A transaction can be deemed a sham if the evidence shows it was never intended to create actual legal rights, emphasizing the principle that oral evidence is admissible to dispute the nature of written documents indicating a sale.

JUDGMENT :

C. PRATHEEP KUMAR, J.

The third defendant in OS No. 70 of 2012 on the file of the Sub Court, Attingal is the appellant. (For the purpose of convenience, the parties are hereafter referred to as per their rank before the trial court.)

2. The plaintiff filed the above suit for declaration of title and possession. The plaint schedule property consists of 30 cents of landed property and a building situated therein. The plaintiff obtained the plaint schedule property as per settlement deed No. 2192 of 1996 dated 07.06.1996, which is marked as Exhibit A1. The case of the plaintiff is that when he was in dire need of money, he approached the first defendant and availed a loan of Rs.3,00,000/- from him. At the time of availing the loan, he had executed Exhibit A2 sale deed No.3988/1998 dated 29.10.1998 in favour of the first defendant on condition that he shall pay interest at the rate of 36% per annum and as and when the principal amount with interest is repaid, the property will be re-conveyed to him. Subsequently when the first defendant demanded repayment of the loan amount, he did not have the money and accordingly, he had approached the second defendant and the second defendant agreed to advance the loan to him. Accordingly, the second defendant advanced a sum of Rs.3,75,000/- and the same was given to the first defendant and the first defendant caused to execute sale deed No. 3646 of 1999 dated 16.08.1999 (Ext.A3) in favour of the second defendant. The second defendant also agreed to reconvey the property as and when the loan amount with interest is repaid. However, when the second defendant demanded back the money, the plaintiff was not in a position to repay the same and accordingly he had approached the third defendant, who in turn advanced a sum of Rs. 3,75,000/- and the same was paid to the second defendant and the second defendant executed sale deed no. 4388 of 1999 (Exhibit A4) in favour of the third defendant. While executing Exhibit A4, the third defendant also agreed to re-convey the property to the plaintiff when the amount borrowed with interest is repaid.

3. According to the plaintiff, as agreed with the third defendant, he was regularly paying monthly interest at the rate of Rs.13,125/- to the third defendant. As per the discussion with the third defendant, the balance amount due to him as on 2.6.2001 was fixed at Rs. 3,00,000/- and a sum of Rs. 2,00,000/- was paid to the third defendant on that day. He further agreed to pay the balance Rs. 1,00,000/- to defendant no.3 within a short time. At that time the future interest to be paid was reduced to 2% per month. An agreement dated 2.6.2001 was also executed with the third defendant in that respect. In May 2009, the defendant no. 3 agreed to return the original title deed after receiving a sum of Rs.1,92,000/-. Accordingly, a sum of Rs. 1,92,000/- was paid to defendant no. 3 on 1.6.2009 and the plaintiff received the original title deed from him. Then the total amount due to defendant no. 3 was Rs.1,64,000/-. Since the land value increased considerably, the defendant no. 3 demanded exorbitant amount for re-conveying the property. Though Exhibits A2 to A4 documents were executed in favour of defendants 1 to 3, those documents were never intended to be acted upon and they were executed only as security for the due repayment of the loans a