RSA No.3986 of 2008 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.3986 of 2008 (O&M) Date of Decision: 21.5.2010 Ram Lal ..Appellant. Vs. Sunil Kumar ..Respondent. CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present: Mr.Sudhanshu Makkar, Advocate for the appellant. Mr.Shailendra Jain, Advocate for the respondent. RAKESH KUMAR JAIN, J. The defendant is in second appeal against the judgment and decree of both the Courts below whereby suit of the plaintiff for specific performance has been decreed. Plaintiff's case is that defendant entered into an agreement to sell dated 28.5.1993 for sale of a residential House No.70/4, Krishna Colony, Bhiwani for a consideration of Rs.60,000/- and received an amount of Rs.25,000/- as earnest money. The date for execution of sale deed was settled as 30.4.1994 but on that day the office of sub Registrar was closed due to Saturday so the plaintiff waited for the defendant in front of the office of Sub-Registrar along with remaining sale consideration but defendant did not turn up. The plaintiff got his presence marked on an affidavit from Executive Magistrate, Bhiwani. On next working day i.e. RSA No.3986 of 2008 (O&M) -2- 2.5.1994, plaintiff again went to the office of Sub Registrar but the defendant did not turn up. He again got his presence marked on an affidavit from the office of Sub Registrar. He thereafter, requested the defendant to accept the balance sale consideration and get the sale deed executed but on his refusal, the suit was filed. The defendant in the written statement totally denied the agreement. It was alleged that the disputed property was worth Rs.3 lacs or so, therefore, there was no occasion for him to enter into agreement for a mere sum of Rs.60,000/-. After filing of the replication, following issues were framed on 19.11.1996: (i)Whether the plaintiff is entitled to a decree of specific performance of the contract as prayed for on the ground alleged in the plaint? OPP. (ii)Whether the defendant had entered into an agreement with the plaintiff? OPP. (iii)Whether the plaintiff has no locus standi to file the present suit? OPD. (iv)Whether no cause of action accrued to the plaintiff to file the present suit? OPD. (v)Whether the suit is not maintainable in the present form? OPD. (vi)Whether the suit is time barred? OPD. (vii)Whether the suit has not been properly valued for the purposes of court fees and jurisdiction? OPD. (viii)Whether the suit has not been properly valued for the purposes of court fees and jurisdiction? OPD. (ix)Whether the suit is bad for non joinder and misjoinder of necessary parties? OPD. (x)Relief. After appreciation of the evidence available on record, both the Courts have concurrently upheld the execution of the agreement between RSA No.3986 of 2008 (O&M) -3- the parties and the readiness and willingness on the part of the plaintiff to perform his part of the contract. In the present appeal, two legal points have been raised by the counsel for the appellant, firstly, the agreement has been misread as a document of sale which was rather meant for loan transaction and secondly, the Court below should not have granted the decree keeping in view hardship of the defendant. In this regard, counsel for the appellant has read over agreement to sell (Ex.P/1) in which it is provided that the appellant/seller has received Rs.25,000/- as earnest money and remaining amount Rs.35,000/- would be received at the time of registration of sale deed on 30.4.1994. During this period, the appellant/seller would return the amount of Rs.25,000/- with interest @ 2% per month to the purchaser otherwise he would execute the sale deed in favour of the purchaser/respondent after receiving the balance sale consideration. In case, he would refuse to execute the sale deed, the purchaser would get the sale deed executed through the process of Court and in that circumstances, the seller would pay the entire expenses incurred in the legal proceedings. Learned counsel for the appellant has submitted that the dominant purpose of the agreement wherein it was agreed that he would return Rs.25,000/- with interest before the date fixed for execution of sale deed, tantamounts to an agreement of loan and not of sale. Thus, the Court below should not have decreed the suit for specific performance by execution of sale deed rather should have decreed the suit for recovery. In this regard, he has relied upon decision of the Supreme Court in the case of S.Rangaraju Naidu Vs. S.Thiruvarakkarasu 1995(3) RRR 298, decision of this Court in the case RSA No.3986 of 2008 (O&M) -4- of Gurbax Singh Vs. Labhu Ram 1996(1) RRR 509 and Prem Singh Vs. Mangu Ram 2004(3) LJR 241 and a decision of Bombay High Court in the case of Lonkaran Kishorilal Paliwal Vs. Bhaskar Rambhau Ghive and another 1994(1) LJR 152. On the other hand, counsel for the respondent has vehemently argued that document Ex.P1 could not be read as a document for raising loan rather it is a document in which defendant has categorically agreed to execute the sale deed in case of non refund of the earnest money with interest and since he failed to refund the earnest money and also failed to execute the sale deed, therefore, the same has been rightly ordered to be executed through the process of Court. He further submits that appellant is a dishonest person as he had been throughout denying the execution of agreement and now when both the Courts have given a concurrent finding of fact that agreement has been duly executed and the