IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR SATURDAY, THE 20TH AUGUST 2011 / 29TH SRAVANA 1933 RSA.No. 965 of 2011() --------------------- AS.42/2008 of ADDL.SUB COURT, IRINJALAKUDA OS.7/2000 of MUNSIFF COURT, KODUNGALLUR .................... APPELLANTS/APPELLANTS/PLAINTIFFS ---------------------------------------------------------- 1. RADHA, W/O. LATE ERIMMAL SASI, POOPATHY DESOM,POYYA VILLAGE,KODUNGALLUR TALUK. 2. SARITHA, D/O. LATE ERIMMAL SASI, POOPATHY DESOM,POYYA VILLAGE,KODUNGALLUR TALUK. 3. SARISH, S/O. LATE, ERIMMAL SASI, POOPATHY DESOM,POYYA VILLAGE,KODUNGALLUR TALUK. BY ADV. SRI.DINESH MATHEW J.MURICKEN SRI.P.V.BALAKRISHNAN RESPONDENT(S):RESPONDENTS/ DEFENDANTS --------------------------------------------------------------------- 1. DAMODARAN NAIR, S/O. PANADATH NARAYANAN NAIR, PUTHUSSERY VEETTIL, MADATHUMPADY VILLAGE & DESOM, KODUNGALLUR TALUK-680733. 2. NANDAKUMAR, S/O. THEKKINIYATHUVEETTIL, RAMAN NAIR, POOPATHY DESOM, POYYA VILLAGE, KODUNGALLUR TALUK-680733. THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 20/08/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.SASIDHARAN NAMBIAR,J. =========================== R.S.A. No. 965 OF 2011 =========================== Dated this the 20th day of August,2011 JUDGMENT Plaintiffs in O.S.7/2000 on the file of Munsiff Court, Kodungallur are the appellants. Defendants are the respondents. Suit was filed for declaration that Exts.A1 and A2 sale deeds executed by Sasi, husband of the first appellant are documents executed as security and they did not create any right or title to respondents in the plaint schedule property and that plaint schedule property absolutely belongs to the appellants and also to cancel Ext.A1 and A2 and for a permanent prohibitory injunction restraining the respondents from trespassing into the plaint schedule property. First appellant is the widow and respondents 2 and 3 the children of deceased Sasi, the executant of Exts.A1 and A2 sale deeds. Ext.A1 R.S.A.965/2011 2 sale deed was executed by Sasi as document No.1879/1997 of SRO Mala on 21.8.1987 whereunder 25 cents belonging to him was assigned in favour of the first respondent for a consideration of Rs.15000/-. Under Ext.A2 sale deed executed on 29.7.1977 deceased Sasi sold 5 cents for a consideration of Rs.3500/-. The case of the appellants is that before the death of Sasi he had disclosed to the first appellant that he had borrowed Rs.15,000/- from the first respondent and Rs.3500/- from the second respondent and executed documents as security and directed first appellant to pay the amount and receive back the documents. It is the case that on enquiry after the death of the husband she realised that Ext.A1 and A2 were executed as sale deeds though they are only documents executed as security. Appellants contended that the sale consideration shown in Exts.A1 and A2 do not reflect the value of the properties at that time and the properties would fetch Rs.5000/- per cent at that time and therefore R.S.A.965/2011 3 Exts.A1 and A2 are not valid sale deeds. It is contended that respondents are money-lenders and were in dominant position to get the sale deed executed from deceased Sasi and Exts.A1 and A2 are therefore created fraudulently by the respondents and are invalid and by the said documents respondents did not derive any right in the plaint schedule properties and they are to be cancelled and the title of the appellants being the legal heirs of the deceased Sasi, to the plaint schedule property is to be declared and respondents are to be restrained by a permanent prohibitory injunction. 2. Respondents filed separate written statements contending that there was no loan transaction as alleged by the appellants and Exts.A1 and A2 sale deeds were not executed as security and instead they were executed as sale deeds transferring the right and title to the plaint schedule property in favour of respondents 1 and 2 and even in 1999 first appellant purchased a R.S.A.965/2011 4 property near to the plaint schedule property having an extent of 4.70 cents for a total consideration of Rs.4000/- and therefore the value of the property in 1997 is less than the value shown in Ext.B1 sale deed obtained by the appellants and Exts.A1 and A2 are not vitiated by undue influence or fraud and suit is only to be dismissed. 3. Learned Munsiff on the evidence found that there is no evidence to prove that Sasi had borrowed any amount from respondents 1 and 2 as claimed by the appellants. Learned Munsiff also found that even the details, including the date of the alleged loan transaction, was not pleaded and Ext.B1 shows that on 4.1.1999 first appellant has purchased another property having an extent of 4.70 cents for a total consideration of Rs.4000/- near to the plaint schedule property and Exts.A1 and A2 sale deeds were two years earlier to the said transaction and therefore case of the appellants that the value shown in Exts.A1 and A2 do not R.S.A.965/2011 5 reflect the actual value is not correct. Learned Munsiff dismissed the suit holding that appellants did not establish that Exts.A1 and A2 are vitiated. Appellants challenged the decree and judgment before Additional Sub Court, Irinjalakuda in A.S.42/2008. Learned Sub Judge on reappreciation of the evidence confirmed the findings of the learned Munsiff and dismissed the appeal. It is challenged in this second appeal. 4. Learned counsel appearing for the appellants was heard. 