REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.    1784         OF 2009 (Arising out of SLP (C) No.12154 of 2007)

Vimal Chand Ghevarchand Jain & Ors. … Appellants

Versus

Ramakant Eknath Jajoo … Respondent

J U D G M E N T

S.B. Sinha, J.

1. Leave granted.

2. Plaintiff is the appellant before us.   

Father of the respondent was owner of four godowns and the land

surrounding them admeasuring 1 acre and 4 guntas being Survey No.462,

situated  at  Village  Saikheda,  Taluka  Niphad,  District  Nasik.   The  said

godowns were numberd as Grampanchayat No.753 to 761.  

Indisputably,  a  deed  of  sale  was  executed  by  the  father  of  the

respondent  in  favour  of  Vimal  Chand  Ghevar  Chand  Jain  &  Co.,  a

partnership  firm,  on  or  about  29.6.1974.    The  said  deed  of  sale  was

registered at Mumbai.  Respondent himself was a witness to the said deed of

sale.   

On  or  about  1.7.1978,  the  possession  of  the  said  property  was

allegedly handed over to the father  of the respondent as a licensee at an

agreed licence fee of Rs.1,257.50 per month.  The said partnership firm was

dissolved  pursuant  whereto  the  appellant  became the  owner  of  the  said

property.   Appellants  contend  that  the  respondent  had  made  payments

towards  licence  fee  by  a  cheque  but  when  deposited,  the  same  was

dishonoured.   

On  the  said  contention,  appellant  filed  a  suit  for  recovery  of

possession which was marked as Special Suit No.330 of 1987 praying, inter

alia, for the following reliefs :

(a) That  it  be declared that  the Defendant  has no  right,  title  or  interest  of  any  nature whatsoever in respect of the property, viz., being the plot of land admeasuring one acre four gunthas or thereabouts, that is 5,324 sq. yards (44 gunthas x 121 sq. yds.) equivalent to  4451.53  sq.  meters,  along  with  6  (six) corrugated  iron-sheet  godowns,  one  house

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and  one  well  thereon,  known  as Kandechichawli situated at Gram Panchayat Nos.753  to  761  in  the  village  Saykheda, Sub-District  Niphad,  District  Nasik  or  say part thereof, or to store or keep any goods, articles  or  things  therein  or  to  use,  enter upon  or  remain upon  the  said  property  or any part thereof, and that the Defendant is in wrongful  use  and  occupation  of  the  said property.

(b) That  the  Defendant  be  ordered  to  remove himself,  his  servants,  agents  and  all  his goods,  articles  and  things  from  the  said property.

(c) That the Defendant by himself, his servants and  agents  or  otherwise  howsoever  be restrained  by  a  perpetual  order  and injunction of this honourable Court from in any manner  storing  or  keeping any goods, articles  or  things  or  using,  occupying  or entering  upon  or  remaining  in  use  and occupation of the said property or any part thereof.

(d) That the Defendant be ordered and decreed to  pay  to  the  Plaintiffs  the  sum  of Rs.45,270/-  being  the  arrears  of  storage charges and/or compensation for the period of three years prior to the institution of the suit  at  the  rate  of  Rs.1,257.50  per  month with  interest  on  Rs.45,270/-  at  the  rate  of 18% per annum from the date  of  filing of the suit  till  the Defendant  remove himself, his  servants  and  agents  and  his  goods, articles and things from the said property.  

(e) That pending the hearing and final disposal of the suit, the court receiver or some other fit and proper be appointed Receiver of the

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said property, with all powers under Order 40, Rule 1 of the Code of Civil Procedure.

(f) That pending the hearing and final disposal of  the  suit,  the  Defendant  by  himself,  his servants and agents or otherwise howsoever, be restrained by an Order and Injunction of this  Hon’ble  Court,  from  in  any  manner, storing  or  keeping  any  goods,  articles  or things  or  using  or  entering  upon  or remaining in use or occupation of the said property or any part thereof.

(g) That pending the hearing and final disposal of the suit, the Defendant, his servants and agents  or  otherwise  howsoever,  be restrained by an order and Injunction of this Hon’ble Court from in any manner dealing with  or  disposing  of,  or  alienating  or encumbering  or  creating  any right,  title  or interest  in favour  of any one in respect  of the said property or any part thereof.”

3. Respondent,  in  his  written  statement,  denied  and disputed  the said

transactions.  We may notice some of the statements made therein :

“25. The title  of the suit  property was with my Advocate.   After  that  I  have  received  the title.  Plaintiffs have never objected to that. I  was  never  the  owner  nor  having possession  after  this  suit.   I  have  made  a wrong application to put my name as owner. And  enclosed  statement  in  English. Plaintiffs  are  calling  this  statement  in English as Sale Deed.  Neither me nor my father  have  executed  any  Sale  Deed.   We have never sold the suit property.   

