IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE FIFTH DAY OF MARCH TWO THOUSAND AND TEN PRESENT HON'BLE SRI JUSTICE A.GOPAL REDDY SECOND APPEAL No.57 OF 2010 Between: Kaliklindi Venkata Subrahmanyewara Rao. … Appellant And Kalavakolanu Veera Venkata Anjaneya Apparao. … Respondent This Court made the following: HON’BLE SRI JUSTICE A.GOPAL REDDY SECOND APPEAL No. 57 OF 2010 ORDER:- The unsuccessful plaintiff in obtaining a decree for specific performance, filed this second appeal against the decree and judgment of II Additional District Judge, East Godavari at Amalapuram, dated 29.04.2008 in dismissing A.S.No.123 of 2004, confirming the decree and judgment of the Senior Civil Judge, Amalapuram, dated 21.04.2004 dismissing the suit O.S.No.31 of 1994, filed seeking specific performance of agreement of sale, dated 12.06.1991. The plaintiff instituted the above suit contending that the defendant, who owns the plaint schedule property, offered to sell the same for a sum of Rs.1,85,000/- by executing an agreement of sale-Ex.A1, dated 12.06.1991. The defendant directed the plaintiff to pay an advance amount of Rs.20,000/- to Penmatsa Sitaramaraju-P.W.2 and accordingly the plaintiff paid the said amount of Rs.20,000/- to him and he has been ready and willing to pay the balance amount and obtained the sale deed. But the defendant was postponing the same on some pretext or the other and the plaintiff got issued a legal notice, dated 19.07.1993, which was returned unserved and the plaintiff was ready to credit the balance of sale consideration to M/s.Padmasri Finance, Tadepalligudem to whom the defendant was indebted. The defendant contested the suit by filing written statement, denying the plaint averments, stating that he did not agree to sell the plaint schedule property and that he had taken a hand loan from Kalidindi Venkata Subrahmanyeswara Raju of Kasipadu i.e., plaintiff on 14.09.1982, who is a proprietor of M/s.Padmasri Finance company, Tadepalligudem and asked the defendant to execute registered agreement as security and as the defendant could not discharge the hand loan, he was asked to pay interest at 12% per annum and the defendant executed an agreement dated 17.06.1988 in favour of Penmatsa Sitaramaraju as security for Rs.1,50,000/- entering the plaint schedule property in that agreement, which was worth about Rs.9,00,000/-; that the plaintiff had also asked the defendant to execute another agreement of sale on the pretext that the earlier agreement was time barred and believing that version the defendant had executed the suit agreement under Ex.A1 as a security; that the defendant could not discharge the hand loan and failed to pay the interest as demanded by the plaintiff; that the defendant was not liable to execute any registered sale deed in favour of the plaintiff. On the basis of the above rival pleadings, the trial court settled the following issues: 1. Whether the plaintiff is entitled to specific performance as prayed for? 2. Whether the plaintiff has been ready and willing to perform his part of contract? 3. Whether the agreement of sale was executed as a security and not for sale of property as pleaded by the defendant? 4. To what relief the plaintiff is entitled? In order to prove the case of the plaintiff, P.Ws.1 to 5 were examined and Exs.A1 to A19 were marked. On behalf of the defendant, he himself examined as D.W.1 and Exs.B1 to B20 were marked. The trial court after appreciation of the oral and documentary evidence, on issues 1 to 4 held that the plaintiff never deposited the balance of sale consideration, as the transaction is one of a creditor and a debtor and not a purchaser and a vendor and the defendant did not receive any consideration under Ex.A1 agreement of sale and Exs.B1 to B15 shows that Ex.A1 was created only for the hand loan of Rs.20,000/- advanced by the plaintiff. Further, P.W.1 admitted that in all defendant received only Rs.20,000/- as advance, which clearly shows that the defendant has received only Rs.20,000/- as a hand loan. P.W.1 also admitted that he has no acquaintance with the defendant except in connection with the debt and deposed that he do not enquire as to how the defendant got the property and he cannot say how many rooms in the suit house are there and that he visited the suit house only once. P.W.4 deposed that P.W.2 prepared a rough agreement and gave it to P.W.1 for signature, the agreement in favour of P.W.2 was not shown to them at the time of Ex.A1. P.W.3 deposed that P.W.2 received Rs.20,000/- from P.W.1 in his presence. The entire cross-examination of P.W.4 that rough agreement was written on a stamp paper; P.W.2 scribed on the agreement and all the parties signed on it; the defendant was indebted to the finance company for a sum of Rs.20,000/-; P.W.1 lent hand loan of Rs.20,000/- to the defendant and the amount belongs to the finance company and that the suit agreement of sale was written in the name of P.W.2, supports the case of the defendant and accordingly dismissed the suit. On appeal being filed, the lower appellate Court framed two points namely: 1. Whether the suit agreement for sale was obtained in connection with a loan transaction and as security and if the defendant did not intend to sell the plaint schedule property to the plaintiff? 