The plaintiffs who were favoured with a decree for the alternative relief of refund of advance amount upon rejection of their claim for specific performance are the appellants. The suit was filed claiming that the defendant had agreed to sell an extent of 3 acres and 30 cents of land for a total consideration of Rs.12,00,000/- in favour of the plaintiffs and executed an registered agreement of sale on 01.12.2014. On the date of the agreement a sum of Rs.11,00,000/- was paid as advance. A period of two years was fixed for performance.
2. The plaintiffs had issued a notice demanding performance on 25.12.2006. Though the said notice was received by the defendant, according the plaintiffs, there was no reply and the suit came to be filed on 24.04.2007.
3. The defendant resisted the suit contending that the object of the agreement of sale was to secure the loan. The defendant had borrowed a sum of Rs.11,00,000/- from the plaintiffs. As a security for the same, he had executed Ex.A1 sale agreement. Pointing out the fact that Rs.11,00,000/- out of total sale consideration Rs.12,00,000/- was paid as advance and an unusually long period of two years was fixed for payment of balance amount, without any reason being assigned, according to the defendant would show that the suit agreement was not an agreement of sale simpliciter. The defendant would also plead that there were two terraced houses existing in the suit property on the date of the agreement and the very fact that they were not shown in the agreement would demonstrate that the agreement was not intended to be a sale agreement.
4. On the above pleadings, the learned Additional District Court, Coimbatore FTC No.IV framed the following issues:
1) Whether the plaintiffs are entitled for specific performance as per the alleged agreement of sale dated 01.12.2004 as prayed for?
2) Is it correct that the sale agreement was executed for the purpose of security for the loan amount of Rs.11 lakhs received by the defendant?
3)Whether the plaintiffs are entitled to the alternative relief of refund of advance amount of Rs.11 lakhs with interest at the rate of 18% as prayed for?
4)Whether the plaintiffs are entitled for the charge over the suit property for the satisfaction of the decree for refund of advance if granted?
5)Whether the plaintiffs are entitled for the relief of permanent injunction as prayed for?
6)To what relief the plaintiffs are entitled?
5. PW 1 and 2 were examined on the side of the plaintiffs and Exs.A1 to A7 were marked. The defendant apart from examining himself as DW1 examined one of the attesting witnesses to the document namely, the sale agreement as DW2 and Exs.B1 to B20 were marked.
6. Upon a consideration of entire evidence on record, the learned Trial Judge came to the conclusion that the suit agreement was in fact executed as security for the loan transaction. The learned Trial Judge accepted the plea of the defendant that the agreement was executed as security for the borrowing. On such findings, the learned Trial Judge taking note of the fact that the plaintiffs had admitted the receipt of Rs.11,00,000/-, granted a decree for refund of advance along with interest at 12% per annum.
7. Aggrieved by the rejection of the main relief namely, the specific performance, the plaintiffs have come forward with the above appeal.
8. I have heard Mr.T.R.Rajagopalan, learned Senior Counsel appearing for the appellants and Mr.P.M.Duraiswamy, the learned counsel appearing for the respondent.
9. Mr.T.R.Rajagopalan, learned senior counsel appearing for the appellants would contend that Ex.A1, being a registered instrument in the absence of evidence to show that the real purpose of transaction is different, once the Court holds that the plaintiffs have been ready and willing to perform their part of the contract, it should not have refused the relief of specific performance. The learned Senior counsel would rely upon the following judgements in support of his case:
1) 2010 2 TNCJ 26
2) 2008 3 MLJ 1395 (T.E.Varadharajan vs. A.Sirajuddin (Died)) The learned Senior counsel would contend that the quantum of balance sale consideration to be paid by itself cannot be a factor indicating the real intention of the parties.
