PLACIDO FRANCISCO PINTO (D) BY LRS. & ANR versus JOSE FRANCISCO PINTO & ANR. on 30 September 2021

[2021] 10 S.C.R.

APLACIDO FRANCISCO PINTO (D) BY LRs. & ANR

v.

JOSE FRANCISCO PINTO & ANR.

(Civil Appeal No. 1491 of 2007)

B

SEPTEMBER 30, 2021

[HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]

Contract Act, 1872 – s.25 – Suit for possession and accountsfiled by appellant no.1 against his younger brother-respondent no.1C(defendant no.1) and his wife-(defendant no.2) alleging that hehad purchased the suit property from them by way of registered saledeed, after settling the creditors of defendant no.1 – Sale denied bydefendants, who filed another suit for declaring the sale deed asnull and void – Appellant’s suit decreed by trial court, respondents’Dsuit dismissed – First appellate court allowed appeals filed by therespondents – Affirmed by High Court – On appeal, held: As pers.25, a registered sale, on account of natural love and affection,between the parties in near relation, even if it is withoutconsideration, would not be void – Parties are in near relations,therefore, if the appellant no.1 being the elder brother had come toEthe help of the younger brother who was facing auction of theproperty gifted by the parents of the parties, and discharged hisdebtors and executed a sale deed mentioning a nominal saleconsideration, it cannot be said to be a sale without consideration– Further, once there is an admission of the respondent no.1 ofFdischarge of his debts by appellant, the sale deed registered innormal course of official duties carries the presumption ofcorrectness – Respondent no.1 tactically admitted execution of thesale deed, his only stand is ignorance of the nature of document onwhich his signatures were obtained – On facts, such ignorance isnot an instance of misrepresentation/fraud – Decree passed by theGtrial court in the suit filed by appellant no.1 is restored – Suit filedby respondents is dismissed – Evidence Act, 1872 – s.92 – Code ofCivil Procedure, 1908 – Deeds and Documents – Fraud.

Evidence Act, 1872 – s.92 & proviso (1) – Scope of –Discussed.H

PLACIDO FRANCISCO PINTO (D) BY LRs. v. JOSE FRANCISCOPINTO

Code of Civil Procedure, 1908:

Or.VI, r.2 – Pleadings – Held: Every pleading shall contain,and contain only, a concise statement in form of the material factson which the party pleading relies upon, but not the evidence bywhich they are supposed to be proved.

Or.VI, r.4 – Held: A party if relies on any misrepresentation,fraud or undue influence, shall state in the pleadings the particularswith dates and items.

Allowing the appeal, the Court

HELD: 1.1 The sale deed (Ex.P/1) had a recital that thesuit property was sold for a sum of Rs.3,000/-. Section 25 of theContract Act is to the effect that an agreement withoutconsideration is void but if a document is registered on accountof natural love and affection between the parties standing in anear relation to each other, then such an agreement is not void.The parties are in near relations, the appellant No.1 being theelder brother and the sale was executed to help his youngerbrother who was facing auction of the property gifted by theparents of the parties. Even the defendants’ witnesses haveadmitted that there was a notice of Court auction of the propertyin question by beat of drum. Therefore, if elder brother had cometo the help of the younger brother, discharging his debtors andexecuting a sale deed mentioning a nominal sale consideration,it cannot be said to be a sale without consideration. It is admittedby respondent No.1 that a sum of Rs.12,000/- was paid by theappellant No. 1 to discharge his debts. Once there is an admissionof the respondent No. 1 of discharge of his debts by appellantNo.1, the sale deed registered in normal course of official dutiescarries the presumption of correctness which cannot be said tobe illegal only on the basis of feigned ignorance that his signatureswere obtained on papers which respondent No. 1 and his wife didnot know. [Paras 20, 21][686E, F-G; 687-C-E]

Bellachi (Dead) by LRs v. Pakeeran (2009) 12 SCC 95: [2009] 4 SCR 823 – relied on.

