The court ruled that a sale agreement executed to secure a loan repayment does not qualify for specific performance, emphasizing the importance of determining true contractual intent.

JUDGMENT :

S. Srimathy, J.

The present second appeal is preferred by plaintiff against the Judgment and Decree dated 07.07.2021 passed in A.S.No.3 of 2020 on the file of the Principal District Judge, Dindigul, reversing the Judgment and Decree dated 30.09.2013 passed in O.S.No.196 of 2012 on the file of the Subordinate Court, Vedasandur, Dindigul District.

2. The plaintiff is the appellant herein and the defendants are respondents herein. For the sake of convenience, the parties shall be referred as Plaintiff and Defendant as per the ranking in the suit.

3. The suit is filed for specific performance. Originally one Amjith Ibrahim and Kathusha Bivi were the owners of the suit properties, subsequently through settlement dated 07.12.1987 the defendants became the owners of the property. The contention of the plaintiff is that the plaintiff and the defendants had entered into registered sale agreement dated 26.04.2010 by paying an advance amount of Rs.2,00,000/- and agreed to pay the balance amount of Rs.2,90,000/- within a period of three months. In the said sale agreement, it has also been mentioned that the defendant had borrowed Rs.60,000/- from one Murugesan son of Ramasamy Gounder of Vadasandur Taluk and had mortgaged the suit property 05.04.2006. The plaintiff had accepted to settle the amount along with interest and the said advance amount of Rs.2,00,000/- is inclusive of the said principal amount of Rs.60,000/- and the interest for the said amount and the receipt is marked as Ex.A-3. Based on the said sale agreement the plaintiff was ready and willing to pay the balance amount of Rs.2,90,000/- within a period of three months and within the said three months the defendant had agreed that he would vacate the order of “attachment before judgment” (ABJ order) and clear all encumbrances. Thereafter the plaintiff had verified the encumbrance, which indicated that the agreed sale amount would not be sufficient to clear the balance debt. Hence, the plaintiff had requested the defendant to clear all encumbrance and executed the sale deed in favour of the plaintiff but the defendants were not coming forward to execute the sale deed. Hence, the plaintiff had intended to deposit the balance amount of Rs.2,90,000/- before the Court and the plaintiff is not having any objection to clear the other debts from the balance amount of Rs.2,90,000/-. In spite of the same, the defendants were not coming forward to execute sale deed. Hence, lawyer notice, dated 04.08.2010, was issued and the same was replied by the defendants on 14.08.2010 stating false case. Hence, the present suit is filed for specific performance.

4. The defendants had filed written statement stating that their grandparents (mother’s parents) namely Amjith Ibrahim and Kathusha Bivi had executed a settlement deed, dated 07.12.1987 and settled the suit property when they were minors. After attaining majority, they are in possession and enjoyment of the suit scheduled property. But denied the execution of the alleged sale agreement dated 26.04.2010 by accepting the advance amount of Rs.2,00,000/- and also denied the contents of the of the sale agreement and also denied the entire contents of the plaint. And stated that the facts remains that the defendants had approached the plaintiff for loan to the tune of Rs.2,00,000/- and the same was granted by the plaintiff with interest at the rate of Rs.2/- for Rs.1,000/- per month, thereby the defendants ought to pay Rs.4,000/- as interest per month. For such loan transaction the alleged sale agreement was executed as security for repayment. The defendants had paid Rs.4,000/- regu