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26. Thinking  that,  I  store  onions  in  the  suit  property  the plaintiffs have created a wrong story of storage charges and  asked  for  a  big  amount  from  me  which  is  not acceptable  by  me.   Plaintiffs  are  doing  business  of earning  interest  illegally  for  which  they  use  various names.  Various firms are being opened.  All these firms and names are bogus.  Few days back plaintiffs  in the plaint.   One  bogus  firm  was  opened  in  1981  by  the plaintiffs.  Some relations have been shown by that firm with  me.   That  firm  has  given  some  cheques  to  me. Some  entries  have  been  made  by  that  firm  for  that cheque given to me.  After some neat calculation it has been shown that  the  cheque is  for storage charges has started in the plaints.  Plaintiffs have collected a lot of information on about me.  I understand that plaintiffs are making open plans and skillfully make some transactions and showing some relation file suits and get orders.

27. The relation of licensor and licensee was never existing between us and no Deed has been executed.  Plaintiffs have applied for title name in record of rights after filing the suit and thus various wrongs have been committed. Plaintiffs have pressurized my servants and given them attraction  of  money  and  succeeded  obtaining  various xerox  copies  of  some  papers.   After  arranging  many things  various  photos  have  been  taken.   Besides  this, plaintiffs are doing various other business.

28. Plaintiffs have arranged to pay taxes of the suit property, and paid the taxes of Saikheda on 11.1.88 and 23.1.88 and received the receipt.  The cashier accepting the tax does not  have a responsibility of inquiring that who is paying the tax and is been never inquired..

29. Plaintiffs have been recorded in cross-examination at the time of making application from title names in record of rights at Saykheda.  At that time plaintiffs have accepted many many things which are stated here.  At that time, false  Sale  deed  was  produced  which  plaintiffs  have stated as registered.  Revenue authorities have ordered to mention plaintiffs names in the column of ‘other rights’.

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Out of such other rights plaintiffs does not get any right to the property.  Further, order of revenue authorities is illegal, and is out of the law and out  of their rights of making order  and such order  is  a  nullity.   Because  of such order plaintiffs does not get any rights and therefore plaintiffs suit is wrong not tenable.”

4. Before  the  learned  Trial  Judge,  the  defendant-respondent  did  not

examine himself.  He, however, examined three witnesses in support of his

plea with regard to possession.   

The learned Trial Judge, inter alia, framed the following issues :

“1. Does  plaintiff  prove  that  was registered as M/s Kewalchand Baniram & sons

In affirmative

2. Does the plaintiff prove that he  purchased  the  suit property  by  registered  sale deed  dated  29.6.78  as alleged?

In Negative

3. Does plaintiff prove that the defendant  is  licensee  and that  he  was  paying  the storage  charges  Rs.1257.50 ps. P.m. to the plaintiff?

In negative”

5. One of the issues, as noticed hereinbefore, framed is as to whether the

plaintiff purchased the property.  The learned Trial Court held that Sections

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91 and 92 of the Indian Evidence Act has no application.  It was opined that

the circumstantial evidences show that the sale deed was executed only by

way of a money lending transaction.  It was held that the appellants have

failed to prove that the suit property was purchased by them by reason of the

aforementioned deed of sale dated 29.6.1978.   

On the said findings, the suit was dismissed.   

An appeal was preferred by the appellant  thereagainst.   During the

pendency of the said appeal, the written statement was amended by inserting

paragraph 25A therein which reads as under :

“25A)Along  with  the  said  sale  deed  of  the  said dated 29/6/1978 this defendant is saying this also that  this  sale  deed  is  nominal  and  of  the  bogus nature that was never implemented and through it the plaintiff had never got any type of ownership and he is not getting it and the same was not in the mind of the father of plaintiff and defendant and never he was not keeping this in his mind.  The possession of the property was never given to the appellant.  In this matter the true fact is such that the firm of the plaintiff namely M/s. Ghevarchand Bhaniram & Co.  and  its  partners  are  doing  the business of money lending.  His other firms also doing the money lending business.  The Firm and its partners and their other firm and the father of the  defendant  in  between  them  many transactions/dealings was taken place and now it is also inexistence.  There was no reason to purchase the property by the said firm afsiya Kheda and not at all.  There is a necessity of the money amount to

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the father of the defendant.  Therefore, the father of  the  defendant  had  taken  the  amount  of Rs.50,000/-  (Fifty  Thousand  Rupees)  as  a  loan from the  said  firm and  its  co-sharers.   And  the mortgage of  the said amount  is  given in  writing the said sale deed at Bombay by the father of the defendant.   There  is  no  intention  of  the implementation of that sale deed and never and the same  was  not  in  the  mind  of  both  the  persons (plaintiff  and  defendant)  and  never  it  in  their minds at all.  And according to it the possession is not  given  and  never  possession  is  taken.   The returning back of the payment of loan is done in time  to  time.   In  this  way the  said  sale  deed  is mortgaged  as  the  money  lender  transaction  and through it the plaintiff or its firm had not obtained any ownership and they did not obtained its actual possession.  Therefore, the contents written in the said contents written in the said sale deed are not admitted by the defendant and he is not accepted it and  before  it  the  suit  which  is  brought  by  the plaintiff cannot be maintained.  Therefore, the suit of the plaintiff should be cancelled.”

