IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 04.03.2011 CORAM: THE HONOURABLE MS.JUSTICE R.MALA Appeal Suit No.1126 of 2007 Anusuya Devi .. Appellant/Defendant Vs 1.K.Panchanathan 2.K.V.Unnikrishnan .. Respondents/Plaintiffs Prayer: This Appeal Suit (First Appeal) preferred under Section 96 of C.P.C., against the judgment and decree passed in O.S.No.23 of 2002 dated 29.06.2007 on the file of the Additional District Court (Fast Track Court No.5) Coimbatore Camp, Tiruppur. For Appellant : Mr.R.Margabandhu for A.K.Sridharan For Respondents : Mr.T.Murugamanickam for RR1 and 2 JUDGMENT This Appeal Suit (First Appeal) arises out of the judgment and decree passed in O.S.No.23 of 2002 dated 29.06.2007 on the file of the Additional District Court (Fast Track Court No.5) Coimbatore Camp, Tiruppur. 2.The averments made in the plaint are as follows: (i) The suit property is absolute property of the defendant. On 13.10.1997, the defendant had entered into an agreement of sale with the plaintiffs for the sale of the suit property and the sale price was fixed at Rs.9,75,000/-. The plaintiffs paid as an advance of Rs.7,00,000/- to the defendant by way of cash and agreed to pay the balance sale consideration of Rs.2,75,000/- to the defendant within 15 months from the date of sale agreement. (ii) At the time of execution of the sale agreement, the defendant had handed over the original title deeds dated 24.06.1987 to the plaintiffs. The plaintiffs were always ready and willing to perform their part of contract. But the defendant refused to receive https://hcservices.ecourts.gov.in/hcservices/ the balance sale consideration from the plaintiffs and postponed the execution of the sale deed. So the plaintiffs issued notice to the defendant on 09.09.1998 and the same was acknowledged by the defendant on 11.09.1998, but the defendant neither issued reply nor executed the sale deed. (iii) The defendant made an attempt to alienate the suit property to the third parties. Hence the plaintiffs made an advertisement in the issue of Dina Malar dated 12.03.1999. Therefore, the plaintiffs are constrained to file a suit for specific performance and alternatively, to get refund of an advance amount with interest at 24% per annum and prayed for a decree. 3.The gist and essence of the written statement filed by the defendant are as follows:- (i) The suit property is purchased out of the sale consideration paid by the husband of the defendant in her name. The defendant never intended to sell the suit property either to the plaintiffs or to anybody. The defendant was compelled to help, some amount of loan borrowed from Santhilakshmi Finance by her uncle and family friend named Somasundaram. The said Somasundaram asked her to produce the title deeds of the suit property and some signatures of the defendant and also promised her to return the title deeds within one or two years. The defendant, without getting any permission from her husband and without his knowledge, handed over all the title deeds of the suit property to the said Somasundaram on 13.10.1997 and the said Somasundaram also received some signatures of the defendant on typed stamp papers at the office of Tiruppur Sub-Registration. At the time, the plaintiffs were not present. The value of the suit property is more than Rs.30,00,000/-. The defendant is never willing to sell the suit property. (ii)There is so many legal contract among the defendant and the plaintiffs. To the knowledge of the defendant, her uncle Somasundaram has borrowed a sum of Rs.5,00,000/- from the plaintiffs' Santhilakshmi Finance Company. For the said loan only, her uncle Somasundaram deposited the title deeds of the defendant for security and also gave some cheques to the plaintiffs' finance unit. Padmanaban, one of the partners of the plaintiffs' finance company lodged a complaint against Somasundaram and a criminal case in C.C.No.451 of 1999 was pending at Judicial Magistrate No.1, Tiruppur. (iii) Since the defendant's husband is the owner of the suit property, he is also a necessary party to the suit. After receipt of the notice, the defendant approached her uncle. Her uncle promised to hand over the documents after settled the finance loan to the plaintiffs and showed some receipt for the proof of payment paid to the plaintiffs' finance towards interest and principal. https://hcservices.ecourts.gov.in/hcservices/ (iv) The defendant has no idea to alienate or encumber the suit property in future. No cause of action for the suit. Hence she prayed for the dismissal of the suit. 4.The trial Court, after considering the averments both in the plaint and the written statement and arguments of both the counsel, framed three issues and considering the oral evidence of P.W.1 to P.W.3 and D.W.1 to D.W.4 and documentary evidence of Exs.A1 to A5 and Exs.B1 to B7, decreed the suit, against which, the appellant/ defendant has come forward with this First Appeal. 