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2011 (5) CTC 543
High Court of Judicature at Madras
R.S. RAMANATHAN
Lakshmamma
Versus
Rathinamma
S.A.No.610 of 2001
Decided on : 17-06-2011
specific performance - agreement of sale - Evidence Act, Sections 91 & 92, Specific Relief Act, Section 20(2) - Ex.A1 - The court held that the oral evidence contrary to the terms of agreement of sale cannot be permitted in view of the provisions of sections 91 and 92 of the Evidence Act. However, the appellant was entitled to plead that Ex.A1 was not intended to be acted upon as an agreement of sale and it was executed only as a security. The court also considered the conduct of the parties and the suppression of the muchalika, concluding that the plaintiff was not entitled to the discretionary relief of specific performance.
Fact of the Case:
The respondent filed a suit for specific performance of an agreement of sale, alleging that the appellant agreed to sell a property but later refused to execute the sale deed. The trial Court declined to grant the relief of specific performance and granted a decree for a sum of Rs.70,000/- in favour of the respondent. The 1st Appellate judge allowed the 1st appeal and decreed the suit as prayed for. The appellant filed this second appeal.
Finding of the Court:
The court found that the appellant was entitled to plead that the agreement of sale was not intended to be acted upon as such and was executed only as a security. The court also held that the plaintiff was not entitled to the discretionary relief of specific performance due to suppression of facts and unclean hands.
Issues: The issues included whether the agreement of sale was intended to be acted upon, whether the plaintiff was entitled to the discretionary relief of specific performance, and the admissibility of oral evidence contrary to the terms of the agreement of sale.
Ratio Decidendi: The court held that while oral evidence contrary to the terms of agreement of sale cannot be permitted in view of the provisions of sections 91 and 92 of the Evidence Act, the appellant was entitled to plead that the agreement was not intended to be acted upon as such. The court also considered the conduct of the parties and the suppression of the muchalika, concluding that the plaintiff was not entitled to the discretionary relief of specific performance.
Final Decision: The judgment and decree of the First Appellate Court were set aside and the judgment and decree of the trial Court were upheld. The second appeal was allowed with no costs.
The defendant, who was successful in the trial Court and lost in the 1st Appellate Court is the appellant.
2. The respondent/plaintiff filed a suit for specific performance of an agreement of sale, dated 30.05.1994 executed by the appellant/defendant in favour of the respondent/plaintiff.
3. The specific case of the respondent/plaintiff was that the suit property belongs to the appellant/defendant and on 30.05.1994, the appellant/defendant agreed to sell the suit property for a consideration of Rs.70,000/- and a sum of Rs.60,000/- was paid as advance and an agreement of sale was also executed on the same day wherein the payment of advance was also mentioned and the defendant agreed to execute a sale deed on receipt of the balance sale consideration from the respondent/plaintiff and a period of three years was fixed in the agreement of sale and the respondent/plaintiff offered to pay the amount and called upon the defendant/appellant to come and execute the sale deed by receiving the balance sale consideration and as the appellant/defendant refused to execute the sale deed, a notice was sent on 05.05.1995 by the respondent/plaintiff to the defendant and even after the receipt of the said notice, the appellant/defendant did not come forward to execute the sale deed, the suit was filed for specific performance of an agreement of sale, dated 30.05.1994.
4. The appellant/defendant contested the suit stating that an agreement of sale, dated 30.05.1994 was not executed for the purpose of conveying the suit property to the respondent/plaintiff and the husband of the appellant and the husband of the respondent were known to each other and for the purpose of constructing the first floor in the suit property, the appellant borrowed money from the husband of the respondent/plaintiff and earlier to 30.05.1994, a sum of Rs.60,000/- was borrowed and as a security for the amount, a document was sought to be executed and when he went to the Registrar office for creating a mortgage it was found that expenses will be more and having regard to the nature of the relationship between the parties viz., the husband of both the parties are friends, it was agreed to write an agreement of sale and it was not intended to be considered as an agreement of sale and the said document was executed only as a security for the amount borrowed by the defendant/appellant and even after the execution of the said agreement, the appellant/defendant borrowed various sums and including the sum of Rs.60,000/-, a total sum of Rs.1,50,000/- was borrowed by the defendant/appellant and the plaintiff was allowed to occupy a portion of the first floor in lieu of interest and a muchalica was also executed by the defendant in favour of the respondent/plaintiff, wherein it has been stated that the respondent/plaintiff is allowed to be in possession of the property in lieu of interest for the loan availed by the appellant/defendant and the appellant/defendant had repaid a sum of Rs.1,35,000/-on various dates to the respondent/plaintiff and a sum of Rs.15,000/- alone was yet to be paid and the appellant/defendant put up a construction over the suit property and the nature of the construction was made with the knowledge of the respondent/plaintiff and the agreement of sale was not intended to be acted upon as such and if the appellant had agreed to sell the property, as per the agreement of sale, she would not have put up construction on the suit property, after entering into an agreement of sale with the respondent/plaintiff as alleged and considering all these aspects, the document, dated 30.05.1994 was not intended to be acted upon as an agreement of sale and it was executed only as a security for the amount borrowed by the plaintiff and suppressing all these facts, a suit has been filed by the plaintiff/appellant and the plaintiff is not entitled to the relief as prayed for.
5. The trial Court declined to grant the relief of specific performance and granted a decree fo
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