In a first appeals regarding specific performance of a registered sale agreement, the High Court of Kerala held that the appellants failed to prove the agreement was a loan sham. Citing Sections 91 and 92 of the Evidence Act, the Court refused to let in evidence contradicting the unambiguous terms of the registered document.
The appeal was dismissed; no order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN &
THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
THURSDAY, THE 2ND DAY OF NOVEMBER 2017/ 11TH KARTHIKA, 1939
RFA.No. 19 of 2014 (B)
O.S. NO.129/2011 OF SUB COURT, PERUMBAVOOR DATED 23-05-2013
APPELLANTS IN RFA - DEFENDANTS IN SUIT:
1. N.M.ABOOBACKER, AGED 32 YEARS, S/O.MUHAMMED MUSALIYAR, NILANGATH PUTHENPURA HOUSE, MUDICKAL P.O., VAZHAKKULAM PANCHAYATH, PALLIPPRAM KARA, MARAMPILLY VILLAGE, KUNNATHUNADU TALUK.
2. ABU SAHIB, AGED 36 YEARS, S/O.MUHAMMED MUSALIYAR, NILANGATH PUTHENPURA HOUSE, MUDICKAL P.O., VAZHAKKULAM PANCHAYATH, PALLIPPRAM KARA, MARAMPILLY VILLAGE, KUNNATHUNADU TALUK.
BY ADV. SRI.V.M.ALI
RESPONDENTS IN RFA - PLAINTIFF IN SUIT:
SUNIL, AGED 41 YEARS, S/O.DHARMABHOSHNA PANICKER, B13, CHOICE GARDENS FLAT, VYTTILLA P.O. - 682 019.
BY ADV. SRI.T.K.RAJESHKUMAR (CAVEATOR)
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 02-11-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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P.N. RAVINDRAN, J.
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DEVAN RAMACHANDRAN, J.
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R.F.A. No. 19 of 2014
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JUDGMENT DEVAN RAMACHANDRAN, J.
A primary rule of evidence, often elevated to the position of a cardinal rule and granted imprimatur as such by courts, is the Best Evidence Rule which mandates that when the terms of a contract or grant or other disposition of property is reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition except the document itself. We are, in this judgment, called upon to consider the contentions relating to a registered agreement and the principles of this Rule would find great significance.
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to a close scrutiny of the impact of these provisions with respect to the proof to be led in a case relating to the covenants and terms of a registered agreement.
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for execution of the sale deed in the agreement had elapsed, the defendants did not execute the deed in terms of Ext.A1, the plaintiff/the respondent herein filed the suit, seeking specific performance of the agreement, on 22.09.2011. The appellants/defendants entered appearance and filed a written statement contending that even though Ext.A1 agreement was executed by them, it was not intended to be acted upon. Their version is that the amount they had received from the plaintiff was only a loan for which Ext.A1 agreement was executed as a security.
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consequently decreed the suit with costs granting a decree of specific performance of Ext.A1 agreement, thus directing the appellants/defendants to execute the sale deed as covenanted in the said agreement. The appellant has filed this appeal assailing the judgment and decree of the court below.
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availed and actually that Ext.A1 agreement was executed only because the plaintiff wanted it as a security. He tries to fortify his contentions by pointing out that the period of six months fixed in the agreement for executing the sale deed is unduly long asserting that a person who has paid virtually the full consideration would not normally wait for such a long period of time to have the deed executed. He further says that once the plaintiff had paid ₹15,00,000/- against the total sale consideration of 16,00,000/-,₹ there was no requirement for him to wait for such a long period of time when admittedly he had the balance sale consideration with him. Sri.Ali continues that even though 15,00,000/- was paid₹ against the full consideration of 16,00,000/- the fact that the₹ possession of the property was not handed over to the plaintiff would also sufficiently demonstrate that the parties never intended that Ext.A1 will be acted upon. This is basically the manner in which the appellants attempt to assail Ext.A1 and to prove that it is not an agreement of sale though it is written to be so.
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fabricated or created by the plaintiff, but only that when it was executed, it was intended only as a security for the loan availed of by the appellants. The submission of Shri. Ali, in effect, is that the intentions of the parties while executing Ext.A1 was not to have a sale deed executed but that the defendants will repay the money within time. He contends that the intention of the parties will have to be gathered from the attendant circumstances and from the evidence let in.
