29. When P.W.1 was examined, he said that with regard to Ex.A-1 agreement, he has spoken to both the second defendant and her husband. If that be so, the husband is a competent witness to speak about the details. In this case, the second defendant's husband has been examined as D.W.1, and he has stated that he is not aware of any such agreement. Further, under Section 120 of the Indian Evidence Act, the husband is a competent witness for the wife in civil proceedings. The question of bona fide purchaser for value also will arise only in case where there is a valid agreement. Once I hold that there was no agreement at all when Ex.A-2 was executed, there is no scope for holding that the second defendant is a bona fide purchaser for value with notice of the agreement. According to me, such a contention is unnecessary for the purpose of this case.
Madras High Court
K. Saroja vs Valliammal And Ors. on 8 March, 1996
Equivalent citations: (1996) 2 MLJ 199
Coram:S.S. Subramani, J.
1. The parties to these appeals will be referred to as parties in O.S. No. 1079 of 1979 from which S.A. No. 69 of 1983 arises.
2. O.S. No. 1079 of 1979 was filed by the plaintiff/appellant herein, to specifically enforce Ex.A-2 agreement dated 26.7.1978 executed by the first defendant in the suit. The second defendant therein is the plaintiff in the connected suit O.S. No. 226 of 1981. That is a suit for redemption filed against the appellant/plaintiff in O.S. No. 1079 of 1979. The 3rd defendant is the husband of the second defendant and defendants 4 and 5 are persons claiming to have some right over superstructure as co-lessee of the site. Hence they are also impleaded.
3. 5th defendant is also the husband of the plaintiff and he was examined as P.W.1 in this case.
4. The material averments in the plaint are as follows: As stated in the plaint, the property belonged to the 1st defendant who executed an agreement for sale in favour of the plaintiff on 26.7.1978, agreeing to sell the property for a sum of Rs. 22,000 within a period of five months and a sum of Rs. 500 was also paid as advance. Plaintiff was all along ready and willing to take the sale deed in terms of the document. But it is seen that the 1st defendant has executed a sale deed in favour of the second defendant 22.8.1978 in respect of the plaint property along with other properties. The sale in favour of the second defendant is intended only to defeat the rights of the plaintiff as agreement-holder. The sale in favour of the second defendant will be subject to the agreement and the second defendant also purchased the property only after she came to know about the agreement. Repeated demands were made to the first defendant to execute the sale deed. But he has failed to do so. It is also said that in the sale deed in favour of the 2nd defendant, there are certain recitals which will show that the same is sham, unnatural and intended only to mislead persons who have got interest over the properties. Since the first defendant has failed to perform his part of the contract, this suit is instituted for the reliefs stated above.
5. In the written statement filed by the 1st defendant who was admittedly the owner of the property, it is said that he has executed an agreement as alleged in the plaint. But the third defendant who is a very influential person in the locality contacted him and wanted the sale to be executed in favour of his wife. He also said that the third defendant represented that he will settle the matter with the plaintiff even if there is an agreement, and it was with that understanding, he executed the agreement of sale on 22.8.1978 in favour of the second defendant. He said that he is an unnecessary party to the suit. He wants dismissal of the suit.
6. In the written statement filed by the second defendant, it is said that the agreement dated 26.7.1978 is not true. On the date when she took the sale deed, there was no agreement, and it can only be the result of a collusive transaction, with an intention to defeat her right as owner of the property. She further said that the agreement can only be an ante-dated agreement. As owner of the property, she is entitled to redeem the mortgage, which is a charge on the property and, therefore, she has already filed a suit O.S. No. 226 of 1981 for redemption. She also said that her husband is an unnecessary party to the suit, and the 4th defendant has also no right over the same. She also contended that the superstructure in the property belongs to the original owner, the 1st defendant, and it was not constructed either by plaintiff or by her husband.
7. All the other defendants remained ex parte.
8. In the connected suit O.S. No. 226 of 1981, plaintiff is the second defendant and the sole defendant therein is the plaintiff in the earlier suit. In the sale deed in favour of the second defendant admittedly executed by the first defendant, there is a direction to redeem a simple mortgage for Rs. 2,000. That is Ex.A-1 in the suit. The second defendant wanted redemption of that mortgage. A demand was made to receive the amount and make an endorsement on the mortgage deed and return the original deeds. Since the defendant has failed to so, the suit is filed for redemption.
