Case: Kalianna Gounder Vs. Palani Gounder & Anr

Shah, J.1. Palani Gounder and his son T. P. Sengottaiah - hereinafter collectively called "the defendants" - own Survey No. 765-B in Kugallur village. Kalianna Gounder - hereinafter called "the plaintiff" - agreed on July 4, 1956 to purchase from the defendants that land for Rs. 12,000/-. A memorandum reciting that Rupees 2,000/- were paid as advance by the plaintiff to the defendants was executed by the plaintiff and the defendants. The memorandum was written by one Ramamurthy Iyer and the signatures thereon were attested by one Kaliyanna Gounder.2. On July 7, 1956, the defendants informed the plaintiff by a letter that only a sum of Rs. 350/- was paid by the plaintiff to the defendants and not Rs. 2,000/- as recited in the memorandum, and since the balance of Rs. 1,650/- which was promised to be paid within three days was not paid, the agreement stood cancelled. The plaintiff on receipt of the letter instituted an action in the Civil Court for a decree for specific performance of the agreement, and deposited in Court Rs. 10,000/- which according to him was the balance of the purchase price due by him. The defendants filed their written statement contending, inter alia, that they were in urgent need of money, and they had agreed to sell the land to the plaintiff, but the plaintiff paid only Rs. 350/- on July 4, 1956, and obtained possession of the memorandum on a representation that he will pay the balance of Rs. 1,650/- within three days and since the amount was not paid the agreement was cancelled, and that in any event the agreement having been altered in material particulars, after it was executed, by adding the words: "Clear the debts and execute the sale deed free from encumbrance", the suit was not maintainable.3. The Court of First Instance upheld the plaintiffs claim and decreed the suit for specific performance of the agreement. In appeal to the High Court of Madras the decree was reversed. The High Court held that the plaintiff paid Rs. 350/- only on July 4, 1956, and on a representation that he will pay the balance of Rupees 1,650/- payable as advance obtained possession of the agreement of sale, and the plaintiff not having paid the amount payable by him the suit for specific performance of the agreement was (sic) maintainable. The High Court also held that the agreement was altered in material particulars by adding the covenant relating to "clearance of encumbrance" after the memorandum was executed. With certificate granted by the High Court this appeal is preferred by the plaintiff.4. Two questions fall to be determined in this appeal:(1) whether the plaintiff paid Rs. 350/- only as contended by the defendants on July 4, 1956, and obtained possession of the agreement on a false representation; and(2) whether the memorandum was altered in material particulars after execution, and was on that account discharged?5. The plaintiff in his statement before the Court asserted that he paid the full amount of Rs. 2,000/- on July 4, 1956 to the defendants. He was supported by his witness Ramamurthy Iyer - the writer of the document. On the side of the defendants there is the evidence of T. P. Sengottaiah who asserted that only Rs. 350/- were paid at the time of the execution of the memorandum, and when the balance was demanded the plaintiff promised to pay the same within three days. He also stated that the amount was not paid within three days as promised and on that account the agreement was cancelled. His testimony was supported by the attesting witness.6. The learned Trial Judge accepted the testimony of the plaintiff and his witness Ramamurthy Iyer. The High Court was of the view that the testimony of T. P. Sengottiah and the attesting witness should be preferred. In our judgment the dispute may be resolved by considering the conflicting testimony of the witnesses in the light of broad probabilities.7. The memorandum expressly recites that the defendants "have received Rs. 2,000/- as advance" and "within sixty days from today" the plaintiff "should pay the balance of the sale price and execute the sale deed. Failing that, besides losing the advance amount, nothing is binding as per the agreement". The memorandum containing a recital that Rupees 2,000/- were received by the defendants as advance was delivered to the plaintiff. The plaintiff is an illiterate agriculturist, whereas the defendants are educated people, and the second defendant was at the material time President of the Local Panchayat. The case of the defendants that they relied upon the bare word of the plaintiff that he will pay the balance of Rupees 1,650/- within three days and on that representation they parted with the memorandum is, in our judgment, unreliable. There was no relation between the plaintiff and the defendants which placed the former in a position of trust or confidence. If the defendants were willing to execute an agreement with the recital that the amount of Rs. 2,000/- was received, though in fact it was not so received, they would have insisted upon making an endorsement at the foot of the agreement that only Rs. 350/- were paid and the plaintiff had obtained extension of time for payment of the balance within three days. In any event they would have, when they parted with the memorandum, insisted upon some writing from the plaintiff that he had paid only Rs. 350/- and not Rs. 2,000/- as recited in the memorandum.8. The High Court was of the view that the plaintiff was unable to show that he could procure a sum of Rupees 2,000/- for payment as advance to the defendants and thatthere was no independent evidence regarding the actual payment of Rs. 2,000/-. But the burden of proving in the circumstances of the case, that Rs. 2,000/- were not paid lay heavily upon the defendants. Again, there is strong evidence to indicate that the plaintiff had at his disposal a substantial amount on which he could have drawn. On July 14, 1956, exactly ten days after the date on which the agreement was entered into, the plaintiff deposited in Court a sum of Rs. 10,000/- in the action for specific performance commenced by him. If the case of the plaintiff depended merely upon his oral testimony for payment of Rupees 2,000/-, absence of independent evidence evidencing payment may have some value as supporting the case of the defendants. But when there was an express recital in the agreement that a sum of Rs. 2,000/- was paid by the plaintiff and it was received by the defendants, it was not necessary for the plaintiff to lead evidence as to the source from which he obtained the money.9. The High Court observed that the plaintiff did not