(Common Prayer: Second Appeals are filed under Section 100 of C.P.C, to set aside the judgment and decree in A.S.No.23 of 2006, on the file of I Additional Sub-Court, Villupuram and dated 15.07.2009 in confirming the judgment and decree in O.S.No.316 of 2004, on the file of Additional District Munsif, Villupuram dated 29.08.2005.)

Common Judgment

1. These Second Appeals have been preferred against the common judgment and decree passed in A.S.Nos.23 & 29 of 2006 dated 15.07.2009.

2. The plaintiff had filed a suit in O.S.No.350 of 2004 seeking the relief of specific performance. One of the defendants in that suit filed a separate suit in O.S.No.316 of 2004 for the relief of declaration and permanent injunction. Both suits were tried together by the trial Court and by a common judgment dated 29.08.2005, decreed the suit in O.S.No.316 of 2004 and partly allowed the other suit in O.S.No.350 of 2004.

3. Aggrieved over that, the plaintiff in O.S.No.350 of 2004 preferred two appeals in A.S.Nos.23 &29 of 2006 before the first appellate Court. Those appeals have also been dismissed by a common judgment dated 15.07.2009. Hence, the present second appeals have been filed challenging the said judgment and decree of the first appellate Court.

4. The short facts pleaded by the plaintiff in O.S.No.316 of 2004 are in brief:-

               The suit ‘A’ schedule property now belongs to the plaintiff and her husband, Natarajan, and they are in possession and enjoyment of the same. The property was acquired by them from the 2nd defendant under a registered sale deed dated 01.03.1995. The suit property originally belonged to the plaintiff’s husband, Natarajan, who had earlier sold it to the 2nd defendant through a sale deed dated 02.02.1982. Thereafter, on 01.03.1995, the 2nd defendant reconveyed the property in favour of the plaintiff and her husband. Thus, the suit ‘A’ schedule property stands in the name of the plaintiff and her husband.

               4.1 The 1st defendant had earlier borrowed Rs.20,000/- with interest from the 2nd defendant. Later, when the 2nd defendant reconveyed the suit property to the plaintiff and her husband on 01.01.1995, they agreed to repay this outstanding loan as part of the reconveyance arrangement. Following this, the plaintiff and her husband had met the 1st defendant several times and offered to repay the loan amount, asking him to accept the money and issue a discharge. However, the 1st defendant refused to receive the amount, which prevented the discharge of the loan.

               4.2 The 1st defendant is in possession of the suit property as a tenant under the plaintiff and her husband, on a monthly rental basis. However, he was never regular in payment of rent and has defaulted in paying rent from June 1997.

               4.3 The plaintiff's family consists of her husband, two sons and a daughter. The eldest son got employment, about three months ago and the other two children are studying. The plaintiff's husband is the owner and driver of a lorry, through which he is earning his livelihood. The plaintiff and her family lived in a rented premises, which has become inconvenient due to the expansion of the family. Hence, the plaintiff requires possession of the suit property for her own use and occupation.

               4.4 Despite repeated requests made by the plaintiff and her husband to the 1st defendant to vacate the suit property and hand over possession, he postponed the same under some pretext or other. The tenancy was an oral tenancy, which was validly terminated by the plaintiff by issuing a legal notice on 21.10.1997. As per the legal notice, the tenancy stood terminated with effect from 30.11.1997. The 1st defendant received notice but had sent frivolous return notice with fabricated allegations.

               4.5 Plaintiff’s husband, Natarajan, had earlier mortgaged the suit property to the 1st defendant under a mortgage deed dated 04.10.1980 for a sum of Rs.2,500/-. This mortgage was subsequently discharged by the 2nd defendant on 06.03.1986. Therefore, the 1st defendant cannot contend that he continued to enjoy the suit property in lieu of interest under the said mortgage. In proof of discharge of the mortgage, the 1st defendant had executed a discharge receipt dated 06.03.1986 in favour of the 2nd defendant. The 1st defendant cannot state that he stayed in the property only because of the mortgage of the year 1980, because the said mortgage had been discharged already.

               4.6. The plaintiff and her husband are the bonafide purchasers of the suit property without notice of any sale agreement executed in favour of the 1st defendant. At the time of reconveyance, the 2nd defendant failed to hand over the original documents on the pretext that he had misplaced them. Thereafter, the 2nd defendant, in collusion with the 1st defendant has created a false and fabricated document.