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their representatives in interest for the purpose of contradicting, varying, adding to or subtracting from its terms. These two provisions assume great significance in the particular facts presented in this case and we therefore reproduce them for ease of reference as under:
“ 91. Evidence of terms of contracts, grants and other dispositions
of property reduced to form of documents. -When the 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 evidence 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 hereinbefore contained.
92. Exclusion of evidence of
oral 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
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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:
Proviso (1).-Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, [want or failure] or consideration, or mistake in fact or law:
Proviso (2).-The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document:
Proviso (3).-The existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved:
Proviso (4).-The existence of any distinct subsequent oral agreement to rescind
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or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents:
Proviso (5).-Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, may be proved:
Provided that the annexing of such incident would not be repugnant to, or inconsistent with, the express terms of the contract:
Proviso (6).-Any fact may proved which shows in what manner the language of a document is related to existing facts.”
stated in several judgments before. It is irrefragable that if the terms of the document are clear and unambiguous, extrinsic evidence to ascertain the true intension of the parties is inadmissible, because Section 92 explicitly provides that in such a case, the intension must be gathered from the language
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employed in the document itself. There is, however, an exception to this that if the language employed is ambiguous or concedes varied meanings, the 6th proviso of Section 92 would permit tendering of extrinsic evidence so as to enable the courts to understand the real intension of the parties. Section 92 however cannot be considered in isolation of Section 91. A close study of the two sections would make it clear that Section 91 would fail without the aid of Section 92 and Section 92 would be inoperative without the aid of Section 91. We are of the view, on a reading of these two sections, that the main limb of Section 92 applies when a party seeks to rely upon the document with respect to its terms. In that event, its provisions mandate that the nature and intent of the transaction must be gathered from the terms of the document itself and no evidence of any Parol agreement can be admitted for the purpose of contradicting or modifying these terms.
may not be attracted when a transaction recorded in the document is contended to be sham and never intended to be
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acted upon. Such questions will arise when a party asserts that there was a completely different transaction and that what is recorded in the document is of no consequence (see for support Thyagaraju Mudaliyar and Anr. Vs. V.Vedathanni [AIR 1936 PC 70] and Smt.Gangabai Vs. Smt.Chhabuba [AIR 1982 SC 20]). The applicability of Section 92 would depend on the facts and circumstances proved and no inflexible rule can be laid down as to in which cases it can be said that the document was not intended to be acted upon and therefore, that its prescriptions apply. The conduct of the parties, attendant circumstances and relevant materials would determine these questions but it is certain that if a party pleads that a document was not intended to be acted upon, he has to substantiate the same.
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amount is repaid the sale amount would be cancelled. It is pertinent that there is no such averment at all in the written statement and that such allegation is put forth for the first time by the first appellant in his proof affidavit while deposing as DW1. Even though never pleaded before, in the proof affidavit, DW1 avers that the term of the alleged loan was for a period of one month and that the interest payable thereon was Rs.75,000/-. It is, however, greatly pertinent that this was never stated so in the written statement, and we see no reason why he did not have an assertion to that effect in the written statement if this was the truth, forcing a logical inference to the contrary.
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have been certainly their first reaction as would have been of any person in such position, to immediately cause a reply saying that the demand contained in the legal notice is without truth. They elected not to do so and chose not even to make that averment in the written statement. These lacunae and lapses, which possibly was occasioned because they were aware of the consequences of their conduct, are then sought to be covered by making averments, hitherto unsaid, in the proof affidavit, filed in lieu of chief examination. However, nothing on record, including the evidence given by the parties, would show any contra indication to the intention as is clearly discernible from Ext.A1 agreement, of the parties, that the property was to be sold in the manner covenanted in it.
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falls squarely in the appellants, who will require to lead evidence specifically to show that contra intention. Unfortunately in this case, neither the evidence on record nor the various circumstances presented by the appellants would justify an inference or conclusion that the intention of the parties was different from what is recorded in Ext.A1 agreement. The terms of the agreement are unambiguous and the parties have also acted specifically in adherence to those terms. There is thus nothing contra to even show that the parties had an intention different from what is shown in Ext.A1.
