Judgment:
K.L. Manjunath, J.
1. The appellants herein are challenging the legality and correctness of the Judgment and decree passed in O.S. No. 10553/96 on the file of City Civil Judge, Bangalore, dt.2.1.2003. The Cross objections are filed by the respondent challenging the direction issued by the Court below directing him to deposit a sum of Rs. 4,50,000/- within a period of three months.
2. Since the appeal as well as the Cross-objections are arising out of the Judgment and decree passed in O.S. No. 10553/96, we have taken up these two matters together and for the sake of convenience the parties would he referred to as per their status before the court below.
3. According to the plaint averments, the 1st defendant - Smt. Susheelamraa is the owner of the plaint schedule property bearing old No. 139, later No. B-18 and further No. 143 and present No. 937 situated at old Taluk Cucheri Road, Nagarthpet, Bangalore. She acquired the same under registered sale deed dt.22.8.86. Defendant-2 is her husband and defendants-3 and 4 are her children.
4. According to the plaintiff, under an agreement dt.31.12.92, the 1st defendant along with defendants-2 to 4 agreed to Bell the plaint schedule property in his favour for a e consideration of Rs. 14,50,000/-. A sum of Rs. 50,000/- was paid as an advance sale consideration on the date of the agreement. Though defendants-2 to 4 have no right over the property with an abundant caution they have also been arrayed as parties to the agreement. In terms of the agreement of sale, the defendants were required to execute the sale deed free from all encumbrance after obtaining the permission from the Income Tax Department under Section 230A of the Income Tax Act and that the entire sale transaction stated to be completed within six months from 31.12.92.
5. It is the case of the plaintiff that on 24.6.93 1st and 2nd defendants have received full sale consideration of Rs. 4,50,000/- and extended the time by another six months by making an endorsement on the back; of the agreement. In order to complete the sale transaction, the plaintiff has taken out paper publication on 20th January 1993 notifying any claims or objections from any third party who may have any interest in the plaint schedule property, and that plaintiff also signed Form 37 I in triplicate and furnished the same to the 1st defendant along with the sale deed to enable the defendants to obtain permission from the Income Tax Department and thereafter he sent a letter by registered post calling upon the defendant to complete her part of the contract and the same has been received by the defendants on 25.6.93 and subsequently he met the defendants many a times and that the defendants promised to receive the balance sale consideration and to execute the sale. Since the defendants failed to do so, suit is filed for enforcement of the contract on the ground that he was ever ready and willing to pay the balance sale consideration of Rs. 9,50,000/-. In the circumstances, plaintiff requested the Court to grant a decree to direct the defendants to receive the balance sale consideration of Rs. 9,50,000/-and execute the sale deed in his favour by deleting all original title deeds in respect of the plaint schedule property.
6. The defendants-1, 2 and 4 filed the written statement contending that 3rd defendant died on 11.6.1996 and that they never agreed to sell the property in favour of the plaintiff at any point of time. Since the defendants were in need of loan of Rs. 5,00,000/- intended to borrow loan from the plaintiff and the plaintiff was introduced by the friend of 3rd defendant and accordingly they approached the plaintiff in the month of November 1992 and that the plaintiff agreed to lend the loan, provided the defendants agree to execute a sale agreement in respect of the plaint schedule property as a security and that they agreed to pay interest at 2% per month on the loan borrowed, by them. in the circumstances, by paying a sum of Rs. 50,000/- as advance loan, agreeing to pay the balance loan of Rs. 4,50,000/- within a week; the documents in question came to be executed. According to them, they never agreed to sell the plaint schedule property and it is not an agreement of sale. The defendants denied the payment of further amount of Rs. 4,50,000/- by the plaintiff and making an endorsement on the back of the agreement extending the time by another six months as contended by the plaintiff. According to them, the plaintiff has obtained an endorsement only for extension of time and no payment was made to them. It is also their case that paper publication referred to by the plaintiff has been issued by the plaintiff with an ulterior motive and the same is nothing to do with the transaction in question. The 1st defendant admitted the receipt of legal notice dt.14.11.94. According to her she has sent a befitting reply on 25.11.94. Along with the said reply she has also sent a cheque for Rs. 74,000/- drawn in the name of the plaintiff to the Counsel for the plaintiff in order to return the loan of Rs. 50,000/- and Bank rate of interest accrued thereon. According to her, the plaintiff instead of encashing the cheque sent back the cheque, for which also a proper reply has been sent. Therefore, they requested the Court to dismiss the suit on the ground that they are liable to pay only Rs. 50,000/- and interest accrued thereon.
