IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 28.01.2011 CORAM: THE HONOURABLE MS.JUSTICE R.MALA A.S.No.270 of 2007 and M.P.No.1 of 2007 A.N.Arunachalam .. Appellant/Plaintiff Vs. 1. T.Sivaprakasam 2.T.Vijayakumar .. Respondents/Defendants Appeal suit against the judgment and decree dated 19.12.2006 in O.S.No.16 of 2003, on the file of the Additional District Court/Fast Track Court No.IV, Bhavani, Erode District. For appellant : Mr.N.Manokaran For respondents: Mr.K.Ravichandra Baabu JUDGMENT The First Appeal has been filed against the judgment and decree dated 19.12.2006 in O.S.No.16 of 2003, on the file of the Additional District Court/Fast Track Court No.IV, Bhavani, Erode District. 2. The averments in the plaint are as follows: (a) The plaintiff is the tenant under the defendants in the suit properties for the past six years. The rent paid finally per month is Rs.1,100/-. The defendants are the owners of the suit properties. The defendants, due to their monetary crisis, entered into a sale agreement on 1.9.1997 with one R.Rangasamy Mudaliar, and the sale price was fixed at Rs.2 lakhs, and the defendants received Rs.1,50,000/- as advance from the said R.Rangasamy Mudaliar. (b) The said Rangasamy Mudaliar died, due to which, his son Madheswaran could not execute the sale agreement. The said Madheswaran demanded the advance amount of Rs.1,50,000/- from the defendants, and hence, the defendants approached the plaintiff-tenant for purchase of the properties. Therefore, the plaintiff and the defendants entered into sale agreement on 16.7.2001 and the sale price fixed was Rs.4,25,000/- and advance of Rs.1,50,000/- was paid and this amount of Rs.1,50,000/- was paid back to the said Madheswaran whose father earlier executed the sale agreement with the https://hcservices.ecourts.gov.in/hcservices/ defendants. (c) The sale agreement between the plaintiff and the defendants, was duly executed and the previous sale agreement-holder Madheswaran was one of the attestors. The time stipulated for execution of sale deed was six months. Time is not the essence of the contract. The plaintiff was always ready and willing to perform his part of the contract by paying the balance amount and get the sale deed executed. (d) The defendants represented that they were in dire need of money and hence they demanded Rs.1,00,000/- from the plaintiff, which could be adjusted towards the remaining part of sale consideration. Therefore, the plaintiff advanced Rs.1,00,000/- on 20.12.2001, for which, the first defendant issued a cheque without date bearing Cheque No.86697 drawn on Bhavani Koodal Urban Bank Ltd., Bhavani, in favour of the plaintiff, which was promised to be adjusted towards the remaining part of sale consideration. Thus, it could be noticed that the totally, the plaintiff paid Rs,2,50,000/- (Rs.1,50,000 + 1,00,000) to the defendants. Therefore, the balance sale consideration is Rs.1,75,000/-. The plaintiff was ready to perform his part of contract with the balance sale consideration. (e) Suddenly, the plaintiff received a legal notice dated 30.1.2002 stating that one P.Shanmugasundaram, son of Palaniappa Mudaliar, obtained a money decree in O.S.No.28 of 1998, on the file of the Sub-Court, Bhavani, on which, the decree amount has to be discharged for sale. The defendants did not disclose the encumbrance of the suit properties, to the plaintiff. The defendants suppressed the encumbrance of the debt and the defendants were advised by the plaintiff to clear the encumbrance and execute the sale deed. (f) As the defendants did not care to clear the encumbrance, the plaintiff issued legal notice to the defendants to clear the encumbrance incurred in O.S.No.28 of 1998 and execute the sale deed as per the earlier agreement of sale, dated 16.7.2001. The defendants issued reply notice dated 22.3.2002 with false allegation that the amount of Rs.1,50,000/- received from the plaintiff earlier, was only a tenancy-advance amount, by denying the receipt of Rs.1,00,000/- on 20.12.2001. Hence, the plaintiff was constrained to file the present suit for specific performance of contract, to direct the defendants to execute the sale deed by receiving the balance sale consideration, and free from any sort of encumbrance and for costs. 