High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE R.S. RAMANATHAN
Pappammal @ T. Pappa
Versus
P. Ramasamy
S.A.No.943 of 2011 & M.P.No.1 of 2011
Decided On : 29-03-2012
Specific Relief Act - Section 20 - The grant of relief of specific performance is discretionary and need not be granted even if the plaintiff is entitled to it. Evidence Act - Section 92 - The appellant is entitled to plead and prove that the document was not intended to be acted upon as an agreement of sale and was only a loan transaction or security transaction. The court can consider oral evidence to show that the document was never intended to operate as an agreement, but that some other agreement altogether was entered into between the parties.
Fact of the Case:
The respondent filed a suit for specific performance of an agreement of sale. The appellant contested the suit stating that she never executed any agreement of sale and that the document executed by her was only a security and not intended to be acted upon as an agreement of sale. The Trial Court and the First Appellate Court held that the agreement of sale was executed by the appellant and decreed the suit. The appellant appealed to the Second Appeal. The substantial questions of law before the court were: (1) Whether the appellant proved that the agreement of sale was executed only as security or meant to be a loan transaction and not intended to be considered as an agreement of sale? (2) Whether the Courts below were right in decreeing the suit when the respondent has not proved his readiness and willingness to perform his part of the contract? (3) Whether the Courts below were right in exercising the discretion vested with them under Section 20 of the Specific Relief Act? The court held that the agreement of sale was not intended to be acted upon and was only a loan transaction. The respondent failed to prove his readiness and willingness to perform his part of the contract. The court also held that the grant of relief of specific performance is discretionary and need not be granted even if the plaintiff is entitled to it. The court set aside the judgments and decrees of the lower courts and allowed the Second Appeal.
Finding of the Court:
The court analyzed the agreement of sale, the evidence presented by both parties, and relevant legal principles. The court held that the agreement of sale was not intended to be acted upon and was only a loan transaction. The court also held that the respondent failed to prove his readiness and willingness to perform his part of the contract. The court further held that the grant of relief of specific performance is discretionary and need not be granted even if the plaintiff is entitled to it.
Ratio Decidendi: The agreement of sale was not intended to be acted upon and was only a loan transaction. The respondent failed to prove his readiness and willingness to perform his part of the contract. The grant of relief of specific performance is discretionary and need not be granted even if the plaintiff is entitled to it.
Result: The judgments and decrees of the lower courts were set aside and the Second Appeal was allowed.
Key Points: - The respondent filed a suit for specific performance of an agreement of sale dated 6.5.1996 (!) . - The court held that the grant of relief of specific performance is discretionary and need not be granted even if the plaintiff is entitled to it (!) . - The appellant proved that the agreement of sale was not intended to be acted upon and was only a loan transaction (!) . - The respondent failed to prove his readiness and willingness to perform his part of the contract (!) . - The court set aside the judgments and decrees of the lower courts and allowed the Second Appeal (!) .
1. The defendant is the appellant herein.
2. The respondent/plaintiff filed the suit for specific performance of an agreement of sale, dated 6.5.1996 and that suit was decreed and the Appeal filed by the appellant herein was dismissed. Hence, this Second Appeal.
3. It is the case of the respondent/plaintiff that the appellant entered into an agreement of sale, dated 6.5.1996 with the respondent, for selling the suit property for a sum of Rs.40,000/- and, on the same date, advance amount of Rs.30,000/- was paid and acknowledged in the agreement of sale, and for payment of balance sum of Rs.10,000/-, time was given upto 6.5.2001 and the respondent was ready and willing to pay the balance sale consideration at one point of time and offered that amount to the appellant. Since the appellant was dragging on the matter, the respondent sent a notice, dated 26.12.2000, informing the appellant that he would be present in the Sub Registrar Office on 5.1.2011 and requested the appellant to come and execute the sale deed, after receiving the balance sale consideration. As the appellant did not come forward, the suit was filed for specific performance of agreement of sale.
4. The appellant contested the suit stating that she never executed any agreement of sale, as alleged by the respondent and she was a Subscriber in a Chit Company, viz., Vetri Murugan Finance and one Mr.Baskaran, the brother-in-law of the respondent was one of the Directors in the said Finance Company and she owed certain amounts to the said Finance Company and to secure that amount, the said Mr.Baskaran, obtained her signature in various bond papers and misused those papers with the help of the respondent, as if, an agreement of sale was entered into between the parties and the document executed by her was only a security and it was never intended to be acted upon as agreement of sale and the said Mr.Baskaran also filed a suit in O.S.No.522 of 2004, on the file of the Additional District Munsif Court, Namakkal and she never received Rs.40,000/-from the respondent, either as a loan or as agreement of sale and hence, she is not liable to execute the sale deed.
5. The respondent examined three witnesses to prove his case and the appellant examined two witnesses, including herself to prove that she never executed the agreement of sale.
6. The Trial Court, on the basis of the oral and documentary evidence, held that the agreement of sale, dated 06.05.1996 was executed by the appellant and the appellant did not prove that the agreement of sale was executed as security towards the lability payable to the Finance Company and it was not a loan transaction or given as security and the respondent also proved his readiness and willingness to perform his part of the contract and therefore the respondent is entitled to the decree for specific performance and decreed the suit.
7. The First Appellate Court also confirmed the findings of the Trial Court and dismissed the Appeal.
8. Mr.R.Subramanian, the learned counsel appearing for the appellant submitted that the Courts below, without properly appreciating the recitals in the agreement of sale and the time given for payment of balance sale consideration of Rs.10,000/-, out of the total consideration of Rs.40,000/-, erred in holding that the agreement of sale was executed by the appellant knowing fully well that it is an agreement of sale and not a loan transaction or given as security, for the loan payable towards Vetri Murugan Finance Company. The Courts below also failed to exercises its discretion under Section 20 of the Specific Relief Act and ought to have held that the agreement, was not executed by the appellant with an intention of executing the sale deed and it is only a loan transaction and the conduct of the respondent would also prove that he was not ready and willing to perform his part of the contract and ought to have dismissed the suit. The learned counsel relied upon the following three reported judgment
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