7. Based on the above pleadings, the following issued were framed by the trial court:
1) Whether the plaintiff [proves that the defendants 1 to 4 have executed an agreement of sale dated 31.12.92 in his favour for the suit schedule property?
2) Whether the plaintiff proves that in pursuance of the said agreement Rs. 4,50,000/- is paid to defendants?
3) Whether the plaintiff is entitled for specific performance of contract as sought?
4) Whether the defendants prove that they only received Rs. 50,000/- from the plaintiff as a loan?
5) What order or decree?
8. In order to prove their respective. contentions, the plaintiff got examined himself as PWi. He relied upon Ex.P1 to P11. On behalf of the defendants, the 2nd defendant was exarainad as DW1, one Govinda Bhat was examined as DW2 and Exs.D1 to D2 were marked. The trial court after considering the evidence let in by the parties, held issue No. 1 in, affirmative, issue No. 2 in negative, issue No. 3 in affirmative, issue No. 4 in negative and ultimately the suit of the plaintiff was decreed by holding that the advance amount of Rs. 4,50,000/- said to have been paid by the plaintiff as per the endorsement on the back of the agreement as incorrect and plaintiff has been directed to pay the said amount of Rs. 4,50,000/- also and also directed the defendants to execute the sale deed. This Judgment and decree are called in question in this appeal.
9. The plaintiff has also filed Cross-objections being aggrieved by the findings on issue No. 2.
10. We have heard the learned Counsel for the parties.
11. The main contention of the appellants before us is that the trial court has committed a serious error in considering that the defendants agreed to sell their property in favour of the plaintiff. According to them, the agreement of sale is only a document obtained by the plaintiff by misrepresenting them as a security to the loan advanced by the plaintiff. It is also the case of the appellants that even though the plaintiff had agreed to lend a loan of Rs. 5,00,000/- by advancing a loan of Rs. 50,000/-, the suit agreement has been obtained and the remaining loan of Rs. 4,50,000/- was to be paid to the appellants and they never agreed to receive the said sum towards the sale consideration. It is also their case that the shara which discloses the alleged payment of Rs. 4,50,000/-is an interpolated one and that the trial court having accepted the contention of the defendants that the endorsement in regard to the payment of Rs. 4,50,000/- as interpolated, still the Court has granted a decree of specific performance.
12. According to the learned Counsel for the appellants, when the plaintiff has interpolated with the endorsement as if he has paid a sum of Rs. 4,50,000/- as further advance, was not entitled for the discretionary relief of the specific performance, since the plaintiff had not approached the Court with clean hands. It is also the case of the appellants that when the plaintiff has failed to prove the payment of Rs. 4,50,000/- and when the Court has come to the conclusion that such an amount has not been paid and the endorsement has been manipulated, the trial court should not have granted a decree for specific performance. He further contends that the appreciation of the evidence is improper and no Court could have granted a decree of specific performance considering the conduct of the respondent-plaintiff. In the circumstances, he requests the Court to allow the appeal and dismiss the suit filed by the plaintiff.
13. Per contra, the learned Counsel appearing for the cross-objector - plaintiff contends that the trial court has committed an error in holding issue No. 2 against the plaintiff. He further contends when the entire payment has been made by the plaintiff, there was no necessity for the trial court to direct the respondent-plaintiff to pay a sum of Rs. 4,50,000/- again. In the circumstances, he request the Court to allow the cross-objections. He further contends that the grounds urged by the appellants Counsel are untenable and contrary to the pleadings and evidence let in by them.
14. Having heard the Counsel for the parties, the following points would arise for our consideration in this appeal:
1) Whether the trial court was justified in granting the discretionary relief of specific performance in favour of the plaintiff in view of the finding of the trial court on issue No. 2 against the plaintiff?
2) Whether the finding of the trial court on issue No. 2 is just and proper?
3) Whether the Judgment and decree of the trial court is required to be confirmed and whether the cross-objection is required to be allowed?
