HONOURABLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No.365 OF 2002 Cross Objections. Dated 20-04-2011 Between: Gantasala Prasad Rao. …Appellant. And: Mungara Dhana Raju and another. ……Respondents. HONOURABLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No.365 OF 2002 Cross Objections. JUDGMENT: The defendant in O.S.No.67 of 1996 on the file of the Senior Civil Judge, Machilipatnam is the appellant herein. The suit was one filed for specific performance of the contract or in the alternative to direct the defendants to pay a sum of Rs.1,90,000/- with interest at 24% p.a., The allegations in the complaint goes to show that the plaintiff is the brother-in-law of the defendant. They are the owners of the plaint schedule property and part of the property was purchased by D.1 from D.2 and the total extent is Ac.3.89 ½ cents which was converted into fish tank. The 1st defendant used to take loans since 1987 and on verification of the accounts on 27- 2-1994, a sum of Rs.1,90,000/- was found due and accordingly, the 1st defendant agreed to sell the property under an agreement of sale dated 27.2.1994 and D.2 also joined in execution of the agreement as no regular sale deed was executed by him in favour of the 1st defendant. In spite of the repeated demands, the defendant did not execute the sale deed though the plaintiff was ready and willing to perform the contract. Hence, the suit. The 1st defendant filed a written statement denying the alleged contract of sale and contending that the same was fabricated due to breakdown of the marriage of the plaintiff’s daughter. The 1st defendant got issued a legal notice for which the plaintiff gave a reply. The account copy filed by the plaintiff is not true and the suit is to be dismissed. The 2nd defendant filed a memo that he has no objection for passing of a decree and execution of the sale deed. On the basis of the above pleadings, the following issues were framed for trial: 1. Whether the suit contract dated 27.2.1994 is true, valid and binding on the defendants? 2. Whether the plaintiff is entitled to seek specific performance of suit contract dated 27.2.1994? 3. Whether the plaintiff is ready and willing to perform his part of obligation under the suit agreement? 4. To what relief? On behalf of the plaintiff, P.Ws.1 to 5 were examined and Exs.A.1 to A.8 were marked. On behalf of the defendants, D.Ws.1 to 3 were examined and Exs.B.1 to B.7 were marked. After considering the evidence on record, the lower Court granted a decree of specific performance and aggrieved by the said judgment, the appeal was filed and cross objections were filed by the plaintiff for a direction to deliver the property in pursuance of the agreement of sale. Points that arise for consideration are: 1) Whether the contract of sale pleaded by the plaintiff is true and enforceable? 2) Whether the plaintiff is entitled for specific performance of the contract? 3) Whether the plaintiff is entitled for the relief of possession as claimed in the cross-objections? 4) To what relief? In this case, admittedly, there is close relationship between the plaintiff and the defendants. D.1 and D.2 are brothers and the plaintiff is no other than their brother-in-law. According to the case of the plaintiff, Defendant No.1 was borrowing from the plaintiff and was found due to a tune of Rs.1,90.000/-and as the amount was not paid, the defendant No.1 has executed the contract of sale along with D.2 since part of the property was sold by D.2 to the 1st defendant. The sale agreement is marked as Ex.A.4. The 2nd defendant who is no other than the brother-in-law of the 1st defendant admits the execution of the contract of sale. Even in the evidence of 1st defendant, nothing serious could be made out to show that what was the reason for the 2nd defendant to collude with the plaintiff. So also, the strains of marriage relationship between some of the family members is also no ground to disbelieve the case of the plaintiff. Therefore, in view of the above circumstances, the burden is on the plaintiff to show that he lent money to the 1st defendant and the sale agreement was executed. Exs.A.1 to A.3 are the entries in the account book said to be maintained by the plaintiff and which was singed by the 1st defendant to some extent. P.W.2 deposed that he is the attestor of Ex.A.4 and D.1 and D.2 were present and they were looking into the accounts maintained by the plaintiff. Evidently, he is not interested in speaking falsehood to the advantage of the plaintiff. P.W.3 is the person who is said to have actually looked into the accounts and found them to be correct and calculated the amount due as Rs.1,90,000/-. He is also an independent witness. P.W.4 is also one of the native of the village of the parties and he also spoke about the defendant borrowing from the plaintiff and looking into the accounts once or twice in his presence. Therefore, the above evidence of the witness clearly goes to show that the defendant has borrowed money from the plaintiff and he was found due a sum of Rs.1,90,000/- by the date of Ex.A.4. Even from the evidence of P.W.5, it is quite clear that in February, 1994, he enquired the 1st defendant about the liability to pay the amount and the 1st defendant promised to discharge the debt. He was the Vice President of the Mandal. Exs.A.1 to A.3 reflects the correctness of the said transaction. Therefore, in view of the above circumstances, there is no reason to disbelieve the case of the plaintiff that the 1st defendant has borrowed money from him and he was