               4.7 The possession of the 1st defendant over the suit property is only in his capacity as a tenant and not otherwise. It is not correct to state that the 2nd defendant had approached the 1st defendant with an offer to sell the property for a sum of Rs.15,500/- and had received a sum of Rs.13,000/- as advance for sale consideration. Hence, the alleged sale agreement dated 24.11.1986 to that effect is not true.

               4.8. The 1st defendant, with an ulterior motive, managed to get his name entered in the local panchayat records in collusion with certain officials of the panchayat. Similarly, he got the assessment in respect of the house property also transferred in his name. It is false to state that the 1st defendant had spent Rs.5,000/- for constructing the compound wall. It is also false to state that the water connection and Patta had been transferred in the name of the 1st defendant.

               4.9 There was no sale agreement executed by the 2nd defendant in favour of the 1st defendant at any point of time. The alleged document is a fabricated and collusive document created by the 1st defendant and the 2nd defendant after the execution of the reconveyance deed in respect of the suit property in favour of the plaintiff and her husband. In order to cheat the plaintiff and her husband, the defendants 1 and 2 colluded together and created a sale agreement dated 24.11.1986. The said document is a motivated and antedated document. As the defendants tried to make unnecessary claim in respect of the suit property, the plaintiff has filed the suit for the relief of declaration and permanent injunction.

5. Written statement of the 1st defendant in brief:-

               The 2nd defendant had agreed to sell the suit property in favour of the 1st defendant for a sum of Rs.15,500/- and received a sum of Rs.13,000/- as advance. The terms were reduced into writing on 24.11.1986 and has been duly signed by the 1st and 2nd defendants. The 1st defendant was put into possession of the suit property pursuant to the said agreement of sale. The 2nd defendant also handed over the sale deed, which is in the name of the plaintiff's husband to the 1st defendant.

               5.1. The 1st defendant has put up a compound wall at a cost of Rs.5,000/- and planted various trees in the suit property. The house tax was assessed in his name, and he also obtained a water connection in the year 1988. The 2nd defendant issued a ‘No Objection Certificate’ to the Town Panchayat for providing water and service connections. In view of the 1st defendant’s enjoyment of the suit property, patta was also granted under the Natham Land Tax Scheme. The 1st defendant requested the 2nd defendant to receive the balance sale consideration of Rs.2,500/- and executed the sale deed in his favour; however, the 2nd defendant kept postponing the execution under some pretext or other. The 1st defendant has always been ready and willing to perform his part of the contract by paying the balance sale consideration and get the sale deed executed from the 2nd defendant.

               5.2. The 1st defendant had issued a legal notice through his advocate to the 2nd defendant calling upon him to receive the balance sale consideration and execute the sale deed, but the 2nd defendant did not come forward to execute the sale deed. While so, on 21.10.1997, the plaintiff and her husband sent a legal notice with untenable allegations. The sale deed executed by the 2nd defendant in favour of the plaintiff and her husband on 01.03.1995 is not valid. The allegations that the plaintiff and her husband had undertaken to discharge a debt of Rs.20,000/- due from the 2nd defendant to the 1st defendant is also not true. It is false to state that the 1st defendant was in possession of the suit property during that time. The 1st defendant had sent a reply notice dated 04.11.1997, refusing the allegations made against him by the plaintiff and her husband.

               5.3. Plaintiff’s husband had mortgaged the suit property in favour of the 1st defendant for a sum of Rs.2,500/- in the year 1980. It was agreed between the parties that the 1st defendant would be entitled to enjoy the suit property in lieu of interest until the mortgage debt was discharged. Accordingly, the 1st defendant was put into possession of the suit property. Thereafter, the plaintiff and her husband sold the property to the 2nd defendant, who had undertaken to discharge the mortgage debt, and the said mortgage was in fact discharged by the 2nd defendant. Only after such a discharge, the 2nd defendant approached the 1st defendant with an offer to sell the suit property to him.

