Grounds of Appeal

The Hon'ble Court Erred in Dismissing the 2nd Defendant's Plea for
Dismissal of the Suit: The trial court erred in concluding that the
plaintiff's suit should not be dismissed despite the fact that the
plaintiff (A. Ibrahim Nallengara) failed to include Poornani, a
necessary party to the case, as a defendant. The court's ruling on
this matter is inconsistent with its own findings that Poornani co-
owned the property with the 1st defendant (V.S. Ganapathy). The
absence of a co-owner, who is a party to the sale deed, from a case
concerning the property's title and sale agreement is a fundamental
legal flaw.

The Hon'ble Court Erred in Granting a Charge on the Property: The

trial court erred in granting the plaintiff a charge on the property,
specifically on the 1st defendant's share of the properties (Items 1
and 2). This is a direct contradiction of its own findings that the
appellant (2nd defendant) is a bona fide purchaser. The court itself
held that the appellant purchased properties (Items 3 to 6) before the
lawsuit was filed and that the sale agreement between the plaintiff
and the 1st defendant was not registered, which made it unlikely for
the appellant to have knowledge of the agreement. The court's
decision to grant a charge on the properties essentially burdens a
bona fide purchaser's interest.

The Hon'ble Court Erred in Its Findings Regarding the Sale Deeds: The
trial court failed to properly consider the fact that the appellant
acquired the properties (Items 3 to 6) through registered sale deeds
on September 8, 2016, which was well before the lawsuit was filed on
October 4, 2018. Furthermore, the appellant also acquired properties
(Items 1 and 2) through a registered sale deed on September 5,
2022, while the lawsuit was still pending. The court's decision to
dismiss the case against the appellant for some of the properties
(Items 3-6) while simultaneously placing a charge on the remaining
ones (Items 1-2) is inconsistent and legally unsound. The appellant,
as a bona fide purchaser, should not be held liable for an
unregistered agreement between the plaintiff and the 1st defendant.

The Hon'ble Court Erred in Its Interpretation of Section 55 of the

Transfer of Property Act: The trial court incorrectly applied Section 55
of the Transfer of Property Act to create a charge on the property in
favor of the plaintiff. The court failed to consider that this section
would not apply to a bona fide purchaser who acquired the property
without notice of the prior unregistered agreement. The court's
decision essentially gives precedence to an unregistered and
unproven agreement over a valid, registered sale deed.

The Hon'ble Court Erred in Its Finding That the Plaintiff Was Not at
Fault: The trial court's finding that the plaintiff was not at fault for the
failure of the sale agreement is erroneous. The court's own
observations indicate that the plaintiff failed to take any action to
enforce the agreement for an extended period, only sending a legal
notice to the 1st defendant in September 2018, nearly three years
after the agreement was allegedly made. This delay clearly
demonstrates a lack of readiness and willingness on the part of the
plaintiff to fulfill their obligations under the contract. The court's
decision to grant a remedy to a party who was not diligent is legally
incorrect.

The Hon'ble Court Erred in Its Findings of Fact and Law: The judgment
and decree are contrary to the evidence presented and the
applicable law. The court failed to give due weight to the oral
evidence of the 2nd defendant (P.W.1) and the documentary
evidence (P.W.A.1 to P.W.A.6), which clearly established the
appellant's position as a bona fide purchaser without knowledge of
the prior agreement.

Erroneous Finding on Sale Agreement Validity:The trial court erred in

holding the sale agreement dated 01.10.2015 (Ex. A1) as a valid,
subsisting, and enforceable contract, without appreciating that the
agreement was never acted upon nor was possession delivered. The
agreement was not registered and does not mention the date of
execution, raising serious doubts about its enforceability under
Section 17 and Section 49 of the Registration Act, 1908.

The trial court failed to consider the evidence that the agreement
was hurriedly typed, lacked sufficient particulars, and the recitals did
not specify the actual parties in possession or capacity to sell,
especially when the properties already stood in the name of third
parties on the relevant date.
Lack of Privity and Absence of Consideration: The appellant was not a
party to the alleged agreement nor was she privy to any negotiations
or transaction between the plaintiff and the 1st defendant. The
impugned judgment overlooks the fact that subsequent transactions
by registered deeds were valid and statutory, and any claim
regarding advance money should have been strictly against the 1st
defendant, not the appellant.

Misappreciation of Evidence and Law: The trial court misapplied the

law relating to specific performance and alternative relief. It placed
reliance on precedents (Ravindran v. Danton Shanmugam 2017(3)
MWN (Civil) 320) without distinguishing the factual matrix,
particularly the absence of proof regarding actual payment of
advance amount to the appellant or existence of any legal liability on
her part to refund.