9. In the written statement filed in that case, it is contended that the second defendant has no right to institute a suit for redemption. The main defence is that she has already filed a suit for specific performance of agreement of sale.
10. Both the suits were clubbed together and evidence was taken in O.S. No. 1079 of 1979. The trial court, after elaborate discussion of the evidence, came to the conclusion that the agreement for sale in favour of the appellant/plaintiff is not valid, and is ante-dated. It also came to the conclusion that the document is a fabricated one with the help of the first defendant and, therefore, there cannot be any question of specific performance of agreement. It also held that on the date when the sale deed was executed in favour of the second defendant, as evidenced by Ex.A-3, there was no agreement for sale in favour of the plaintiff, and it was only after getting knowledge of the same, such a document was created. The trial court also came to the conclusion that the superstructure in the property belonged to the first defendant on the basis of Ex.B-2 and the superstructure was not constructed either by the original lessee Govindarajan or by the 5th defendant or his wife, the plaintiff. The trial court, therefore, dismissed the suit for specific performance, and decree for redemption was granted in favour of the second defendant. Two appeals were preferred before the lower appellate court as A.S. Nos. 277 of 1981 and 278 of 1981. Both the appeals were clubbed together and a common judgment was pronounced whereby the decision of the trial court was confirmed. Two second appeals are preferred against the concurrent judgment.
11. The writ petition is filed by the second defendant. It relates to the grant of licence for continuing the rice mill. It is the case of the second defendant that after she became the owner without her consent, plaintiff or her husband cannot run a rice mill and licence should not be granted, and that by making misrepresentations to authorities, licence has been obtained. She wanted the licence granted to the plaintiff to be quashed by issuance of necessary writ or direction.
12. When the writ petition came for hearing, it was represented that the subject matter in all these proceedings are the same, and accordingly, the writ petition was ordered to be heard along with the second appeals, and that is how the writ petition has come before this Court for final disposal.
13. In this connection, it is also worth-while to note that two more writ petitions were filed by the plaintiff herself as W.P. Nos. 8298 and 8299 of 1982. As per order dated 10.12.1990, this Court held that the grant of licence in favour of the petitioner will be subject to the final result of the second appeals.
14. In the second appeals, the following (common) substantial questions of law were raised for consideration:
(1) Whether the findings of the courts below that Ex.A-2 was not executed on 26.7.1978 is supported by any evidence on record?
(2) Whether the courts below are right in casting the onus of knowledge of the agreement of sale on the plaintiff in spite of Sec.19(b) of the Specific Relief Act? and (3) Whether the findings of the courts below are vitiated by misreading Exs.A-1, A-2 and A-3 and whether the plaintiff in O.S. No. 226 of 1981 is in law entitled to redeem Ex.A-1?
15. Learned Counsel for the plaintiff/appellant put forward the following submissions; (1) The contention of the second defendant is that Ex.A-2 agreement is ante-dated, that the presumption under law that when a document purports to have been executed on a particular date, it is presumed that it was executed on that date. There is not even a suggestion by the second defendant while the plaintiff and her witness were examined that it was ante-dated and, therefore, the presumption continues. If so, the agreement can only be prior to Ex.A-3 sale deed and, therefore, the dismissal of the suit for specific performance is not correct. (2) The contention of the second defendant is that she is a bonafide purchaser for value. Since the second defendant has not entered appearance, it cannot be found that she is a bonafide purchaser. (3) The sale deed Ex.A-3 will show that the document was executed in a hurry, intended only to defeat the right of the plaintiff. It has no legal validity. (4) The onus of proof was wrongly cast on the appellant and it has also vitiated the decision.
16. In answer to the above contentions, learned Counsel for the respondent submitted that the relief of specific performance is only discretionary and when two courts have refused to exercise the discretion in favour of the plaintiff, unless some patent illegality is found, or unless there is a finding of perversity, this Court shall not ordinarily interfere. It is further contended that the case of the second defendant is that there is no such agreement at all, and if at all there is an agreement, it would have come into existence only after the execution of the sale deed in her favour. It is again argued by learned Counsel for the second defendant that while considering the genuineness of an agreement for sale, when the sale is seriously challenged, the deposition of the attestors' alone is not the matter to be considered, but the surrounding circumstances must also be taken into consideration.
