Invalid Sale Deed Agreement

Without valid agreement no specific relief can be sought for any relief of specific performance while the Agreement of Sale is not enforceable under Section 17 of the Specific Relief Act, 1963. The provisions of Section 17 of the Specific Relief Act in categorical term expressly state that a Contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor who does not have absolute title and right upon the party.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7835 OF 2014

(Arising out of SLP(C) NO. 24653 OF 2012)

PEMMADA PRABHAKAR & ORS. …APPELLANTS

Vs.

YOUNGMEN’S VYSYA ASSOCIATION & ORS. …RESPONDENTS

J U D G M E N T: V.GOPALA GOWDA, J.

1.       Leave granted.

2.        This appeal has been filed against the judgment and final order dated 04.11.2011 passed in the Second Appeal No. 815 of 2011 by the High Court of Judicature of Andhra Pradesh at Hyderabad, whereby the High Court has dismissed the Second Appeal.

3.       Certain relevant facts are stated for the purpose of appreciating the rival legal contentions urged on behalf of the parties with a view to examine the correctness of the findings and reasons recorded by the High Court in the impugned judgment.

     For the sake of brevity and convenience, the parties are referred to in this judgment as per the rank assigned to them in the original suit proceedings.

4.       The property bearing Door No. 20/42-1-9 with land measuring about 657-1/3rd sq. yards situated to the west of Vallabhai Street, Cinema Road, Kakinada (hereinafter, referred to as the ‘suit schedule property’) was the self acquired property of one Pemmada Venkateswara Rao. He died intestate and survived by wife Syama Sundari, three sons and three daughters (the defendant Nos. 1 to 6).

5.       The plaintiffs-the Youngmen’s Vyasa Association (who are the respondents herein), instituted O.S.No.267 of 1995 for the specific performance of Agreement of Sale dated 03.05.1993 against the defendants (the appellants herein). The plaintiffs alleged that the defendant Nos. 1 and 2, who are managing the suit schedule property, agreed to sell the same to plaintiff No. 1.

6.       According to the plaintiffs, the defendant Nos. 1 and 2 executed the Agreement of Sale dated 03.05.1993 in favour of plaintiff No. 1 agreeing to sell the suit schedule property at the rate of Rs.575/- per sq. yard, the total consideration of which was to be fixed later after taking the actual measurement. Later on, the total land value was fixed at Rs.3,77,967/- for 657-1/3 sq. yards. The defendant Nos. 1 and 2 received advance amount of Rs.5000/- and Rs.10,000/- also. Under the Agreement the plaintiff No. 1 agreed to pay Rs.1,70,000/- to the defendants within 10 days from the day of vacating the tenants from the suit schedule property. Rs.50,000/- was to be paid on 30.11.1993 and that the balance amount of Rs.1,50,000/- was to be paid by 30.3.1994. The defendant Nos. 1 and 2 agreed that they would obtain the signatures of their 3rd brother-the defendant No. 3 by 9.05.1993. Defendant Nos. 7 and 8 are the tenants in the sheds situated in the suit schedule property. The defendant Nos.1 & 2 stated that their sisters were married long ago therefore, they had no interest in the suit schedule property, and that they would also get the sisters’ signatures on the agreement.

7.       The 2nd Addl. Senior Civil Judge, Kakinada (the Trial Court) by his judgment dated 12.7.2006 dismissed O.S. No 267/95, in so far as the main relief for the specific performance of sale is concerned. The Trial Court has directed the defendants to refund Rs.5000/- with interest at the rate of 12% p.a. from 5.03.1993 till the date of realization and Rs.10,000/- with the interest rate at 12% p.a. from 6.08.1993 till the date of realization.

8.       The Trial Court after considering the oral and documentary evidence on record, observed that as the suit schedule property is adjacent to the plaintiff’s property, taking advantage of the financial difficulties of defendant Nos. 1 and 2, the plaintiffs attempted to grab the suit schedule property and dragged the defendants to the court of law.

9.       The Trial Court further held that the Agreement of Sale was not valid as the defendant Nos.3 to 6 and their mother did not give consent to sell the suit schedule property to the plaintiffs. Accordingly, the main relief for specific performance was rejected and the defendants were directed to refund the amount of advance sale consideration to the plaintiffs with interest at the rate of 12% p.a.

10.  Being aggrieved by the judgment and decree dated 12.7.2006 of the Trial Court, the plaintiffs filed an appeal being A.S. No. 269 of 2006 before the Court of 3rd Additional District Judge, Kakinada, the First Appellate Court.

11.  On 28.04.2010 the First Appellate Court allowed the appeal partly, directing the defendant Nos. 1, 2, 4 and 5 to execute the registered sale deed in favour of the plaintiff’s Association in respect of their 1/6th share each i.e. 4/6th share by receiving their respective shares of the balance sale consideration from the plaintiffs and modified the decree for specific performance of Agreement of Sale.

12.  The First Appellate Court vide its order dated 28.4.2010 held that the transaction between the parties is real sale transaction and not mere money transaction and the sale agreement is valid and binding between the parties and the plaintiffs are entitled for the first main relief of specific performance and directed defendant Nos. 1, 2, 4 and 5 to execute sale deed in respect of their 4 shares of the suit schedule property after receiving proportionate sale price.

13.  Being aggrieved by the judgment and decree dated 28.04.2010 of the First Appellate Court, the defendants preferred Second Appeal being S.A. No. 815 of 2011 before the High Court of Judicature of Andhra Pradesh at Hyderabad whereby the High Court vide order dated 4.11.2011 dismissed the Second Appeal which is impugned in this appeal.

14.  The High Court held that the approach of the First Appellate Court in granting the relief of specific performance directing defendants 1, 2, 4 and 5 to execute sale deed in respect of their shares, i.e. 4/6th share of the suit schedule property in favour of the plaintiffs on receipt of their respective balance consideration which stood deposited in the court, cannot be faulted with.

