IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.11 .2011 CORAM : THE HONOURABLE Mr.JUSTICE K. MOHAN RAM and THE HONOURABLE Mr.JUSTICE G.M. AKBAR ALI A.S.No.1035 of 2007 and M.P.No.1 of 2007 R. Kumar .. Appellant/defendant vs R. Sushilkumar .. Respondent/Plaintiff Appeal filed under Sec.96 C.P.C against the judgment and decree made in O.S.No.24 of 2005 dated 13.11.2006 on the file of the learned Principal District and Sessions Judge, Thiruvannamalai. For appellant : Mr. R. Subramanian for MR.A. Srinivasan For respondent : Mr.T.V. Sekar JUDGMENT G.M. AKBAR ALI,J., Appeal filed under Sec.96 C.P.C against the judgment and decree made in O.S.No.24 of 2005 dated 13.11.2006 on the file of the learned Principal District and Sessions Judge, Thiruvannamalai. 2. The defendant is the appellant. The suit was filed for specific performance of the contract dated 7.1.2002. The brief facts leading to the filing of the appeal are as follows: 3. The appellant had purchased the property by a sale deed dated 13.11.1998 and started Blue Metal Crusher Factory Hall, Shivasakthi Blue Metal. According to the respondent/plaintiff, the appellant proposed to alienate the property and the respondent expressed his willingness to purchase. After negotiations, it was mutually agreed that for a total value of Rs.15 lakhs the appellant agreed to sell the property and received a sum of Rs.4,95,000/- as advance and executed the agreement of sale dated 7.1.2002. It is a registered agreement. https://hcservices.ecourts.gov.in/hcservices/ 4. As per the terms of the agreement, the respondent/plaintiff shall pay the balance sale consideration of Rs.10,05,000/- on or before 6.1.2005 and the sale deed has to be executed. The respondent was always ready and willing to pay the balance. However, while typing the agreement of sale, the balance amount payable was shown mistakenly as Rs.10,50,000/- instead of Rs.10,05,000/-. 5. On 17.1.2002, the respondent paid a sum of Rs.5,00,000/- and on 8.1.2004, the respondent paid a further sum of Rs.5,25,000/-. Both these payments were duly endorsed on the sale agreement and the said payment was also duly attested by the witnesses. However, as stated above, there was a typographical error in the agreement which made the respondent to pay a sum of Rs.20,000/- in excess. Therefore, there is no balance of sale consideration payable. 6. The respondent has been calling upon the appellant to execute the sale deed and the appellant was evading. Therefore, a suit notice was issued on 30.12.2004 for which there was no reply. Finding out the typographical error, the respondent sent a re- joinder, for which also, there was no reply. Therefore, a suit was filed for specific performance. 7.The appellant resisted the suit by filing writtenstatment, inter-alia stating as follows: According to the appellant, there was no agreement of sale and the appellant has not received any consideration as stated in the sale agreement. The respondent was an automobile financier having business at Thiruvannamalai. During the year 1993 to 1996, the appellant obtained auto finance for purchase of lorries for the use of his blue metal crusher factory. He had purchased lorries bearing Registration Nos.TN 27-Z-2399, TN 51 2138 and TNU 1134 from the loan obtained from the respondent. 8. There was a due payable to the respondent for a sum of Rs.4,95,000/-. The respondent came with his henchmen and insisted the appellant to pay the balance immediately. The appellant agreed to pay the balance within six months. The respondent forced and coerced the appellant to execute the sale agreement as security. The appellant received no money towards sale consideration. Therefore, the allegation that the respondent was ready and willing to perform the contract is not true and the respondent has not come to the court with clean hands. The receipt of other amounts are also denied. 9. Based on the above averments, the parties went for a trial before the District Court, Thiruvannamalai in OS.No 24 of 2005. The learned District judge, Thiruvannamalai framed triable https://hcservices.ecourts.gov.in/hcservices/ issues and found that the sale agreement dated 7.1.2002 was true and genuine and the appellant had obtained the entire sale consideration and the respondent is entitled for the specific performance of the contract and thereby decreed the suit. Aggrieved by the decree and judgment, the defendant is before this Court. 10. Mr.R. Subramaniam, the learned counsel who appeared for Mr. A. Srinivasan, the learned counsel for the appellant would submit that the sale agreement was executed only as a security. The learned counsel pointed out that the following circumstances would show that the sale agreement was not intended for a sale of the property: i) the plaint averment viz., the execution of sale agreement with intention to sell the property was specifically denied by the appellant in his written statment and it was further alleged in the written statement that the sale agreement was executed only as a security for the due under an auto finance which was not specifically denied by a reply statement. ii) P.W.1 would admit that his father one Ramesh Kumar Jain is dealing in auto finance and P.W.1 is assisting his business; iii) though the sale consideration was Rs.15,00,000/- a