Dismissed

Smt Saraswathamma v. Sri S M Kumar

Karnataka HC24 Sept 2024RSA/1276/2015

Case brief

AI extract

What is this about?

Second appeal by defendant challenging the first appellate court's decree for specific performance of two registered sale agreements. The court held her loan-transaction defence inadmissible under Sections 91 and 92 of the Evidence Act since she admitted executing the agreements, found no substantial question of law, and dismissed the appeal.

What did the court decide?

Appeal dismissed; judgment and decree in R.A.Nos.51/2012 and 7/2012 confirming specific performance decreed; no costs.

Smt Saraswathamma Vs Sri S M Kumar — Specific Performance | Karnataka HC (2024)

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NC: 2024:KHC:39593 RSA No. 1276 of 2015

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 24^TH DAY OF SEPTEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE ASHOK S.KINAGI

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REGULAR SECOND APPEAL NO. 1276 OF 2015 (SP)

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BETWEEN:

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SMT. SARASWATHAMMA W/O U.G. SRINIVASA RAO AGED 67 YEARS R/O SPM ROAD, SAGAR CITY-577401 SHIVAMOGGA DISTRICT

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…APPELLANT

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(BY SRI. S V PRAKASH, ADVOCATE)

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AND:

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Digitally signed by R DEEPA Location: HIGH COURT OF KARNATAKA

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SRI. S M KUMAR S/O MALLAPPA AGED 56 YEARS FOREST CONTRACTOR, ASHOKA ROAD, SAGAR CITY-577401 …RESPONDENT

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(BY SRI. MAHESH R UPPIN, ADVOCATE)

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THIS RSA IS FILED UNDER SEC.100 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 31.03.2015 PASSED IN R.A NO.51/2012 ON THE FILE OF PRESIDING OFFICER, FAST TRACK, SAGAR, ALLOWING THE APPEAL AND MODIFYING THE JUDGMENT AND DECREE DATED 03.01.2012 PASSED IN O.S NO.16/2010 ON THE FILE OF THE ADDL. SENIOR CIVIL JUDGE AND JMFC., SAGAR.

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NC: 2024:KHC:39593 RSA No. 1276 of 2015

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THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI

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ORAL JUDGMENT

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This regular second appeal is filed by the appellant challenging the judgment dated 31.03.2015 passed in R.A.No.51/2012 by the Presiding Officer, Fast Track Court, Sagar.

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For convenience, parties are referred to as per their ranking before the trial Court. The appellant is the defendant, and the respondent is the plaintiff.

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The brief facts leading rise to the filing of the appeal are as follows:

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The plaintiff filed a suit for specific performance of contract alleging that the defendant is the owner of land bearing Sy.No.91 of Marasa village, Kasaba Hobli of Sagara Taluk and in unauthorized occupation of three acres of government land. In 2003, the defendant

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approached the plaintiff and offered to sell the suit schedule property on the ground that she was in need of money and unable to manage the same. In that regard, negotiations were held for about six months, and ultimately, a contract was entered into on 29.01.2004. The defendant agreed to sell the same to him for a sum of Rs.10,00,000/-, and the plaintiff agreed to purchase the same for the aforesaid consideration amount. It is contended that the plaintiff was always ready and willing to perform his part of the contract and to get the sale deed registered at his cost, but the defendant sought for six months time to execute the sale deed and to clear the property from encumbrances. The plaintiff paid a sum of Rs.9,00,000/- as an advance amount, and it was agreed that the balance would be paid at the time of registration of the sale deed. The defendant executed a registered sale agreement into two portions on 29.01.2004 in that the southern part was agreed to be sold for Rs.5,00,000/- and in another agreement, the northern portion was agreed to be sold for Rs.5,00,000/-. In each agreement, the plaintiff

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NC: 2024:KHC:39593 RSA No. 1276 of 2015

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paid a sum of Rs.4,50,000/- and it was agreed that the sale deeds would be executed after six months by receiving the balance consideration amount of Rs.5,00,000/- at the time of registration of a sale deed. The defendant handed over the title deeds regarding the suit schedule property to the plaintiff. The plaintiff requested the defendant to execute the registered sale deed by receiving the balance consideration amount. The plaintiff claimed that he was/is ready and willing to perform his part of the contract and get the sale deed registered from the defendant, but the defendant went on postponing the same on one pretext or the other. Therefore, the plaintiff was issued a legal notice to the defendant on 26.08.2004 and on 25.09.2004. Inspite of the service of legal notice, the defendant did not come forward to the execution of a registered sale deed. The plaintiff filed a suit in O.S.No.71/2009. The said suit was withdrawn with the liberty to file a suit for specific performance of a contract. Hence, a cause of action arose

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for the plaintiff to file a suit for the specific performance of a contract.

