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2011 DIGILAW 849 (KAR)

B. Shivaram Rai v. N. C. Palani Swamy

2011-08-24

K.GOVINDARAJULU, MOHAN M.SHANTANAGOUDAR

body2011
JUDGMENT MOHAN SHANTANAGOUDAR, J.—This appeal is filed by the original defendant in O.S. No. 4/2000 against the judgment and decree dated 13.12.2005 passed by the Civil Judge (Senior Division), Madikeri. 2. For the purpose of convenience, the parties are referred to as per their ranking before the Court below. 3. The suit property is a vacant land measuring 25 cents in Sy. No. 127 (renumbered as 127/14) identified as house site No. 2 of Uluguli Village, Somawar Pet Taluk, Kodagu District. The defendant is the owner of the suit property. 4. The case of the plaintiff is that the defendant entered into sale agreement as per Ex. P1 on 14.7.1998 agreeing to sell the suit schedule property to the plaintiff for a sale consideration of Rs.4,00,000/-. An amount of Rs.2,50,000/- was paid earlier to execution of Ex. P1 and the balance of Rs.1,50,000/- was to be paid at the time of execution of sale agreement. The period stipulated for completion of the process of executing the sale deed was one year from the date of agreement. On 15.7.1998, the defendant converted the land for non-agricultural purposes. Thereafter the defendant started delaying the process of execution of the sale deed. In the meanwhile, defendant offered to pay a sum of Rs.4,00,000/- to the plaintiff with interest at 18% p.a., from 14.7.1998 and in default thereof to comply with the agreement dated 14.7.1998. Accordingly, the defendant executed another agreement as per Ex. P2 dated 13.10.1999 mentioning therein that he has received entire sale price of the suit schedule property and due to various reasons he could not sell the suit property and would return the sale amount of Rs.4,00,000/- with interest at 18% p.a. amounting to Rs.90,000/-, i.e., in all Rs.4,90,000/-. Accordingly, a cheque bearing No. 0854875, dated 15.11.1999 drawn on Karnataka Bank Limited, Sunticoppa for Rs.4,90,000/- was drawn by the defendant and was handed over to the plaintiff with the condition that if the cheque is not honoured in the bank, the agreement dated 14.7.1998 would revive, empowering the plaintiff to have the suit schedule property sold in his favour as per the agreement dated 14.7.1998; the cheque was presented to the bank by the plaintiff, which came to be returned, due to insufficient funds. Thereafter the plaintiff issued notice on 29.11.1999 calling upon the defendant to comply with the agreement Ex. P11 immediately. Defendant sent his reply as per Ex. Thereafter the plaintiff issued notice on 29.11.1999 calling upon the defendant to comply with the agreement Ex. P11 immediately. Defendant sent his reply as per Ex. P12 on 14.11.1999, denying the sale agreement and the cheque. Hence, the suit came to be filed for specific performance of the agreements, dated 14.7.1998 and 13.10.1999. 5. The suit is opposed by the defendant by filing the written statement. The defendant has denied all the contentions raised in the plaint, including the execution of Exs. P1 and P2, and cheque, etc. The case of the defendant is of total denial. In addition, he has stated that the suit property is a joint family property and his daughter is having equal right in the suit schedule property. According to the defendant, he is having coffee estate and there was no occasion for him to alienate the suit property. 6. Based on the aforementioned pleadings, the following issues were framed by the Court below: 1. Does the plaintiff prove that the defendant has executed an agreement of sale dated 14.7.1993 to sell the plaint schedule property for a consideration of Rs.4,00,000/-? 2. Does the plaintiff further prove that the defendant has executed a further agreement dated 13.10.1999? 3. Does the plaintiff further prove that he is willing to perform his part of the contract? 4. Does the defendant prove that the alleged agreements are forged and fraudulent and there is no contract as alleged? 5. Does the defendant prove that he has not issued any cheque to the plaintiff for Rs.4,90,000/- including cheque No. 0854375, dated 15.11.1999, drawn on Karnataka Bank., Sunticoppa Branch? 6. Whether the suit of the plaintiff is bad for non-joinder of necessary party to the suit? 7. Whether the suit is barred by law of limitation? 8. In the alternative whether the plaintiff is entitled for refund of Rs.4,00,000/-? 7. In order to establish his case, the plaintiff examined three witnesses and got marked 14 documents. On behalf of the defendant, he examined himself as DW. 1 and got marked two documents. Upon hearing and after considering the material on record, the Court below decreed the suit for specific performance, directing the defendant to execute necessary sale deed in favour of the plaintiff at the cost of the plaintiff. 8. On behalf of the defendant, he examined himself as DW. 1 and got marked two documents. Upon hearing and after considering the material on record, the Court below decreed the suit for specific performance, directing the defendant to execute necessary sale deed in favour of the plaintiff at the cost of the plaintiff. 