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2026 Supreme(Mad) 2815
IN THE HIGH COURT OF JUDICATURE AT MADRAS
K. KUMARESH BABU, J.
Rajendiran, S/o. Perumal – Appellant
Versus
Ayyadurai, S/o. Rangapillai – Respondent
AS No. 309 of 2017 and CMP. Nos.11649 of 2017 & 28014 of 2025
Decided On : 08-07-2026
For the Appellant : M/s. T. Balaji
For the Respondent: Mr. A. Sundaravadhanan For M/s. Karan and Uday
An appellate court has the discretion under Section 22 of the Specific Relief Act and Order VI Rule 17 of the Code of Civil Procedure to allow an amendment of the plaint to include a prayer for the refund of an advance, even at the appellate stage, to serve the interests of justice.
Headnote:(A) Specific Relief Act, 1963 - Sections 16(c) and 22 - Civil Procedure Code, 1908 - Order VI Rule 17 - Agreement for sale - Suit for specific performance - Suit agreement found to be a security for loan transaction rather than a genuine sale agreement - Relief of specific performance declined - Plaintiff sought refund of advance amount paid - Appellate Court exercised discretionary power to allow amendment of plaint to include prayer for refund under Section 22 - Held, since the Appellant had admitted receipt of the amount in written statement, technical objection regarding lack of specific prayer for refund at trial stage is overruled in interest of justice. (Paras 34, 38, 39)
Facts of the case:
The appellant allegedly entered into a sale agreement for his property for Rs.16,00,000/-, receiving Rs.15,00,000/- as advance. The respondent filed a suit for specific performance. The appellant contended the agreement was a sham, executed only as security for a loan. The trial court dismissed the prayer for specific performance but decreed a refund of the advance amount with interest. The appellant challenged this in the High Court.
Findings of Court:
The court held that while a prayer for refund must generally be pleaded under Section 22 of the Specific Relief Act, the appellate court has the authority to allow an amendment to the pleadings even at the appellate stage to determine the real controversy and prevent unjust enrichment, especially given the defendant’s admission of the loan receipt.
Issues: Whether the appellate court can grant a decree for refund of advance money when no specific prayer was made in the plaint and whether the suit agreement was a genuine sale or a loan security.
Ratio Decidendi: The proviso to Section 22 of the Specific Relief Act and Order VI Rule 17 of the CPC enable the appellate court to allow amendment of the plaint to include a claim for refund of advance, ensuring that a party who has admitted to receiving money is not unjustly enriched when specific performance is declined.
Result: Appeal dismissed; CMP allowed; Trial Court decree confirmed.
| Table of Content |
|---|
| 1. overview of the nature of the suit and the dispute regarding the agreement's purpose. (Para 1 , 2 , 3 , 4 , 5) |
| 2. trial court's rationale in determining the agreement was a loan security, not a sale. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14) |
| 3. trial court's findings on readiness and willingness, and the subsequent money decree. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24) |
| 4. arguments concerning the lack of specific pleadings for refund under section 22. (Para 25 , 26 , 27 , 28 , 29 , 30) |
| 5. appellate court's power to allow amendment of plaint to include refund prayer in interest of justice. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40) |
COMMON JUDGMENT :
K. KUMARESH BABU, J.
The present Appeal Suit has been filed challenging the judgment and decree dated 23.11.2016 passed in O.S.No. 23 of 2012 on the file of the learned III Additional District Court, Tirpattur.
2. The case of the plaintiff, is that the suit property absolutely belonged to the defendant and that the defendant had agreed to sell the same to the plaintiff for a total sale consideration of Rs.16,00,000/-. Pursuant thereto, an agreement of sale dated 20.01.2011 was entered into between the parties, under which the defendant allegedly received a sum of Rs.15,00,000/- as advance and agreed to execute the sale deed on receipt of the balance sale consideration of Rs.1,00,000/-. According to the plaintiff, the period fixed for completion of the transaction was eleven months and he was always ready and willing to perform his part of the contract by paying the balance consideration and obtaining the sale deed. It was further pleaded that, despite repeated requests, the defendant postponed execution of the sale deed, compelling the plaintiff to issue a legal notice dated 10.12.2011 calling upon the defendant to execute the sale deed. Since the defendant failed to comply with the demand and also failed to appear before the Sub-Registrar as required, the plaintiff instituted the suit seeking specific performance of the agreement, permanent injunction restraining alienation of the suit property and costs.
3. The defendant, in the written statement, denied the plaint averments and contended that the suit agreement was not a genuine agreement of sale but was executed only as security for a loan transaction. According to the defendant, he had borrowed money from the plaintiff through the plaintiff’s brother Arumugham for the purpose of construction of a house in the suit property and, as security for such loan, the impugned agreement dated 20.01.2011 had been executed. It was specifically pleaded that the defendant had no necessity to alienate the suit property, which was his only property, and that the plaintiff and his brother were habitually obtaining agreements of sale while advancing loans. The defendant further contended that even prior to issuance of notice, he had attempted to repay the amount together with interest, but the plaintiff refused to receive the same with an intention to grab the valuable immovable property. Hence, the defendant contended that the plaintiff was not entitled to the discretionary relief of specific performance and sought dismissal of the suit.
4. Upon the above pleadings, the Trial Court framed the following issues:-
(1) Whether the suit agreement dated 20.01.2011 is a sale agreement as claimed by the plaintiff or it is a loan transaction agreement as alleged by the defendant ?
(2) If the suit agreement is a sale agreement, whether the plaintiff was always with readiness and willingness to perform his part of contract ?
(3) Whether the plaintiff is entitled to the suit claim of specific performance?
(4) Whether the plaintiff entitled the claim of permanent injunction ?
(5) To what other reliefs?
5. Before the Trial Court, the plaintiff examined himself as PW1 and examined Arumugham as PW2, marking Exs.A1 to A5. On the side of the defendant, the defendant examined himself as DW1 and examined one Ambiga as DW2 and marke