sum of Rs.4,95,000/- was shown as advance paid on 7.1.2002, which amount the appellant claims is a due payable under the auto finance. iv) the period to complete the sale is contemplated as three years which is peculiar in the circumstances of the case. v) till 30.12.2004, (date of issuance of legal notice), the respondent has not taken any steps to enforce the contract. vi) a part of the balance amount was alleged to have been paid on 17.1.2002 within 10 days from the date of the alleged sale agreement and another instalment on 8.1.2004 after two years. The respondent has waited for one more year to issue a notice and has filed a suit on 6.1.2005 on the last date of limitation. The suit was numbered only on 13.10.2005 which shows that the respondent was not willing to get the sale deed executed. https://hcservices.ecourts.gov.in/hcservices/ vii) one of the attesting witness to the sale agreement, P.W.4 would admit that the other attesting witness was his brother who is a auto finance broker and as per the direction of his brother, he signed as a witness in the document and he knew nothing of the transaction. viii) P.W.5 the scribe would also admit that the advance was not paid in his presence and the document was prepared on the instruction of the said attesting witness who was not examined. ix) P.W.2 the attesting witness for the payment of Rs.5,25,000/- would admit that he is the customer to the jewellery shop of the respondent and he would also admit tht the respondent was doing an auto finance business. x) the endorsement for the payment on 17.1.2002 and on 8.1.2004 would show that they are insertions and the signature of the appellant also differs from the admitted signatures. xi) when the payments are denied the respondent has failed to substantiate the payments by producing his books of accounts, which would be the best evidence. 11. The learned counsel for the appellant relied on the following case laws: (1977) 1 SCC 592 Ramdas Oil Mills vs Union of India (Miltary Dept) 1980 SCC 1 (Khushalbhai Mahijibhai Patel vs A firm of Mohamadhussain Rahimbux 1987 (Supp) SCC 340 (Parakunnan Veetill Jospph's Son Mathew vs Nedumbara Kuruvila'sSon and others) AIR 2001 SCC 2783 (A,C, Arulappan vs Smt.Ahalya Naik) 12. On the contrary, Mr. S.T.V. Sekar, the learned counsel for the respondent/ plaintiff would submit that the appellant had executed the sale agreement and has received the entire payment and therefore, liable to execute the sale deed. The learned counsel pointed out that the respondent had examined P.W.3, Sub Registrar of Thiruvannamalai who would state that they will not register any document if any one of the party complains that he is forced to execute a document. https://hcservices.ecourts.gov.in/hcservices/ 13. He further pointed out that the appellant has not proved that the signatures found in the endorsement are not that of his and the attesting witnesses and the scribe would categorically state that the appellant had received the sale consideration and executed the sale agreement. 14. The learned counsel for the respondent relied on the following decisions: 2010 STPL (LE) 44261 SC (Man Kaur (dead) by Lrs vs Hartar Singh Sangha) = 2010 10 SCC 512 2010 STPL (LE) 44484 SC(M/s J.P.Builders & another vs A. Ramadas Rao and another) 15. We have carefully considered the rival contentions put forth on the either side and perused the materials available on record. 16. The points that arise for consideration in this appeal are; whether the sale agreement dated 7.1.2002 was intended only as a security; and whether the trial court is right in holding that the respondent is entitled for the discretionary relief of specific performance. 17. In a suit for specific performance of contract, the plaintiff is to plead and prove readiness and willingness to perform the essential terms of the contract. Sec.16 (c) explanation (II) bars a specific relief unless the plaintiff pleads and prove the readiness and willingness. 18. The person against whom the relief is claimed may plead by way of defence any ground which is available to him under any law relating to contract. Often, the defence of denial of contract is pleaded. Like in the present suit, the defence may be taken that the contract was not intended for a specific performance but was intended as security for the repayment of the loan. 19. In 1980 SCC 1 (Khushalbhai Mahijibhai Patel vs A firm of Mohamadhussain Rahimbux it is held that the initial onus is on the plaintiff to prove the privity of the contract between the parties and admission by the defendant would raise a presumption till the contrary is proved. Onus then shifts on the defendant to rebut the presumption. 20. Secs.91 and 92 of Evidence Act deals with exclusion of oral evidence by documentary evidence. In 2009(5) SCC 713, VIMAL CHAND GHEVARCHAND JAIN AND OTHERS Versus RAMAKANT EKNATH JADOO in which the Supreme Curt held as follows: Indisputably when the true character of a document is questioned, extrinsic evidence by way of oral evidence is admissible. (See R. Janakiraman v. https://hcservices.ecourts.gov.in/hcservices/ State6, SCC para 24; Roop Kumar v. Mohan Thedani1, SCC para 19 and SBI v. Mula Sahakari Sakhar Karkhana Ltd.7, SCC paras 23 to 32.) We would, therefore, proceed on the premise that it was open to the respondent to adduce oral evidence in regard to the nature of the document. But, in our opinion, he did not discharge the burden of proof in respect thereof which was on him. The document in question was not only a registered one but also the title deeds in respect of the properties have also been handed over. Symbolic possession if not actual physical possession, thus, must be held to have been handed over. It was acted upon. The appellants started paying rent in respect of the said property. No objection thereto has been raised by the respondent. 