IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:21.01.2011 Coram: THE HONOURABLE MR.JUSTICE G.RAJASURIA S.A.No.204 of 2008 and M.P.No.1 of 2008 V.Vaiyapuri ... Appellant/Plaintiff vs. 1.M.Pavayi 2.M.Ramesh ... Respondents/Defendants This second appeal is filed against the judgement and decree dated 30.7.2007 passed by the Principal Subordinate Court, Salem, in A.S.No.25 of 2007 reversing the judgment and decree dated 22.7.2005 passed by the II Additional District Munsif, Salem, in O.S.No.1240 of 2004. For Appellant : Mrs.Hemasampath,Sr.counsel for Mrs.R.Meenal For Respondents : Mr.P.Jagadeesan JUDGMENT This second appeal is filed by the plaintiff, inveighing the judgement and decree dated 30.7.2007 passed by the Principal Subordinate Court, Salem, in A.S.No.25 of 2007 reversing the judgment and decree dated 22.7.2005 passed by the II Additional District Munsif, Salem, in O.S.No.1240 of 2004, which was filed for specific performance of an agreement to sell. 2. The parties, for the sake of convenience, are referred to here under according to their litigative status and ranking before the trial Court. 3. The epitome and the long and short of the relevant facts absolutely necessary and germane for the disposal of this second appeal would run thus: The plaintiff, who is the appellant herein, filed the suit seeking the following relief: https://hcservices.ecourts.gov.in/hcservices/ "a) to pass a judgement and decree against the defendants directing the suit contract dated 18.2.99 touching the suit property set out in the schedule hereto be specifically performed by the defendants within the time to be fixed by this Honourable Court and in default to order execution of such sale deed by process of Court and to put him in possession the suit property set out in the plaint schedule hereto. 2) In the alternative directing the defendants to refund the advance amount of Rs.50,000/- paid to the defendants with interest at 24% p.a. From the date of suit i.e. From 17.5.2000 till date of realisation." (extracted as such) (b) The defendants resisted the suit by filing written statement. (c) Whereupon the trial Court framed the issues. The plaintiff on his side examined himself as P.W.1 along with P.W.2 and P.W.3 and marked Ex.A1 to A6. On the defendants' side, the first defendant examined herself as D.W.1 along with the second defendant as D.W.2 and marked Exs.B1 to B3. (d) The trial Court decreed the suit for specific performance, as against which, the appeal was filed. Whereupon the appellate Court reversed the findings of the trial Court and dismissed the original suit filed by the plaintiff. 4. Being aggrieved by and dissatisfied with the judgement and decree of the appellate Court, this second appeal has been filed on various grounds inter alia thus: (i) The lower appellate Court failed to consider that Ex.A1 was a Registered Agreement to Sell, intended to be acted upon, and the contention of the defendants that D1's husband, while working as collecting agent for the plaintiff caused the said Ex.A1 to be executed by the defendants as security was not proved by the defendants. (ii) The 'onus of proof' was on the defendants, but they failed to discharge the same. However, the first appellate Court erroneously held as though the 'onus of proof' was on the plaintiff to prove the genuineness of Ex.A1 and the burden of proof was not on the defendants. (iii) Once the defendants accepted the execution of the registered agreement to sell-Ex.A1, the onus was on the defendants to prove their plea that the said document emerged only as a security and not intended to be acted upon. (iv) Without considering these salient features, the lower appellate Court simply upset the reasoned judgement of the trial Court. https://hcservices.ecourts.gov.in/hcservices/ 5. The following substantial questions of law are found suggested in the memorandum of grounds of second appeal. "(i) Whether in law the lower appellate Court was right in dismissing the suit when the execution of Ex.A1 registered sale agreement was clearly admitted by the respondents both in their written statement and in the oral evidence? (ii) Whether in law the lower appellate Court was right in overlooking that the burden of proving that Ex.A1 was executed for some other purpose, when the respondents had not discharged the burden? (iii) Whether in law the lower appellate Court was not wrong in omitting to see that the respondents had come with a totally false case and that their defence should be rejected?" (extracted as such) 6. Heard both sides. 7. Taking into consideration the arguments on both sides and the materials available on record and also on perusal of the judgements of the first appellate Court as well as the trial Court, I am of the considered view that the following substantial questions of law would arise. "(i) Whether the first appellate Court was right in applying the concept 'burden of proof', in deciding the appeal? (ii) Whether the first appellate Court, in accordance with the provisions of law analysed the findings of the trial Court and rendered its judgement, when Ex.A1 is a registered agreement to sell, which was admitted by the defendants and that the defendants only pleaded that Ex.A1 document emerged only as a security? (iii) Whether the fact of D2 being a minor on the date of emergence of Ex.A1 would render Ex.A1 void when in fact the minor was not one of the co-owners or co-sharers of the suit property?" 