and taking possession of the property he got the katha transferred to his name i.e. the property was mutated in his favour and he is in peaceful possession and enjoyment of the same ever since the sale and it is also pleaded that the suit as brought is not maintainable in law.
8. On the basis of the said pleadings the trial Court framed the following issues:-
"1.Whether the plaintiff proves that, the sale deed dated 20.8.1984 in respect of suit properties in favour of the defendant is nominal, void, sham, without consideration and never acted upon?
2.Whether the plaintiff proves that, he is in lawful possession of the suit schedule properties?
3.Whether the plaintiff further proves that the defendant is interfering with his possession and enjoyment of the suit schedule properties?
4.Whether the plaintiff is entitled for the reliefs prayed for?
[SECTION].To what order or decree?"
The plaintiff chose to examine three witnesses out of whom P.W.1 is one of the L.R. of the plaintiff while P.Ws.2 is one [ENTITY] and P.W.3 is one [ENTITY], in whose favour cheques were issued and got marked the documents Exs.P1 to P8. On behalf of the defendant also three witnesses are examined and the documents Exs.D1 to D3 are got marked.
9. Heard the arguments.
10. In view of the submissions made, the points that arise for consideration are :-
"(1)Whether the impugned judgment and decree passed in R.A.No.7[SECTION]/02 on the file of the FTC, Kadur is liable to the set aside?
(2)What order?"
11. The learned counsel for the appellant submitted that the suit filed is well within time as per the cause of action shown in the plaint which is also duly substantiated by adducing evidence. Further, it is contended by the learned counsel for the appellant that the said sale deed was only a nominal sale deed executed as security for the loan availed by him from the defendant and the said sale deed was never acted upon etc. He also narrated in detail with regard to the pleadings put forth by the plaintiff as to how and under what circumstances the said sale deed was executed.
12. Learned counsel for the appellant further contended that under the sale deed there is no passing of consideration and there is no delivery of possession of the property to the purchaser; in other words, the contents of the sale deed is not acted upon and further, he submitted that in the said circumstances, as possession was not delivered, seeking possession of the property does not arise and as such the suit is not hit by [SECTION] of the [ACT]. With regard to limitation, he further submitted that the limitation starts to run when the plaintiff refused to reconvey the property.
13. Learned counsel for the appellant relying upon the decision rendered in BADAT AND CO.,BOMBAY vs EAST INDIA TRADING CO. (1963 STPL(LE) 2[SECTION]49 SC contended that under [SECTION], it is not sufficient for the defendant in his written statement to deny in general the grounds alleged by the plaintiff but he must specifically deny each allegation of fact of which he does not admit the truth except damages, mere evasive written statement will not be sufficient to substantiate the case of the defendant. In the said decision, it is observed as hereunder:
11. [SECTION] of the [ACT] prescribes, among others, that the plaintiff shall give in the plaint the facts constituting the cause of action and when it arose, and the facts showing that the court has jurisdiction. The object is to enable the defendant to ascertain from the plaint the necessary facts so that he may admit or deny them. [SECTION] provides for the filing of a written-statement, the particulars to be contained therein and the manner of doing so; [SECTION] and [SECTION] thereof are relevant to the present enquiry and they read:
[SECTION]. It shall not be sufficient for a defendant in his written statement to deny generally the grounds alleged by the plaintiff, but the defendant must deal specifically with each allegation of fact of which he does not admit the truth, except damages.
R.4 Where a defendant denies an allegation of fact in the plaint, he must not do so evasively, but answer the point of substance. Thus if it is alleged that he received a certain sum of money, it shall not be sufficient to deny that he received that particular amount, but he must deny that he received that sum or any part thereof, or else set out how much he received. And if an allegation is made with diverse circumstances, it shall not be sufficient to deny it along with those circumstances.
R.[SECTION]. Every allegation of fact in the plaint, if not denied specifically, or by necessary implication or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability.
Provided that the Court may in its discretion require any fact so admitted to be proved otherwise than by such admission.
