RSA No.2522 of 2011 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.2522 of 2011 (O&M) Date of decision 20.7.2011. Kishori Lal ...... Appellant. versus Yash Pal Sharma ...... Respondent. CORAM : HON'BLE MR.JUSTICE K.C.PURI. Present : Mr. Sudeep Mahajan, Advocate for the appellant. K.C.PURI . J. This is an appeal directed by plaintiff-appellant against the judgment and decree dated 31.3.2011 passed by Shri Roshan Lal Ahuja, Additional District Judge, (Adhoc), Fast Track Court, Hoshiarpur vide which the appeal preferred by the plaintiff/appellant against the judgment and decree dated 21.7.2009 passed by Shri Gurjant Singh, PCS, Additional Civil Judge (Senior Division) Hoshiarpur was dismissed. Kishori Lal filed suit for specific performance in respect of agreement to sell dated 16.12.1997 regarding property mentioned in the RSA No.2522 of 2011 2 heading of the plaint. It is alleged that defendants agreed to sell the shop in question for a consideration of Rs.1,50,000/- and out of which a sum of Rs.1,00,000/- was given as earnest money. The sale deed was to be executed on or before 16.12.1999. Vacant possession of the shop was to be delivered to the plaintiff at the time of execution of the sale deed. The defendant has not executed the sale deed. Hence this suit. 3. On put to notice, the defendant resisted the claim of the plaintiff by filing the written statement. It is alleged that defendant was in need of money and to secure the payment, the parties agreed to execute the mortgage deed. However, when they reached before the Deed Writer to execute the mortgage deed, on latter's suggestion agreement to sell was executed in order to save the stamp duty. There was never an intention to execute the sale deed. It was agreed on repayment of money, the claim of the plaintiff would be satisfied. The defendant has approached the plaintiff to accept the money but he refused. The shop in question has been rented out at the rate of Rs.1200/- per month about few years ago and the value of the suit property is more than Rs.5,00,000/-. There was no question of execution of agreement to sell. 4. Plaintiff filed replication denying the contents of written statement and reiterated the stand taken in the plaint. 5. From the pleadings of the parties following issues were framed :- 1. Whether plaintiff is entitled to possession by way of specific performance of agreement to sell dated 16.12.1997 ?OPP 2. Whether in alternative, plaintiff is entitled to recovery of RSA No.2522 of 2011 3 Rs.1,50,000/- from defendant ?OPP 3. Whether plaintiff has not come to court with clean hands ? OPD 4. Relief. The plaintiff in order to prove its case examined PW-1 Joginder Singh, Clerk, Tehsil Office, Hoshiarpur, Mangal Singh; PW1 (re-numbered) Mangal Singh (PW-2) Balbir Raj, (PW-3) Kamaljit Kumar, besides appearing as his own witness as PW-4. In rebuttal, defendant himself appeared as DW-1. Learned trial Court after appraisal of the evidence reached to the conclusion that there was no agreement to sell but the document was executed to secure the payment of the plaintiff and consequently decreed the suit of the plaintiff for recovery of Rs.1,00,000/-. Feeling dissatisfied with the judgment and decree of the trial Court, plaintiff/appellant filed the appeal before the First Appellate Court. The learned Additional District Judge, vide judgment and decree dated 31.3.2011 dismissed the appeal with costs after affirming the finding of the learned trial Court. Feeling dissatisfied with the above said judgments and decrees dated 21.7.2009 passed by the Additional Civil (Senior Division), Hoshiarpur and judgment and decree dated 31.3.2011 passed by Additional District Judge, (Adhoc), Fast Track Court, Hoshiarpur, the plaintiff has filed the present appeal seeking the relief of specific performance instead of recovery of the amount. Appellant in para No.15 of the grounds of appeal has RSA No.2522 of 2011 4 mentioned that following substantial questions of law have arisen in the present appeal :- 1. Whether in view of the fact that it is undisputable that an agreement to sell dated 16.12.1997 was executed by the defendant in favour of the plaintiff and the earnest money received, the trial Court as well as the first appellate court have not erred in not granting the relief of possession by way of specific performance of the agreement to sell dated 16.12.1997 ? 2. Whether it is lawful for defendant to avoid execution of the sale deed under the terms of the agreement to sell, exhibit P-1, only on the ground that initially the parties had intended to go for mortgage deed but they later decided to execute the agreement to sell ? 3. Whether it is lawful for the defendant to avoid the execution of sale deed under the terms of the agreement to sell dated 16.12.1997, exhibit P-1, only on the ground that said agreement to sell, though executed out of free consent and voluntarily, was intended by the parties to be a mere security for the alleged loan taken by defendant of Rs.one lac from the plaintiff on the date of the agreement to sell i.e. On 16.12.1997 ? 