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enable the execution of the sale deed of the property with vacant possession. The evidence of DW1 unequivocally concedes to a tenant being in possession of the property and we, therefore, cannot get ourselves to agree that the term of six months is unusual. This fact becomes luculent from the testimony of DW1 who concedes that the tenant vacated only sometime in the year 2012; whereas Ext.A1 having been executed on 21.03.2011, making it perspicuous that on the date when the agreement was entered into, there was a tenant in the property. Therefore, the submission of Sri.Ali that the term of six months is unusually long does not find favour with us and we reject the same.
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judgment is that when a person has paid the lion's share of the sale consideration but has not been given possession, it would an inference that the agreement itself is suspect. We are afraid, we are unable to see how Shri Ali could cite this judgment in support of the facts of this case because, as is evident from the cited judgment, that was a case where the agreement of sale was specifically denied and an express plea was raised that the agreement was fabricated and concocted. Au contraire, the facts of this case would establish without any doubt that the appellants have conceded to the execution of Ext.A1 and have virtually admitted to its terms but raised a defence that it was not intended to be acted upon. Nothing else nothing more. We, therefore, cannot find that Thomas Vs. Merlin Construction (supra) would come to the aid of the appellants at all.
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plaint schedule property was in the admitted possession of a tenant as on the date of agreement and until somewhere in December 2012 (see the testimony of DW1, which is recorded 08.04.2013, that he got vacant possession on the tenant only 4 or 5 months prior to that).
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and therefore, the interested version of the defendant, as deposed by him while he was examined as DWI, without bringing in any corroborative or supporting evidence, would render it unworthy.
by DWI, he admits that he has paid an amount of Rs.5,00,000/- as brokerage to one Muhammed Kutty, however, without citing him as a witness. We fail to understand why the appellants should have paid such a hefty amount as brokerage, when the transaction between them and the plaintiff, as alleged by them, is one of money lending. If it was indeed a case of money lending, it is incomprehensible why anybody should be paid brokerage, that too of such a hefty sum.
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the execution of sale a deed pursuant to Ext.A1 agreement. In any event, as we have already indicated above, Ext.A1 is a registered document and going by the provisions of Sections 91 and 92 of the Evidence Act we are proscribed from entering into an enquiry to contradict, vary or add to the terms of such agreement, especially when there are no pleadings at all. Any way, we do not require to strain too much because it is now established law that no evidence can be let in on a plea that is not specifically raised or expressly pleaded by the parties. What is attempted by the appellants in this case, as is evident from the attempt of Shri Ali, their learned counsel, is to raise a claim which is never raised in the pleadings but sought to be projected for the first time in oral evidence.
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Even though costs should normally follow, in the rather peculiar circumstances that we have seen above, we are of the view that we will be justified in not making any order as to costs and we therefore, leave the parties to suffer the respective costs in this appeal.
Sd/-
P.N.RAVINDRAN, JUDGE
Sd/-
DEVAN RAMACHANDRAN, JUDGE
ww&SKV
//True Copy//
PA to Judge
3 issues framed by the court
Whether a registered sale agreement which is admitted can be declared a sham and treated as security for a loan despite the lack of possession.
Whether extra-oral evidence of a loan transaction is admissible to contradict the terms of a registered sale agreement.
Whether the appellants successfully established that the registered agreement was never intended to be acted upon as a sale.
Colour shows how this judgement treated each authority
Thyagaraju Mudaliyar and Anr. Vs. V.VedathanniReferred¶75
Thyagaraju Mudaliyar and Anr. Vs. V.Vedathanni [AIR 1936 PC 70] · Who else cites this
Smt.Gangabai Vs. Smt.ChhabubaReferred¶75
Smt.Gangabai Vs. Smt.Chhabuba [AIR 1982 SC 20] · Who else cites this
Thomas Vs. Merlin ConstructionDistinguished¶95
Thomas Vs. Merlin Construction [2016 (3) KLT 84]
2 provisions across 1 enactments
N.M.ABOOBACKER
ABU SAHIB
SUNIL
P.N.RAVINDRAN
DEVAN RAMACHANDRAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
