Biji Pothen v Thankamma John and Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE THOMAS P.JOSEPH FRIDAY, THE 25TH DAY OF MAY 2012/4TH JYAISHTA 1934 RSA.No. 139 of 2005 ( ) ----------------------AS.130/2002 of PRINCIPAL SUB COURT,KOCHI OS.527/2000 of PRINCIPAL MUNSIFF COURT, KOCHI APPELLANT(S)/APPELLANT/1ST DEFENDANT: ---------------------------------------------- BIJI POTHEN S/O. K.M.BABY, RESIDING AT KARINGADAVEEDU, NEDUMKUNNAM VILLAGE NEDUMKUNNAM MURI, NEDUMKUNNAM 686 542 MALLAPPALLY TALUK. BY ADVS.SRI.K.GOPALAKRISHNA KURUP, SR. ADVOCATE SRI.SADER E.REAZ RESPONDENT(S)/RESPONDENTS/PLAINTIFF & DEFENDANTS 2 & 3: ------------------------------------------------------- 1. MRS.THANKAMMA JOHN W/O. JOHN, AGED 50 YEARS, RESIDING AT PALLIPARAMBIL HOUSE C.C.1/1806, (OLD NO.C.C.1/1274), THEKKE THAMARAPARAMBU DESOM, FORT KOCHI VILLAGE KOCHI TALUK, ERNAKULAM DISTRICT 2. MR.PHILIP SENTY ISSAC @ SANTY PHILIP S/O. MR.C.I.PHILIP, AGED ABOUT 31 YEARS RESIDING AT VELUTHAMODAYIL HOUSE, NEDUMGARAPPALLY MALLAPPALLY PANCHAYAT, MALLAPPALLY TALUK. 3. MRS.BIJI W/O. MR.PHILIP SANTY ISSAC, AGED ABOUT 26 YEARS, RESIDING AT VELUTHAMODAYIL HOUSE, NEDUMGARAPPALLY, MALLAPPALLY PANCHAYAT MALLAPPALLY TALUK. ADV. SMT.ELIZABETH MATHAI IDICULLA FOR R1 ADV. SRI.MOHAN IDICULLA ABRAHAM FOR R1 ADV. SRI.MARTIN D.ALUMKARA FOR R1 ADV. SRI.RACHEL JOSEPH FOR R1 ADV. SMT.PUSHPY B.MURICKEN FOR R1 THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 25-05-2012, ALONG WITH RSA. 194/2005, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **THOMAS P. JOSEPH, J.** **-------------------------------------R.S.A. Nos.139 & 194 of 2005 -------------------------------------Dated this the 25[th] day of May, 2012.** ## **JUDGMENT** Following are the substantial questions of law framed for a decision in these second appeals arising from the judgment and decree in A.S.Nos.130 of 2002 and 130(A) of 2002 of the Principal Sub Court, Kochi which arose from the judgment and decree in the suit and counter claim in O.S.No.527 of 2000 of the Principal Munsiff's Court, Kochi: i. Whether the finding of the courts below that relationship of plaintiff and defendants 2 and 3 is fiduciary in nature is justified in the facts and circumstances of the case? ii. Whether the legal conclusion arrived by the courts below on the basis of proved facts that Ext.B3 is vitiated by fraud and misrepresentation is correct, especially when the plaintiff, who is of full age and of sound mind executed that deed voluntarily, by which she was denuded of her property, is bound by her own act? iii. Whether the courts below are justified in setting aside Ext.B3, when the plaintiff failed to make out a case of fraud or misrepresentation, with necessary pleadings of utmost particularity and specific facts? 2 RSA No.139 & 194/2005 iv. Whether the courts below are justified in inferring fraud from the circumstances placed, when the alleged acts were not sufficient to draw an inference of fraudulent intention? v. Whether the conduct of the plaintiff revealed from the admitted and proved facts in the case, coupled with the omission to mention in Ext.P7 (first notice) regarding execution of Ext.B3 under the belief the the same was a hypothecation deed, particularly when she realised the (alleged) mistake as early as on 30.11.1999 is inconsistent with the case of fraud pleaded by the plaintiff? 2. 1[st] respondent/plaintiff was the owner of 6 ¾ cents of land with building thereon in survey Nos.1036/A/1A2 and 1036/1A1A of Fort Kochi Village as per settlement deed No.3109 of 1985 executed by her father (Ext.A1 is a copy of that document). 1[st] respondent sold 3 ½ cents and portion of the building in it as per assignment deed dated 30.11.1989, a copy of which is marked as Ext.A2. While so, Ext.B3, assignment deed No.4891 of 1999 dated 04.11.1999 (Ext.A6 is its certified copy) was (allegedly) executed by the 1[st] respondent in favour of the appellant as if the latter conveyed her right, title, interest and possession of the entire 6 ¾ cents for consideration of `50,000/-. According to the 1[st] respondent, she was closely acquainted with respondents 2 and 3/defendants 2 and 3 (husband and wife) The husband of 1[st] respondent, the 2[nd] respondent and the son-in-law of the 1[st] respondent had joint business 3 RSA No.139 & 194/2005 abroad. In the above situation, 1[st] respondent had much confidence and trust in respondents 2 and 3. Thus respondents 2 and 3 stood in a fiduciary relationship with the 1[st] respondent. Respondents 2 and 3 were in dire need for `50,000/- and approached the 1[st] respondent with a request to lend that amount. Since the 1[st] respondent was short of money, she could not oblige them. Respondents 2 and 3 suggested that appellant who is a money lender is willing to advance the amount (`50,000/-) to respondents 2 and 3 on the strength of a deed of hypothecation. Respondents 2 and 3 wanted the 1[st] respondent to execute a deed of hypothecation concerning her property. 1[st] respondent consulted her husband (PW3) who was abroad over telephone and on getting his assent, agreed to execute a hypothecation deed in respect of her property in favour of the appellant as security for the loan to be availed by respondents 2 and 3. 