8. Heard both further on the above substantial questions of law. 9. The gist and kernal of the arguments of the learned Senior counsel for the appellant/plaintiff would run thus: (a) The onus of proof is on the defendants who pleaded that Ex.A1- the registered agreement to sell emerged only as a security, whereas, the first appellate Court held as though the burden is on the plaintiff https://hcservices.ecourts.gov.in/hcservices/ to prove that Ex.A1 was intended to be acted upon and not one emerged as security. (b) Section 92 of the Indian Evidence Act was not at all taken into consideration by the first appellate Court. (c) The trial Court extracted the various portions of the evidence and rendered its judgement, whereas, the first appellate Court furnished no reason for disagreeing or upseting the finding of facts rendered by the trial Court. Accordingly, the learned Senior counsel for the appellant/plaintiff prays for setting aside the judgement and decree of the first appellate Court and for restoring the judgement and decree of the trial Court. 10. In an attempt to torpedo and pulverise the arguments as put forth on the side of the appellant/plaintiff, the learned counsel for the respondents/defendants would advance his arguments, the gist and kernal of them would run thus: (1) D2 was proved to be a minor as on the date of Ex.A1 and the trial Court also rendered its finding to that effect, however, it failed to hold that Ex.A1 was void and the appellate Court correctly applied the concept 'onus of proof' and expected the plaintiff to prove his case, and on seeing that the plaintiff did not examine any attesting witness to prove Ex.A1, the first appellate Court correctly reversed the findings of the trial Court, warranting no interference in second appeal. (2) The alleged reply notice-Ex.A5 dated 15.5.2000 was not given by the defendants even then the trial Court held as though reply notice was given by the defendants. (3) Shortly three days after the demise of D1's husband, the plaintiff's notice dated 25.4.1999 was given and at that time, the defendants were not in a position to reply at all. (4) D1's husband was acting as collecting agent of the plaintiff, in addition to his job as a small weaver and hence, the plaintiff managed to obtain Ex.A1 while he was in a dominating position and as such, the first appellate Court considering the pros and cons of the matter and the plight of the defendants reversed the findings of the trial Court, correctly. (5) As per Ex.A1 it is found stated that 'the remaining part of the sale consideration was only Rs.10,000/- out of the total sale consideration of Rs.60,000/-', even then two years time is found specified in Ex.A1 for completing the sale. If really it was an https://hcservices.ecourts.gov.in/hcservices/ agreement to sell, such a huge period of two years might not have been contemplated in the agreement to sell and that itself is indicative of the fact that the said document was not intended to be an agreement to sell. (6) The deposition of D.W.1 was misread by the trial Court and such error was rectified by the first appellate Court, warranting no interference in second appeal. Accordingly, the learned counsel for the defendants would pray for dismissing the second appeal. 11. The learned counsel for the defendants also would submit that as per Section 20 of the Specific Relief Act, the Court is not bound to order for enforcing an agreement to sell even if it is found to be legally permissible and this is a fit case wherein Ex.A1 need not be specifically enforced in view of the reasons found set out on the side of the defendants. 12. Substantial Questions of law (i), (ii) and (iii) are taken together for discussion as they are interwoven and interlinked, interconnected and entwined with one another. 13. At the outset itself I would like to refer to the decisions cited on both sides. (a) On the side of the appellant/plaintiff the following decisions are found cited. (i) (2009)5 SUPREME COURT CASES 713 – VIMAL CHAND GHEVARCHAND JAIN AND OTHERS VS. RAMAKANT EKNATH JADOO, certain excerpts from it would run thus: "36. if the appellants were able to prove that the deed of sale was duly executed and it was neither a sham transaction nor represented a transaction of different character, a suit for recovery of possession was maintainable. A heavy onus lay on the respondent to show that the apparent state of affairs was not the real state of affairs. It was for the defendant in a case of this nature to prove his defence. The first appellate Court, therefore, in our opinion, misdirected itself in passing the impugned judgement insofar as it failed to take into consideration the relevant facts and based its decision on wholly irrelevant consideration. 37. A heavy burden of proof lay upon the defendnt to show that the transaction was a sham one. It was not a case where the parties did not intend to enter into any transaction at all. Admittedly, a transaction had taken place. Only the nature of transaction was in issue. A https://hcservices.ecourts.gov.in/hcservices/ distinction must be borne in mind in regard to the nominal nature of a transaction which is no transaction in the eye of the law at all and the nature and character of a transaction as reflected in a deed of conveyance. The construction of the deed clearly shows that it was a deed of sale. The stipulation with regard to payment of compensation in the event the appellants are dispossessed was by way of an indemnity and did not affect the real nature of transaction. In any event, the said stipulation could not have been read in isolation. The judgement of the first appellate Court was, therefore, perverse. The High Court, thus, failed to consider the real dispute between the parties." (ii) (2009) 7 MLJ 640 – S.ANDAL AND ANOTHER VS. K.CHINNASAMY, certain excerpts from it would run thus: "22. Learned counsel for the