8. Sri G. Balakrishna Shastry, learned counsel appearing for the appellant-defendant submits that even according to the plaintiff, the entire amount of Rs.4,00,000/- was paid by him to the plaintiff at the time of executing the first agreement of sale at Ex. P1 dated 14.7.1998 and that, therefore, there was nothing more to be done either by the plaintiff or by the defendant for the purpose of execution of the sale deed; that number of contradictions are found in the evidence of plaintiff which makes the case of the plaintiff suspicious; that even if the entire material on record produced by the plaintiff is taken to be true, then also, it cannot be said that the property in question was agreed to be sold by the defendant in favour of plaintiffs; on the other hand, the intention of the parties appears to be that Exs. P1 and P2 were executed for the purpose of securing the loan of Rs.4,00,000/- said to have been paid by the plaintiff to the defendant. Even the notice at Ex. P11 issued by the plaintiff clearly reveals that the dominant intention of the plaintiff was that to get back his money. He further submits that the plaintiff has not proved the case as made out in the plaint. Per contra, Sri Sripathy, learned counsel appearing for the respondent argued in support of the judgment of the Court below by contending that the Court below is justified in decreeing the suit, more particularly when the cheque issued by the defendants per Ex. P3 for Rs.4,90,000/- was dishonoured by the bank and, therefore, the plaintiff is entitled to get the decree for specific performance in terms of the agreements - Exs. P1 and P2. 9. Based on the aforementioned rival contentions, the points which arise for our consideration in this appeal are as under: (1) Whether the plaintiff has proved that the defendant has executed the agreements as per Exs. P1 and P2 dated 14.7.1993 and 13.10.1999 respectively? P1 and P2. 9. Based on the aforementioned rival contentions, the points which arise for our consideration in this appeal are as under: (1) Whether the plaintiff has proved that the defendant has executed the agreements as per Exs. P1 and P2 dated 14.7.1993 and 13.10.1999 respectively? (2) Whether the Court below is justified in granting the decree for specific performance directing the defendant to execute the sale deed in favour of the plaintiff in respect of the suit schedule property? 10. The aforementioned points are answered in the Following manner: In order to prove the agreement of sale at Ex. P1 and the subsequent agreement entered into between the parties as per Ex. P2; the plaintiff has examined himself as P.W. 1. P.W. 2 is the attestor of Ex. P1, whereas P.W. 4 is attestor of Ex. P2. PWs. 2 and 4 have deposed that they have seen the executant signing the agreements at Ex. P1 and P2, inasmuch as the executant signed the agreements before them and they signed the agreements in front of the executant as well as other witnesses. Though in the cross-examination of PWs.1, 2 and 4 we find contradictions in respect of other matters, do not find anything to disbelieve PWs.1, 2 and 4 in respect of execution of agreements - Ex. P1 and P2. There are minor variations in their evidence in respect of the place of execution of Ex. P1 and P2, so also there are variations in the evidence of these witnesses with regard to presence of advocate during the relevant time. Apart from aforementioned minor variations in the evidence of PWs.1, 2 and 4 in respect of execution of the agreements, we do not find anything to disbelieve the very execution of Ex. P1 and P2 by the defendant. Defendant knows English and he has signed the agreements at Ex. P1 and P2 in English. He has issued a cheque as per Ex. P3 in favour of the plaintiff for Rs.4,90,000/- for refund of the money which he had taken from the plaintiff. The said cheque also came to be returned. If really the defendant had not executed Ex. P1 and P2, there was no occasion for him to issue a cheque in favour of the plaintiff as per the promise contained in Ex. The said cheque also came to be returned. If really the defendant had not executed Ex. P1 and P2, there was no occasion for him to issue a cheque in favour of the plaintiff as per the promise contained in Ex. P2 for repaying the earnest money of Rs.4,00,000/- with interest at 18% per annum amounting to Rs.90,000/-. The very fact that the defendant issued a cheque for Rs.4,90,000/- pursuant to Ex. P2 itself clearly goes to show that he executed Ex. P1 and P2 purporting to be the agreements of sale in favour of the plaintiff. Hence, the Court below is justified in concluding that Ex. Pl and P2 are executed by the defendant in favour of the plaintiff. 