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The defendant filed a written statement and denied the execution of the suit agreements, agreeing to sell the suit schedule property for consideration of Rs.10,00,000/and also denied having received Rs.9,00,000/-. It is denied that she got a reply sent through an advocate and stated that it was concocted the reply. The said reply was issued by the plaintiff himself to suit his convenience, and she did not approach the said advocate for issuing a reply to the plaintiff. The defendant contended that her husband was a hotelier, and he incurred loss in the year 2001-02 and let out the hotel to others on rent basis. He obtained a bank loan to run the hotel, and the bank obtained a decree against him. On account of the same, he was mentally upset and addicted to bad vices, and at that time, the 4th son Krishna, with a view of establishing an auto care centre, obtained a loan of Rs.1,00,000/- and in the meantime, the defendant

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obtained a loan of Rs.1,25,000/- from SBI, Sagar to help the husband to run the hotel and there was a pressure from the SBI Bank, Sagar. Therefore, the defendant was forced to sell the gold ornaments to clear the bank loan. The plaintiff was quarreling with her husband and son about having to repay the loan and obtained her husband's signature on blank cheques. It is contended that the plaintiff executed a document. It is a nominal one for the purpose of security to the loan advanced to her son. It is contended that the defendant paid Rs.50,000/on two occasions towards the repayment of the loan obtained by her son, and though the plaintiff agreed to issue the receipt, she failed to issue the same. The defendant’s son died in a road traffic accident on 18.03.2005, and she was in deep shock and anguish, and she never attended the office of the advocate. It is contended that the plaintiff lodged a private complaint against the husband of the defendant claiming that the suit agreements were cancelled as the defendant agreed to pay Rs.11,00,000/- to him and in furtherance of the

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same, the husband of the defendant issued cheque and the said cheque was bounced, and he filed a private complaint in C.C.No.303/2010. Hence, prayed to dismiss the suit.

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The trial Court on the basis of the pleadings of

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the parties framed the issues.

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The plaintiff in order to substantiate his case, examined himself as PW.1 and got marked 36 documents as Exs.P1 to P63. In rebuttal, the defendant examined herself as DW.1 and no documents were marked. The trial Court, after recording the evidence, hearing on both side and on assessment of oral and documentary evidence, dismissed the suit of the plaintiff for specific performance of contract and the plaintiff is entitled for return of earnest money of Rs.9,00,000/- from the defendant along with interest at the rate of 24% p.a. from 29.01.2024 till the date of payment. The plaintiff as well as the defendant both aggrieved by the judgment and decree passed in

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NC: 2024:KHC:39593 RSA No. 1276 of 2015

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O.S.No.16/2010, preferred appeals in R.A.Nos.51/2012

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and 7/2012 on the file of learned Fast Track Court, Sagar.

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The First Appellate Court after hearing the parties framed the points for consideration.

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The First Appellate Court, on re-assessment of the oral and documentary evidence, dismissed the appeal filed by the defendant i.e., in R.A.No.7/2012 and allowed the appeal filed by the plaintiff in R.A.No.51/2012. The judgment and decree of the trial Court passed in O.S.No.16/2010 dated 03.01.2012 was modified and decreed the suit for specific performance of contract that the defendant is directed to execute registered sale deed in respect of suit schedule property i.e., in respect of 5 acres of suit land on receiving balance consideration amount of Rs.50,000/- each within two months from the date of decree, failing which, the plaintiff at liberty to get the registered sale deed executed through the Court Commissioner. The defendant aggrieved by the judgment

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NC: 2024:KHC:39593 RSA No. 1276 of 2015

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passed in R.A.No.51/2012, has filed this regular second appeal.

