M.Manthaiyan v. C.Savarimuthu

JUDGMENT The Second Appeal is directed against the judgment and decree made in A.S.No.24 of 2018, dated 22.01.2019, on the file of the Additional District Court

(FTC), Theni, confirming the judgment and decree passed in O.S.No.96 of 2013, dated 22.01.2015, on the file of the Subordinate Court, Uthamapalayam.

¶2The appellant is the defendant. The respondent/plaintiff filed a suit in O.S.No.96 of 2013 before the Subordinate Court, Uthamapalayam seeking the relief of specific performance of the sale agreement dated 03.06.2011.

¶3For the sake of convenience and brevity, the parties will hereinafter be referred as per their status/ranking in their original suit.

¶4The case of the plaintiff in brief is as follows: The suit property is owned by the defendant. The defendant offered to sell the suit property and the plaintiff agreed to purchase the same and both of them entered into a sale agreement on 03.06.2011, whereunder they have fixed the sale consideration at Rs.3,10,000/- and the period of performance as two years. The plaintiff paid an advance amount of Rs.3,00,000/- to the defendant and agreed to pay the balance sale price of Rs.10,000/- before 02.06.2013. The defendant has handed over the original sale deed in respect of the suit property to the plaintiff. The plaintiff has always been ready and willing to pay the balance sale price and to get the sale deed executed. But the defendant was postponing the same on some pretext or the other. Hence, the plaintiff sent a legal notice dated

25.05.2013 to the defendant directing him to receive the balance sale price and to execute the sale deed. The defendant having received the notice on 28.05.2013, has neither sent any reply nor complied with the notice demand. Hence, the plaintiff was constrained to file the above suit seeking the relief of specific performance.

¶5The defence of the defendant in brief is as follows: The defendant borrowed a sum of Rs.3,00,000/- from the plaintiff on

03.06.2011 and executed a sale agreement as demanded by the plaintiff and also handed over the original sale deed to the plaintiff. The plaintiff is doing money lending business. The defendant has paid the interest at Rs.9,000/- per month till

03.12.2012. The defendant executed the sale agreement only as a security for the loan transaction. The plaintiff and his wife are in the habit of obtaining sale agreements as security for loan transaction. After the receipt of the legal notice, the defendant met the plaintiff and at that time, the plaintiff informed that it was only a formal notice and the agreement will be cancelled upon the receipt of the loan amount. Believing the words of the plaintiff, the defendant did not send any reply. The defendant is ready to pay the loan amount, but the plaintiff in an attempt to snatch the suit property filed the above suit. Hence, the suit is liable to be dismissed.

¶6The learned trial Judge, upon considering the pleadings of both sides, framed the following issues:

(i) Whether the plaintiff is entitled for the relief sought in the plaint?

(ii) Any other relief, the plaintiff is entitled to?

¶7During trial, the plaintiff examined himself as P.W.1 and his wife as P.W. 2 and exhibited 4 documents as Exs.A.1 to A.4. The defendant examined himself as D.W.1 and exhibited four documents as Exs.B.1 to B.4. The learned trial Judge, upon considering the pleadings and evidence both oral and documentary and on hearing the arguments of both sides, passed the judgment and decree dated

22.01.2015 granting the relief of specific performance as prayed for. Aggrieved by the said judgment and decree, the defendant preferred an appeal in A.S.No.24 of 2018 and the learned District Judge, Theni, upon considering the materials available on record and on hearing the arguments of both sides, passed the impugned judgment and decree dated 22.01.2015 dismissing the appeal and thereby confirming the judgment and decree passed by the trial Court. Challenging the dismissal of the first appeal, the defendant has preferred the present Second Appeal.

¶8At the time of admission, the following Substantial Questions of Law came to be formulated: "1.Whether the Courts below are right in concluding that the agreement, dated 03.06.2011 was not intended to operate as security for a loan transaction?

¶2Whether the Courts below were right in not adverting to the fact that almost entire sale consideration was paid on the date of the agreement and unusually long period of two years was fixed for payment of the balance, which necessarily indicates that the agreement was only to operate as security for the borrowing?

¶3Whether the Courts below were right in disbelieving Exhibits B.1 to B.4 on the ground that no one connected with the documents have been examined?"

