The brief facts of the case as follows:
The appellant / plaintiff has filed the suit in O.S.No.27 of 2006 for specific performance. The first defendant is the Karta of the joint family consisting of defendants 2 and 3 who are his sons. On 23.10.2003, the respondents / defendants for the purpose of joint family necessity have entered into an agreement with the plaintiff for selling the suit schedule mentioned property for a sum of Rs.1,60,000/- and received a sum of Rs.1,50,000/- towards part of the sale price and executed an agreement to that effect. Further, they have agreed to receive the balance sale consideration of Rs.10,000/- on or before 23.4.2006 and execute the sale deed to plaintiff. Plaintiff. Plaintiff has always been ready and willing to perform his part of contract and get the sale deed executed in his favour. But the defendants are postponing to perform their part of contract by some pretext or the other. Time is not the essence of contract. On 17.3.2006, the plaintiff sent a notice to the defendants calling upon them to appear before the Sub Registrar, Gudiyatham on 24.4.2006 to receive the balance sale consideration and to execute the sale deed. But they have sent a reply on 19.4.2006 containing false and baseless allegations by denying the contract itself and evaded to perform their part of contract. Defendants 1 and 2 have filed written statement denying the allegations made in the plaint. According to the defendants, the suit property is ancestral joint family property owned by the father of the first defendant and as such the properties were belongs to the legal heirs in the family, namely, three sons including the defendants 2 and 3. The alleged sale agreement in favour of the plaintiff is not true, valid and binding and it is a fabricated one. The defendants are not liable to execute such document for such a meager amount, since the suit schedule mentioned property worth more than three to five lakhs and it has been falsely prepared. The signature itself is fabricated for the purpose of the case. The documents relied upon by the plaintiff do not relate to the suit property, at any rate they are concocted, for the purpose of the case and they do not have any evidentiary value. There is no cause of action for the plaintiff to file the suit. The plaintiff is not entitled to any relief sought for by him. Hence, the suit is liable to be dismissed. The third respondent / third defendant in his written statement has stated that at the time of agreement, the third defendant was a minor, aged 15 years and hence it is not valid in law and the suit is liable to be dismissed. The trial court, by considering the evidence of plaintiff side and defendant side, decreed the suit, by directing the defendants to execute the sale deed in favour of the plaintiff after receiving balance sale consideration amount of Rs.10,000/-, granting one month time to deposit the balance sale consideration and three months time granted to execute the sale deed.
2. Challenging the aforesaid judgment and decree of the trial court, the defendants have preferred an appeal before the learned Additional District Judge, Vellore in A.S.No.17 of 2011. The Appellate Court by relying the Ex.A2 encumbrance certificate, which shows that the defendants 2, 3 and another son namely, Yoganandam as lessors have executed lease in respect of the suit property for the period 21.10.1996 till 20.10.2006. As such, said Yoganandam had interest in the suit property. Therefore, the Appellate court has held that Ex.A1 is not valid, since Yoganandam was not a party in the agreement of sale. Further, placing reliance on Ex.B2 birth certificate and Ex.B3 transfer certificate to show that the third defendant was minor at the time of executing sale agreement, has held that Ex.A1 is not binding the third defendant. The Appellate Court rejected the contention of the plaintiff that Ex.B2 and B3 are manipulated and are not true, as the plaintiff has to substantiate the said contention with evidence allowed the appeal suit.
3 Challenging the judgment and decree of the appeal suit in A.S.No.17 of 2011, the appellant / plaintiff has approached this court by filing the present Second Appeal.
4. This court framed the following substantial questions of law involved, for entertaining the Second Appeal for further consideration.
(i) When the execution of sale agreement is admitted by the defendants whether the lower appellate Court is right in dismissing the suit by drawing an inference that it was intended to create security over the suit property against the rulings reported in 2014(1) CTC 165 ?
(ii) When the defendants admitted the execution of sale agreement whether the lower appellate court is right in accepting their plea of defective title as defence against the rulings reported in AIR 1994 A.P. 244 ?
(iii) When the 1st defendant as Kartha of the joint family and for himself along with his two sons executed the agreement leaving the one son whether the lower appellate court is right in reversing the trial court's judgment on the ground that one of the first defendant's son is not a signatory to the agreement ?