1[st] respondent handed over the original settlement deed No.3109 of 1985 to the respondents 2 and 3 for preparation of the draft hypothecation deed. A draft hypothecation deed was prepared and that was approved by the 1[st] respondent. A photocopy of that draft (marked as Ext.A5) was given to the 1[st] respondent. On 04.11.1999 1[st] respondent, accompanied by her daughter (PW2) and the 2[nd] respondent went to the office of the Sub Registrar where a document was got executed by the 1[st] respondent. Along with that, four signed blank stamp papers/papers were also obtained from the 1[st] respondent. According to the 1[st] respondent, she was under the impression that what was being executed was a deed of hypothecation of her property in favour of the appellant as security for the loan of `50,000/- appellant had advanced to 4 RSA No.139 & 194/2005 respondents 2 and 3. Later, getting information from one Giji, PW3, the husband of 1[st] respondent informed the latter from abroad that respondents 2 and 3 had availed a loan of `8,00,000/- (and not `50,000/- as represented to the 1[st] respondent) from the appellant. Thereon, 1[st] respondent obtained a certified copy of the document she was made to execute (on 04.11.1999) and on verification of the certified copy (Ext.A6), 1[st] respondent learnt that she was deceived by the appellant and respondents 2 and 3 to execute an assignment deed in respect of 6 ¾ cents (including the 3 ¼ cents referred to in the plaint schedule). According to the 1[st] respondent, she never intended to execute an assignment deed like Ext.B3. She only intended to execute a deed of hypothecation. It is her further case that the suit property and the building situated thereon is valued much more than `50,000/- mentioned in Ext.B3. 1[st] respondent contended that Ext.B3, assignment deed No.4891 of 1999 dated 04.11.1999 is obtained by fraud, misrepresentation and collusion and hence is void. 1[st] respondent claimed that notwithstanding Ext.B3 she continues to be in possession of the suit property and the building thereon and is residing on the ground floor of the said building. She therefore wanted that document to be set aside. 3. Appellant denied that there was any fraud, misrepresentation or collusion as pleaded by the 1[st] respondent. He contended that he purchased the suit property for a total consideration of `50,000/- and with the eyes wide open, 1st respondent executed the assignment deed (Ext.B3) in his favour. 5 RSA No.139 & 194/2005 Since the 1[st] respondent wanted to stay in the ground floor of the building in the suit property, she was allowed to do so on rental arrangement. 1[st] respondent executed Ext.B2, rent deed dated 04.11.1999 in favour of the appellant. Appellant claimed that he is in possession of the suit property though, by virtue of Ext.B2, 1[st] respondent was allowed to stay in the ground floor of the building as his tenant. He claimed that since out of the sale consideration of `50,000/-, he had already paid `35,000/- even prior to the execution of Ext.B3, assignment deed, he did not get the property measured at the time of Ext.B3 and hence the extent of property happened to be mentioned in Ext.B3 as 6 ¾ cents. He claimed that since the 1[st] respondent had title and possession of only 3¼ cents which alone she could convey to him, he is entitled to get back the proportionate value of 3½ cents (amounting to `16,600/-). 1[st] respondent prayed for dismissal of the suit and made a counter claim for recovery of 16,600/- with interest from the 1[st] respondent. 4. Respondents 2 and 3 denied that they had any such acquaintance with the 1[st] respondent as the latter pleaded. They contended that as desired by the 1[st] respondent, they found out a purchaser (appellant) since the 1[st] respondent wanted to sell the suit property to provide money to her daughter. Respondents 2 and 3 denied that there was any collusion, fraud or misrepresentation on their part in the matter of execution of the sale deed (Ext.B3). 6 RSA No.139 & 194/2005 5. Learned Munsiff framed issues among others whether Ext.B3, assignment deed is vitiated by fraud, collusion and misrepresentation as pleaded by 1[st] respondent, the same is liable to be set aside and whether the counter claim of appellant is allowable? Learned Munsiff concluded that Ext.B3, assignment deed was obtained by fraud, misrepresentation and collusion and it is liable to be set aside. Accordingly, the declaration prayed for by the 1[st] respondent was granted and the consequence was a dismissal of the counter claim. 6. Appellant, in challenge of the decree in the suit and dismissal of the counter claim filed A.S.Nos.130 of 2002 and 130(A) of 2002. Appellant filed applications in the said appeals to amend the counter claim raising a plea that as consideration for purchase of the 6 ¾ cents he had paid `8,00,000/- to the 1[st] respondent, the proportionate value of 3 ½ cents (excluding the 3 ¼ cents which alone according to the appellant he got title as per Ext.B3) would come to `3,00,000/- and hence, the counter claim be amended allowing the appellant to recover `3,00,000/- with interest from the 1[st] respondent. The first appellate court dismissed the applications for amendment. First appellate court concurred with the findings of learned Munsiff on other issues and dismissed the appeals. Hence these Second Appeals. 