The defendant in the suit in O.S.No.137 of 2006 on the file of the Sub Court, Periyakulam, is the appellant in the above Second Appeal. The respondent herein filed a suit in O.S.No.137 of 2006 for specific performance of an agreement of sale dated 28.10.2004 entered into between the plaintiff and the defendant.
2.It is the case of the respondent that the suit property belonged to defendant by virtue of sale deed dated 15.11.1999 and that there was an agreement of sale between the plaintiff and defendant whereby the plaintiff had agreed to purchase the suit property for a sum of Rs.2,10,000/- . It is the further case of the respondent that a sum of Rs.2,00,000/- was received as advance by the defendant and that the balance of sale consideration has to be paid within three years from the date of agreement. The sale agreement referred to by the plaintiff is a registered sale agreement. The plaintiff stated in the plaint that the plaintiff informed the defendant as to his readiness to pay the balance sale consideration but the defendant refused to come to the Registrar Office on 15.09.2006. It was stated by the plaintiff that therefore, the plaintiff issued a suit notice on 30.08.2006. It was further stated that the defendant issued a reply on 14.09.2006 contending false allegations.
3.The case of the defendant in the reply notice that the defendant had received only a sum of Rs.1,00,000/- and that there was no agreement of sale etc., are denied as false and devoid of any merits.
4.The suit was contested by the appellant by filing a written statement disputing the case of the plaintiff with regard to the transaction. It is the definite case of the defendant that the plaintiff is a professional money lender. It was the case of the defendant that she approached the plaintiff for getting a sum of Rs.1,00,000/- as a loan and that the plaintiff insisted to execute a sale agreement as a security for the loan transaction and that the defendant should pay interest at the rate of Rs.10/- per Rs.100/- per annum. It was further alleged that the plaintiff also insisted the defendant to give a blank cheque. The defendant pleaded that at the time of agreement she was hard pressed for money and since she had no option at that time, signed the suit agreement and handed over the unfilled cheque of her husband. It was the case of the defendant that she was paying interest from 28.10.2004 to 28.08.2006 and that the plaintiff did not issue any receipts. It was alleged by the defendant that the plaintiff threatened the defendant to pay the money with interest on the same day and that the defendant prayed for time. The contents of the notice issued by the plaintiff are denied as false and it was further contended that the suit is premature.
5.The trial Court framed only two issues, and they are:
(a) Whether the plaintiff is entitled to a decree for specific performance?
(b) Whether the plaintiff is entitled to any other relief?
6.After elaborately discussing the evidence, the trial Court came to the conclusion that the suit agreement is proved. Since the plaintiff, by examining other witnesses, proved the due execution of the sale agreement, the trial Court disbelieved the case of the plaintiff that the agreement Ex.A2 is not a bona fide transaction as reflected in the sale agreement but connected to a loan transaction. Therefore, the trial Court decreed the suit as prayed for. Aggrieved by the same, the defendant preferred an appeal in A.S.No.15 of 2010 on the file of the Principal District Court, Theni. The Appellate Court also came to the conclusion that the suit agreement is proved and that the defendant is bound to execute the sale deed. The appellate Court, of course, framed the following issues:
(a) Whether the suit agreement under Ex.A1 dated 28.10.2004 was executed by the defendant in favour of the plaintiff after receiving a sale advance of Rs.2,00,000/- on 28.10.2004?
(b) Whether Ex.A1 was executed as a sham and nominal sale agreement in connection with the paltry sum of Rs.1,00,000/-?
(c) Whether the plaintiff was ready and willing to get the sale deed?
(d) Whether the plaintiff is entitled to a decree for specific performance?
7.It is to be seen that the appellate Court also confirmed the findings of the trial Court and dismissed the appeal. Aggrieved by the judgment and decree of the lower appellate Court in A.S.No.15 of 2010, the defendant has preferred the above appeal.
8.At the time of admitting the Second Appeal, the following questions of law were framed:
(1) Whether the suit agreement with a lesser value of suit property at Rs.2,10,000/- in the year 2004 prove the falsity of the case pleaded by the respondent when the appellant himself had purchased it at Rs.3,00,000/- as early as 1999?
(2) When the respondent is capable of paying Rs.2,00,000/- on the date of alleged suit agreement, have not the Courts below committed error in not understanding the intention and logic behind the fixation of period of 3 years for payment of a paltry balance sum of Rs.10,000/-?
(3) Whether the suit is sustainable by the respondent a money lender, on the suit document given as security for due repayment by the appellant?
9.Mr.M.Vallinayagam, learned Senior Counsel appearing for the appellant, after referring to the pleadings, documents and oral evidence of the witnesses examined on both sides submitted that the following circumstances would really indicate that Ex.A1 is purely a sham and nominal document obtained as a security for the loan transaction.