5 This Court framed the following additional substantial questions of law:
(a) When the Birth Certificate Ex.B2 and Transfer Certificate Ex.B3 were issued pending suit without examining the issuing Authority is not valid in law and whether the lower Appellate Court is right in dismissing the suit that the third defendant is minor at the time of execution of Ex.A1 sale agreement ?
(b) When the third defendant as D.W.3 admits that his name was included in Ex.A6 and A7 only after submission of Birth Certificate and non production of the said Birth Certificate clearly establish that Ex.B2 and B3 which obtained pending suit is not valid and whether the Appellate Court is right in dismissing the suit based on Ex.B2 and B3 that third defendant was a minor at the time of execution of Ex.A1 sale agreement?
6. The learned counsel for the appellant would submit that the first defendant is Karta of the joint family and for himself and along with his two sons, executed the sale agreement under Ex.A1. The defendants entered into agreement with the plaintiff for selling the schedule property for a sum of Rs.1,60,000/- and the advance amount of Rs.1,50,000/- was paid by the appellant / plaintiff as a part payment to the defendants and only the balance sale consideration of Rs.10,000/- had to be paid to the defendants on or before 23.04.2006. The specific defence of the defendants in the written statement that at the time of execution of sale agreement, the third defendant was minor and one of the son was not a party to the sale agreement. Therefore, the sale agreement entered for the suit property is void. The suit property is a joint family property and his three sons namely Bramanandam, Sivanandam and another son Yoganandam are entitled in the property. It is an admitted fact that Ex.A1 was executed by the defendants, disputed the third defendant, was a minor at the time of entering the sale agreement. During the examination of the DW3, the third defendant admitted his signature, but does not know about the transaction between the plaintiff and his father. The learned counsel has relied upon the Exs.A6 and A7 voters list which would clearly prove that the third defendant was not a minor at the time of execution of sale agreement. D3 also admitted, during his cross examination that after submitting the birth extract, his name was included in Ex.A6 and B2 dated 30.06.2008 marked by the defendant was obtained subsequently to filing of the suit. Therefore, Exs.B2 and B3 have been manipulated for the purpose of suit, Authenticity of the authority has not been examined by the defendants. In view of the above, aforesaid additional questions of law have been framed by the court that Ex.A6 would prove that the plaintiff / appellant was a major at the time of execution of sale agreement. Therefore, the additional questions of law raised in the second appeal, on the basis of Exs.A6 and A7, would clearly establish that the third defendant was a major at the time of execution of sale agreement.
7. This court now consider the other question of law raised in the second appeal. The main contention of the appellant that the first defendant is the Karta of the joint family at the time of execution of Ex.A1. One of his son was residing in Bangalore had not executed the sale agreement in favour of the plaintiff. The first defendant / first respondent is the Karta of the joint family property. Eventhough, the other son namely Yoganandam was not a party to the said proceedings. The entire sale agreement executed by the defendants is non est in law. The other defence raised by the plaintiff in the written statement, the said agreement was executed as a security to the loan transaction. The findings of the trial court, by observing that the defendants have not established by way of any evidence to show that amount has been paid for the loan transaction. When the transaction has been admitted by the defendants, onus lies on the defendants to prove that the Ex.A1 was executed only for the security for the purpose of loan transaction. So, in the absence of any evidence, the said contention of the defendants not to be accepted. But, it is admitted that the aforesaid Yoganandam who is the son of D1 was not a party to the agreement and also has legal right over the schedule property. But he was not a party to the said sale agreement. The trial court has not decided subsequently the right of the Yoganandam in the present suit. But the Appellate court has considered the right of the Yoganandam and relying upon the Judgment of the Hon'ble Supreme Court reported in 2015 (2) LW P30, that agreement of sale entered between the plaintiffs and some of the co-owners who do not have absolute title is not enforceable and held that the suit is for specific performance and same is equitable relief. Therefore, one has to come to court with clean hands. Admittedly, one of the shareholder has not been included in the said sale agreement in the present suit. It is also further held that under Ex.A1, the boundaries are not mentioned and not correctly valued the property. Therefore, the plaintiff is engaging in money lending business and without inclusion of the shareholders, the agreement was entered by the appellant and the respondents.
