F.M. Ibrahim Kalifulla, J.
1. The defendants are the appellants. Since the second appellant died during the pendency of this Appeal, the first appellant being the sole legal representative of the deceased first appellant, the Appeal is being pursued by the first appellant alone.
2. The respondent/plaintiff laid the suit for specific performance based on an agreement dated 23.8.1980 executed by the appellants/defendants for sale of the plaint schedule properties in favour of the respondent. Ex. A-1 is the agreement dated 23.8.1980.
3. The trial Court dismissed the suit holding that Ex. A-1 agreement was not intended to be acted upon. The respondent/plaintiff preferred First Appeal in A.S. No. 214 of 1984 on the file of this Court. By judgment and decree dated 13.11.1995, a learned single Judge of this Court held that by virtue of Section 92 of the Indian Evidence Act, the appellants are precluded from raising a plea contrary to the terms of the agreement and therefore, the judgment and decree of the trial Court cannot be sustained and consequently decreed the suit filed by the respondent/plaintiff as prayed for, with costs. Hence, this Letters Patent Appeal by the appellants/defendants.
4. Brief facts which led to the filing of the suit can be stated as under:
According to the respondent/plaintiff, under Ex. A-1 dated 23.8.1980, the appellants/defendants agreed to sell the plaint schedule properties in favour of the respondent/plaintiff, that the price was fixed at Rs. 15,000/-, that an earnest sum of Rs. 9,300/- was also paid and the balance sum was agreed to be paid on or before 23.8.1983. It was also claimed by the respondent/plaintiff that she was given possession of the plaint schedule properties and that she was always willing to perform her part of the contract. It was further alleged that legal notices were issued on 1.7.1981 and 29.12.1981 and the appellants/defendants did not come forward to perform their part of the contract. The plaintiff therefore prayed for a decree to direct the appellants/defendants to perform their part of the contract by virtue of the agreement Ex. A-1 dated 23.8.1980 and execute the sale deed and in the absence of the appellants failing to execute the same, prayed the Court to execute the sale deed.
5. The appellants/defendants filed their written statement contending that the suit schedule properties originally belonged to one Kamireddi Subbiah, that he had two sons, namely Kamireddi Venkataraju and Kamireddi Sattiaraju, who partitioned among themselves under a partition deed dated 28.3.1947 and that is how the suit properties devolved on the share of Kamireddi Sattiaraju, who is the grandfather of the first appellant. It is also stated that the said Kamireddi Sattiaraju had two sons, namely Kamireddi Sathyanarayana and Kamireddi Subbarao and that the appellants are the son and wife of Kamireddi Subbarao, who succeeded to one-half of the suit schedule properties, while the other half belonged to Kamireddi Sathyanarayana. The appellants came forward with a specific plea in the written statement in paragraphs 6 and 7, which read as under:
6. The defendants deny that they entered into an agreement of sale with the plaintiff on 23.8.1980. But the plaintiff's husband lent a sum of Rs. 1,000/- on 9.12.1978 with interest at the rate of Rs. 1.75 per month per Rs. 100/- since he is a tenant under the defendants in respect of the item No. 2 of the suit properties. The plaintiff's husband Kondamouri Venkateswara Rao is running a betel-nut shop in the said premises. The defendants asked the plaintiff's husband Kondamouri Venkateswara Rao to lend further a sum of Rs. 5,400/- to them on execution of mortgage deed in respect of the suit properties. The plaintiff's husband agreed to lend, but he asked the defendants to execute an agreement of sale of the suit properties instead of executing a deed of mortgage, to avoid stamp duty of Rs. 400/- and he promised to receive the mortgage money with interest after three years. The defendants executed a deed of agreement of sale instead of a mortgage deed in favour of the plaintiff as per the request of her husband Kondamouri Venkateswara Rao.