Respondent examined himself thereafter.  He, inter alia, by way of an

affidavit, stated :

“3. Appellant/plaintiffs  have  filed  the  present suit on the sale deed dated 29/6/1978 and plaintiff claim to  have  owner  by  means  of  the  said  sale deed  and  claim that  the  respondent  are  licensee and the suit is filed for obtaining possession from respondents.   I  have  in  my  written  statement denied  plaintiffs  claim  of  ownership  and  have claimed that  said sale  deed is  sham and without effect  and  plaintiffs  do  not  get  any  ownership

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rights  because  of  the  said  sale  deed.   Said  sale deed  is  without  any  legal  effect  and  is  sham document  in  the  nature  of  security  for  money lending.

4. In respect to the sale deed dated 29.6.1978 present  respondent  states  that  said  sale  deed  is sham  and  was  never  given  effect  to  and  the plaintiff did not and presently do not acquire any ownership  rights  by  the  said  sale  deed  and respective  fathers  of  the  plaintiff  and  the respondent had no such intention.  The possession of the property had never been handed over to the appellant.   The  fact  is  that  plaintiff’s  firm M/s. Ghevarchand  Bhaniram and  Co.  and  its  partners carry the business of money lending.  There other firm  also  carries  the  same  business  of  money lending.   There were and there are many money lending  transactions  between  the  said  firms  and defendant’s  father.   Said  firm had  no  reason  to purchase the property at Saikheda.  As defendant’s father was in need of money he had borrowed as a loan a sum of Rs.50,000/- from said firm and its partners  and defendant’s  father  had executed  the said  so  called  sale  deed  dated  29.6.1978  as  a security for the said loan amount.  As the plaintiff firm and  its  partners  have  no  license  for  money lending  business  they  have  obtained  the  said  so called  sale  deed  from  defendant’s  father  at Mumbai.  It was never meant to be given effect to and is not presently meant to be given effect to and accordingly possession was not transferred and is not transferred.  Plaintiff’s loan amount was repaid from time to time and said sale deed was executed as a document for security for the money lending transaction and the plaintiff or his firm has not & never  acquired  any  ownership  rights  because  of the  said  sale  deed  and  has  not  acquired  actual possession.   Therefore,  said  so  called  sale  deed and its contents are not admitted to defendant and

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the  suit  filed  on  its  basis  cannot  be  maintained plaintiff’s suit be dismissed.”

6. In his cross-examination, however, he accepted that his firm named

‘Eknath Gondiram Jadoo’ was an income-tax payee from 1954-55.  He had

also  been  paying  income-tax  individually.   Books  of  account  have  been

maintained by the firm regularly.  He accepted his signature in the cheque

having been issued as proprietor of his firm.  He furthermore admitted that

his  firm had business  relations  with Ghevarchand Bhaniram & Co.   He

moreover stated :

“I have been shown Sale deed in the plaint.  This deed  bears  my  signature  as  a  witness.   I  was personally  present  at  the  time  of  registration  of this Sale Deed. At that time me and my father were residing in Mumbai.  My father was very old.  For the  sake  of  convenience,  we have  registered  the sale deed in Mumbai, since me, my father and Shri Ghevarchand Seth were staying in Mumbai.  We have  not  taken  any  legal  opinion  before registration.   Account  of  this  transaction  was privately kept by me.  I do not remember that at time  of  registration,  Sub-Registrar  had  told  my father about the Deed of sale of property.  It is not true  that  possession  was  given  at  the  time  of registration of Sale Deed.  At the time of Sale, my father  has  also  handed  over  the  original  title documents  of  the  property, from whom we have purchased  the  property;  to  Shri  Ghevarchand Sheth.  My father has not given any notice that he has  not  sold  the  property  to  Shri  Ghevarchand

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Sheth’s firm.  When this transaction occurred, we owe  Rs.50,000/-  to  Shri  Ghevarchand  Sheth’s Firm.  To show this loan, I have written proof and oral.   The  proof  has  not  been  produced  in  the Court for which I have no reason to say.  After this transaction of loan I won’t be able to say whether I have  taken  any  other  loans  from them.   In  the Accounting  year  1978-79,  my firm owe  to  Shri Ghevarchand firm Rs.50,000/-  was not  shown in our A/c books.  It is also true that even in income tax return I have not shown this loan taken from Ghevarchand firm, because I was not to repay this money to them even afterwards.  I have shown suit property as my firms property in Registrar of firm. I cannot answer this question. It is not true that my father  has  sold  his  private  property  to Ghevarchand Bhaniram.  The possession is given, this clause in sale deed is not true Rs.50,000/- was rcd. By my father as is mentioned in the Sale Deed by my father, I cannot say anything about it.”