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Heard the learned counsel for the defendant.

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Learned counsel for the defendant submits that

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the First Appellate Court has committed an error in decreeing the suit for the specific performance of a contract. He submits that the alleged agreement executed by the defendant is only for security purposes regarding the loan obtained by the defendant, and it is a loan transaction and not a sale transaction. Further, the plaintiff has failed to establish the sale agreement. Hence, the First Appellate Court has committed an error in decreeing the suit for the specific performance of a contract. Hence, on these grounds, he prays to allow the appeal.

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Perused the records and considered the

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submissions of learned counsel for the defendant.

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NC: 2024:KHC:39593 RSA No. 1276 of 2015

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The plaintiff in order to prove his case, examined himself as PW.1 and he reiterated the plaint averments in the examination in chief and to prove that the suit schedule property was purchased, he has produced the documents i.e., Ex.P1 is the original agreement of sale executed by the defendant in favour of the plaintiff agreeing to sell the suit schedule property, Ex.P2 is also agreement of sale executed by the defendant in respect of Sy.No.91/5 dated 29.01.2004, Ex.P3 is the copy of legal notice issued to the defendant calling upon the defendant to receive the balance consideration amount and to execute a registered sale deed, Ex.P4 is the postal cover, which discloses that the plaintiff got issued a legal notice as per Ex.P3 and the postal cover returned with shara as the unserved to the counsel for the plaintiff, Exs.P4 and P5 are the postal cover, Ex.P6 is the copy of legal notice, which discloses that the plaintiff in order to establish that he was always ready and willing to perform his part of contract, Ex.P8 is the reply notice issued by the defendant to the learned counsel for the plaintiff, Ex.P9 is

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also legal notice issued by the plaintiff to the defendant calling upon the defendant to receive the balance consideration amount and to execute a registered sale deed, Ex.P10 is the reply notice, Ex.P11 is the legal notice, Ex.P12 is the postal acknowledgement, Ex.P13 is the copy of the order sheet of O.S.No.71/2009, Ex.P14 is the original registered sale deed, Ex.P15 is the RTC extract, Ex.P16 is the nil encumbrance certificate, Ex.P18 is the rough sketch in respect of the suit schedule property, Ex.P18 is the receipt patta, Ex.P19 is the copy of khata, Ex.P20 is the kandayam paid receipt, Ex.P21 is the proceedings, Ex.P22 is the Haddubasth sketch, Ex.P23 is the demand register, Ex.P24 is the kandayam paid receipt, Ex.P25 is the encumbrance certificate, Ex.P26 is the objection certificate, Ex.P27 is the RTC, Ex.P28 is the copy of mutation, Exs.P29 to 31 are the RTCs, Ex.P32 is the original of Ex.P2, Ex.P33 is the original copy of Ex.P2(a), Ex.P34 is the original of Ex.P10, Ex.P35 is the RTC and Ex.P36 is the copy of mutation.

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NC: 2024:KHC:39593 RSA No. 1276 of 2015

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In the course of cross-examination, it was suggested to PW.1 that the transaction between the plaintiff and the defendant is the loan transaction, but not a sale transaction and it is also suggested that the documents executed in favour of the plaintiff is only a nominal and not to be acted upon. The said suggestion was denied by PW.1. It is elicited that the husband of the defendant issued a cheque for Rs.1,00,000/- in favour of the plaintiff and the plaintiff filed a private complaint, which was numbered as C.C.No.303/2010 and the said criminal case was disposed of vide judgment dated 22.10.2011. Further, the plaintiff in order to establish that he was always ready and willing to perform his part of contract and got issued a legal notices calling upon the defendant to receive the balance consideration amount and execute a registered sale deed. The defendant has admitted regarding the execution of Exs.P1 and P2, but the defence of the defendant that it is a loan transaction and not a sale transaction.

