M. Sasidharan Nambiar, J.

Defendant in a suit for specific performance of an agreement for sale is the appellant. Plaintiff is the respondent. Respondent instituted O.S. 176 of 1995 before Sub Court, Payyannur for specific performance of Ext.A1 agreement for sale dated 29.11.1994 contending that appellant agreed to sell the plaint schedule property for a consideration @ Rs. 2700/- per cent and received Rs. 10,000/- as advance towards the sale consideration and agreed to execute a sale deed within eight months after measuring and satisfying the extent to the respondent, on the respondent paying the balance consideration. It was alleged that in spite of the oral demand to execute the sale deed, appellant did not execute it. Therefore Ext.A2 notice was sent demanding execution of the sale deed. Appellant failed to execute the sale deed. A decree for specific performance of Ext.A1 agreement was sought. Appellant resisted the suit denying the agreement for sale or execution of Ext.A1 agreement. According to the appellant, he had borrowed Rs. 10,000/- from the respondent to perform the ceremonies connected with the death of his mother and as insisted by the respondent, he had handed over signed blank stamp paper to the respondent. He subsequently repaid Rs. 5000/- with interest, though respondent did not issue a receipt. Ext.A1 agreement was created using the said signed blank paper. Appellant is not liable to execute the sale deed.

2. Learned Sub Judge on the evidence of the respondent as PW1, the scribe of Ext.A1 as PW2 and the appellant as DW1, Exts.A1 to A5, B1, C1 and C2 found that there was no agreement for sale of the plaint schedule property between the appellant and the respondent. But on the admission of the appellant that he borrowed Rs. 10,000/- and he failed to establish the discharge it was held that respondent is entitled to a decree for realisation of Rs. 10,000/- with interest at the rate of 18% per annum from 29.11.1994, till realisation. The plaint schedule property was made a charge for the amount. Respondent challenged the judgment before District Court, Thalassery in A.S. 164 of 1998. Learned Additional District Judge, on re-appreciation of the evidence, found that Ext.A1 agreement was executed by the appellant agreeing to sell the plaint schedule property and received Rs. 10,000/- and respondent has always been ready and willing to perform his part of the agreement and therefore respondent is entitled to a decree for specific performance of the agreement. The suit was decreed directing the appellant to execute a sale deed in favour of the respondent on the respondent depositing the balance sale consideration within three months. The judgment is challenged in the second appeal.

3. The second appeal was admitted formulating the following substantial questions of law.

"(1) Whether the appellate court has not gone wrong in finding that Ext.A1 agreement was validly executed.

(2) Whether appellate court has exercised its discretion under Section 20 of the Specific Relief Act correctly.

4. Learned counsel appearing for appellant and respondent were heard.

5. Learned counsel appearing for appellant pointed out that learned Sub Judge, who had occasion to note the demeanor of witnesses, had properly appreciated the evidence and found that Ext.A1 agreement was not proved and there was no agreement for sale as claimed by the respondent and in spite of the specific plea taken by the appellant that he did not execute Ext.A1 agreement and did not agree to sell the plaint schedule property, learned District Judge wrongly proceeded on the basis that appellant admitted execution of the agreement and without proper appreciation of evidence upheld Ext.A1 and directed specific performance of the agreement. Learned counsel would argue that in spite of the denial of execution, even though Ext.A1 shows that there are two attesting witnesses, respondent did not examine any one of them. It was argued that apart from the respondent,