7 RSA No.139 & 194/2005 7. Learned Senior Advocate for the appellants contended that the courts below have proceeded on a wrong tangent as if the first respondent had pleaded that whether Ext.B3 though executed as a sale deed, was taken as security for the loan allegedly availed by respondents 2 and 3. The issue involved in the case is only whether the plea of 'non est factum' raised by the 1[st] respondent, ie., that 1[st] respondent intended to execute only a deed of hypothecation but, she was made to sign a deed of conveyance is correct or not? According to the learned Senior Advocate, having regard to the facts and circumstances of the case, a plea of non est facturm is not available to the 1[st] respondent who was aged around 50 years (at the time of execution of Ext.B3, assignment deed) and even as per her admission, had studied upto the SSLC. Learned Senior Advocate, placing reliance on the decision in **Saunders v. Anglia Building Society ((1970) 3 All ER 961)** relied on in **Mathu v. Cherchi (1990 (1) KLT 416)** has contended that in a situation of the nature presented in this case, 1[st] respondent could not successfully raise a plea of non est factum. It is also contended by the learned Senior Advocate that the allegation of fraud, misrepresentation and collusion which required a higher degree of proof, is not established. According to the learned Senior Advocate, when Ext.B3 is a document duly executed and registered in accordance with the law in force, a mere allegation of fraud, misrepresentation and collusion is not sufficient. It is argued that since Ext.B3 is a registered document, there should be a presumption attached to it that it is duly and validly executed. Learned Senior Advocate contends that the evidence let in by the 1[st] respondent is insufficient to 8 RSA No.139 & 194/2005 enter a finding that Ext.B3 is the result of collusion, fraud or misrepresentation. It is pointed out that the discrepancy in the extent of property in Ext.B3 is sufficiently explained by the appellant in his evidence as DW1. It is argued that no fiduciary relationship existed between the 1[st] respondent and respondents 2 and 3. A further contention is that the first appellate court was not correct in disallowing the applications made in A.S.Nos.130 of 2002 and 130(A) of 2002 for amendment of the counter claim. It is pointed out that even the evidence let in by the 1[st] respondent would indicate that `8,00,000/- was given to the 1[st] respondent by way of sale consideration and hence, appellant is entitled to get back the proportionate value of the 3 ½ cents. 8. The learned counsel for 1[st] respondent has contended that in so far as the case of 1[st] respondent is that the document (Ext.B3) was got executed by fraud, misrepresentation and collusion, a plea of non est factum is available to the 1[st] respondent even as the decisions relied on by the learned Senior Advocate would say. Learned counsel contended that circumstances proved in the case are sufficient to show that the document was got executed by collusion, fraud and misrepresentation. It is pointed out by the learned counsel that when fraud and misrepresentation relates to the character of the document, the document is void unlike in the case of a recital in a document. The trial and first appellate courts have rightly found that the document was got executed by collusion, fraud and misrepresentation and that being a finding of fact, no substantial question of law is involved. It is also contended that first appellate 9 RSA No.139 & 194/2005 court was right in dismissing the applications filed in the appeals for amendment of the counter claim - it is argued that as against the amount mentioned in Ext.B3 (`50,000/-) appellant is barred from pleading, under Sec.92 of the Evidence Act (for short, “the Act”) that the sale consideration was `8,00,000/-. 9. Though, in the written statement respondents 2 and 3 denied that they had such acquaintance with the 1[st] respondent as the latter pleaded, it has come in evidence that respondents 2 and 3 were acquainted with the 1[st] respondent atleast to the extent that respondents 2 and 3 had gone to the house of the 1[st] respondent atleast once. According to the 1[st] respondent (PW1), respondents 2 and 3 had stayed in her house once. It is seen from the deposition of the 2[nd] respondent (PW5) that in cross examination he was confronted with a photograph (that photograph is not exhibited in evidence or produced in the case) and PW5 admitted that it is the photograph of himself, 3[rd] respondent (his wife), 1[st] respondent and a child and that the said photograph was taken when himself and the 3[rd] respondent had been to the house of the 1[st] respondent. It is the case of 1[st] respondent that her husband had some joint business abroad with the 2[nd] respondent for some time. 2[nd] respondent when examined as PW5 admitted that he was also abroad at the time PW3, the husband of 1[st] respondent was abroad and thus he knew the 1[st] respondent and family well. According to the 1[st] respondent (as PW1) her acquaintance with respondents 2 and 3 is since one month before Ext.B3. 10 RSA No.139 & 194/2005 10. The question is whether from the above, there could be a finding that respondents 2 and 3 were in a fiduciary relationship with the 1[st] respondent as found by the trial court and as confirmed by the first appellate court? What is a “fiduciary relationship” was considered by a Division Bench of this Court in **Francis v. Central Bank of India (1990 (2) KLT 983)** . This Court was considering whether a surety to the principal debtor could be said to be standing in a fiduciary relationship so far as the creditor is concerned. This Court held that 'fiduciary relationship' invariably involves dominion over property which is wholly lacking in the case of a contract of suretyship or guarantee, that the surety has not received anything nor has he been given dominion with money or property and that he has no liability to account. There is no quasi-trust or fiduciary capacity involving liability to account in relation to another. Mere confidence cannot result in a fiduciary relationship. Another Division Bench in **Sunitha v. Ramesh (2010 (3) KLT 501)** while considering whether the relationship between