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2024 Supreme(Mad) 2038

IN THE HIGH COURT OF JUDICATURE AT MADRAS
R.N. Manjula, J.
B.Venkatarama Chetty - Appellant
Versus
Annapoorani @ Usha - Respondent
S.A. No. 1048 of 2012 and M.P. No. 1 of 2012
Decided On : 29-11-2024

Advocates:
Advocate Appeared:
For the Appellant : Ms.V.Srimathi
For the Respondent: Mr.V.Nicholas

A sale agreement must be proven by its written terms, and inconsistencies in evidence can undermine claims for specific performance.

Headnote:(A) Code of Civil Procedure, 1908 - Section 100 - Specific performance - Plaintiff filed suit for specific performance of sale agreement dated 18.07.2001 for Rs.2,00,000/-; trial court decreed suit, but first appellate court reversed decision - Plaintiff claimed readiness to perform, while defendant contended agreement was a loan security - Court found evidence of plaintiff's financial dealings undermined his claim - Appeal dismissed. (Paras 1-21)

(B) Burden of Proof - The burden of proof lies on the party asserting the existence of a contract, and the defendant's evidence raised doubts about the sale agreement's authenticity. (Paras 18-20)

Facts of the case:
The plaintiff and defendant entered into a sale agreement for property, with partial payments made, but the defendant claimed it was a loan security. The trial court ruled in favor of the plaintiff, but the appellate court reversed this decision.

Findings of Court:
The appellate court found the sale agreement was executed under suspicious circumstances, indicating it was a security for loans rather than a genuine sale.

Issues: Whether the appellate court erred in dismissing the suit despite the plaintiff's claims of readiness and willingness, and whether the sale agreement was mischaracterized as a loan.

Ratio Decidendi: The court held that the unusual terms of the sale agreement and the plaintiff's financial dealings raised significant doubts about the agreement's legitimacy, justifying the appellate court's decision.

Result: Second appeal dismissed.

JUDGMENT :

R.N.Manjula, J.

PRAYER: Second Appeal is filed under section 100 of the Code of Civil Procedure, 1908, to set aside the judgment and decree dated 23.07.2012 made in A.S. No. 19 of 2010 on the file of the Principal District Court, Krishnagiri, reversing the judgment and decree dated 21.06.2010 made in O.S. No. 88 of 2006 on the file of the Principal Subordinate Court, Krishnagiri.

The appellant is the plaintiff, who has filed a suit for specific performance against the defendant. The trial Court had decreed the suit and the first appeal preferred by the defendant, the first appellate Court had allowed the first appeal and reversed the judgment and thereby, dismissed the suit. Aggrieved over that, the plaintiff has preferred the second appeal.

2. The short facts pleaded in the plaint are as under:-

The plaintiff and the defendant have entered into a sale agreement in respect of the suit property on 18.07.2001 for a total sale consideration of Rs.2,00,000/-. On the date of sale agreement itself Rs.25,000/- was received in advance. The defendant agreed to receive the balance sale consideration within five years. On 02.11.2001, the defendant has paid a further part sale consideration of Rs.30,000/- and made an endorsement on the sale agreement itself. On 04.07.2002, the plaintiff has paid another sum of Rs.25,000/- and on 10.01.2004, he has paid a sum of Rs.70,000/- and totally the defendant has received a sum of Rs.1,50,000/- out of the total sale consideration of Rs.2,00,000/-.

2.2.The plaintiff was all along ready and willing to perform his part of contract. In fact, the plaintiff informed the defendant to receive the balance sale consideration to execute the sale deed, but the defendant did not come forward.

2.3.After issuing a pre-litigation notice on 10.04.2006 calling upon the defendant to execute the sale deed, the plaintiff has filed the suit for specific performance.

3.The defendant resisted the suit he has filed his written statement :-

The sale agreement is a false one and the defendant did not receive any part sale consideration as alleged by the plaintiff. On 10.04.2006, the defendant went and met the plaintiff, after receiving his legal notice.

3.1. At that time, the plaintiff agreed to settle the loan. The sale agreement though appears to be so it is only a loan document. The plaintiff is involved in money transaction and he used to get such agreements from persons who avail loan from him as a security.

3.2. On 18.07.2001, the defendant and her husband asked Rs.25,000/-as loan from the plaintiff and after giving the loan, the plaintiff has got the sale agreement of this nature as security. The sale agreement has no specified time limit. On 02.11.2001, the defendant has got Rs.30,000/- and for which he has made an endorsement on the fourth page of the sale agreement. On 04.07.2002, the plaintiff has made an another endorsement for Rs.25,000/-alleging that the interest on the amount advanced by him was due.

3.3. As the defendant was not able to repay the loan amount availed by her, the plaintiff had given a legal notice. Even when the defendant approached the plaintiff and inquired he had stated that the legal notice was issued to give pressure to the defendant to repay the loan and as per the negotiations between her and the plaintiff, he has agreed to give back the sale agreement if the defendant pays Rs.1,50,000/- in full quit. Only that the defendant did not give any reply notice. On 10.01.2004 the plaintiff did not receive any Rs.25,000/- as alleged by the plaintiff. The sale agreement dated 18.07.2001 has already been barred by limitation and the plaintiff has inserted five years time on his own whims. As the plaintiff is influential person and has got surplus money, he would have paid the entire sale consideration on 18.07.2001 itself and completed the sale transaction. Hence, the suit itself is frivolous one.

4. On the basis of the above pleadings, the trial Court has framed the following issues:-

    “1. Whether the

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