5.After hearing the arguments of both sides counsel, the following points for consideration are framed: 1. Whether the trial Court is correct in held that Ex.A1 is a sale agreement? 2.Whether the trial Court is correct in granting equitable relief of decree of specific performance? 3.Whether the judgment and decree passed by the trial Court are sustainable? 4.To what relief, the appellant/defendant is entitled to? 6.The learned counsel for the appellant/defendant submitted that the respondents are the plaintiffs filed a suit for specific performance on the basis of Ex.A1-a registered sale agreement for Rs.9,75,000/- and alleged to be paid Rs.7,00,000/- as an advance and 15 months time has been given for the execution of the sale deed. But Ex.A1 was executed only for the security purpose for the loan borrowed by Somasundaram, who is none other than uncle of the appellant/defendant. He also received the title deeds under Ex.A2-a sale deed in favour of the appellant/defendant and the same was pledged to borrow a loan from the Santhilakshmi Finance, where the respondents/plaintiffs are partners. He further submitted that the respondents/plaintiffs are not always ready and willing to perform their part of contract. They issued notice only on 09.09.1998 under Ex.A3 and an acknowledgement for the same was marked as Ex.A4. So they were never ready and willing to perform their part of contract. He further submitted that the respondents/plaintiffs have no financial status to perform their part of contract. Somasundaram, who is the uncle of the appellant/defendant, was examined as D.W.2 to prove Ex.A1 was executed for the security for the money transaction. Viswanathan is one of the attestor in Ex.A1, who was examined as P.W.2. He further submitted that during the pendency of the suit, the matter was compromised and for the same, a memo was filed on behalf of the appellant/defendant and she paid towards part satisfaction, which was marked as Ex.B1. As per Ex.B3, a complaint was lodged by one Padmanaban against Somasundaram under Section 138 of Negotiable Instruments Act and the same was taken on file in Crime No.451 of 1999 and then, Somasundaram was acquitted, which was marked https://hcservices.ecourts.gov.in/hcservices/ as Ex.B4. Ex.B5 is a letter sent by appellant/defendant to the Commissioner of Municipality, Tiruppur, to verify whether P.W.1, the first respondent/first plaintiff is having residence at Tiruppur and Ex.B6 is an acknowledgement card sent by the Commissioner of Municipality, Tiruppur. Ex.B7 is a reply sent by Tiruppur Municipality to Ex.B5. So the trial Court has not considered all the above documentary evidence with proper perspective. He further submitted that the respondents/plaintiffs have not approached the Court with clean hands, since they denied the settled out of Court. To prove the settlement out of Court, one Saravanan, an Advocate of the appellant/defendant was examined as D.W.3. To substantiate his arguments, the learned counsel for the appellant/defendant relied upon the decisions of this Court as well as Apex Court and prayed for allowing the appeal. 7.Refuting the same, the learned counsel for the respondents/plaintiffs submitted that Ex.A1 is a registered sale agreement. As per Section 92 of Indian Evidence Act, the appellant/defendant is not entitled to give evidence gainst Ex.A1, which is a registered document. So her evidence against Ex.A1 should be excluded. To substantiate his arguments, he relied upon the decisions of this Court as well as Apex Court. He further submitted that he issued notice under Ex.A3 on 09.09.1998 and the same was received by the appellant/defendant on 11.09.1998, but no reply was sent for the same. The respondents/plaintiffs also made public notice in the issue of Dina Malar under Ex.A5, directed the appellant/defendant not to encumber and alienate the suit property. Even then, the appellant/defendant kept quiet all along and she never disputed that Ex.A1 was executed only for the security purpose for the money transaction between Somasundaram and Santhilakshmi Finance. He further submitted that during the pendency of the suit, a memo towards part satisfaction, was filed by the appellant/defendant that the respondents/plaintiffs have allegedly received the portion of the amount is false. In para-3 of Ex.B3, it was stated that as the loan amount of Rs.5,00,000/- was obtained by Somasundaram only on 16.11.1998. He further submitted that the receipt for Rs.5,00,000/- under Ex.B2 was not pleaded in the written statement and Ex.B2 was also not marked through D.W.1. He also narrated the facts that after filing the suit, an ex-parte decree was passed. Thereafter, he filed a petition to set aside the ex-parte decree along with the petition to condonation of delay under Section 5 of Limitation Act. The appellant/defendant deposited the entire amount and subsequently, the said ex-parte decree was set aside. Since the appellant/defendant has not contested the suit, again an ex-parte decree was passed. At the