               5.4. The plaintiff and her husband are aware of the existence of the sale agreement in favour of the 1st defendant and that he has been in possession of the suit property in pursuant to the sale agreement. The sale deed dated 01.03.1995 is not supported by any valid consideration and that will not bind the 1st defendant. The plaintiff and her husband are not bonafide purchasers of the suit property as claimed. There is no relationship of landlord and tenant between the plaintiff, her husband and the 1st defendant. The 1st defendant has also filed a suit for specific performance against the 2nd defendant. Hence, the plaintiff is not entitled to the relief as claimed by them.

6. The 2nd defendant's written statement in brief:

               It is true that the plaintiff and her husband purchased the suit property from the 2nd defendant under a sale deed dated 01.03.1995. The 2nd defendant had earlier borrowed a sum of Rs.13,000/- from the 1st defendant and, as an acknowledgment of that loan, he had signed on a plain paper. The 2nd defendant contends that the 1st defendant, taking advantage of the signed blank paper, later fabricated the alleged sale agreement dated 24.11.1986. The 2nd defendant has not executed any such agreement in favour of the 1st defendant. The second defendant had purchased the property from the plaintiff’s husband in the year 1982 for a sum of Rs.19,000/-, and therefore the alleged sale agreement for a lesser amount of Rs.15,500/- in the year 1986 is unbelievable. After the mortgage was discharged in 1986, the 1st defendant agreed to pay Rs.150/- per month as rent to the 2nd defendant. When the 2nd defendant demanded the rent, the 1st defendant advanced a sum of Rs.13,000/- as an additional loan. The interest on the loan was adjusted against the monthly rent payable by the 1st defendant.

               6.1. A detailed written statement has also been filed by the 2nd defendant in the suit for specific performance filed by the 1st defendant. The 1st defendant is not entitled to the relief of specific performance. In fact, the suit of the 1st defendant claiming specific performance is barred by limitation also. By exhorting influence on the public officials, the 1st defendant managed to get the mutated patta, water connection and house assessment in his name. The plaintiff and her husband are the bonafide purchaser for value and they are entitled to take possession after discharging the debt payable by the 2nd defendant to the 1st defendant.

               6.2. The other suit in O.S.No.316 of 2004, had been filed by the plaintiff against the 1st and 2nd defendants. The plaintiff in O.S.No.350 of 2004 has filed the suit, claiming the relief of specific performance. Pleadings made by him in the suit were similar to that of the written statement filed in the suit in O.S.No.316 of 2004. The written statements of the defendants in the suit are similar to that of the plaint and the written statement of the 2nd defendant filed in O.S.No.350 of 2004.

7. On the basis of the above pleadings, the trial Court has framed the following issues:-

               O.S.No.316 of 2004

               

               

               O.S.No.350 of 2004

               

8. A joint trial was conducted, and the evidence has been let in in O.S.No.316 of 2004 only. For the sake of convenient discussion, the parties are referred in accordance with their rank in O.S.No.316 of 2004. The plaintiff's husband is also a party in the other suit filed by the 1st defendant in O.S.No.350 of 2004.

9. During the course of the trial, on the side of the plaintiff, the plaintiff has been examined as PW.1 and Ex.A1 to Ex.A8 have been marked and on the side of the defendants, one witness, the defendant in O.S.No.316 of 2004 has been examined as DW.1 and Ex.B1 to Ex.B18 were marked.

10. After the conclusion of the trial and on considering the evidence available on record, the Trial Court decreed the suit in O.S.No.316 of 2004 and partly decreed the suit in O.S.No.350 of 2004, directing a refund of Rs.13,412/- along with interest at 12% in favour of the defendants in that suit. So both the first appeals preferred by the 1st defendant were dismissed, thereby confirming the judgment of the trial Court. Now the 1st defendant has preferred these second appeals challenging the common judgment of the first appellate Court.

11. These second appeals have been admitted on the following substantial question of law.

               “1.Whether the order of the Courts below in insisting upon both the parties to the agreement to sign and coming to a conclusion that in the absence of signature of the vendee it cannot be treated as agreement of sale, is not opposed to the judgment of the Supreme Court in 2009 SC 1529?

               2. Whether the suit for specific performance is barred by limitation when it had been instituted within the period prescribed under Article 54 of the Limitation Act?

               3. Whether the judgment of the lower appellate Court being a final Court of fact is not cryptic, when it merely confirms the order of the trial Court without discussion, which is impugned before it?"