3. The sum and substance of the written statement filed by the defendants, are as follows: (a) The suit is not maintainable. The plaintiff has been occupying the suit premises as a tenant under the defendants from July 1996 to 15.7.2001 and the rent is Rs.1,500/- p.m. The plaintiff paid rent till 15.7.2001. The defendants deny that they have entered into sale agreement with one Rangasamy Mudaliar, S/o Sengoda Mudaliar for the consideration of Rs.2 lakhs on 1.9.1997 and received the advance of Rs.1,50,000/-. (b) The plaintiff was not ready and willing to perform his https://hcservices.ecourts.gov.in/hcservices/ part of the contract. The sale agreement, dated 16.7.2001 is not executed with an intention to sell the properties to the plaintiff at any point of time and the defendants did not receive any consideration for the alleged sale agreement, dated 16.7.2001. The defendants have received Rs.1,50,000/- from the plaintiff only for the purpose of "Bokkiam" (nghf;fpak;) {usufructuary mortgage}, and the plaintiff has been residing as a tenant in the suit properties. (c) The allegation of the plaintiff in the plaint that the defendants represented to the plaintiff that, one of their brothers filed the suit in the name of one S.K.Sundaramoorthy on two promissory notes for Rs.2 lakhs, on the file of the Sub-Court, Bhavani, and that the amount has been discharged, is false. The allegation of the plaintiff that in order to clear the encumbrance of the above said promissory notes of Sundaramoorthy, the defendants were in dire need of money and requested the plaintiff to advance Rs.1 lakhs, and the amount may be adjusted towards the remaining part of the sale consideration, is denied. The allegation that the defendants totally received Rs.2,50,000/- as part of the sale consideration, is not true. (d) In respect of money decree in O.S.No.28 of 1998 on the file of the Sub-Court, Bhavani, the defendants preferred appeal, and hence, there is no need on the part of the defendants to disclose the above said decree in O.S.No.28 of 1998 to the plaintiff, which could not be treated as an encumbrance. The defendants prayed for dismissal of the suit. 4. The trial Court, after considering the arguments advanced by both sides and on a perusal of the pleadings both in the plaint and in the written statement, framed three issues for consideration. Considering the oral evidence of P.Ws.1 to 3 and D.W.1 and Exs.A-1 to A-11 and Exs.B-1 to B-7, dismissed the suit, stating that the plaintiff was not ready and willing to perform his part of the contract. Challenging the judgment and decree of the trial Court, the plaintiff has come forward with this First Appeal. 5. This Court, after hearing the arguments of the learned counsel appearing for the parties, frames the following points for consideration: (i) Whether the trial Court's finding that Ex.A-1 is the sale agreement and not executed as the security for the amount received, i.e. Rs,1,50,000/- as "Bokkiam" (nghf;fpak;) (usufructuary mortgage), is correct ? (ii) Whether the trial Court is correct in holding that the appellant/plaintiff was not ready and willing to perform his part of the contract ? (iii) Whether the judgment and decree of the trial Court are sustainable ? and (iv) To what relief the plaintiff is entitled to ? https://hcservices.ecourts.gov.in/hcservices/ 6. Learned counsel appearing for the appellant/plaintiff submitted that as the trial Court considered Ex.A-1 as a sale agreement and not as usufructuary mortgage, it ought to have decreed the suit, instead, the trial Court gave a finding that the appellant/plaintiff was not ready and willing to perform his part of the contract, on the basis of the oral evidence adduced by P.Ws.1 to 3 and D.W.1. Learned counsel further submitted that the trial Court committed error in dismissing the suit, without properly considering the oral and documentary evidence. He further submitted that Ex.A-2 undated cheque for Rs.1 lakh, has been issued by one of the respondents/defendants, which shows that the plaintiff received Rs.1 lakh and totally, the defendants have paid Rs.2,50,000/-. The trial Court failed to consider the fact that the respondents/defendants have not taken any action to clear the cheque received by the plaintiff. The trial Court committed error in holding that non- issuance of notice within the time stipulated in the sale agreement, is fatal to the case of the plaintiff. 7. Learned counsel appearing for the appellant/plaintiff further submitted that the appellant/plaintiff has properly pleaded and proved that he was always ready and willing to perform his part of contract. The trial Court ought not to have taken some sentences from the deposition of P.W.1 and dismissed the suit, stating that the appellant/plaintiff was not ready and willing to perform his part of the contract. 