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1961 DIGILAW 301 (KER)

Subhadra v. Kesavan

1961-09-07

P.T.RAMAN NAYAR

body1961
JUDGMENT P.T. Raman Nayar, J. 1. By Ext. A dated 13-6-1124 M. E. (26-1-1949 A. D.) the three defendants agreed to sell a piece of land 2 acres 75 cents in extent to the plaintiff for Rs. 1,425/-, the transaction to be put through within a year. The property was at that time, along with another property, the subject matter of a decree for sale in O. S. 413/1111 of the Quilon Munsiff's Court for the recovery of about Rs. 1,370/-. (Ext. I is a copy of the decree). Ext. A said nothing about this decree charged on the property. No sale was effected in pursuance of Ext. A, and the defendants having ignored his notice Ext. III dated 22-9-1951, demanding a sale, the plaintiff instituted the present suit on 5-11-1951 asking for specific performance and other ancillary reliefs. The 1st defendant alone contested the suit and his principal defence was -- and that is the only defence with which we are now concerned -- that there was a contemporaneous oral agreement that the plaintiff should, with his own money, pay the amount due under the decree and then pay the defendants the further sum of Rs. 1,425/- stipulated in Ext. A for obtaining the sale. The plaintiff having failed to discharge the decree, Ext. A was unenforceable. This defence found favour with the first court which held that evidence of this contemporaneous oral agreement was admissible under the third proviso to S.92 of the Evidence Act. On appeal by the plaintiff, the lower appellate court found against the alleged oral agreement and held further that evidence thereof was inadmissible under S.92 of the Evidence Act, the third proviso thereto being inapplicable. It therefore decreed the plaintiff's suit, and the legal representatives of the 1st defendant (who were brought on record as respondents 4 to 8 on the death of the 1st defendant pending the appeal) have come up with this second appeal. 2. Regarding the truth of the alleged oral agreement I am inclined to agree with the lower appellate Court that the first court misread the evidence of D. W. 2, the principal witness in the case, a lawyer who had often acted for both the plaintiff and the 1st defendant and who at their request drafted Ext. 2. Regarding the truth of the alleged oral agreement I am inclined to agree with the lower appellate Court that the first court misread the evidence of D. W. 2, the principal witness in the case, a lawyer who had often acted for both the plaintiff and the 1st defendant and who at their request drafted Ext. A, but who nevertheless thought fit to appear for the plaintiff in this case until he was compelled to give up his appearance on being cited as a witness by the 1st defendant. His evidence is clear. The understanding between the parties was that the decree should be paid from out of the consideration of the proposed sale, the very purpose of that sale being to free, by the sale of a portion, the entire property covered by the decree from the encumbrance thereunder. Therefore his statement that the arrangement was that the plaintiff should pay up the decree could only have meant, as the lower appellate court understood it to mean, that the plaintiff should make the payment from out of the price fixed in Ext. A (which according to the witness was fixed having regard to the amount due under the decree and the incidental expenditure, so much of the property being sold as was necessary to clear the charge under the decree) and not as the first court understood it to mean, namely, that the plaintiff was to pay the amount due under the decree, and, over and above that, pay the price mentioned in Ext. A. But I do not think it necessary to consider this question at length for I hold, in agreement with the lower appellate court, that evidence of the alleged oral agreement is inadmissible. The plaintiff was in no way liable under the decree, and, if he was to pay it, that could only have been as part of the price for the suit property. In other words the case of the 1st defendant amounted to this, namely, that the price agreed was not the sum of Rs. 1,425/- mentioned in Ext. A, but that sum plus the further sum of Rs. 1,370/-or so due under the decree. But the terms of the contract for sale between the plaintiff and the defendants, including the term of the price, having been reduced to writing in the shape of Ext. 1,425/- mentioned in Ext. A, but that sum plus the further sum of Rs. 1,370/-or so due under the decree. But the terms of the contract for sale between the plaintiff and the defendants, including the term of the price, having been reduced to writing in the shape of Ext. A, no proof of such terms is admissible under S.91 of the Evidence Act apart from Ext. A itself; and S.92 rules out evidence of any oral agreement or statement for the purpose of contradicting, varying, adding to, or subtracting from its terms -- to say that there was an oral agreement that the price should be Rs. 2,7951- instead of the price of Rs. 1,425/- mentioned in the document is surely to do this. The decision in Mothey Krishnayya v. Mohamad Galeb (AIR 1930 Madras 659) relied upon by the lower appellate Court is exactly in point. The facts therein are similar. That decision contains a full discussion of the question with reference to the decided cases and with the conclusion therein that evidence of an oral agreement like the present is inadmissible, I am in