5. The argument of the learned counsel is that courts below did not properly appreciate the evidence and the effect of sub section (3) of Section 16 of Indian Contract Act was omitted to be appreciated by the courts below. The argument of the learned counsel is that in the plaint itself it was specifically pleaded that respondents 1 and 2 are money lenders and that fact was not denied in the written statement and in such circumstances as provided under sub section (3) of Section 16, the R.S.A.965/2011 6 burden is on the respondents, the assignees under Exts.A1 and A2, to prove that the sale deeds executed by Sasi were not the result of inducement and undue influence and courts below wrongly cast the burden on the appellants. Learned counsel argued that under Ext.A1 sale deed 25 cents was sold for Rs.15,000/- and under Ext.A2, 5 cents was sold for Rs.3500/- and it establishes that the transaction was unconscionable and therefore respondents should have established that the sale deeds were not the result of undue influence exerted by the respondents who are in a dominant position to influence the assignor Sasi and on the evidence it should have been found that Ext.A1 and A2 are vitiated. Learned counsel argued that inspite of the contention raised by the appellants, only son of the first respondent was examined and adverse inference should have been drawn for non examination of first respondent and it should have been declared that Ext.A1 and A2 are void. 6. On hearing the learned counsel I do not find R.S.A.965/2011 7 any substantial question of law involved in the second appeal. 7. Exts.A1 and A2 are admittedly executed by deceased Sasi respectively on 21.8.1997 and 29.7.1997, whereunder 25 cents was assigned in favour of the first respondent for a consideration of Rs.15,000/- and five cents was assigned in favour of the second respondent for a consideration of Rs.3500/-. Exts.A1 and A2 documents establish that they are executed as sale deeds. There is nothing in Exts.A1 and A2 to show that they were executed as documents of security, as contended by the appellants. As rightly pointed out by the courts below the allegation in the plaint itself is that appellants were unaware of execution of Exts.A1 and A2 and before the death of the assignor thereunder, namely the husband of the first appellant till he disclosed to the first appellant that he had borrowed Rs.15,000/- from the first respondent and Rs.3500/- from the second respondent and executed documents as security and directed the R.S.A.965/2011 8 first appellant to get back the documents after paying the amount due to them. There is no case for the appellants that deceased Sasi had borrowed money from the first respondent or the second respondent earlier to the transaction reflected in Exts.A1 and A2. Though reliance was placed on sub section (3) of Section 16 of the Indian Contract Act, to attract the said sub section, appellants have to establish that respondents 1 and 2 were persons who are in a position to dominate the will of Sasi, who executed Exts.A1 and A2 and court must be satisfied on the face of the documents or on the evidence adduced that the transaction was unconscionable. If these aspects are established, then the burden of proving that such contract was not induced by undue influence lie upon the respondents who are in a position to dominate the will of other. Sub section (3) of Section 16 reads: (3) Where a person who is in a position to dominate the will R.S.A.965/2011 9 of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other.” Reliance was placed on the Illustration (C) of Section 16. It reads:- (C) A, being in debt to B, the money-lender of his village, contracts a fresh loan on terms which appear to be unconscionable. It lies on B to prove that the contract was not induced by R.S.A.965/2011 10 undue influence. Illustration (C) provides that a person who is already in debt to another person when contracts a fresh loan with that person and the terms are unconscionable, the burden to prove that the contract was not induced by undue influence is on the creditor. Therefore to attract Illustration (C) of Section 16 (3), appellants have to prove that Sasi was in debt to the respondents earlier to the transaction covered under Ext.A1 and A2. They have also to establish that Exts.A1 and A2 were executed thereafter as fresh transactions and the terms of Exts.A1 and A2 on their face should appear unconscionable. If these aspects are proved positively, the burden to prove that the transaction is not induced by undue influence would be on the respondents. As stated earlier, there is no pleading or evidence that respondents 1 and 2, even if they are money lenders, were creditors of deceased Sasi and while in debt Sasi executed Exts.A1 and A2. Moreover, a perusal of Exts.A1 and R.S.A.965/2011 11 A2 must appear to be unconscionable. Then only Illustration (C) can be applied and the burden to prove that Ext.A1 and A2 were not executed by the inducement could be shifted on the respondents. 8. The courts below on appreciation of the evidence found that the consideration shown in Exts.A1 and A2 is reasonable. The courts below relied on Ext.B1 sale deed executed in favour of the first appellant in 1999, whereunder 4.70 cents was purchased by the first appellant for a total consideration of Rs.4000/-. PW1 first appellant admitted that the value shown in Ext.B1 was the prevailing value at that time. The value seen in Ext.B1 is the value of the property two years after execution of Ext.A1 and A2. Courts below were therefore justified in holding that when the property covered under Ext.B1 is near to the plaint schedule property and as it is not established that the said property was having any added advantage than the property covered under Ext.A1 and A2 consideration seen in Ext.A1 and A2 is reasonable. R.S.A.965/2011 12 In such circumstances, from Exts.A1 and A2 or the evidence adduced by the appellants, it cannot be found that the transactions under Exts.A1 and A2 are unconscionable. Therefore appellants cannot be heard to contend that the burden to prove that Exts.A1 and A2 are not vitiated is on the respondents. The burden is definitely on the appellants to prove that Exts.A1 and A2 were not executed as genuine sale deeds. On the evidence courts below rendered a factual finding that appellant did not establish that Exts.A1 and A2 were executed as documents of security. That factual finding, which is in accordance with the evidence, cannot be interfered in exercise of the powers under section 100 of Code of Civil Procedure. Appeal is dismissed. M.SASIDHARAN NAMBIAR JUDGE tpl/- M.SASIDHARAN NAMBIAR, J. --------------------- W.P.(C).NO. /06 --------------------- JUDGMENT SEPTEMBER,2006