IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH FRIDAY, THE 20TH NOVEMBER 2009 / 29TH KARTHIKA 1931 RSA.NO. 878 OF 2004() ------------------------------ AS.92/1999 OF ADDL. DISTRICT COURT, N.PARAVUR OS.451/1996 OF PRINCIPAL SUB COURT,PARAVUR .................... APPELLANTS – APPELLANTS – DEFENDANTS: -------------------------------------------------------------- 1. KURIAN, S/O.MATHAI, CHAKKYATTIL HOUSE, THIRUVANKULAM VILLAGE. 2. SHEELA, W/O.KURIAN, IN DO. DO. BY ADV. SRI.S.V.BALAKRISHNA IYER, SENIOR ADVOCATE SRI.K.JAYAKUMAR SRI.P.B.KRISHNAN RESPONDENT(S) – RESPONDENT - PLAINTIFF: ----------------------------------------------------------------- GIRIJA, W/O.VASUDEVAN, ERAMPIL HOUSE, PIRAVAM, MUVATTUPUZHA. ADV. SRI.PEEYUS A.KOTTAM FOR R1 THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 20/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P.JOSEPH, J. = = = = = = = = = = = = = = = = = = = = = = = = R.S.A. NO.878 of 2004 = = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 20th day of November, 2009 J U D G M E N T --------------------- The subject matter of this litigation is 20 cents of land in respect of which, it is not disputed, Ext.A1, agreement for sale was executed by the appellants in favour of the respondent on 30.9.1995. Alleging that in spite of granting extension of time for two months appellants did not execute the document, respondent instituted suit in the trial court for specific performance of the said agreement. Appellants contended that there was no agreement for sale and instead, it was only a security for repayment of a loan. Trial court was not impressed by that contention and granted decree in favour of respondent directing specific performance. Appellants took up the matter in appeal. First appellate court confirmed the judgment and decree and dismissed the appeal. In the meantime on the application of respondent trial court executed the assignment deed in favour of respondent. Appellants, challenging judgment and decree of the first appellate court has preferred this Second Appeal. The following substantial questions of law are framed for a decision. (i) Is Section 92 of the Evidence Act a R.S.A. NO.878 of 2004 -: 2 :- bar to a plea that the agreement for sale is rally executed only as security for a loan transaction between the parties? (ii) In the absence of pleadings and in view of the non-production of the alleged supplementary agreement along with the plaint is lower appellate court correct in law in casting the burden to disprove Ext.A2 on the appellants? (iii) Has not lower appellate court committed an error of law in ignoring the admissions made by the respondent as P.W.1 which establish that she had no idea regarding the market price or the price she was paying for the property? (iv) Is respondent who has concocted a supplementary agreement entitled to the discretionary and equitable relief of specific performance? It is contended by learned counsel for appellants that first appellate court was not legally correct in accepting and acting upon Exts.A1 and A2 and in particular Ext.A2 which is not even pleaded in the plaint. It is contended that a perusal of Ext.A2 would show that it is the result R.S.A. NO.878 of 2004 -: 3 :- of fabrication. According to the learned counsel Section 92 of the Indian Evidence Act (for short, “the Act”) did not prevent appellants from proving the real nature of transaction. It is also argued that courts below went wrong in exercising discretion in favour of the respondent. 2. Exhibit A1 is the agreement for sale which it is not disputed by appellants was executed though according to them as security for repayment of the loan. Exhibit A1 recites that appellants agreed to sell 20 cents referred to in the plaint schedule in favour of respondent for a total consideration of Rs.1,25,000/- and received Rs.1,00,000/- by way of advance. Time for execution of the assignment deed was fixed as eight months. It is the case of respondent that on 29.5.1996 appellants executed Ext.A2, agreement in her favour receiving a further sum of Rs.20,000/- getting further extension of time for execution of the assignment deed by two months. Respondent was ready and willing to perform her part of the contract but appellants refused to perform their part. Hence respondent issued notice on 30.7.1996 demanding specific performance. There was neither reply nor compliance. Respondent gave evidence as P.W1 and proved Exts.A1 to A4. Exhibit A4 is the acknowledgment card produced to show that notice, copy of which is Ext.A3 was served on the appellants. Respondent also examined P.W2 who claimed to have R.S.A. NO.878 of 2004 -: 4 :- negotiated the deal. He supported respondent. Contra evidence is given by appellant No.1 as D.W.1. He claimed that he had borrowed Rs.1,00,000/- from the respondent and as security executed Ext.A1. On 28.5.1996 respondent demanded repayment of the entire amount but he requested two months’ further time. Respondent agreed to extend time by two months and obtained signed blank stamp papers from the appellants. 