8. The trial court by considering the evidence of DW1, during his cross examination, DW1 has stated as follows.
"jhth brhj;J vdf;F ghj;jpag;gl;lJ/ ehDk; tpthde;jKk; nrh;e;J thjpf;F mf;hpbkz;l; vGjpf; bfhLj;njhk; vd;why; rhpjhd;/ gj;jpuj;jpy; U:/1.60.000-? vGjpa[s;sJ/ Mdhy; U:/25.000-? jhd; fld; th';fpndd;/ ve;j njjpapy; fld; th';fpaJ vd;W jd;dhy; brhy;y KoahJ/ th/rh/M/1y; cs;sJ vd; ifbaGj;J kw;Wk; vd; Fkhuh;fs; ifbaGj;J/ ehd; 9tJ goj;Js;nsd;/ ehDk;. vd; kfd;fs; K:tUk; M';fpyj;jpy; jhd; ifbaGj;J nghl;nlhk; vd;why; rhpjhd;/ v';fSf;F ghj;jpag;gl;lJ vd;W th/r/M/1 vGjpf; bfhLj;Js;nshk;/"
9. From the aforesaid admission, the court below has come to conclusion that Ex.A1 is admitted by the defendant. The trial court has failed to consider the evidence of DW1 specifically admitted the signature in the agreement, but he has received a sum of Rs.25,000/- as a loan crop. In the deposition of DW1, he has stated that the debts are only executed the mortgage deed and not the sale agreement. The evidence of DW3 has stated as follows.
thjpahdth;. Kjy; gpujpthjpahd vd; jfg;gdhh; trk; flDjtp bgw;Ws;s jfty; brhd;dhh; vd;fpw tpc^ak; bjhpa[k;/ vdJ jfg;gdhh; gaph; fld; mof;fo v';fs; fpuhkj;jpy; cs;s rpy Kf;fpa!;j;hfs; trk; fld; bgWtJ tHf;fk;. jpUg;gpa[k; brYj;jpa[s;shh;/ ,nj nghy; vd; jfg;gdhh; bgaUf;F fld; U:gha; bfhLj;J cjtp bra;tjhf thjp brhd;djpd; nghpy; vd; jfg;gdhh; gz cjtp bgw;Ws;shh;/ mj;jUzj;jpy; thjp ntW egh;fisf; bfhz;L vd;id miHj;J tur; brhd;djpd; nghpy; ehd; thjpia re;jpj;njd;/ thjp vd;id fz;lwpe;J cd; jfg;gdhh; "ehd; itj;Js;s gj;jpuj;jpy; ifbaGj;J bra;a brhy;yp cs;shh; vd "ehd; itj;Js;s gj;jpuj;jpy; ifbaGj;J bra;a brhy;yp cs;shh; vd" brhd;djpd; Kd;dpiyf;F ehd; ifbaGj;J bra;njd; vd;gJ cz;ik/ Mdhy; ve;j fhuzj;jpw;fhf ifbaGj;J bgw;whh;fs; vd;gJ vd; kd mwpt[f;F bjhpahJ/ mj;jUzj;jpy; ehd; ,istuhf ,Ue;jjpd; fhuzj;jpdhy; vdf;Fk;. thjpf;Fk;. Kjy; gpujpthjp Mfpa vd; jfg;gdhUf;Fk; ,ilapy; vd;d ngr;R thh;j;ijfs; cld;ghL Vw;gl;lJ vd;gJ bjhpahJ"/
10. The decision of this Court in the case of Rajeswari and Others Vs. K.M.Kumarasamy and Others reported in 2007 (4) MLJ 444, wherein this Court has held that No evidence to show that the transaction pertained to a loan, the defence raised is hit by
Section 92 of the Evidence Act. Hence, plaintiff is entitled for specific performance.
11. The decision of this Court reported in 2009 (3) MLJ 1168, this Court has held that persons of full age and understanding who execute the signatures in a document cannot later contend that they affixed signature on Held if they had been so imprudent to affix the signatures. They have to taken up the consequence parties are bound to honour the contract. Entire consideration made to perform the part of the contract. Further readiness and willingness held equitable relief in such cases. Breach on the part of the vendor cannot be compensated by money.