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In rebuttal, the defendant examined herself as DW.1 and she reiterated the written statement averments in the examination-in-chief and denied the execution of Exs.P1 and P2 and contended that she has not replied to the legal notice, the plaintiff got created the reply notice. During the course of cross-examination, DW.1 has clearly admitted her signatures on three sale agreements and it was elicited that she does not required assistance of her husband to deal with the property matters and three sale agreements were drafted by scribe namely Gurumurthy Marate and also admits that all her family documents will

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be scribed by Gurumurthy Marate only and she admits that at the time of registration of the sale agreements, her husband was present and it was elicited that DW.1 and her husband instructed the scribe to draft the sale agreements. On the instructions of DW.1 and her husband, the scribe drafted the sale agreements. On the perusal of the oral evidence on record the defendant had admitted the execution of sale agreements in favour of the plaintiff. Only defence raised by the defendant is that it is not a sale

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NC: 2024:KHC:39593 RSA No. 1276 of 2015

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transaction, but it is a loan transaction. In a suit of specific performance of contract, the initial burden is always on the plaintiff to establish the execution of sale agreement and once if the plaintiff discharges the burden of proof, the burden shifts on the defendant. Admittedly, in view of the admission of DW.1 regarding her signature on sale agreements, the plaintiff has discharged the burden. It is the case of the defendant that the said transaction is not a sale transaction, but it is a loan transaction, but the defendant trying to vary the terms and conditions of sale agreements by leading evidence. The said evidence led by DW.1 regarding the loan transaction is inadmissible in evidence as per Section 92 of the Indian Evidence Act, 1872 (for short 'the Act').

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In order to consider the case in hand, it is necessary to examine Sections 91 and 92 of the Act, which reads as under:

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"91. Evidence of terms of contracts, grants and other dispositions of property reduced to form of documents .-When the

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terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence1 shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions herein-before contained.

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92. Exclusion of evidence of oral

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agreement. -When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms:"

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16. Section 91 of the Act contemplates that when

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the terms of contract have been reduced to the form of a document, no evidence can be given in proof of terms of such contract except document where secondary evidence of its contents is admissible. It follows that if the contract between the parties has been reduced to the from of a

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document, they cannot be allowed to set up any other

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contract at variance with the terms of the document.

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Section 92 of the Act provides that where the contract has been entered into between two parties and certain terms has been reduced to the form of a document, then neither party, with certain exceptions, can be allowed to go back upon the written document and either contradict, vary, add or subtract its terms. Both parties must be tied down to the agreement which they chose to reduce into writing. The exceptions are contained in the various provisions. The Section therefore prevents a party from varying the terms of the document in a way which would be contrary to its plain language, but where other evidence is sought to be produced in order to invalidate the document itself, then, of course, there is no prohibition, because obviously the invalidation of the document is not a variation of its terms, but its very negation.

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Admittedly, in the instant case, both the plaintiff and the defendant have entered into a contract and the same was reduced into the form of a document. The defendant is trying to invalidate the document/instrument stating that it is not a sale transaction, but it is a loan transaction. The evidence of the defendant is inadmissible in evidence as per Sections 91 and 92 of the Act. Both the courts below have concurrently recorded a finding of fact that the defendant executed an agreement of sale in favour of the plaintiff. Though the defendant has challenged the judgment and decree passed by the trial Court in R.A.No.7/2012, the plaintiff also filed an appeal challenging the dismissal of the suit for specific performance of contract in R.A.No.51/2012. The first Appellate Court on reassessment of oral and documentary evidence has recorded its finding that the defendant entered into an agreement of sale with the plaintiff and also recorded a finding that the plaintiff was ready and willing to perform his part of contract, but the defendant declined to perform

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her part of contract. The first Appellate Court placing reliance on the judgment of the Hon'ble Apex Court has rightly passed the impugned judgment. In view of the above discussion, I do not find any error in the impugned judgment passed by the first Appellate Court or any substantial question of law that arises for my consideration in this appeal.

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In view of the above discussion, I proceed to pass the following:

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ORDER

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The appeal is dismissed.

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The judgment and decree passed by the first Appellate Court in R.A.Nos.51/2012 and 7/2012 is confirmed.

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No order as to the costs.

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Sd/(ASHOK S.KINAGI) JUDGE

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SSB

Smt Saraswathamma v. Sri S M Kumar

Case brief

What is this about?

What did the court decide?

Smt Saraswathamma v. Sri S M Kumar

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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