respondent argued that the amount of Rs.4 lakhs has been borrowed for the purpose of discharging the loan to the Bank as well as to others from whom the respondent borrowed money for the purpose of marriage of three daughters. Of course, a part of the amount of Rs.1,60,000/- has been established to be paid to the Bank by evidence. But in respect of the balance amount, there is no acceptable evidence to support the contention. The respondent also has not established before the trial Court as well as before us when the daughters were got married and what was the amount borrowed and what was the amount unpaid during the relevant period of time when Exhibit P-1 was executed. Even assuming that the existence of the loan is true, the loan would have been paid back out of the sale consideration. We are of the view that there is no material worth consideration made available to accept the contention of the respondent that the Exhibit A-1 agreement was entered into with an intention not to act upon it and only for securing the loan borrowed." (b) On the side of the respondents/defendants, the following judgements are found cited. (i) AIR 1987 SUPREME COURT 2328 – PARAKUNNAN VEETILL JOSEPH'S SON MATHEW VS. NEDUMBARA KURUVILA'S SON AND OTHERS, an excerpt from it would run thus: "14. Section 20 of the Specific Relief Act, 1903 preserves judicial discretion to Courts as to decreeing specific performance. The 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 https://hcservices.ecourts.gov.in/hcservices/ care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff. The High Court has failed to consider the motive with which Varghese instituted the suit. It was instituted because Kuruvila could not get the estate and Mathew was not prepared to part with it. The sheet anchor of the suit by Varghese is the agreement for sale Ex.A1. Since Chettiar had waived his rights thereunder, Varghese as an assignee could not get a better right to enforce that agreement. He is, therefore, not entitled to a decree for specific performance." Absolutely there is no quarrel over such a proposition. But, here the facts are to the effect that there is no attitude of oppression on the part of the plaintiff as against the defendants. As the facts and circumstances were clear to the effect that the plaintiff approached the Court with clear facts, whereas, the defendants resisted the suit setting out contrary and contradictory pleas. (ii) 2001(1) CTC 601 – GOVIND DAS PURUSHOTHAM DAS AND ANOTHER VS. SHAW WALLACE & CO.LTD., MADRAS AND 4 OTHERS (High Court of Madras). This decision is not applicable to the facts and circumstances of this case, as the following excerpts from the said cited decision would show that the facts are entirely different. "3. The first plaintiff in the suit has been the tenant of this property for several decades. The last lease agreement being of the year 1978 for a period of five years. It was claimed by the first plaintiff that the first defendant, who is the father of the second defendant and to whose share these property had been allotted at a partition in the family had agreed to sell the property to the first plaintiff or it's nominee by a letter dated 18.8.1979 marked as Ex.P.9 in the suit. It is also it's case thath it has nominated the other plaintiffs 2 to 5 to purchase the property, and that they were all ready and willing at all times to pay the purchase price and obtain the sale deed. The consideration for which the properties alleged to have been agreed to be sold was Rs.10,00,001. No amount was paid to the owner when this alleged agreement came into existence subsequently. Though the claim made by the plaintiffs that they were entitled to enforce the agreement, and that defendants were bound to execute the sale deed was repudiated by the defendants through their replies sent by them to such a claim, their reply having been sent on 3rd May, 1980, the suit came to be instituted only on 13.8.1982 five days before the expiry of three years from 18.8.1979 and few months prior to the expiry of the last lease in favour of the first plaintiff. https://hcservices.ecourts.gov.in/hcservices/ 4. In the suit brought by the plaintiffs, several alternate prayers are also made. The first alternate prayer is for a decree for sale of the half share of the first defendant who is the father of the second defendant for a sum of Rs.5,00,000. The second alternate prayer is for the payment as compensation and damages in the sum of Rs.10 lakhs in the event of the Court declining to grant the plaintiff's prayer for specific performance." (iii) 1975 THE MADRAS LAW JOURNAL REPORTS 65 – KHIVRAJ CHORDIA AND OTHERS V. ESSO STEANDARD EASTERN INC. This decision is with regard to interpretation of documents and here there is absolutely no complication interpreted in the agreement to sell, which is a registered one, as already cited supra. 14. Over and above the above precedents, I would also like to refer to some other decisions, which are enunciating the law relating to specific performance. (2010) 10 SCC 512 [Man Kaur (dead) by Lrs. vs. Hartar Singh Sangha] "12. Section 16(c) of the Specific Relief Act, 1963 ("the Act", for short) bars the specific performance of a contract in favour of a plaintiff "who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms of the performance of which has been prevented or waived by the defendant". Explanation (ii) to Section 16 provides that for purposes of clause © of Section 16, "the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction." Thus, in a suit for specific performance, the plaintiff should not only plead and prove the terms of the agreement, but should also plead and prove his readiness and willingness to perform his obligations under the contract in terms of the contract. (See N.P. Thiurgnanam v. Dr. R. Jagan Mohan Rao (1995) 5 SCC 115:AIR 1996 SC 116; Pushparani S. Sudaram v. Pauline Manomani James (2002) 9 SCC 582 and Manjunath Anandappa v. Tammanasa (2003) 10 SCC 390. 