3. Section 92 of the Act cannot prevent the appellants from doing so. They are entitled to plead and prove the real nature of the transaction notwithstanding that execution of Ext.A1 is admitted. Question is whether appellants were able to prove that Ext.A1 was not intended to be an agreement for sale and instead was only a security for the loan transaction. 4. Main thrust of argument is based on Ext.A2 dated 29.5.1996 whereby appellants are stated to have received a further sum of Rs.20,000/- out of the balance sale consideration and obtained two months’ time for execution of the assignment deed. It is contended by learned counsel for appellants that courts below went wrong in accepting and acting upon Ext.A2 for more than one reason. According to the learned counsel though there is reference in the plaint about the alleged agreement dated 29.5.1996 there is no allegation of execution of the agreement as such in the plaint and R.S.A. NO.878 of 2004 -: 5 :- Ext.A2, agreement is not produced in the court along with the plaint. Counsel submits that Under Order VII Rule 18 of the Code of Civil Procedure and Rule 14(3) of the amended Code a document on which plaintiff relies could not have been produced in evidence without leave of the court and at any rate even if leave is granted that is only for the purpose of receiving the document in evidence but cannot be the basis for a decree in favour of the respondent. Learned counsel placed reliance on the decision in Narayanamurti v. Suryanarayana (AIR 1937 Madras 122). Learned counsel contends with reference to Ext.A2 that Ext.A2 by itself is an agreement for sale on which respondent could have laid the suit and in the absence of any specific reference in the plaint about that document and so far as it is not produced along with the plaint respondent may have been able to get it proved in evidence with the leave of the court but that cannot form the basis of a decree. 5. To appreciate that contention it is necessary to refer to Ext.A2. Though the preamble portion of Ext.A2 described that document as an agreement for sale, further recitals in Ext.A2 would show that by the said agreement on the very same terms and conditions stated in Ext.A1 time for execution of the sale deed referred to in Ext.A1 was extended by two months on appellants receiving a further sum of Rs.20,000/- from the respondent. On a reading of Ext.A2 R.S.A. NO.878 of 2004 -: 6 :- as a whole, I am unable to accept the contention of counsel for appellants that Ext.A2 itself is an agreement for sale on which respondent could have initiated an action. Exhibit A2 is only an agreement as per which on the same terms and conditions stated in Ext.A1 time for execution of Ext.A1 was extended by two months. Therefore Ext.A2 cannot be taken as the basic document on which respondent is laying her cause of action. 6. It is seen from the evidence of respondent as P.W1 that Ext.A2 was proved through her. No objection was raised to the marking of Ext.A2 on the ground that the said document was not produced along with the plaint or that there is no reference to that document in the plaint. Hence I am inclined to presume that the learned Munsiff granted leave to the respondent to prove Ext.A2. It is idle for the appellants to contend now that Ext.A2 ought not have been admitted in evidence for lack of plea about the agreement in the plaint or for its non-production along with the plaint. 7. It is argued by learned counsel for appellants that Ext.A2 is fraudulently created. According to learned counsel belated production of Ext.A2 in the trial court has to be taken into account in deciding whether Ext.A2 is genuine. Learned counsel contends that even in Ext.A3 there is no reference to Ext.A2. 8. Appellants have admitted signing Ext.A2. The column in R.S.A. NO.878 of 2004 -: 7 :- Ext.A2 for name and signature of witnesses remain blank. It is also seen that after the entry about the Scribe and document writer appellants have again signed. This according to learned counsel would indicate that Ext.A2 was prepared on signed blank paper. First appellate court pointed out that in the written statement filed on behalf of the appellants they have no contention that any signed blank stamp paper was obtained from them. According to the learned counsel there was no occasion for the appellants to contend so since neither Ext.A2 was referred nor produced along with the plaint. But it must be remembered that appellants were aware of the fact of their allegedly signing blank stamp papers. If their case that signed stamp papers were obtained from them were true, they would have in the normal course stated that in the written statement. When respondent was in the box it was suggested to her on behalf of appellants that at the time Ext.A1 was executed signed blank stamp papers were also obtained from the appellants. She denied that suggestion. 