the husband and wife creates any fiduciary relationship for the purpose of Clause (c) of the proviso to Sec.51 of the Code of Civil Procedure (for short, “the Code”) observed that all relationships which are built on mutual trust, dependence and confidence of special variety can be described to be fiduciary relationship for the purpose of Clause (c) of proviso to Sec.51 of the Code and that following the dictionaries, a trustee, executor, administrator, director of a corporation or society, medical or religious advisor, husband and wife, ward and guardian, agent and principal, etc. can safely be held to have fiduciary relationship. The term “fiduciary” as an adjective means “in the nature 11 RSA No.139 & 194/2005 of a trust, having the characteristics of a trust, analogus to a trust; relating to or founded upon a trust or confidence”. Assuming that respondents 2 and 3 were well acquainted with the 1[st] respondent and they shared the confidence, that would not create any fiduciary relationship between them in that, one was liable to account to the other, one had dominion over the other or one was bound to protect the interest of the other. Therefore the finding entered by the trial and first appellate courts that respondents 2 and 3 stood in a fiduciary relationship with the 1[st] respondent is patently erroneous and cannot be sustained. 11. Could the 1[st] respondent, on the facts, circumstances and evidence successfully take up the plea of non est factum to avoid Ext.B3 is the next question. 12. Lord Denning MR said in Gallie v. Lee ((1969) 1 All ER 1062 at page 1072): “Whenever a man of full age and understanding, who can read and write, signs a legal document which is put before him for signature - by which I mean a document which, it is apparent on the face of it, is intended to have legal consequences - then, if he does not take the trouble to read it, but signs it as it is, relying on the word of another as to its character or contents or effect, he cannot be heard to say that it is not his document. By his conduct in signing it he has represented, to all those into whose 12 RSA No.139 & 194/2005 hands it may come, that it is his document; and once they act on it as being his document, he cannot go back on it, and say it was a nullity from the beginning.” Applying the said principle, Lord Denning MR pointed out: “............... the plaintiff cannot in this case say that the deed of assignment was not her deed. She signed it without reading it, relying on the assurance of the first defendant that it was a deed of gift to Mr.Parkin. It turned out to be a deed of assignment to the first defendant. But it was obviously a legal document. She signed it; and the building society advanced money on the faith of its being her document. She cannot now be allowed to disavow her ” signature. 13. Donovan LJ said in Muskham Finance Ltd. v. Howard ((1963) 1 All ER 81 at page 83): “The plea of non est factum is a plea which must necessarily be kept within narrow limits. Much confusion and uncertainty would result in the field of contract and elsewhere if a man were permitted to try to disown his signature simply by asserting that he did not understand that which he had signed.” Mellish LJ said, in Hunter v. Walters ((1871) 7 Ch. App. 75 at page 87): 13 RSA No.139 & 194/2005 “Now, in my opinion, it is still a doubtful question of law, on which I do not wish to give any decisive opinion, whether, if there be a false representation respecting the contents of a deed, a person who is an educated person, and who might, by very simple means, have satisfied himself as to what the contents of the deed really were, may not, by executing it negligently be estopped as between himself and a person who innocently acts upon the faith of the deed being valid, and who accepts an estate under it.” 14. The above decisions were referred to with acceptance in **Saunders v. Anglia Building Society** (supra). Lord Pearson opined in **Saunders** case; “the principle stated by Lord Denning MR can and should be applied so as to confine the scope of the plea of non est factum within narrow limits. It rightly prevents the plea from being successful in the normal case of a man who, however much he may have been misinformed about the nature of a deed or document, could easily have ascertained its true nature by reading it and has taken on himself the risk of not reading it......” and held, 14 RSA No.139 & 194/2005 “In my opinion, the plea of non est factum ought to be available in a proper case for the relief of a person who for permanent or temporary reasons (not limited to blindness or illiteracy) is not capable of both reading and sufficiently understanding the deed or other document to be signed............ There would not be a proper case if: (a) the signature of the document was brought about by negligence of the signer in failing to take precautions which he ought to have taken ; or (b) the actual document was not fundamentally different from the document as the signer believed it to be....” Lord Pearson also accepted the law laid down in Foster v. Mackinnon ((1869) LR 4 CP 704) that a person who had signed a document differing fundamentally from what he believed it to be would be disentitled from successfully pleading non est factum if his signing of the document was due to his own negligence. ## 15. Referring to the decision in **Saunders v. Anglia Building Society** (supra) this Court in **Mathu v. Cherchi** (supra) stated in paragraph 7: “Plea of mistake of fact is peculiar to the law of written contracts due to the existence of the common law defence of non-est-factum, which