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Page 1 of 14 AFR HIGH COURT OF CHHATTISGARH, BILASPUR FA No. 343 of 2018 Birendra Kumar Tiwari (Died Through LRs ) in Compliance of Honble Court
Order
dated
23-11-2022
1.1 - Smt. Pushpalata Tiwari W/o Late Birendra Kumar Tiwari Aged About 69 Years R/o Gali No. 1, Kasaridih, Durg Tehsil And District Durg Chhattisgarh. ( Address Wrongly Written as M.P. Kiraya Bhandar, Santrabadi, Station Road, Durg Tahsil and District Durg Chhattisgarh. ( Defendant No. 1 ) --- Appellant Versus 1. G.S. Arora S/o Late Deshraj Arora Aged About 62 Years R/o M.P. Kiraya Bhandar, Santrabadi, Station Road, Durg , Tahsil and District Durg Chhattisgarh. (Plaintiff), 2. State of Chhattisgarh through the Collector, Durg District Durg Chhattisgarh. ( Defendant No. 2 ). ---- Respondents For the Appellant : Mr. Shrawan Agrawal, Advocate with Ms. Neeta Tulsani Thawani, Advocate For respondent no.1 : Mr. Ravindra Sharma, Advocate with Mr. Akash Agrawal, Advocate. For the State : Mr. Pravin Shrivastava, Panel Lawyer. Hon'ble Shri Justice
Goutam Bhaduri, Judge &
Hon'ble Shri Justice
Sachin Singh Rajput, Judge
Judgment on Board (25.04.2023) Per Goutam Bhaduri, J 1) The instant appeal is against the judgment and decree dated 28.02.2018 passed by the third Additional District Judge, Durg, whereby the suit for specific performance of agreement was decreed. 2) As per the plaint allegations, appellant/defendant owned a land bearing Kh.No.717/44 admeasuring 2086 sq.ft., wherein at the ground floor, construction of 1032 sqft was made and at the first floor construction of 930 sqft was made. The property is situated at Mouja Kasaridih, Ward
Page 2 of 14 No.42, Lane No. 1 P.H.No.18/25, Tahsil & District Durg. Plaintiff G.S. Arora averred that an agreement to sell the property was made by the seller-defendant for Rs.12 lakhs, out of which, 8 lakhs was paid by the plaintiff (Appellant no.1 herein) and further, the agreement was executed on 22.07.2011 and was got registered. As per the terms of the agreement, the remaining amount of Rs.4 lakhs was to be paid at the time of registration of sale deed. The plaintiff further averred that when the sale deed was not executed within the specified time, the defendant was asked to execute it, on which, the defendant sought time and another agreement was executed on 21.11.2011 that he will execute the sale deed by 31.12.2011. Thereafter the plaintiff respondent informed the defendant that he would be present with remaining amount of Rs.4 lakhs before the Sub-Registrar, but despite the fact that he was present there till 31.12.2011, the defendant seller did not turn up and sale-deed could not be executed. Therefore, the suit was filed by specific performance of the agreement. 3) The case of the appellant/defendant is that Virendra Kumar Tiwari, husband of appellant was in need of money, as such, he received an amount of Rs.2,30,000/- as a loan and interest over such loan was levied @ 4 ½ % per month and in lieu of security of such loan, 3 Cheques were given, which were kept in possession of the plaintiff and further more, the subject suit land was kept as a security for the loan. The defendant further stated that the agreement (Ex.P.1) was executed in the background of fact that on repayment of loan of Rs.2,30,000/-, the agreement would be cancelled, therefore, the agreement dated 22.07.2011 was a formal document which was not included to be acted upon for execution of sale deed. It is further stated that the defendant was not at all given Rs.8 lakhs and as per the guidelines of 2011 the market value of the property is worth Rs.80 lakhs, therefore, obviously it could not have been sold for Rs.12 lakhs. The seller further asserted
Page 3 of 14 that the agreement was in lieu of security of loan received of Rs. 2,30,000/- and since the financial position of the seller became week, as such, the plaintiff purchaser got certain documents executed and are being used for the purpose of the suit. 4) On the basis of the pleading of the parties, the trial Court framed as many as 7 issues and decreed the suit for specific performance without there being an issue on readiness and willingness. Issue no.1 was whether there was any transaction to purchase subject suit property. The answer to this issue was given in favour of the plaintiff. Issue no. 2 was as to whether the Appellant defendant after obtaining advance amount of Rs.8 lakhs on 22.7.2011 and further balance of Rs.4 lakhs within four months thereafter executed the sale agreement to sell the suit property and handed over the possession in favour of the plaintiff ? The court has answered the issue in positive. With respect to issue no. 3 whether the defendant has executed any promissory note on 21.11.2011 to execute the sale deed by 31.12.2011, finding was given in favour of the plaintff. Issue no. 4 was framed with respect to non- compliance of the terms of agreement and promissory