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2008 Supreme(Mad) 2971

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S. NAGAMUTHU
Renuka
Versus
Chennakesavalu Naidu
Second Appeal No.340 of 2000 and C.M.P.No.2900 of 2000
Decided on : 19-08-2008

Advocates Appeared:
For the Appellant:Uma Ramanathan, Advocate.
For the Respondent:M/s.Aiyar and Dolia, Advocate.

A contract obtained by undue influence may be set aside. The burden of proving absence of undue influence lies on the party in a position to dominate the will of the other.

Headnote:

Indian Contract Act, 1872 - Section 16(3) defines 'undue influence' and places the burden of proving absence of undue influence on the party in a position to dominate the will of the other. Section 19(A) allows a contract obtained by undue influence to be set aside. The court applied these provisions to determine the validity of the sale agreement.

Fact of the Case:

The respondent filed a suit for specific performance based on a sale agreement executed by the defendant. The trial court decreed the suit, which was confirmed by the first appellate court. The defendant appealed to the second appellate court.

Finding of the Court:

The defendant argued that the sale agreement was obtained by undue influence and coercion. The court analyzed the evidence and held that the defendant had proved the existence of undue influence. The burden of proving absence of undue influence lies on the plaintiff, who failed to discharge this burden. The court concluded that the sale agreement was not genuine and voidable at the option of the defendant.

Ratio Decidendi: The court held that a contract obtained by undue influence may be set aside. In this case, the sale agreement was not genuine and voidable. The defendant was not obligated to enforce the agreement. The decree and judgment of the lower courts were set aside and the suit was dismissed.

Result: The second appeal was allowed and the suit was dismissed.

Judgment :-

The defendant is the appellant. The respondent filed O.S.No.12 of 1992 on the file of the learned Subordinate Judge, Krishnagiri for specific performance on the basis of an alleged sale agreement said to have been executed by the defendant in favour of the respondent on 20.05.1988. The trial Court decreed the suit by decree and judgment dated 111. 1997. Challenging the same, the appellant filed A.S.No.3 of 1998 which came to be disposed of by the learned I Additional District Judge, Krishnagiri by decree and judgment dated 30.11.1999. The First Appellate Court dismissed the appeal and confirmed the decree and judgment of the trial Court. Challenging the same, the appellant has come forward with this second appeal.

2. For the sake of convenience, in the judgment, the defendant shall be referred to as the defendant and the respondent as plaintiff.

3. The case of the respondent/plaintiff is as follows:-

The suit property belongs to the defendant. On 20.05.1988, the defendant executed a sale agreement in favour of the plaintiff thereby agreeing to sell the suit property to him for a sale consideration of Rs.85,000/-. A sum of Rs.70,000/- was paid as advance at the time of the agreement and it was agreed that the balance of sale consideration of Rs.15,000/- should be paid on or before 25.07.1991 by the plaintiff and on such payment, the defendant should execute necessary sale deed in favour of the plaintiff. Thereafter, on 10.03.1991, the defendant received a further sum of Rs.10,000/- from him towards the sale consideration and in acknowledgment of the same, the defendant made an endorsement on the backside of the sale agreement itself in the presence of witnesses. Again on 11.07.1991, the defendant received yet another amount of Rs.4,000/- from the respondent towards sale consideration and made an endorsement on the backside of the sale agreement acknowledging the same. Thus, the balance of sale consideration to be paid was only Rs.1,000/-. He approached the defendant and requested her to receive the balance of sale consideration of Rs.1,000/- which remained due and wanted her to execute the sale deed. Further, the plaintiff issued a legal notice on 03.07.1991 calling upon the defendant to execute sale deed. Another legal notice was also issued on 12.09.1991 by the plaintiff calling upon the defendant to execute necessary sale deed. But, the defendant did not choose to perform her part of contract or atleast to send a reply to the said legal notices issued by the respondent. It is further stated that the plaintiff was all along ready to perform his part of contract since the defendant was not ready to perform her part of contract, the plaintiff had to file the present suit for specific performance of contract.

4. In the written statement, the defendant has pleaded as follows:-

The defendant never agreed to sell the suit property to the plaintiff for a sum of Rs.85,000/-. She would further submit that the document dated 20.05.1988, on which basis, the suit has been laid is not a true and valid document. The said document is not enforceable under law, as there was no concluded contract between the defendant and the plaintiff. She has not received any amount towards sale consideration. She has also denied the receipt of the legal notices. She has put forward that her husband Mr.Radhakrishnan, Mr.Chennakesavalu Naidu, the respondent herein, one Mr.Dhanapal and one Mr.Kuppusamy are close relatives. The husband of the defendant borrowed a sum of Rs.15,000/- from the said Dhanapal in the year 1985. The defendant’s husband paid interest for the said amount for one year and thereafter, he could not either pay interest or principal amount. Therefore, Mr.Dhanapal and the plaintiff forced the defendant to execute a document as security for loan outstanding. Though, the defendant pleaded that she would discharge the debt, she could not do so due to financial constrains in the family. Finally, the plaintiff and one Mr.Ravi came to






































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