1.2 The only stand of respondent No.1 is ignorance of thenature of the document on which his signatures were obtained.

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ASuch ignorance is not an instance of misrepresentation or a fraudin the facts of the present case which would vitiate a sale deedexecuted and registered with the Sub-Registrar. It has beenadmitted by respondent No. 1 that he went to the Sub-Registrar’soffice with his wife, signed once outside the Municipal Buildingand once before the Officers, shows that tactically he has admittedBexecution of the sale deed without expressly stating so. Thefindings of the Courts below that the document is withoutconsideration or the consideration having not pleaded in the plaintor the fact that appellant No. 1 has discharged the debtors ofrespondent No. 1 will not render the document of sale deed asCvoid. Order VI Rule 2 of the Code of Civil Procedure, 1908 is tothe effect that every pleading shall contain, and contain only, astatement in a concise form of the material facts on which theparty pleading relies upon for his claim or defence as the casemay be, but not the evidence by which they are supposed to beproved. Appellant No.1 has relied upon the sale deed whichDcontains the recital of payment of Rs.3,000/- as the saleconsideration. The evidence in support of such sale deed wasnot required to be pleaded in the plaint filed by the appellant.Still further, in terms of Order VI Rule 4 of the Code, in all casesin which the party pleading relies on any misrepresentation, fraud,Eor undue influence shall state in the pleadings the particularswith dates and items in the pleadings. The extract from the writtenstatement or the plaint does not show that there is any pleadingof misrepresentation or fraud. The evidence led by therespondents is not indicative of any instance of fraud ormisrepresentation as well. The findings recorded by the CourtsFbelow that the sale deed was result of fraud or misrepresentationare clearly not sustainable. [Paras 22, 23][687-F-H; 688-A-E]

1.3 The oral evidence of a written agreement is excludedexcept when it is sought to be alleged the document as a shamtransaction. A sale deed is required to be registered i.e. aGdocument required by law to be reduced to the form of a document.Therefore, no evidence of any oral agreement or statement shallbe admitted for the purpose of contradicting, varying, adding orsubtracting from its terms. The proviso (1) of Section 92 of the H

Evidence Act is a proof of such fact which would invalidate anydocument such as fraud, intimidation, illegality, want of dueexecution, want of capacity in any contracting party, want or failureof consideration, or mistake in fact or law. The respondents werefree to prove fraud in execution of the sale deed. However,factually, the respondents have not alleged any fraud in their suitor in the written statement in the suit filed by appellant No. 1.The feigned ignorance about the nature of document cannot besaid to be an instance of fraud. In the absence of any plea or proofof fraud, respondent No.1 is bound by the written document onwhich he admitted his signatures and of his wife. There is no oralevidence which could prove fraud, intimidation, illegality or failureof consideration to permit the respondents to lead oral evidenceto dispute the sale deed. The judgment and decree passed bythe trial court in Special Civil Suit No. 55/77/I is restored. SpecialCivil Suit No. 71/80/I is dismissed. [Paras 27-30][691-E-H;692-C-D, F]

Smt. Gangabai w/o Rambilas Gilda v. Smt. Chhabubaiw/o Pukharajji Gandhi (1982) 1 SCC 4 : [1982] 1 SCR1176; Roop Kumar v. Mohan Thedan (2003) 6 SCC595 : [2003] 3 SCR 292 – distinguished.

CIVIL APPELLATE JURISDICTION: Civil Appeal No.1491 of2007.

From the Judgment and Order dated 16.08.2006 of the High Courtof Bombay at Goa in Second Appeal Nos.168 and 139 of 2005.

Ms. Binu Tamta, Dhruv Tamta, Advs. for the Appellants.

Dhruv Mehta, Sr. Adv., Yashraj Singh Deora, Ms. SonalMashankar, Ms. Prakriti Roy for M/s Mitter & Mitter Co., Advs. for theRespondents.

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AThe Judgment of the Court was delivered by HEMANT GUPTA, J.

1. The legal representatives of the plaintiff have appealed beforethis Court, aggrieved by the judgment and decree of the First AppellateCourt dated 6.7.2005 affirmed by the High Court in the Second AppealBon 16.8.2006.

2. The plaintiff filed a suit[1 ](Special Civil Suit No. 55/77/I) seekingpossession and accounts from his younger brother-defendant No. 1(respondent No. 1) who was given the southern portion of the propertyin question by virtue of a gift deed dated 10.5.1957 executed by theCparents of the parties involved. The northern portion was allotted to theplaintiff by the same gift deed.

