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1997 Supreme(Mad) 607

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE RAJU
Muthia Pillai & Another
Versus
P. Radhakrishna Pillai (died) & Others
S.A. No. 1830 of 1983
Decided On :Decided on : 14-06-1997

Advocates Appeared:
For the Appellants:K.S. Ahamed, Advocate.
For the Respondents:N. Vanchinathan, Advocate.

Oral evidence is admissible to prove want of consideration or failure of consideration for a written contract, even though the contract is required by law to be reduced to the form of a document.

Headnote:

EVIDENCE ACT, 1872 - SECTION 92 - SALE DEED - CONSIDERATION - FAILURE OF CONSIDERATION - ORAL EVIDENCE - ADMISSIBILITY - PRESUMPTION UNDER SECTION 58(1) OF THE REGISTRATION ACT, 1908 - APPLICABILITY.

Fact of the Case:

Plaintiff filed a suit for declaration that the sale consideration for a sale deed was actually Rs. 20,000/- and for recovery of the same from the defendants. The defendants contended that the agreed consideration was only Rs. 10,000/- as recited in the document and that the same had been duly passed on to the vendor.

Finding of the Court:

The trial court and the first appellate court found that the sale consideration was really Rs. 10,000/- and that no consideration actually passed for the transaction. The courts held that the plaintiff had executed and got the sale deed registered on the assurance of payment, but that no amount as such had been paid for the transaction.

Issues: 1. Whether oral evidence is admissible to contradict, vary, add to or subtract from the terms of a written contract required by law to be reduced to the form of a document? 2. Whether the presumption under Section 58(1) of the Registration Act, 1908 applies in the present case?

Ratio Decidendi: 1. Section 92 of the Evidence Act, 1872 prohibits the admission of oral evidence to contradict, vary, add to or subtract from the terms of a written contract required by law to be reduced to the form of a document. 2. However, Proviso No. 1 to Section 92 allows for the admission of oral evidence to prove facts that would invalidate the document or entitle a person to a decree or order relating thereto, such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, want of failure of consideration or mistake in fact or law. 3. In the present case, the courts below found that the vendor had executed the sale deed without actually receiving the consideration recited therein and only on the assurance of payment in future. This finding falls within the ambit of Proviso No. 1 to Section 92 of the Evidence Act and therefore, oral evidence was admissible to prove the failure of consideration.

Final Decision: The second appeal was dismissed.

Judgment :-

1. The defendants in O.S. No. 305 of 1980 on the file of Sub Court. Chidambaram, who lost before both the Courts below, are the appellants in the above Second Appeal. The 1st respondent herein filed the suit before the trial Court for declaration that the sale consideration for Ex. A-1 dated 25.5.1980 was really Rs. 20,000/- and for recovery of the same from the defendants.

2. There is no controversy over the position that Ex. A-1 has been executed and registered in accordance with the law relating to registration and that possession of the property has also been obtained by the defendants predecessors in interest. The limited controversy in this appeal is with reference to the quantum of consideration said to have been agreed to be paid actually. The case of the defendants was that the agreed consideration was only Rs. 10,000/- as recited in the document and that the same has also been duly passed on to the vendor-the plaintiff and consequently, nothing remains due from the defendants.

3. On the above claims and counter claims, the suit came to be tried, and both parties adduced oral and documentary evidence. The learned trial Judge came to the conclusion that the sale consideration was really Rs. 10,000/- and such an amount was agreed to be the consideration by showing concession to the defendants. In spite of the said finding, a decree for Rs. 10,000/- was granted in favour of the plaintiff on the further finding that no consideration actually passed for the transaction and that the plaintiff has executed and got the sale deed registered on the assurance of payment, but that no amount as such has been paid for the transaction.

4. The defendants filed A.S. No. 219 of 1982 before the District Court, Cuddalore, against the judgment and decree of the learned trial Judge dated 30.6.1982. The learned First Appellate Judge also concurred with the findings of the learned trial Judge and dismissed the appeal by judgment and decree dated 21.4.1983. Hence, the above Second Appeal.

5. At the time of the admission of the Second Appeal, the learned Judge was of the view that a substantial question of law based on the omission of the Courts below in overlooking and ignoring the presumption arising from the endorsement of registration made in Ex. A-1, deed of sale, under Section 58(1) of the Registration Act arises for consideration and in that context, the legality and propriety of the conclusions arrived at the by the Courts below was found necessary to be considered. During the pendency of the above Second Appeal, the 1st respondent herein appears to have died and in his place, his legal representatives have been brought on record.

6. Mr. N.K. Ahamed, learned counsel appearing for the appellants contended, while placing reliance upon Section 92 of the Evidence Act, 1872, that when the terms of the contract, in this case Ex. A-1 sale deed, which is required by law to be reduced in the form of a document, has been proved, it is not permissible for either of the parties to such document or their representatives-in-interest to let in any oral evidence or set up any oral agreement for the purpose of contradicting, varying, adding to or subtracting from its terms. Adverting to Proviso No. 1 to the said provision, the learned counsel also stated that it will have no application and that therefore, the Courts below have committed a serious error of law in decreeing the suit for the sum, as noticed supra. Reliance has also been placed on a decision of a Division Bench of this Court in K.S. Narasimhachari v. Indo Commr. Bank (AIR 1965 Mad 147=(1964) 77 L.W. 622) and in Bonam Venugopal Rao v. Tavvala Veerabhadra Rao (AIR 1989 NOC 178 (AP), in support of the said stand. Per contra, learned counsel appearing for the respondents, while adopting the reasons and findings concurrently recorded by both the Courts below, contended that the conclusions arrived at, are not in any manner opposed to the principles contained in Section 92 of the Evid








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