¶9It is not in dispute that the suit property is owned by the defendant. According to the plaintiff, he and the defendant entered into a sale agreement dated 03.06.2011 under Ex.A.1 fixing the sale price at Rs.3,10,000/- and the period of performace as two years and he paid Rs.3,00,000/- towards advance on the date of agreement itself. However, it is the specific defence of the defendant that the sale agreement under Ex.A.1 was executed only as a security for the loan transaction, as the defendant borrowed a sum of Rs.3,00,000/- on 03.06.2011 and paid interest till 03.12.2012. The Courts below upon appreciation of the evidence have concurrently held that the execution of the sale agreement stands proved and that the plaintiff is entitled to a decree for specific performance. Moreover, both the Courts below have held that the plaintiff has proved his readiness and willingness to perform his part of the contract, as contemplated under Section 16(c) of the Specific Relief Act.

¶10It is settled law that in a suit for specific performance, the plaintiff must establish his readiness and willingness to perform his part of the contract as mandated under Section 16(c) of the Specific Relief Act. Such requirement is not a mere formality, but a condition precedent for granting the relief of specific performance. In the case on hand, a cursory perusal of the judgment of the Courts below, discloses that there is no independent discussion or clear finding regarding the readiness and willingness of the plaintiff. The only conclusion recorded are merely mechanical and did not reflect any application of mind to the evidence on record.

¶11Now turning to the nature of the transaction, the defence of the defendant is that the agreement was executed as a security for loan transaction, as rightly pointed out by the learned Counsel for the defendant, finds support from several surrounding circumstances. The payment of substantial portion of the alleged sale consideration at the inception, the stipulation of an unusually long period for performace, and the handing over of the original title deed are all factors, which are more consistent with a loan transaction than with a bonafide agreement of sale.

¶12As already pointed out, even according to the plaintiff, he paid a sum of Rs.3,00,000/-, being the entire sale consideration, and a period of two years was fixed for performance. The plaintiff, in his evidence, has attempted to explain the fixation of such a long period by stating that the defendant had expressed that he had no other house. However, as rightly pointed out by the learned counsel for the defendant, during the course of cross-examination of the defendant, a suggestion was put on behalf of the plaintiff to the effect that a period of two years was fixed to enable the defendant to purchase another house. The said suggestion runs contrary to the explanation now offered by the plaintiff in his evidence. " jhth fpiuaj; bjhifia itj;J BtW tPL thA;fBtz;Lk; vd;gjw;fhfjhd; 2 tUl fhy mtfhrk; fpiua xg;ge;jj;jpy; Bghlg;gl;lJ vd;why; rhpay;y." Thus, the plaintiff's own evidence stands inconsistent with the suggestion put forth by his side during the cross-examination of the defendant with regard to the fixation of the two-year period for performance.

¶13The defendant has produced the copy of the sale agreement cancellation deed dated 02.01.2013 entered into between the wife of the plaintiff (P.W.2) and one Sahaya Thiraviyam under Ex.B.1 and the copy of the sale agreement dated

17.04.2013 entered into between the plaintiff's wife and one Seeniammal under Ex.B.2. The defendant has also produced the copy of the sale agreement dated

23.06.2009 entered into beween himself and Uvari Anthony, along with the deed of cancellation dated 19.08.2010 under Exs.B.3 and B.4 respectively.