3. The plaintiff had inter-alia pleaded that Defendant No. 1 –Jose Francisco Pinto earlier sold his one of his properties to the plaintiffdue to failure in timely discharging the debts raised by him in the yearD1962. Subsequently, the plaintiff purchased the southern portion of theproperty from defendant No. 1 by a registered sale deed after settlingthe creditors of defendant No. 1 so as to save their ancestral property.The plaintiff, as an elder brother, allowed his younger brother to stay inthe house for five years. Defendant No. 1 collected rents from the otherdefendants as well during this period. The plaintiff filed the first suit onE10.5.1977 relying upon the sale deed executed on 14.9.1970 and registeredon 23.9.1970 in respect of southern half of the property called “Pedda”.It is pleaded that defendant Nos. 3 to 9 are occupying the premisesastenants of the six tenements existing in the premises.

4. The plaintiff had pleaded that the suit property after the sameFwas purchased from the defendant No. 1 and his wife Defendant No. 2,the said defendants had created several charges and encumbrancesthereon and the plaintiff to prevent its compulsory auction-sale at theinstance of one of the creditors, had paid and cleared all those chargesand encumbrances thereby spending much more than the market valueGof the suit property, and that the Defendant No. 1 executed sale deed infavour of the plaintiff on 14.9.1970. Since defendant No. 1 did not vacatethe property after the expiry of five years, an Advocate’s notice wassent by registered post on 6.11.1976 calling upon him to surrender thesuit property and also to stop collecting rent from the other defendant H1 Hereinafter referred to as the ‘first suit’

PLACIDO FRANCISCO PINTO (D) BY LRs. v. JOSE FRANCISCOPINTO [HEMANT GUPTA, J.]

Nos. 3 to 9. Therefore, the suit was filed claiming vacant possession ofthe house occupied by defendant Nos. 1 and 2 and directing defendantNos. 1 and 2 to render accounts of the money received by him fromdefendant Nos. 3 to 9 as rent. In the written statement filed on 11.8.1977,the defendant Nos. 1 and 2 have pleaded as under:

“2. With reference to paragraph 2 of the plaint, these defendantssubmit that they are not aware of any property sold by thesedefendants to the plaintiff. Defendants however recollect that theplaintiff had represented to them in the office of the Sub Registrarof Margao certain documents purported to be a document inrespect of an amount of Rs.12000/- which was paid by him to thecreditors of defendant no. 1. Under such pretext the plaintiffmanaged to obtain the signatures of the defendants no. 1 and 2who do not know to read or write except that they write their ownname. These defendants deny having sold their property to theplaintiff mentioned in paragraph 2 of the plaint.”

5. Another suit, namely, Special Civil Suit No. 71/80/I[2 ]was filedby the respondents on 1.7.1980 against the appellants, inter alia, on theground that they had never sold the southern half of the suit property tothe appellants nor intend to sell the same to any person. It was alsoclaimed that they had never executed any sale deed in favour of theappellants nor received any amount as consideration of the sale. It wasspecifically pleaded as under:

“13. The plaintiffs state that they never executed the sale deed ofthe suit property and they had never gone in the office of the Sub-Registrar of Margao to register the sale deed. However, thedefendant no. 1 in the year 1970 had taken the plaintiffs in theoffice of Sub-Registrar, Margao and asked them to sign the stamppaper purported to be a document in respect of the loan amountof Rs. 12000/- (Rupees twelve thousand only) paid by thedefendant no.1 to the creditors of the plaintiff no. 1. He furtherexplained that it is necessary for him to take in writing from theplaintiff about the amount paid to the creditors of plaintiffs andthat amount was due to him by the plaintiffs. The writings on thestamp was in Roman scripts and the language not known to theplaintiffs and now learnt that it is in Portuguese.”

2 Hereinafter referred to as the ‘second suit.’

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A6. The parties went to trial on following issues in the first suit:

“(i) Whether the plaintiff proves that the defendant nos. 1 and 2sold to the plaintiff the southern half of the property Peda situatedNavelim and identified in paragraph 2 of the plaint?

B(ii) Whether the plaintiff proves that he allowed the defendantsno. 1 and 2 to continue to live in the corresponding portion of thehouse for five years free of any charge?