(Emphasis supplied)

7. The First Appellate Court framed an additional  issue as to whether

the deed of sale deed of sale was executed as a security for the amount of

money lending of Rs.50,000/- and was not intended to be acted upon as a

sale deed.   

Upon taking into consideration the evidence brought on record by the

parties, the learned Trial Court enumerated the following circumstances to

hold against the appellant :

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“(i) For the property of Rs.50,000/- the monthly charges  for  its  occupation  of  Rs.1,257.50 appear  excessive.   With  such amount  in  4 years, the entire price of the property can be realized  which  is  not  befitting  to  the common course of transaction.  

(ii) There  is  evidence  on  record  that  for  the godown,  the  society  is  paying  Rs.45/-  per month only to the defendant.

(iii) The plaintiffs are businessmen and were not likely  to  allow  the  rent/licence  fee accumulated  for  40  months.   During  this period there would have been a demand in writing.

(iv) The second cheque of Rs.10,000/- at Exh.93 is  similar  type  of  cheque  paid  after  15 months of the earlier.  Charges of 15 months were  to  the  extent  of  Rs.18,862.50.   How such  part  payment  after  15  months  is accepted even though the earlier cheque was dishonoured and no steps  for  the recovery are taken is not explained by the plaintiffs. In  fact,  when  the  monthly  charges  ere agreed, the payments would have been made regularly  by  the  defendant  and  if  not  so, would have been insisted by the plaintiffs. The  dealing  between the  parties,  however, are not accordingly.”

8. The High Court also enumerated the circumstances in favour of the

appellants.   

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In regard to the question that the defendant-respondent never took the

plea of transaction being that of a loan, the Appellate Court held that the

said  defect  was  cured  by  reason  of  the  alternative  stand  taken  by  the

respondent, holding:

“It is no doubt true that the alternative defence is raised at a very late stage.  There is no substance in the submission of the counsel for the appellants that the intention behind executing a document is the  state  of  mind  of  that  person  and  he  must disclose about it, at the earliest opportunity.  That if he discloses later on, it can be considered as an after thought.

But  then  in  the  present  case  the  strong circumstantial  evidence  discussed  above,  when makes  out  a  reasonable  probability  of  the execution  of  the  sale  deed  with  otherwise intention, omission on the part of the defendant to state  it  specifically  will  not  affect  him  much. Moreover, we cannot forget that in our system the pleadings are drafted by the advocates on the basis of  the  information  given  by  their  clients. Pleadings  are  prepared  by the  Advocates  as  per their knowledge and experience and if any wrong is committed by the Advocate in making out the deference or if any material thing is omitted, the same is glaringly coming before us emerging out before us from the circumstance then we need not attach  much  importance  to  the  defects  in  the pleadings  and omission.   The settled  position  of law, therefore, says that moffusil pleadings are to be liberally construed.”

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9. The First Appellate Court, however, did not believe that part of the

case of the appellant that the amount of loan had been repaid.   

It was in the aforementioned situation directed :

“1. The appeal is partly allowed with costs.

2. Judgment  and decree of  the  Trial  Court  is hereby set aside and the suit is partly decreed as under :

The plaintiff’s suit for mandatory injunction as well as prohibitory injunction and for the storage  charges  at  the  monthly  rate  of Rs.1,257.50 stands dismissed.

The  plaintiff  are,  however,  entitled  to  the amount of Rs.50,000/- with interest thereon @  6%  per  annum  from  29.6.1973  till  its realization.

The plaintiffs are entitled to the costs of the suit.

The defendant do deposit the said amount or pay the  same to  the  plaintiffs  immediately failing  with  the  plaintiff  can  recover  it through the court.”

10. The High Court dismissed the Second Appeal preferred thereagainst,

inter alia, opining :

“It is true that initially such defence was not raised in  the  written  statement,  however,  in  the  first appeal the amendment of the pleadings was sought

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and it was allowed by the court and by way of the amendment  the respondent-defendant raised such contentions.   The  order  of  allowing  the amendment was not challenged by the appellant in further  proceedings.   In  view  thereof  the submissions  of  Mr.  Sugadre,  learned counsel  for the  appellant  that  in  the  absence  of  substantive pleadings the courts below have committed error in entertaining the plea that the sale deed was not intended  to  be  acted  upon  and  it  was  a  money transaction must be rejected.