12. In the decision of this Court in the case of Santhamani Vs. Usha reported in 2017-3-LW 293, wherein this Court has held that as held by the Larger Bench of the Hon'ble Apex Court relinquishment can be made at any stage, even during the appeal stage. There need not be any pleadings in that regard. Hence, having regard to the above judgments and facts, this Court does not find any reason to interfere with the findings of the learned trial court in granting specific performance, insofar as the 2/3 share of the defendant. In the light of the aforesaid Judgment, the learned counsel for the appellant would vehemently contend that he has filed a memo by stating that the aforesaid sale agreement entered between the plaintiff and the defendants 1 to 3 is valid in law and entitled for 2/3 share by excluding 1/3 share of Mr.Yoganandham, since he is not a party to the sale agreement. By considering the evidence of the defendant DW1, mortgage deed was executed in respect of the suit property for the period from 21.10.1996 till 20.10.2006 by the defendants and the said Yoganandham. Therefore, Yoganandham, one of the son is having the share in the suit property also party to the mortgage deed. But the appellant has not given any reason why the aforesaid Yoganandham was not a party to the sale agreement. DW3 during his deposition, he deposed that the plaintiff is doing money lending transaction business and getting interest by mortgage deed. Therefore, appellant / plaintiff admitted his signature in the said deed for the purpose of obtaining loan from the plaintiff. But, the Yoganandam has not signed in the sale agreement, therefore from the above evidence and admitted fact, it is clear that it is only for loan purpose and not for sale agreement to sell the property in favour of the plaintiff. It is clear that the appellant / plaintiff has paid the money to the defendants and the same was received by the defendants. But considering the evidence of the plaintiff / appellant, he has failed to prove the genuineness of the sale agreement by placing materials. Firstly, the said mortgage deed was executed by the defendants and one of the son, Yoganandam is not party to the sale agreement, non explanation for obtaining the signature from Yoganandam. Further, at the time of examination of D3, wherein he has stated that DW1 very oftenly obtained crop loan from the local persons in the village. At the time, he was not aware of the purpose of obtaining the signature in the document. Therefore, he was not aware about the transaction between the plaintiff and the his father. Further, DW1 was not consented with the family members. The plaintiff has not specifically denied, he is not doing the money lending business. Therefore, the basis of the pleadings and issues framed by the trial court and the evidence of PW1, the evidence of plaintiff and the evidence of defendants and on the basis of the documentary evidence of both sides, it is clear that the respondents / defendants has admitted the execution of Ex.A1 and also party to the said deed except Yoganandam. Through the evidence of DW3, it is the practice of the defendant to borrow money from the local villagers for the cultivation of the crops. The plaintiff has not explained , Yoganandham is one of the son, having the share in the property was also party to the lease deed, but not party to the present sale agreement. There is no satisfactory reasons by the plaintiff. But the plaintiff has filed the application before this Court by restricting his claim only 2/3 share of the defendants for the execution of the sale agreement. By analysing the said sale agreement and the evidence of the defendants, the circumstances which the sale agreement was signed by the parties would show that the payment of the money is only for the loan transaction between the plaintiff and the first defendant. Further as rightly held by the Appellate court that the plaintiff has paid a sum of Rs.1,50,000/- whereas the balance amount of the consideration amount has to pay only Rs.10,000/- for the execution of the sale deed, to take time for the plaintiff to pay the aforesaid amount within 30 months commencing on the date of the sale agreement. The plaintiff has also not established that the aforesaid sale agreement is intended to sell the suit property in favour of the plaintiff. Therefore, by considering at any angle, in the event of come to conclusion that disagreed the execution of the sale agreement to sell the property in favour of the plaintiff, at this juncture, the learned counsel for the appellant relied upon the decision of this Court in the case of V.P.Murugesan Vs. P.Sheik Mideen reported in 2016-1-LW 332, wherein this Court has held as follows.