9.1.The suit property was purchased by the defendant for a sum of Rs.3,00,000/- in the year 1999 under the document Ex.B1 dated 15.11.1999. The defendant also put up construction in the first floor of the suit property and this fact is also admitted by D.W.1 in his evidence. It is unnatural and unbelievable that the person who purchase the property in 1999 for a sum of Rs.3,00,000/- to part away the same property after making a substantial improvements to the value to execute the sale for a paltry sum of Rs.2,10,000/-.
9.2.The sale agreement is dated 28.10.2004. It has been recited in the said sale agreement acknowledging receipt of Rs.2,00,000/- as advance. However, a long period of three years was specified as the time limit for paying balance consideration, within which the sale transaction should be completed after receiving a paltry sum of Rs.10,000/-.
9.3.The evidence of P.W.1 and P.W.2 would show that the transaction under Ex.A1 was completed within a day without an enquiry about the existence of any encumbrance or the good title by the defendant. In short, an enquiry that is expected from a purchaser of the property is absent in this case.
9.4.The contradictions among the witnesses examined on the side of plaintiff with regard to the value of the suit property and the manner in which the agreement was finalised and the attendant circumstances would show that the agreement under Ex.A1 is not a bona fide sale agreement and that it was only obtained at the instance of the plaintiff who is a money lender.
9.5.The learned Senior Counsel further submitted that it is the duty of the plaintiff in a suit for specific performance to plead and prove his readiness. In this case, even the agreement of sale under Ex.A1 specifically refers to the obligation of the plaintiff to deposit the balance of sale consideration in the Court concerned and to get the sale deed registered through Court and take possession. However, in this case, the plaintiff has not deposited the balance of sale consideration in Court when the suit was filed.
9.6.Finally, the learned Senior Counsel submitted that the relief for specific performance being a discretionary and equitable relief, the Court ought not to have granted a decree for specific performance when the suit agreement is not proved to be a genuine and bona fide sale agreement in the light of the specific stand taken by the defendant and the failure on the part of the plaintiff to explain the circumstances warranting an inference in favour of the defendant regarding genuineness of the sale agreement.
10.The learned Counsel for the respondent submitted that the sale agreement as such has been proved by examining P.W.2-the broker of the transaction and the attestor of Ex.A1. The plaintiff has examined P.W.3- scribe and another person P.W.4 who prepared the draft agreement. In the circumstances and having regard to the findings of the Courts below with regard to the genuineness of the sale agreement under Ex.A1 and conclusions reached by the Court that the sale agreement was executed upon receipt of a sum of Rs.2,00,000/- the document Ex.A1 is not in relation to the loan transaction. Secondly, the learned Counsel for the respondent submitted that in the written statement filed by the defendant, there was no whisper about the inadequacy of price or the value of the suit property at the time of entering into the sale transaction. In such circumstances, it is not open to the defendant to raise any plea on the inadequacy of price. The learned Counsel for the respondent relied upon the evidence of defendant as D.W.1 and pointed out that the material contradictions between the defendants pleadings in the written statement and the evidence would indicate that the defendant has come forward with a false case. The learned Counsel for the respondent also relied upon the principle that no amount of evidence can be looked into without a plea and that the evidence of defendant cannot be elaborated without a specific plea to substantiate the contentions now put forth by the learned Senior Counsel for the appellant.
11.The learned Counsel appearing for the respondent referred to the document filed by both sides and submitted that Ex.B3 and B4 are not relating to the suit property and that the said documents cannot be relied upon without there being a specific plea about such practice to get the sale agreement as security for advancing loan.
12.The document Ex.B3 and B4 namely the earlier sale agreement executed by the plaintiff's husband and the cancellation of the said agreement under Ex.B4 would show that it is the practice of money lenders to get sale agreement as security for the money lent by them.