15.  It was further held by the High Court that the mother of the defendants was alive when the suit was instituted in 1995 and she died on 29.09.2005. She had one share and after her death, the property would be divided into 6 shares and the agreement was held as binding on the defendants 1, 2, 4 and 5. Therefore, the High Court upheld the decision of the First Appellate Court and moulded the relief in the above terms while granting decree of specific performance of the Agreement of Sale by executing the sale deed of their share in the property in favour of the plaintiffs.

16.  The following submissions were made by the learned counsel for both the parties in support of their claim and counter claim.

17.  On behalf of the defendant Nos.1 & 2, it is contended that their father Pemmada Venkateswara Rao was engaged in lathe works which incurred heavy loss and he was allegedly indebted to various creditors. They approached one Murali Krishna (who had acquaintance with them) who was the Secretary of the plaintiff Association to borrow some money. Taking advantage of their situation, the Secretary and the President of the Plaintiff Association obtained the signatures of defendant Nos. 1 and 2 on a blank sheet of paper and gave Rs.5000/- on 3.5.1993 and Rs.10,000/- on 6.8.1993 to them.

18.  It was further contended by the learned counsel that the defendants never intended to sell the suit schedule property and the transaction with the plaintiffs Association was only money transaction and was not a sale transaction with it. A separate written statement was filed by the 4th defendant to the same effect.

19.  It was further contended by defendant Nos. 1 to 6 that even on the date of execution of Agreement of Sale their mother was very much alive and, therefore in the absence of execution of Agreement of Sale by all the seven co-sharers of the suit schedule property the suit for specific performance does not lie. The learned counsel for the defendants placed reliance on the decisions of Andhra Pradesh High Court and this Court in the cases of Kommisetti Venkatasubbayya v. Karamestti Venkateswarlu (A.I.R. 1971 AP 279) and Lourdu Mari David & Ors. v. Louis Chinnaya Arogiaswamy & Ors. [ (1996) 5 SCC 589] in support of their claim.

20.  Further, they placed reliance upon the case of this Court in Rameshwar & Ors. v. Jot Ram & Anr.[(1976) 1 SCC 194]. In the said authority it has been held as follows:

“9…First, its bearing on the right of action, second, on the nature of the relief and third, on its impotence to create or destroy substantive rights. Where the nature of the relief, as originally sought, has become obsolete or unserviceable or a new form of relief will be more efficacious on account of developments subsequent to the suit or even during the appellate stage, it is but fair that the relief is moulded, varied or reshaped in the light of updated facts. Patterson illustrates this position. It is important that the party claiming the relief or change of relief must have the same right from which either the first or the modified remedy may flow. Subsequent events in the course of the case cannot be constitutive of substantive rights enforceable in that very litigation except in a narrow category (later spelt out) but may influence the equitable jurisdiction to mould reliefs. Conversely, where rights have already vested in a party, they cannot be nullified or negated by subsequent events save where there is a change in the law and it is made applicable at any stage. Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri falls in this category. Courts of justice may, when the compelling equities of a case oblige them, shape reliefs — cannot deny rights — to make them justly relevant in the updated circumstances. Where the relief is discretionary, courts may exercise this jurisdiction to avoid injustice. Likewise, where the right to the remedy depends, under the statute itself, on the presence or absence of certain basic facts at the time the relief is to be ultimately granted, the Court, even in appeal, can take note of such supervening facts with fundamental impact…” (Emphasis supplied)

21.  The High court held that defendants pleaded falsehood at the time of execution of the Agreement of Sale by stating that their mother had predeceasedtheir father. The agreement and the endorsement thereon made by defendant Nos.1 and 2 had swayed discretion of the High Court in favour of the plaintiffs which is an Association engaged in the welfare of the community.

22.  The High Court further held that the suit schedule property was not purchased for unlawful gain of an individual and that the First Appellate Court considered the entire evidence on record and exercised its sound jurisdiction and modified the judgment of the Trial Court by granting a decree of specific performance as per the terms stipulated therein.

23.  The High Court dismissed the second appeal without adverting to the substantial questions of law that were framed in the second appeal at the admission stage itself stating that there is no substantial question of law for its adjudication. The First Appellate Court and the Second Appellate Court committed serious error in law in not noticing the relevant important findings of fact recorded by the Trial Court on the contentious issues on proper appreciation of pleadings and evidence on record with reference to the legal submission made on behalf of the parties. The Trial Court after proper appreciation of evidence on record, particularly, Ex.-A1, the Agreement of Sale, has held that it is not a valid agreement and no rights can flow from it in favour of the plaintiffs in the light of the fact that the signatures of defendant Nos. 1 and 2 were obtained on different dates on blank papers as they were in financial crisis and that fact is proved by producing Exs.-B1 to B-8 to show that the entire family (defendant Nos. 1 to 6) were in financial crisis and they were forced to pay the debts to their creditors. Therefore, they were in urgent need of money and they approached the PW-1 for financial help, who obtained the signatures of defendant Nos. 1 and 2 on blank paper and the same was fabricated as a receipt. The said receipt was not signed by defendant Nos. 3 to 6. The mother of the defendant Nos. 1 and 2 is one of the co-sharers of the suit schedule property as a class-I legal heir to succeed to the intestate property of her deceased husband, which was his self acquired property left by him, as he had purchased the same vide Sale-Deed document No. 5174/1970 dated 24.11.1970 from his vendors. In fact, there is a reference made in this regard in the Agreement of Sale executed by defendant Nos. 1 and 2 to the effect that after demise of Pemmada Venkateswara Rao, the father of defendant Nos. 1 to 6, the property devolved upon them jointly and they are enjoying with absolute rights. As per Section 8 of the Hindu Succession Act, 1956 the general rules of succession would be applicable in the case of a male Hindu dying intestate, relevant portion of which reads as under :-

