2009 (3) TMI 997 - SC - Indian Laws

Whether the deed of sale deed of sale was executed as a security for the amount of money lending of ₹ 50,000/- and was not intended to be acted upon as a sale deed?

Issues Involved:
1. Ownership and Title of the Property
2. Nature of the Sale Deed
3. Relationship Between the Parties (Licensor-Licensee or Otherwise)
4. Admissibility and Interpretation of Evidence under Sections 91 and 92 of the Indian Evidence Act
5. Payment and Recovery of Storage Charges

Issue-wise Detailed Analysis:

1. Ownership and Title of the Property:
The appellant (plaintiff) claimed ownership of the property based on a registered sale deed dated 29.6.1978, executed by the respondent's father. The respondent, however, denied the execution of the sale deed and claimed that neither he nor his father had sold the property. The respondent also contended that the title of the suit property was never transferred to the appellant.

2. Nature of the Sale Deed:
The primary contention was whether the sale deed was a genuine transaction or merely a security for a loan. The respondent argued that the sale deed was a sham document executed as security for a loan of Rs. 50,000 and not intended to transfer ownership. The trial court, first appellate court, and the High Court all considered circumstantial evidence and concluded that the sale deed was executed as a money lending transaction. The Supreme Court, however, emphasized that the sale deed was a registered document, carrying a presumption of genuineness, and that the respondent failed to discharge the burden of proving it was a sham.

3. Relationship Between the Parties (Licensor-Licensee or Otherwise):
The appellant claimed that the respondent's father was given possession of the property as a licensee at a monthly fee of Rs. 1,257.50. The respondent denied any licensor-licensee relationship and contended that no such deed was executed. The trial court and the first appellate court found the appellant's claim of a licensor-licensee relationship unconvincing, citing the excessive monthly charges and lack of regular payment records. The Supreme Court, however, noted that the respondent's father was put in possession on 1.7.1978, and the character of his possession was in dispute.

4. Admissibility and Interpretation of Evidence under Sections 91 and 92 of the Indian Evidence Act:
The appellant argued that the courts below erred in not adhering to the best evidence rule under Sections 91 and 92 of the Indian Evidence Act. The Supreme Court acknowledged that extrinsic evidence could be admitted to determine the true nature of the transaction but found that the respondent failed to provide sufficient evidence to prove the sale deed was a sham. The Court emphasized that the deed of sale was a registered document, and the respondent did not examine himself during the trial, leading to an adverse inference.

5. Payment and Recovery of Storage Charges:
The appellant sought recovery of Rs. 45,270 as arrears of storage charges at the rate of Rs. 1,257.50 per month. The trial court and the first appellate court dismissed this claim, finding the charges excessive and the payment records inconsistent. The Supreme Court did not specifically address this issue in its final judgment, focusing instead on the nature of the sale deed and the respondent's failure to prove it was a sham transaction.

Conclusion:
The Supreme Court set aside the judgments of the lower courts, holding that the plaintiff's suit should have been decreed. The Court found that the respondent failed to discharge the burden of proving the sale deed was a sham and emphasized the presumption of genuineness attached to a registered document. The appeal was allowed with costs, and the respondent was ordered to pay Rs. 50,000 with interest at 6% per annum from 29.6.1978 until realization. The Supreme Court also highlighted the importance of approaching the court with clean hands for equitable relief.

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