(iii) Whether the plaintiff proves that he suggested to the defendantNo. 1 to surrender the suit premises after 5 years had passed?

C(iv) Whether the defendant Nos. 1 and 2 prove that the sale deedwas obtained by fraud by the plaintiff?

(v) What relief, what order?

(vi) Whether the defendants prove that the suit is undervalued.”

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7. The plaintiff examined himself as PW-1 and deposed as pleadedby him in the plaint filed. Silvester Coutinho (PW-2) deposed that therewas some beat of drum on the road in front of the Chapel near the houseof the plaintiff and that his house is situated behind the plaintiff’s house.The Bailiff told the witness that the house of the defendant is beingEauctioned by the Court. Devidas Chari (PW-3) had seen the partiesresiding at one and the same place.

8. Defendant No. 1 appeared as DW-1. In examination-in-chief,he deposed as under:

F“I know the plaintiff who is my brother. The suit property includingthe house has been divided between us into two halves. I havenot obtained any loan at any time in respect of the half of thehouse and the property belonging to me I have obtained loan ofRs.12,000/- but this has no connection of whatsoever nature inrespect of my half of the share in respect of the suit property andGmy house. The loan of Rs.12,000/- which I secured has beenrepaid by my brother (plaintiff). I have not repaid the suit amountto my brother. But on one occasion the plaintiff asked me in myhouse as to when I am going to repay the amount which is paid onmy behalf. As I could not paid the amount the plaintiff asked meto execute a document mentioning therein that he would payH

PLACIDO FRANCISCO PINTO (D) BY LRs. v. JOSE FRANCISCOPINTO [HEMANT GUPTA, J.]

Rs.12,000/- which he had paid. The plaintiff then asked me tocome to a hotel near Margao Municipality in order to execute thesaid document. The plaintiff three days thereafter once again hecame to my house and asked me to come near the Municipality inorder to prepare the said documents. This he told me at 2:30 atmy house. Accordingly myself and my wife came near theMunicipality to execute the said documents.

After me and my wife came near my municipality the obtainedmy signature and also my wife signature on the stamp papers.The plaintiff, however did not explained to me and my wife thecontents of the documents on which he obtained my signatureand my wife. I say that he and his wife made two signatures eachon the said stamp paper. Out of said two signatures made by eachof us signature was obtained outside the Municipal Building andother signature was obtained in side the M. Building. Even whenthe plaintiff obtained second signature from me and my wife, wewere not explained the contents of the documents. The personbefore whom me and my wife made signatures in the M. Buildingdid not explain to use the contents of the said documents. I do notknow to read and to write English so is the case of my wife. Ihave not sold the half of the house in my possession and belongingto me and also my land to anyone.”

9. In cross-examination, defendant No. 1 admitted that the plaintiffhas repaid two of his loans. One loan was of Jose Minguel Pereira ofChandor amounting to Rs.6,000/-. He further deposed that he went alongwith the plaintiff to execute a document in connection with the loanamount of Rs.12,000/- paid by the plaintiff on his behalf. He furtherdeposed that he did not ask the Officer to explain the contents of thesaid document to him. He and his wife were present on the said day. Hefurther denied selling the property to the plaintiff vide sale deed dated14.9.1970 (Ex.P/1).

10. DW-2 is Eduardo Pinto. In cross-examination, he stated thatthe loan taken by defendant No. 1 from one Mr. Pareira was cleared bythe plaintiff. He further admitted that the plaintiff had filed a criminalcase against him for the theft of his cow. Romeo D’Costa (DW-3)deposed that in the year 1970 on Carnival Day, two persons from theCourt had come to the suit property with a beating drum in order toattach the property. At that time, the appellant told the employees of the AB

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ACourt in presence of defendant No. 1 that he would clear the debt on theproperty and seek release of the property. In cross-examination, he admitsthat when the Court employees came with a drum for announcement,he was present in the house of the appellant but he was unaware of theamount of debt accrued by the defendant.B11. The learned trial court found that the evidence presented bythe defendants does not rebut the duly registered sale deed (Ex.P/1) inrespect of Issue Nos. 2 and 3, which were decided in favour of theplaintiff. However, in respect of Issue No. 4, the Court returned thefollowing finding:

C“12. From the deposition of D.W.1 it is borne out that there hasnever been any intention on the part of the plaintiff to deceive thedefendants nor they have caused any inducement to them to enterinto any contract. The silence which has been discussed in theevidence of D.W.1 shows willingness of a person to enter into acontract. It is the duty of the person keeping silent to speak orDunless he is silent it is equivalent to speech. Thus, none of theingredients of section 17 have bene fulfilled by the defendants inthis case.”

