Mangilal Narsingdas Gattani vs Daulat Shewale and Others

A.H. Joshi, J.—This is second appeal filed by the original plaintiffs,

The plaintiff filed a Special Civil Suit No. 23 of 1982 for specific performance of contract and in the alternative for refund of consideration. The defendant No. 1 is the owner and possessor of a Touring Cinema Talkies which comprises of machines such as Projector, Amplifier and other equipments such as curtain, tent of cinema, loud speaker, almirah for booking house all in running condition, necessary for running Touring Cinema Talkies. On 14.3.1981, the defendant No. 1 entered into an agreement of sale with the plaintiffs and promised to sell the suit property. Under the agreement, the defendant Nos. 2 and 3 were to share the agreed consideration of Rs. 40.000/- to the extent of Rs. 6,000/- by the defendant No. 2 and Rs. 4.000/- by the defendant No. 3. The plaintiff had to pay Rs. 25,000/- in cash at the time of agreement and a sum of Rs. 5.000/- was to be paid at the time of delivery of possession to the defendant No. 1 and thereupon, the defendant No. 1 had to transfer licence alongwith all necessary permission of Shri Gattani Talkies in the name of the plaintiff. The date of delivery of possession was agreed to be on or before 15.1.1982 at Janephal, Tah. Mehakar, District Buldana. The defendant No. 1 was indebted to defendant No. 2 for Rs. 6.000/- and also indebted to defendant No. 3 to Rs. 4,000/-. According to the plaintiff, the amount was adjusted for purchasing suit property and necessary entry was made to that effect in the agreement executed by the defendant No. 1 thereby the defendant No. 1 received Rs. 35.000/- from the plaintiff alongwith defendant Nos. 2 and 3. The defendant No. 2 had taken responsibility of handing over lawful possession of the suit property for which he executed a separate agreement in favour of the plaintiff and even thereby he stood surety to the plaintiff towards any breach by the defendant No. 1 in relation to the agreement dated 14.3.1981 thereby defendant promised to compensate the plaintiff towards the amount, of consideration transferred by him as well as loss, damages etc., and agreed to charge by way of security towards the promise his agricultural card namely :-

------------------------------------------------------------------------ S.No. H.R. Assessment ------------------------------------------------------------------------ 1. 182/1 3-30 5-81 2. 185/2 8-9 16-56 ------------------------------------------------------------------------

As the defendants failed to perform their part, the plaintiff gave notice on 24.4.1982 and showing willingness to make balance consideration of Rs. 5,000/-. The plaintiff filed a suit for specific performance of agreement and in the alternative for refund of consideration and for keeping the charges on the property towards the decreetal liability.

The suit was opposed by the defendant No. 1 wherein he denied the execution of agreement dated 14.3.1981 and as well denied the promises with the defendant Nos. 2 and 3 relating to paying part of consideration amount. According to the defendant No. 1, the agreement dated 14.3.1981 is fabricated and scribed behind the back of the defendant No. 1 without his knowledge and without proper attestation and that it was a matter of conspiracy between the plaintiff and the attesting witnesses to procure with ulterior motives. He also denied the promise of the defendant No. 2 relating to charging his property. According to the defendant No. 1, as he had suffered loss in the business during the yatra of Kalmeshwar, he was in dire need of a sum of Rs. 5.000/- and he borrowed the loan from the plaintiff at "Sawal" to be repaid at the end of 6th month, for which the defendant No. 1 purchased three stamp papers of Rs. 5 on 27.1.1982 and signed the blank stamp papers believing the plaintiff on his representation and promise not to misuse. He ultimately prayed for dismissal of the suit.

The defendant Nos. 2 and 3 more or less adopted the defence taken by the plaintiff.

After framing issues, the Trial Court proceeded to hear the evidence and delivered the judgment and decree ''on 6.4.1984. Learned Trial Court reached a conclusion in favour of the plaintiff as far as proof of agreement of sale is concerned and payment of earnest of Rs. 25.000/-. However, on the point of question as to whether decree of specific performance should be granted. The learned Trial Court found that the plaintiff was entitled for refund of consideration though according to the Court, the defendant No. 1 was never ready and willing to perform his part of contract as he has denied the very nature of transaction. The Court held that the claim for damages was not proved and therefore, on the basis of mere claim which could not have been granted, the Trial Court placed charge of the debt under the decree on the properties of the defendant No. 2.