13. In the first case, this Court held: (N.P. Thirugnanam case, SCC p.118, para 5) "5. ... The continuous readiness and willingness on the part of the plaintiff is a condition precedent to grant the relief of specific performance. This circumstance is material https://hcservices.ecourts.gov.in/hcservices/ and relevant and is required to be considered by the court while granting or refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail. To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the courst must take into consideration the conduct of the plaintiff prior and subsequent to the filing of the suit along with other attending circumstances. The amount of consideration which he has to pay to the defendant must of necessity be proved to be available. Right from the date of the execution till date of the decree he must prove that he is ready and has always been willing to perform his part of the contract. As stated, the factum of his readiness and willingness to perform his part of the contract is to be adjudged with reference to the conduct of the party and the attending circumstances. The court may infer from the facts and circumstances whether the plaintiff was ready and was always ready and willing to perform his part of the contract." (ii) (2003)1 M.L.J 694- M.RAMALINGAM (DIED) AND OTHERS VS. V.SUBRAMANYAM (DIED) AND OTHERS, an excerpt from it would run thus: "10 . . . . When the defendant came with a plea stating that the intention of the parties was only to treat the same as a loan transaction, and it was never intended to be acted upon, which is inconsistent with the terms of the document, a duty is cast upon the defendant to strictly prove that it was a different transaction altogether, and what was recorded in the document was intended to be of no consequence whatsoever. No doubt, the defendant who came with such a plea, can well adduce evidence to show that Ex.A-1 agreement though executed by him, was never intended to be operated as an agreement for sale, but only for a loan transaction, which was not recorded in the document. After careful consideration of the available materials, the Court may hasten to say that the appellants have miserably failed to prove that it was a loan transaction, and the agreement was never intended to be acted upon. The defendant has not examined any independent witness or the attestors to the document, nor has he placed acceptable materials to hold so. Except the interested testimony of the defendant, nothing more is available on record." 15. A mere perusal of all those judgements would exemplify and demonstrate that the relief of specific performance, no doubt is a discretionary remedy and the Court is expected to exercise its judicial discretion in ordering specific performance. The plaintiff who seeks specific performance, as per Section 16 of the Specific Relief Act, should necessarily approach the Court with clean hands and there should https://hcservices.ecourts.gov.in/hcservices/ not be any falsehood on the part of the plaintiff. In this background, the judgements of the Courts below have to be analysed in the light of the evidence available on record. 16. The trial Court in its detailed judgement discussed all the factual issues, by applying the correct propositions of law and ultimately decreed the suit, whereas, the first appellate Court in paragraph No.12 rendered its judgement by misapplying the concept 'onus of proof'. Ex.A1 is a registered agreement to sell. Even as per the written statement and the additional written statement, Ex.A1 was admitted to be the one emerged as a registered agreement to sell. However, the main contention of the defendants was that it was not intended to be acted upon. In such a case, the 'onus of proof' was on the defendants to prove the same. 17. Defendants 1 and 2, who are the mother and son, examined themselves as D.W.1 and D.W.2 and no other witness was examined. Even though D.W.1 admitted that one of the attesting witnesses to Ex.A1, namely, Arunachalam was their relative, the defendants had not chosen to examine him on their side. On the other hand, the plaintiff, by way of abundant caution, on his side examined P.W.2 who happened to be the scribe as well as the attesting witness to the said agreement to sell. The first appellate Court erroneously held as though P.W.2 was only the scribe and not an attesting witness. A mere perusal of Ex.A1 would indicate and display that he signed as a scribe as well as attesting witness. Over and above that Ex.A1 is a registered document attracting the presumption as contemplated under illustration (e) to Section 114 of the Indian Evidence Act. Section 92 of the Indian Evidence Act should not be lost sight of. The decisions emerged thereunder would run thus: (i) (1982) 1 SCC 4, at page 10 -Gangabai v. Chhabubai, certain excerpts from it would run thus: "11. The next contention on behalf of the appellant is that sub-section (1) of Section 92 of the Evidence Act bars the respondent from contending that there was no sale and, it is submitted, the respondent should not have been permitted to lead parol evidence in support of the contention. Section 91 of the Evidence Act provides that when the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself. Sub-section (1) of Section 92 declares that when the terms of any contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a