¶14The learned counsel for the defendant would contend that the evidence brought on record, particularly Exs.B.1 and B.2 evidencing similar transactions entered into by P.W.2 with third parties, lends further support to the defence set up by the defendant. However, the Courts below, on the ground that the parties to the documents under Exs.B.1 and B.2, namely, Sahaya Thiraviyam and Seeniammal, were not examined, held that the defendant had failed to prove the said documents and consequently rejected the evidence adduced on his side. In other words, the defence set up by the defendant came to be rejected primarily on the premise that the parties to the other agreements relied upon by him were not examined. However, it is pertinent to note that both P.W.1 as well as P.W.2, in their evidence, have categorically admitted the transactions covered under Exs.B.1 and B.2. P.W.1, in her evidence, would state that "vd; Chpy; cs;s rfhajputpak; tPl;il 30.11.2011 md;W &.2,10,000/-f;F fpiuak; Bgrpajhf brhy;yp ml;thd;!; 2 yl;rk; bfhLj;jjhf mtBuhL xU fpiua xg;ge;jk; vd; kidtp bgaUf;F gjpt[ bra;Bjdh vd;why; gjpt[ bra;Bjd;. Bkw;go fpiua xg;ge;jj;jpYk; fhy mtfhrk; kPj bjhif 10 Mapuj;Jf;Fg; Bghlg;gl;lJ vd;why; rhpjhd;. Bkw;go fpiua xg;ge;jj;jpw;F 2 tUl fhy mtfhrk; Bghlg;gl;lJ vd;why; mth; vd; cwtpdh; vd;gjhy; Bghlg;gl;lJ. ...................... mBjBghy; 17.04.13y; rPdpak;khs; vd;gth; tPl;ila[k; vd; kidtp bgahpy; fpiua xg;ge;jk; bra;Bjd; vd;why; rhpjhd. Bkw;go rPdpak;khs; tPl;ila[k; &. 2,25,000/-f;F fpiuak; Bgrp Kd; gzk; 2,10,000/- brYj;jg;gl;Ls;sJ vd;why; rhpjhd;. ..................... kPjp bjhif 15Mapuk; ghf;fp brYj;Jtjw;Fk; 2 tUl fhy mtfhrk; Bghlg;gl;lJ vd;why; rhpjhd;. ne;jf; fpiua xg;ge;jjpYk; 2 tUl fhy mtfhrk; Bghlg;gl;Ls;sJ vd;why; Bkw;go rPdpak;khSk; 2 tUlk; tPl;oy; nUg;gjhf Bfl;ljhy; Bghlg;gl;lJ. rPdpak;khs; Bkw;go fpiua xg;ge;j tPl;oy; fl;o jw;BghJk; trpj;J tUfpwhh; vd;why; rhpjhd;. ehd; fpiua xg;ge;jk; bra;a[k; BghJ rPdpak;khs; fl;o bfhz;L nUe;jhh; vd;why; rhpay;y. mth; fl;o Koj;Jtpl;lhh;. nd;Wtiu rPdpak;khs; kPJ fpiua xg;ge;jk; gpufhuk; gjpt[ bra;a[khW vt;tpj eltof;ifa[k; vLf;ftpy;iy vd;why; rhpjhd;."

¶15The plaintiff's wife P.W.2 in her cross-examination would admit "vA;fs; Ch; rfha jputpak; vd;gtuJ tPl;il ehA;fs; 30.11.11y ;&.2,10,000/- f;F fpiuak; Bgrp xg;ge;jk; Bghl;Blhk; vd;why; rhpjhd;. Kd; gzkhf &.2,00,000/- bfhLj;Bjhk; vd;why; rhpjhd;. fpiuaj;jpid gjpt[ bra;tjw;F 2 tUl fhy mtfhrk; rfha jputpak; Bfl;ljhy; bfhLj;Bjhk;. Rfha jputpaj;jplKk; fpiua xg;ge;jk; Bghl;lgpwF mth; brhj;J rk;ke;jg;gl;l gj;jpuj;ij thA;fp itj;Jf;bfhz;Blhk; vd;why; rhpjhd;. 2.1.13y; 2 tUl fhy mtfhrk; nUe;jBghJk; gzj;ij thA;fpf;bfhz;L fpiua xg;ge;jj;ij uj;J bra;Bjhk; vd;why; rhpjhd;. rfha jputpaj;jplKk; &.2,00,000/-j;ijj;jhd; jpUg;gp thA;fpBdhk;. ..................... vA;fs; Ch; ghz;o kidtp rPdpak;khs; vd;gth; tPl;ila[k; ehA;fs; fpiuak; BgrpBdhk;. rPdpak;khs;jhd; vd; tPl;il itj;Jf;bfhs;SA;fs; vd;W te;jhh;. 17.4.13 md;W &.2,25,000/- fpiuak; Bgrp &.2,10,000/-j;ij Kd; gzkhf bfhLj;Bjhk;. Bkw;go fpiuak; Bgrp rPdpak;khs; tPl;il fl;of;bfhz;oUe;jhh;fs; vd;why; rhpjhd;. jw;BghJ fl;o Koj;J rPdpak;khs; me;j tPl;oy; trpj;J tUfpwhh;. fpiuak; Bgrp Koj;jgpwF rPdpak;khs; tPl;il fl;of;bfhz;oUg;gJ Fwpj;J ehA;fs; vJt[k; Ml;Brgiz vJt[k; bra;Bjhkh vd;why; Ml;Brgiz bra;atpy;iy. rPdpak;khs; fl;oa tPL Mh;rp tPL vd;why; rhpjhd. rPdpak;khsplk; fpiuak ;xg;ge;jk; BghLk;BghJ 2 tUl fhy mtfhrk; Bghlg;gl;lJ vd;why; rhpjhd;. rfha jputpaj;Jld; fpiuak; xg;ge;jk; bra;a[k;BghJ fhy bfL 2 Mz;Lfs;jhd; Bghl;Blhk;. rPdpak;khSf;F ml;thd;!; bfhLj;jBghJk; mtuJ %yg;gj;jpuj;ij thA;fpf;bfhz;Ljhd; gzj;ijf; bfhLj;Bjhk;."