7. The plaintiff's husband deducted the amount due on the promissory note with interest of Rs. 1,350/- and another payment of Rs. 645/- out of the money agreed to lend of Rs. 5,400/-. He also claimed the interest @ 24% per annum of Rs. 5,400/- in advance for three years of Rs. 3,888/- and the document was written for Rs. 9,300/- by rounding off to the nearest hundred, as if, the plaintiff paid an advance of Rs. 9,300/-. The plaintiff's husband Kondamouri Venkateswara Rao agreed to receive back the money lent of Rs. 5,400/- with interest of Rs. 3,888/- after three years only.
On the above stand taken by the appellants/defendants, it was contended that Ex. A-1 agreement was not intended to be acted upon and that it was only by way of a security for the borrowings made. It was also contended that since Kamireddi Sathyanarayana was entitled for half share in the suit schedule properties, the agreement was unenforceable.
6. On the above stated pleadings, the parties went in for trial. Exs. A-1 and A-2 were marked on the side of the respondent/plaintiff, while Exs. B-1, B.1(a), B-2, B-3 and B-4 were marked on the side of the appellants/defendants. The respondent's husband was examined as P.W. 1. On the side of the appellants, the second appellant was examined as D.W. 1. That apart, a local resident of Yanam was examined as D.W. 2 and one of the witnesses to Ex. A-1 agreement was examined as D.W. 3.
7. The trial Court framed as many as ten issues for consideration, which read as under:
1. Whether the plaintiff is entitled to the relief as prayed for?
2. Whether the defendants have failed to perform their part of contract as per agreement dated 23.8.1980?
3. Whether the defendants have not entered into an agreement of sale with the plaintiff on 23.8.1980 as alleged by the defendants?
4. Whether the defendants have no right to sell the entire suit properties? If so, whether the agreement of sale entered into by the defendants is not valid and binding in respect of the shares of the other co-partners?
5. Whether the agreement of sale is really a deed of mortgage as alleged by the defendants?
6. Whether the plaintiff was not in possession of the suit properties?
7. Whether there is no cause of action for the suit?
8. Whether the suit is premature?
9. Whether the suit is bad for non-joinder of necessary parties?
10. To what relief if any the plaintiff is entitled?
8. Issue Nos. 3 to 5 were answered in favour of the appellants/defendants. On issue No. 6, the trial Court held that the possession of the respondent/plaintiff was only as a tenant. Issue Nos. 7 to 9 were also answered against the respondent/plaintiff. In view of the findings made in favour of the appellants on issue Nos. 3 to 5, on issue No. 2, it was held that no finding was called for. Ultimately, on issue Nos.1 and 10, the trial Court held that the respondent/plaintiff was only entitled for recovery of Rs. 5,400/- with interest as agreed at 24% till the date of plaint and thereafter at 12% till the realisation of the decretal sum. It also granted six months' time for payment and ultimately, the suit was partly decreed for payment of Rs. 5,400/- with proportionate costs and the suit insofar as it related to specific performance of the contract, was dismissed.
9. In the First Appeal, learned single Judge of this Court framed the following point for consideration:
Whether the plaintiff is not entitled to decree for specific performance of agreement of sale?
10. While dealing with the said point, the learned single Judge held that the plea put forward by the appellants were repugnant and inconsistent with the express terms of the contract under Ex. A-1 and by virtue of Section 92 of the Indian Evidence Act, the appellants were precluded from putting-forth such a theory. As regards the contention that at the instance of the respondent/plaintiff, to avoid stamp duty, Ex. A-1 came to be executed instead of mortgage deed, the learned single Judge held that such a contention was opposed to public policy, which cannot be approved by a Court. Failure of the appellants to respond to the legal notices was also frowned upon by the learned single Judge, apart from rejecting the contention based on entitlement of half share of Kamireddi Sathyanarayana over the suit schedule properties. As regards the value of the properties, the learned single Judge held that mere under-valuation of the properties will not mean that there was no consensus ad-idem. The learned single Judge therefore set aside the judgment and decree of the trial Court and decreed the suit as prayed for.