13.After elaborately hearing the learned Senior Counsel for the appellant and the learned Counsel appearing for the respondent, I find that the Courts below have not considered the issues in right perspective. It is the specific case of the defendant that the suit agreement is not a bona fide sale agreement and that it was executed at the instance of the plaintiff who is a money lender for the purpose of securing the loan transaction. The lower appellate Court though framed a specific issue, failed to decide the issue on the basis of entire evidence on record but by presuming genuineness of the transaction after holding that the suit agreement under Ex.A1 has been duly executed. The execution of Ex.A1 is not in dispute. The question is whether the defendant has proved his case that it was in relation to a loan, the sale agreement was executed at the instance of plaintiff to secure the loan advanced by him. The fact that the suit property was purchased by the defendant under Ex.B1 for a sum of Rs.3,00,000/- is not in dispute. Ex.B1 is dated 15.11.1999. The document Ex.B1 indicates that the property conveyed under Ex.B1 is an extent of 1404 square feet of land with a tiled and madras terrace building. However, it is admitted in the course of evidence that the defendant has put up first floor by spending huge amount. It is also admitted by P.W.2 that the value of the suit property in 2009 is Rs.30,00,000/-. Hence, the construction of the first floor would mean that the structure has been completely altered. The unnatural circumstance in this case is that the defendant has agreed to sell the property five years later for a price which is far below the price for which he purchased the property. The trial Court has relied upon the evidence in this case about the fall in price because of the shifting of District Headquarters. However, the Courts below have not accounted for the improvements which the defendant had made by constructing the first floor by changing the entire roof of the building. The cost of improvement will be certainly two times more than the price for which the property has been agreed to be sold under Ex.A1. It is true that the defendant has not stated in the written statement about the inadequacy of the price. Inadequacy of price cannot be a reason for refusing specific performance. However, inadequacy of price can be a circumstance to support the plea of defendant that the sale agreement under Ex.A1 is a sham and nominal document executed at the instance of the plaintiff to secure the amount advanced by him to the defendant as loan. Hence, the defendant is entitled to lead evidence with regard to the value of the building on the date of suit agreement Ex.A1 to prove the real nature of transaction as pleaded by him and the evidence on the market value of the building can be entertained even without a specific plea in the written statement.
14.The learned Senior Counsel for the appellant relied upon a judgment of the Hon'ble Supreme Court in the case of Tejram v. Patirambhau reported in AIR 1997 SC 2702 wherein payment of substantial part of the sale consideration as advance and giving a very long time for completing the transaction by paying the remaining part of the sale consideration was considered. The Hon'ble Supreme Court observed that the agreement for sale was not purported to be a sale in truth and in reality. The learned Senior Counsel relied upon another judgment of the learned single judge of this Court in the case of Pappammal @ T.Pappa v. P.Ramasamy reported in 2012 (4) CTC 100 wherein it has been held as follows:
?23.In this case also, out of the total sale consideration of Rs.40,000/-, Rs.30,000/- was paid and for the payment of balance sum of Rs.10,000/- five year period was prescribed and therefore, in my opinion, Ex.A2 was not intended to be an Agreement of Sale and it must have been executed only as security or as a loan transaction.?
15.In yet another judgment of a learned Single Judge of this Court in the case of Rajammal and another v. M.Senbagam reported in 2016 (6) CTC 225 has held, in a similar case, where out of the total sale consideration of Rs.2,00,000/- a sum of Rs.1,65,000/- was paid as advance and three years period was fixed for the payment of balance of sale consideration that the sale agreement is not a bona fide agreement for sale but it is a document to secure a loan transaction.
16.As pointed out earlier, the suit agreement provides for a longer time to pay the balance of sale consideration which is less than 1/20th of the total sale consideration. Normally, it is the tendency of every purchaser to get the sale deed immediately within a reasonable time after paying the entire sale consideration. In this case, three years period was given to the purchaser to pay the balance of Rs.10,000/-. The conduct of parties by entering into the agreement under Ex.A1 does not appear to be a bona fide sale agreement. As indicated in the judgment of the Hon'ble Supreme Court, the long time specified in the agreement is only the outer limit within which the owner of the property has to repay the entire amount received as loan with interest. The third point on the genuineness of the agreement of sale is also relevant. P.W.2 has been examined to prove the document Ex.A1. He also admitted that he is a broker. He admitted that the plaintiff wanted a house for a sum between Rs.2,00,000/- to Rs.2,50,000/-. Consciously, he admitted that he has not enquired about any encumbrance over the suit property. Though according to him, the plaintiff enquired about the parent document of title deed, and it was replied by the defendant that the property was mortgaged to LIC, he says that both plaintiff and himself did not enquire the defendant as to the amount of money borrowed by the defendant from LIC by mortgaging the property. P.W.2 also admits that the entire transaction under Ex.A1 was completed without proper enquiry within a day. The evidence of P.W.3 is contrary to his own evidence in chief examination with regard to the preparation of draft sale deed. It is his specific evidence in the cross examination that the xerox copy of the sale deed or the original parent document were not given to him at the time of preparing the draft sale deed. The draft sale deed according to him was written only in a stamp paper of the value of Rs.20/-. It is surprising to note that a sale deed can be drafted in a stamp paper of Rs.20/-. The document Ex.A7 is a unregistered and unstamped sale deed drafted by P.W.3. This document appears to have been created for the purpose of proving that the plaintiff is ready and willing to perform his part of the contract by making the sale deed prepared when he issued notice. A draft sale deed need not be written in stamp paper. For drafting the sale deed, the plaintiff is required to purchase stamp papers in tune with the total consideration. Hence, the plaintiff has called upon P.W.3 to speak something which is again unnatural. The evidence of P.W.3 would only indicate that the plaintiff has neither come forward with clean hands nor has pleaded the truth.