8. It is contended firstly by the learned counsel appearing for the appellant/plaintiff is that non-issuance of pre-suit notice within the stipulated time, is not fatal. Nextly, it is contended that mere consideration of few sentences from the deposition of P.W.1, will not create any presumption that the appellant/plaintiff was not ready and willing to perform his part of the contract. Lastly, he submitted that the respondents/defendants raised a plea that Ex.A-1 has been executed only as a security for the money received, i.e. "Bokkiam" (nghf;fpak;) usufructuary mortgage, and rent shall not be paid by the appellant/plaintiff for his occupation till the amount of Rs.1,50,000/- is repaid. Since the trial Court accepted that Ex.A-1 is the registered sale agreement, the trial Court ought to have decreed the suit as prayed for in the plaint and the conduct of the respondents/defendants also has to be looked into while granting the relief of discretionary decree. 9. Learned counsel appearing for the respondents/defendants submitted that even though the trial Court held that Ex.A-1 is a sale agreement, it has not properly considered the oral and documentary evidence and so, the finding of the trial Court on this aspect, is not correct. He further submitted that the trial Court is correct in holding that the appellant/plaintiff was not always ready and willing to perform his part of the contract. To substantiate the same, he https://hcservices.ecourts.gov.in/hcservices/ relied on various decisions of the Supreme Court. 10. Now, this Court has to decide as to whether non-issuance of notice within the stipulated time mentioned in the sale agreement, is fatal to the case of the appellant/plaintiff. 11. Ex.A-1 is the registered sale agreement, dated 16.7.2001. Admittedly, the suit properties belong to the respondents/defendants. The appellant/plaintiff was a tenant under them before Ex.A-1 sale agreement has been entered upon between the parties. The respondents/defendants raised a defence that though the document has been named and styled as a sale agreement, there was no intention of the parties to execute the sale deed and the intention is only "Bookiam" (nghf;fpak;) usufructuary mortgage. The appellant/plaintiff was permitted to reside there without paying any interest. After considering the oral and documentary evidence, the trial Court came to the conclusion that Ex.A-1 is a sale agreement. 12. In this regard, it is appropriate to quote Section 92 of the Indian Evidence Act: Section 92 : Exclusion of evidence of oral agreement. When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms; Proviso (1)--Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, want or failure of consideration, or mistake in fact or law. Proviso (2)--The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document. https://hcservices.ecourts.gov.in/hcservices/ Proviso (3)--The existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved. Proviso (4)--The existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents. Proviso (5)--Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, may be proved: Provided that the annexing of such incident would not be repugnant to, or inconsistent with, the express terms of the contract. Proviso (6)--Any fact may be proved which shows in what manner the language of a document is related to existing facts." Therefore, as per Section 92 of the Indian Evidence Act, no one is permitted to let in evidence contra to a registered document. Hence, the parties have to prove that the document in question, is in accordance with law. The burden is upon the respondents/defendants to prove that the document has been executed as "Bokkiam" (nghf;fpak;) (usufructuary mortgage). 13. At this stage, it is appropriate to consider the Division Bench decision of this Court, relied on by learned counsel appearing for the appellant/plaintiff reported in 2003 (1) MLJ 694 (Ramalingam Vs. Subramanyam), wherein, it was held that in a suit for specific performance of an agreement of sale, when the defendants plead that it is only a loan transaction a duty is cast upon him to prove that the said agreement is not a sale agreement of sale. 14. It is also appropriate to notice a decision of this Court reported in 2010 (8) MLJ 1050 (P.Thulasimani Vs. K.G.Chandran), wherein this Court observed that the onus of proving that the sale agreement was executed only with regard to some money transaction and https://hcservices.ecourts.gov.in/hcservices/ that there was no intention of selling the suit property, is upon the defendant who made the contention, once the execution of sale agreement, is admitted. 