11. The learned counsel appearing for the appellant would submit that since the defendant has admitted the due execution of Ex.A1, the first appellate court ought not to have reversed the decree granted by the trial court in favour of the appellant. But the said argument does not persuade me at all. The defendant has not disputed that he signed the document (Ex.A1) and he was a party to the registration. The question is whether this admission would amount to due execution of Ex.A1 or not. The defendant has stated in his evidence that he never intended to sell the suit property to the plaintiff. He has further stated in his evidence that he borrowed a sum of Rs.35,000/- as loan from the plaintiff and according to his money lending practice the plaintiff took him to the Registrar's office and got Ex.A1 executed. According to him, there was no consensus and idem between the parties to treat the same as a sale agreement.
12. The contention of the learned counsel for the appellant is that the defendant has not proved the loan transaction and thus, the first appellate court ought to have treated Ex.A1 as a duly executed sale agreement. In this regard, I may state that the defendant, in clear terms in his evidence, has stated that he borrowed a sum of Rs.35,000/- as loan only and in connection with the same, Ex.A1 was executed. But PW1 and PW2 have stated in their evidence that Ex.A1 was intended to be performed and there was agreement between the parties to sell the property by the defendant to the plaintiff. Now, we have to appreciate these oral evidence as to which version is true. This can be done by analyzing the circumstances under which this document came to be executed. It is not in dispute that on an earlier occasion, that was on 18.05.2000, in respect of the very same suit property, a sale agreement was executed by the defendant to the plaintiff thereby agreeing to sell the suit property for Rs.60,000/-. According to the plaintiff, a sum of Rs.50,000/- was paid as advance under the sale agreement and the balance of sale consideration to be paid was Rs.10,000/-. But, that sale agreement was not performed. Subsequently, Ex.A1 came to be executed on 13.05.2002. In para 3 of the plaint, it is the specific case of the plaintiff that he did not have the balance sale consideration of Rs.10,000/- to pay the same to the defendant and get the sale completed in his favour. It was because of that reason, the sale agreement dated 18.05.2000 was cancelled. But, strangely, in Ex.A1, which was executed on the same day, it is stated that a sum of Rs.35,000/- was paid as advance as per the terms of the sale agreement. The first appellate court has correctly analyzed this fact and has come to a right conclusion that when it is the positive case of the plaintiff that he did not have Rs.10,000/- to pay to the defendant and to get the sale completed in his favour on 13.05.2002, it is not explained to this Court as to how he could pay Rs.35,000/- to the defendant on the same day simultaneously. The earlier sale agreement was for Rs.60,000/- and Ex.A1 Sale Agreement is also for Rs.60,000/- and under the earlier sale agreement, a part of sale consideration of Rs.50,000/- had been paid to the defendant. If that be so, the same should have been mentioned in Ex.A1. But, Ex.A1 reads as through a sum of Rs.35,000/- was afresh paid to the defendant. It is not explained to the court by the plaintiff as to what had happened to Rs.50,000/- which was already paid by the plaintiff to the defendant under the earlier sale agreement. Further, it is not explained to the court as to what was the need for executing a fresh sale agreement when the earlier sale agreement was not even time barred. These facts have not been explained by the plaintiff. From these facts, the first appellate court has come to the right conclusion that the plaintiff was a money lender and it was his practice to get a sale agreement executed as and when money was lent. From the above factual background and the circumstances, the first appellate court has believed the evidence of DW1 rightly. Thus, I hold that the defendant has proved that Ex.A1 was not executed with the intention to treat the same as a sale agreement.
13. In the light of the aforesaid Judgment, on the basis of the respondents / defendants admitted, they borrowed the loan from the plaintiff, and executed the sale agreement and the same was registered in the Registration Office. Therefore, he is entitled to the refund of aforesaid amount. In the light of the aforesaid decision of this Court, by considering the facts and decisions of this Court, this Court has come to conclusion that the sale agreement entered between the parties under Ex.A1 was not intended to perform to sell the suit property. The said sale agreement under Ex.A1 is entitled only for the loan for the security to the loan amount borrowed by the defendant. Hence, as observed by the Appellate court, the sale agreement under Ex.A1 is not intended to sell the suit property in favour of the plaintiff. Therefore, this Court comes to conclusion that there is no such sale agreement at all entered between the parties under Ex.A1, it was never intended to perform to sell the suit property. Since, this Court has confirmed the Judgment and Decree passed by the Appellate court that Ex.A1 is not intended for performing sale in favour of the plaintiff, by considering the above facts and decisions of this Court. This Court comes to conclusion that a sum of Rs.1,50,000/- was paid only as loan.