17.Regarding the value of the property, the evidence of P.W.2 is contrary to the evidence of P.W.1. While P.W.1 admits that the value of the property demanded by the defendant was more than Rs.5,00,000/-, the evidence of P.W.2 is that the defendant quoted Rs.2,50,000/- as price. Though the agreement is for a sum of Rs.2,10,000/- it was stated by P.W.2 that the amount demanded by the defendant was Rs.2,50,000/-. Hence, the evidence of P.W.1 and P.W.2 are mutually contradictory. Even with regard to the payment of a sum of Rs.2,00,000/- as advance, P.W.2 says in his proof affidavit that the said sum of Rs.2,00,000/- was paid at the Sub Registrar Office. Whereas, the document writer who was examined as P.W.4 says that the plaintiff paid the sum of Rs.2,00,000/- when the parties were in his office. The evidence of P.W.3 and P.W.4 are brought in to prove the genuineness of the sale agreement as the plaintiff expected that he would be confronted with Ex.A1 as a document to support the loan transaction.
18.From the reading of the evidence, I find that the Courts below have not considered the relevant circumstances and the evidence of plaintiff's witnesses in a proper perspective. When the witnesses examined on the side of the plaintiff have given different versions, their credibility ought to have been considered before accepting their evidence. Secondly, having regard to the nature of case pleaded by the parties, the Court should appreciate the evidence with little more care and caution so as to give a definite finding. In the present case, I am of the firm view that the findings of the Courts below are perverse. Regarding the entitlement of plaintiff to get the equitable relief of specific performance of the agreement under Ex.A1, the learned Senior Counsel appearing for the appellants argued about the readiness and willingness by referring to the sale agreement Ex.A1 wherein it was specifically recited that in the event of the defendant failing to come forward to complete the sale, it is open to the defendant to deposit the balance of sale consideration into Court and then to seek specific performance through Court. This issue was not focused very much before the Courts below. Hence, failure to deposit the balance of sale consideration in Court at the time of filing suit cannot be viewed seriously especially the same was not pleaded as a ground even in the written statement particularly, when this issue involves the true understanding of the agreement under Ex.A1. In such circumstances, though the contention of the learned Senior Counsel appearing for the appellant that the plaintiff can succeed in a suit for specific performance only if he plead and prove his readiness and willingness even without an objection raised by the defendant is correct, this Court is not in a position to agree with the case of the appellant on the readiness and willingness of the plaintiff merely by the fact that the balance amount was not deposited. However, having regard to the conclusion of mine on the nature of transaction under Ex.A1, the issue whether the plaintiff is ready and willing to perform his part of contract does not arise. It is important to note that in a suit for specific performance, the plaintiff cannot succeed in all cases merely by proving execution of the sale agreement. Since the nature of agreement under Ex.A1 and its genuineness as a bona fide sale agreement is questioned, even if there is some doubt about the genuineness of the agreement, Court may not be justified for granting the equitable relief of specific performance. In the present case, the suit agreement Ex.A1 is not a bona fide sale agreement. Hence, the plaintiff is not entitled to the relief of specific performance. The fact that the plaintiff is a money lender is established. The Courts below failed to consider the admitted facts and attending circumstances which are necessary and relevant to decide the issue relating to the nature of transaction. Hence, the findings of the Courts below are liable to be interfered with and the question of law framed are answered in favour of the appellant.
19.However, the fact that the defendant had received a sum of Rs.2,00,000/- has been held in favour of the plaintiff by Courts below. In such circumstances, in order to render justice between the parties, the defendant should be directed to pay a sum of Rs.2,00,000/- with interest at the rate of 12% from the date of agreement till the date of payment. Hence, the above Second Appeal is allowed and the judgment and decree of the lower appellate Court in A.S.No.15 of 2010 confirming the judgment and decree of the trial Court in O.S.No.137 of 2006 is set aside. The suit for specific performance in O.S.No.137 of 2006 on the file of the Sub Court, Periyakulam is dismissed. However, the appellant in this Second Appeal is directed to pay a sum of Rs.2,00,000/- with 12% interest from 28.10.2004 till the date of payment and it is open to the plaintiff / respondent to execute the decree as a money decree. The defendant is also entitled to costs of this appeal from the respondent. Consequently, the connected miscellaneous petitions are closed.
To
1.The Principal District Judge, Theni.
2.The Sub Court, Periyakulam.
3.The Section Officer, Vernacular Records, Madurai Bench of Madras High Court, Madurai..