2. Whether the plaintiff was ready and willing to perform his part of contract and is entitled to the relief of Specific Performance? On point No.1, the lower appellate court held that in Ex.A1, dated 12.06.1991 it was mentioned that the property of the plaintiff was sold for a consolidated sum of Rs.1,65,000/- and out of the sole consideration a sum of Rs.20,000/- was to be paid to M/s.Padmasri Finance as the amount of advance received another agreement for sale dated 17.06.1988 executed in favour of P.W.2. The balance amount of Rs.1,65,000/- was agreed to be applied to discharge the debt due to M/s.Padmasri Finance at the convenience of the plaintiff and the balance amount has to be paid to the defendant. There is absolutely no reference to payment of any interest by the plaintiff to the defendant. The recitals in Ex.A1 would show a strong indication of a transaction not merely purchasing the property mentioned in Ex.A1, but it is a security. Under Ex.A3-registered agreement of sale, dated 17.06.1988 executed by the plaintiff in favour of P.W.2, the value of the plaint schedule property was agreed to be sold to P.W.2 for a consideration of Rs.1,50,000/- and a sum of Rs.20,000/- was received as an advance amount. P.W.2 agreed to pay that amount by 16.12.1988 firstly applying the amount to discharge the debt due by the defendant to pay to M/s.Padmsri Finance and nextly to pay the balance to the defendant. P.W.2 did not pay any amount to M/s.Padmasri Finance, but ultimately he cancelled the agreement by taking back Rs.20,000/- on 12.06.1991. In the agreement Ex.A3, there is a reference for payment of interest, if P.W.2 failed to pay the amount within seven months. In spite of recitals in Ex.A3, P.W.2 did not press the agreement, but indeed he took back the advance amount of Rs.20,000/- without interest and cancelled the agreement Ex.A3 and an endorsement Ex.A4 was made on the date of Ex.A1 showing payment of Rs.20,000/-. P.W.1 is not a stranger to M/s.Padmasri Finance, he admitted that he is a Managing Partner of the firm and stated that M/s.Padmasri Finance lent a sum of Rs.75,000/- to the defendant on 15.11.1987, where the defendant agreed to repay that amount with interest. The amount of Rs.75,000/- would become around Rs.1,63,000/- by 12.06.1991. Had P.W.2 discharged the debt due to M/s.Padmasri Finance soon after obtaining the agreement under Ex.A3, there would be some surplus amount the defendant could receive out of the balance of sale consideration payable under Ex.A3. Therefore, P.Ws.1 and 2 and M/s.Padmasri Finance conspired under the guise of obtaining agreement under Ex.A1 in the place of earlier agreement Ex.A3 in favour of P.W.2, leading to detriment to the defendant in a sum not less than Rs.45,000/-. The plaintiff after obtaining the agreement on 12.06.1991 had to pay the amount due to M/s.Padmasri Finance at the convenience of the plaintiff as per the terms of Ex.A1. P.W.1 deposed that he was ready and willing to perform his part of contract and demanded the defendant several times to execute sale deed and the defendant was postponing the execution of the sale deed and issued notice on 19.07.1993 but failed to discharge the loan amount to M/s.Padmasri Finance as agreed. When the statement of P.W.1 that an amount of Rs.75,000/- was borrowed from M/s.Padmasri Finance for the purpose of constructing the suit house which appears to be not true as the defendant got approval of the building plan on 13.06.1985 under Ex.B6 permission with plan. In view of the same, when the plaintiff was not ready and wiling to perform his part of the contract at any point of time and there is no averment that he was always ready and willing to perform his part of the contract, the lower appellate court rightly dismissed the above appeal by giving cogent reasons on appreciation of evidence, which does not give raise to any substantial question of law to be decided in this second appeal. Accordingly, the second appeal is dismissed. No costs. __________________ A.GOPAL REDDY, J 5th March 2010 lmv