15. In order to appreciate the contentions raised by both the parties, it would be useful for us, to refer to the evidence let in by the parties.
16. On behalf of the plaintiff, he alone has been examined. According to him, he came in contact with the defendant-1 through his brother who is a Developer residing in the same locality where the defendants are residing and that he agreed to purchase the suit property for Rs. 14,50,000/- and a sum of Rs. 50,000/- was paid as advance sale consideration. He further deposes that he had paid a sum of Rs. 4,50,000/- on 24.6.93 and an endorsement has been made as per Ex.P1(b). He further contends that after the institution of the suit, he has deposited the balance sale consideration of Rs. 9,50,000/- in Court and that he was ready and willing to perform his part of the contract. Therefore, he requested the Court to decree the suit. In the cross-examination he admits that he is a Pawnbroker by profession and he has maintained the books of account in respect of the transactions relating to Pawn brokerage and he further admits that he has maintained accounts in respect of all the transactions. According to him, on 24.6.93 he paid a sum of Rs. 4,50,000/-to the defendants in cash. He admits that in his account book there is an entry for having paid the said amount. He has denied the suggestion that Ex.P1(a)-Agreeemt and P1(b), the endorsement are created for the purpose of the suit. He has also denied the suggestion, defendants-1 and 2 never executed endorsement as per Ex.P1(a) and P1(b). He admits that Ex.P1 is written by one Mohan who is a bond writer and he does not no whether he is a licenced deed writer. He also denied the suggestion that the defendants had approached him for availing loan of Rs. 5,00,000/- and that he had lent only Rs. 50,000/- and promised to pay the balance of Rs. 4,50,000/- and obtained Ex.P1 and P1(a). He admits that Ex. P1 is attested by one Chandrashekar and Nagaraj and they were brought by his brother and they are alive. He further admits that before filing the suit he had addressed several letters to the defendants requesting them to execute a sale deed by receiving the balance amount. He further admits, that in the said letters he has not mentioned about payment of Rs. 4,50,000/-. He further admits, that he is not having any documents to show that he had handed over the draft sale deed and IT form No. 37. According to him, the draft sale deed and IT Form 37 were handed over to them two months after 31.12.92. He has also denied the suggestion on 23.6.93 he had not come to Bangalore and amount of Rs. 4,50,000/-was not paid to the defendants. He admits except he and his brother none were present on 24.6.93 when Rs. 4,50,000/- was paid. DW1 - defendant-2 in his examination-in-chief, has reiterated what has been stated in his written statement. According to him, agreement was executed only as a security for the loan to be. obtained by him and his wife from the plaintiff.
17. He has not been cross-examined except suggesting that Ex.P-1(a) has been signed by him and that plaintiff was ready to pay the balance sale consideration. Though DW-1 second defendant has denied the receipt of Rs. 4,50,000/- as further advance and the entry made therein in Ex.P-1(b), the counsel for the plaintiff has not cross-examined DW1 on this aspect. DW1 in his further examination-in-chief has stated that manipulation of Ex. P-1 endorsement as an interpolation and the payment of Rs. 4,45,000/- mentioned in the endorsement was noticed by him only after obtaining the certified copy of Ex. P-1. Though the defendants have contended that they have not received further advance of Rs. 4,50,000/- on 24.6.2003, the counsel has not chosen to cross-examine on this aspect. DW. is one Govinda Bhat who in his examination-in-chief has stated that he knows the plaintiff and defendant No. 1 and is aware of the transaction between the plaintiff and the defendant and the plaintiff had agreed to give the loan of Rs. 5,00,000/- and only a sum of Rs. 50,000/- was paid as advance and that there was no talk of sale of suit property. He has also been cross-examined, but nothing is elicited in his cross-examination to disbelieve his evidence. The trial court considering the evidence of PW1 and DW1 has came to the conclusion that the plaintiff has proved the execution of agreement dated 31.12.1991 since the defendants have executed the agreement and further held that the defendants did not prove that Ex.P-1 was executed by the defendant as a security to the loan to be advanced by the plaintiff to them.
