In a second appeal regarding a suit for specific performance of a sale agreement, the High Court dismissed the appeal, upholding the finding that the agreement was executed as security for a loan transaction based on extrinsic evidence.
The second appeal was dismissed; liberty granted to appellant to approach statutory forum regarding the loan.
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.
S.A.No.852 of 2009
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 02.07.2024
PRONOUNCED ON : 11.07.2024
CORAM
THE HONOURABLE MR.JUSTICE V.SIVAGNANAM
S.A.No.852 of 2009
A.Ranganathan ... Appellant Vs. 1.M.L.Ponnusamy (Died) 2.Yasodha 3.Panneerselvam ... Respondents [R2 and R3 were set ex-parte vide order dated 02.07.2024] Prayer :- Second Appeal has been filed under Section 100 of CPC against the Judgement and Decree dated 30.11.2007 in A.S.No.31 of 2005 on the file of the Sub Ordinate Court, Dharmapuri reversing the judgment and decree dated 24.03.2004 made in O.S.No.226 of 1999 on the file of District Munsif Court, Palacode.
For Appellant : Mr.T.Karunakanan 1/13
S.A.No.852 of 2009
JUDGMENT
Challenge in this second appeal is made to the Judgement and Decree dated 30.11.2007 in A.S.No.31 of 2005 on the file of the Sub Ordinate Court, Dharmapuri reversing the judgment and decree dated 24.03.2004 made in O.S.No.226 of 1999 on the file of District Munsif Court, Palacode.
rankings in the Trial Court.
2/13
S.A.No.852 of 2009
4.The defendants contested the suit, denied the allegations in the plaint
and filed a written statement contending that 1st defendant had no intention to sell the plaint schedule property to the plaintiff. He borrowed a sum of Rs.50,000/- from the plaintiff as a debt. For the same, he executed a promissory note for Rs.40,000/- and executed a Sale Agreement Ex.A.1 for Rs.10,000/-. At the same time, he also executed two general agreements on the same date, mentioning about the loan transaction. Thus, pleaded to dismiss the suit.
5.On the basis of the abovesaid pleas set out by the respective parties,
the following issues were framed by the trial Court for consideration:
“1/thjpf;F jhth brhj;ij U/20.000: /- tpw;gjhf gpujpthjp fpua xg;ge;jk; bra;Js;shh; vd;gJ rhpah>
2/ fpua xg;ge;jk; gpujpthjpbgw;w fldpw;F Mjhukhf vGjpf; bfhLf;fg;gl;lJ vd;gJ rhpah>
3/ fpua xg;ge;jk; bry;yj;jf;fjh>
4/ thjp nfhhpa[s;s ghpfhu';fs; bgwj;jf;ftuh>
5/,ju ghpfhu';fs; vd;d>
PW2 were examined and 8 documents were marked as Ex.A.1 to Ex.A.8. On
the side of the defendants, 1st defendant himself examined as DW1 and 2
3/13
S.A.No.852 of 2009
documents were marked as Ex.B.1 and Ex.B-2.
the suit and granted the prayer for specific performance of sale agreement and possession as claimed by the plaintiff.
8.Aggrieved over the same, the defendant had filed A.S.No.31 of 2005,
before the Sub Ordinate Court, Dharmapuri. The First Appellate Court, after considering the entire materials and evidence on record reversed the Judgment and Decree of the trial Court and allowed the appeal. Aggrieved by the same, the plaintiff has filed the present second appeal.
“a) Whether the appellant court can decide
the case on the basis of unregistered document i.e., Ex.B2, while the suit filed on the basis of registered sale agreement i.e., Ex.A1.
b) Whether the appellate Court is correct in coming to a conclusion that the Ex.A1/B1 is not
4/13
S.A.No.852 of 2009
made with intention to sell the property, even though the Ex.B2 reflects why Ex.Al has been made and when Ex.Al can be used by the appellant through Court.”
10.The learned counsel appearing for the appellant contended that the First Appellate Court failed to consider the documents Ex.B.1 and B.2 properly. Ex.B.2 is an operative document of Ex.A.1. It is not a registered document. Ex.A.1 Sale Agreement is a registered document. There should be another registered document, for varying the contents of the registered document. The First Appellate Court failed to appreciate this fact and erroneously relied on Ex.B.1 and B.2 and found that the Sale Agreement Ex.A.1 was executed for a loan transaction and dismissed the suit filed by the plaintiff. It is erroneous and irrelevant consideration of material on the record. Without considering the evidence on record and reiterated the other grounds raised in the grounds of appeal and thus pleaded to allow the second appeal.
11.The learned counsel appearing for the respondents supported the judgment of the First Appellate Court and contended that the Ex.A.1 Sale Agreement is not valid. To show the loan transaction between the plaintiff and the defendants and for the purpose of exposing the fact that Ex.A.1 was https://www.mhc.tn.gov.in/judis 5/13
S.A.No.852 of 2009
executed only for the purpose of loan transaction and that there was no intention for the 1st defendant to sell his property to the plaintiff. Exs.B.1 and B.2 was written and signed by the plaintiff, which is admitted by the plaintiff during his cross examination. Under these circumstances, there is no reason to reject Exs.B.1 and B.2. The First Appellate Court had rightly relied upon Exs.B.1 and B.2 and found that the Ex.A.1 Sale Agreement is not entered with an intention to sell the property. It has been entered only as a security to the loan transaction. There is no ground to interfere with the findings of the First Appellate Court. There is no irregularity and no substantial question of law is involved in this case and thus, pleaded to dismiss the Appeal.