17. All the substantial questions of law and submissions thereon could be considered together, for, according to me, the finding is mainly based on appreciation of evidence only. In the appreciation, if the courts below have not taken into consideration any material evidence, or have misapplied the law, the decision might be different.
18. In a suit for specific performance, it is for the plaintiff to prove that there is a valid agreement in her favour and that she is entitled to get a decree as prayed for. Since it is a discretion of the court, even if there is an agreement, it does not follow that the plaintiff is entitled to get a decree for specific performance. While considering the agreement, the court is entitled to consider the surrounding circumstances so as to arrive at a finding regarding the genuineness of the so-called agreement.
19. Ex.A-2 is the agreement admittedly executed by the first defendant. In the written statement filed by the first defendant, he admitted that he executed such agreement in favour of the plaintiff. He also said that the third defendant who is a politically influential person in the locality, wanted the sale to be executed not only in respect of the plaint item but also other items belonging to him, and he under-took to settle the matter with the plaintiff, and it was with that understanding, that Ex.A-2 was executed. So, here is a case where the executant and executee agreed that there is an agreement for sale. The person disputing the genuineness of the transaction is the second defendant who has taken a sale deed from the owner himself. As against the said contention, the second defendant says that it is a collusive transaction between the owner and the plaintiff to defeat her rights, and, on the date when she got the sale deed, there was no such agreement, and if at all there was any such agreement, it should have been ante-dated. The first defendant has not entered the box. The plaintiff who claims to have taken the agreement has also not entered the box. Instead, her husband, the 5th defendant, was examined as P.W.1. Before the institution of the suit, certain developments also took place? In Ex.A-3, the first defendant undertook to discharge certain debts and it is the case of the second defendant that he received a sum of Rs. 14,000 for the said purpose and one of the encumbrancers was the 4th defendant. It is seen that the first defendant did not discharge the debt and there was some misunderstanding between defendants 2 and 3 and the first defendant and, therefore, the second defendant was constrained to file a suit as O.S. No. 935 of 1979 against the first defendant. Before instituting the suit, the second defendant had to discharge the debt of the 4th defendant and obtain release even though payment was made to the first defendant for the said purpose. So, the parties were not on good terms is clear, and the litigation was also pending.
20. The first defendant who has already executed a sale deed is not a person interested in the second defendant especially when litigations are pending between them. Having parted with the interest in the property, he is not concerned with the result of any litigation between the plaintiff and the second defendant, but due to enmity, he contended in the written statement that he has executed an agreement for sale, as evidenced by Ex.A-2 and put forward his own reasons why he has executed Ex.A-3. While we consider the validity of Ex.A-2, the conduct of the first defendant is a relevant circumstance.
21. P.Ws.2, 3 and 4 are witnesses who have been examined in this case to prove Ex.A-2 agreement. All these witnesses are close relations and P. W.2 was also an employee under the plaintiff. While P.W.2 was examined, he said that on the date of his deposition, he was employed as a driver in the rice mill at Palamedu, and before that, he was a driver under the plaintiff. He also speaks about Ex.A-2 agreement and says that it was signed in his presence and he has also attested the same. He said that Ex.A-2 might have been executed nearly three years before his deposition. He was examined on 19.8.1981.
22. In his cross-examination, he has stated that for the last one year prior to his deposition, he was employed as a driver at Palamedu, and his sister's son is a witness; he was an employee under the plaintiff. He pleaded ignorance about the details of the document-writer and it was the first defendant who brought him. He also said that before the execution of Ex. A-2, there was a talk about the sale and that the first defendant had received an amount of Rs. 2,000 from the plaintiff. For a question whether there was any talk about the debt by settling the transaction for sale, he pleaded ignorance. He also said that the sale consideration must be paid in various instalments, though he does not say how it has to be discharged or paid.