12. Thus, it was held that the defendants had failed to prove thatthe sale deed was obtained by fraud. The first suit was decreed onE24.2.1997.

13. The second suit filed by the respondents was to declare theregistered sale deed dated 14.9.1970 as null and void. In the said suit,the defendants pleaded that no consideration was received by them forsale. The second suit was dismissed on 16.1.2001, inter alia, holdingFthat the suit is barred by the principle of res judicata and the sale deedis valid.

14. The respondents herein filed two appeals from the judgmentand decree passed in the first and second suit. Such appeals were heardand decided together. The respondents sought amendment in the writtenGstatement and also in the plaint in the first and second suit respectivelyduring the pendency of the appeal before the First Appellate Court. Suchamendments were allowed on 8.9.2004 after many years of filing of thesuit and the written statement. The first appeals against both the judgmentand decree were allowed by the learned First Appellate Court, interalia, on the following grounds:H

(i) The appellant has produced oral evidence contrary to theterms of the sale deed. Therefore, such oral evidence isbarred by Section 91 of the Evidence Act as there is norecital in the sale deed that he has paid and cleared all duesof respondent No. 1 for purchasing the suit property.

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(ii) The appellant has not pleaded that he had paid Rs.3,000/-as consideration under the sale deed. Therefore, the sale isnull and void for want of consideration.

(iii) The fact that respondent No. 1 continued to occupy thehouse goes to show that respondent No. 1 was not given tounderstand that it was a sale deed. The signatures on suchCsale deed by respondent No. 1 were obtained bymisrepresentation and concealment.

(iv) The sale consideration is inadequate; therefore, the consentof the vendor was not freely given.

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15. It is an admitted fact that consequent to the amendment in theplaint and in the written statement, no evidence was led. Mr. DhruvMehta, learned senior counsel for the respondents stated that the evidencewas already on record in respect of misrepresentation leading to fraud,therefore, the pleadings were amended so as to support the evidence.

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16. The learned counsel for the appellants has argued that theamendment of the pleadings should not have been allowed at the firstappeal stage and that the second suit is barred by the principle of resjudicata. But we do not find that such questions need to be examinedas the first suit and the second suit were pending in appeal and weredecided by the common judgment. Still further, since the amendment inthe plaint and the written statement has been allowed in exercise ofdiscretion vested with the First Appellate Court, we do not find that suchamendment can be permitted to be disputed at this stage.

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17. The appellants relied upon judgment of this Court in Bellachi(Dead) by LRs v. Pakeeran[3 ]to contend that the burden of proofregarding the genuineness of documents lies upon the vendee. In caseof a registered document, there is a presumption that it was executed inaccordance with law. This Court held as under:

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3 (2009) 12 SCC 95

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A“17. In a given case it is possible to hold that when an illiterate,pardanashin woman executes a deed of sale, the burden wouldbe on the vendee to prove that it was (sic) the deed of sale was agenuine document. It is, however, a registered document. It carrieswith it a presumption that it was executed in accordance withlaw. Again a concurrent finding of fact has been arrived at thatBthe appellant was not an illiterate woman or she was incapable ofunderstanding as to what she had done.”

18. The primary finding recorded by the First Appellate Court asaffirmed by the High Court is that the signatures of respondent No. 1were obtained by misrepresentation. Mr. Mehta vehemently argued thatCmisrepresentation is another facet of fraud and the oral evidence of saleconsideration led by the plaintiff had been rightly not accepted.

19. We have heard the learned counsels for the parties and findthat the findings of the First Appellate Court as affirmed by the HighCourt are clearly erroneous. Respondent No. 1 in the written statementDhas admitted payment of Rs.12,000/- to his creditors by the appellantNo.1. It is also admitted by him that his and his wife’s signatures wereobtained outside the Municipal Office and also before the Officers inthe Municipal Building when there were about 10-12 people in the office.