note and the finding was against the defendant. With respect to issue no. 5, the trial Court held that the plaintiff is entitled to get the sale deed of the subject suit property registered in his favour. With respect to Issue no.6 that in case of non-registration of sale deed, whether the plaintiff is entitled to receive eight lakhs rupees from defendant no.1and interest there on, the court held that it has not been proved. With respect to Issue no.7 that whether the agreement dated 22.07.2011 and the promissory note dated 21.11.2011 were executed as security for the loan taken by the defendant appellant from the plaintiff, the Court held that it has not been proved. Thus the trial Court decreed the suit in favour of the plaintiff. 5) Being aggrieved by the said findings, the appellant defendant has filed
Page 4 of 14 this appeal. During the pendency of the appeal, the original defendant seller died and his widow was substituted as appellant. 6) Learned counsel for the appellant/defendant would submit that the confession made by purchaser plaintiff in his evidence would show that the entire transaction was done for the security in lieu of the loan and the document (Ex.P-2) was never intended to be acted upon. He further submits that there is no evidence to this fact that how Rs.8 lakhs was paid and despite the fact the plaintiff averred that he is subjected to income tax assessment, the payment of Rs.8 lakhs was not shown in income tax details and further the copies of bank statements do not reflect the payment of Rs.8 lakhs, therefore, a bald statement was made that the amount of Rs.8 lakhs was paid to the defendant. Consequently, the entire transaction failed as there was non existence of agreement for specific performance. He submits that the trial Court forgot to notice the vital confusion made by the plaintiff and decreed the suit. 7) Per contra, learned counsel for the respondent No.1 would submit that the defendant seller admitted the documents and having admitted the execution of agreement, no other course was left before the trial Court except to order for a decree for specific performance. He placed reliance on a decision of Supreme Court in P. Rama-Subbamma Vs. V. Vijayalakshmi (2022) 7 SCC 384 to contend that in absence of any denial, the decree of learned trial Court is well merited which do not call for any interference. 8) We have heard learned counsel for the parties at length and have also perused the documents. 9) The plaintiff/respondent no.1 (purchaser) came with a pleading that an agreement Ex.P-1 was executed on 22.07.2011 which was registered
Page 5 of 14 with the Sub-Registrar, Durg, wherein an amount of Rs.8 lakhs was paid as a consideration in lieu of agreement. On the contrary, the appellant defendant denied the execution of agreement but it was stated that the agreement for sale of immovable property was never executed and it was executed as a security for a loan transaction of Rs.2,30,000/-, which was advanced by respondent-purchaser. We have perused the agreement Ex.P-1 which is a registered document. According to the purchaser, an amount of Rs.8 lakhs was received by the defendant in lieu of the sale price. However, the document Ex.P-1 which bears the seal of Sub-Registrar purports that the agreement though was executed but in respect of the amount paid, it is kept blank. 10) According to P.W.2, Digambar Meshram, the amount was paid while registration of the agreement was done. However, he deposes that he has no knowledge about the payment mode of Rs.8 lakhs by the plaintiff, whether it arranged from Bank or from elsewhere. It is stated that the plaintiff is an income tax payer and this witness is not in know of the fact as to whether or not the amount details of sale & purchase transactions are shown by the plaintiff in income tax return. 11) Like wise, P.W.3 Charlie Messih also affirmed the fact that while the agreement was executed, Rs.8 lakhs in cash was given in advance which was brought in a bag and the amount was paid before the Registrar. The document (Ex.P-1) however reflects otherwise which does not show that the amount was paid before the Registrar as it was kept blank. Therefore, it creates a doubt in respect of transaction. The defendant appellant has stated that the agreement was not for sale, it was a security document for a transaction of loan availed of Rs.2,30,000/-. According to the defendant, a collateral agreement existed and the document was not intended to be acted upon execution of sale deed. When we refer to the statement of the plaintiff, at para 10