reply to the notice dated July 7, 1956. But it was the plaintiffs case that he received the notice on July 14, 1956, and on the same day he instituted the suit. Failure to reply to the notice cannot therefore be a circumstance of any value in the present case.10. It was also observed by the High Court that there was no particular reason for the defendants to resile from the terms of the agreement within three days of its execution, and set up a false plea, and that in "such cases evidence is given to prove that it was a temptation of a better offer that induced the party to resile from the agreement". The plaintiff did state in his evidence that his pangalis who were inimical to him had made an offer of Rs. 16,000/- for the property, and because of that offer the defendants resiled from the agreement. In the view of the High Court this part of the case of the plaintiff could not be believed because it was not expressly pleaded in the plaint. But the plaintiff did plead in paragraph 6 of the plaint that the defendants had " with the evil influence and instigation of Karuppa Gounden, Pongia Goundar and Appachi Gounder of the place who are now planning to have the suit properties for themselves are now evading to rescind the contract". This, in our judgment, is a sufficient plea, if it was necessary to plead it, in support of the case which the plaintiff sought to make out.11. The High Court discarded the testimony of Ramamurthy Iyer on the view that he was inimical to the defendants. We have been taken through his evidence and we see no justification for holding that his testimony could not be believed. If Ramamurthy Iyer was an enemy of the defendants, it is very unlikely that they would permit him to write out an important document at their residence. The broad probabilities of the case strongly support his testimony.12. Having carefully considered the evidence we are of the view that the story of the defendants that only Rs. 350/- were paid to them on July 4, 1956, and no Rs. 2,000/- as recited in the memorandum is untrue and has been put up as an excuse for resiling from the agreement.13. The second plea that there was an alteration in the memorandum in material particulars cannot also be sustained. The original document is not before us, but from the cross-examination of the writer and the plaintiffs witnesses and also from the testimony of T. P. Sengottiah and his witnesses it does not appear that the words "Clear the debts and execute the sale deed free from encumbrance" were written in a cramped style. This sentence occurs immediately before the Schedule of property sold and after the first three paragraphs of the covenants of the memorandum. There was no reason for the writer to leave any space which could be availed of to add this sentence after the document was executed. There is no denial that the sentence has been written by Ramamurthy. It is true that the High Court has observed that the ink in which the sentence was written appeared to be slightly different in shade from the rest of the document. But Ramamurthy Iyer has deposed that it was not true that the portion in the agreement relating to the encumbrance was written subsequent to the agreement in collusion with the plaintiff. He explained that the ink in his fountain-pen was exhausted when he wrote with one pen, and he wrote the portion after reading the document, with another fountain-pen, and since the portion was written in a hurry the ink may have differed. According to him he did not notice any difference in ink. There is no reason to disbelieve the testimony of Ramamurthy Iyer.14. Even if it be assumed that the sentence regarding encumbrance was written after the deed was executed it will not invalidate the deed. The second defendant and his witnesses have admitted that there was no discussion at the time of the writing and execution of the agreement about the encumbrances upon the land. There is not even evidence that there were any encumbrances subsisting on the land.Ordinarily when property is agreed to be sold for a price, it would be the duty of the vendor to clear it of all the encumbrances before executing the sale deed. The alteration, if any, cannot therefore be regarded as material. As observed in Halsburys Laws of England, Vol. 11, 3rd Edn., Art. 599 at p. 368:"A material alteration is one which varies the rights, liabilities, or legal position of the parties as ascertained by the deed in its original state, or otherwise varies the legal effect of the instrument as originally expressed,or reduces to certainty some provision which was originally unascertained and as such void, or may otherwise prejudice the party bound by the deed as originally executed.The effect of making such an alteration, without the consent of the party bound, is exactly the same as that of cancelling the deed."15. It is also stated in Art. 604 at pp. 370 and 371:"An alteration made in a deed, after its execution, in some particular which is not material does not in any way affect the validity of the deed; x x x x an alteration is not material which does not vary the legal effect of the deed in its original state,but merely expresses that which was implied by law in the deed as originally written, or which carries out the intention of the parties already apparent on the face of the deed, provided that the alteration does not otherwise prejudice the party liable thereunder."This rule has been applied by the Privy Council in Nathu Lal v. Mt. Gomti Kuar, 67 Ind App 318 = (AIR 1940 PC 160 ). The Judicial Committee observed in that case at p. 331 (of Ind App) = (at p. 164 of AIR):"A deed is nothing more than an instrument or agreement under seal; and the principle of those cases is that any alteration in a material part of any instrument or agreement avoids it, because it thereby ceases to be the same instrument."The Judicial Committee observed at p. 333 (of Ind App) = (at p. 165 of AIR):"A material alteration has been defined in the rule as one which varies the rights, liabilities or legal position of the parties ascertained by the deed, etc.,"and after applying that test they held that the alteration in that case was not material in the sense of altering the rights, liabilities or legal position of the parties or the legal effect of the document.16. Since the defendants were liable to clear the encumbrances, if any, subsisting on the land before executing the sale deed, assuming that the covenant was incorporated after the execution of the deed, it cannot be regarded as a material alteration on that account, for, it does not alter the rights or liabilities of the parties or the legal effects of the instrument.