These three rules form an integrated code dealing with the manner in which allegations of fact in the plaint should be traversed and the legal consequences flowing from its non-compliance. The written statement must deal specifically with each allegation of fact in the plain and when a defendant denies any such fact, he must not do so evasively, but answer the point of substance. If his denial of a fact is not specific but evasive, the said fact shall be taken to be admitted. In such an event, the admission itself being proof, no other proof is necessary.
Thus contended that on the allegations made with regard to the availing of loan for purchase of lorry to the brother of the plaintiff and also the circumstances under which the cheques were issued to one [ENTITY] and how they were bounced are not denied specifically, which has to be construed as having been proved by the plaintiff.
14. On perusal of the written statement, it is seen that no doubt as contended by the learned counsel for the appellant, the defendant has not specifically traversed the said facts except stating that all those allegations are extraneous to the suit transaction.
1[SECTION]. Learned counsel for the appellant relied upon another decision rendered in [PRECEDENT]; Ors rendered in [CASE NUMBER] dated 29th March 2010 and contended that as the plaintiff is the executant of the alleged document, the sale deed, suffice it if he seeks only the declaration that the deed is invalid non-est or illegal or it is not binding on him and he need not seek cancellation.
16. On perusal of the plaint, it is seen that the plaintiff not only sought declaration that the sale deed in question is nominal void or never acted upon but he has also sought cancellation of the said sale deed. In the foregoing circumstances, the said decision is of no relevance.
17. As against the said submission of the learned counsel for the appellant the counsel appearing for the respondent submitted that basically the suit is hit by limitation and also hit by the proviso to [SECTION] of the [ACT]. Further, he contended that the substantial questions of law involved in the proceedings can be formulated not only at the stage of admission of the second appeal, but, also subsequently at any time during the course of hearing of the appeal and as such two more substantial questions of law that require to be adjudicated upon in this appeal are that
(i) Whether the suit filed beyond three years from the date of sale deed namely 20.8.1984 is well within the time prescribed under the [ACT]?
(ii) Whether mere declaration sought to declare the sale deed as null and void without seeking consequential relief of possession which fact flows from the document itself is maintainable in view of the provisio to [SECTION] of the [ACT]?
18. With regard to one of the substantial question of law which requires to be considered is irrespective of whether defendant specifically pleaded in his written statement or not, do arise in the case i.e., with regard to limitation, it is seen that as nowhere in the document in question, anything is stipulated with regard to performance of any part of the contract by the defendant, it cannot be said that the [SECTION] to the [ACT] is applicable. Admittedly, as discussed supra, the suit is for declaration that the sale deed is invalid and for cancellation. Thus, the said 2 reliefs are bound by [SECTION] and [SECTION] mentioned in the schedule to the [ACT] which reads as under:
Description of Period of Time from which Suit limitation period begins to run
[SECTION]8. To obtain any Three yrs When the right to other decla- sue first accrues ration PART - IV SUITS RELATING TO DECREES AND INSTRUMENTS
[SECTION].To cancel or set aside an instrument Three yrs When the facts or decree or for entitling plaintiff the recission to have the instru-
of a contract ment or decree cancelled or set aside or the contract rescinded first become known to him
19. It is the specific case of the plaintiff that as on the date of the execution of the alleged sale deed itself, the same was executed as a security for the loan availed by him in the circumstances detailed in the plaint in which event, it has to be held that right to sue first accrued on the date of execution of the said document itself and hence, under [SECTION] the plaintiff ought to have filed the suit within three years from the said date.
20. With regard to applicability of [SECTION] regarding cancellation of the document, it is seen that the facts entitling the plaintiff to have the instrument cancelled also arose on the date of the execution of the sale deed. In this regard, further it has to be seen that as there is no covenant in the sale deed with regard to reconveyance of the property, it cannot be said that their existed any contract casting burden upon the defendant to perform so as to fix the date of commencement of limitation as the date when the contract rescinded first became known to him. Thus, in the circumstance of the case, when the plaintiff executed the sale deed as only a security and it was a nominal sale deed, dishonour of cheque subsequently on 1[SECTION].9.1994, when he got written two sale deeds on stamp papers on 14.12.1994, will not stop the limitation which has already begun to run and such act does not amount to acknowledgement so as to hold that a fresh period of limitation can be computed from the said date. In other words, that will not renew the period of limitation and it cannot also be said that there is any further renewal of limitation by act of parties as contemplated under the [ACT].