The  submission  of  Mr.  Sugdare  based  on  the judgment  of  the  Supreme Court  in  Roop Kumar (supra) also deserves to be rejected outright.  It is true  that  under  Section  91  of  the  Evidence  Act, oral evidence against the terms of contract is not permissible,  but  to  this  provision  exception  is made out  by Section  92  which  allows such oral evidence as per the third proviso thereto.  It is well settled, that a plea that title has not passed on the execution of the sale deed can be raised to rebut the contents of the document and intention of the parties  behind  executing  the  document  can  be gathered from the recitals  in the document or by other attending circumstances.  It is thus clear that from  the  circumstantial  evidence  if  it  is inconsistent with the recitals of the document, it is open for the court to infer that the contents of the document are rebutted.  This  is  what exactly the courts below have done.  Taking overall facts and circumstances of the case into consideration, in my opinion,  the  courts  below have  rightly  held  that the document was not intended to be acted upon and it was executed by way of security.  I find no reason to interfere with the findings of fact.  I find sufficient  material  on  record  to  sustain  those findings.  In the circumstances the appeal deserves to be rejected.  Order accordingly.”

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11. Mr. Shyam Diwan, learned senior counsel appearing on behalf of the

appellant would urge :

(i) The courts below committed a serious error insofar as they failed to

adhere to the best evidence rule as contained in Sections 91 and 92 of

the Indian Evidence Act.   

(ii) First Appellate Court as also the High Court furthermore committed a

serious  error  insofar  as  they  failed  to  take  into  consideration  that

subsequent plea raised by the respondent by way of amended written

statement  and  his  evidence  could  not  have  been  relied  upon;

particularly when he has utterly failed to prove either taking of loan

or repayment thereof.   

12. Mr.  Jaideep Gupta, learned senior  advocate  appearing on behalf  of

the respondent, on the other hand, contended  

i) Three courts having arrived at concurrent findings of fact, this Court

should not interfere therewith.   

ii) The purported deed of sale spells out the real transaction between the

parties as would be evident from the following :

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“It  is  a  condition  of  this  sale  that  in  case  the Purchasers shall be deprived of possession of the said property (said premises)  or  any part  thereof by  virtue  of  any  act  of  Vendor  or  his  heirs  or assigns or successors in interest or by any person claiming title thereto vendor and his estate shall be bound to compensate the Purchasers for such loss or damage arising from such act and shall be liable to refund the purchase money with interest or by any person claiming title thereto  the Vendor and his  estate  shall  be  bound  to  compensate  the Purchasers  for such loss  or  damage arising from such act and shall be liable to refund the purchase money  with  interest  from  the  date  of  the deprivation or accrual of such loss.”

(iii) Nature  of  transaction  being  a money lending one  as  would appear

from  the  purported  deed  of  sale  itself  and  the  plaintiff-appellant

having failed to prove its case of creation of a leave and licence, the

judgment of the Trial Judge is unassailable in view of the extrinsic

evidence that the transaction was a sham one and, thus, could not be

eschewed and for the said purpose Section 92 of the Indian Evidence

Act does not debar adduction of additional evidence.   

(iv) Although the burden of proof was on the respondent, he must be held

to have discharged the same fully.

13. The deed of sale dated 29.6.1978 was a registered one.  It, therefore,

carries a presumption that the transaction was a genuine one.  Respondent

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was the son of the vendor.   He was an attesting witness.   In his written

statement, he categorically denied execution of the said deed of sale.  He

also denied that he had attested the document.   He even did not examine

himself before the learned Trial Judge.  His witnesses merely proved his

possession.  The fact that the respondent’s father was put in possession with

effect from 1.7.1978 was in dispute.  What was in dispute was the character

of his possession.  Did he continue to possess the godown as owner thereof

or  on  the  basis  of  leave  and  licence  was  the  question,  which  was  not

considered in its proper perspective by any of the three courts below.   

14. The  learned  Trial  Judge  without  any  pleading  in  that  behalf

proceeded to determine the nature of transaction and opined that in effect

and substance, the transaction was a money lending one.   

No such issue was framed as no such contention was raised in the

written  statement.   Respondent  realized  his  mistake.   He,  therefore,

amended his written statement and examined himself as a witness.

15. It  is  true  that  the  written  statement  was  permitted  to  be  amended.

Additional  evidence  pursuant  thereto  was  also  permitted  to  be  adduced.