11. Assailing the judgment of the learned single Judge, Mr. R. Subramanian, learned Counsel appearing for the appellants/defendants contended that even by applying Section 92 of the Indian Evidence Act, the stand of the appellants cannot be defeated. According to the learned counsel, taking Ex. A-1 for its face value, the contention of the appellants was that the same was not intended to be acted upon and that there was a different agreement between the parties and therefore, there was no scope to grant the decree for specific performance as held by the trial Court. It was also contended that having regard to the various pitfalls in the stand of the respondent/plaintiff, the equitable relief of specific performance ought not to have been granted by the learned single Judge. It was further contended that the evidence placed before the Courts below would sufficiently demonstrate that there was no consensus ad-idem between the parties which is the fundamental and basic requirement for grant of a decree for specific performance. Learned Counsel relied on the following decisions in support of his submissions:
(i) Bhaskar v. Shrinarayan;
(ii) Gangabai v. Chhabubai;
(iii) Roop Kumar v. Mohan Thedani;
(iv) Parvinder Singh v. Renu Gautam;
(v) K.Bhaskaran Nari v. Habeeb Mohammed;
(vi) Ram Bilas v. Bishwa Muni;
(vii) Lourdu Mari David v. Louis Chinnaya Arogiaswamy and
(viii) 2002 (2) L.W. 399 (SC) A.C. Arulappan v. Smt. Ahalya Naik).
12. As against the above submissions, Mr. C.S. Prakash Rao, learned Counsel appearing for the respondent/plaintiff would contend that the plea of the appellants based on the averments contained in paragraphs 6 and 7 of the written statement would never fit into the terms contained in Ex-A.1 agreement and therefore, invocation of Section 92 of the Indian Evidence Act by the learned single Judge to reject their stand was justified and therefore, no interference is called for to the judgment of the learned single Judge. Learned Counsel also relied upon a decision of a Division Bench of this Court reported in 2004 (2) M.L.J. 399 Ramanujam v. Rajamani in support of his contentions.
13. After hearing learned Counsel for the respective parties, we frame the following issues for determination:
(i) Whether Ex. A-1 agreement was not intended to be acted upon as claimed by the appellants?
(ii) Whether there was a different agreement between the parties as claimed by the appellants?
(iii) Whether the decree for specific performance as claimed by the respondent/plaintiff can be granted? and
(iv) To what relief the parties are entitled to?
14. Having heard the contentions of the learned Counsel for the respective parties, we take up issue Nos. (i) and (ii) together for consideration in the first instance:
Issue Nos. (i) and (ii):
(i) Whether Ex. A-1 agreement was not intended to be acted upon as claimed by the appellants?
(ii) Whether there was a different agreement between the parties as claimed by the appellants?
At the outset, it will have to be stated that existence of Ex. A-1 agreement was never in dispute. As far as application of Section 92 of the Indian Evidence Act is concerned, by virtue of Section 91, and having regard to the existence of Ex. A-1 agreement, the terms contained in Ex. A-1 are to be considered without any reference to any other oral evidence insofar as it related to the terms contained therein. In that respect, Sections 91 and 92 of the Indian Evidence Act are inter-dependent. In the light of the evidence available on record, both oral and documentary, as well as the application of Section 92 of the Indian Evidence Act, there is no scope to permit the appellants to contradict, vary or subtract the terms contained in Ex. A-1 agreement. Therefore, even taking Ex. A-1 agreement on its face value, what has to be considered is whether the contention put forward on behalf of the appellants that it was never intended to be acted upon, requires consideration. On this aspect, we find that the decisions relied on by learned Counsel for the appellants Mr. R. Subramanian as (supra) and (supra) fully support his contention.
15. In the judgment , in paragraph 22, the
Supreme Court has stated the legal position as regards the substantive part of Section 92 of the Indian Evidence Act in the following words:
22. This Court in Gangabai v. Chhabubai and Ishwar Dass Jain v. Sohan Lal with reference to Section 92(1) held that it is permissible to a party to a deed to contend that the deed was not intended to be acted upon but was only a sham document. The bar arises only when the document is relied upon and its terms are sought to be varied and contradicted. Oral evidence is admissible to show that document executed was never intended to operate as an agreement but that some other agreement altogether, not recorded in the document, was entered into between the parties.