respectful agreement. It is true that in that case it was on proviso 2 rather than on proviso 3 to S.92 that reliance was placed but in my view neither proviso can apply. The price is a term of the contract; the document mentions the price and is therefore not silent about it; and to say that there was an oral agreement that a higher price should be paid is to say something at variance with the terms of the document. Hence proviso 2 is ruled out. And, as for proviso 3, it seems to me meaningless to say that there was a separate oral agreement, constituting a condition precedent, that a higher price should be paid than the price mentioned in the document. If a contradiction or variation of the terms of a document could be pleaded as constituting a condition precedent to the attaching of any obligation thereunder, then the purpose of S.92 of the Evidence Act would be largely defeated. In Maung Mon v. Ma Kin Oh and one ((1927) V Rangoon 636) the evidence that was allowed and accepted was that an admitted payment of Rs. In Maung Mon v. Ma Kin Oh and one ((1927) V Rangoon 636) the evidence that was allowed and accepted was that an admitted payment of Rs. 300/- was not towards the price stipulated in the document but on some other account so that in effect the evidence was to disprove the plaintiff's plea of part payment and establish the defendant's plea of failure of consideration, not to vary the price mentioned in the document. If that decision lays down that evidence of an oral agreement to pay a higher price is admissible I must express my respectful dissent. 3. Great reliance is placed on behalf of the appellants on Turner v. Forwood ((1951)1 All E. R. 746). But although we have it on the high authority of Rowland v. Administrator - General (AIR 1938 P. C. 198 at page 201) that S.92 of the Evidence Act states the Indian law in terms which are in accord with the English law, it must be remembered that English cases do not construe the Indian statute and that however useful they may be for understanding the law on which the statute is based, they are scarcely direct authority regarding its construction on which alone must depend the decision in a case governed by statute. If it were necessary for me to distinguish this English case, I would say that unlike as in the present case, the consideration mentioned in the document therein was on the face of it nominal so that it was apparent on the very face of the document that that could not have been the consideration which the parties had agreed upon. It was as if the document were silent on the question of consideration so that other evidence in proof of that term of the contract would not be shut out either by S.91 or S.92 of the Evidence Act. Or, if the consideration mentioned were to be read literally, it would on its very face be so obviously not what the parties intended that an action for rectification would lie and evidence for ascertaining the real intention of the parties and for giving effect to it would be admissible. Or, if the consideration mentioned were to be read literally, it would on its very face be so obviously not what the parties intended that an action for rectification would lie and evidence for ascertaining the real intention of the parties and for giving effect to it would be admissible. Although Lord Goddard C. J. who delivered the leading judgment seems to have been inclined to the view that it did not matter whether the consideration mentioned in the document was nominal or not and that evidence of consideration additional to what was stated in the document was admissible, it would appear from the judgment of Singleton L. J. and Denning L. J. that they rested the decision on the circumstance that, on the face of the document, it appeared that the consideration was no more than nominal. With great respect, I think that the judgment of Denning L. J. sets out the true position quite clearly. It is a very short judgment and runs thus: "I also agree. The reason for the rule in Clifford v. Turrell ((1841), 1 Y. & C. On. Cas. 138) is that in the old days a nominal consideration was inserted so as to make the conveyance or assignment good, but it was not inserted to state the consideration which was agreed to be given to the other party. There was, therefore, no bar to the proof of a contractual consideration because the deed was not intended to embody it. The rule excluding parol evidence only applies when the parties set down in writing the terms agreed. Paro evidence has been held to be admissible in the case of the assignment of property or in that of the appointment of an attorney: Frith v. Frith (1906) A. C. 254). In the present case there was an assignment, and evidence of the real contractual consideration is, in my opinion, admissible. I agree, therefore, that the appeal should be dismissed.'' Even if we were to apply the English law, I do not regard this case as countenancing evidence of an oral agreement that the price was to be Rs. 2795/- where the document mentions the price as Rs. 1425/-. 4. I agree, therefore, that the appeal should be dismissed.'' Even if we were to apply the English law, I do not regard this case as countenancing evidence of an oral agreement that the price was to be Rs. 2795/- where the document mentions the price as Rs. 1425/-. 4. I might mention that no defence based on S.26 of the Specific Relief Act was set up by the 1st defendant so that the question whether the evidence was admissible as evidence in proof of a variation which could be set up under that section, does not arise. 