The First Appellate Court, however, had a duty to properly appreciate the

evidence in the light of the pleadings of the parties.  While doing so, it was

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required to pose unto itself the correct questions.  The deed of sale being a

registered one and apparently  containing  stipulations  of  transfer  of  right,

title and interest by the vendor in favour of the vendee, the onus of proof

was upon the defendant to show that the said deed was, in fact, not executed

or otherwise does not reflect the true nature of transaction.  Evidently, with

a  view  to  avoid  confrontation  in  regard  to  his  signature  as  an  attesting

witness as also that of his father as vendor in the said sale deed, he did not

examine  himself.   An  adverse  inference,  thus,  should  have  been  drawn

against  him  by  the  learned  Trial  Court.   {[See  Kamakshi  Builders v.

Ambedkar Educational Society & Ors. [AIR 2007 SC 2191]}.

16. The First Appellate Court, however, having regard to the amendment

carried out  in  the written statement  setting  up  a  totally inconsistent  plea

from the one taken before the learned Trial Court by the respondent posed a

question as to whether the respondent has discharged the burden placed on

him.   

For the said purpose, critical analysis of the prevarication of the stand

taken by the respondent from stage to stage also became relevant.  It is true

that when a pleading is amended, it, subject to just exceptions, takes effect

from the date when original one is filed.  It is also true that the Appellate

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Court, in exercise of its discretionary jurisdiction and subject to fulfillment

of the conditions laid down under Order XLI Rule 27 of the Code of Civil

Procedure, may allow the parties to adduce additional evidence.   

Pleadings of the parties, it is trite, are required to be read as a whole.

Defendants, although are entitled to raise alternative and inconsistent plea

but should not be permitted to raise pleas which are mutually destructive of

each other.  It is also a cardinal principle of appreciation of evidence that

the court in considering as to whether the deposition of a witness and/or a

party is truthful or not may consider his conduct.  Equally well settled is the

principle  of  law  that  an  admission  made  by  a  party  in  his  pleadings  is

admissible against him  proprio vigore. [(See  Ranganayakamma & Anr. v.

K.S. Prakash (D) By Lrs. & Ors. [2008 (9) SCALE 144]

17. It is for the aforementioned purpose, the deed of sale was required to

be construed in proper perspective.  Indisputably, the deed of sale contained

stipulations  as  regards  passing  of  the  consideration,  lawful  title  of  the

vendor,  full  description  of  the vended property,  conveyance of  the  right,

title,  interest,  use,  inheritance,  property,  possession,  benefits,  claims and

demands at law and in equity of the vendor.  The said clause uses the terms

“granted, released, conveyed and assured or intended or expressed so to be

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with their and every of their rights, members and appurtenances unto and to

the use and benefits of the said purchasers for ever subject to payment of all

rent, rates taxes…”    

It was stipulated :

“He,  the  Vendor  has  now  has  in  himself  good right,  full  power and absolute  authority to grant, release,  convey  and  assure  the  said  premises hereby grants, released, assured or intended to be unto  and  to  the  use  of  the  Purchasers  in  the manner aforesaid and that shall be lawful for the purchasers  from  time  to  time  and  at  all  times hereafter  peaceably  and  quietly  to  hold,  enter upon,  have  occupy,  possess  and  enjoy  the  said premises hereby granted with their appurtenances and  receive  the  rents,  issues  and  profits  thereof and every part thereof to and for their own use and benefits  without  any  suit,  lawful  eviction,  in eruption, claim and demand whatsoever from or by the Vendor or by any person or persons lawfully or equitably claiming or to claim by, from under or in trust  for  him or  any of  him AND that  free  and clear  and  freely  and  clearly  and  absolutely acquitted,  exonerated  released  and  for  ever discharged or  otherwise by the  Vendor well  and sufficiently  saved,  defended,  kept  harmless  and indemnified  of,  from and  against  all  former and other  estates,  titles,  charges  and  incumbrances whatsoever  either  already or  to  be  hereafter  had made,  executed  occasions  or  suffered  by  the Vendor or by any other person or persons lawfully or equitably claim or to claim by, from under or in trust for him or any of him AND FURTHER that the Vendor and all persons having or lawfully or equitably  claiming  any  estate,  right,  title  and

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interest  or  law or  in  equity in  the  said  premises hereby  granted,  released,  conveyed,  assured  or intended  so  to  be  or  any  part  thereof  by,  from under or in trust  for him the vendor or any him shall  and  will  from  time  to  time  and  all  times hereafter  at  the  test  and costs  execute  all  such further  and  other  lawful  reasonably  acts,  deeds, things matter conveyances and assurances in law whatsoever  for  the  better,  further  and  more perfectly  and  absolutely,  granting,  realizing conveying and assuring the said premises and any part  thereof  hereby  granted,  released,  conveyed and assured unto and to the use of the purchasers in manner aforesaid as shall or may be reasonably required  by  the  purchasers,  their  successors  or assigns or their counsel in law.”