16. In the decision , the Supreme Court
has held as under in paragraph 9:
An enquiry into reality of transaction is not excluded merely by availability of writing reciting the transaction. Tyagaraja Mudaliyar v. Vedathanni AIR 1936 PC 70 : 64 IA 126 is an authority for the proposition that the oral evidence in departure from the terms of a written deed is admissible to show that what is mentioned in the deed was not the real transaction between the parties but it was something different.
17. From the above ratio laid down by the Supreme Court, when we analyse the stand of the parties, according to the appellants, irrespective of the fact that Ex. A-1 came into being, it was contended that the deed was never intended to be acted upon and that it was a sham document. When the said stand is probed into further, as held by the Supreme Court, the bar under Section 92 of the Indian Evidence Act vis-a-vis Ex. A-1 would operate if only the appellants attempt to rely upon Ex. A-1 agreement and simultaneously sought to vary and contradict its terms. Such is not the case of the appellants. The appellants are not attempting to contend that the terms contained therein are to be varied or that the evidence let in on their side was to contradict the terms contained therein. According to the appellants, the entire evidence let in both oral and documentary, was only to demonstrate that inspite of existence of Ex. A-1, it will have to be held that the parties had a different contract altogether and Ex. A-1 was never intended to be acted upon. At the risk of repetition, we state that applying the ratio laid down by the Supreme Court, such a stand of the appellants was certainly not prohibited under Section 92 of the Indian Evidence Act.
18. With that legal principle in mind, when we examine further, we find that de-hors Ex. A-1, it is claimed that defendants, apart from earlier borrowings to an extent of Rs. 1,000/- from the plaintiff, wanted some more monetary assistance from the plaintiff, that the plaintiff came forward to grant some more loan, that the plaintiff wanted execution of Ex. A-1 instead of the mortgage deed since the latter would involve heavy stamp duty, apart from adjusting the balance due under the earlier loan transaction as well as future interest for a period of three years on the present loan amount to be granted at the time when Ex. A-1 was executed. Based on the above, the stand was taken in paragraphs 6 and 7 of the written statement that the additional loan agreed to be paid was in a sum of Rs. 5,400/-. In fact, D.Ws. 1 to 3 in their deposition, have attempted to demonstrate the said stand-point of the appellants. It was also pointed out that the claim of the plaintiff that she was put in possession pursuant to Ex. A-1 was not true. On this aspect, the evidence of the appellants in the course of cross-examination of P.W. 1, Ex. B-3 Commissioner's report and the version of D.W. 1, sufficiently disclose that such a claim of the plaintiff was not true. The plaintiff was only a tenant as contended by the appellants, that too, in a small portion of the property where she was inducted as a tenant to run a pawn shop. Further, when D.W. 1 in her evidence elaborately explained the circumstances under which she borrowed a sum of Rs. 5,400/- over and above the earlier borrowing of Rs. 1,000/- and took a stand that Ex. A-1 came to be executed in the said background, significantly, in the course of cross-examination of D.W. 1, no question was put as regards the different transaction other than Ex. A-1. Apparently, the plaintiff must have been very sceptical to put any question on the different agreement, which was transacted between the parties. The absence of cross-examination on that aspect in spite of elaborate statement made by D.W. 1 in the chief examination, throws considerable doubt as to the bona-fides of the plaintiff as regards the claim made based on Ex. A-1. D.Ws. 2 and 3 also fully supported the version of D.W. 1 as regards the subsequent loan transaction. Even to those witnesses, nothing was elicited in the course of cross-examination contradicting whatever that has been stated in their respective chief examination.
