IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH TUESDAY, THE 23RD MARCH 2010 / 2ND CHAITHRA 1932 RSA.NO. 113 OF 2010() --------------------- AS.154/2008 OF SUB COURT,KOTTARAKKARA OS.132/2006 OF MUNSIFF COURT, KOTTARAKKARA .................... APPELLANT – APPELLANT – PLAINTIFF: --------------------------------------- SHAJAHAN, S/O.ALIYARUKUNJU, RESIDING AT PORUMPALLIYIL VILAYIL VEEDU, KAITHODU, VELLARI MURI, NILAMEL VILLAGE, KOTTARAKKARA TALUK, KOLLAM DISTRICT. BY ADV. SRI.T.K.MARTHANDAN UNNITHAN SRI.V.JAYAKUMAR RESPONDENT – RESPONDENT – DEFENDANT: ------------------------ R.BINUJA, W/O.K.H.FAILAL, RESIDING AT TC 48/606, RAJEEV NAGAR, KARAMANA, THIRUVANANTHAPURAM, NOW RESIDING AT 4/23, NGO QUARTERS, THRIKKAKARA, ERNAKULAM. ADV. SRI.S.M.PREM SMT.K.P.SANTHI SRI.P.K.NIJOY SMT.NISHA G.THARAMAL THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 23/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P.JOSEPH, J. ================================= R.S.A. NO.113 of 2010 ================================= Dated this the 23rd day of March, 2010 J U D G M E N T Dispute concerned 8 cents and a commercial building situated therein which, it is not disputed originally belonged along with the adjacent land to the appellant as per assignment deed No.2520 of 1995. While so, appellant embarked on construction of an Auditorium in the adjacent land by availing loan from the Kerala Financial Corporation (for short, 'the KFC”) on the strength of an equitable mortgage. It is the case of appellant that since the loan sanctioned by the KFC was not sufficient for completion of the Auditorium he availed a loan of Rs.50,000/- from the respondent on 25.3.2002 and as security executed Ext.A1, styled as sale deed on 01.04.2003 in favour of the respondent as if title and possession of the suit property and the building therein was conveyed to the respondent. According to the appellant that document was not intended by the parties to convey title, interest and possession of the suit property in favour of the respondent but only as a security for due repayment of the loan availed by him. It is also the case of R.S.A. No. 113 of 2010 -: 2 :- appellant that notwithstanding execution of the sale deed and recitals made therein he continued to be the owner in possession and enjoyment of the suit property. While so, appellant filed O.S. No.132 of 2004 against the KFC. Respondent got herself impleaded and raised a counter claim. That case I am told, was disposed of since rest of the property of the appellant was sold and liability of the KFC was discharged. In the present suit appellant sought for a declaration that assignment deed No.1247 of 2003 dated 1.4.2003 though styled as an assignment deed is only a security for the loan availed by him from the respondent and for consequential relief of injunction against the respondent trespassing into the suit property or committing waste. Respondent denied that there was any loan transaction but claimed that there was an outright sale of the suit property in her favour as per Ext.A1 for consideration. It is not correct to say that the sale deed was taken as security. It is also the contention of respondent that pursuant to Ext.A1, sale deed she got title and possession of the suit property. Appellant filed O.S. No.132 of 2004 against the KFC with fraudulent R.S.A. No. 113 of 2010 -: 3 :- intention of defeating her right and hence she got impleaded in that suit. She claimed that appellant is not entitled to the reliefs prayed for. Appellant produced Exts.A1 to 19 and gave evidence as P.W.1. He examined P.Ws.2 and 3 to support of his case. Respondent proved Exts.B1 to B17 and gave evidence as D.W.1. Exhibit A9 is an agreement dated 1.4.2003 allegedly executed between appellant and respondent stating that on appellant repaying the sum of Rs.50,000/- taken by him from the respondent, the latter was to re-convey the property covered by Ext.A1, assignment deed No.1247 of 2003. Appellant also produced certain other documents to support his claim of possession of the suit property notwithstanding Ext.A1, assignment deed. Trial court took the view that Ext.A9 is not a genuine document and the suit being one on title question as to possession is irrelevant and need not be looked into. It is also the view of trial court that Ext.A1 being a pucca sale deed expressing intention of the parties to assign the suit property in favour of respondent, extraneous evidence of parties is not warranted since the terms of Ext.A1 are not in any way ambiguous. R.S.A. No. 113 of 2010 -: 4 :- Holding so the suit was dismissed. First appellate court agreed with the trail court as to genuineness of Ext.A9 and stated that so far Ext.A1 evidenced a pucca sale of the suit property, it cannot be treated as a deed of mortgage (by way of security) and that Section 92 of the Indian Evidence Act (for short, “the Act”) prohibited appellant from adducing evidence to the contra. So far as possession claimed by the respondent is concerned first appellate court observed that evidence adduced by the appellant cannot be looked into, firstly it being against the mandatory provisions of Sec.92 of the Act and secondly, principle that possession should follow title must apply, respondent is the rightful owner of the property as per Ext.A1 and hence any person other than respondent can only be treated as a trespasser. Holding so judgment and decree of learned Munsiff were confirmed. Hence this Second Appeal at the instance of appellant/plaintiff. 