9. Even according to the appellants there was a transaction on 29.5.1996 though according to them it was when the respondent demanded repayment of the entire amount and they requested two months’ further time to repay the amount. Therefore it is not as if there was no transaction at all between appellants and respondent on R.S.A. NO.878 of 2004 -: 8 :- 29.5.1996 (on which day Ext.A2 was allegedly executed). Courts below have referred to Ext.A2, oral evidence of both sides and come to the conclusion that Ext.A2 was executed by the appellants. The mere fact that Ext.A2 was not referred to in the plaint or was produced in the court only subsequent to the filing of the suit are not by itself sufficient to reject the same. I must also bear in mind that finding of courts below as to the genuineness of Ext.A2 is based on evidence on record and it does not present any substantial question of law requiring interference by this Court. 10. It is then contended by learned counsel that at any rate courts below were not correct in holding that respondent was ready and willing to perform her part of the contract. This argument stems from the genuineness and acceptability of Ext.A2. According to the learned counsel if Ext.A2 were not accepted the version of respondent regarding payment of Rs.20,000/- towards the balance sale consideration on 29.5.1996 cannot stand in which case the balance amount payable as on the date of institution of the suit was Rs.25,000/- which respondent has no case that she was willing to pay. But that argument has no legs to stand as courts below have upheld the genuineness of Ext.A2 based on evidence which I do not find reason to interfere. 11. It is then argued by learned counsel that in the nature of R.S.A. NO.878 of 2004 -: 9 :- Ext.A1 which is “unilateral “ as is in the case of money transactions and in the light of the evidence given by P.W.1 courts below went wrong in holding that Ext.A1 is really intended as an agreement for sale of the property. Learned counsel has referred me to the evidence of P.W1. According to the learned counsel evidence of P.W1 would show that she has no idea about the price of the property. But going by Exts.A1 and A2 it is not a case where it lacks mutuality. The mere fact that agreements are signed only by the appellants do not mean that agreements are unilateral in character in that it is not enforceable at the instance of the appellants. Enforceability of the agreements by the appellants and its mutuality cannot depend upon the fact that the agreements are signed by appellants alone. The mere fact that if the agreements were to be enforced by the appellants and if execution of the agreements were denied by respondent, appellants may have to prove due execution of the same is also no ground to think that agreements lacked mutuality and are therefore not enforceable. 12. So far as the evidence of P.W1 is concerned she stated that she has no idea about the price of the property and that she is not able to state of the boundary of the property. But she claimed that before Ext.A1 she had been to the said property. She also stated that she knows the boundaries of the suit property but she was not able to R.S.A. NO.878 of 2004 -: 10 :- say which are the boundaries on the east, west, etc. Evidence of P.W1 would show that her husband negotiated the deal with the appellants. In that situation if P.W1 were not able to speak details about the transaction or value of the land in the locality that is not by itself sufficient to show that there was no intention for the respondent to purchase the property. After having gone through the evidence and hearing counsel on both sides and perusing judgment and decree I do not find reason to interfere with the judgment and decree under challenge. Substantial questions of law framed are answered accordingly. Second Appeal is dismissed. No costs. Interlocutory Application No.2442 of 2004 shall stand dismissed. THOMAS P.JOSEPH, JUDGE. vsv R.S.A. NO.878 of 2004 -: 11 :- THOMAS P.JOSEPH, J. =================== R.S.A. NO.878 OF 2004 =================== J U D G M E N T 20TH NOVEMBER, 2009