Decision reasoning: 1[ds]6. The learned Trial Judge accepted the testimony of the plaintiff and his witness Ramamurthy Iyer. The High Court was of the view that the testimony of T. P. Sengottiah and the attesting witness should be preferred. In our judgment the dispute may be resolved by considering the conflicting testimony of the witnesses in the light of broadcase of the defendants that they relied upon the bare word of the plaintiff that he will pay the balance of Rupees 1,650/- within three days and on that representation they parted with the memorandum is, in our judgment,It was also observed by the High Court that there was no particular reason for the defendants to resile from the terms of the agreement within three days of its execution, and set up a false plea, and that in "such cases evidence is given to prove that it was a temptation of a better offer that induced the party to resile from the agreement". The plaintiff did state in his evidence that his pangalis who were inimical to him had made an offer of Rs. 16,000/- for the property, and because of that offer the defendants resiled from the agreement. In the view of the High Court this part of the case of the plaintiff could not be believed because it was not expressly pleaded in the plaint. But the plaintiff did plead in paragraph 6 of the plaint that the defendants had " with the evil influence and instigation of Karuppa Gounden, Pongia Goundar and Appachi Gounder of the place who are now planning to have the suit properties for themselves are now evading to rescind the contract". This, in our judgment, is a sufficient plea, if it was necessary to plead it, in support of the case which the plaintiff sought to make out.11. The High Court discarded the testimony of Ramamurthy Iyer on the view that he was inimical to the defendants. We have been taken through his evidence and we see no justification for holding that his testimony could not be believed. If Ramamurthy Iyer was an enemy of the defendants, it is very unlikely that they would permit him to write out an important document at their residence. The broad probabilities of the case strongly support his testimony.12. Having carefully considered the evidence we are of the view that the story of the defendants that only Rs. 350/- were paid to them on July 4, 1956, and no Rs. 2,000/- as recited in the memorandum is untrue and has been put up as an excuse for resiling from theoriginal document is not before us, but from the cross-examination of the writer and the plaintiffs witnesses and also from the testimony of T. P. Sengottiah and his witnesses it does not appear that the words "Clear the debts and execute the sale deed free from encumbrance" were written in a cramped style. This sentence occurs immediately before the Schedule of property sold and after the first three paragraphs of the covenants of the memorandum. There was no reason for the writer to leave any space which could be availed of to add this sentence after the document was executed. There is no denial that the sentence has been written by Ramamurthy. It is true that the High Court has observed that the ink in which the sentence was written appeared to be slightly different in shade from the rest of the document. But Ramamurthy Iyer has deposed that it was not true that the portion in the agreement relating to the encumbrance was written subsequent to the agreement in collusion with the plaintiff. He explained that the ink in his fountain-pen was exhausted when he wrote with one pen, and he wrote the portion after reading the document, with another fountain-pen, and since the portion was written in a hurry the ink may have differed. According to him he did not notice any difference in ink. There is no reason to disbelieve the testimony of Ramamurthy Iyer.14. Even if it be assumed that the sentence regarding encumbrance was written after the deed was executed it will not invalidate the deed. The second defendant and his witnesses have admitted that there was no discussion at the time of the writing and execution of the agreement about the encumbrances upon the land. There is not even evidence that there were any encumbrances subsisting on the land.Ordinarily when property is agreed to be sold for a price, it would be the duty of the vendor to clear it of all the encumbrances before executing the sale deed. The alteration, if any, cannot therefore be regarded asSince the defendants were liable to clear the encumbrances, if any, subsisting on the land before executing the sale deed, assuming that the covenant was incorporated after the execution of the deed, it cannot be regarded as a material alteration on that account, for, it does not alter the rights or liabilities of the parties or the legal effects of the instrument.