THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO C.C.C.A. NO. 84 OF 2001 Date: 29-04-2011 Between: Sham Sunder Singh .. Appellant And Smt.Pedigoni Andalamma .. Respondent THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO C.C.C.A. NO. 84 OF 2001 JUDGMENT: The plaintiff in O.S.No.705 of 1986 on the file of the I Additional Judge, City Civil Court, Hyderabad is the appellant herein. The suit was filed for specific performance of contract of sale dated 29.11.1983. The allegations in the plaint go to show that the defendant is the absolute owner of the schedule property and the defendant agreed to sell the same for a sum of Rs.75,000/- and executed an agreement of sale on 29.11.1983 after receiving a sum of Rs.50,000/-. The balance of Rs.25,000/- has to be paid within six months. The plaintiff was always ready and willing to perform his part of contract of sale. The defendant has to obtain the encumbrance certificate and also income tax clearance certificate before registration of the sale deed. It was further stipulated that if the defendant fails to perform the obligation of obtaining necessary documents and fail to intimate the same and about her readiness to execute the sale deed, the plaintiff was given two options either to obtain an agreement of sale by way of specific performance or claim back the advance amount of Rs.50,000/- along with damages of Rs.10,000/-. The defendant in spite of repeated demands has not come forward to execute the sale deed and for legal notice issued the defendant gave a false reply and also filed a Caveat before the Civil Court thereby showing that the defendant is not ready and willing to perform the contract. The defendant filed a written statement contending that the defendant is owner of the property but disputed the agreement of sale dated 29.11.1983. According to the defendant, the plaintiff is a professional money lender advancing loans at higher interests. Further the defendant submits that the plaintiff has advanced now and then a sum of Rs.30,000/- with interest at 24% per annum to late Sri P.Pandu, who was the husband of the defendant on the basis of the pronote. The plaintiff had been demanding nearly about Rs.50,000/- including interest upto end of November, 1983 and was pressing to the husband of the defendant for immediate payment of the loan, otherwise he will take legal action and get the husband of defendant be arrested and the same was informed to the defendant by the plaintiff. The plaintiff suggested that he is ready to give 3 years time provided the defendant should execute an agreement for sale of the said property in favour of the plaintiff, because the Limitation Act provides 3 years period and the husband of the defendant can avail the said period for discharging the loan. It is pertinent to note that by the date 29.11.1983 the defendant had entered into an agreement for sale of the suit property with Sri P.Maisaiah s/o late P.Pentaiah of Marpally village, Hayathnagar Taluq, Ranga Reddy District, for a consideration of Rs.60,000/- on 07.08.1983 and after execution of agreement for sale she received a part payment of Rs.40,000/- from the said person and handed over the possession of the two rooms of the southern side adjacent to stair case of the said building to the said person as a part performance of the sale agreement. The sale deed was to be completed within extended period i.e. one and half years and get the same registered in favour of Sri P.Maisaiah after obtaining remaining consideration. This fact was brought to the notice of the plaintiff by late Sri P.Pandu and the defendant. But the plaintiff answered that he would face the said person and the defendant and her husband should not worry. In the evening of 29.11.1983 the plaintiff brought typed stamped papers to the defendant and dominated her and her husband to execute the same, otherwise the plaintiff will file a suit and get the husband of the defendant be arrested. To avoid all the difficulties, complications and litigation, the defendant was forced to make her thumb impressions on agreement of sale on 29.11.1983 and on other papers. In fact there was no intention of the defendant to enter into sale transaction with the plaintiff in view of the circumstances stated above. Therefore, the sale agreement dated 29.11.1983 is invalid and cannot be enforced under the eye of law in the circumstances stated above. On the basis of the above pleadings, the following issues have been framed for trial: 1. Whether the defendant executed suit agreement of sale in the circumstances mentioned in the written statement? And same was not intended to be acted upon? 2. Whether the suit agreement of sale is obtained under threat and coersion from the defendant by plaintiff? 3. Whether one P.Maisaiah is a necessary party to this suit? 4. Whether the plaintiff is entitled to specific performance of the suit agreement of sale? 5. To what relief? The following additional issues have been framed on 09.06.1994 as per order dated 09.06.1994 made in I.A.No.1100 of 1988. 1. Whether the plaintiff is a professional money lender without valid licence? 2. Whether the suit transaction in not loan as such hit by the provisions of the Money Lenders’ Act? 3. Whether the interest is exhorbitant and excessive? On behalf of the plaintiff, P.Ws.1 and 2 were examined and marked Exs.A-1 to A-3. On behalf of the defendant, D.W.1 was examined and marked Exs.B-1 to B-3. After considering the evidence on record, the learned I Additional Judge, City Civil Court, Hyderabad dismissed the suit of the plaintiff and aggrieved by the said judgment and decree, the present appeal is filed. The points that arise for consideration are: 1. Whether the plaintiff is entitled for specific performance of the contract of sale or for recovery of the money? 