“8. General rules of succession in the case of males.- The property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter-

(a) Firstly, upon the heirs, being the relatives specified in class I of the Schedule;

XXX               XXX                   XXX”

 In the Schedule of the said Act, class I heirs are son, daughter, widow, mother and others. In view of the enumeration of the class I heirs in the Schedule, the mother and sisters of the defendant Nos. 1 and 2 are also co-sharers of the property left intestate by the deceased Pemmada Venkateswara Rao. As could be seen from the Agreement of Sale-Ex.-A1 undisputedly, the third brother and 3 sisters, (defendant Nos. 3 to 6) and their mother have not executed the Agreement of Sale in favour of the plaintiffs. Therefore, the same is not enforceable under Section 17 of the Specific Relief Act, 1963. The mother lived upto September, 2005, the aforesaid legal heirs of deceased Pemmada Venkateswara Rao got equal shares in the suit schedule property.

24.       It is further contended on behalf of the defendants that the First Appellate Court and the High Court have failed in not applying the legal principle laid down by this Court in the case of Lourdu Mari David & Ors. (supra), wherein this Court held that the party who seeks to avail of the equitable jurisdiction of a court and specific performance decree being equitable relief must come to the court with clean hands. In other words, the party who makes false allegations against the defendants does not come with clean hands and therefore, it is not entitled to the equitable relief of specific performance decree from the court.

25.     Another legal contention urged on behalf of the defendants is that the High Court has erroneously come to the conclusion on facts and evidence on record and it has affirmed the divergent findings of fact recorded by the First Appellate Court without examining and answering the substantial questions of law framed in the Second Appeal and it has erroneously dismissed the appeal holding that the suit schedule property was not purchased by the plaintiffs for unlawful gain of an individual. The said property is probably purchased by the plaintiffs to put it to use for the purpose of the community.

  The High Court without considering the legal submissions urged on behalf of the defendants adjudicated the rights of the parties ignoring certain facts, evidence on record and legal contentions urged. It has erroneously held that the plaintiffs are entitled for the relief of specific performance while the Agreement of Sale is not enforceable under Section 17 of the Specific Relief Act, 1963, in view of the fact that all the legal heirs of the deceased Pemmada Venkateswara Rao are not parties to the Agreement of Sale and the defendant Nos. 1 and 2 do not have absolute title and right upon the entire suit schedule property. Even assuming for the sake of argument that the Agreement of Sale is valid, the same could not have been enforced against the defendants as the plaintiffs have committed breach of the contract as agreed upon by them as per clause 2 of the penultimate paragraph Nos. 2 and 3 of the Agreement of Sale. The plaintiffs gave a sum of Rs.5,000/- & Rs. 10,000/- as an advance amount towards sale consideration and the remaining sale consideration, i.e.(i)an amount of Rs.1,70,000/- which was to be paid within 10 days from the day of vacating the tenants in the property, (ii) Rs.50,000/- to be paid on 30.11.1993 and the remaining sale consideration of Rs.1,50,000/- to be paid on or before 30.3.1994 was not paid to the defendant Nos. 1 and 2.

26.      It is also contended by the learned counsel that the First Appellate Court and the Second Appellate Court have not exercised their discretionary powers as required under Section 20(2) of the Specific Relief Act for decreeing the specific performance in favour of the plaintiffs, even though, the defendants have made out a case before the Trial Court that the plaintiffs are not entitled for the decree for specific performance. Therefore, the First Appellate Court and the Second Appellate Court have gravely erred in not exercising their discretionary power under Section 20(2) of the Specific Relief Act at the time of passing decree for specific performance in favour of the plaintiffs, which is not only erroneous in law but also vitiated in law and therefore, the same is liable to be set aside.

27.     On the contrary, the learned counsel for the plaintiffs has sought to justify the impugned judgment contending that the Second Appellate Court in exercise of its appellate jurisdiction after examining the facts and evidence on record has held that the substantial questions of law framed by the defendants in the second appeal, on the divergent findings of fact recorded by the First Appellate Court would not arise. Decreeing the suit by the First Appellate Court as prayed by the plaintiffs is correct as it has set aside the decree of the Trial Court. It is further urged that the High Court is right in dismissing the second appeal and therefore, the same does not call for interference by this Court as there is no substantial question of law which would arise for consideration. Therefore, the learned counsel for the respondent-plaintiffs prayed for dismissal of this civil appeal as the same is devoid of merit.

28.  With reference to the above said rival contentions, the following points would arise for our consideration :-

(1)  Whether the plaintiffs are entitled for the decree for specific performance of the Agreement of Sale (Ex.-A1) when Agreement of Sale entered between the plaintiffs and defendant Nos. 1 and 2 who do not have absolute title to the property?

(2) Whether in the absence of execution of the Agreement of Sale-Ex.-A1 by the other defendants/co-sharers is it valid, even assuming that Agreement of Sale is valid, there is breach of terms and conditions of the Contract on the part of the plaintiffs in not paying the sale consideration amount of Rs. 1,70,000/- within 10 days from the day of vacating the tenants, Rs.50,000/- on 30.11.1993 and an amount of Rs.1,50,000/- on or before 30.3.1994 to the defendants and plaintiffs are entitled for decree of specific performance of the Agreement of Sale?

(3) Whether the plaintiffs are entitled for discretionary relief of specific performance under Section 20(2) of the Specific Relief Act when it has not approached the court with clean hands?

(4) What relief?