permits one who has signed a document, which is essentially different from what he intended to sign, to plead that, notwithstanding his signature, it is not “his deed in contemplation law”. The defence of being too lazy or too busy to read is not available. The plea must be kept within narrow limits in 15 RSA No.139 & 194/2005 order to avoid confusion and uncertainty in the field of contract if a man is permitted to disown his signature simply by asserting that he did not understand what he signed. He must show that the transaction which the document purports is essentially different in substance or kind from the transaction intended. In a case where the person executing the deed is not blind, infirm or otherwise incapacitated and no fraudulent misrepresentation is made to him and he had opportunity of reading the deed, the plea of non-est factum is not available. It is immaterial whether he read or not. He is bound by the deed because it operates as a conclusive bar against him not because he read or understood, but because he has chosen to execute it. That is so in equity as at law except in special cases where there is an equitable ground. The plea can rarely be established by a person of full capacity. Though it is not confined to blind or illiterate alone, any extension of the scope of the plea will have to be kept within specified limits. The plea must be proved by the person setting it up. He must show that he acted with care.” A plea of non est factum is available to a blind or illiterate person or to a person who, for permanent or temporary reasons, not limited to blindness or illiteracy was not capable of both reading and sufficiently understanding the deed or other document he signed and not to a person who could have easily ascertained its true nature by reading it but has taken on himself the risk of not reading it. 16 RSA No.139 & 194/2005 16. Learned Senior Advocate for the appellant contends that if in spite of having the opportunity to read and understand the deed (Ext.B3), 1[st] respondent did not do so and took the risk of signing it without reading or understanding it, she cannot turn round and contend that she did not intend to execute the document as it is signed, executed and registered. It is pointed out that 1[st] respondent aged around only 50 years at the relevant time, had studied upto the SSLC and was able to read and understand the vernacular language in which Ext.B3 is prepared. Evidence also shows that PW2, her daughter aged about 26 years then and had studied upto B.Com. had accompanied the 1[st] respondent for execution and registration of the deed. It is contended that having regard to the said circumstances 1[st] respondent cannot successfully raise a plea of non-est factum. 17. The learned counsel for 1[st] respondent contends that the decision in **Mathu v. Cherchi** (supra) has no application to the facts of this case since even in that decision it is held that when there is fraud and misrepresentation a plea of non-est factum is available. In that case there was no evidence of fraud or misrepresentation. Learned counsel submits that in this case there is sufficient evidence of collusion, fraud and misrepresentation on the part of the appellant and respondents 2 and 3 in deceiving the 1[st] respondent to sign Ext.B3, document. 17 RSA No.139 & 194/2005 18. As the evidence reveals, 1[st] respondent was aged about 50 years at the relevant time and had studied upto the SSLC. For the execution and registration of the document (Ext.B3), she was accompanied by PW2, her daughter then aged about 26 years and who had studied upto B. Com. The version of 1[st] respondent is that prior to the execution of the document (Ext.B3), a draft of the hypothecation deed was brought to her for approval, she approved it and a photocopy of that (Ext.A5), was given to her. It is the further case of the 1[st] respondent as PW1 that when the document was signed, it was done in such a way that the former pages of the document were lifted a little so that, she could sign on the bottom of the subsequent pages. 19. It is relevant to note that so far as Ext.B1 which is an application signed by the 1[st] respondent for effecting mutation of the property in the name of the appellant (consequent to Ext.B3, assignment deed), 1[st] respondent has admittedly signed not only at the bottom of each page but also at the middle of the reverse side of the first page which is in printed form. It is difficult to think that unaware of the printed form on the reverse side of the first page of Ext.B1, 1[st] respondent subscribed her signature. Hence, her contention that lifting the former pages a little, she was made to sign blank papers in the subsequent pages cannot be accepted. 18 RSA No.139 & 194/2005 20. Turning to Ext.B3, assignment deed even if it is assumed for the sake of argument that as pleaded by the 1[st] respondent her signature was obtained on the subsequent pages of Ext.B3 by lifting the former pages a little, I must notice that on the first page itself it is specifically written in the vernacular language known to the 1[st] respondent that it is an assignment deed executed by her in favour of the appellant. She has signed on the bottom of the first page also. It is difficult to think that unaware of the contents of atleast the first page of Ext.B3, 1[st] respondent who was aged about 50 years and has studied upto the SSLC, accompanied by her daughter, PW2 still younger and studied upto the B.Com. signed. 