18. It  further  contains  a  stipulation  that  the  purchaser  had  been  in

possession of the property and the original sale deed dated 15.7.1968 was

handed over.  One of the stipulations in regard whereto the contention of the

respondent that the deed of sale in fact was a money lending transaction was

raised reads as under :

“It  is  a  condition  of  this  Sale  that  in  case  the Purchasers shall be deprived of possession of said property  (said  premises)  or  any  part  thereof  by virtue of any act of Vendor or his heirs or assigns or successors in interest or by any person claiming title  thereto  the  vendor  and  his  estate  shall  be bound to compensate the Purchasers for such loss or damage arising from such act and shall be liable to refund the purchase money with interest or by any person claiming title thereto  the Vendor and

22

his  estate  shall  be  bound  to  compensate  the Purchasers  for such loss  or  damage arising from such act and shall be liable to refund the purchase money  with  interest  from  the  date  of  the deprivation or accrual of such loss.”

19. A document,  as  is  well  known,  must  be  construed  in  its  entirety.

Reading the said in its entirety, there cannot be any doubt whatsoever that it

was a deed of sale.  It satisfies all the requirements of a conveyance of sale

as envisaged under Section 54 of the Transfer of Property Act.

In Bishwanath Prasad Singh v. Rajendra Prasad& Anr. [(2006) 4 SCC

432], this Court held :

“16. A deed as is well known must be construed having  regard  to  the  language  used  therein.  We have  noticed  hereinbefore  that  by  reason  of  the said deed of sale, the right, title and interest of the respondents  herein  was  conveyed  absolutely  in favour  of  the  appellant.  The  sale  deed  does  not recite any other transaction of advance of any sum by  the  appellant  to  the  respondents  which  was entered into  by and between the parties.  In  fact, the  recitals  made  in  the  sale  deed  categorically show  that  the  respondents  expressed  their intention to convey the property to the appellant herein as they had incurred debts by taking loans from various other creditors.

It was furthermore observed :

“19. It is of some significance to note that therein the  expressions  “vendor”,  “vendee”,  “sold”  and “consideration”  have  been  used.  These expressions  together  with  the  fact  that  the  sale

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deed  was  to  be  executed  within  a  period  of  23 months  i.e.  up  to  June  1978,  evidently  the expression  “vaibulwafa”  as  a  condition  was loosely used.

20. Furthermore, the agreement was also executed for a fixed period. The other terms and conditions of the said agreement (ekrarnama) also clearly go to show that the parties understood the same to be a  deed  of  reconveyance  and  not  mortgage  or  a conditional sale.

21. The  terminology  “vaibulwafa”  used  in  the agreement does not carry any meaning. It could be either “bai-ul-wafa” or “bai-bil-wafa”.

22. It will bear repetition to state that with a view to  ascertain  the  nature  of  a  transaction  the document has to be read as a whole. A sentence used or a term used may not be determinative of the real nature of transaction.”

Despite  the  fact  that  the  term  ‘baib-ul-wafa’  was  used  in  the

transaction,  this  Court  held that  the document in question was a deed of

reconveyance and not a mortgage with conditional sale,  stating :

“23. Baib-ul-wafa,  it  was held  by the  trial  court connotes only an agreement for sale. In terms of Section 91 of the Evidence Act, if the terms of any disposition  of  property  is  reduced to  writing,  no evidence  is  admissible  in  proof  of  the  terms  of such disposition of property except the document itself.”

It relied upon a decision of this Court in  Ishwar Dass Jain v.  Sohan

Lal [(2000) 1 SCC 434] and Roop Kumar v. Mohan Thedani [(2003) 6 SCC

595] to which we would revert to a little later.

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20. Indisputably  when  a  true  character  of  a  document  is  questioned,

extrinsic  evidence  by  way  of  oral  evidence  is  admissible.   {See  R.

Janakiraman Vs.  State  Rep.  by  Inspector  of  Police,  CBI,  SPE,  Madras

(2006) 1 SCC 697 para 24];  Roop Kumar  Vs.  Mohan Thedani [(2003) 6

SCC 595,  para  19];  and  State  Bank  of  India  & Anr. Vs.  Mula  Sahakari

Sakhar Karkhana Ltd. [(2006) 6 SCC 293 paras 23 to 32]}.

21. We would, therefore, proceed on the premise that it was open to the

respondent to adduce oral evidence in regard to the nature of the document.

But,  in  our opinion,  he did  not  discharge  the  burden of  proof  in  respect

thereof  which  was  on  him.   The  document  in  question  was  not  only  a

registered one but also the title deeds in respect of the properties have also

been handed over.  Symbolical possession if not actual physical possession,

thus, must be held to have been handed over.  It was acted upon.  Appellants

started paying rent in respect of the said property.  No objection thereto has

been raised by the respondent.