time, the respondents/plaintiffs filed a petition to amend the decree and the appellant/defendant herein made an endorsement in the same that he has no objection to amend the decree. So in E.P.No.9 of 2005, a sale deed was executed and registered in favour of the respondents/plaintiffs, subsequently he come forward with the https://hcservices.ecourts.gov.in/hcservices/ petition to set aside the ex-parte decree along with the petition to condonation of delay under Section 5 of Limitation Act. D.W.3/Saravanan, Advocate in his evidence, he has candidly admitted that he has written the entire memo, except the amount "for Rs.6,50,000/-". He has also stated that he handed over the memo to his client and his client alone filed the same before the Court. So the appellant/defendant herein has not putforth her version correctly. So the attitude of the appellant/defendant has to be taken into consideration by the trial Court while granting of decree of specific performance and thus he prayed for the dismissal of the appeal. 8.Point No.1 (i)Considered the rival submissions made on both sides. (ii)Admittedly, the suit property was purchased by the appellant/defendant under Ex.A2 on 24.06.1987. Even though the appellant/defendant herein has raised a plea that major portion of sale consideration was paid by her husband and he is also an owner of the suit property, he should be added as a necessary party in the suit. But she has not putforth any arguments regarding the same. Furthermore, in her oral evidence, she has fairly conceded that she is the owner of the property. (iii)Ex.A1 is a registered sale agreement between the appellant/defendant and the respondents/plaintiffs. The sale consideration was alleged to be fixed at Rs.9,75,000/- and Rs.7,00,000/- was paid as an advance and 15 months time was granted for the payment of balance sale consideration of Rs.2,75,000/-, for which, the reason assigned by the appellant/defendant is that her child is studying nearby school, so she sought 15 months time to shift her house. (iv) Now this Court has to decide that whether Ex.A1 is a sale agreement or it was executed only for the security purpose for the money borrowed by Somasundaram. It is pertinent to note that D.W.1, the appellant/defendant in her evidence, has stated that Somasundaram/D.W.2 is her uncle, in her cross-examination, she has fairly conceded that Somasundaram is neither her maternal uncle nor her paternal uncle. Somasundaram is her junior paternal grand father's son-in-law and his wife is Kannammal. Further she has stated that she has not accompanied with Somasundaram, while he borrowed money. (v) At this juncture, it is appropriate to consider Ex.B3, in which, it was stated that Somasundaram is the proprietor of the concern M/S.Balaji Traders. He borrowed Rs.5,00,000/- by way of promissory note and agreed to repay the same. He gave the cheque https://hcservices.ecourts.gov.in/hcservices/ dated 21.07.1999 for Rs.5,00,000/- which was returned as "Account Closed". So one Padmanaban, who is the brother of the first respondent/first plaintiff was lodged a complaint against Somasundaram and the same was ended that Somasundaram was acquitted, which was evidenced by Ex.B4. In that it was stated that the complainant has to file the account books and other documents to prove that the accused was guilty. So the learned Magistrate came to the conclusion that the complainant has not proved that the accused was guilty under Section 138 of Negotiable Instruments Act. But D.W.1-the appellant/defendant herein is not a party to that proceedings. D.W.1 in her cross-examination, accepted the execution of Ex.A1-sale agreement and it is a registered one. But it is the duty bound upon the appellant/defendant to prove that Ex.A1 was executed only for the security for the amount borrowed, by way of convincing, cogent and concrete evidence. In Ex.A1, Somasundaram is an attestor and the original document was handed over to Somasundaram. (v)The learned counsel for the respondents/plaintiffs relied upon the decision reported in 2001-1-L.W.855 (S.Saktivel(dead) by Lrs. V. M.Venugopal Pillai and Ors.), in which, it reads as follows: "Held: What S.92 (of the Evidence Act) provides is that when the terms of any contract, grant or other disposition of the property, or any matter required by law to be reduced in the form of document, have been proved, no evidence of any oral agreement or statement is permissible for the purpose of contradicting, varying, adding or subtracting the said written document. However, this provision is subject to proviso 1 to 6 but we are not concerned with other provisos except proviso 4, which is relevant in the present case. The question then is whether the defendant-appellant can derive any benefit out of proviso(4) to Section 92 for setting up oral agreement arrived at in the year 1941 which has the effect of modifying the written and registered disposition. Proviso (4) to Section 92 contemplates three situations, ... In