The defendant No. 2 who was aggrieved by the decree, preferred Regular Civil Appeal No. 79 of 1984. The plaintiff as well challenging the decree by filing cross objection in so far as the claim for damages is concerned and claiming interest on the decreetal amount at the rate of Rs. 12% per annum with effect from 14.3.1981. The appeal has been heard and decided by the judgment and decree dated 18.4.1987, wherein the Court allowed the appeal of the defendant No. 2 and set aside the part of the decree of the Trial Court by which the charge was kept on the property of the defendant No. 2 and dismissed the plaintiffs cross objection. It is this decree passed by the 1st Appellate Court which is challenged in present second appeal.

At the time of admission, this Court had formulated substantial question of law namely whether the document of agreement creating charge and guarantee, can be read for collateral purpose i.e. probably for guarantee. At the hearing, learned Advocate Shri Hedau sought to argue, isolate the substantial question of law with a prayer that question be re-framed. Thus, the question which is argued pertains reading Exh. 39 a document of creation of charge executed by the defendant No. 2 to be interpreted as deed of guarantee. Substantial question of law thus, formulated reads as follows :-

Is Exh. 39 document, creating charge liable to be read as a contract of guarantee, and could be considered for said collateral purpose.

Entire submissions were focused on Section 49 of the Registration Act, Learned Advocate for the appellant relied upon reported judgment AIR 1969 SC 609 for the purpose of substantiating the plea that the document could be read for collateral purpose. Learned Advocate submitted that a contract of guarantee was not compulsorily registered u/s 17 of the Registration Act and that to this extent Exh. 39 can be read in evidence.

In reply, learned Advocate Shri Dhabe placed reliance on reported judgment Ratan Lal and Others Vs. Hari Shanker and Others, . In this judgment, scope of collateral purpose has been discussed. The claim in question in the case at hand before the Allahabad High Court was a deed of partition which was not admissible in evidence and was sought to be relied upon as arrangement deed. Relying upon the Kale and Others Vs. Deputy Director of Consolidation and Others, , Lordships of Allahabad High Court held that while had the agreement been oral, it did not require registration, however, once the terms are reduced into writing, it becomes imperative to have the document registered. The plea of family arrangement which was sought to be derived from such document which needed registration, cannot be admitted in evidence for want thereof. This judgment relied upon by Shri Dhabe does not in any manner contradict the proposition advanced by Advocate Shri Hedau.

The question still arises is even if the said document Is read in evidence, what is relief that the plaintiff is entitled in the event this Court considers proper to reverse the decree of the Appellate Court. The prayer of qua the defendant No. 2 contained in the plaint are prayer Clauses (b) and (c). Prayer (c) is for keeping the charge on the property. Prayers (b) and (c) read as under :-

(b) In any case the plaintiff claims alternatively refund of consideration of Rs. 25.000/- as well as damages of breach of contract of Rs. 15.000/- total Rs. 40,000/- from all the defendants jointly and severally.

(c) The Hon''ble Court, further be pleased to declare the charge of the present plaintiff over the field S. Nos. 185/2 and 182/1 situated at village Janephal tq. Mehkar, District Buldana over the 4 acres of land from each S. No. which is owned by defendant No. 2 for the satisfaction of the decree.

Once it is held that the document Exh. 39 is not admissible for the purpose of creation of charge on the property, but can be construed to be a document of contract of guarantee, lesser relief than what is prayed alone may be granted. Thus prayer (c) in any event cannot be granted.

The substantial question of law initially formulated and later on modified can thus, be answered in the affirmative. In the result, the appeal partly succeeds and appellant is entitled to restoration of the decree of Trial Court as originally passed against the defendant Nos. 1 and 2 except order Clause No. 4 thereof. Hence, the following order.

The order Clause Nos. 1, 2, 3. 5 & 6 of the decree of the Trial Court passed on 6.4.2000 in Regular Civil Suit No. 23 of 1982 are restored with costs throughout.