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1969 Supreme(SC) 369

SUPREME COURT OF INDIA
J.C. SHAH, V. RAMASWAMI, AND A.N. GROVER, JJ.
Kalianna Gounder, Appellant
Versus
Palani Gounder and another, Respondents.
Civil Appeal No. 1360 of 1966, D/- 17-9-1969.
Advocates appeared
M/s. M. C. Chagla and M. K. Ramamurthi, Senior Advocates, (M/s. S. Sethuratnam, J. Ramamurthy and Vineet Kumar Advocates, with them), for Appellant; Mr. A. V. V. Nair, Advocate, for Respondents.

Advocates:
A.V.Velayudhan Nair, J.RAMAMURTHY, M.C.CHAGLA, M.K.RAMAMURTHY, S.SETHURAMAN, VINIT KUMAR

Headnote:

Land - Agreement - Decree for specific performance - Defendants informed plaintiff by a letter that only a sum was paid by plaintiff to defendants and not as recited in memorandum and since balance which was promised to be paid within three days was not paid, agreement stood cancelled - Plaintiff on receipt of letter instituted an action in Civil Court for a decree for specific performance of agreement, and deposited in Court - which according to him was balance of purchase price due by him - Defendants filed their written statement contending, inter alia, that they were in urgent need of money and they had agreed to sell land to plaintiff, but plaintiff paid only and obtained possession of memorandum on a representation that he will pay balance - Whether plaintiff paid only as contended by defendants and obtained possession of agreement on a false representation and whether memorandum was altered in material particulars after execution, and was on that account discharged? – Held, Even if it be assumed that sentence regarding encumbrance was written after deed was executed it will not invalidate deed - Second defendant and his witnesses have admitted that there was no discussion at time of writing and execution of agreement about encumbrances upon land - There is not even evidence that there were any encumbrances subsisting on land - Ordinarily when property is agreed to be sold for a price, it would be duty of vendor to clear it of all encumbrances before executing sale deed - Since defendants were liable to clear encumbrances, if any, subsisting on land before executing the sale deed, assuming that covenant was incorporated after execution of deed, it cannot be regarded as a material alteration on that account, for, it does not alter rights or liabilities of parties or legal effects of instrument - Appeal allowed.

Judgment

SHAH, J.: 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 plaintiff s 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





















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