sum and substance what proviso (4) to Section 92 provides is that where a contract or disposition, not required by law to be in writing, has been arrived at orally, then subsequent oral agreement modifying or rescinding the said contract or disposition can be substantiated by parol evidence and such evidence is admissible. Thus if a party has entered into a contract which is not required to be reduced in writing but such a contract has been reduced in writing, or it is oral, in such situations it is always open to the parties to the contract to modify https://hcservices.ecourts.gov.in/hcservices/ its terms and even substitute a new by oral contract and it can be substantiated by parol evidence. In such kind of cases, the oral evidence can be let into prove that the earlier contract or agreement has been modified or substituted by new oral agreement." But, admittedly, no evidence was marked to contradict Ex.A1, because D.W.1, who is a party to Ex.A1 has also fairly conceded that she does not aware, when Somasundaram was borrowed the amount from the respondents/plaintiffs. (vi)Further, D.W.1 in her cross-examination, she gone to the extent of saying that even she does not know the averments in the written statement and her uncle Somasundaram alone aware of it and the averments in the written statement are prepared on the instructions given by Somasundaram, which was stated as follows: " ehd; jhf;fy; bra;Js;s vjph; tHf;Fiuapy; cs;s tptu';fs; vd;dbtd;W vdf;Fj; bjhpahJ/ vdJ khkh nrhkRe;juj;jpw;F jhd; bjhpa[k;/ vjph; tHf;Fiuapy; cs;s tptu';fs; vd; khkh nrhkRe;juk; brhy;;yp jhd; jahhpf;fg;gl;ljhFk;/ " In her cross-examination, she has fairly conceded that she was separated from her husband for more than 12 years. At the time of execution of Ex.A1, her husband was not resided with her. She further stated that she does not know when Somasundaram borrowed money from the respondents/plaintiffs and she has not accompanied with Somasundaram, while he borrowed money. She has also signed the promissory note executed by Somasundaram. Further she has fairly conceded in her cross-examination that the signature in Ex.A1 is belonging to her and she affixed her Left Thumb Impression before the Sub-Registrar Office, Tiruppur and her uncle also affixed his Left Thumb Impression. She does not know whether the averments in Ex.A1 is true or false. She further stated that as soon as she received notice, she came to know that she was executed the sale agreement. She further stated that the sale agreement was executed in respect of site No.100 and not in respect of Site No.101. Site No.101 was purchased through another sale deed. In respect of Site No.101, she has not executed the sale agreement. In Site No.101, there is no building and it is only a vacant site, whereas in Site No.100, there was a building. She further stated that the respondents/plaintiffs have not filed a suit in respect of Site No.101. She further stated that after the execution of the sale agreement, she has not maintained the house for past 10 years and she has not white washed the same. So the evidence of appellant/defendant has clearly proved that to escape from the clutches of law, she has gone to the extent of saying that Ex.A1 was executed only for the security for the loan borrowed by Somasundaram. https://hcservices.ecourts.gov.in/hcservices/ (vii) Somasundaram was examined as D.W.2. In his cross- examination, he has fairly conceded that he is a third party and he was not connected with the suit property. He further stated that he is the attestor of Ex.A1. His candid admission is that Ex.A1 was not executed for an agreement of sale and it was executed only for the security purpose and also it is not a fabricated or forgery document. He further stated that there is no endorsement in Ex.A1 that it was executed for the security purpose. Somasundaram is having own house and his mother owing three acres land. In such circumstances, no reason has been assigned why should the appellant/defendant herein has given her property to her uncle for executing the sale agreement for security purpose. So it is very painful to accept that Ex.A1 was executed for the security purpose for the loan borrowed by Somasundaram from one Padmanaban, who is the brother of the first respondent/first plaintiff Panchanathan. (viii)One more adding point is that after issuing notice to the appellant/defendant, she has not sent any reply for the same to the respondents/plaintiffs. Thereafter, the respondents/plaintiffs have given public notice in the issue of Dina Malar, made an awareness to the public not to enter any agreement in respect of the suit property and directed the appellant/defendant herein not to encumber or alienate the suit property. Even after the said public notice, the appellant/defendant kept quiet. (ix)After filing the suit, the appellant/defendant was set ex- parte and an ex-parte decree was passed and the same was set aside after condoning the delay in