12.I have considered the matter in the light of the submissions made on
either side and perused the materials on records as well as the Judgments passed by the Courts below.
13.The suit property is owned by the defendants. It is not in dispute. The averment in the plaint is that the defendant agreed to sell the plaint schedule property for a sale consideration of Rs.20,000/- and received an advance of Rs.10,000/-. He executed a Sale Agreement on 14.06.1995 and fixed three
years time for completing the sale transaction. Since 1st defendant failed to https://www.mhc.tn.gov.in/judis 6/13
S.A.No.852 of 2009
come forward to complete the sale transaction, plaintiff filed the suit. The defendant filed written statement and contested that he had no intention to sell the plaint schedule property. He borrowed a sum of Rs.50,000/- from the plaintiff as a debt, for which, he executed a promissory note for Rs.40,000/and executed a Sale Agreement (Ex.A.1) for Rs.10,000/-. At the same time, they also executed two general agreements on the same date, mentioning about the loan transaction. Therefore, pleaded that the suit is liable to be dismissed
14.Now, I have to consider, whether the defendant executed the Ex.A.1,
Sale Agreement with an intention to sell the suit property for a sum of Rs.20,000/-. In this regard, I have gone through the evidence adduced by the parties. Ex.A.1 Sale Agreement is admitted by the defendant. Their only contention is that, it is executed to acknowledge the loan transaction. To support his contention, defendant filed Exs.B.1 and B.2, General Agreements signed by both the parties.
15.On perusal of Ex.A.1, it is noticed that the Sale Agreement is executed on 14.06.1995. Sale consideration is fixed as Rs.20,000/- and an advance of Rs.10,000/- was paid. For completing the sale transaction, three
years time was fixed for paying the balance Rs.10,000/-. Three years time https://www.mhc.tn.gov.in/judis 7/13
S.A.No.852 of 2009
period for completing sale transaction is abnormal in this case. It raises a doubt about the intention of the parties who sell or purchase the property.
16.It is to be noted that on the same date of Sale Agreement i.e., 14.06.1995, the parties executed two General Agreement dated 14.06.1995. It
is evidenced as Ex.B.1 and B.2. For better appreciation, Ex.B.1 reproduced
herein under,
8/13
S.A.No.852 of 2009
17.These Agreements were admitted by the plaintiff during his cross examination. These two documents i.e., Exs.B.1 and B.2 exposes the fact that the Sale Agreement Ex.A1 is executed for the purpose of loan transaction and
not with an intention to sell the property to the plaintiff. The First Appellate Court in its Judgment discussed in detail with evidence.
“12/ nkw;go xg;ge;j';fs; ,uz;Lk; gjpt[ bra;ag;gltpy;iy vd;whYk; rhpahd Kj;jpiuj;jhspy; rhl;rpfs; Kd;dpiyapy; nkw;go xg;ge;j';fs; Vw;gl;Ls;sd vd nky;KiwaPl;lhsh;/gpujpthjp jpug;gpy; tprhuid bra;ag;gl;l rhl;rpfspd; rhl;rpa';fspypUe;J mwpe;J bfhs;s KofpwJ/ vdnt th/rh/M/1 fpua xg;ge;jk; jhth brhj;ij fpuak; bra;J ju ntz;Lbkd;w vz;zj;njhL Vw;gl;lJ vd vjph;kDjhuh;/thjp jug;gpy; rhd;W mog;gilapyhd rhl;rpak; thapyhf bra;g;gpf;ftpy;iy/”
9/13
S.A.No.852 of 2009
18.The argument of the learned counsel for the appellant that Ex.A.1 is a registered agreement, therefore, no extrinsic evidence is admissible to contradict, vary, add or subtract from the terms of the document, is not an acceptable one, for the reason that, the transaction between the parties is contained in more than one document. If any transaction is contained in more than one document, that document should be read and interpreted together and this section is not applicable to the present case. When the true character of the document is questioned, extrinsic evidence by way of oral evidence is admissible. In this case, Ex.B.1 and B.2 is admitted by the plaintiff. In this circumstance, the argument placed by the learned counsel for the appellant is not acceptable and thus, rejected.
19.Finally, based upon the evidence the First Appellate Court set aside the judgment and decree of the trial Court and allowed the appeal, stating that the Sale Agreement Ex.A1 is not executed with an intention to sell the property, but only for the purpose of loan transaction.
20.In the light of the abovesaid factors, it is found that the First Appellate Court, on a proper appreciation of the materials placed on record, both oral and documentary evidence adduced by the respective parties and the https://www.mhc.tn.gov.in/judis 10/13
S.A.No.852 of 2009
principles of law governing the same, had rightly allowed the appeal. There is no misappreciation of evidence, irrelevant consideration and no ground to hold
that the findings are perverse. There are no merits in the appeal. The substantial questions of law formulated in the second appeal are accordingly answered.
.07.2024
gd Index : Yes/No Internet: Yes/No Speaking order/Non-Speaking order Neutral Citation : Yes/No
To
2.The District Munsif Court, Palacode.
11/13
S.A.No.852 of 2009
V.SIVAGNANAM, J.
gd
Pre-Delivery Judgment made in S.A.No.852 of 2009
12/13
2 issues framed by the court
Whether the High Court can decide the case based on unregistered documents despite a registered sale agreement being the basis of the suit.
Whether the appellate court correctly found that the registered sale agreement was executed to secure a loan rather than to sell the property.
A.Ranganathan
Yasodha
Panneerselvam
V.Sivagnanam
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