Answer to Point No. 1

29.     It is an undisputed fact that the suit schedule property is self acquired property by late Pemmada Venkateswara Rao as he had purchased the said property vide Sale-Deed Document No.5174 of 1970 dated 24.11.1970 from his vendors. It is also an undisputed fact that the said property is intestate property. He is survived by his wife, 3 sons and 3 daughters. The said property devolved upon them in view of Section 8 of Chapter 2 of the Hindu Succession Act as the defendants are class I legal heirs in the suit schedule property. Undisputedly, the Agreement of Sale-Ex.-A1 is executed only by defendant Nos. 1 and 2. The 3^rd son, mother and 3 sisters who have got equal shares in the property have not executed the Agreement of Sale. In view of the matter, the Agreement of Sale executed by defendant Nos. 1 and 2 who have no absolute right to property in question cannot confer any right whatsoever upon the plaintiffs for grant of decree of specific performance of Agreement of Sale in their favour. The said agreement is not enforceable in law in view of Section 17 of the Specific Relief Act in view of right accrued in favour of defendant Nos. 3 to 6 under Section 8 of the Hindu Succession Act. The provisions of Section 17 of the Specific Relief Act in categorical term expressly state that a Contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor who does not have absolute title and right upon the party. It is worthwhile to extract Section 17 of the Specific Relief Act,1963 here :-

“17.-Contract to sell or let property by one who has no title, not specifically enforceable.- A contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor;

(a) who, knowing not to have any title to the property, has contracted to sell or let the property

(b) who, though he entered into the contract believing that he had a good title to the property, cannot at the time fixed by the parties or by the court for the completion of the sale or letting, give the purchaser or lessee a title free from reasonable doubt.”

In view of the aforesaid provisions of the Specific Relief Act, the Agreement of Sale entered between the plaintiffs and some of the co-sharers who do not have the absolute title to the suit schedule property is not enforceable in law. This aspect of the matter has not been properly appreciated and considered by both the First Appellate Court and the Second Appellate Court. Therefore, the impugned judgment is vitiated in law.

30.     Even assuming for the sake of argument that the agreement is valid, the names of three sons are mentioned in Agreement of Sale, out of whom the agreement is executed by defendant Nos. 1 and 2 and they assured that they would get the signatures of the 3rd brother namely, Srinivasa Rao and also the remaining 3 sisters. At the time of execution of this agreement signatures were not obtained. Therefore, the agreement is not executed by all the co-sharers of the property which fact is evident from the recitals of the document itself. Hence, the plaintiffs are not entitled for specific performance decree. This vital factual and legal aspect has been ignored by both the First Appellate Court and the Second Appellate Court. Therefore, the impugned judgment is vitiated both on facts and law. Accordingly, the point No. 1 is answered in favour of the defendants.

Answer to Point No. 2

31.      The second point is also required to be answered against the plaintiffs for the following reasons:-

         As could be seen from the Agreement of Sale document marked as Ex.-A1 and the pleadings of the parties payment of sale consideration was agreed to be paid to the defendant Nos. 1 and 2 as per following terms of the agreement :-

“… (i) an amount of Rs.1,70,000/- shall be paid by Vendee to Vendors within 10 days from the day of vacating the tenants in the property, (ii) Rs. 50,000/- shall be paid on 30.11.1993., (iii) the remaining sale consideration of Rs.1,50,000/- shall be paid on or before 30.3.1994.”

32.          It is an undisputed fact that except payment of Rs.5,000/- and Rs.10,000/- paid by the plaintiff No.1 to the defendant Nos. 1 and 2 according to the Agreement of Sale, the remaining installment i.e. an amount of Rs.1,70,000/- which was to be paid to the Vendors within 10 days from the day of vacating the tenants in the property was not paid. Even assuming that the amount could have been paid had the tenants vacated the schedule property then the remaining part of the sale consideration agreed to be paid as notified under clauses (ii) and (iii) as per aforesaid paragraph of the Agreement of Sale undisputedly not paid to the defendant Nos. 1 and 2. Therefore, there is breach of contract on the part of  the plaintiffs as could be seen from the agreement of sale regarding the payment of part sale consideration amount. For this reason itself plaintiffs are not entitled for a decree of specific performance.

Answer to the Point Nos. 3

33.             Point No. 3 is also answered in favour of the defendants for the following reasons:-

          It is an undisputed fact that the plaintiffs have not approached the Trial Court with clean hands. It is evident from the pleadings of the Agreement of Sale which is produced for the decree for specific performance of Agreement of Sale as the plaintiffs did not obtain the signatures of all the co-sharers of the property namely, the mother of the defendants, the third brother and 3 sisters. Therefore, the agreement is not enforceable in law as the persons who have executed the sale deed, did not have the absolute title of the property. Apart from the said legal lacuna, the terms and conditions of the Agreement of Sale for payment of sale consideration agreed to be paid by the first plaintiff in installments within the period stipulated as indicated above were not paid. The First Appellate Court and the High Court have not exercised their power under Section 20(2) of the Specific Relief Act which by itself is the substantial question of law which fell for consideration before the High Court as the First Appellate Court failed to consider this important aspect of the matter and exercised its power while determining the rights of the party, particularly, in the light of the unenforceable contract between the plaintiffs against the defendants as all of them are not parties to the Agreement of Sale document (Ex.-A1) and the executants viz. defendant Nos. 1 and 2 have not acquired absolute title to the property in question.Therefore, the impugned judgment is vitiated and liable to be set aside.

Answer to Point No. 4

34.           Though we have answered the questions of law framed in this appeal in favour of the defendants, the learned counsel for the defendants during the course of arguments, has offered some monetary compensation in favour of the plaintiffs if this Court set aside the impugned judgment and decree of specific performance granted in their favour. Though, the defendants on merits have succeeded in this case for the reasons recorded by us on the substantial questions of law that have been framed by us on appreciation of facts and legal evidence on record, having regard to the peculiar facts and circumstances of the case particularly, the execution of Agreement of Sale, Ex. A-1 by defendant Nos. 1 and 2 on 3.5.1993, after receiving part consideration of Rs.15,000/-, and the submission made by the learned counsel for the defendants, it would be just and proper for this Court to award a sum of Rs.6,00,000/- by lump-sum amount of compensation to the plaintiffs within 3 months from the date of receipt of a copy of this judgment as provided under Section 22 of the Specific Relief Act.