21. Therefore, once there is denial of the execution of the contract, the initial burden is on the plaintiff to prove the execution of the document. 22. In the present case, to prove the execution of the sale agreement, apart from the respondent, who is the agreement holder, P.W.3 the Sub Registrar, who registered the document, P.W.4, an attesting witness, P.W.5 the scribe of the document were examined. P.W.1 would state that ehDk; gpujpthjpa[k; ngrpndhk;/ tpy;y';fk; vLj;J ghh;j;njd;. (rhl;rp kPz;Lk; brhy;fpwhh;)/ tpy;y';fk; vLj;J ghh;f;ftpy;iy/ rh;nt ek;gh; bjhpahJ/ mry; gj;jpuj;ij ,J tiu goj;J ghh;j;njd; vd;why; epidf;ftpy;iy/ th/rh/M/1 vGJk; nghJ ehd; vd; jfg;gdhh; gpujpthjp rhl;rpfs; gj;jpuk; vGjpa eghfs; ,Ue;njhk; 23. P.W.3 is the sub Registrar. His evidence is not much helpful to the respondent as he speaks in his official capacity on registration of a document. In his cross examination, he would state that he has no knowledge about the terms of the agreement. 24. P.W.4 is the attesting witness who would admit in his cross examination that he signed at the instance of his brother, who is an auto finance broker. 25. P.W.5 is the scribe who would state that he prepared the document at the dictation of the appellant and later he typed the same with the help of a typist and brought it back for execution. Therefore, in our considered view, the evidence regarding the execution of the document suffers credibility. 26. Exs.A.2 and A.3 are the two endorsements in respect of receipt of additional amount towards sale consideration. P.W.5 https://hcservices.ecourts.gov.in/hcservices/ would speak about the endorsement. Though he is a scribe he has not stated anything about the receipt of a sum of Rs.5,00,000/- by the appellant from the respondent. 27. P.W.6 is the attesting witness. He has also failed to state the passing of consideration. 28. As far as Ex.A.3 endorsement is concerned, P.W.2 would speak about the receipt of Rs.5,25,000/- and the execution of Ex.A.3. His evidence is not inspiring any confidence, as he states that he went to the shop of the respondent to purchase silver anklet for his grand-daughter and he was asked to be a witness for the endorsement. 29. The appellant has examined himself as D.W.1 and would state that he had taken auto finance from the father of the respondent for purchase of Lorries and agreed to repay the amount within six months and he was forced to execute the sale agreement for security purpose. 30. Mr.T.V. Sekar, the learned counsel for the respondent relied on a decision reported in 2010 STPL (LE) 44261 SC (Man Kaur (dead) by Lrs Hartar Singh Sangha) = 2010 10 SCC 512 where the Hon’ble Supreme Court has held; `17. To succeed in a suit for specific performance, the plaintiff has to prove (a) that a valid agreement of sale was entered by the definition in his favour an the terms thereof; (b) that the defendant committed breach of the contract; and © that he was always ready and willing to perform his part of the obligations in terms of the contract. If a plaintiff has to prove that he was always ready and willing to perform his part of the contract, that is, to perform his obligations in terms of the contract, necessarily he should step into the witness box and give evidence that he has all along been ready and willing to perform his part of the contract and subject himself to cross examination on that issue. A plaintiff cannot obviously examine in his place, his attorney holder who did not have personal knowledge either of the transaction or of his readiness and willingness. Readiness and willingness refer to the state of mind and conduct https://hcservices.ecourts.gov.in/hcservices/ of the purchaser, as also his capacity and preparedness on the other. One without the office is not sufficient. Therefore, the third party liability who has no personal knowledge cannot given evidence about such readiness and willingness, even if he is an attorney holder of the person concerned.” 31. The construction of the contract is a relevant factor to decide whether the sale agreement is intended to be performed. Ex.A.1 would show that the appellant had agreed to sell the property for a sale consideration of Rs.15,00,000/- and has received Rs.4,95,000/- as advance. This forms one of the essential terms of the contract. 32. The next essential term of the contract is the period. Interestingly, the document shows that the sale deed has to be executed within three years i.e., on or before 6.1.2005. There is no reason given in the contract for fixing the period as three years, when the balance to be paid is only Rs.10,05,000/- 33. It is pertinent to note that the respondent, as well as his father, are doing business in auto finance, pawn brokerage and jewellery shop. The respondent in his evidence would state that he wanted to run a blue metal crusher factory which is unbelievable. 