12. The learned counsel appearing for the appellant submitted that both the Courts below failed to properly consider an important fact of the case that the original title documents in respect of the suit property have been in possession of the 1st defendant. The sale agreement which bears only the signature of the vendor alone ought not have been held against the 1st defendant, to deny him the relief of specific performance. The observation on this aspect by the Court below is in contradiction to the judgment of the Hon'ble Supreme Court held in Alka Bose Vs. Parmatma Devi and Ors reported in (2009) 2 SCC 582.

13. It is further submitted that the 1st defendant, merely being a tenant, could not have been in possession of the original title deeds of the suit property. The revenue records standing in the name of the 1st defendant also confirms the lawful possession of the suit property, but the plaintiff and the 2nd defendant claim that the transaction was not an agreement of sale, but only a loan transaction. As per Section 91 of the Indian Evidence Act, the burden would shift upon them to prove the contrary. Hence, the 1st defendant has proved his entitlement to the decree for specific performance. The same was not properly considered by the trial Court as well as the first appellate Court. The 1st defendant had filed the suit immediately after the refusal to execute the sale deed. As the limitation period for specific performance is three years from the date of such refusal, the suit is well within time. The plaintiff’s husband remained ex-parte in O.S.No.350 of 2004. The first appellate Court did not properly consider the grounds raised in the appeal and but had adopted the same reasoning of the trial Court.

14. The learned counsel for the respondent submitted that the trial Court has rightly appreciated the features of Ex.B1 and observed that it can only be a fabricated document. The 1st defendant had misused the signature made by the 2nd defendant as an acknowledgement for the loan received from the 1st defendant. The loan availed by the plaintiff's husband has been discharged by the 2nd defendant. When the property was reconveyed in favour of the plaintiff and her husband on 01.03.1995 itself, the plaintiff and her husband had undertaken to discharge the debt availed by the 2nd defendant from the 1st defendant. One of the contesting witnesses, examined as PW2, Dakshinamoorthy, referred to Ex.B1 in his evidence and stated that the 1st defendant, Pakkirisamy, had paid money to the 2nd defendant and he (PW2) had signed the document. He further stated that it was Pakirisamy who is the 1st defendant, in O.S.No.350 of 2004, had brought the document writer to write Ex.B.1. Had that been the case, the document writer would have obtained the necessary details from the parties and clearly incorporated the essential terms of the contract. However, Ex.A1 which is the alleged sale agreement, does not contain any recital to show that the 1st defendant was inducted into possession of the suit property pursuant to the sale agreement. Since Ex.B1 does not bear the essential features of a sale agreement, the learned Trial Judge has rightly held that the signature of the 2nd defendant acknowledging receipt of Rs.13,000/- was subsequently converted into a sale agreement in favour of the 1st defendant.

Discussion:

15. For the sake of convenient discussion, the parties are referred as per their rank in O.S.No.350 of 2004. The plaintiff, Krishnamoorthy in O.S.No.350 of 2004 has filed a suit for specific performance against three defendants. The 3rd defendant in O.S.No.350 of 2004 is the plaintiff in the other suit in O.S.No.316 of 2004, which was filed for declaration and permanent injunction. The 1st defendant Pakkirisamy has executed a sale agreement in favour of Krishnamoorthy. The 2nd defendant, Natarajan is the husband of the 3rd defendant, Valarmathi and she is the plaintiff in O.S.No.316 of 2004.

16. The suit property was originally owned by Natarajan, the husband of Valarmathi, through Ex.B2, a registered sale deed dated 10.04.1974. On 02.02.1982, Natarajan sold the suit property in favour of Pakkirisamy. However, on 01.03.1995, the said Pakkirisamy reconveyed the suit property in favour of Valarmathi, wife of Natarajan. Valarmathi and her husband agreed to settle the mortgage amount due to Pakkirisamy in favour of Krishnamoorthy.

17. It is seen that Krishnamoorthy had executed a receipt in favour of Pakkirisamy and it has been mentioned in the sale deed also. The receipt itself has been marked as Ex.A4 in O.S.No.316 of 2004. The said Krishnamoorthy had been a tenant in the suit property. However, he claims that the sale agreement had been executed by Pakkirisamy in favour of Krishnamoorthy on 24.11.1986 for a sale consideration of Rs.15,500/-. It is further alleged that on the same day, a sum of Rs.13,000/- was paid as an advance by Krishnamoorthy to Pakkirisamy. However, the alleged document is only a receipt executed by Pakkirisamy for having received a sum of Rs.13,000/- from Krishnamoorthy.