35.            Since, we have answered point Nos. 1 to 4 in favour of the defendants and against the plaintiffs, the appeal of the defendants must succeed. Accordingly, the impugned judgment and decree passed by the High Court in affirming the judgment and decree of the First Appellate Court, is set aside.

The judgment and decree of the Trial Court is restored with modification that the defendants shall pay a sum of Rs.6,00,000/- to the plaintiffs as lump sum compensation within 3 months from the date of receipt of copy of this order.

The appeal is allowed in the above said terms. No costs.

……………………………………………………………………J.

[DIPAK MISRA]

……………………………………………………………………J.

[V. GOPALA GOWDA]

New Delhi,

August 20,2014

NON JUDICIAL STAMP PAPERS DO NOT HAVE ANY EXPIRY PERIOD BEING USED FOR A DOCUMENT.

Head Note : Indian Stamp Act, 1899 nowhere prescribes any expiry date for use of a stamp paper. Section 54 merely provide that a person possessing a stamp paper for which he has no immediate use (which is not spoiled or rendered unfit or useless), can seek refund of the value thereof by surrendering such stamp paper to the Collector provided it was purchased within the period of six months next preceding the date on which it was so surrendered. The stipulation of the period of six months prescribed in section 54 is only for the purpose of seeking refund of the value of the unused stamp paper, and not for use of the stamp paper. Section 54 does not require the person who has purchased a stamp paper, to use it within six months. The stamp papers do not have any expiry period. Section 54 does not require the person who has purchased a stamp paper, to use it within six months. Therefore, there is no impediment for a stamp paper purchased more than six months prior to the proposed date of execution, being used for a document.

SUPREME COURT OF INDIA

CASE NO.: Writ Petition (civil) 290 of 2001

PETITIONER: Thiruvengada Pillai

RESPONDENT: Navaneethammal & Anr.

DATE OF JUDGMENT: 19/02/2008

BENCH: R. V. Raveendran & P.Sathasivam

J U D G M E N T : R. V. RAVEENDRAN, J.

1.     This appeal by special leave is by the plaintiff in a suit for specific performance - OS No.290/1980 on the file of District Munsiff, Tindivanam.

Pleadings

2.      In the plaint, the plaintiff (appellant) alleged that the first defendant (Adilakshmi) agreed to sell the suit schedule property to him under an agreement of sale dated 5.1.1980 for a consideration of Rs.3,000/-, and received Rs.2,000/- as advance. She agreed to execute a sale deed by receiving the balance consideration of Rs.1,000/- within three months. Possession of the suit property was delivered to him, under the said agreement. He issued a notice dated 14.2.1980 calling upon the first defendant to receive the balance price and execute the sale deed. The first defendant sent a reply denying the agreement. To avoid performing the agreement of sale, the first defendant executed a nominal sale deed in regard to the suit property in favour of the second defendant (first respondent herein), who was her close relative. The said sale was neither valid nor binding on him. On the said averments, he sought specific performance of the agreement of sale, against the defendant, alleging that he was ready and willing to perform his part of the contract.

3.      The defendants denied the allegation that the first defendant had executed an agreement of sale dated 5.1.1980 in favour of the plaintiff or that she had delivered possession of the suit property to him. They contended that plaintiff had concocted and forged the document with the help of his henchmen to defraud the defendants. They claimed that the first defendant had executed a valid sale deed dated 11.2.1980 in favour of the second defendant and had delivered possession of the suit property to her; and that the second defendant had put up a hut in the schedule property and was actually residing therein. The second defendant raised an additional contention that she was a bona fide purchaser for value and therefore, the sale in her favour was valid.

4.      During the pendency of the suit first defendant died, and the third defendant (second respondent herein) was impleaded as her legal representative, who adopted the written statement of the second defendant.

Issues and the Judgment

5.      On the said pleadings, three issues were framed by the trial court :

(i) whether the agreement put forth by the plaintiff was true or concocted ? (ii)whether the second defendant had purchased the suit property for valid consideration ? and

(iii) whether the plaintiff was entitled to the relief of specific performance ? The plaintiff examined himself as PW-1 and the scribe of the agreement (Ramaswami Pillai) as PW-2 and an attesting witness to the sale agreement (Venkatesha Pillai) as PW-3. The agreement of sale was exhibited as Ex. A-1. The notice and reply were marked as Ex. A2 and A4. The second defendant, (purchaser of the site), gave evidence as DW-1 and the third defendant, who was also a witness to the sale deed dated 11.2.1980, was examined as DW-2. The sale deed dated 11.2.1980 executed by first defendant in favour of second defendant was marked as Ex.B2 and previous title deed was exhibited as Ex. B4. The plaintiff and his witnesses gave evidence that the sale agreement was duly executed by first defendant in favour of plaintiff. The defendants gave evidence about the sale in favour of second defendant and denied execution of any agreement of sale in favour of plaintiff.

6.      The trial court after appreciating the evidence, dismissed the suit by judgment and decree dated 28.2.1984. It held that the agreement of sale put forth by plaintiff was false and must have been created after the sale on 11.2.1980 in favour of second defendant, by using some old stamp papers in his possession. The said finding was based on the following facts and circumstances :

(a)   The sale agreement (A-1) was not executed on currently purchased stamp paper, but was written on two stamp papers, one purchased on 25.8.1973 in the name of Thiruvengadam and another purchased on 7.8.1978 in the name of Thiruvengadam Pillai.

