IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN THURSDAY, THE 22ND JULY 2010 / 31ST ASHADHA 1932 SA.No. 261 of 1997() ---------------------------- AS.261/1993 of IV ADDL. DISTRICT COURT, ERNAKULAM OS.406/1991 of PRL.MUNSIFF COURT,ERNAKULAM .................... PLAINTIFF/ RESPONDENT/ APPELLANT(S): ------------------------------------------------------------ SAROJINI, THRIKKAKKARA, SOUTH VILLAGE, KAKKANADU. BY ADV. SRI.R.K.MURALEEDHARAN DEFENDANT/ APPELLANT/RESPONDENT(S): ----------------------------------------------------------------- DR. JAYA, FLAT NO.3/9/50 N.G.O. QUARTERS, THRIKKAKARA SOUTH VILLAGE, KAKKANADU BY ADV. SRI.JAIJI ITTAN THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 22/07/2010 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss P.BHAVADASAN, J. ------------------------------------- SA No.261 of 1997 ------------------------------------- Dated 22nd July 2010 Judgment The plaintiff in OS No.406/91 before the Munsiff's Court, Ernakulam, is the appellant. 2. The Trial Court decreed the suit in her favour. The lower Appellate Court chose to reverse the same. Hence the Second Appeal. 3. The suit was one for cancellation of Ext.A1 sale deed dated 28.07.1987. The plaint schedule property belonged to the father of the plaintiff and on his death, it devolved on the plaintiff. Since the plaintiff was in need of money, she is said to have approached the second defendant, who directed her to the first defendant. She needed money to go abroad in search of a job. According to the plaintiff, she mortgaged the property and obtained a sum of Rs.11,500/- as loan from the first defendant. She would assert that as per the agreement, when the amount SA 261/97 2 was repaid, the mortgage was to be released. The further agreement was that the building in the plaint schedule property will be leased out on rent and the income derived therefrom will be adjusted towards the interest payable by the plaintiff. According to the plaintiff, all these stipulations were incorporated in the document registered on 28.07.1987. Subsequent to the execution of the document, it is claimed that amounts were sent to the plaintiff by the first defendant. When she returned home and offered to repay the debt, the first defendant is said to have declined to release the mortgage. The first defendant is stated to have claimed that she has spent more than Rs.35,000/- for the renovation of the building. When the plaintiff found that the first defendant was not amenable to release the mortgage, she approached the Commissioner of Police. Since she could not get any reliefs from there, ultimately, she approached the court. 4. The defendants filed a joint written statement. According to them, Ext.A1 sale deed was executed after SA 261/97 3 receiving the consideration made mention of therein. They denied the allegation that the plaintiff had signed the document, thinking that it was a mortgage deed. According to them, the plaintiff knew that it was a pakka sale deed. The allegation of entrustment of articles with the defendant is without any basis. They denied that a mortgage had been created on that basis. The plaintiff had received money from the first defendant. The first defendant denied that she is a money lender. She claimed that she has spent more than Rs.35,000/- for modification and reconstruction of the building in the plaint schedule property. Since Ext.A1 is a sale deed, there is no question of releasing the mortgage. Pointing out that none of the allegations are sustainable in law, the defendants prayed for dismissal of the suit. 5. The Trial Court raised necessary issues for consideration. The plaintiff examined PWs 1 to 5 and had Exts.A1 to A11 marked. From the side of the defendants, DW1 was examined and Exts.B1 to B7 were marked. SA 261/97 4 6. On a consideration of the evidence in the case, the Trial Court came to the conclusion that the claim made by the plaintiff is true and that what was intended was to provide the property only as a security and there was no intention to sell the property. Accordingly, the sale deed stood cancelled. 7. The first defendant took up the matter in appeal as AS No.261/93 before the District Court, Ernakulam. The District Court, Ernakulam differed from the findings of the Trial Court and dismissed the suit. Hence the Second Appeal. 8. The following questions of law are seen formulated in the Second Appeal : “1) When the plaintiff set up a case that Ext.A1 was intended only as a mortgage and adduced evidence to prove the same, is not the non- examination of the first defendant too fatal to her defence and is the lower appellate court correct in law stating that non-examination of the first SA 261/97 5 defendant will not in any way, affect the case of the plaintiff. 2). When Ext.A1 shows a consideration of Rs.,12,000/- and admittedly, amounts have been advanced over and above the consideration shown in Ext.A1, is it not consistent with the case of security as set up by plaintiff rather than outright sale as set up by the first defendant ? 3) Has not the lower Appellate Court gone wrong in ignoring the admission made by the first defendant before the people's council for Social Justice as evidenced by Ext.A3 letter in return of the property by receiving amounts including those spent by the first defendant for the repairs of the house ?” 