1[st] respondent is neither blind nor illiterate. Nor has she a case that due to any temporary or permanent reason she was unable to read and understand the contents of Ext.B3. She has no case that by fraud or otherwise, she was not allowed to read and understand the contents. Her only case is that she signed the document without reading it under the impression that it is a deed of hypothecation a copy of which was given to her. 21. It is relevant to note whether Ext.A5 is a draft of the hypothecation deed (allegedly) executed at the instance of appellant or respondents 2 and 3. According to the 1[st] respondent, when the draft of the hypothecation deed was brought to her for approval, Ext.A5 which is a photocopy of the same was given to her. It is not proved by evidence who had drafted the original of Ext.A5. Ext.A5 does not say who had drafted that document. It is not signed by anybody. DWs 2 and 3, the scribe and his assistant (who prepared Ext.B3) 19 RSA No.139 & 194/2005 denied that they had prepared any draft hypothecation deed. They denied that Ext.A5 is in their handwriting. Thus, there is no reliable evidence, apart from the ipse dixit of the 1[st] respondent as PW1 and the evidence her daughter has given as PW2 about the draft of the hypothecation deed being brought to 1[st] respondent and Ext.A5 being its photocopy. When it was suggested to the 1[st] respondent (PW1) that the handwriting in Ext.A5 is similar to the docket writing on Ext.A5 (for production in the trial court), 1[st] respondent was not able to give any satisfactory answer. Thus, Ext.A5 emerges from suspicious circumstances. There is no reliable evidence to show that any draft of the hypothecation deed was prepared by the appellant or respondents 2 and 3, brought to the 1[st] respondent for approval or that Ext.A5 is the photocopy of that draft given to the 1[st] respondent. 22. It is also difficult to think, having regard to the evidence that any such draft hypothecation deed was prepared and given to the 1[st] respondent. Ext.A1 is the certified copy of settlement deed No.3109 of 1985 executed in favour of the 1[st] respondent by her father concerning the 6¾ cents. 1[st] respondent sold 3½ cents (out of the said 6¾ cents) as per assignment deed dated 30.11.1989 (Ext.A2 is a copy of that deed). If so, at the time the transaction referred to by the parties took place the extent of property available to the 1[st] respondent for sale was only 3 ¼ cents and building thereon. Ext.A5, photocopy also refers to the said 3¼ cents while in Ext.B3, the extent of property sought to be conveyed is stated as 6¾ cents and the building. Had a 20 RSA No.139 & 194/2005 draft hypothecation deed been prepared by or to the knowledge of the appellant, he would have been aware that the property available to the 1[st] respondent, be it for hypothecation or conveyance was only 3¼ cents in which case he would not have allowed Ext.B3 to be executed for the entire 6 ¾ cents. That indicates that appellant had no information about the alleged execution of the draft hypothecation deed or Ext.A5. 23. Learned counsel for 1[st] respondent would contend that if appellant was a bonafide purchaser, he would not have, in the light of Ext.A2, assignment deed dated 30.11.1989 assigning 3 ½ cents out of the 6¾ cents agreed to purchase 6¾ cents. Certainly the argument is attractive at the first blush. But I must refer to the circumstances while considering that argument. Appellant contended that since out of the sale consideration of `50,000/- (mentioned in Ext.B3) he had already paid `35,000/- (to the 1[st] respondent), he did not go for a measurement of the property (to be conveyed) and thus he happened to get Ext.B3 executed in respect of 6 ¾ cents. Ext.A11 is the certificate of encumbrance dated 22.01.2001 which the 1[st] respondent has produced in support of her case. It is for the period from 01.01.1988 to 12.01.2001. Ext.A2, assignment deed is executed on 30.11.1989. But, there is no mention in Ext.A11, certificate of encumbrance about execution of Ext.A2. Assuming that the appellant, unaware of the assignment as per Ext.A2 got Ext.B3 executed, that does not mean that the version of the 1[st] respondent that without reading and understanding the contents of Ext.B3 she signed it, has to be accepted. 21 RSA No.139 & 194/2005 24. Learned counsel for the 1[st] respondent has brought my notice to Ext.B2, rent deed executed by the 1[st] respondent in favour of the appellant. It is pointed out that in the second page, the witness is seen to have signed above the signature of the executant, the 1[st] respondent. I have perused Ext.B2 and find that on the first page of Ext.B2, 1[st] respondent has signed while in the second page, her signature appears to be below the signature of the witness. It is also pointed out by the learned counsel that notwithstanding that there is admittedly tenants occupying the first floor of the building in the 3 ¼ cents over which appellant is now claiming right, title, interest and possession as per Ext.B3, there is no mention of the first floor of the building being occupied by the tenants. I am inclined to think that merely for the reason of executant signing on the second page of Ext.B2 after the witness has signed it or because in Ext.B3 there is no mention of the first floor of the building being occupied by the tenants I must conclude that there was fraud or misrepresentation on the part of the appellant or respondents 2 and 3. 25. Though appellant contended in the written statement that he took the sale deed for a total consideration of .