18. The learned Trial Judge has made an observation that the above said document dated 24.11.1986, which was marked as Ex.A1 in O.S.No.350 of 2004 is equivalent to Ex.B1 in O.S.No.316 of 2004. Only Pakkirisamy has signed and hence it cannot be considered as a bilateral agreement like a sale agreement.

19. The learned counsel appearing for the appellant submitted that the signature of the vendor alone is sufficient to presume a document as a sale agreement. In support of the said contention, the learned counsel placed reliance on the judgment of Hon'ble Supreme Court in Alka Bose Vs. Paramathma Devi reported in (2009) 2 SCC 582. The relevant part of the above judgement is extracted as below:-

               “8.The defendant next contended that the agreement of sale in this case (Ex.2) was clearly in a form which required signatures of both the vendor and purchaser. It is pointed out that the agreement begins as: “Agreement for sale between Kanika Bose and Parmatma Devi” and not an “Agreement of sale executed by Kanika Bose in favour of Parmatma Devi”. Our attention is also drawn to the testimonium clause (the provision at the end of the instrument stating when and by whom it was signed) of the agreement, which reads thus:

               “In witnesses whereof, the parties hereto have here unto set and subscribed their respective hands and seals on these presents.” It is therefore contended that the agreement specifically contemplated execution by both parties; and as it was not so executed, it was incomplete and unenforceable. We have carefully examined the agreement (Ex.2), a photocopy of which is produced. The testimonium portion in the agreement is in an archaic form which has lost its meaning. Parties no longer “subscribe their respective hands and seals”.

               It is true that the format obviously contemplates signature by both parties. But it is clear that the intention of the parties was that it should be complete on signature by only the vendor. This is evident from the fact that the document is signed by the vendor and duly witnessed by four witnesses and was delivered to the purchaser. Apart from a separate endorsement made on the date of the agreement itself (7-9- 1979) by the vendor acknowledging the receipt of Rs 2001 as advance, it also contains a second endorsement (which is also duly witnessed) made on 10-10-1979 by the vendor, acknowledging the receipt of a further sum of Rs 2000 and confirming that the total earnest money received was Rs 4001. This shows that the purchaser accepted and acted in terms of the agreement which was signed, witnessed and delivered to her as a complete instrument and that she then obtained an endorsement thereon by the vendor, in regard to second payment. If the agreement was not complete, the vendor would not have received a further amount and endorsed an acknowledgment thereon on 10-10-1979. Apart from the above, the evidence of the witnesses also shows that there was a concluded contract. Therefore, even though the draftsman who prepared the agreement might have used a format intended for execution by both vendor and purchaser, the manner in which the parties had proceeded, clearly demonstrated that it was intended to be executed only by the vendor alone. Thus, we hold that the agreement of sale (Ext.2) signed only by the vendor was valid and enforceable by the purchaser”

20. While admitting the appeal, the question of law has been framed as to the validity of the sale agreement signed by vendor alone. In the above judgment, it has been held that if the intention of the parties is to effect a complete sale, the signature of the vendor alone, duly attested by witnesses, may be considered as a sale agreement. In the factual context of that case, the vendor had also signed by making endorsements for the subsequent payments. In the case in hand, Pakkirisamy has affixed only his signature in Ex.A1 (equivalent in Ex.B1) and according to him, it is only a receipt for a loan and not a sale agreement.

21. So, the crux of the matter not just revolves around the absence of the signature of Krishnamoorthy in Ex.A1, but it is about the intention of the parties also. Even in the judgment of the Hon'ble Supreme Court, it has been held that if the intention of the parties to effect a sale is not complete and if the vendor alone has affixed his signature in the sale agreement, that cannot be considered as a valid consideration. Therefore, until the intention is proved, the signature affixed by Pakkirisamy alone in Ex.A1 (equivalent to Ex.B1) cannot be considered as a sale agreement.

