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1900 Supreme(SC) 8
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD HOBHOUSE, LORD DAVEY, LORD ROBERTSON, AND SIR RICHARD COUCH.
SAH LAL CHAND - Appellant
Versus
INDARJIT - Respondents
On appeal from the High Court at Allahabad.
Decided On : Feb. 15; Mar. 24. 1900.
Solicitors for appellant:Pyke & Parrott. Solicitors for respondent: Barrow & Rogers.
A recital in a sale deed stating that consideration has been paid is not conclusive. Oral evidence is admissible to prove non-payment, as this contradicts a statement of fact rather than varying the terms of the contract, and is not barred by Section 92 of the Evidence Act.
Headnote:(A) Evidence Act - Sections 91 and 92 - Sale deed - Recital of payment of consideration - Admissibility of oral evidence - It is settled law that notwithstanding an admission in a sale deed that the consideration has been received, it is open to the vendor to prove that no consideration has been actually paid - The Evidence Act does not prohibit contradicting a statement of fact in a written instrument by oral evidence, but rather prevents the terms of the contract from being varied - A recital as to payment of consideration money is not conclusive and can be contradicted by proof of the actual transaction.
Facts of the case:
A vendor sold a moiety of an estate for a specified sum via a registered sale deed. The deed contained a recital stating that the entire consideration had been received in cash, by set-off, and through payments to third parties. The vendor subsequently filed a suit for the balance of the consideration, alleging that the payment recitals were fictitious and that the money was actually held by the vendees to defray litigation costs for recovering the estate, with the balance to be paid after the decree.
Findings of Court:
The court agreed with the lower courts' finding that no part of the consideration money was actually paid to or on account of the vendor.
Issues: Whether oral evidence is admissible to contradict the terms of a registered sale deed regarding the payment of consideration, or if such evidence is barred by Section 92 of the Evidence Act.
Ratio Decidendi: The court held that the prohibition under Section 92 of the Evidence Act applies to the variation of the terms of a contract, not to the contradiction of a statement of fact contained within the instrument. Since the contract was to sell the property for a specific price, proving that the price was not actually paid—despite a recital to the contrary—does not vary the contract terms but corrects a factual error.
Result: Appeal dismissed.
Legal Category Hierarchy
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practice and procedure
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evidence
- oral evidence
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evidence
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property law
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transfer of property
- sale consideration
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transfer of property
Judgement
Appeal from a decree of the High Court (June 2, 1896) reversing a decree of the Subordinate Judge at Agra (June 13, 1893).
The suit was brought to recover from the appellant the sum of Rs. 33,133 5a. 3p., as the balance of the amount of consideration for a sale deed dated February 18, 1888.
The First Court dismissed the suit, but the High Court decreed the respondents claim with costs.
The plaint, which was filed on December 6, 1892, narrated that the respondent was sole heir to Jiwa Earn, deceased, and had become entitled to possession of all his estates on the death of his widow Incha Kuar, that the widow had affected to dispose of the estate by will in favour of persons who had gained possession thereof, and alleged in its 4th paragraph that, in order to defray the costs of the litigation thereby rendered necessary and other incidental expenses, the respondent had sold to the defendants, Sah Lal Chand and Kesar Kuar, by a sale deed dated February 18, 1888, half of the said estate for Rs. 30,000, the price to remain in deposit with the defendants, who, it was agreed, were to join the respondent in a suit to recover the whole estate, defray the whole costs thereof, and, after deducting the respondents moiety from the said price in deposit, pay the balance thereof to the respondent, after obtaining a decree in ejectment from the First or Appellate Court.
It being common ground between the parties that the sale consideration was Rs. 30,000, and that the same was produced, and changed hands, before the Registrar, the issue of fact was solely whether it was actually paid down at the date of the deed, or whether the real arrangement was that it was to be paid on the recovery of the property, less the respondents share of the costs of recovery.
The Subordinate Judge dismissed the suit, on the ground that the plaintiff had not proved an agreement to defer payment till after the recovery of the property; for, if made, it ought to have been reduced to writing ; nor had he proved the return of the money to the defendants after registration. He found, contrary to the pleadings and evidence of both parties, that the real agreement was one " for engaging in litigation, the defendants, in consideration of their defraying the expenses of that litigation, to have half the property."
The High Court found that the case for the plaintiff was proved. There was no sufficient reason for disbelieving his witnesses. His case was consistent with probabilities, and the finding of the Subordinate Judge was opposed to the evidence on both sides, and improbable. They considered the genuine and undisputed account-books produced by the defendants to be decisive on the real issue between the parties. The items making up the Rs. 30,000 were absent from those accounts, and no sufficient explanation of their absence was given.
Boss, for the appellant, contended that the High Court erred in admitting evidence of an oral agreement which contradicted and varied the terms of the registered sale deed. Sect. 92 of Act I. of 1892 rendered such oral evidence inadmissible. It was, moreover, unworthy of credit when admitted.
Cowell, for the respondent, contended that the evidence admitted in this case did not vary the terms of the deed and was within the meaning of s. 91 of the Act, explanation 3 and s. 92, provisoes 1 and 2. It was. settled law that a recital as to payment of consideration money in a sale deed was not conclusive, but could be contradicted by proof of the actual transaction see Hukum Chand v. Hiralal (( 1876) lnd. L. R. 3 Bomb. 159.); Lala Himmat Sahai Singh v. Llewhellen . (( 1885) Ind. L. R. 11 Calc. 486.)
Ross replied.
The judgment of their Lordships was delivered by
LORD DAVEY. In this case the respondent sued the appellant and another person for & sum of Rs. 33,133 5a. 3p. alleged to be due to the respondent as the balance of the consideration for a certain sale deed dated February 18, 1888.
The First Court dismissed the suit, but on app