15. While considering the above decision of this Court reported in 2010 (8) MLJ 1050 (cited supra), as well as the oral and documentary evidence, I am of the view that Ex.A-1 is a sale agreement. The learned trial Judge has considered this aspect with proper circumspection and came to the conclusion that Ex.A-1 is a sale agreement. Hence, the finding of the trial Court that Ex.A-1 is a sale agreement, is sustainable. 16. Considering the oral and documentary evidence on both sides, along with Section 92 of the Indian Evidence Act, the respondents/defendants have not proved that Ex.A-1 was executed after receipt of Rs.1,50,000/- and executed only for the purpose of "Bokkiam" (nghf;fpak;) (usufructuary mortgage), for which, the appellant/plaintiff was permitted to reside as a tenant in the suit properties by the respondents/defendants from 16.7.2001. So, the trial Court has considered all the aspects in proper perspective. 17. It is pertinent to note that as per Ex.A-1 sale agreement, the sale consideration was fixed at Rs.4,25,000/- and on the date of Ex.A-1 sale agreement, Rs.1,50,000/- is stated to have been paid. The case of the appellant/plaintiff is that subsequently the respondents/defendants demanded some amount to discharge the loan and so, the appellant/plaintiff gave Rs.1 lakh and hence, Ex.A-2 undated cheque has been given for receipt of Rs.1 lakh in favour of the appellant/plaintiff with an undertaking that the amount of Rs.1 lakh has to be given credit to the balance sale consideration. 18. It is also to be noted that Ex.A-2 undated cheque was signed by the first defendant, but he has not entered into the box to adduce evidence. D.W.1/D2 fairly conceded that the signature in the cheque is of his brother. Considering the evidence of P.W.1 and D.W.1 and Ex.A-1 sale agreement and Ex.A-2 undated cheque, it is clearly proved that Ex.A-1 is styled as an agreement and so, the trial Court is correct in holding that Ex.A-1 is a sale agreement. 19. As already stated, as per Section 92 of the Indian Evidence Act, duty is cast upon the defendants to show that Ex.A-1 is not a sale agreement and it was only executed as "Bokkiam" (nghf;fpak;) usufructuary mortgage, and the burden is upon the defendants to prove the same. Except the ipse dixit of D.W.1, no other evidence has been adduced before the trial Court to prove the case of the defendants. In such circumstance, I am of the view that Ex.A-1 is only a sale agreement. Point No.(i) is answered accordingly. https://hcservices.ecourts.gov.in/hcservices/ 20. Point No.(ii): Learned counsel for the appellant/plaintiff submitted that since Ex.A-1 sale agreement is a true and genuine document, the plaintiff averred in the plaint that he was always ready and willing to perform his part of the contract and also let in evidence; but the trial Court picked up some sentences from the evidence of P.W.1/plaintiff and came to the conclusion that the appellant- plaintiff was not ready and willing to perform his part of the contract. Learned counsel for the appellant-plaintiff further submitted that the above finding of the trial Court is erroneous. To substantiate his arguments, learned counsel relied on various decisions. 21. Before considering the decisions relied on by the learned counsel for the appellant/plaintiff, it is appropriate to incorporate Section 16 of the Specific Relief Act, as follows: Section 16: Personal bars to relief: Specific performance of a contract cannot be enforced in favour of a person-- (a) who would not be entitled to recover compensation for its breach; or (b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or (c) who fails to aver and prove that he has 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 terms the performance of which has been prevented or waived by the defendant. Explanation: For the purpose of clause (c)-- (i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court; (ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction." 22. As per Section 16(c) of the Specific Relief Act, the appellant/plaintiff who is the agreement holder, should always be ready and willing to perform his part of the contract. 