¶16The above categorical admissions made by the plaintiff and his wife (P.W.2) have a decisive bearing on the matter. The rejection of Exs.B.1 and B.2 by the Courts below, on the sole ground that the parties to those documents were not examined, is legally unsustainable. Once P.W.1 and P.W.2 have admitted the execution and existence of the said documents, the same stand duly proved and no further proof is required. The failure of the Courts below to accord due weight to such material evidence has resulted in a clear miscarriage of justice.

¶17Moreover, the Courts below appear to have erroneously shifted the burden of proof onto the defendant by expecting him to disprove the nature of the transaction. In a suit for specific performance, the burden squarely lies upon the plaintiff to establish the genuineness of the agreement and to prove compliance with the statutory requirements, including readiness and willingness. The approach adopted by the Courts below is thus contrary to the settled principles governing burden of proof.

¶18As rightly contended by the learned counsel for the defendant, Exs.B.1 and B.2, coupled with the admissions of P.W.1 and P.W.2, probabilise the defence set up by the defendant. However, the Courts below, merely referring to the recitals in Ex.A.1 and the evidence of D.W.1 acknowledging such recitals, proceeded to conclude that the agreement of sale under Ex.A.1 stood proved, without properly appreciating the totality of evidence on record.

¶19In view of the above, this Court has no hesitation in holding that the findings recorded by the Courts below are perverse, being vitiated by non-consideration of material evidence and failure to apply settled legal principles. Consequently, the judgments and decrees of the Courts below are liable to be set aside. Having regard to the facts and circumstances of the case, this Court holds that the defendant is entitled to costs throughout. Accordingly, the Substantial Questions of Law are answered in favour of the defendant.

¶20In the result, the Second Appeal is allowed and the judgment and decree made in A.S.No.24 of 2018, dated 22.01.2019, on the file of the Additional District Court (FTC), Theni, confirming the judgment and decree passed in O.S.No.96 of 2013, dated 22.01.2015, on the file of the Subordinate Court, Uthamapalayam are set aside. Consequently, the suit in O.S.No.96 of 2013 stands dismissed. The defendant is entitled to costs throughout. Consequently, the connected Civil Miscellaneous Petition is closed.

17.04.2026 NCC :Yes/No Index :Yes/No Internet : Yes/ No SSL To:

¶1The Additional District Court (FTC), Theni.

¶2The Subordinate Court, Uthamapalayam.

¶3The Section Officer, VR Section, Madurai Bench of Madras High Court, Madurai. K.MURALI SHANKAR,J. SSL S.A.(MD).No.589 of 2019

17.04.2026

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT RESERVED ON :06.02.2026 DELIVERED ON : 17.04.2026 CORAM: THE HONOURABLE MR.JUSTICE K.MURALI SHANKAR S.A.(MD).No.589 of 2019 and C.M.P.(MD)No.11939 of 2019 M.Manthaiyan : Appellant/Appellant/Defendant Vs. C.Savarimuthu : Respondent/Respondent/Plaintiff P RAYER : Second Appeal filed under Section 100 of the Civil Procedure Code, against the judgment and decree passed in A.S.No.24 of 2018, dated 22.01.2019, by the Additional District Judge (FTC), Theni partly confirming the judgment and decree, passed in O.S.No.96 of 2013, dated 22.01.2015 by the Sub Court, Uthamapalayam, Theni District. For Appellant : Mr.S.C.Herold Singh For Respondent : Mr.K.Prabhu