`50,000/- and paid `35,000/- in advance, in the course of the first appeals, he filed applications for amendment of the counter claim to state that the sale consideration was `8,00,000/- and that excluding the proportionate consideration for the 3 ¼ cents he is entitled to get back proportionate consideration for the 3 ½ cents covered by Ext.A2, I am inclined to think that in view of the bar under Sec.92 of the Act, appellant is 22 RSA No.139 & 194/2005 precluded from contending so (see **Ambika Kumari v. Ramakrishnan (1991 (2) KLT 728** ), **Krishi Utpadan Mandi Samiti, Sahaswan v. Bipin Kumar ((2004) 2 SCC 283)** and **Vasu @ Bhaskaran v. Parukutty Amma and another (2012 (1) KHC 285** )) . 26. PW3 is the husband of the 1[st] respondent. He would say that for execution of the hypothecation deed 1[st] respondent had consulted him over telephone as he was abroad and he gave consent. Later, he learnt from one Giji that respondents 2 and 3 had availed a loan of `8,00,000/- from the appellant. It is also the version of PW3 that he learnt that it was not a deed of hypothecation appellant had obtained but, a deed of conveyance and that information was conveyed to the 1[st] respondent. PW5 is the 2[nd] respondent. He did not support 1[st] respondent. It has come in evidence that before the institution of the suit 1[st] respondent had preferred a complaint to the Dy.S.P.,Thiruvalla. According to the 1[st] respondent, the stand of the Police initially was favourable to her but the Police was won over by the appellant and respondents 2 and 3. Thereon, she preferred a complaint to the Superintendent of Police, Pathanamthitta. Ext.A10 is a receipt dated 17.07.2000 issued by the Superintendent of Police for acceptance of the complaint. It would appear that at the Thiruvalla Police Station some agreement was executed (that agreement has not seen the light of the day) concerning the dispute. PW5 (2[nd] respondent) stated in cross examination that at the Police Station he had executed an agreement stating that he had borrowed `8,00,000/- from the appellant on the security of the suit property. He agreed to repay the said sum of `8,00,000/- to 23 RSA No.139 & 194/2005 the 1st respondent(?). He would say that he paid the said amount of `8,00,000/- by way of cheque. At another stage he would say that the cheque was given to the appellant. It is also the version of PW5 that the said agreement was got executed under compulsion and on being satisfied of that, the said agreement was cancelled by the Dy. S.P. It was suggested to PW5 (2nd respondent) on behalf of the 1st respondent that there is a practice of executing sale deed as security for repayment of the loan and when the loan is repaid, the property is reconveyed. PW5 answered in the affirmative. He also said that the present transaction is not in that way (obviously, the said statement came from PW5 in answer to the question whether the present transaction was one in which a sale deed was executed as security for the loan on the understanding that when the loan is repaid, property will be reconveyed. But that is not the case pleaded or attempted to be proved by the 1[st] respondent). 27. PW3, the husband of 1[st] respondent would say that the 2nd respondent gave cheque for 19,000 Dirhams to PW3 (according to PW3, one Dirham corresponded to `10/- as per the Indian Currency) and that the 2nd respondent had given a cheque for the said amount which he encashed. PW3 was asked what action he had taken on that basis. The answer was that it is for that purpose that the court was approached (it is not disputed that the only case pending in the court is the present case). It is also the version of PW3 that 2[nd] 24 RSA No.139 & 194/2005 respondent said that `8,00,000/- was received from the appellant and what the 2 nd respondent gave to the 1st respondent is the cheque for the said sum of ` 8,00,000/-. But that was not as the consideration for sale of the property. 28. I referred to the evidence of PWs 3 and 5 concerning the sum of `8,00,000/-. Evidence of PWs 3 and 5 in that regard is confusing and contradictory. If the 1[st] respondent, as she vows had no transaction with the appellant, she had not availed any loan from the appellant and instead, it was respondents 2 and 3 who had availed a loan of `50,000/- from the appellant, it is not clear why, as PW3 stated, 2[nd] respondent gave cheque for 19,000 Dirhams to PW3 or `8,00,000/- to the 1[st] respondent at her residence. There is no case for the 1[st] respondent that she had received any money from the 2[nd] respondent. I must also notice that this is not a case where the 1[st] respondent pleaded and attempted to prove that she executed a sale deed (Ext.B3), knowing it be so but as security for the loan availed either by the 1[st] respondent or by respondents 2 and 3, on a condition that on repayment of the amount the property will be reconveyed. Instead, the plea is one of non-est factum. 29. A further fact I must notice is that according to PW3, he learnt while abroad from Giji that the loan availed by respondents 2 and 3 is not of `50,000/- but of `8,00,000/-, that the deed executed by the 1[st] respondent is not a hypothecation deed but a deed of reconveyance and that information was given to the 1[st] respondent over telephone. The averment in the plaint and the 25 RSA No.139 & 194/2005 evidence of 1[st] respondent is that learning that the loan availed by respondents 2 and 3 was not `50,000/- but was `8,00,000/- she applied for and obtained copy of Ext.B3 (Ext.A6). That was followed by Ext.A7, notice dated 23.06.2000 from the 1[st] respondent to the appellant. It is seen from Ext.A6 that the said copy was obtained by the 1[st] respondent on 30.11.1999. This, the 1[st] respondent also admitted in her evidence as PW1. Assuming that she had not