defendant has been always ready and willing to perform his part of the contract, he has tried to take shelter of the law laid down by the Supreme Court without its applicability to the facts of the present case. He also relies upon a decision of this Court in the case of Krishan Kumar Verma Vs. Narender Prabhakar 2009(4) PLR 109. Learned counsel for the respondent has also very categorically read the statement of the defendant which clinches the dispute between the parties. The defendant appeared as his own witness as DW1 and in his examination-in-chief he has categorically stated “I have not borrowed any money from Sunil Kumar on interest.” It is submitted that if it is the positive case of the appellant on oath that he had never borrowed any money from the respondent, then he had no cheek to say that agreement was RSA No.3986 of 2008 (O&M) -5- meant for taking loan and not for selling the property. It is also submitted that this point was never raised by the appellant before both the Court below, therefore, it could not raised for the first time before this Court. I have heard both the counsel for the parties and have perused the record with their assistance. The dispute in this case has started with the execution of document Ex.P1 which according to the plaintiff/respondent is an agreement to sell and according to the defendant/appellant is a document meant for raising loan. Interestingly, the defendant has been throughout denying the execution of document Ex.P1 which has been concurrently proved before both the Courts below besides the readiness and willingness on the part of the plaintiff/respondent for the purpose of execution of the sale deed. Taking advantage of the conditions enumerated in agreement Ex.P1, defendant/appellant has now tried to set up a new case that the agreement was meant for loan, therefore, plaintiff was entitled to alternative relief of refund with simple interest and not for execution of the sale deed. The judgment relied upon by the appellant, namely, in the case of S.Rangaraju Naidu Vs. S.Thiruvarakkarasu (supra) is not applicable because it was a case for recovery of Rs.15,500/- for which a promissory note was executed on 30.12.1977. On the same day, appellant executed an agreement of sale for the discharge of the very same promissory note debt, and since he was not in a position to pay the same, he agreed to sell three plots of land to an extent of 7,500 sq.feet for the same consideration. As he did not execute the sale deed, a civil suit was filed against him for specific performance of the agreement which was decreed and was confirmed upto RSA No.3986 of 2008 (O&M) -6- to the stage of second appeal. However, the Supreme Court held that agreement to sell was only collateral to the promissory note and there was no consensus of ad idem to sell the land under the agreement, therefore, pre dominant object was recovery of the dues with interest and not the intention to sell the land. In the case of Gurbax Singh Vs. Labhu Ram (supra) finding of fact was recorded by the Court below that document which was executed in the shape of agreement to sell was in fact a document meant for advancement of loan. This Court upheld the decision by dismissing the Regular Second Appeal. In the case of Prem Singh Vs. Mangu Ram (supra), it has been held that if the Court comes to the finding that document was executed only to secure loan and ensure its repayment, it is only a money transaction without any intention to sale and purchase the land. In the case of Lonkaran Kishorilal Paliwal Vs. Bhaskar Rambhau Ghive and another (supra), it was held that specific performance of an agreement to sell is ordinarily to be granted unless it is shown that damages would constitute adequate relief. In that case also, plea was that the agreement was a security for a loan transaction but he agreed to sell his property under pressure for a consideration, which was inadequate. To my mind, all the judgments relied upon by the counsel for the appellant are not applicable to the facts and circumstances of the present case for the reason that defendant has been altogether denying execution of the agreement to sell and had even stated as DW1 that he had never secured or borrowed any money from the plaintiff on interest. If the stand of the defendant is that he had never borrowed any money on interest from the plaintiff then it could not be said that the agreement which he has been RSA No.3986 of 2008 (O&M) -7- denying throughout was meant for raising loan on interest. Moreover, the defendant has never offered to repay the said amount which he has now claimed as loan. He has been throughout denying the agreement. Therefore, I fully agree with the judgment relied upon by the learned counsel for the respondent in the case of Krishan Kumar Verma Vs. Narender Prabhakar (supra) in which it has been held that defendant/appellant was not honest. He denied the execution of the agreement and claimed it to be forged and fabricated document though he himself was signatory to the agreement and then alleging it to be a loan transaction. There is another aspect of the matter that the question which has now been raised before this Court, was never raised before the Courts below, therefore, the same could not be raised for the first time in second appeal. In view of the aforesaid discussion, I do not find any merit in the present appeal and as such, the same is hereby dismissed though without any order as to costs. (Rakesh Kumar Jain) 21.5.2010 Judge Meenu