2. Following substantial questions of law are framed for a decision. (i) Whether in the light of the R.S.A. No. 113 of 2010 -: 5 :- decision in Gangabai v. Chhabubai (AIR 1982 SC 20) courts below were legally correct in holding that appellant is debarred from adducing evidence against the recitals in Ext.A1 and proving that Ext.A1, assignment deed was only intended as a security of the loan transaction? (ii) Whether finding of the courts below that appellant could not have adduced evidence to show that he continued to be in possession of the suit property notwithstanding Ext.A1 is legally correct? (iii) Whether finding of the courts below that Ext.A1 is a sale deed and does not relate to the loan as pleaded by the appellant is factually justified? (iv) Is not appreciation of evidence in that regard perverse? It is contended by learned counsel for the appellant/plaintiff R.S.A. No. 113 of 2010 -: 6 :- placing reliance on the decision in Gangabai v. Chhabubai (supra) that since appellant wanted to show Ext.A1 as not intended to be a sale deed but only a security evidence in that line is not barred under Sec.92 of the Act. According to the learned counsel courts below are not justified in holding that the appellant was debarred from adducing evidence against the recitals in Ext.A1 regarding passing of title and possession. Learned counsel for the respondent would support the finding of the courts below. According to the learned counsel there is no evidence to show that notwithstanding the recitals in Ext.A1, appellant continued to be in possession of the suit property. It is also contended by learned counsel that Ext.A9 could not be acted upon as rightly found by the courts below in which case recitals in Ext.A1 should stand. Learned counsel has also an argument that findings of the courts below based on the evidence on record do not involve any substantial question of law so that this Court should interfere and to buttress that contention placed reliance on the decision in Afsar Sheik v. Soleman Bibi (1976) 2 SCC 142). R.S.A. No. 113 of 2010 -: 7 :- 3. No doubt, a finding of fact even if erroneous cannot involve a substantial question of law requiring this Court to interfere. But if the finding of fact is perverse or is based on impermissible or wrong impression of law necessarily that finding can be said to be perverse and this Court has to interfere as it involved a substantial question of law. It is the case of the appellant that Ext.A1 was executed not intending to convey right, title, interest and possession of the suit property in favour of the respondent but only as a security for the loan availed. Appellant admits execution of the document but not the transaction as referred to in it. Exhibit A9 is produced by the appellant to show that there was a contemporaneous agreement between him and respondent to re-convey the property covered by Ext.A1 since the document was only taken as security for the loan. Trial court rejected Ext.A9 for the reason that though the document is dated 1.4.2003 the stamp paper for executing Ext.A9 was purchased on 7.2.003 while for Ext.A1, stamp paper was purchased on 28.3.2003 and since, though it is the case of appellant that the stamp paper for Ext.A9 was purchased by R.S.A. No. 113 of 2010 -: 8 :- the appellant, Exts.B10 and B11 would show that no such stamp paper was purchased on the relevant day. On the other hand Ext.B11 reveal that on 7.2.2003 register of the stamp vendor was closed with sale of stamp paper bearing No.9802 whereas stamp paper of Ext.A9 bears No.10005. A further fact which was taken note of by the learned Munsiff is that though the document is dated 01.04.2003 there was no mention of the same in the plaint or the suit notice and the document was produced only after the case came up for trial in the list. Appellant examined P.W.3 to prove due execution of Ext.A9. Her evidence was discarded by the trial court on the ground that she is only a scribe and not the attesting witness and hence her evidence cannot be relied. I am not at the question whether Ext.A9 has been duly proved and whether courts below could have invoked the power under Sec.73 of the Act to compare the disputed signature in Ext.A9 with the admitted signatures of respondent along with other evidence let in. I am at the question whether courts below approached the issue in the correct perspective bearing in mind the correct provision of law and the scope of Sec.92 of R.S.A. No. 113 of 2010 -: 9 :- the Act. Appellant also produced certain documents in the trial court to prove that he continued to be in possession of the property notwithstanding Ext.A1. I find from the judgment of the trial court that those documents were discarded on a sweeping observation that as the suit is on title the court is not concerned with the issue of possession. I am afraid, that finding of the trial court is not sustainable. Contention of appellant is that Ext.A1 was intended only as a security and that notwithstanding it he continued to be in possession of the property. In that situation the question whether even after Ext.A1 appellant continued to be in possession of the suit property was certainly relevant for consideration. It is seen from paragraph 7 of the judgment that trial court was carried away by the recitals in Ext.A1 as to sale of suit property. Trial court was of the view that extraneous evidence as to the