A registered sale agreement may be deemed a security for a loan if supported by credible evidence, thereby negating specific performance claims under Indian Evidence Act sections.

JUDGEMENT :

T.V.THAMILSELVI, J.

The plaintiff / appellant has filed this appeal to set aside the judgment and decree made in AS No.2 of 2022 dated 16.03.2023 on the file of the learned Principal District Judge, Perambalur whereby the judgment and decree dated 01.04.2022 made in OS No.134 of 2016 on the file of the learned Subordinate Judge, Perambalur, was reversed.

2. For the sake of convenience, the parties herein are referred to as they were ranked in the suit.

3. The plaintiff filed a suit against the defendant seeking the relief of specific performance, alleging that the suit property belongs to the respondent/defendant, who had offered to sell the same for a total consideration of Rs.2,25,000/-. Accordingly, on 14.05.2014, a registered sale agreement was entered into between the parties, under which a sum of Rs.2,00,000/- was paid as advance, and the balance amount of Rs.25,000/- was agreed to be paid within two years, during which period the sale was to be completed. He further pleaded that the plaintiff had always been ready and willing to perform her part of the contract and expressed her readiness to have the sale deed executed. However, the defendant refused to execute the sale deed, compelling the plaintiff to file the suit for specific performance.

4. The defendant, on the other hand, denied the execution of the sale agreement as alleged by the plaintiff. She contended that due to family necessity, she had borrowed a loan from the plaintiff and, as security for the said loan transaction, she was compelled to execute the sale agreement. According to the defendant, she regularly paid interest on the loan amount, but with an intention to grab the suit property, the plaintiff issued a legal notice with false allegations and thereafter filed the suit. The defendant sent a reply notice explaining the true facts and denied the plaintiff’s claim in entirety.

5. Before the Trial Court, both parties adduced oral and documentary evidence. The Trial Court framed two principal issues, namely: (i) whether the alleged sale agreement was executed only as a security for the loan transaction and (ii) whether the plaintiff is entitled to the relief of specific performance.

6. Upon appreciation of the evidence and documents on record, the Trial Court held that the plaintiff had prima facie established the execution of the sale agreement and had also proved her readiness and willingness by issuing notice. The Trial Court further observed that the defendant had not adduced any contra evidence to disprove the plaintiff’s case. Relying upon Sections 91 and 92 of the Indian Evidence Act, the Trial Court held that the recitals contained in the document itself are sufficient proof of the contract. The Trial Court found that Exhibit A1 clearly establishes the contract between the parties and, in the absence of contrary evidence, held that Exhibit A1 is a valid sale agreement. Consequently, the Trial Court held that the plaintiff is entitled to the relief of specific performance and decreed the suit as prayed for.

7. Aggrieved by the said findings, the defendant preferred an appeal in A.S. No. 2 of 2022 before the learned District Judge, Perambalur. The First Appellate Court independently analysed the facts and circumstances of the case, framed separate points for consideration, and rendered findings without being influenced by the conclusions of the Trial Court.

8. The learned First Appellate Judge relied upon the cross-examinat