23. In support of his submissions, learned counsel appearing for the appellant/plaintiff relied upon the following decisions of the Supreme Court: https://hcservices.ecourts.gov.in/hcservices/ (i) 2005 (7) SCC 534 (Aniglase Yohannan Vs. Ramlatha): "9. ..... While examining the requirement of Section 16 (c) this Court in Syed Dastagir Vs. T.R. Gopalakrishna Settty, [1999] 6 SCC 337 noted as follows: (SCC p.341 para 9) " 9. So the whole gamut of the issue raised is, how to construe a plea specially with reference to Section 16 (c) and what are the obligations which the plaintiff has to comply with in reference to his plea and whether the plea of the plaintiff could not be construed to conform to the requirement of the aforesaid section, or does this section require specific words to be pleaded that he has performed or has always been ready and is willing to perform his part of the contract. In construing a plea in any pleading, courts must keep in mind that a plea is not an expression of art and science but an expression through words to place fact and law of one's case for a relief. Such an expression may be pointed, precise, sometimes vague but still it could be gathered what he wants to convey through only by reading the whole pleading, depending on the person drafting a plea. In India most of the pleas are drafted by counsel hence the aforesaid difference of pleas which inevitably differ from one to the other. Thus, to gather true spirit behind a plea it should be read as a whole. This does not distract one from performing his obligations as required under a statute. But to test whether he has performed his obligations, one has to see the pith and substance of a plea. Where a statute requires any fact to be pleaded then that has to be pleaded may be in any form. The same plea may be stated by different persons through different words; then how could it be constricted to be only in any particular nomenclature or word. Unless a statute specifically requires a plea to be in any particular form, it can be in any form. No specific phraseology or language is required to take such a plea. The language in Section 16(c) does not require any specific phraseology but only that the plaintiff must aver that he has performed or has always been and is willing to perform his part of the contract. So the compliance of 'readiness and willingness' has to be in spirit and substance and not in letter and form. So to insist for a mechanical production of the exact words of a statute is to insist for the form rather than the essence. So the absence of form cannot dissolve an essence if already pleaded." 10. Again in Motilal Jain Vs. Ramdasi Devi, [2000] 6 SCC 420 it was noted as follows: "7. The other contention which found favour with the High Court, is that plaint averments do not show that the plaintiff was ready and willing to perform his part of the contract and at any rate there is no evidence on record to https://hcservices.ecourts.gov.in/hcservices/ prove it. Mr.Choudhary developed that contention placing reliance on the decision in Varghese case (Ouseph Varghese Vs. Joseph Aley--[1969] 2 SCC 539). In that case, the plaintiff pleaded an oral contract for sale of the suit property. The defendant denied the alleged oral agreement and pleaded a different agreement in regard to which the plaintiff neither amended his plaint nor filed subsequent pleading and it was in that context that this Court pointed out that the pleading in specific performance should conform to Forms 47 and 48 of the First Schedule of the Code of Civil Procedure. That view was followed in Abdul Khader case (Abdul Khader Rowther Vs. P.K.Sara Bai [1989] 4 SCC 313 : AIR 1990 SC 682). 8. However, a different note was struck by this Court in Chandiok case (R.C.Chandiok Vs. Chuni Lal Sabharwal--[1970] 3 SCC 140 : AIR 1971 SC 1238). In that case 'A' agreed to purchase from 'R' a leasehold plot. 'R' was not having lease of the land in his favour from the Government nor was he in possession of the same. 'R', however, received earnest money pursuant to the agreement for sale which provided that the balance of consideration would be paid within a month at the time of the execution of the registered sale deed. Under the agreement 'R' was under obligation to obtain permission and sanction from the Government before the transfer of leasehold plot. 'R' did not take any steps to apply for the sanction from the Government. 'A' filed the suit for specific performance of the contract for sale. One of the contentions of 'R' was that 'A' was not ready and willing to perform his part of the contract. This Court observed that readiness and willingness could not be treated as a straitjacket formula and that had to be determined from the entirety of facts and circumstances relevant to the intention and conduct of