20. The sale deed (Ex.P/1) had a recital that the suit propertyEwas sold for a sum of Rs.3,000/-. The First Appellate Court returned afinding that such sale consideration was not mentioned in the plaint andthat the evidence has come on record that there were loans which weresettled by the appellant No.1 which fact is also not recited in the saledeed. Thus, it is a sale without consideration. Reliance was placed uponFSection 25 of the Indian Contract Act, 1872[4]. We find that such findingis not correct in law. Section 25 of the Contract Act is to the effect thatan agreement without consideration is void but if a document is registeredon account of natural love and affection between the parties standing ina near relation to each other, then such an agreement is not void. Section25 of the Contract Act reads as under:G“25. Agreement without consideration void, unless it is in writingand registered, or is a promise to compensate for something done,or is a promise to pay a debt barred by limitation law. - Anagreement made without consideration is void, unless—

H4 For short, the ‘Contract Act’

(1) it is expressed in writing and registered under the law for thetime being in force for registration of documents, and is made onaccount of natural love and affection between parties standing ina near relation to each other; or unless

(2) xxxx

In any of these cases, such an agreement is a contract.

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Illustration (b). A, for natural love and affection, promises to givehis son, B, Rs.1,000. A puts his promise to B into writing andregisters it. This is a contract.”

21. The parties are in near relations, the appellant No.1 being theelder brother and the sale was executed to help his younger brother whowas facing auction of the property gifted by the parents of the parties.Even the defendants’ witnesses have admitted that there was a noticeof Court auction of the property in question by beat of drum. Therefore,if elder brother had come to the help of the younger brother, discharginghis debtors and executing a sale deed mentioning a nominal saleconsideration, it cannot be said to be a sale without consideration. It isadmitted by respondent No.1 that a sum of Rs.12,000/- was paid by theappellant No. 1 to discharge his debts. Once there is an admission of therespondent No. 1 of discharge of his debts by appellant No.1, the saledeed registered in normal course of official duties carries the presumptionof correctness which cannot be said to be illegal only on the basis offeigned ignorance that his signatures were obtained on papers whichrespondent No. 1 and his wife did not know. The Judgment of this Courtin Bellachi supports the argument raised by the appellants.

22. The only stand of respondent No.1 is ignorance of the natureof the document on which his signatures were obtained. Such ignoranceis not an instance of misrepresentation or a fraud in the facts of thepresent case which would vitiate a sale deed executed and registeredwith the Sub-Registrar. It has been admitted by respondent No. 1 thathe went to the Sub-Registrar’s office with his wife, signed once outsidethe Municipal Building and once before the Officers, shows that tacticallyhe has admitted execution of the sale deed without expressly stating so.We find that the findings of the Courts below that the document is withoutconsideration or the consideration having not pleaded in the plaint or thefact that appellant No. 1 has discharged the debtors of respondent No. 1will not render the document of sale deed as void.

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A23. Order VI Rule 2 of the Code of Civil Procedure, 1908[5 ]is tothe effect that every pleading shall contain, and contain only, a statementin a concise form of the material facts on which the party pleading reliesupon for his claim or defence as the case may be, but not the evidenceby which they are supposed to be proved. Appellant No.1 has reliedupon the sale deed which contains the recital of payment of Rs.3,000/-Bas the sale consideration. The evidence in support of such sale deedwas not required to be pleaded in the plaint filed by the appellant. Stillfurther, in terms of Order VI Rule 4 of the Code, in all cases in whichthe party pleading relies on any misrepresentation, fraud, or undueinfluence shall state in the pleadings the particulars with dates and itemsCin the pleadings. The extract from the written statement or the plaintdoes not show that there is any pleading of misrepresentation or fraud.The evidence led by the respondents is not indicative of any instance offraud or misrepresentation as well. Respondent No. 1 was candid enoughto admit that there were debts of Rs.12,000/- which were paid off byappellant No.1. He also admits that he was taken to the Municipal OfficeDand signed once outside the Municipal Office and once inside theMunicipal Office. His wife had accompanied him. With such facts onrecord, we find that the findings recorded by the Courts below that thesale deed was result of fraud or misrepresentation are clearly notsustainable.