nature of transaction has to be called upon only when the terms of the document is ambiguous. It is not as if appellant denies Ext.A1 or the recitals therein. What was required was not an interpretation of Ext.A1. In such a situation merely looking at the recitals in Ext.A1 there can be R.S.A. No. 113 of 2010 -: 10 :- no proper adjudication of the dispute involved. Trial court has proceeded on a wrong impression of law and fact. When it came to the first appellate court, learned Sub Judge took the view that Ext.A1 has all the characteristics of a sale deed and on reading Ext.A1 indisputably it is a sale deed and not created as security. First appellate court was of the view that intention of parties has to be gathered from Ext.A1 itself. In paragraph 6 of the judgment it is stated that when the document is executed as a sale deed direct or circumstantial evidence to show that it was not intended as sale deed but only as security was not admissible. Hence Ext.A1 should stand. Yet another reason which the first appellate court stated is that Ext.A9 is not attested by two witnesses. No provision of law or authority has been placed before me to show that an agreement is required by law to be attested by two or more witnesses. First appellate court has observed that so far as the claim of possession of appellant is concerned evidence adduced is against the mandatory provisions of Sec.92 of the Act and hence is not admissible. Yet another circumstance stated by the learned Sub Judge is R.S.A. No. 113 of 2010 -: 11 :- that so far as possession is concerned the principle that possession should follow title must apply and hence respondent must be deemed to be in possession of the property on the strength of Ext.A1. That view also cannot be sustained in view of the decision in Hathika v. Padmanabhan (1994 [1] KLJ 89) and Antony and Others v. Thresia and Others (1997 [1] KLJ 494). Generally that principle is applied only in regard to possession of vacant lands where parties may not be able to adduce appropriate evidence regarding possession. Here suit property takes in a commercial building according to the appellant rented out to tenants and to prove possession he has produced some documents stated to be rent deeds and copy of receipts issued by him. 4. A recital in a document as to possession is not a term of the contract but only a recital of fact. The same is the position regarding passing of consideration. Section 92 of the Act does not bar a party from proving that the recital as to passing of consideration or transfer of possession is not correct. This Court has taken that view in Kunhammed R.S.A. No. 113 of 2010 -: 12 :- Kutty v. Avokker (1984 KLJ 415) and State of Kerala v. Thomas (1986 KLT 861). In Hathika v. Padmanabhan (supra) this Court held that though oral evidence is not admissible to contradict or vary the terms of the agreement reduced to writing oral evidence is admissible to show that the document executed by the parties was never intended to be acted upon where parties have entered into some other transaction which was not recorded in the document. In Gangabai v. Chhabubai (supra) the Supreme Court has ruled that Sec.92 of the Act does not bar a party from proving that a document was not intended to be acted upon. Hence Sec.92 of the Act did not prevent the appellant from adducing evidence to show that Ext.A1 was not intended as a sale deed, no consideration as stated therein passed, there was transfer of possession as stated in Ext.A1 and that it was intended only as a security for the loan transaction he pleaded. In Ramlal and Another v. Phagna and Others (AIR 2006 SC 623) the Supreme Court has held when in addition to a sale deed, an agreement was also executed simultaneously for re-conveyance of the property a declaration R.S.A. No. 113 of 2010 -: 13 :- could be granted that the sale as per sale deed was only nominal and the 'vendor' continued to be the owner of the land. It is also open to the appellant to prove existence of a contemporaneous agreement to treat Ext.A1 only as a security for the loan transaction. Courts below have not approached the issue in accordance with the correct position of law. The findings entered by the courts below are contrary to the position of law and are perverse involving a substantial question of law and this Court necessarily has to interfere. I answer question Nos.I, II and IV in the above lines. In the light of what I have stated the matter has to go back to the trial court for fresh decision in accordance with the law. I make myself clear that I have not expressed either way on the merits of the contentions raised by the parties or the acceptability of the evidence on facts. I also make it clear that both sides can adduce further evidence if they are so advised in support of their respective contentions. Resultantly, Second Appeal is allowed by way of remand. Judgments under challenge are set aside. Case is remitted to the court of learned Munsiff, Kottarakkara for fresh disposal R.S.A. No. 113 of 2010 -: 14 :- in the light of the observations made but untrammelled by any of the finding in the impugned judgments. Parties shall appear in the trial court on 18.05.2010. Refund one half of the court fee paid on the memorandum of appeal to the appellant. Registry shall send the records of the case to the trial court forthwith. Interlocutory Application No.275 of 2010 shall stand dismissed. THOMAS P.JOSEPH, JUDGE. vsv