found due a sum of Rs.1,90,000/- by the date of Ex.A.4 agreement. The plea of the 1st defendant that the agreement Ex.A.4 and the accounts Exs.A.1 to A.3 were fabricated cannot be accepted in view of the positive evidence available on record and also the admission of 2nd defendant who is his brother. Now the question that false for consideration is: Whether the agreement of sale pleaded by the plaintiff is a loan transaction or whether it was a sale transaction? It is not uncommon that whenever some amount was due from a person, the creditors obtain sale agreement. But from the account and the intention of the parties, the Court has to gather what was the real intention of the parties. In this case, a few circumstances clearly go to show that the 1st plaintiff never intended the suit transaction to a sale transaction and it is only intended to be a security for the repayment of the loan amount due by him. Even if the 1st defendant is to deny the transaction still, in a suit for specific performance, it is the duty of the Court to decide as to the nature of the transaction and the nature of the relief, the plaintiff is entitled to. In fact, in the cross-examination of P.W.2, Ex.B.1 which is said to be the mahazar was marked. Even in the evidence of plaintiff as P.W.1, he states that it is the general practice that in case of any dispute in between the persons of different villages, the elders will be sent and the document will be sent in writing referring to the particulars of the dispute. In this case also, such a mahazar was sent twice or thrice. In the evidence of P.W.2, he was confronted with Ex.B.1 dated 17.3.1996 whereunder the letter was addressed to the sarpanch of Pandiripalligudem in respect of the dispute between the plaintiff and the defendants. In fact, the evidence of P.W.5 who is said to be the elder of the village clearly goes to show that the 1st defendant in July, 1994 promised to discharge the debt but did not pay and thereupon after March, 1995, he did not pay the money and he was informed by P.W.1 that the 1st defendant sold the land. Therefore, from his evidence, it is quite clear that what the plaintiff was pursuing was only the recovery of money. Ex.A.4 is dated 27.2.1994. In the evidence of P.W.5, he stated that for the first time, he went to the house of D.1 in February, 1994 and later in July, 1994. According to him, to his knowledge by July, 1994, there are only monetary transactions and there are no other transactions. Further more, he was again sent in July, 1994, D.1 promised to pay after March, 1995. In fact, Ex.B.1 is dated 17.3.1996 which was addressed to the sarpanch of Pandiripalligudem which discloses that in spite of repeated demands for the payment of money due by the 1st defendant to the plaintiff, he did not pay the money and therefore, there was a request to hold the panchayat. In fact, even in the evidence of D.W.1, he admits that such a request has come on 17.3.1996. Therefore, the evidence on record and the conduct of the plaintiff only reflects that the plaintiff was pursuing his claim for recovery of money rather than enforcement of the contract under Ex.A.4. If really the transaction was a sale transaction, there was no need for the plaintiff to demand repayment of the money. Probably may be the reason the plaintiff has asked for the alternative relief of recovery of Rs.1,90,000/-. Therefore, from the nature of circumstances available on record and the conduct of the plaintiff, it is quite clear that the defendant was borrowing and evidently due was a sum of Rs.1,90,000/- by the defendant under Ex.A.4 and the agreement of sale was executed only towards the liability for repayment of the money and the parties never intended that it should be a sale transaction. By virtue of the abundant evidence available on record, I feel that the relief for specific performance cannot be granted and instead the plaintiff will be entitled to the decree for payment of sum of Rs.1,90,000/- due to him by the defendant under Ex.A.4. Learned Counsel for the respondents pleaded that in case such a modification is given by the Court, the time may be fixed for repayment otherwise, the relief of specific performance may be confirmed. I think, the said relief is not possible in view of the opinion of this Court that the transaction is only a loan transaction and the plaintiff will be entitled for the decree for money only. Therefore, accordingly, the judgment of the lower Court so far as it relates to the relief of specific performance of contract is set aside and instead a decree is passed for recovery of Rs.1,90,000/- with interest at 12% p.a., from the date of the suit, till the date of decree and with subsequent interest at 6% p.a., from the date of the decree, till the date of realization. In the result the appeal is allowed and the judgment of the lower Court in so far as it relates to the relief of specific performance of contract is set aside and instead decree is passed for recovery of Rs.1,90,000/- with interest at 12% p.a., from the date of the suit, till the date of decree and with subsequent interest at 6% p.a., from the date of the decree, till the date of realization. Each party do bear their own costs in the appeal. Since the relief of specific performance is set aside, the cross objections also are liable to be dismissed and accordingly dismissed. _________________________________ Justice N.R.L.NAGESWARA RAO Dated 20-04-2011. Dvs HONOURABLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No.365 OF 2002 Cross Objections. Dated 20-04-2011