RSA No.216 of 2011 (O & M) - 1 - IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.216 of 2011 (O & M) Date of Decision: 25.02.2011 Gurmeet Singh ……Appellant Versus Gurnam Singh …...Respondent Coram: HON’BLE MR. JUSTICE L. N. MITTAL. Present: Mr. Jasbir Singh, Advocate for the appellant. L.N. MITTAL, J (ORAL) CM No.632-C of 2011 Allowed as prayed for. Main Appeal. Gurmeet Singh-plaintiff, who has been partly successful in the Courts below, has filed the instant second appeal. Defendant-respondent-Gurnam Singh vide agreement dated 04.07.2002 agreed to sell the suit house measuring 200 square yards to the plaintiff for Rs.5,00,000/- and received Rs.1,70,000/- as earnest money and executed the aforesaid agreement. The agreement, however, provided that the defendant could repay the amount of Rs.1,70,000/- with interest at the rate of 2% per month to the plaintiff upto 20.01.2003, failing which the defendant shall have to execute sale deed of the suit house in favour of the plaintiff. Time for execution of the sale deed was extended many times i.e upto 20.03.2003, 20.04.2003, 20.06.2003, 20.07.2003 RSA No.216 of 2011 (O & M) - 2 - and finally upto 20.12.2003. The plaintiff alleged that he had always been ready and willing to perform his part of the contract, but the defendant committed breach thereof. Accordingly, the plaintiff sought possession of the suit house by specific performance of the agreement. The defendant inter alia pleaded that he borrowed Rs.1,70,000/- from the plaintiff and as security for the loan, the defendant executed the impugned agreement. The defendant repaid Rs.40,000/- on 17.04.2003 and also Rs.40,000/- on 17.05.2003 vide receipts issued by the plaintiff. Thereafter the defendant repaid Rs.70,000/- to the plaintiff without receipt. There was no intention of the parties regarding sale of the suit house and it was only a loan transaction. The defendant never agreed to sell the suit house to the plaintiff. Time was extended for repayment of the balance loan amount from time to time. Other averments of the plaintiff were broadly controverted. Defendant also raised some other pleas Learned Civil Judge (Senior Division), Patiala vide judgment and decree dated 02.02.2008, instead of decreeing the suit for specific performance of the agreement, decreed the suit for recovery of balance amount of Rs.90000/- with interest thereon at the rate of 12% per annum with effect from 04.07.2002 (the date of agreement) till date of decree of the trial Court and future interest at the rate of 6% per annum. Both parties preferred first appeals against judgment and decree of the trial Court. Learned Additional District Judge, Fast Track Court, Patiala vide common judgment dated 08.10.2010 dismissed both the appeals. Feeling aggrieved, plaintiff has preferred the instant second appeal. RSA No.216 of 2011 (O & M) - 3 - I have heard learned counsel for the appellant and perused the case file. Facts in this case are not very much in dispute as is also evident from the pleadings and evidence of both the parties. The defendant borrowed Rs.1,70,000/- from the plaintiff and executed the impugned agreement. The agreement itself stipulates that the defendant could repay the loan amount to the plaintiff with interest upto 20.01.2003 and in that event, the agreement was to stand cancelled. This stipulation in the agreement clearly demonstrates that it was only a loan transaction and the impugned agreement was executed only as security. In view thereof, specific performance of the impugned agreement has been rightly declined by the Courts below. In the aforesaid context, it is significant to notice that the defendant specifically pleaded in the written statement that he repaid Rs.40,000/- on 17.04.2003 and also Rs.40,000/- on 17.05.2003 to the plaintiff out of the loan amount. The defendant has also produced receipts Ex. DW-1/B and Ex.DW-1/C regarding the said repayments. The plaintiff admitted his signature on one of the said receipts whereas he stated about the other receipt that it might have been issued by him. Plaintiff’s signatures on both the receipts have also been proved by defendant’s evidence including testimony of handwriting expert. However, the plaintiff in spite of admitting his signatures on the receipts stated that he had not issued the receipts. Thus the plaintiff even tried to deny the receipt of Rs.80,000/- from the defendant, who had paid the same through two receipts to the plaintiff. Even in the plaint, the plaintiff did not plead about the said RSA No.216 of 2011 (O & M) - 4 - repayment. This conduct of the plaintiff further disentitles him to the discretionary relief of specific performance of the agreement. Moreover, since almost half of the loan amount stood repaid by the defendant within the extended period, for this reason also, the plaintiff is not entitled to the relief of specific performance of the agreement. The defendant also pleaded further repayment of Rs.70,000/- without receipt, but the same has been rightly discarded by the Courts below. From the aforesaid circumstances, it becomes manifest that there was no intention of the defendant to sell the suit house to the plaintiff while executing the agreement and rather the defendant had borrowed amount of Rs.1,70,000/- from the plaintiff and the agreement was executed only as security for the repayment of the said loan amount. Consequently, question of specific performance of the agreement does not arise when there was no intention of the defendant to sell the suit house. Extension of date of execution of the sale deed from time to time further strengthens the aforesaid conclusion. Learned counsel for the appellant contended that the agreement stipulated that the defendant shall execute sale deed of the suit house in favour of the plaintiff-appellant if the defendant failed to repay the loan amount with interest within the stipulated period. However, merely on account of this stipulation in the impugned agreement, the plaintiff cannot be granted relief of specific performance of the agreement when it is amply established that it was only a loan transaction and there was never any intention of the defendant to sell the suit house to the plaintiff. RSA No.216 of 2011 (O & M) - 5 - Learned counsel for the appellant also contended that interest till filing of the suit should be awarded at the agreed rate of 2% per month. This contention also cannot be accepted because interest at the rate of 2% per month would be highly excessive and oppressive. Trial Court has rightly granted interest at reasonable rate of 12% per annum from the date of agreement till date of decree of the trial Court whereas future interest has been awarded @ 6% per annum in view of mandatory provision of Section 34 of the Code of Civil Procedure. For the reasons aforesaid, I find no merit in the instant second appeal. Concurrent finding recorded by both the Courts below does not require interference in second appeal as the said finding is not shown to be perverse or illegal in any manner nor it is based on misreading or misappreciation of evidence. On the contrary, the said finding is fully justified by the evidence on record. No question of law, much less substantial question of law, arises for determination in the instant second appeal. Accordingly, the appeal is dismissed in limine. (L. N. MITTAL) JUDGE 25.02.2011 A.kaundal