Page 6 of 14 of cross examination, he admits the fact that he lent money and initially in 2009, since the defendant seller wanted money he has advanced Rs. 2,30,000/- and in para 13 a clear admission was made that when the defendant could not repay the loan amount, then to secure his loan, the agreement was executed. 12) The admission of confession of witnesses in the oral evidence makes no difference whether he was examined on behalf of the plaintiff or defendant. When the evidence of the purchaser speaks of the fact that the agreement was executed for the purpose to secure a loan, the same would not be restricted by virtue of sections 91 & 92 of the Evidence Act which specifically bars the change of terms of agreement. The evidence led by the defendant seller shows that right from beginning he maintained a firm stand that having received the amount for loan, the agreement of sale was meant for security in lieu of the loan. Therefore, such evidence of defendant wherein it has been stated that the document was never intended to operate as an agreement but was brought into existence solely for the purpose of creating evidence to secure the loan of some other matter that would be admissible in evidence. 13) The aforesaid proposition has been laid down in Tyagaraja Mudaliyar Versus Vedathanni AIR 1936 Privy Council 17 wherein it is held that a defendant, who is sued upon a written contract purporting to be signed by him, cannot be precluded in disproof of such agreement from giving oral evidence (1) that the signed document was not to operate as an agreement until a specified condition was fulfilled, or (2) that the document was never intended to operate as an agreement but was brought into existence solely for the purpose of creating evidence of some other matter. Paras 7, 8 & 9 are relevant and quoted below : 7. There being no proviso in either section making
Page 7 of 14 oral evidence to show that there was no agreement and therefore no contract inadmissible, their Lordships will consider, in the first place whether there is anything in the sections themselves to render it inadmissible, and secondly, whether the terms of proviso 1 to Section 92 are not wide enough to make it admissible under that proviso. When a contract has been reduced to the form of a document, section 91 excludes oral evidence of the terms of the document by requiring those terms to be proved by the document itself unless otherwise expressly provided in the Act, and Section 92 excludes oral evidence for the purpose of contradicting, varying, adding to, or subtracting from such terms. Section 92 only excludes oral evidence to vary the terms of the written contract, and has no reference to the question whether the parties had agreed to contract on the terms set forth in the document. The objection must therefore be based on Section 91 which only excludes oral evidence as to the terms of a written contract. Clearly under that section a defendant sued, as in the present case, upon a written contract purporting to be signed by him could not be precluded in disproof of such agreement from giving oral evidence that his signature was a forgery. In their Lordships’ opinion oral evidence in disproof of the agreement (1), that as in Pym v. Campbell (1856) 6 E & B 370 the signed document was not to operate as an agreement until a specified condition was fulfilled, or (2) that as in the present case, the document was never intended to operate as an agreement but was brought into existence solely for the purpose of creating evidence of some other matter stands exactly on the same footing as evidence that the defendant’s signature was forged. In Pym v. Campbell (1856) 6 E & B 370 the defendants were sued upon a written contract to purchase an invention, and Lord Campbell had ruled at the trial that on the plea denying the agreement oral evidence was admissible that it had been agreed between the parties before they signed that there was to be no agreement until the invention was approved by A. In his judgment discharging the rule nisi for a new trial, Lord Campbell said : “It was proved in the most satisfactory manner that before the paper was signed, it was explained to the plaintiff that the defendants did not intend the paper to be an agreement till A had been consulted and found to approve of the invention; and that the paper was signed before he was seen only because it was not convenient for the defendants to remain. The plaintiff assented to this and received the writing on those terms. That being proved, there was no
Page 8 of 14 agreement. 8. Erie, J., who gave judgment first had dealt more fully with this question : “The point made is that there is a written agreement absolute on the face of it, and that evidence was admitted to show that it was conditional; and if that had been so it would have been wrong. But I am of the opinion that the evidence showed that in fact there was never any agreement at all. The production of a paper purporting to be an agreement by a party with his signature attached, affords a strong presumption that it is his written agreement; and, if in fact he did sign the paper ammo contrahendi, the terms contained in it are conclusive and cannot be varied by parol evidence… but, if it be proved that in fact the paper was signed with the express intention that it should not be an agreement, the other party cannot fix it as an agreement upon those so signing. The distinction in point of law is that evidence to vary the terms of the agreement in writing is not admissible, but evidence to show that there is not an agreement at all is admissible.” 