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2024 Supreme(Online)(Mad) 68269
IN THE HIGH COURT OF JUDICATURE AT MADRAS
K.Murali Shankar, J
Nagarajan – Appellant
Versus
Nirmala – Respondent
S.A.(MD)No.206 of 2018
For the Appellants/Petitioners: Mr.K.Govindarajan
For the Respondents: Mr.Shangar Murali
The court affirmed that a sale agreement's adequacy of consideration is irrelevant unless fraud is proven, and the defendant failed to establish the agreement was a sham.
Headnote:(A) Code of Civil Procedure, 1908 - Section 100 - Specific Relief Act, 1963 - Second appeal against decree for specific performance - Plaintiff claimed specific performance of sale agreement - Defendant argued agreement was a security for a loan - Trial Court rejected specific performance, granted refund - First appellate Court reversed, granted specific performance - Substantial questions of law regarding unfair advantage and intent of agreement raised. (Paras 9, 10, 11, 24, 44)
(B) Specific Performance - The court emphasized that the adequacy of consideration is not a critical factor unless fraud is established - The defendant failed to prove the agreement was intended as a security rather than a sale. (Paras 18, 35)
(C) Evidence - The defendant's failure to provide evidence supporting the claim of the agreement being a sham document undermined his defense. (Paras 26, 30)
(D) Readiness and Willingness - The plaintiff demonstrated readiness to perform her part of the contract, countering the defendant's claims. (Paras 39, 40)
Findings of Court:
The appellate court found the plaintiff entitled to specific performance, rejecting the defendant's claims regarding the agreement's nature.
Issues: The court addressed whether the sale agreement was intended to be acted upon and if the plaintiff had an unfair advantage.
Ratio Decidendi: The court ruled that the defendant failed to prove the sale agreement was a sham and that the plaintiff's readiness to perform was established.
Result: Second appeal dismissed with costs.
| Table of Content |
|---|
| 1. the second appeal is against a judgment and decree. (Para 1 , 2) |
| 2. plaintiff claims specific performance of a sale agreement. (Para 3 , 4 , 5 , 6) |
| 3. trial judge framed issues based on pleadings. (Para 7 , 8 , 9) |
| 4. substantial questions of law admitted. (Para 10) |
| 5. defendant argues the agreement was a loan security. (Para 11 , 12 , 13 , 14 , 15) |
| 6. defendant admits execution of the sale agreement. (Para 16 , 17) |
| 7. legal principles under section 92 of the evidence act. (Para 18 , 19 , 20) |
| 8. burden of proof lies on the party claiming the document is sham. (Para 21 , 22 , 23 , 24) |
| 9. defendant's failure to prove loan transaction. (Para 25 , 26 , 27 , 28) |
| 10. defendant's claims regarding earlier agreements lack evidence. (Para 29 , 30 , 31) |
| 11. plaintiff's legal notice and defendant's failure to respond. (Para 32 , 33 , 34) |
| 12. defendant failed to prove the market value of the property. (Para 35 , 36 , 37) |
| 13. plaintiff's readiness and willingness to perform contract. (Para 38 , 39 , 40) |
| 14. hardship as a defense in specific performance cases. (Para 41 , 42 , 43) |
| 15. second appeal dismissed; plaintiff entitled to costs. (Para 44 , 45) |
JUDGMENT
The Second Appeal is directed against the judgment and decree passed in A.S.No.41 of 2015 dated 29.04.2017 on the file of the Principal District Court, Tiruchirappalli, reversing the judgment and decree made in O.S.No.8 of 2005 dated 03.12.2012 on the file of the Ist Additional Subordinate Court, Tiruchirappalli.
2. The appellant is the respondent/defendant and the respondent is the appellant/plaintiff. For the sake of convenience and brevity, the parties herein will be referred to as per their status/ranking in the trial Court.
3. The plaintiff has filed a suit in O.S.No.8 of 2005 on the file of the Subordinate Court, Tiruchirappalli, claiming the relief of specific performance of the agreement dated 28.08.2003 or in the alternative to refund the advance amount of Rs.1,00,000/- with interest and costs.
4. Admittedly, the suit property is owned by the defendant.
5. The case of the plaintiff is that the defendant offered to sell the property to the plaintiff and the plaintiff agreed to purchase the same, that the plaintiff and the defendant have entered into a registered sale agreement on 28.08.2003 fixing the sale price as Rs.1,50,000/- and the period for performance as one year, that the plaintiff has paid sum of Rs.1,00,000/- towards advance on the date of agreement itself, that the plaintiff having paid 2/3rd of the agreed sale price has always been ready and willing to perform her part of the contract but the defendant has been evading under some pretext or other, that the plaintiff has then sent a legal notice dated 23.07.2004 calling upon the defendant to receive the balance sale price and to execute a sale deed, that the defendant having received the notice on 24.07.2004 has neither sent any reply nor chosen to comply with the notice demand and that therefore the plaintiff was constrained to file the present suit claiming the relief of specific performance or in the alternative refund of the advance amount.
6. The defence of the defendant is that the defendant was running a saw mill in the suit property with the finance availed from the Tamil Nadu Industrial Investment Corporation (hereinafter called as 'the TIIC'), that since the finance Corporation had been demanding the repayment of the loan and threatened of distraint proceedings, the defendant approached the plaintiff and her husband for financial assistance, that the plaintiff and her husband agreed to advance a loan of Rs.1,00,000/- and the defendant received the loan and discharged the liability to the TIIC, that the plaintiff and her husband directed the defendant to sign a document prepared in the form of sale agreement at the time of borrowing, that since it has been in the practice of the area, the defendant signed in the stamp papers and the same was executed on 19.03.2003, that since the defendant could not discharge