34. Yet another factor is that the person who arranged for the entire transaction viz., one Farook Basha was not examined. 35. As rightly pointed out by the learned counsel for the appellant a perusal of Ex.A.2 would show that the sentences are cramped as if to accommodate all the sentences within a limited space. 36. The sale agreement was entered on 7.1.2002 and a sum of Rs.4,95,000/- was paid and endorsement on 17.1.2002 was made for receipt of Rs.5,00,000/-. And an endorsement on 8.1.2004 was made for receipt of Rs.5,25,000/- and having paid the entire sale consideration the respondent has chosen to call upon the appellant only in December 2004 to enforce the agreement. The suit was filed on the last date of limitation and the same was numbered only after 10 months. 37. The readiness and willingness is the essential part of the contract. The conduct of the respondent would show that he was never willing to enforce the contract. The construction of the agreement, the conduct of the party and the admission of the respondent and his witnesses that the respondent and his father are doing business in auto finance would show that Ex.A.1 the alleged sale agreement is not a true and genuine document and there is no intention of the parties to perform the contract. https://hcservices.ecourts.gov.in/hcservices/ 38. Specific Relief is the discretionary relief. In a suit for specific performance, the plaintiff should not only plead and prove the terms of agreement but also plead and prove his readiness and willingness to perform his obligation under the contract in terms of the contract. In 1987 (Supp) SCC 340 (Parakunnan Veetill Jospph's Son Mathew vs Nedumbara Kuruvila's Son and others) the Apex Court has held; `Section 20 of the Specific Relief Act, preserves judicial discretion to courts as to decreeing specific performance. This Court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff”. 39. In AIR 2001 SCC 2783 (A,C, Arulappan vs Smt.Ahalya Naik) the Hon'ble Supreme Court again held; The jurisdiction to decree specific relief is discretionary and the Court can consider various circumstances to decide whether such relief is to be granted. Merely because it is lawful to grant specific relief, but this discretion shall not be exercised in an arbitrary or unreasonable manner. Certain circumstances have been mentioned in S.20(2) of the Specific Relief Act, 1963 as to under hat circumstances the Court shall exercise such discretion. If under the terms of the contract the plaintiff gets an unfair advantage over the defendant, the Court may not exercise its discretion in favour of the plaintiff. So also, specific relief may not be granted if the defendant would be put to undue hardship which he did not foresee at the time of agreement if it is inequitable to grant specific relief, then also the Court would desist from Granting a Decree and plaintiff. https://hcservices.ecourts.gov.in/hcservices/ 40. As rightly pointed out by the learned counsel for the appellant, for the payment of Rs.15,00,000/- on various dates, the respondent could have produced his books of accounts which could have been the best evidence. 41. In (1977) 1 SCC 592 Ramdas Oil Mills vs Union of India (Miltary Dept), the Apex Court has held as follows: `10. Counsel for the appellant pressed really these three claims. We are unable to accept the submission of the appellant. The High Court rightly disallowed the major part of the claim of compensation for damages to building and also for G.I. Water pipes. The principal reason given by the Court is that account books were maintained in respect of construction and repairs to the building by the high Court that the appellant did not produce account books which would have shown the length of the pipes used for running the mills. It is well settled that if a person does not produce account books which are in his possession an adverse inference can be drawn for non-production thereof”. 42. Therefore, when the payments are denied the respondent could have produced the books of accounts to prove the payments. The initial burden of the plaintiff to prove the true construction of the contract and the execution thereof is not discharged and on the other hand the appellant has succeeded in establishing that the respondent was doing auto finance business and the document was executed only as a security to discharge the loan and not intended to be performed. 43. Therefore, we are of the considered view that the trial court is wrong in granting the discretionary relief of specific performance. 44. In the result, the appeal is allowed and the judgment and decree made in O.S.No.24 of 2005 dated 13.11.2006 on the file of the learned Principal District and Sessions Judge, https://hcservices.ecourts.gov.in/hcservices/ Thiruvannamalai, is set aside and the suit is dismissed. No costs. Consequently, connected MP is closed. Sd/ Asst. Registrar /true copy/ Sub Asst.Registrar sr To Principal District and Sessions Judge, Thiruvannamalai. + 1 cc to Mr.A. Srinivasan, sR.68636 + 1 cc to Mr.t.V. Sekar, Sr.68729 in A.S.No.1035 of 2007 NG(CO) eu 22.12.11 https://hcservices.ecourts.gov.in/hcservices/