9. The Indian legislature has thought well to give statutory effect to the decision in Pym v. Campbell (1856) 6 E & B 370 in proviso 3 to Section 92 : The existence of any separate oral agreement constituting a condition precedent to the attaching of any obligation under any such contract...may be proved; and in Mottayappan v. Palani Goundan 1915 Mad. 855 Benson and Sundara Ayyar, JJ., have expressed the opinion that oral evidence to show that a document was never intended to operate according to its terms, but was brought into existence, as in the present case, solely for the purpose of creating evidence about some other matter, is admissible under proviso 1 to Section 92, “any fact may be proved which would invalidate any document.” This may well be so, but in their Lordship’s opinion, even if there were no provisoes to either section, the result in the present case would be the same, because there is nothing in either section to
Page 9 of 14 exclude oral evidence that there was no agreement between the parties and therefore,no contract. It was also contended that the case came with Section 92, because of the provision recognizing the widow’s title to the jewels in her possession. The High Court have found that this provision was not intended to operate as an agreement, but was introduced to give verisimilitude to the document, it being; usual to make such a provision in agreements for a widow’s maintenance. Further it was held by this Board in the passage already cited from the judgment in Pertab Chunder Ghose v. Mohendra Nath Purkait (1889) 17 Cal. 291, that if the defendants were told that any stipulation in the agreement would not be enforced, they could not be held to have assented to it. Consequently the document was not the real agreement between the parties, and the plaintiff could not sue upon it…………..”
(Emphasis applied) 14) Another aspect which comes for consideration is that the defendant maintained the stand through out that while execution of agreement, Rs.8 lakhs was never parted with. The plaintiff purchaser asserts that an amount of Rs.8 lakhs was paid in cash. In cross examination of evidence, he admits that he is regularly assessed to the income tax and all mandatory transactions are recorded. The plaintiff admits his stand that the amount of Rs.8 lakhs which was given to the defendant was not shown in the income tax. 15) The Supreme Court in Shenbagam Versus K.K. Rathinavel 2022 SCC OnLine SC 71 has observed that the conduct of parties in the specific performance of the agreement, the suit would also be relevant factor. The amount which is said to have been paid in cash is not fortified by the subsequent copy of bank statement of account of the plaintiff Ex.P-3 & Ex.P-4. A perusal of such transaction does not inspire such statement of transaction of money to that extent of Rs.8 lakhs and obviously Rs.8
Page 10 of 14 lakhs is a considerable amount, which otherwise would have reflected the monetary status of the parties. Further perusal of the judgment and decree of the Court below would show that no issue was framed as to whether the respondent plaintiff has always been ready and willing to perform his obligation under the contract. The Supreme Court in Shenbagam’s case (supra) has held that in a suit for specific performance, section 16 of the Specific Relief Act provides certain bars to the relief of specific performance. These include, inter alia, a person 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 which has been prevented and waived by the defendant. Further at para 15, the Court observed that ‘readiness’ refers to the financial capacity and ‘willingness’ refers to the conduct of plaintiff wanting the performance. The relevant portion of paras 13, 14 & 15 are quoted below : “13. The present appeal involves a suit for specific performance of an agreement to sell the suit property between the appellants and respondent. The core of the dispute arising from the suit seeking the relief of specific performance under the specific Relief Act is whether the respondent-plaintiff has performed or has always been “ready and willing” to perform his obligations under the contract. 14. “……….. In J.P. Builders v. A. Ramadas Rao, a two-judge Bench of this Court observed that Section 16 (c) mandates ‘readiness and willingness’ of the plaintiff and is a condition precedent to obtain the relief of specific performance. The Court held : “25. Section 16(c) of the Specific Relief Act, 1963 mandates “readyness and willingness’ on the part of the plaintiff and it is a condition precedent for obtaining relief of grant of specific performance. It is also clear that in a suit for specific performance,