(b)  The two attestors to the agreement were close relatives of plaintiff. One of them was Kannan, brother of the plaintiff and he was not examined. The other was Venkatesa Pillai, uncle of plaintiff examined as PW3. The scribe (PW-2) was a caste-man of plaintiff. Their evidence was not trustworthy.

(c)   Though the agreement of sale recited that the possession of the suit property was delivered to plaintiff, no such possession was delivered. On the other hand, the second defendant was put in possession on execution of the sale deed and she put up a thatched hut in the schedule property and was in actual physical possession. This falsified the agreement.

(d)  If really there was an agreement of sale, in the normal course, the plaintiff would have obtained the title deeds from the first defendant. But the earlier title deeds were not delivered to him. On the other hand, they were delivered to the second defendant who produced them as Ex.B3 and Ex.B4.

(e)   In spite of defendants denying the agreement (Ex.A1), the plaintiff failed to discharge his onus to prove that execution of the agreement as he did not seek reference to a fingerprint expert to establish that the thumb impression on the agreement was that of the first defendant.

The first & second appeals

7.      Feeling aggrieved, the plaintiff filed an appeal before the Sub-Court, Tindivanam. The first appellate court allowed the plaintiff’s appeal by judgment dated 12.1.1987, held that the agreement of sale was proved and decreed the suit granting specific performance. The following reasons were given by the first appellant court in support of its finding :

(a)  The evidence of PW1 (plaintiff), the scribe (PW2) and the attestor (PW3) proved the due execution of the agreement by the first defendant. As the scribe (PW2) was not related to plaintiff and as PW3 was not a close relative of plaintiff, their evidence could not have been rejected.

(b)  The burden of proving that the agreement of sale was concocted and forged was on the defendants and they ought to have taken steps to have the document examined by a Finger Print expert, to establish that the disputed thumb mark in the agreement of sale (Ex.A1), was different from the admitted thumb mark of the first defendant in the sale deed (Ex.B2). They failed to do so.

(c)   There appeared to be no marked difference between the finger impression in the agreement of sale (Ex.A1) and the finger impression in the sale deed in favour of the second defendant (Ex.B2), on a perusal of the said two documents. Therefore, it could be inferred that first defendant had executed the agreement.

(d)  Execution of the agreement of sale on two stamp papers purchased on different dates, did not invalidate the agreement.

8.      Being aggrieved, the second defendant filed a second appeal. The High Court allowed the second appeal and dismissed the suit, by judgment dated 17.2.1999. The High Court while restoring the decision of the trial court held that the agreement of sale was not genuine for the following reasons:

(i)                 The first appellate court had placed the onus wrongly on the defendants to prove the negative. As the first defendant denied execution of the agreement, the burden of establishing the execution of document, was on the plaintiff. The plaintiff had failed to establish by acceptable evidence that Ex. A-1 was a true and valid agreement of sale. The evidence, examined as a whole, threw considerable doubt as to whether it was truly and validly executed.

(ii)              A perusal of the agreement (Ex.A1) showed that the thumb impression was very pale and not clear. The first appellate court could not, by a casual comparison of the disputed thumb impression in the agreement with the admitted thumb impression in the sale deed, record a finding that there were no marked differences in the thumb impressions in the two documents (Ex.A1 and Ex.B2). In the absence of an expert’s opinion that the thumb impression on the agreement of the sale was that of the first defendant, the first appellate court ought not to have concluded that the agreement of sale was executed by the first defendant.

(iii)            In the normal course, an agreement would be executed on stamp papers purchased immediately prior to the execution of the agreement. The fact that the agreement was written on two stamp papers bearing the dates 25.8.1973 and 7.8.1978 purchased in two different names showed that it was not genuine, but was anti-dated and forged.

(iv)            The attesting witnesses to the agreement of sale were close relatives of plaintiff. Their evidence was not trustworthy.

Points for consideration

9.      The said judgment of the High Court is challenged in this appeal by special leave. The appellant contended that having regard to the provisions of Evidence Act, 1872, there was nothing improper in the first appellate court comparing the disputed thumb impression in Ex. A-1 with the admitted thumb impression of first defendant in Ex. B-2; and the finding of the first appellate court on such comparison, that there were no marked differences between the two thumb impressions, being a finding of fact, was not open to interference in second appeal. It was next contended that the execution of the agreement of sale was duly proved by the evidence of plaintiff (PW1), the scribe (PW-2) and one of the attesting witnesses (PW3). It was pointed out there was no evidence to rebut the evidence of PW1, PW2 and PW3 regarding due execution as first defendant died without giving evidence, and as the defendants did not seek reference to a finger print expert to prove that the thumb impression on the agreement of sale was not that of first defendant. It was submitted that an agreement cannot be doubted or invalidated merely on account of the fact that the two stamp papers used for the agreement were purchased on different dates. The Appellant therefore submitted that the sale agreement was duly proved.

10.             On the contentions urged, the following questions arise for consideration :

(i)                Whether the agreement of sale executed on two stamp papers purchased on different dates and more than six months prior to date of execution is not valid?

(ii)              Whether the first appellate court was justified in comparing the disputed thumb impression with the admitted thumb impression and recording a finding about the authenticity of the thumb impression, without the benefit of any opinion of an expert?

(iii)            Whether the High Court erred in reversing the judgment of the first appellate court in second appeal?