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24. Mr. Dhruv Mehta relied upon judgments of this Court reportedas Smt. Gangabai w/o Rambilas Gilda v. Smt. Chhabubai w/oPukharajji Gandhi[6] and Roop Kumar v. Mohan Thedani[7] to contendthat the respondents can lead oral evidence to rebut the contents of thedocument but not the appellants who had relied upon the sale deed. InFGangabai, the plaintiff entered into an agreement with the appellant fora loan of Rs.2,000/- and it was decided that simultaneously the plaintiffwould execute a nominal document of sale and a rent note. It was allegedby the plaintiff that documents were never intended to be acted upon.The trial court decreed the suit holding that the sale deed was neverintended to be acted upon but the First Appellate Court held that the saleGhas taken place but the transaction between the parties constitutes amortgage. The High Court held that Section 92 of the Indian Evidence 5 For short, the ‘Code’6 (1982) 1 SCC 4H7 (2003) 6 SCC 595

Act, 1872[8 ]did not prevent plaintiff from establishing the true nature ofthe transaction. In appeal, this Court held that first proviso to Section 92permits any fact which may prove which would invalidate any document,such as fraud, intimidation, illegality, want of due execution can be ledinto evidence. This Court while dismissing appeal of the defendant heldas under:

“11. …It is clear to us that the bar imposed by sub-section (1) ofSection 92 applies only when a party seeks to rely upon thedocument embodying the terms of the transaction. In that event,the law declares that the nature and intent of the transaction mustbe gathered from the terms of the document itself and no evidenceof any oral agreement or statement can be admitted as betweenthe parties to such document for the purpose of contradicting ormodifying its terms. The sub-section is not attracted when thecase of a party is that the transaction recorded in the documentwas never intended to be acted upon at all between the partiesand that the document is a sham. Such a question arises whenthe party asserts that there was a different transactionaltogether and what is recorded in the document was intendedto be of no consequence whatever. For that purpose oral evidenceis admissible to show that the document executed was neverintended to operate as an agreement but that some other agreementaltogether, not recorded in the document, was entered into betweenthe parties…”(Emphasis Supplied)

25. A reading of the aforesaid judgment would show that it wasopen to the plaintiff to assert that the document was never intended tobe acted upon and the document is a sham. Such question arises whenone party asserts that there has been a different transaction altogetherthan what is recorded in the document. It is for that purpose oral evidenceis admissible.

26. In Roop Kumar, this Court was seized of an appeal filed bythe defendant arising out of a suit for possession and for rendition ofaccounts. The plaintiff claimed that he entered into an agency-cum-deed of license with the appellant-defendant on 15.5.1975 and the termsof such agency-cum-licensing agreement was incorporated in anagreement dated 15.5.1975.The stand of the defendant was that he was 8 For short, the ‘Evidence Act’

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Ain lawful possession as a tenant under the plaintiff. The trial court decreedthe suit holding that the transaction between the respondent and theappellant evidenced by an agreement dated 15.5.1975 amounts to licenseand not sub-letting. The question before the High Court was whether arelationship between the parties is that of a licensor and licensee or thatof a lessor and lessee. The first appeal was dismissed. This Court heldBthat it is general and most inflexible rule that in respect of writteninstruments, any other evidence is excluded from being used either as asubstitute for such instruments, or to contradict or alter them. This is amatter both of principle and policy. It was held that in Section 92 of theEvidence Act, the legislature has prevented oral evidence from beingCadduced for the purpose of varying the contract, such contract can beproved by production of such writing. It was held that Section 91 isconcerned with the mode of proof of a document with limitation imposedby Section 92. If after the document has been produced to prove itsterms under Section 91, provisions of Section 92 come into operation forthe purpose of excluding evidence of any oral agreement or statementDfor the purpose of contradicting, varying, adding or subtracting from itsterms. This Court held as under:

“17. It is likewise a general and most inflexible rule that whereverwritten instruments are appointed, either by the requirement oflaw, or by the contract of the parties, to be the repositories andEmemorials of truth, any other evidence is excluded from beingused either as a substitute for such instruments, or to contradictor alter them. This is a matter both of principle and policy. It is ofprinciple because such instruments are in their own nature andorigin, entitled to a much higher degree of credit than oral evidence.FIt is of policy because it would be attended with great mischief ifthose instruments, upon which men’s rights depended, were liableto be impeached by loose collateral evidence. (See Starkie onEvidence, p. 648.)

