CAUSE TITLE:
Bhasy Vs Thomas & Ors.
DATE OF ORDER:
07 April 2022
JUDGE(S):
The Honourable Mr. Justice K. Babu
PARTIES:
Appellant/Defendant: Bhasy
Respondent/Plaintiff: Thomas &Ors.
SUBJECT
This appeal arose from the judgment and decree passed by the Additional District Court. The defendant is the appellant. The plaintiff is the respondent.
IMPORTANT PROVISION
Section 34 in The Registration Act, 1908
Enquiry before registration by registering officer.
OVERVIEW
- The plaintiff was the original owner of the plaint property. The plaintiff claimed that on the date of the sale deed's execution, the plaintiff had borrowed Rs.1,00,000/- from the defendant, a money lender, and that a sale deed was executed as collateral for the transaction. According to the plaintiff, he kept possession of the plaint schedule property.
- The plaintiff also claimed that the parties had an oral arrangement in which the defendant committed to re-convey the plaint schedule property for Rs.1,00,000/- plus interest. The plaintiff made an advance payment. After receiving the cash owed to him, the plaintiff requested that the defendant re-convey the plaint schedule property. The defendant refused to execute the sale deed.
- The defendant resisted the suit, claiming that he never lent money to the plaintiff. The defendant paid the plaintiff Rs.1,78,500/- to purchase the plaint schedule property. The plaintiff had no legal or physical possession of the property. The alleged oral contract between the parties was without baseless. The defendant never agreed to re-convey the property as the plaintiff requested.
- The parties went to trial. The Trial Court dismissed the suit holding that the plaintiff was not entitled to the specific performance of the contract as pleaded.
- Before the District Court, the plaintiff contested the Trial Court's decree and verdict. The First Appellate Court overruled the Trial Court's decision and decreed the suit, granting the plaintiff specific performance of the contract in exchange for a deposit of Rs.76,500/- plus interest at the rate of 12% per annum.
- The defendant subsequently filed an appeal before the High Court, challenging the First Appellate Court's decision.
ISSUE
- Does a decree for specific performance be granted based solely on oral agreement unless supported by cogent evidence?
ARGUMENTS ADVANCED BY THE APPELLANT/DEFENDANT
- The learned counsel for the appellant/defendant contended that the sale deed was a registered document with a mandatory presumption of execution and registration under Section 34(2) of the Registration Act, and that in the absence of pleadings and compelling evidence tendered by the respondent/plaintiff to rebut such a presumption, the First Appellate Court was not justified in granting a decree for specific performance. It was also argued that the First Appellate Court disregarded the established norm that substantial and reliable evidence was required to grant specific performance based on an oral agreement.
ARGUMENTS ADVANCED BY THE RESPONDENT/PLAINTIFF
- The learned counsel for the respondent/plaintiff contended that the plaintiff could cite sufficient evidence to conclude that there was an earlier agreement for re-conveyance between the parties at the time of the sale deed's execution and that there was no prohibition on mentioning oral evidence about the nature of the document. The respondent/plaintiff could establish possession of the property listed in the plaint schedule. The factors relied on by the First Appellate Court to reach the conclusion that there was an oral contract between the parties agreeing to re-conveyance upon repayment of the loaned sum was probable.
JUDGEMENT ANALYSIS
- In Seema v. Johny Thomas [2012 (3) KLT 207], the Kerala High Court held that in the case of a registered document, the presumption under Section 34 of the Registration Act would come into play to infer that there was due execution of the document. In the present case, the plaintiff failed to lead cogent evidence to rebut the presumption available to a registered document. Coming to the question of acceptability of the oral agreement for sale, a sale agreement can also be oral and it is not necessary that the agreement be written. What was more important was that it should be within the ambit of the Indian Contract Act, and all oral and written agreements shall fulfill the conditions specified in the Act.
- In Brij Mohan and Others v. Sugra Begum and Others [(1990) 4 SCC 147] the Apex Court held that in a case where the plaintiffs come forward to seek a decree for specific performance of a contract of sale of immovable property on the basis of an oral agreement alone, a heavy burden lies on the plaintiffs to prove that there was consensus ad idem between the parties for a concluded oral agreement for the sale of immovable property. InUmmer and another v. Kunhava alias Ahammedkutty [2007 (4) KHC 315], the Kerala High Court held that a decree for specific performance could not be granted based on an oral agreement supported by evidence unless there is cogent evidence to prove the agreement. In Balakrishnan v. Yakoob and Others [2001KHC 32], the Kerala High Court held that even though preponderance of probability constitutes sufficient ground for decision in civil proceedings there must be cogent and reliable evidence to base a suit for specific performance on the basis of an oral agreement.
CONCLUSION
- In the case on hand, the plaintiff failed to establish evidence on the touchstone of the principles discussed above to establish the existence of an oral contract as pleaded. Apart from the interested testimonies of the plaintiff and his wife, no other convincing evidence was available to show that there was an oral agreement.
- As a result, the Appeal was allowed. The judgment and decree passed by the First Appellate Court was set aside. The judgment and decree passed by the Trial Court was restored.
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