23. In the evidence of P.W.3, he also said that he is a witness to Ex.A-2. He is a nephew of P.W.1. He also said that he does not know the details of the document-writer, and he came of his own and he was not brought by any one. He also pleaded ignorance about the details of Ex.A-2. P.W.4 also does not say anything about the details of Ex.A-2. He said that in Ex. A-2 the parties affixed signatures in his presence, and he also signed in their presence, and it was three years prior to his deposition, it was executed. What remains is, the evidence of P.W.1. In his deposition, he said that the stamp paper for executing Ex.A-2 was purchased on the same date and that he went to Madurai for purchasing the stamp papers. He went there at 8.00 a.m. and at about 9.00 a.m., the stamp papers were purchased, and on the same date at about 4.00 p.m., Ex.A-2 was executed. He also said that the talks regarding the sale also concluded only on the date when the agreement was executed. We find that the stamps were purchased on 15.5-1978 long before Ex.A-2. If the agreement was executed on the date of purchasing the stamp paper, naturally, the date that is put in Ex.A-2 cannot be correct. Plaintiff has no case that the agreement was executed on 15.5.1978. So, naturally, even if there is any presumption regarding the date of execution, that was rebutted by the evidence of P.W.1 himself. Before an agreement for sale is executed, naturally, encumbrance over the property will have to be taken into consideration for fixing the sale consideration. In Ex.A-2, nothing is stated about Ex.A-1 mortgage though it is a registered mortgage deed. The mortgagee is none other than the plaintiff. There is also no statement as to how the advance amount is to be adjusted. In the total consideration of Rs. 22,000 as stated in Ex.A-2, there is no provision for adjusting the mortgage debt or advance. That is also a suspicious circumstance. In this case, even if there is no encumbrance, the plaintiff who herself is a mortgagee is aware that she is entitled to Rs. 2,000 from the first defendant. While the document is silent about it, the genuineness can be doubted.
24. The stamp paper is also purchased from a far away place. Even though the property is situate at Kumaram Village, the stamp papers were purchased from Madurai, on 15.5.1978. When the witnesses are close relations, and the document is also executed in a stamp paper not bearing the date of purchase, the trial court as well as the lower appellate court came to the conclusion that it can only be ante-dated, and Ex.A-2 might have been executed only after Ex.A-3 was executed. The second defendant who is a stranger to the transaction can only plead before the court that she is unaware of such agreement and it might only be ante-dated. In these circumstances, it was for the plaintiff to prove that there was a genuine agreement.
25. Learned Counsel, relying on the decisions reported in Kirmani and Sons v. Aga Ali Akbar A.I.R. 1928 Mad. 919 at 921, Mohan Lal v. Anandi Bai and also the decision reported in P. Pocker v. V. Khalid , at paragraph 4, contended that presumption regarding date has to be taken in his favour in spite of inconsistencies in his evidence. According to me, none of these decisions will apply to third party. In this case, even if there is any such presumption, that is validly rebutted in view of admission by P.W.1 himself.
26. It is submitted by learned Counsel that there is no suggestion by the 2nd defendant that Ex.A-2 is antedated. If there is a presumption regarding the date of execution, unless the same is suggested to the witnesses, the learned Counsel submitted that the evidence stands unimpeached. The said contention has also no force. On a reading of the evidence of P.W.1 and also other witnesses, I find that the definite suggestion put to the witness stating that Ex.A-1 was executed only after getting knowledge of the sale deed in favour of the second defendant. While P.W.1 was in the box, his answer to a definite question put to him reads thus:
Little down, he has stated thus:
To P.W.4, a definite suggestion was put and his answer to that was as follows:
The finding of the courts below that Ex.A-2 was executed only to defeat the rights of the second defendant is therefore, to be upheld. The plaintiff has come to his this Court with an agreement which is ante-dated, and which was fraudulently created. The first defendant is alleged to have colluded with the plaintiff in creating the document. In such circumstances, the discretion exercised by the courts below is not to be interfered with.
27. In Uttar Pradesh Co-operative Federation Limited v. Sunder Bros. Delhi , their Lordships were considering the powers of appellate court in passing discretionary orders. Their Lordships were considering Section 34 of the Indian Arbitration Act which deals with stay of suit. Learned Counsel said that the discretion exercised by the trial court should not be interfered with unless the appellate court feels that the discretion exercised by the trial court is unacceptable or capricious or that the trial court has ignored relevant facts, and only in those circumstances, the appellate court shall interfere. In the said decision of the Supreme Court, it was held thus:
Where the discretion vested in the court under Section 34 has been exercised by the lower court, the appellate court would be slow to interfere with the exercise of their discretion. In dealing with the matter raised before it at the appellate stage, the appellate court would normally not be justified in interfering with the exercise of the discretion under appeal solely on the ground that if it had considered the matter at the trial stage it may have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify such interference with the trial court's exercise of discretion. If it appears to the appellate court that in exercising its discretion that trial court has acted unreasonably or capriciously or has ignored relevant facts, then it would be open to the appellate court to interfere with the trial court's exercise of discretion.
