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2022 (4) TMI 1647 - HC - Indian LawsChallenge judgment and decree passed by the Additional District Court - lending of money or not - deed of sale carry a mandatory presumption under section 34(2)(a) of the Registration Act with regard to its execution and registration or not - deed of assignment was obtained from the plaintiff himself - absence of pleadings or evidence impugning the validity or execution of Exhibit B1 deed of assignment - burden to prove the borrowal of amount - defendant resisted the suit contending that he never lent money to the plaintiff. HELD THAT - Apart from the interested testimonies of PWs 1 and 2 the plaintiff and his wife there is no other convincing evidence or circumstance to enter into a conclusion that an oral agreement in respect of the sale of the property had taken place on 25.8.2004. In Grasim Industries Ltd. v. Agarwal Steel 2009 (10) TMI 952 - SUPREME COURT the Apex Court held that when a person signs a document there is a presumption unless there is proof of force or fraud that he has read the document properly and understood it and only then he has affixed his signature thereon otherwise no signature on a document can ever be accepted. In Prem Singh v. Birbal 2006 (5) TMI 517 - SUPREME COURT the Apex Court held that there is a presumption that a registered document is validly executed. The registered document therefore prima facie would be valid in law. The onus of proof thus would be on a person who leads evidence to rebut the presumption. In Vimal Chand Ghevarchand Jain and Ors. v. Ramakant Eknath Jadoo 2009 (3) TMI 997 - SUPREME COURT the Apex Court held that a registered deed of sale carries the presumption that the transaction was a genuine one and that if the execution of sale deed is proved onus is on the defendant to prove that the deed is not executed and it was a sham document. In the present case the plaintiff failed to lead cogent evidence to rebut the presumption available to a registered document - In the case on hand the plaintiff failed to establish evidence on the touchstone of the principles discussed above to establish the existence of an oral contract as pleaded. Apart from the interested testimonies of the plaintiff and his wife no other convincing evidence is available to show that there was an oral agreement - In the present case the plaintiff failed to show that he is still in possession of the plaint schedule property. Right of possession over a property is a facet of title. The legal fiction consequent to the execution of Ext. B1 sale deed is that the plaintiff stands dispossessed. The First Appellate Court misconstrued the evidence and failed to draw necessary presumptions and inferences on the pleadings and evidence. The First Appellate Court lost sight of the settled principle that a decree for specific performance could not be granted based on an oral agreement unless there was cogent evidence to prove the same. The finding of the First Appellate Court that the plaintiff is in possession of the plaint schedule property is contrary to the evidence available. The First Appellate Court was not justified in reversing the decree and judgment of the trial Court. The Court also lost sight of the evidentiary burden on the plaintiff by invoking the proviso under Section 92 of the Evidence Act assailing the execution of Ext. B1. The resultant conclusion is that the judgment and decree passed by the First Appellate Court are liable to be set aside. Conclusion - i) A registered document carries a presumption of validity and the burden is on the challenging party to rebut this presumption with cogent evidence. ii) The principle that possession follows title applies unless there is convincing evidence to the contrary. iii) Specific performance based on an oral agreement requires clear and convincing evidence and interested testimonies alone are insufficient. iv) The burden of proof lies on the party alleging an oral agreement or borrowal to provide evidence supporting their claims. The Regular Second Appeal is allowed.
ISSUES PRESENTED and CONSIDERED
The Court considered several substantial questions of law in this appeal: 1. Whether Exhibit B1, a registered sale deed, carries a mandatory presumption under Section 34(2)(a) of the Registration Act regarding its execution and registration, and if the appellate court was justified in granting a decree for specific performance based solely on the plaintiff's oral evidence. 2. Whether the presumption that possession follows title applies since the title of the defendant was obtained from the plaintiff himself, indicating a transfer of title and possession of the property. 3. Whether the plaintiff is entitled to the benefit of Section 91 or the proviso to Section 92 of the Evidence Act to challenge the execution and validity of Exhibit B1, and if the appellate court was justified in reversing the trial court's decision based on the plaintiff's evidence. 4. Whether the plaintiff had the burden to prove the borrowal of Rs. 1 lakh from the defendant in exchange for executing Exhibit B1, and if the appellate court was justified in reversing the trial court's decision without evidence of such borrowal or an oral agreement for sale. ISSUE-WISE DETAILED ANALYSIS 1. Presumption of Validity of Registered Documents: The legal framework under Section 34(2) of the Registration Act and precedents such as Grasim Industries Ltd. v. Agarwal Steel and Prem Singh v. Birbal establish that a registered document carries a presumption of validity. The Court noted that the plaintiff failed to provide cogent evidence to rebut this presumption. The Court emphasized that the execution of a registered deed is presumed valid unless proven otherwise by the party challenging it. 2. Possession Follows Title: The principle that possession follows title was considered, with the Court observing that the defendant's acquisition of title through Exhibit B1 implied possession. The evidence showed that the defendant had remitted land tax and was in possession of the property, reinforcing the presumption that possession accompanies title. 3. Oral Agreement and Burden of Proof: The Court examined the plaintiff's claim of an oral agreement for reconveyance. It highlighted that specific performance based on an oral agreement requires convincing evidence, as established in cases like Ouseph Varghese v. Joseph Aley and Brij Mohan v. Sugra Begum. The Court found that the plaintiff's evidence, primarily consisting of interested testimonies, was insufficient to prove the existence of such an agreement. 4. Borrowal of Money and Execution of Exhibit B1: The Court analyzed the plaintiff's claim of borrowing Rs. 1 lakh from the defendant and executing Exhibit B1 as security. It noted the lack of evidence supporting this claim and emphasized the burden on the plaintiff to prove the borrowal and the alleged oral agreement. The Court found that the plaintiff failed to discharge this burden. 5. Treatment of Competing Arguments: The Court considered the defendant's arguments regarding the sale transaction and the alleged sale of a jackfruit tree. It found that the defendant's evidence was consistent with the registered sale deed, and the absence of documentation for the jackfruit tree transaction did not undermine the validity of Exhibit B1. 6. Conclusions: The Court concluded that the plaintiff failed to provide sufficient evidence to rebut the presumption of validity of Exhibit B1 or to prove the existence of an oral agreement for reconveyance. The appellate court's decision to grant specific performance was not supported by the evidence, and the trial court's dismissal of the suit was justified. SIGNIFICANT HOLDINGS The Court emphasized the following core principles: - A registered document carries a presumption of validity, and the burden is on the challenging party to rebut this presumption with cogent evidence. - The principle that possession follows title applies unless there is convincing evidence to the contrary. - Specific performance based on an oral agreement requires clear and convincing evidence, and interested testimonies alone are insufficient. - The burden of proof lies on the party alleging an oral agreement or borrowal to provide evidence supporting their claims. The Court set aside the judgment and decree of the First Appellate Court, restoring the trial court's decision to dismiss the suit. The parties were directed to bear their respective costs.
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