The impugned judgment wrongly treats the 2nd defendant as liable,

despite the fact that she acquired title from parties other than the
plaintiff and 1st defendant, following due process and for valuable
consideration through registered sale deeds. The findings disregard
the requirement for the plaintiff to establish that the alleged
transaction affected the appellant’s rights.

Failure to Frame Proper Issues: The trial court failed to address the
primary issue regarding the nature, validity, and enforceability of the
sale agreement and whether the subsequent sale deeds in favour of
the appellant were hit by any prior contractual or legal obligation.

The decree directing refund of amounts from the appellant is thus

unsustainable in law and contrary to settled principles governing
restitution and specific relief under the Specific Relief Act, 1963 and
Section 65 of the Indian Contract Act, 1872.

Quantum and Rate of Interest: The award of interest at 12% p.a. from
2015 is arbitrary and excessive, especially when the facts do not
support deliberate withholding or unjust enrichment by the appellant.
The rate ought to have been reasonable and restricted to the
principal debtor, viz., 1st defendant if at all.
Erroneous Decree Against Appellant: The learned trial Judge gravely
erred in holding that the plaintiff is entitled to recover an alleged
advance amount with interest from the appellant, when in fact the
appellant was not a party to the agreement dated 01.10.2015 and
had no privity of contract with the plaintiff.

Non-joinder of Necessary Parties: The trial court failed to appreciate

that the suit property was originally purchased in the name of one
Poorani under two sale deeds dated 12.12.2011. She being a
necessary party to any contract relating to the property, her non-
impleadment rendered the suit and findings unsustainable.

Absence of Proof of Payment: The finding that the plaintiff paid a total
advance of Rs.25,00,000/- is unsustainable, since no credible
documentary proof was filed to establish the alleged cash payment of
Rs.20,00,000/-. The alleged cheque/DD of Rs.5,00,000/- was not
proved to have been encashed by the appellant.

Misappreciation of Evidence: The learned Judge erred in relying upon

Ex.A1 (alleged sale agreement) though it was undated, executed on
insufficient stamp paper, and attested by witnesses who admittedly
could neither read nor understand the recitals. The suspicious
circumstances surrounding Ex.A1 were ignored.

Failure to Consider Defendant’s Evidence: The court failed to give

due weight to the defence that the suit agreement was fabricated for
the purpose of extracting money, and that the 2nd Defendant had
purchased the property under a registered sale deed dated
08.09.2016, much prior to the alleged notice by plaintiff.

Improper Decree Against Non-Signatory: The decree directing

recovery against the appellant is legally untenable, as the appellant
was a bona fide purchaser for value under a registered sale deed,
and was not privy to any alleged earlier arrangement between
plaintiff and 1st Defendant.

Limitation and Delay: The suit filed in October 2018, nearly three
years after the alleged agreement of October 2015, was hopelessly
barred by limitation under Article 54 of the Limitation Act. The trial
court failed to consider that time was the essence of contract.
Failure to Frame Proper Issues: The trial court failed to frame and
decide necessary issues regarding (i) the validity of the undated
agreement, (ii) the maintainability of a recovery suit without
cancellation of subsequent registered sale deed in favour of
appellant, and (iii) limitation.

Contradictory Findings: While the court held the agreement valid, it

simultaneously held that the appellant, a subsequent purchaser, is
liable for refund. Such contradictory findings reflect misapplication of
settled law that a stranger to contract cannot be burdened with
liability.

Quantum of Interest Arbitrary: The direction to pay interest at 18%

per annum is arbitrary, excessive, and contrary to settled principles.
Even assuming any liability, which is denied, the imposition of such
usurious interest is wholly unsustainable.

Equitable Considerations Ignored: The trial court failed to appreciate

that the plaintiff, having remained silent for over three years and not
taking steps to enforce the alleged agreement, is guilty of laches and
is disentitled to equitable relief. The decree unjustly enriches the
plaintiff at the expense of a bona fide purchaser.

The learned Trial Judge erred in law and on facts in holding that the
alleged sale agreement dated 01.10.2015 (Ex.P.1) is genuine and
valid, despite clear inconsistencies and suspicious circumstances
surrounding its execution, including the absence of any mention of
the date of preparation, the identity of the document writer, and the
fact that the stamp paper was purchased on the same day as the
alleged execution, rendering it hastily prepared and unreliable.