Respondent paid certain amount by cheque towards the licence fee.  It

was for him to show on what account the money was paid.  Only because

the parties had other transactions by itself was not sufficient to hold that the

defendant  has  discharged  his  onus.   If  the  sum of  Rs.50,000/-  was  the

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amount of loan wherefor the deed of sale was executed by way of security,

having regard to his  admission that  the firm is  an income-tax payee and

maintains books of account in regular course of business, failure on his part

to  produce  any  documentary  evidence  merited  drawing  of  an  adverse

inference.   

Why he did not examine himself before the Trial Court or before the

Appellate Court?   He should have furnished an explanation in this regard to

prove his plea.  Why he failed to produce documentary evidence had also

not been explained.  The approach of the First Appellant Court in relying

upon certain circumstantial evidence was also of no use.  Why the plaintiffs

have purchased the properties at village Saikheda or why they had allowed

another  tenant  to  continue  were  not  decisive  far  less  relevant  for

construction of a document.   

The First Appellate Court had arrived at a conclusion first and then

started to assign reasons in support thereof.  It, as indicated hereinbefore,

did not pose unto itself the correct questions.  Apart from wrongly placing

the  burden  of  proof  on  the  plaintiff,  even  adverse  inference  against  the

defendant  had  not  been  drawn.   The  pleadings  were  required  to  be

considered provided any evidence in support thereof had been adduced.  No

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cogent evidence had been adduced by the respondent to show that the deed

of sale was a sham transaction and/or the same was executed by way of a

security.   

Right of possession over a property is a facet of title.  As soon as a

deed of sale is registered,  the title  passes to the vendee.   The vendor,  in

terms  of  the  stipulations  made  in  the  deed  of  sale,  is  bound  to  deliver

possession of the property sold.  If he does not do so, he makes him liable

for damages.  The indemnity clause should have been construed keeping in

view that legal principle in mind.  

Although evidences had been brought on record to show that upon

grant of leave and licence, the keys of godowns had been handed over but in

respect thereof no contrary findings had been arrived at.   

We would assume that the parties entered into an arrangement as a

result whereof the father of the respondent was to continue in possession.

The character of his possession, however, changed from that of an owner to

a licensee.  A legal fiction in a situation of this nature is created in terms

whereof  the  owner  becomes  dispossessed  and  regains  possession  in  a

different capacity, namely, as a licensee.

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If  the  appellant  was  able  to  prove  that  the  deed of  sale  was  duly

executed and it was neither a sham transaction nor represented a transaction

of different character, a suit for recovery of possession was maintainable.  A

heavy onus lay on the respondent to show that apparent state of affairs was

not the real state of affairs.   

It was for the defendant in a case of this nature to prove his defence.

The First  Appellant  Court,  therefore, in our opinion,  misdirected itself  in

passing the impugned judgment insofar as it failed to take into consideration

the relevant facts and based its decision on wholly irrelevant consideration.   

A heavy burden of  proof  lay upon the defendant  to  show that  the

transaction was a sham one.  It  was not a case where the parties did not

intend to enter  into any transaction at all.   Admittedly, a transaction had

taken place.  Only the nature of transaction was in issue.  A distinction must

be borne in mind in regard to the nominal nature of a transaction which is

no transaction in  the eye of  law at all  and the nature and character  of  a

transaction as reflected in a deed of conveyance.  The construction of the

deed clearly shows that it was a deed of sale.  The stipulation with regard to

payment of compensation in the event appellants are dispossessed was by

way of an indemnity and did not affect the real nature of transaction.

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22. In  any  event,  the  said  stipulation  could  not  have  been  read  in

isolation.   The  judgment  of  the  First  appellate  Court  was,  therefore,

perverse.  The High Court, thus, failed to consider the real dispute between

the parties.

23. In view of the findings aforementioned, it is not necessary for us to

enter into the question as to whether the extrinsic evidence was admissible

to show that a transaction of sale was, in fact, a sham one.

24. We cannot also accept the contention of Mr. Gupta that the decree

should  be  allowed  to  be  sustained  with  reference  to  the  aforementioned

stipulation in the deed of sale that in case the plaintiffs are dispossessed, the

defendants would pay compensation.  Such a case had never been made out.

Such a question cannot be allowed to be raised for the first time before us.   

25. In any event,  in  view of the  conduct  of  the  respondent,  he cannot

claim  equity.   An  equitable  relief  can  be  prayed  for  by  a  party  who

approaches the court with clean hands.   

26. We,  therefore,  have  no  hesitation  in  holding  that  in  the  facts  and

circumstances of this case, the plaintiff’s suit should have been decreed.

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27. For  the  reasons  aforementioned,  the  impugned  judgments  are  set

aside with costs throughout.  The appeal is allowed with costs.  Counsel’s

fee assessed at Rs.25,000/-.

………………………………J. [S.B. Sinha]

………………………………J.  [Dr. Mukundakam Sharma]

New Delhi; March 23, 2009

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