9. Per contra, Mr.P.M.Duraiswamy, the learned counsel appearing for the respondent would contend Ex.A1 agreement prescribed a unusually long period for performance. More so, he would contend that only a sum of Rs.1,00,000/- remained to be paid as balance sale consideration out of total sale consideration of Rs.12,00,000/-. The learned counsel would also point out that admittedly two terraced houses were in existance at the time of agreement and the non-inclusion of the houses in the agreement would support his contention. Pointing out that one of the attestors to the document has been examined as DW2, who had spoken about the real intention of the parties and the failure on the part of the plaintiffs to examine the other attestor to the document the learned counsel would submit that the plaintiffs have not proved their case. The learned counsel would take me through the evidence of PW1 pointing out the contradictions and contend that the Trial Court was justified in concluding that Ex.A2 was not intended to be an agreement of sale.
10. On the above rival submissions, the following issues arise for consideration:
1) Whether the defendant has established his plea that the suit agreement Ex.A1 was not intended to be an agreement of sale?
2) Whether the Trial Court was right in refusing the relief of specific performance?
11. Execution of the agreement is admitted. It is a registered agreement of sale. The total sale consideration fixed under the agreement is Rs.12,00,000/-. Rs.11,00,000/- was paid as advance leaving a balance sale consideration Rs.1,00,000/-. The period of two years was fixed for performance. The agreement does not per se recites any reason for such a long period of two years having been fixed. In the plaint it is alleged that the period of two years was fixed, since the defendant has cultivated his land he has to furnish the plaintiffs the documents relating to the suit properties. In the evidence,PW1 would depose that since there was chilly crop in the land and the defendant wanted to harvest the same, the period of two years was fixed.
12. The existence of two houses in the suit property is not denied. The plaint was amended subsequently for including two house properties. The reason given in the affidavit filed in support of the application in I.A.No.170 of 2010 seeking amendment was that the houses were not mentioned due to inadvertent mistake. In cross-examination, PW1 would depose that the houses were left out because the defendants had stated that it could be included at the time of execution of sale. Such a reason is not given in the affidavit filed in support of the amendment petition, namely I.A.No.170 of 2010.
13. As regards fixing of a unusually long period of two years, the 1st plaintiff as PW1 would depose that two years was fixed because the defendant wanted to construct another house. This evidence is not supported by pleadings in the plaint or in the agreement. DW2, the attestor of the document has deposed that the agreement was executed only as a security for the loan transaction. I have been taken through his evidence. I do not find that his evidence has in any way been discredited by cross-examination. Yet an another admission in the evidence of PW1, which compels me to agree with the Trial Court is that PW1 would depose that the property was said to have been mortgaged. He would however add that he did not even ascertain as to what was mortgaged amount. In his cross-examination he had deposed as follows:
@gpujpthjp tHf;F brhj;jpid ahhplk; vg;bghGJ vt;tst[ U:gha;f;F vt;tst[ tl;otpfpjk; ngrp mjw;F fpiua xg;ge;jj; njjpapy; vt;tst[ gzk; bfhLf;fntz;oapUe;jJ vd;gij vy;yhk; ehd; nfl;L bjhpe;Jbfhs;stpy;iy/ Vw;fdnt gpujpthjp th';fpa flDf;fhf vt;tst[ bjhifia tHf;F fpiua bjhifia fHpj;Jf;bfhs;s ntz;Lk; vd;W ehd; gpujpthjpia nfl;ftpy;iy/ ehd; bfhLj;jJk; xU fld; eltof;if vd;gjhy;jhd; gpujpthjp Vw;fdnt fld; th';fpapUe;jhuh ,y;iyah vd;gijgw;wp tprhhpf;ftpy;iy vd;Wk; me;j bjhiffis fpiua bjhifapy; fHpj;Jf;bfhs;tjh vd;W ngrg;gltpy;iy vd;Wk; brhd;dhy; rhpay;y/@ In his re-examination he would depose as follows:
tHf;F brhj;jpy; ,Ue;j tPLfs; gw;wp th/rh/M/1 fpiua xg;ge;jj;jpy; Fwpg;;gplhjjw;F fhuzk; me;j r';fjpfis fpiua xg;ge;jj;jpy; gjpt[ bra;a[k; nghJ fpiua gj;jpuj;jpy; vGjpbfhs;syhk; vd;W gpujpthjp brhd;djhy; me;j tPLfisgw;wp t/rh/M/1 fpiuaxg;ge;jj;jpy; vGjg;gltpy;iy/ tHf;fwp"h; mwptpg;g[ bfhLj;J 4 khjk; fHpj;J tHf;F jhf;fy; bra;jjw;F fhuzk; mwptpg;ig bgw;wt[lnd gpujpthjp 3 khjj;jpy; fpiuaxg;ge;jk; vGjpbfhLj;JtpLtjhf bjhptpj;jpUe;jhh;/ mjdhy; me;e 4 khjk; fhy jhkjk; Vw;gl;lJ/