19. Therefore, while on the one hand, existence of Ex. A-1 is not disputed by the appellants, even assuming the evidence let in on the side of the appellants as regards the stand taken in paragraph 6 and 7 of the written statement, did not fully support such a stand, yet we are not able to rule out the claim of the appellants that a different agreement was intended by the parties other than what was executed under Ex. A-1. As far as the stand of the appellants that the value of the property was on the higher side and that was one of the factors which was projected on the side of the appellants to show that the parties never intended to act upon Ex. A-1, the said stand of the appellants cannot be taken to mean that by stating so, the appellants wanted to vary or contradict Ex. A-1. What was contended was that if the value that existed as on the date of the agreement was far above the consideration that was mentioned in Ex. A-1 agreement and on that basis, it should be held that Ex. A-1 was never intended to be acted upon. Even on this aspect, though the oral evidence let in on the side of the appellants was specific in their respective chief examination, nothing was even suggested to those witnesses in the course of cross-examination. Even the learned single Judge has only stated that merely because the property was under-valued, on that score, the Ex. A-1 agreement cannot be rejected. All the above factors only go to show that the stand of the appellants that Ex. A-1 inspite of its existence, was never intended to be acted upon, merits acceptance.
20. As far as the claim that a different agreement came into being instead of Ex. A-1, the various material evidence placed before the Court do support to a very large extent the said stand of the appellants.
21. In the light of our above conclusions on Ex. A-1 and the claim of different agreement as between the parties, we are of the firm view that in a suit for specific performance, the relief being depending on the discretion of the Court, as specified in Section 20 of the Specific Relief Act, the question is whether the plaintiff has made out such a strong case for the said discretion of the Court to be exercised in her favour. Section 20 of the Specific Relief Act makes it clear that the jurisdiction should not be arbitrary and should be guided by judicial principles.
22. On the above legal principles, we wish to refer to the decision relied upon by learned Counsel for the appellants in AIR 1996 SC 2814 (supra), wherein, the Supreme Court has held as under in paragraph 2:
2. It is settled law that the party who seeks to avail of the equitable jurisdiction of a Court and specific performance being equitable relief, must come to the Court with clean hands. In other words the party who makes false allegations does not come with clean hands and is not entitled to the equitable relief. The Division Bench has pointed out in the judgment three grounds which disentitle the plaintiff to the equitable relief as he came with a positive case of incorrect and false facts as set out in paragraphs 4 to 6
The other decisions relied on by learned Counsel for the appellants are not applicable to the facts and circumstances of the case.
23. It will also be appropriate to refer to the following decisions with regard to the grant of relief of specific performance:
(a) In 1937 The Madras Weekly Notes (i.e. MWN) 1158 Sirigineedi Subbarayadu v. Kopanathi Tatayya and Ors. a Division Bench of this Court has held as under in the penultimate paragraph of the judgment:
... The relief sought lies in the discretion of the court. The discretion of the court is not arbitrary but sound and reasonable, and must be guided by judicial principles. This is so declared by Section 22 of the Specific Relief Act. Now, in this case the appellant alleged that he tendered the full amount of the purchase consideration Rs. 6,000, within two months of the agreement having been entered into and he supported this allegation on oath in the witness box. The learned trial Judge refused to believe him and we consider that he was fully justified in so doing. A plaintiff who is capable of setting up a false case cannot expect a court of equity to grant him relief. ... There are, therefore, two main reasons why specific performance should not be granted in this case. One is that the appellant has given false testimony in the witness box, and the other is that to grant him the relief which he asks for would be doing an injustice to the 4th respondent.
(b) In the decision S.V.R. Mudaliar
(dead) by Legal Representatives and Ors. v. Rajabu F. Buhari (Mrs.)(dead) by Legal Representatives and Ors., the Supreme Court has held as under in paragraph 29:
29... if the conduct of the respondents is also borne in mind, about which one could say that the same is tainted inasmuch as they departed from truth to bolster their case and went to the extent of not complying with the desire of the trial Judge in allowing aforesaid Kamal to be examined even as a court witness. Such parties who play foul with equity cannot be allowed to use the shield of equity to protect them.