21. The cause of action is described as 20.8.1984 the date of execution of the sale deed, 1[SECTION].9.1984 when cheques were dishonoured and 4.12.1994 - when two sale deeds were written, last week of July 1997 when the defendants refused to reconvey. In this regard, it is to be seen that on perusal of the sale deed, the cheques were not the subject of consideration in the said sale deed. It is clearly mentioned that the amount was received by the vendor in cash. Thus, the said dishonour of cheque cannot be linked to the transaction dated 20.8.1984.
22. On perusal of Exs.P.6 and P.7, the cheques are said to have been issued for sale consideration under Ex.P.1 and D.1, it is seen that the same are dated 30.7.1984 and 10.8.1984 i.e., much earlier to the date of execution of the sale deed on 20.8.1984. Besides, in both the cheques it is seen that the same are having the printed year relating '60; in other words, the same have the printed format as date 196 and the dates read as 19684 which also gives room for suspecting the bonafides of both the drawer and the drawee. Be that as it may. Nothing is mentioned in the sale deed about the cheques and thus, the said dishonour of cheque cannot be linked to the transaction dated 20.8.1984.
23. With regard to the preparing a draft of the sale deeds as per Exs.P.2 and 3 and also the affidavits thereon marked as Exs.P.4 and P.[SECTION], it is seen that nothing is mentioned with regard to the nature of Ex.P.1. In other words, it is seen that it is also like an out and out sale deed. Thus, the sale also does not give any continuity to the original sale deed besides admittedly, Exs.P.2 to P.[SECTION] are not signed by the defendant. Thus, the same also cannot bind the defendant and the same also cannot renew the period of limitation. Hence, the above suit is filed beyond the period of limitation prescribed.
24. With regard to another substantial question of law as to the applicability of the proviso to [SECTION] of [ACT] as discussed supra, admittedly it is seen that under the document in question the property is said to have been delivered to the purchaser besides the defendant has also chosen to file certified copies of mutation register extract, RTC extract, patta book etc. which all discloses that the defendant was put in possession under the said sale deed dated 20.8.1984. The defendant has also filed tax paid receipts, endorsement issued by the DCC Bank as Ex.D.34 which discloses that it is a no-due certificate issued with regard to the lands so purchased by him - Ex.P.1 and Ex.D.1. Thus, it cannot be said that the defendant was not put in possession of the property. Besides, on perusal of the plaint it is also seen that it is not the case of the plaintiff that the defendant was interfering with his possession. On the other hand, he has sought the consequential relief of injunction restraining the defendant from alienating the schedule property.
2[SECTION]. In the foregoing circumstances, considering the nature of prayer sought, the contents of the documents which is under challenge under which the property is alleged to have been delivered to the purchaser and also the contents of the documents got marked by the defendant disclosing his possession over the property, the contention of the learned counsel for the respondent that under proviso to [SECTION] of the [ACT], the suit should fail for not seeking further relief of possession inasmuch as under the said proviso, it is clear that no Court can make any such declaration where the plaintiff will be able to seek title omits to do so. Thus, the said suit is also hit by [SECTION] of the [ACT].
26. With regard to the other substantial question of law formulated by this Court at the time of admission that, "Whether the contention of the appellants that the sale deed that was set up by the defendant could be called a nominal sale deed and if so, what are the circumstances that are required to be established in challenging the judgment impugned" is also answered holding that the lower appellate court has discussed at length with regard to the said aspects by appreciating both oral and documentary evidence placed on record and the same does not call for any interference. Hence, the following:
ORDER The above appeal is dismissed.
JUDGE Brn