IN THE HIGH COURT OF JUDICATURE AT MADRAS
A.D.MARIA CLETE, J.
M.Mahesh S/o.V.Mylsamy – Appellant
Versus
V. Kanagaraj – Respondent
A.S. No. 924 of 2020
Decided on : 02-01-2026
JUDGMENT :
1. This appeal is directed against the judgment and decree dated 24.06.2020 passed by the learned IV Additional District & Sessions Judge, Coimbatore, in O.S. No.408 of 2016.
2. The plaintiffs instituted the suit seeking specific performance of the agreement of sale dated 07.10.2013, and in the alternative, refund of the advance amount of Rs.15,00,000/-. The trial Court declined to grant either of the reliefs and dismissed the suit in its entirety. Aggrieved thereby, the plaintiffs has preferred the present appeal. For the sake of convenience, the parties are referred to according to their ranking before the trial Court.
3. Brief facts of the plaintiff’s case: The suit property belongs to the defendant. On 07.10.2013, the defendant entered into a registered agreement of sale with the plaintiffs, agreeing to sell the suit schedule property for a total consideration of Rs.15,50,000/-. A sum of Rs.15,00,000/- was paid as advance, and the time for completion of the transaction was fixed on 06.10.2016. Under the terms of the agreement, the defendant undertook to hand over the parent title deeds and revenue records and to execute the sale deed whenever called upon by the plaintiffs. According to the plaintiffs, he was always ready and willing to perform his part of the contract, the balance consideration being negligible; however, the defendant repeatedly delayed execution of the sale deed on the pretext of securing alternative accommodation. The plaintiffs issued a legal notice dated 09.02.2016 calling upon the defendant to execute the sale deed. The defendant, by reply notice dated 23.02.2016, made false allegations and refused to comply, necessitating the filing of the suit.
4. Brief facts of the written statement: The defendant contended that the plaintiffs had suppressed material facts. It was pleaded that the transaction was engineered by the defendant’s own brother, Mylsamy; that the first plaintiffs is Mylsamy’s son and the second plaintiffs is the wife of the first plaintiffs. According to the defendant, the agreement of sale dated 07.10.2013 was never intended to be acted upon as a genuine sale agreement. The alleged sale consideration of Rs.15,50,000/-, the payment of advance of Rs.15,00,000/-, and the stipulation of a three-year period for completion were all denied as false. It was further contended that the legal notice issued by the plaintiffs did not disclose the true state of affairs, and that a suitable reply notice had been sent.
5. The defendant further pleaded that there was an earlier agreement of sale dated 02.05.2012 between the defendant and the 1st plaintiff. The suit property originally belonged to the defendant’s father, namely Vadivel Chettiar, who had settled the property in favour of the defendant’s son by a settlement deed dated 16.11.1992. Later defendant’s son settled the properties in favour of defendant by means of document dated 06.12.2010. For the purpose of starting a hotel business, the defendant had borrowed a sum of Rs.7,00,000/- from one C.K. Kanagaraj and executed an agreement of sale only as security for the said loan. Thereafter, the defendant approached his brother Mylsamy for additional funds, pursuant to which Mylsamy discharged the loan due to C.K. Kanagaraj and advanced further sums of Rs. 3,00,00, aggregating to Rs.10,00,000/-. The earlier agreement was cancelled and the suit agreement came to be executed between the plaintiffs and the defendant . It was further stated that Mylsamy collected rents from the tenants towards interest on the loan amount. The unusually long period of three years stipulated for execution of the sale deed, according to the defendant, clearly demonstrated the absence of any intention to effect a sale. On these grounds, dismissal of the suit was sought.
6. The trial Court, upon appreciation of the oral and documentary evidence on record, dismissed the suit in its entirety.
7. Grounds of Appeal: The appellant contended that, once the execution of Ex.A1 r
A money decree cannot be granted when a sale agreement is found non-genuine; it changes the nature of the claim to a loan recovery without proper pleadings.
The court reaffirmed that in specific performance cases, the burden of proof lies on the defendant to substantiate claims regarding the advance amount and contract genuineness, ultimately determining....
The court can grant alternative relief of refund even if not explicitly claimed, ensuring fair justice is delivered in contract disputes.
The duty to rebut the recitals of a registered document and the inadmissibility of evidence to disprove a sale agreement.
The court applied the principles of Sections 16 and 20 of the Specific Relief Act, 1963 to determine the enforceability of the sale agreement and the plaintiff's entitlement to the relief of specific....
Section 22 of the Specific Relief Act allows for the refund of earnest money or deposit paid when the claim for specific performance is refused, with discretion for the court to allow the plaintiff t....
In suits for specific performance, plaintiffs must prove the agreement's genuineness and continuous readiness to perform, particularly when execution is disputed.
The court determined that the agreement was intended as a security for a loan rather than a sale, emphasizing the necessity of proving readiness and willingness for specific performance.
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