14. It is seen that PW1 has given different versions regarding the non-inclusion of house in the sale agreement. His reasons for fixing longer time also vary at every stage. After all there cannot be direct evidence to conclude that the suit agreement was not intended to be a sale agreement and was given as a security for loan amount, the intention of the parties has to be gathered from the attending circumstances. According to me, the following circumstances would clinchingly prove that the agreement was executed only as a security for loan transaction:
1) A major portion of sale consideration i.e. Rs.11,00,000/- out of Rs.12,00,000/- was paid as advance;
2) A unusually long period of 2 years was fixed for payment of balance sale consideration;
3) A unbelievable story that the defendant wanted to harvest the crop and hence more time is required is projected in evidence;
4) the reason for fixing an unusual long time varies at every stage;
5) The plaintiffs did not even ascertain what is the amount outstanding under the mortgage on the date of agreement but claims to have paid almost the entire sale consideration i.e. Rs.11,00,000/- out of Rs.12,00,000/- as advance;
6) DW2, an attestor to the instrument has been examined and he has clearly deposed that the suit agreement was only intended to be a security for the loan transaction; and
7) The existing construction namely, residential building as well as agricultural shed were not included in the sale agreement.
15. The Division Bench of this Court in Lakshmamma vs. Rathinamma reported in 2007 1 LW 309 had held that provision of
Section 92 of the Evidence Act does not bar on the contention that the transaction was not intended to be a sale agreement. Once it is found that there is no legal bar for the defendants to plead that the agreement was not intended to be a sale agreement simplicitor, it has to be seen whether it was executed as a security for loan transaction. The above features pointed out by me would lead to the conclusion that the agreement was executed only as a security for the loan transaction and it was not intended to be a sale agreement. Once it is found that the evidence on record points out that the intention of the parties was not for sale of the properties, the suit for specific performance based on such agreement has to be dismissed.
16. Similar view was taken by this Court in Rajammal and another vs. Senbagam reported on 2016 (6) CTC 225 and this court taking note of the fact that the balance sale consideration payable was only a small portion of the sale consideration and the fact that larger time was fixed for performance of the agreement would by itself show that the agreement was not intended to be an agreement for sale. In the light of the above pronouncements as well as the evidence on record, I do not see any reason to differ from the conclusion of the learned Trial Judge that the suit agreement was only executed as a security for the loan transaction. Points 1 and 2 raised are answered as above.
17. The learned Trial Judge had however, taking note of the admission of the defendant that he received a sum of Rs.11,00,000/- on the date of the suit agreement, granted a decree for refund of advance with interest at 12% per annum from the date of the suit agreement till date of realisation. The learned counsel appearing for the respondent would contend that interest at 12% per annum, after the suit is not justified. I do not see any reason to interfere with discretion exercised by the Trial Court for grant of refund of advance fixing interest at 12% per annum in a suit for specific performance. The court has to look into the equities also. DW2 would depose that the defendant had agreed to pay 18% interest per annum. Therefore, I do not find any reason to interfere with the decision of the Trial Court in granting interest at 12% per annum from the date of agreement till date of realisation.
18. For the foregoing reason, the appeal stands dismissed confirming the judgement and decree dated 30.09.2010 in O.S.No.252 of 2007 on the file of Additional District Court, Coimbatore FTC No.IV. However, in the circumstances of the case, I direct the parties to bare their own costs.
24.02.2017 Index : Yes/No Internet: Yes/No vk To The Additional District Court, Coimbatore FTC No.IV.
R.SUBRAMANIAN,J vk A.S.No.240 of 2001 24.02.2017 http://www.judis.nic.in