18. On Issue No. 2 the court has come to the conclusion that considering the dispute between the parties the document in question was referred for scientific examination by a handwriting expert and that the handwriting expert has given an opinion casting doubt pertaining to payment of Rs. 4,50,000/-. The court has also came to the conclusion that since the endorsement has been made in the handwriting of the brother of the plaintiff and as he has failed to examine his brother, no payment has been made by the plaintiff to the defendant. Accordingly, Issue No. 2 is held against the plaintiff.
19. In order to come to the conclusion that a sum of Rs. 4,50,000/- has not been paid by the plaintiff to the defendant a strong reliance is made by the trial court in regard to various letters addressed by the plaintiff wherein the plaintiff has not mentioned about the said payment in those letters.
20. Having considered the findings of the trial court on issue No. 2, we are of the opinion that the trial court is justified in holding that the plaintiff has failed to prove issue No. 2. We have also perused the trial court records and there is a serious dispute between the plaintiff and defendant No. 1 in regard to the genuinity of the endorsement. The defendant has produced xerox copy of the agreement which is marked as Ex.D-1. On the back side of the agreement, there is also an endorsement dated 24.6.1993 which reads as hereunder:
On mutual consent, we have agreed to extend this agreement to a further period of six months from this date.
Signed by Susheelamma and G.Achutha Rao. From Ex.D-1 it is clear that there is no mention about the payment of Rs. 4,50,000/-. We have also perused Ex.P-1 and the endorsement on the back side of Ex.P-1 reads as under:
Received further Rs. 4.50 (four lakhs & fifty thousand only). On mutual consent, we have agreed to extend this agreement to a further period of 6 (six) months from this date.
Signed by Susheelamma and Achutha Rao. When we compare Ex.P-1(a) the endorsement on the back of Ex.P-1 and the endorsement Ex.D-1 which we have referred to earlier discloses that the first sentence under Ex.P-1(a) 'received further Rs. 4.50 (four lakhs and fifty thousand only)' this sentence is not there in Ex.D-1. We have also carefully-scrutinised the ink used under Ex.P-1 (a). The sentence reads 'Received further Rs. 4.50 (four lakhs & fifty thousand only)' is in a different ink and the same is interpolated in between the date 24.6.1993 and the first sentence of the endorsement as per Ex.D-1. From looking into the interpolation at Ex.P-1 (a), any man of prudence can say that the sentence 'received further Rs. 4.50 lakhs' is interpolated later and that at the time of making the endorsement on 24.6.1993, this sentence was not there. Considering Ex.D-1 and P-1(a) we are of the firm opinion that payment of Rs. 4,50,000/- as per the endorsement Ex.P-1(a) is manipulated and interpolated subsequently, to suit the convenience of the plaintiff. Our view is also strengthened by considering the correspondence which were taken place between the parties. Just prior to 24.6.1993, as per Ex.P-3 on 22.6.1993, the plaintiff has addressed a letter to the defendant showing his inclination to go for a registration. Subsequently, on 23.12.1993, he has addressed a letter Ex.P-5 to the first defendant stating that the first defendant has requested for time upto 24.12.1993 to produce the documents and that she had promised to arrange for registration before 31.12.1993 and that he had made necessary arrangement for money etc., and therefore, he has requested the first defendant to obtain income tax clearance. This letter is addressed by him on 24.12.1993 six months prior to Ex.P-1. In the said letter he has not mentioned payment made by him in a sum of Rs. 4,50,000/-.
21. Ex.P-7 is another notice dated 2.8.1994 issued by the first defendant. Even in the said notice, he has not mentioned about payment of further advance of Rs. 4,50,000/-on 24.6.1993 as per Ex.P-1(a). Ex.P-9 is a reply sent by defendant No. 1 to the advocate's letter dated 2.8.1994 as per reply sent by the plaintiff. Wherein the advocate of the first defendant has stated that the defendants have executed the agreement only as a security to the loan advanced by the plaintiff and that only a sum of Rs. 50,000/- has been received as loan and remaining loan of Rs. 4,50,000/- was agreed to be paid in the month of January 1993 and no further loan has been paid to her and she has denied the execution of the agreement of sale. Subsequently, as per Ex.P-10, the defendant through an advocate has sent a reply to the plaintiff's advocate by enclosing a cheque for Rs. 74,000/-. The plaintiff has admitted series of correspondence. But his advocate has not produced the copy of the legal notice. From this it is clear that the plaintiff for the reasons best known to him has not stated about the payment of Rs. 4,50,000/- said to have been paid by him to defendant No. 1 as per Ex.P-1(a) on 24.6.1993. If really the plaintiff had paid a sum of Rs. 4,50,000/- on 24.6.1993, he would have mentioned in the letters about the second advance made by defendant No. 1. Considering the opinion of the handwriting expert and comparing Ex.D-1 and P-1(a) we have come to the conclusion that the first sentence in Ex.P-1(a) is interpolated by the plaintiff without making any payment and the finding of trial court on Issue No. 2 is correct.