The learned Trial Judge failed to appreciate that the 1st

Defendant/Respondent No.2 had categorically denied entering into
any sale agreement with the Plaintiff/Respondent No.1, denied
receiving any advance, and denied his signatures on Ex.P.1 in his
written statements, and the Trial Court's reliance on the testimonies
of P.W.1 and P.W.2 (both from Kerala, unfamiliar with Tamil, and
interested witnesses) without independent corroboration or forensic
verification of signatures amounts to a grave miscarriage of justice.
The learned Trial Judge erred in accepting the Plaintiff/Respondent
No.1's claim of payment of ₹20,00,000/- in cash as advance, without
any receipt, bank records, or independent evidence, especially when
the alleged payment was in ₹100 and ₹500 notes, and no proof was
adduced for the return of the ₹5,00,000/- cheque or its substitution
with cash on 15.10.2015, rendering the finding perverse and
unsupported by evidence.

The learned Trial Judge wrongly shifted the burden of proof onto the
Defendants by not requiring the Plaintiff/Respondent No.1 to strictly
prove the execution and validity of Ex.P.1 under Sections 67 and 68
of the Indian Evidence Act, 1872, particularly when the agreement
was unregistered, conditional on obtaining crusher permissions
(which were never obtained), and lacked a fixed timeframe for
completion, making it unenforceable under Section 54 of the Transfer
of Property Act, 1882, and Section 29 of the Indian Contract Act,
1872.

The learned Trial Judge erred in not dismissing the suit for non-joinder
of necessary parties, as Poorani (co-owner of the suit properties 1 to
6, as evidenced by Ex.D.1 to D.3) was not impleaded, despite her
ownership through sale deeds dated 12.12.2011, rendering the
decree ineffective and violative of Order I Rule 10 of the Code of Civil
Procedure, 1908, as any charge or recovery affects her undivided
share.

The learned Trial Judge failed to consider that the alleged sale
agreement (Ex.P.1) is void ab initio for want of consideration and
authority, as the 1st Defendant/Respondent No.2 only held a half-
share in the suit properties, could not bind Poorani's share, and the
Plaintiff/Respondent No.1 admitted discovering this defect shortly
after 2015 but took no steps until 2018, indicating abandonment or
waiver of the agreement.

The learned Trial Judge erred in holding that the Appellant/2nd

Defendant is a bona fide purchaser only qua suit properties 3 to 6,
while ignoring that the Appellant held a valid General Power of
Attorney (Ex.D.3 dated 08.09.2016) for properties 1 and 2 prior to the
suit's filing, and the subsequent sale of properties 1 and 2 on
05.09.2022 (Ex.D.4) was in good faith for value without notice of
Ex.P.1, entitling the Appellant to protection under Section 41 of the
Transfer of Property Act, 1882.

The learned Trial Judge wrongly created a charge on the 1st

Defendant's half-share in suit properties 1 and 2 under Section 55(6)
(b) of the Transfer of Property Act, 1882, as the suit was merely for
money recovery (not specific performance or rescission), the
properties were sold during pendency without any interim injunction
or attachment, and the doctrine of lis pendens under Section 52 does
not apply retrospectively to the Appellant who was added as a party
only on 05.08.2022, after the GPA was executed.

The learned Trial Judge failed to appreciate that the suit is barred by
laches and delay, as the alleged agreement was in 2015, the
Plaintiff/Respondent No.1 learned of the defects and the sale to the
Appellant in 2016, yet filed the suit only in 2018 and added the
Appellant in 2022, without any explanation, violating equity and
Article 54 of the Limitation Act, 1963 (if treated as specific
performance) or Article 113 (for money recovery).

The learned Trial Judge erred in not holding that time was of the
essence in the alleged agreement (conditional on crusher
permissions and phased payments), and the Plaintiff/Respondent
No.1's failure to perform or enforce within a reasonable time (over 3
years) disentitles him to any relief, as per Section 55 of the Indian
Contract Act, 1872.

The learned Trial Judge arbitrarily awarded 12% interest per annum
on ₹20,00,000/- from 01.10.2015, without evidence of commercial
rates or the Plaintiff/Respondent No.1's loss, and contrary to Section
34 of the Code of Civil Procedure, 1908, which caps post-decree
interest at 6% unless justified, especially when the claim for 18% was
rejected and no interest was stipulated in Ex.P.1.

The learned Trial Judge failed to draw an adverse inference against

the Plaintiff/Respondent No.1 for not examining the intermediaries
Kuppusamy and Ponnusamy or producing any contemporaneous
records, bank statements, or tax acknowledgments to prove the cash
payments, rendering the decree based on insufficient evidence.
The learned Trial Judge erred in concluding that the fault lay solely
with the 1st Defendant/Respondent No.2, ignoring the
Plaintiff/Respondent No.1's admission of not verifying title documents
before paying advance, which amounts to negligence and bars
equitable relief.

The impugned Judgment and Decree is perverse, against the weight

of evidence, and liable to be set aside in toto, as it grants relief not
prayed for (charge on only properties 1 and 2) and ignores the
Appellant's bona fide status qua all properties.