preferring the petition. Since the appellant/defendant has not contested the suit, again an ex-parte decree was passed and after that, the respondents/plaintiffs herein filed a petition to amend the decree. Since the appellant/defendant has no objection, the decree was amended and subsequently E.P. was filed and the sale deed was executed and registered by the Court. Thereafter, the appellant/defendant has come forward with the petition to set aside the ex-parte decree and the same was set aside by allowing the condone delay petition. It clearly shows the lethargic attitude of the appellant/defendant, who wants to delay the case of the respondents/plaintiffs to enjoy the fruits of Ex.A1-sale agreement. So the cumulative facts of the conduct of the appellant/defendant clearly proved that Ex.A1 is true and genuine document. (x) The learned counsel for the appellant/defendant relied upon the decision reported in 1976 1 MLJ 243 (Ramaswamy Gounder v. K.M.Venkatachalam and Others) , in which, it reads as follows: "The plaintiff had filed the suit for specific performance of an agreement making false allegations. The falsity of the case directly impugned on the https://hcservices.ecourts.gov.in/hcservices/ essential ingredients and elements necessary for claiming the relief. On the question whether the plaintiff would be entitled to the relief, Held, the falsity of the case put forward by the plaintiff disentitled him from obtaining the discretionary relief of specific performance of agreement." He submitted that there is a false allegation in the plaint. So the respondents/plaintiffs are dis-entitled from obtaining the discretionary relief of specific performance of the agreement. There is no quarrel over the proposition. (xi) The learned counsel for the respondents/plaintiffs relied upon the decision reported in (2008) 3 MLJ 951 (SC) (Silvey and Others v. Arun Varghese and Another), in para-12, it reads as follows: "12.D.W.1 accepted that possession certificates could not be obtained by the defendants in view of the nature of the property involved in the context of Kerala Land Reforms Act, and the Kerala Private Forest (Vesting and Assignment) Act. The defendants never responded to the letter-Exhibit A2 issued by the plaintiffs seeking performance of the contract. No response was also sent to the letters Exhibit A-2 to A- 10. Exhibit A-6 was a letter sent through registered post which was refused. The lawyer's notice Exhibit A-11 was also not responded to." He submitted that the appellant/defendant herein after the receipt of the notice and issuance of the public notice, she has not given any reply and she kept quiet. She was set ex-parte twice and an ex-parte decree was passed. So it is clearly proved that the appellant/defendant has admitted the case of the respondents/plaintiffs. (xii) Further, the learned counsel for the respondents/plaintiffs relied upon the decision reported in A.I.R. 1930 PC 57(1) (Siddik Mahomed Shah v. Mt.Saran and others), in which, he submitted that without pleadings, no evidence can be looked into. There is no quarrel over the proposition. (xiii) As already discussed above that there is no reason for discarding the evidences of P.W.1, who is the first respondent/first plaintiff, P.W.2, who is one of the attestor of Ex.A1 and P.W.3, who is a document writer of Ex.A1. Considering the evidences of P.Ws.1 to 3 and D.Ws.1 and 2, it has clearly proved that Ex.A1-sale agreement was not executed for the security for the amount borrowed by Somasundaram. Hence I am of the considered view that Ex.A1 is a sale https://hcservices.ecourts.gov.in/hcservices/ agreement and the trial Court is correct in held that Ex.A1 is a sale agreement. Point No.1 is answered accordingly. 9.Point No.9: (i)The learned counsel for the appellant/defendant submitted that the respondents/plaintiffs were not always ready and willing to perform their part of contract, so they are not entitled to decree of specific performance. To substantiate his arguments, he relied upon the decisions reported in (a) 1996-1-L.W. 239 (N.P.Thirugnanam (D) by L.rs v. Dr.R.Jagan Mohan Rao and Others), in which, it reads as follows: "It is settled law that remedy for specific performance is an equitable remedy and it is in the discretion of the Court, which discretion requires to be exercised according to settled principles of law and not arbitrarily as adumbrated under S.20 of the Specific Relief Act 1963; Under S.20, the Court is not bound to grant the relief just because there was valid agreement of sale. Section 16(c) of the Act envisages that plaintiff must plead and prove that he had performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than those terms the performance of which has been prevented or waived by the defendant. The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. .. .." (b)1999 (III) CTC 724 (S.Maruthai and another v. Gokuldoss Dharam Doss and four others), in which, he submitted that buyer has to prove readiness