14. In view of the above, the questions of law 1 to 3 are answered against the appellant. It is useful to extract the decision of the Hon'ble Supreme Court in the case of M.Gouriammal Vs. Soundaraj, Minor Anith Raj and another reported in 2012 (2) CTCOL 581, wherein it has been held as follows:
"34. In an agreement of sale, where money is paid only as part of sale price, the forfeiture clause will be treated as having the effect of penanly. The effect of
Section 74 is to disentitle the plaintiff to recover simplicter the sum fixed in the contract, whether penalty or liquidated damages. The plaintiff must prove the damages they have suffered, but the same agreed upon as damages is not recoverable as a matter of course. It is a duty of the Court to determine what compensation could be allowed as reasonable compensation.
35. As pointed out earlier, as per the recitals in Ex.A1 sale agreement, the amount of Rs.4,00,000/- was paid only as advance / part of sale consideration. Even though the defendants claim that the said amount of Rs.4,00,000/- was paid as earnest money, their contention is not reflected in the recitals in Ex.A1 Considering the recitals in Ex.A1 sale agreement, the question falling for consideration is, whether the defendants are entitled to forfeit the entire advance amount of Rs.4,00,000/-. In this regard, the learned Senior Counsel for the appellants contended that when the land was under acquisition notification, agreement thus becoming enforceable and forfeiture of advance money paid in circumstances of the case is improbable and in support of his contention, the learned Senior Counsel plead reliance upon judgment of the Supreme Court in the case of Thiruveedhi Channaiah Vs. Gudipudi Venkata Subbarao (D) By Lrs & Others, 2007 AIR (SC) 2439), wherein considering the similar question, in paragraph No.12, the Supreme Court held as follows:-
"10. The only question which arises for our consideration is as to whether in a situation of this nature, the respondent could exercise his right of forfeiture of the entire amount. It is not his case that he had suffered any damage. He did not deny or dispute that after the Agreement of Sale was executed, a notification under
Section 4(1) of the Act had been issued. He himself raised a contention that the Agreement stood frustrated. It may be true that he not only questioned the validity of the said notification, but had also filed a suit, but indisputably the parties were aware that unless and until, the notification was set aside, the Agreement for Sale, in the aforementioned situation, cannot be enforced by either of them."
36. As discussed earlier, even in Ex.B12 letter dated 19.04.2002, the 1st defendant has sent the letter to the plaintiff asking him to cancel Ex.A1-Sale agreement. It is not the case of the defendants that because of the non-performance / delay in performance of plaintiff's obligations, the defendants suffered any loss. The defendants have not adduced any evidence that they suffered damages. In the absence of any evidence as to the damages suffered by the defendants, the trial court was not right in holding that the entire advance amount is liable to be forfeited. In the facts and circumstances of the case and applying the ratio of the Thiriveedhi Channaiah case (AIR 2007 SC 2439), in our considered view, the defendants are not entitled to forfeit the amount of advance. Even though the plaintiff has not asked for the alternative relief of return of advance amount, with a view to render complete justice between the parties, the Court is empowered to mould the relief. It would be appropriate to direct the respondents / defendants to repay the amount of advance paid by the plaintiff / appellant with interest at the rate of 9% p.a. from the date of plaint till this date and thereafter with interest at the rate of 6% p.a. till the date of realisation."
15. The Division Bench of this Court also considered the similar issue in the case of N.Sekaran & another Vs. C.Rajendran reported in 2017-5-LW-46, for granting of refund of the advance amount and hence, the appellants are entitled to refund of the amount.
16. In view of the above, it would be appropriate to direct the respondents / defendants to repay the amount of advance paid by the plaintiff / appellant with interest at the rate of 9% p.a. from the date of plaint till this date and thereafter with interest at the rate of 6% p.a. till the date of realisation.
17. Therefore, the Second appeal fails and accordingly the same is dismissed with the above direction. Consequently, the connected miscellaneous petition is closed. No costs.