4. Whether in view of the admitted position by the defendant that an agreement to sell was indeed executed on 16.12.1997 and an earnest money of Rs.1,00,000/- was received under the said agreement and also that the plaintiff indeed was ready and willing to execute the sale deed, the defendant was not bound under the law to execute the sale deed and if he has failed to do so, should the courts not direct execution of the sale deed under the process of court ? 5. Whether in absence of any plea and proof of fraud, misrepresentation and coercion, as laid down in Section 19 of the Contract Act, there is no way that the defendant can escape his responsibility under the law to execute the sale deed under the terms of the agreement to sell dated 16.12.1997 ? 6. Whether both the courts below have not gravely erred in not forcing the execution of the sale deed, in absence of any pleading and proof of coercion, fraud or misrepresentation on the part of the defendant, as laid down in Section 19 of the Indian Contract Act ? RSA No.2522 of 2011 5 7. Whether the ground of the defendant that the motivation of execution of agreement to sell was only to secure the alleged loan taken by him from the plaintiff on 16.12.1997 is a lawful defence, even if true (though not admitted to be true ) to avoid the execution of the sale deed under the terms of the agreement to sell dated 16.12.1997, exhibit P-1. The main stress of the learned counsel for the appellant is that the agreement to sell dated 16.12.1997 has been proved on the file. So, in these circumstances, both the Courts below have committed error in not allowing the relief of specific performance. It is further contended that there was no fraud or misrepresentation or coercion on the part of the plaintiff/appellant. So, there was no question of withholding the relief of specific performance of contract. He has further contended that any evidence against the terms of document cannot be read into. The plaintiff has been ready and willing to perform his part of contract. The relief of specific performance is the adequate relief in case agreement to sell is proved properly. So, both the Courts below have committed error in observing that agreement was executed merely to secure the loan of plaintiff. I have considered the submission made by counsel for the appellant and have gone through the records of the case. It is now settled law that if there is a money transaction and earnest money is secured to pay loan in that case relief of specific performance should not be allowed. The case of the defendant from the very beginning is that defendant has never agreed to sell the shop in question. He has further pleaded that plaintiff in order to secure the loan wanted to RSA No.2522 of 2011 6 get the mortgage deed of the shop in question executed in his favour. However, on the proposal of deed writer, agreement to sell was executed and there was no intention to execute the sale deed. There is concurrent finding of fact recorded by both the Courts below that the transaction between the parties was a money transaction. Both the Courts below have taken into account the testimony of the plaintiff himself, who has stated that there was proposal to execute the mortgage deed. So, there was no intention to execute the agreement to sell. So, in view of the concurrent finding of fact recorded by both the courts below, moreover, in view of the admission made by the plaintiff himself, no ground for interference in the present appeal is made out. No doubt, specific performance of the contract is the adequate relief in case there is a valid agreement between the parties in respect of the immoveable property but where the intention of the parties is not to execute the sale deed but to secure the loan amount, in that case the decree of specific performance cannot be allowed. There is another circumstance which militate against the case of the appellant. The agreement admittedly was executed on 16.12.1997 and the date of execution of sale deed has been mentioned as 16.12.1999 i.e. after two years of the execution of the agreement. Had the intention of the parties was to execute the sale deed in terms of the agreement in that case the period of two years would not have been fixed moreso, when substantial amount of sale consideration has been paid. Moreover, the plaintiff has filed suit in the year 2001, which also shows that intention was not to execute the sale deed but to secure the loan amount. RSA No.2522 of 2011 7 So, in view of the above discussion, the substantial question of law raised by the appellant in paragraph No.15 stand determined against the appellant. Accordingly, the appeal is without any merit and the same stands dismissed. 20. A copy of this judgment be sent to the trial Court for strict compliance. ( K.C.PURI ) JUDGE July 20, 2011 sv