Page 11 of 14 the plaintiff must allege and prove a continuous “readiness and willingness” to perform the contract on his part from the date of the contract. The onus is on the plaintiff. […..] 27. It is settled law that even in absence of specific plea by the opposite party, it is the mandate of the statute that the plaintiff has to comply with Section 16(c) of the Specific Relief Act and when there is a non-compliance with this statutory mandate, the court is not bound to grant specific performance and is left with no other alternative but to dismiss the suit. It is also clear that readiness to perform must be established throughout the relevant points of time. “Readiness and willingness” to perform the part of contract has to be determined/ ascertained from the conduct of the parties.” 15. The Court further observed that ‘readiness’ refers to the financial capacity and ‘willingness’ refers to the conduct of the plaintiff wanting the performance”. Further at para 28, the Court observed that “no issue on readiness and willingness was framed by the trial Court. The trial Court analysed the notice issued by the appellants and held that the appellants made no demand from the respondent to discharge the mortgage liability. Thus, the appellant’s plead that the respondent plaintiff had to pay the loan and only thereafter, could the appellants execute the sale deed was rejected. The Court also accepted the respondent’s arguments that the advance amount of Rs.10,000 was paid to discharge the mortgage. ……...” 16) During the course of evidence, the defendants stated that the subject property of the suit was valued at certain price, for which, the different guidelines as existing on 2011-2012 was placed and at Kasaridih Ward the rate per square meter was shown as Rs.19,368/- in case the property is situated on the main road upto the distance of 20 meters
Page 12 of 14 and different rate of Rs.6994/- per square meter was shown in case the property is situated inside the main road which includes rate of lands situated at 20 meters away from the main road. Therefore, even the respondent was willing to perform his obligation under the Contract, the issue would arise for consideration in this case as to whether it would be appropriate to direct a decree for specific performance of the contract especially in view of efflux of time and the escalation of prices of property. 17) The Supreme Court in case of Shenbagam Vs. K.K. Rathinavel (Supra) at para 37 relying on decision in Satya Jain v. Anis Ahmed Rushdie emphasized that the discretion to direct specific performance of an agreement and that too after elapse of a long period time, undoubtedly, has to be exercised on sound, reasonable, rational and acceptable principles. The parameters for the exercise of discretion vested by Section 20 of the Specific Relief Act, 1963 cannot be entrapped within any precise expression of language and the contours thereof will always depend on the facts and circumstances of each case. The ultimate guiding test would be the principles of fairness and reasonableness as may be dictated by the peculiar facts of any given case. The court further held at para 41 that in deciding whether to grant the remedy of specific performance, specifically in suits relating to sale of immovable property, the Courts must be cognizant of the conduct of the parties, the escalation of the price of the suit property, and whether one party will unfairly benefit from the decree. The remedy provided must not cause injustice to a party, specifically when they are not at fault. 18) Applying the above position of law to the facts of the present case and considering the stand taken by the appellant-defendant that Ex.P-1 was executed as a security against the loan taken from the plaintiff and
Page 13 of 14 further the trial Court has not framed any issue relating to readiness and willingness, we are of the considered view that the findings reached by the Court below cannot be sustained and judgment deserves to be set aside. 19) For the above reasons, we allow the appeal and set aside the judgment and decree of the trial Court. Accordingly, a decree be drawn. Sd/- (Goutam Bhaduri) Judge Sd/- (Sachin Singh Rajput) Judge Rao
Page 14 of 14 Head-notes (i) Oral evidence can be given to disprove the written agreement to the extent that the document was not to operate as an agreement until the specific condition is fulfilled. fyf[kr djkj dks [kafMr djus gsrq ekSf[kd lk{; ml lhek rd fn;k tk ldrk gS fd nLrkost dks djkj ds :i esa rc rd iz;ksx ugha fd;k tk,xk tc rd fd mlesa fufnZ"V fof’k"V 'krZ iw.kZ ugha gks tkrhA (ii) The document was never intended to operate as an agreement but was brought into existence for the purpose of creating evidence of some other matter. nLrkost dk vk’k; djkj ds :i esa iz;ksx djuk ugha Fkk fdUrq mls fdlh vU; ekeys esa lk{; x<+us gsrq fufeZr fd;k x;k FkkA