9. The learned counsel appearing for the appellant pointed out that the lower Appellate Court was not justified in interfering with the well-considered finding rendered by the Trial Court. The sequence of events have SA 261/97 6 been properly appreciated by the Trial Court and the findings are based on evidence on record. Emphasis was laid by the learned counsel on the fact that for reasons best known to them, the first defendant chose to stay away from the box and therefore, the Trial Court drew an adverse inference against her. In fact, DW2, who had nothing to do with the transaction, was more interested in upholding the sale deed. That itself was suspicious. Apart from that, the learned counsel pointed out that it is inconceivable that after the sale deed has been executed and the sale consideration has been paid, the vendor will continue to send amounts to the vendee. This vital aspect, according to the learned counsel, was omitted to be noticed by the lower Appellate Court and that has resulted in the passing of the impugned Judgment. 10. It must be said that there is considerable force in the above contention. The case of the plaintiff was that since she was in dire need of money to go abroad in search of a job, she approached the second defendant, SA 261/97 7 who directed her to the first defendant. According to the defendants, the plaintiff offered to sell the property and the first defendant agreed to purchase the same. Thus Ext.A1 was entered into between the plaintiff and the first defendant. However, from the evidence, it is seen that the transaction is something else. It has come out in evidence that the so called sale consideration was paid in instalments. It was also disclosed that even after the execution of Ext.A1 sale deed, the vendee continued to send amounts to the vendor. Of course, at the time of evidence, an attempt was made by the defendants to characterise the subsequent payments as part of a different transaction. But, that was not successful, for the simple reason, it had no foundation in the pleadings. The lower Appellate Court seems to have placed considerable reliance on the letters said to have been sent by the plaintiff to the first defendant. Those letters do mention about the sad plight in which the plaintiff was placed. But, those letters will have to be read in the context of other SA 261/97 8 items of evidence available in the case. Read in isolation, they may carry the meaning adopted by the lower Appellate Court. It is significant to notice that the Trial Court had considered the recitals in the letters and had come to the conclusion that it can be seen from those letters that what was intended was only to provide the property as a security and it was not an outright sale. 11. It is true that the document is a registered document. Too much emphasis seems to have been given by the lower Appellate Court to this aspect of the case. The plaintiff had examined PWs 2 and 4 in support of her case. True, PW1 was found to be related to the plaintiff. His evidence was found to be trustworthy and the Trial Court accepted the same. His evidence shows that he was aware of the transaction and the understanding was that when the loan amount is repaid, the property will be re- conveyed. Both PWs2 and 4 have stated that major portion of the transaction was with the involvement of the second defendant and the first defendant had very little role SA 261/97 9 to play. 12. As rightly noticed by the Trial Court, the conduct of the first defendant is suspicious. It is here that one has to notice Ext.A3 document. From the evidence, it is seen that the plaintiff had approached the Peoples Council for Social Justice and reliefs. Ext.A3 shows that they had intervened in the matter and the plaintiff was informed about the stand taken by the first defendant. The communication said that the first defendant was prepared to re-convey the land if Rs.35,000/- was paid to her. If, as a matter of fact, it was not at the instance of the second defendant how the transaction was entered into, one would have expected the first defendant to mount the box and depose to her case. She remained away without mounting the box. This compels the court to draw an adverse finding against her. 13. It is also surprising to note that the defendants have filed a joint written statement. One fails to understand what was the common interest between them. SA 261/97 10 If the second defendant was only a broker, his role was over when the sale deed was executed. He had nothing more to do. But, he takes active role in the subsequent proceedings also. The Trial Court has considered all these aspects and has come to the conclusion that the transaction was suspicious. At any rate, Ext.A1 cannot be treated to be a sale deed, consciously executed by the plaintiff. 14. The lower Appellate Court has not considered Ext.A3 at all and also the evidence of PWs 2 and 4. The lower Appellate Court was more carried away by the letters said to have been sent by the plaintiff and the factum of registration of the sale deed. So, the lower Appellate Court has missed many vital evidence and therefore, it is felt that the lower Appellate Court has erred in its finding. Accordingly, this appeal is allowed. The Judgment and decree of the lower Appellate Court are set SA 261/97 11 aside and the decree of the Trial Court is restored. There will be no order as to costs. P.BHAVADASAN, JUDGE sta SA 261/97 12