Re : Question (i)

11.             The Trial Court and the High Court have doubted the genuineness of the agreement dated 5.1.1980 because it was written on two stamp papers purchased on 25.8.1973 and 7.8.1978. The learned counsel for first respondent submitted that apart from raising a doubt about the authenticity of the document, the use of such old stamp papers invalidated the agreement itself for two reasons. Firstly, it was illegal to use stamp papers purchased on different dates for execution of a document. Secondly, as the stamp papers used in the agreement of sale were more than six months old, they were not valid stamp papers and consequently, the agreement prepared on such ’expired’ papers was also not valid. We will deal with the second contention first. The Indian Stamp Act, 1899 nowhere prescribes any expiry date for use of a stamp paper. Section 54 merely provides that a person possessing a stamp paper for which he has no immediate use (which is not spoiled or rendered unfit or useless), can seek refund of the value thereof by surrendering such stamp paper to the Collector provided it was purchased within the period of six months next preceding the date on which it was so surrendered. The stipulation of the period of six months prescribed in section 54 is only for the purpose of seeking refund of the value of the unused stamp paper, and not for use of the stamp paper. Section 54 does not require the person who has purchased a stamp paper, to use it within six months. Therefore, there is no impediment for a stamp paper purchased more than six months prior to the proposed date of execution, being used for a document.

12.             The Stamp Rules in many States provide that when a person wants to purchase stamp papers of a specified value and a single stamp paper of such value is not available, the stamp vendor can supply appropriate number of stamp papers required to make up the specified value; and that when more than one stamp paper is issued in regard to a single transaction, the stamp vendor is required to give consecutive numbers. In some States, the rules further require an endorsement by the stamp vendor on the stamp paper certifying that a single sheet of required value was not available and therefore more than one sheet (specifying the number of sheets) have been issued to make up the requisite stamp value. But the Indian Stamp Rules, 1925 applicable to Tamil Nadu, do not contain any provision that the stamp papers of required value should be purchased together from the same vendor with consecutive serial numbers. The Rules merely provide that where two or more sheets of paper on which stamps are engraved or embossed are used to make up the amount of duty chargeable in respect of any instrument, a portion of such instrument shall be written on each sheet so used. No other Rule was brought to our notice which required use of consecutively numbered stamp papers in the State of Tamil Nadu. The Stamp Act is a fiscal enactment intended to secure revenue for the State. In the absence of any Rule requiring consecutively numbered stamp papers purchased on the same day, being used for an instrument which is not intended to be registered, a document cannot be termed as invalid merely because it is written on two stamp papers purchased by the same person on different dates. Even assuming that use of such stamp papers is an irregularity, the court can only deem the document to be not properly stamped, but cannot, only on that ground, hold the document to be invalid. Even if an agreement is not executed on requisite stamp paper, it is admissible in evidence on payment of duty and penalty under section 35 or 37 of the Indian Stamp Act, 1899. If an agreement executed on a plain paper could be admitted in evidence by paying duty and penalty, there is no reason why an agreement executed on two stamp papers, even assuming that they were defective, cannot be accepted on payment of duty and penalty. But admissibility of a document into evidence and proof of genuineness of such document are different issues.

13.             If a person wants to create or a back-dated agreement, the first hurdle he faces is the non-availability of stamp paper of such old date. Therefore tampering of the date of issue and seal affixed by the stamp vendor, as also the entries made by the stamp vendor, are quite common in a forged document. When the agreement is dated 5.1.1980, and the stamp papers used are purchased in the years 1973 and 1978, one of the possible inferences is that the plaintiff not being able to secure an anti-dated stamp paper for creating the agreement (bearing a date prior to the date of sale in favour of second defendant), made use of some old stamp papers that were available with him, to fabricate the document. The fact that very old stamp papers of different dates have been used, may certainly be a circumstance that can be used as a piece of evidence to cast doubt on the authenticity of the agreement. But that cannot be a clinching evidence. There is also a possibility that a lay man unfamiliar with legal provisions relating to stamps, may bona fide think that he could use the old unused stamp papers lying with him for preparation of the document and accordingly use the old stamp papers.

Re : Point No.(ii)

14.             Section 45 of the Indian Evidence Act, 1872 relates to ’opinion of experts’. It provides inter alia that when the court has to form an opinion as to identity of handwriting or finger impressions, the opinion upon that point of persons specially skilled in questions as to identity or handwriting or finger impressions are relevant facts. Section 73 provides that in order to ascertain whether a finger impression is that of the person by whom it purports to have been made, any finger impression admitted to have been made by that person, may be compared with the one which is to be proved. These provisions have been the subject matter of several decisions of this Court.

14.1.     In The State (Delhi Administration) v. Pali Ram [1979 (2) SCC 158] this Court held that a court does not exceed its power under section 73 if it compares the disputed writing with the admitted writing of the party so as to reach its own conclusion. But this Court cautioned :

"Although there is no legal bar to the Judge using his own eyes to compare the disputed writing with the admitted writing, even without the aid of the evidence of any handwriting expert, the Judge should, as a matter of prudence and caution, hesitate to base his finding with regard to the identity of a handwriting which forms the sheet-anchor of the prosecution case against a person accused of an offence, solely on comparison made by himself. It is therefore, not advisable that a Judge should take upon himself the task of comparing the admitted writing with the disputed one to find out whether the two agree with each other; and the prudent course is to obtain the opinion and assistance of an expert."

The caution was reiterated in O. Bharathan vs. K. Sudhakaran \026 1996 (2) SCC 704. Again in Ajit Savant Majagvai v. State of Karnataka [1997 (7) SCC 110] referring to section 73 of the Evidence Act, this Court held

"The section does not specify by whom the comparison shall be made. However, looking to the other provisions of the Act, it is clear that such comparison may either be made by a handwriting expert under Section 45 or by anyone familiar with the handwriting of the person concerned as provided by Section 47 or by the Court itself. As a matter of extreme caution and judicial sobriety, the Court should not normally take upon itself the responsibility of comparing the disputed signature with that of the admitted signature or handwriting and in the event of the slightest doubt, leave the matter to the wisdom of experts. But this does not mean that the Court has not the power to compare the dispute signature with the admitted signature as this power is clearly available under Section 73 of the Act."