22. Admittedly, the alleged document Ex.A1 was not executed on a stamp paper, but on a white paper. One of the attesting witnesses has stated that the above document has been written by a document writer. However, the features of the document do not appear to be the document written by a document writer by incorporating the terms relevant to the sale agreement. In fact, the trial Court has also made observations on these aspects.

23. Krishnamoorthy claims that his possession over the suit property after the execution of Ex.B1 (equivalent to Ex.A1) was pursuant to the alleged sale agreement. However, the alleged sale agreement does not contain any recitals to indicate that the possession of the suit property by Krishnamoorthy due to his capacity as an agreement holder. In other words, Krishnamoorthy's claim that his possession in the suit property constitutes part performance of the contract is not supported by any document.

24. When Valarmathi and Natarajan claimed that Krishnamoorthy has been a tenant in the suit property, any claim by Krishnamoorthy regarding a change in his status with respect to the said property, would necessarily require such particulars be reflected in the alleged sale agreement. Since Ex.A1 appears to be a casual document, containing only the signature of Pakkirisamy, it is incumbent upon Krishnamoorthy to establish the intention of the parties in executing Ex.A1, before claiming it as a sale agreement, especially in the absence of his own signature on the document. Thus, the substantial question of law No.1 is answered by applying the above principles laid down by the Hon'ble Supreme Court in Alka Bose Vs. Parmatma Devi and Ors reported in (2009) 2 SCC 582.

25. Further, the suit for specific performance is not barred by limitation. As per Article 54 of the Limitation Act, the period of limitation is three years from the date on which the plaintiff has the notice of refusal to perform the contract. In the present case, the plaintiff/appellant, Krishnamoorthy, had called upon the 1st defendant, Pakkirisamy, to execute the sale deed pursuant to the alleged agreement, and the refusal on the part of Pakkirisamy became evident through the notice dated 04.11.1997. The suit for specific performance in O.S.No.350 of 2004 was filed well within three years from the said date of refusal. Therefore, the suit is within the prescribed period and is not barred by limitation under Article 54 of the Limitation Act. Hence, the substantial question of law No.2 is answered accordingly.

26. In the present case, one of the attesting witnesses, Dakshinamoorthy, deposed that, Ex.A1 (equivalent to Ex.B1) contained certain recitals indicating that it was an ‘agreement. However, the other details stated by the witness Dakshinamoorthy were not found in the sale agreement. The discrepancy between the witness’s testimony and the actual contents of the document created a serious doubt regarding the reliability of his evidence.

27. The trial Court has not only been carried away by the absence of Krishnamoorthy's signature in Ex.A1 (equivalent to Ex.B1). It had other reasons for not considering Ex.A1 as a sale agreement. Failure on the part of Krishnamoorthy to prove Ex.A1 equivalent to Ex.B1 would only disentitle him to get the relief prayed in the suit.

28. The first appellate Court had considered the reasoning of the trial Court especially about the absence of words in the sale agreement Ex.A1 (equivalent to Ex.B1). The judgment of the first appellate Court could have been more exhaustive, but that by itself cannot be treated as a factor in favour of the appellant when he has failed to establish that Ex.A1 (equivalent to Ex.B1) is a valid sale agreement. Thus, the Court below had rightly appreciated the material available on record and has confirmed about the status of Krishnamoorthy as a tenant in the suit property. The substantial question of law No.3 is also answered accordingly.

29. The trial Court correctly held that Ex.A1 (equivalent to Ex.B1) is merely a receipt or acknowledgement executed by Pakkirisamy for having received a sum of Rs.13,000/- as a loan from Krishnamoorthy and the liability has been undertaken by Valarmathi and Natarajan, who had purchased the suit property. So, it is right to grant the relief of declaration and permanent injunction as claimed by Valarmathi in the suit filed by her and grant the alternative relief of recovery of money with interest in respect of the transaction covered under Ex.A1 (equivalent to Ex.B1). As the first appellate Court found no reason to interfere with the findings of the trial Court, the first appeal was dismissed accordingly. Hence I don’t find any merits in these second appeals.

30. Consequently, both the Second Appeals S.A.No.1329 & 1330 of 2009 are dismissed. The judgement and decree passed by the I Additional Sub-Court, Villupuram in A.S.No.23 of 2006 dated 15.07.2009 is confirmed. No order as to costs.