18. In Section 92 the legislature has prevented oral evidence beingGadduced for the purpose of varying the contract as between theparties to the contract; but, no such limitations are imposed underSection 91. Having regard to the jural position of Sections 91 and92 and the deliberate omission from Section 91 of such words oflimitation, it must be taken note of that even a third party if hewants to establish a particular contract between certain others,H

either when such contract has been reduced to in a document orwhere under the law such contract has to be in writing, can onlyprove such contract by the production of such writing.

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21. The grounds of exclusion of extrinsic evidence are: (i) to admitinferior evidence when the law requires superior would amountto nullifying the law, and (ii) when parties have deliberately puttheir agreement into writing, it is conclusively presumed, betweenthemselves and their privies, that they intended the writing to forma full and final statement of their intentions, and one which shouldbe placed beyond the reach of future controversy, bad faith andtreacherous memory.

22. This Court in Gangabai v. Chhabubai [(1982) 1 SCC 4 : AIR1982 SC 20] and Ishwar Dass Jain v. Sohan Lal [(2000) 1 SCC434 : AIR 2000 SC 426] with reference to Section 92(1) held thatit is permissible to a party to a deed to contend that the deed wasnot intended to be acted upon, but was only a sham document.The bar arises only when the document is relied upon and itsterms are sought to be varied and contradicted. Oral evidence isadmissible to show that document executed was never intendedto operate as an agreement but that some other agreementaltogether, not recorded in the document, was entered intobetween the parties.”(Emphasis Supplied)

27. A perusal of the above judgment would show that the oralevidence of a written agreement is excluded except when it is sought tobe alleged the document as a sham transaction.

28. It is beyond dispute that a sale deed is required to be registeredi.e. a document required by law to be reduced to the form of a document.Therefore, no evidence of any oral agreement or statement shall beadmitted for the purpose of contradicting, varying, adding or subtractingfrom its terms. The proviso (1) of Section 92 of the Evidence Actonwhich reliance was placed is a proof of such fact which would invalidateany document such as fraud, intimidation, illegality, want of due execution,want of capacity in any contracting party, want or failure of consideration,or mistake in fact or law. Section 92 of the Evidence Act reads as under:

“92. Exclusion of evidence or oral agreement. - When the termsof any such contract, grant or other disposition of property, or any A

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Amatter required by law to be reduced to the form of a document,have been proved according to the last section, no evidence ofany oral agreement or statement shall be admitted, as betweenthe parties to any such instrument or their representatives in interest,for the purpose of contradicting, varying, adding to, or subtractingfrom, its terms:BProviso (1).—Any fact may be proved which would invalidateany document, or which would entitle any person to any decreeor order relating thereto; such as fraud, intimidation, illegality, wantof due execution, want of capacity in any contracting party, wantor failure of consideration, or mistake in fact or law.”C29. The respondents were free to prove fraud in execution of thesale deed. However, factually, the respondents have not alleged anyfraud in their suit or in the written statement in the suit filed by appellantNo. 1. The feigned ignorance about the nature of document cannot besaid to be an instance of fraud. In the absence of any plea or proof ofDfraud, respondent No.1 is bound by the written document on which headmitted his signatures and of his wife. There is no oral evidence whichcould prove fraud, intimidation, illegality or failure of consideration topermit the respondents to lead oral evidence to dispute the sale deeddated 14.9.1970. Therefore, the judgments referred to by Mr. MehtaEare of no help to support his arguments. Thus, the findings recorded bythe First Appellate Court as affirmed by the High Court are clearlyerroneous in law and are, thus, set aside.

30. Accordingly, the appeal is allowed and the judgment and decreepassed by the trial court in Special Civil Suit No. 55/77/I is restored.FSpecial Civil Suit No. 71/80/I is dismissed. The respondents are giventwo months’ time to vacate and hand over the vacant physical possessionof the property in question.

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Divya Pandey

Appeal allowed.

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