2. Whether the judgment and decree passed by the learned I Additional Judge, City Civil Court, Hyderabad is legal and sustainable? POINTS: As can be seen from the contentions on both sides and also the admissions on behalf of the defendant in the written statement and in the evidence by the date of execution of the agreement of sale Ex.A-1, a sum of Rs.50,000/- was found due by her husband and as the amount was not repaid the said agreement of sale was forced to be executed. In fact in the written statement also, it was pleaded that the plaintiff may file a suit for recovery of the amount due. In fact, when as per the terms of the contract, there is alternative right of the plaintiff to Rs.50,000/-, which is said to be the amount of consideration paid on the date of Ex.A-1. The lower Court in its judgment found that there was no sale transaction and plaintiff is not entitled for the relief of specific performance and dismissed the suit. In fact, in the evidence of D.W.1, who is the General Power of Attorney holder of defendant, it was specifically stated that the husband of the defendant obtained a loan from the plaintiff in the year 1983 to a tune of Rs.30,000/- and by the date of the agreement it came to Rs.50,000/- and, therefore, the plaintiff suggested to mortgage the house property promising to get three years time to discharge the loan. It is was said to have been informed to the plaintiff that already the property was sold to one Maisaiah under an agreement of sale dated 07.08.1983, who subsequently filed a suit for specific performance but the plaintiff obtained the signatures of defendant on some papers. It is said to have been signed under coersion and thumb impression was obtained. Evidently, D.W.1 is not the person competent to depose about the fraud or illegality. The nature of the transaction was within the plaintiff and defendant and she is competent to give the evidence and there is no reason as to why the defendant has not gone into the box. In fact, when P.W.1 was cross-examined by the defendant, it was elicited that when the defendant admitted her liability to discharge the loan due by her husband the plaintiff obtained the thumb impression on the agreement. Therefore, from the above circumstances, it is quite clear that the transaction between the plaintiff and defendant is in reality a loan transaction and not a sale transaction. As already stated, the agreement itself stipulates the right to recover Rs.50,000/- instead of specific performance thereby showing the intention of the parties would treat it as a loan transaction. The learned counsel for the respondent contends that there is no alternative plea for refund of the sale consideration and at this stage no decree can be passed for the recovery of the said loan amount. It was also pleaded that the said claim is barred by time. Evidently, the suit was filed within three years from the date of Ex.A-1. The question of the amount due by the husband of the plaintiff being time barred does not arise since Ex.A-1 acknowledges the receipt of the consideration and that is, evidently, the amount due by her husband. Therefore, the fact that a sum of Rs.50,000/- was due by the date of agreement and essentially the agreement was obtained for realization of the loan amount cannot be doubted. The question is whether without asking for refund of the money it can be granted. When there is no sale transaction and if it is only a loan transaction then the power of the Court to grant a decree for money cannot be doubted. In this connection, it is useful to refer to a decision reported in the case of ALEX JOSEPH vs. MADHAVAN NAIR[1], wherein the alternative relief for refund was claimed, but the Court granted a decree for money treating the transaction as a loan transaction and not a sale transaction. In para-8 of the above judgment, it was found as under: “…if the transaction was not one of agreement to sell but of loan and security for repayment, then a decree for refund of such amount as was advanced by the plaintiff to the defendant and had remained unpaid may be passed with such interest as to which the plaintiff may be found entitled” Therefore, if the above decision is applied the plaintiff is entitled for decree of refund of Rs.50,000/- and accordingly, I hold that the transaction is a loan transaction and there is no proof that the plaintiff is a professional money lender requiring any licence for doing the business and that the borrowing is effected under any provisions of law. The lower Court also found on this aspect that there is no proof that the transaction is hit by the provisions of the Money Lenders’ Act. Therefore, in view of the above circumstances, the liability of the defendant cannot be denied. Accordingly, the judgment and decree of the lower Court is set aside and a decree for Rs.50,000/- (Rupees fifty thousand only) with interest @ 12% per annum from 29.11.1983 till the date of decree and with subsequent interest @ 6% per annum till the date of realization is granted. Accordingly, the points are answered. In the result, the appeal is allowed by setting aside the judgment and decree of the lower Court and a decree for Rs.50,000/- (Rupees fifty thousand only) with interest @ 12% per annum from 29.11.1983 till the date of decree and with subsequent interest @ 6% per annum till the date of realization is granted. The plaintiff will be entitled to the proportionate costs in this Court and also in the lower Court. The defendant is granted three months time for repayment of the said amount. ________________________ N.R.L.NAGESWARA RAO, J 29-04-2011 MR THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO C.C.C.A. NO. 84 OF 2001 Date: 29-04-2011 MR [1] (2005) 12 SUPREME COURT CASES 378