5. As I have said this alleged oral agreement is the only matter that really arises for consideration in the appeal but I might refer to one or two other matters that have been adverted to in the course of the argument. The first court seems to have thought that because by his notice Ext. Ill the plaintiff insisted that the defendant should satisfy the plaintiff regarding the discharge of the decree debt, the agreement, Ext. A, had become incapable of performance, that the plaintiff had not bargained for a straight deal, and that there was something rotten in the deal. Further, that the agreement was an unfair agreement because while it stated that if the defendants committed default the plaintiff could seek relief in a court of law it made no corresponding provision in the case of default by the plaintiff. I am quite unable to follow the reasoning. If the agreement was that the price paid by the plaintiff should go in discharge of the decree debt so that the property may be relieved of the charge under the decree, obviously the plaintiff was entitled to see to it that the consideration would be so applied, and there was nothing crooked or rotten in his insisting on doing so. And, as for the recital that the plaintiff could go to a court of law, that was a mere superfluity. The plaintiff's right to go to a court of law to enforce the agreement is in no way dependent on this recital, and the recital no more confers that right on the plaintiff than the absence of a corresponding recital providing for a default by the plaintiff disentitles the defendants to go to a court of law to enforce their rights. 6. 6. It is said that the plaint in this case does not make the essential averment of the plaintiff's readiness and willingness to perform the contract and that, on the contrary, his insistence in his notice Ext. III that the defendants should discharge the encumbrances on the property would indicate the contrary. The plaint is by no means a model of what a plaint in such a case should be, and the obstinate refusal of lawyers in the mofussil to look even so far as the forms given in Appendix A of the Civil Procedure Code (Forms 47 and 48 are for plaints in a suit for specific performance) before settling their pleadings is a matter for regret. But I should think that the expression of readiness and willingness to pay the stipulated price and take a sale, is implied in the prayer in the plaint that the court should, after receiving the price from the plaintiff, call upon the defendants to execute a sale deed. And, as for the notice Ext. III I might say that if it did call upon the defendants to discharge the encumbrances on the property that was no more than what the defendants were, in the absence of a contract to the contrary -- and none is alleged -- bound to do under S.55(1)(g) of the Transfer of Property Act. What is more, no objection based on the absence of willingness and readiness on the part of the plaintiff (in this connection it might be pertinent to note that the plaintiff has deposited the price) or of the essential averment of readiness and willingness in the plaint, was taken either at the trial or in the appeal. It is not even taken in the memorandum of second appeal and I am not prepared to countenance an objection taken for the first time at the hearing of the second appeal. For the same reason, I take no note of the argument that the suit was instituted only about 20 months after the breach. 7. In his plaint the plaintiff asked for mesne profits at the rate of Rs. 75/-per annum from the date of the deposit of the price into court. The 1st defendant alleged that the mesne profits would be no more than Rs. 20/- a year, and both the plaintiff and the 1st defendant spoke to their respective cases. 7. In his plaint the plaintiff asked for mesne profits at the rate of Rs. 75/-per annum from the date of the deposit of the price into court. The 1st defendant alleged that the mesne profits would be no more than Rs. 20/- a year, and both the plaintiff and the 1st defendant spoke to their respective cases. In the absence of independent evidence the first court adopted the lower figure of Rs. 20/- mentioned by the 1st defendant. The first court was further of the view that, until title passed to the plaintiff and the defendants' possession became wrongful, no question of mesne profits could arise. The lower appellate court while agreeing with this, took the view that the claim was really for damages equivalent to mesne profits, but, instead of awarding damages at the rate awarded the plaintiff damages equivalent to interest at 6% per annum on the amount deposited by him, from the date the defendants had notice of the deposit. With this I see no reason to disagree. 8. In the result I dismiss this second appeal with costs. 9. I might add, with a view to obviate future disputes between the parties regarding the subject matter of the present litigation, that if he wished to impose on the defendants, the obligation mentioned in S.55(1)(g) of the Transfer of Property Act the plaintiff should have alleged and proved that the sale agreed upon was not subject to encumbrances, a matter regarding which Ext. A is silent. Not having done so, I do not think it would be open for him to say hereafter that the sale is not subject to encumbrances so as to make it incumbent on the defendants to discharge all existing encumbrances on the property.