(c) In a case of specific performance of a contract, in the judgment Smt. Mayawanti v. Smt. Kaushalya Devi, the Supreme Court has held as under in paragraph 11:
11... It is settled law that if a contract is to be made, the intention of the offeree to accept the offer must be expressed without leaving room for doubt as to the fact of acceptance or to the coincidence of the terms of acceptance with those of the offer. The rule is that the acceptance must be absolute, and must correspond with the terms of the offer. If the two minds were not ad idem in respect of the property to be sold, there cannot be said to have been a contract for specific performance. If the parties themselves were not ad idem as to the subject matter of the contract the court cannot order specific performance.
24. In the decision relied upon by learned Counsel for the respondent/plaintiff, reported in 2004 (2) M.L.J. 399 (supra), a Division Bench of this Court has specifically found that incorrect statement made in the plaint is not a material defect so as to affect the decision in the case. For holding so, the Division Bench relied upon an earlier Division Bench decision of this Court reported in 1996 (2) M.L.J. 378 : 1996 (2) L.W. 1 Pachiappan v. S.P. Koon Mari, wherein it had been held as under in paragraph 17:
17. The principle that the equitable relief of specific performance cannot be granted to a person who has put forward a false case is based on the doctrine that one who seeks equity must do equity. But the question whether the plaintiff is disentitled to claim the relief, will depend on the facts of each case. If in a particular case the false claim set up by the plaintiff is immaterial and does not affect the main case in any manner, the Court shall not refuse the relief.
25. In the light of the above settled legal principles, we are constrained to hold and answer the issue No. (i) that Ex. A-1 agreement though came to be executed by the parties, was not intended to be acted upon as rightly claimed by the appellants/defendants. On issue No. (ii), we hold that a different agreement did exist as between the parties other than Ex. A-1 agreement.
26. Issue No. (iii):
Whether the decree for specific performance as claimed by the respondent/plaintiff can be granted?
In the light of our above conclusions on issue Nos. (i) and (ii), there is no scope for grant of the decree for specific performance as claimed by the respondent/plaintiff. The judgment of the learned single Judge cannot therefore be sustained.
27. In the recent decision of the Supreme Court reported in 2002 (2) L.W. 399 (supra), the Supreme Court has set out the legal position as under in paragraph 15:
15. Granting of specific performance is an equitable relief, though the same is now governed by the statutory provisions of the Specific Relief Act, 1963. These equitable principles are nicely incorporated in Section 20 of the Act. While granting a decree for specific performance, these salutary guidelines shall be in the forefront of the mind of the Court. The trial court, which had the added advantage of recording the evidence and seeing the demeanour of the witnesses considered the relevant facts and reached a conclusion. The appellate court should not have reversed that decision disregarding these facts, and, in our view, the appellate court seriously flawed in its decision. Therefore, we hold that the respondent is not entitled to a decree of specific performance of the contract.
28. In the light of the above decision of the Supreme Court in 2002 (2) L.W. 399 (supra), when we consider the impugned judgment of the learned single Judge, we are of the view that the learned single Judge was not justified in interfering with the well-considered decision of the trial Court, which had the advantage of observing the demeanour of P.W.1 in the course of recording the evidence and in whose opinion, the claim of the respondent/plaintiff was not bona-fide and did not merit acceptance. Such a conclusion reached by the trial Court ought not to have been lightly interfered with by the learned single Judge. Therefore, on issue No. (iii), we hold that the respondent/plaintiff is disentitled for a decree for specific performance as claimed by her.
29. Issue No. (iv):
To what relief the parties are entitled to?
Having regard to our above conclusions on issue Nos. (i) to (iii), we hold that the judgment and decree of the trial Court did not call for any interference and accordingly, we set aside the judgment and decree of the learned single Judge and uphold the judgment and decree of the trial Court.
30. The Letters Patent Appeal stands allowed with costs. C.M.P. is closed.