14.2.     In Murari Lal v. State of Madhya Pradesh - 1980 (1) SCC 704, this Court indicated the circumstances in which the Court may itself compare disputed and admitted writings, thus :

"The argument that the court should not venture to compare writings itself, as it would thereby assume to itself the role of an expert is entirely without force. Section 73 of the Evidence Act expressly enables the court to compare disputed writings with admitted or proved writings to ascertain whether a writing is that of the person by whom it purports to have been written. If it is hazardous to do so, as sometimes said, we are afraid it is one of the hazards to which judge and litigant must expose themselves whenever it becomes necessary. There may be cases where both sides call experts and the voices of science are heard. There may be cases where neither side calls an expert, being ill able to afford him. In all such cases, it becomes the plain duty of the court to compare the writings and come to its own conclusions. The duty cannot be avoided by recourse to the statement that the court is no expert. Where there are expert opinions, they will aid the court. Where there is none, the court will have to seek guidance from some authoritative textbook and the court’s own experience and knowledge. But discharge it must, its plain duty, with or without expert, with or without other evidence."

The decision in Murari Lal (supra) was followed in Lalit Popli v. Canara Bank & Ors. [2003 (3) SCC 583].

15.         While there is no doubt that court can compare the disputed handwriting/signature/finger impression with the admitted handwriting/ signature/finger impression, such comparison by court without the assistance of any expert, has always been considered to be hazardous and risky. When it is said that there is no bar to a court to compare the disputed finger impression with the admitted finger impression, it goes without saying that it can record an opinion or finding on such comparison, only after an analysis of the characteristics of the admitted finger impression and after verifying whether the same characteristics are found in the disputed finger impression. The comparison of the two thumb impressions cannot be casual or by a mere glance. Further, a finding in the judgment that there appeared to be no marked differences between the admitted thumb impression and disputed thumb impression, without anything more, cannot be accepted as a valid finding that the disputed signature is of the person who has put the admitted thumb impression. Where the Court finds that the disputed finger impression and admitted thumb impression are clear and where the court is in a position to identify the characteristics of finger prints, the court may record a finding on comparison, even in the absence of an expert’s opinion. But where the disputed thumb impression is smudgy, vague or very light, the court should not hazard a guess by a casual perusal. The decision in Muralilal (supra) and Lalit Popli (supra) should not be construed as laying a proposition that the court is bound to compare the disputed and admitted finger impressions and record a finding thereon, irrespective of the condition of the disputed finger impression. When there is a positive denial by the person who is said to have affixed his finger impression and where the finger impression in the disputed document is vague or smudgy or not clear, making it difficult for comparison, the court should hesitate to venture a decision based on its own comparison of the disputed and admitted finger impressions. Further even in cases where the court is constrained to take up such comparison, it should make a thorough study, if necessary with the assistance of counsel, to ascertain the characteristics, similarities and dissimilarities. Necessarily, the judgment should contain the reasons for any conclusion based on comparison of the thumb impression, if it chooses to record a finding thereon. The court should avoid reaching conclusions based on a mere casual or routine glance or perusal.

16.         In this case the first defendant had denied having put her finger impression on Ex. A-1. She died during the pendency of the suit before her turn came for giving evidence. The High Court having examined the document has clearly recorded the finding that the thumb mark in Ex. A-1 was pale (that is light) and not clear. The document though dated 1980, was executed on two stamp papers which were purchased in 1973 and 1978. Contrary to the recital in the agreement that possession had been delivered to the plaintiff, the possession was not in fact delivered to plaintiff, but continued with the first defendant and she delivered the possession to the second defendant. The title deeds were not delivered to plaintiff. The attesting witnesses were close relatives of plaintiff and one of them was not examined. The scribe’s evidence was unsatisfactory. It was also difficult to believe that the first defendant, an illiterate old woman from a village, would enter into an agreement of sale on 5.1.1980 with plaintiff, and even when he is ready to complete the sale, sell the property to someone else hardly a month thereafter, on 11.2.1980. In this background, the finding by the first appellant court, recorded without the benefit of any expert opinion, merely on a casual perusal, that there appeared to be no marked differences between the two thumb impressions, and therefore Ex. A-1 (sale agreement) must have been executed by first defendant, was unsound. The High Court was justified in interfering with the finding of the first appellate court that the Ex.A1 was executed by first defendant.

Re : Point No.(iii)

17.         The trial court had analyzed the evidence properly and had dismissed the suit by giving cogent reasons. The first appellate court reversed it by wrongly placing onus on the defendants. Its observation that when the execution of an unregistered document put forth by the plaintiff was denied by the defendants, it was for the defendants to establish that the document was forged or concocted, is not sound proposition. The first appellate court proceeded on the basis that it is for the party who asserts something to prove that thing; and as the defendants alleged that the agreement was forged, it was for them to prove it. But the first appellate court lost sight of the fact that the party who propounds the document will have to prove it. In this case plaintiffs came to court alleging that the first defendant had executed an agreement of sale in favour. The first defendant having denied it, the burden was on the plaintiff to prove that the first defendant had executed the agreement and not on the first defendant to prove the negative. The issues also placed the burden on the plaintiff to prove the document to be true. No doubt, the plaintiff attempted to discharge his burden by examining himself as also scribe and one of the attesting witnesses. But the various circumstances enumerated by the trial court and High Court referred to earlier, when taken together, rightly create a doubt about the genuineness of the agreement and dislodge the effect of the evidence of PW 1 to 3. We are therefore of the view that the decision of the High Court, reversing the decision of the first appellate court, does not call for interference.

18.         We, therefore, find no merit in this appeal and the same is accordingly

dismissed. Parties to bear their respective costs.