22. If the plaintiff has approached the court for grant of the relief of specific performance has approached the court with clean hands, the plaintiff is entitled for the relief of specific performance. The trial court having come to the conclusion that issue No. 2 is not proved by the plaintiff, granted discretionary relief of specific performance without considering the conduct of the plaintiff. The trial court, only on the ground that the defendants have failed to prove that Ex.P-1 came to be executed by them as security to receive the loan from the plaintiff, has granted the decree. The trial court has also proceeded with on the basis of the golden rule that the grant of specific performance is a and refusal is an exception, but the finding on issue No. 3 by the trial court has to be set aside only considering the conduct of the plaintiff. When the plaintiff has not approached the court with clean hands and has meddled with the document and when the trial court was of the view that without making payment of Rs. 4,50,000/- such an endorsement has been made, we are of the opinion that the trial court shall not have granted the decree of specific performance.
23. In addition to that we have observed in the evidence of PW1 that though he contends that he was ready and willing to perform part of the contract and that he was ready to pay the balance sale consideration from the date of agreement till the date of institution of the suit and even though he has admitted that he is an income tax assessee and all payments are entered in his cash book for the reasons best known to him, he has not produced the books of account. Admittedly, he is a resident of K6F and has established his shop in Bangalore City in Nagarthpet. The alleged transaction is of the year 1992. The suit is instituted in 1996 by paying a sum of Rs. 50,000/- and by playing fraud on defendants by interpolating the alleged payment of Rs. 4,50,000/-, the plaintiff has approached the court for grant of specific performance.
The trial court without considering the conduct of the plaintiff has granted the relief which according to us has to be set aside.
24. It is to be noted that when the defendants have contended that the document in question has been executed as a security to the loan to be advanced, as the attestors are close relatives of the plaintiff, there was no impediment for him to examine them. The learned Counsel for the plaintiff contends that the attestors being the relatives of the plaintiff, they cannot examine them. Be that as it may, in view of the conduct of the plaintiff as he has not approached the court with clean hands and as he has meddled with the suit documents and without making payment of Rs. 4,50,000/-, he has tried to play a fraud on the first defendant, we are of the opinion that the finding on the said point has to be reversed and the judgment and decree of the trial court are to be set aside.
25. Since the defendant has admitted the receipt of Rs. 50,000/- from the plaintiff, even though the plaintiff has not sought for refund of Rs. 50,000/- and considering the fact that the said amount of Rs. 50,000/- was paid in the year 1992, as the defendants have used for their legal necessities, we are of the opinion that the relief has to be granted for refund of the advance money to the plaintiff with interest by moulding the relief.
26. In the result, the appeal is allowed in part. The judgment and decree passed in O.S. No. 10553/96 by the City Civil & Sessions Judge, Mayo Hall, dated 2.1.2003 are hereby set aside. The suit filed by the respondent plaintiff for enforcement of the agreement dated 31.12.92 is hereby dismissed. Cross- objection filed by the respondents is dismissed. It appears that the respondents have deposited the amount of Rs. 9,50,000/- during the pendency of the suit and a sum of Rs. 4,50,000/- after the decree is passed by the trial court respondent is permitted to withdraw the said amount.
27. In the result, the appeal is allowed and Cross-objections is dismissed and the Judgment and decree passed in O.S. No. 10553/96 dt.2.1.2003 are hereby set aside and in modification of the decree, we direct the appellants-defendants to refund the amount of Rs. 50,000/- which has been received under Ex.P-1 as advance along with interest at 15% p.a. from 31.12.1992 till the date of deposit. Parties to bear their costs.