The conduct of the party is a relevant factor while exercising discretion. In 'The Law of Special Relief' by Dr. S.C. Banerjee - 9th Edition (1992), at page 298, the learned Author has said thus:
The relief by way of specific performance being discretionary, the plaintiff must come into court with clean hands. Where he does not come with clean hands, as where he is guilty of fraud or forgery, or other sharp practice, like making interpolation in the agreement amounting to material alterations, he may, ordinarily, get no relief by way of specific performance....
28. Learned Counsel submitted that the second defendant has not entered the box and, therefore, she cannot claim that she will be a bonafide purchaser for value. Relying on the decision reported in Arunachala Thevar v, Govindarajan Chettiar (1977) 2 M.L.J. 431, learned Counsel submitted that to claim the benefit of a bona fide purchaser, only rebuttal evidence is required, and once the second defendant enters the box and asserts that she is not aware of the agreement, that will be sufficient for the purpose of the case. Since she has failed to depose before court, it is contended that the sale in her favour is only after notice of the agreement. The said contention of the learned Counsel also cannot be accepted.
29. When P.W.1 was examined, he said that with regard to Ex.A-1 agreement, he has spoken to both the second defendant and her husband. If that be so, the husband is a competent witness to speak about the details. In this case, the second defendant's husband has been examined as D.W.1, and he has stated that he is not aware of any such agreement. Further, under Section 120 of the Indian Evidence Act, the husband is a competent witness for the wife in civil proceedings. The question of bona fide purchaser for value also will arise only in case where there is a valid agreement. Once I hold that there was no agreement at all when Ex.A-2 was executed, there is no scope for holding that the second defendant is a bona fide purchaser for value with notice of the agreement. According to me, such a contention is unnecessary for the purpose of this case.
30. Learned Counsel for the appellant also wanted to enter a finding regarding the validity of the document taken by the second defendant as evidenced by Ex.A-3. Copy of the sale deed has also been filed by the second defendant as Ex.B-1. Learned Counsel wanted me to infer that the document is invalid for the reason that the value mentioned therein cannot be true. I do not want to enter a finding on those issues, since, according to me, it is unnecessary. The first defendant has admitted that he has executed a proper sale deed in favour of the second defendant. Once I hold that the agreement is fraudulent, the decisions of the courts below that the plaintiff is not entitled to get any decree for specific performance has to be only confirmed. Second Appeal No. 69 of 1983 has to be dismissed, and I accordingly do so. S. A. No. 68 of 1983 arises from a suit for redemption filed by the second plaintiff on the basis of Ex.B-1 sale deed. In Ex.B-1, the second defendant has been directed to redeem a simple mortgage. The mortgage is admitted. The only defence is that there is an agreement of sale in favour of the plaintiff. Once that defence is held to be not valid, the second defendant will be entitled to redeem the property. Even if there is any agreement for sale, that will not bar the second defendant from redemption until plaintiff gets proper title. In either way, the redemption suit has got only to be decreed, and I do not find any infirmity in the passing of a decree as has been done by the courts below. Second Appeal No. 68 of 1983 is also to be dismissed.
31. The second defendant has filed the writ petition, against the grant of licence to the plaintiff for running the rice mill, in view of the order passed in W.P. Nos. 8298 and 8299 of 1982, the granting of or renewal of licence in favour of the plaintiff will depend on the result or outcome of the second appeals.
32. This Court permitted the plaintiff to run the rice mill during the pendency of the second appeals on the ground that the rice mill should not kept idle, and the same has to serve a public purpose. Once the title has been confirmed in favour of the second defendant, the question whether the plaintiff is entitled to get the licence renewed will have to be decided by the Authorities in accordance with law.
33. On the basis of the order passed in W.P. Nos. 8298 and 8299 of 1982, once I dispose of the second appeals, the plaintiff may not be in a position to run the rice mill, on the basis of the order in the writ petitions.
34. In the result, S.A. Nos. 68 and 69 of 1983 are dismissed with costs. W.P. No. 11747 of 1985 is disposed of as indicated above, however, without any order as to costs.
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