11. However, on appreciation of the material on record, the Court below is not justified in concluding that Ex. P1 and P2 were intended for the purpose of executing the sale deed by the defendant in favour of the plaintiff in respect of the suit schedule property. P.W. 1 in his evidence has admitted in his cross examination that Rs.2,50,000/- was paid at the time of agreement and the remaining amount was agreed to be paid by the plaintiff to the defendant at the time of handing over possession in favour of the plaintiff. After few lines, again he admits that, as on the date of the talks between the parties no amount was paid by the plaintiff to the defendant, In his further cross-examination, P.W. I admits that he has paid Rs.4,00,000/- in full at the time of execution of Ex. P1, to the defendant. These facts would clearly go to show that P.W. 1 was himself confused as to when the amounts were paid to the defendant. At one point of time he has deposed that the entire amount of Rs.4,00,000/- was paid at the time of execution of Ex. P1. However, in the next breath he has deposed that only Rs.2,50,000/- was paid earlier to the agreement and remaining amount was to be paid subsequently. In the further cross-examination, P.W. 1 has admitted that on the date of the execution of Ex. P2, an amount of Rs.1,50,000/- was paid by him to the defendant. However, he has clearly admitted that Ex. In the further cross-examination, P.W. 1 has admitted that on the date of the execution of Ex. P2, an amount of Rs.1,50,000/- was paid by him to the defendant. However, he has clearly admitted that Ex. P3 was taken by the plaintiff from the defendant as security for the loan and the said cheque was taken on the date of execution of Ex. P1 itself, which clearly means that the plaintiff has lent money to the defendant in instalments from time to time. The total amounts which may be due to the plaintiff by the defendant were about Rs.4,00,000/-. In order to secure the said amount, Ex. P1 has come into existence. The same is clear from the admission of P.W. 1 himself. As aforementioned, P.W. 1 has clearly admitted that he has taken cheque from the defendant towards security for the loan. In his further cross-examination, P.W. 1 admits that the total amount due to him by defendant is Rs.4,90,000/-. In this view of the matter, Sri G. Balakrishna Shastry, learned advocate appearing for the appellant is justified in submitting that the transaction between the parties was not intended to end in execution of sale deed on the basis of an agreement of sale, but it was a loan transaction and the agreements at Ex. P1 and P2 as well as the cheque at Ex. P3 came to be executed for the purpose of securing the loan. 12. Ex. P2, dated 13.10.1999 reveals that the amount of Rs.4,00,000/- has been paid by the plaintiff to the defendant on 14.7.1998 and as there was some problem for executing the sale deed the defendant has agreed to repay the said amount of Rs.4,00,000/- with interest at the rate of 18% p.a., i.e., Rs.90,000/-, to the plaintiff. On the date of execution of Ex. P2, the defendant issued a cheque, dated 15.11.1999 for Rs.4,90,000/- drawn on Karnataka Bank, Sunticoppa. It is clearly mentioned therein that in case if the cheque is dishonoured, then it is open for the plaintiff to get the sale deed registered pursuant to the agreement of sale dated 14.7.1998 at Ex. P1. Even while executing Ex. P2, the dominant intention of the parties appears to be to secure the loan paid by the plaintiff in favour of the defendant. Thus, as per agreement at Ex. P1. Even while executing Ex. P2, the dominant intention of the parties appears to be to secure the loan paid by the plaintiff in favour of the defendant. Thus, as per agreement at Ex. P2, the defendant agreed to repay the entire amount of Rs.4,00,000/- with interest of Rs.90,000/- by issuing a cheque for Rs.4,90,000/-. 13. In Addition to the same, further conduct of the parties would make it clear that the intention of the plaintiff was to get back his money with interest. The notice issued by him as per Ex. P11, dated 29.11.1999, clearly reveals that the same is issued after the date of dishonour of the cheque issued by the defendant. By issuing the said notice the plaintiff has threatened the defendant that the entire amount should be repaid to him within fifteen days from the date of receipt of the notice, otherwise action will be taken against the defendant under the provisions of Negotiable Instruments Act. Of course alternatively, the plaintiff also reserved the liberty to proceed the suit for specific performance. Looking to the totality of the facts and circumstances, particularly having regard to the admissions made by the plaintiff himself that the cheque was received by him as security loan from the defendant would clearly go to show that the intention of the plaintiff is not go ahead with the agreement of sale of the property, but to secure the loan amount paid by the plaintiff to the defendant. In view of the above, the plaintiff is not entitled to decree of specific performance, but is entitled to decree of refund of money paid by him. These facts are not appreciated by the Court below in proper perspective, which has resulted in miscarriage of justice. In view of the above, the impugned judgment and decree passed by the Court below is liable to be modified. Accordingly, the following order is made: The judgment and decree dated 13.12.2005, passed by the Court below in O.S. No. 4/2000 is modified as under: (i) Plaintiff is not entitled for decree of specific performance of the agreement dated 14.7.1998; (ii) Plaintiff is entitled to the amount of Rs.4,90,000/- (Rupees four lakhs ninety thousand only) with interest at 10% per annum, from the date of Ex. P2, i.e., from 13.10.1999 till the date of payment. The defendant is directed to pay the same, 14. Appeal is allowed in part. P2, i.e., from 13.10.1999 till the date of payment. The defendant is directed to pay the same, 14. Appeal is allowed in part. 15. Accordingly parties to bear their own costs.