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1948 Supreme(SC) 50
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD UTHWATT, LORD MACDERMOTT AND SIR MADHAVAN NAIR.
SARA VEERASWAMI ALIAS SARA VEERRAJU - Appellant
Versus
TALLURI NARAYYA (DECEASED) - Respondents
On appeal from the High Court at Madras.
Decided On : June. 17. 1948.
Solicitors for appellants :Lambert & White. Solicitors for respondents: Hy. S. L. Polak & Co.
An oral agreement for reconveyance after an absolute sale is a separate transaction and does not contradict or vary the terms of the sale deed, making it admissible under Section 92 of the Indian Evidence Act, 1872. Trial courts' findings on witness credibility deserve great weight.
Headnote:(A) Indian Evidence Act, 1872 - Sections 91 and 92 - Admissibility of oral agreement for reconveyance - Where a registered sale deed is absolute and unconditional, a separate oral agreement to reconvey the property upon repayment of a sum is not inconsistent with the terms of the sale deed - Such an agreement does not contradict, vary, add to, or subtract from the terms of the instrument as contemplated by Section 92 - It is a separate and independent transaction that leaves the terms of the sale and the interest passing thereunder entirely unaffected.
(B) Appeal - Appreciation of evidence - Findings of fact by a trial judge who has seen and heard the witnesses are entitled to great weight - An appellate court should not disturb such findings unless there is an adequate ground or the conclusion is unsound, as the trial judge has the advantage of observing the manner in which evidence is given.
Facts of the case:
Properties were transferred via a registered sale deed to raise funds to prevent an execution sale. The deed evidenced an absolute and unconditional sale. It was alleged that a contemporaneous oral agreement existed for the reconveyance of the properties if the sale price was repaid within a specified period, which was later extended. The respondents denied the existence of any such oral agreement and contended that the only agreement was that manifested by the sale deed.
Findings of Court:
The oral agreement for reconveyance was established based on the trial court's assessment of witness credibility. This agreement did not violate the bar against oral evidence under Section 92 of the Indian Evidence Act as it did not modify the terms of the absolute sale but constituted a separate transaction.
Issues: (1) Whether the parties orally agreed to reconvey the lands upon repayment of the price within a specified period; (2) Whether such an oral agreement is admissible in evidence given the provisions of Section 92 of the Indian Evidence Act, 1872.
Ratio Decidendi: An oral agreement for reconveyance following an absolute sale is a separate transaction that does not contradict, vary, or subtract from the terms of the sale deed. It does not constitute an "addition" to the terms of the instrument within the meaning of Section 92 if it is unconnected with the terms of sale and leaves the purchaser's interest unaffected. Furthermore, the credibility of witnesses as determined by the trial judge is entitled to significant weight in appellate review.
Result: Consolidated appeals allowed.
Legal Category Hierarchy
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property law
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sale
- reconveyance
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sale
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evidence law
- exclusion of oral evidence
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practice and procedure
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appellate review
- findings of fact
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appellate review
Judgement
Consolidated appeal (No. 10 of 1946) from two judgments and two decrees of the High Court (February 3, 1943) which had reversed a judgment and two decrees of the Court of the Subordinate Judge of Cocanada (July 29, 1941).
The following facts are taken from the judgment of the Judicial Committee. The appeals arose out of two connected suits. Of those, one—/No. 38 of 1940—was brought by the appellant, Sara Veeraswami or Veerraju (hereinafter called the appellant-plaintiff) against the first and second respondents for specific performance of an alleged oral agreement to reconvey certain properties which had been sold to them. The other suit—No. 32 of 1940—was brought by these respondents against the appellants and others to obtain possession of the said properties. The first named respondent having died in the course of the proceedings his legal representative, the third respondent, was added as a party to each suit.
The circumstances of the dispute leading to this litigation have been fully stated in the judgments of the courts in India and for present purposes the narrative may be limited to a brief summary of the salient features. In November, 1932, the appellant-plaintiff and his father (who died in 1939) found themselves in urgent need of a sum of Rs. 6,000 to save their lands from sale in execution proceedings initiated by a judgment-creditor named Bandaru Sooranna. They succeeded in obtaining that amount by transferring the properties now in question to the original respondents. The sale deed effecting that transaction was executed on November 30, 1932, and duly registered. It evidenced an outright and unconditional sale. On the same day the original respondents leased the properties to one Pothula Kondayya, the father-in-law of the appellant-plaintiff. In 1937 that lease was renewed at a reduced rent for a further three years. Those facts were not in dispute but there was an acute conflict between the parties as to what took place when the sale and the subsequent extension of the lease were arranged. The appellants contended that the first approach to the original respondents was for a loan of Rs. 6,000 to be secured by a mortgage of the lands ; that the original respondents refused to take a mortgage and insisted on a sale ; and that it was then orally agreed that the properties should be sold for Rs. 6,000, and that the original respondents would reconvey what was sold if the said price was repaid to them within a period of five years. The appellants further contended that in 1937 the appellant-plaintiff and his father offered the Rs. 6,000 and sought a reconveyance, but that the original respondents met that offer with a counter-proposal, which was then accepted, namely, that the rental payable under the lease should be reduced and the period within which the lands might be bought back under the original arrangement extended for another three years. The respondents denied those allegations in their entirety and contended that, apart from the leases, the only agreement concerning the lands was that manifested by the sale deed. In 1940 the appellants again sought a reconveyance. That was refused by the original respondents, and on June 24, 1940, they and the appellant-plaintiff filed their plaints in the present suits.
The issues raised for determination by the Board were two in number. They may be stated thus (1.) Did the parties to the sale deed orally agree (a) that the lands sold would be re-conveyed if the price of Rs. 6,000 was repaid within the period of five years, and (b) that that period should be extended for a further three years ? (2.) If so, could the appellants avail themselves of such agreement having regard to s. 92 of the Indian Evidence Act, 1872 ?
56 Law. Rep. 75 Ind. App. 252 ( 1947- 1948) Sara Veeraswami Alias Sara Veerraju V. Talluri Narayya 158
The High Court (Krishnaswami Ayyangar and Horwill JJ.) reversing the decision of the trial judge, answered the first question in the negative.
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