read or understood Ext.B3 at the time of its execution and registration, she would have read Ext.A6 when she got it on 30.11.1999 particularly in view of the information she claims to have got from PW3, her husband that it is not a deed of hypothecation but a deed of conveyance. Still in Ext.A7, notice dated 23.06.2000, ie., almost after six months of her learning from PW3 and Ext.A6 that she has executed a deed of conveyance, there is no mention in Ext.A7 about the nature of transaction she has entered with the appellant - she did not say in Ext.A7 that she intended to execute only a deed of hypothecation but , by fraud, collusion or misrepresentation she was made to sign a sale deed. That is not a conduct which is expected from a reasonable and prudent person. The absence of any mention of the present version of 1[st] respondent in Ext.A7 is an eloquent indication that her version that she signed Ext.B3 without reading and understanding it is nothing but a cock and bull story. 30. Learned counsel for 1[st] respondent has argued that the appellant is a money lender. It is pointed out that the specific averment in paragraph 3 of the plaint to that effect is not denied in the written statement filed by the 26 RSA No.139 & 194/2005 appellant. It is also pointed out by the learned counsel that though appellant when examined as DW1 denied that he is running two finance companies, he admitted that if correspondences are addressed to him in the address of “Proprietor, Nedumkunnam Financiers”, he would get it. He added that he would not decline such correspondences and would receive it if it also mentioned 'Mulavanam Estate'. It is relevant to note from Ext.A7, notice that it was issued to the appellant in his address as the “Proprietor of M/s.Nedunkunnam Financiers” and that even without the address of 'Mulavanam Estate' appellant has accepted it, may be, his residential address is also mentioned there. In Ext.B3, calling of the appellant is stated as 'business'. True that 1[st] respondent when examined as PW1 stated that her information that appellant is a money lender is a hearsay. But, from the circumstances I am inclined to accept the version of 1[st] respondent that appellant is running a private financing institution. But, that does not mean that appellant has to fail so far as due execution of Ext.B3 is concerned for the reasons I have stated above. 31. I must also notice that under Sec.34(2) of the Registration Act, the registering authority is to enquire whether or not the document is executed by the persons by whom it purports to have been executed. Sec.60(1) of the said Act deals with certificate of registration and Sub-sec.(2) states that such certificate shall be signed, sealed and dated by the registering officer and shall then be admissible for the purpose of proving that the document has been duly registered in the manner provided by the said Act and that the facts mentioned 27 RSA No.139 & 194/2005 in the endorsements referred to in Sec.59 have occurred as therein mentioned. Ext.B3 contains that endorsement by the registering authority on the reverse side of the first page. That endorsement is admissible in evidence to show that the Registrar has complied with the statutory obligations on him under Sec.34(2) of the Registration Act which includes ascertaining from the person who has purported to execute the document that he has executed such document . It includes ascertaining that he has executed that document, in this case, a deed of conveyance. When a person signs a document the presumption is that he has read the document and understood it unless there is proof of force or fraud (see **Grasim Industries Ltd. v. Agarwal Steel – (2010) 1 SCC 83** ) 32. Learned counsel for 1[st] respondent drew my attention to the evidence of DWs 2 and 3, the scribe and the assistant who prepared Ext.B3. It is pointed out that DWs 2 and 3 belong to Nedumkunnam (to which place the appellant belong) and were brought to Kochi for the purpose of registration of Ext.B3. DW2 stated that he had prepared about 10-11 documents for the appellant and that he is residing two kms. away from the house of the appellant. 28 RSA No.139 & 194/2005 33. According to the 2[nd] respondent who was examined on the side of the 1[st] respondent as PW5, 1[st] respondent signed Ext.B3 at her residence. If the appellant has consulted a scribe and assistant who are acquainted to him, that by itself is no circumstance to say that it is part of the fraud allegedly played by the appellant or respondents 2 and 3. I must notice that there is no case of impersonation of the 1[st] respondent in the matter of execution and registration of Ext.B3. 34. Having regard to the above circumstances, I am unable to accept the contention that 1[st] respondent intended to execute a deed of hypothecation but by fraud she was made to execute Ext.B3. This is not a case where the 1[st] respondent had no opportunity to read and understand the deed on account of any reason whatsoever or on account of any fraud, misrepresentation or collusion on the part of the appellant or respondents 2 and 3. Hence the plea of non est factum raised by the 1[st] respondent cannot be accepted. The finding of the trial and first appellate courts to the contrary cannot be sustained. 35. Coming to the counter claim made by the appellant, the prayer as it now stands (applications for amendment having been disallowed) is to allow the appellant recover `16,600/- being the proportionate sale consideration for the 3½ cents covered by Ext.A2. In view of Ext.A2, appellant can get title and possession of only 3¼ cents which remains after Ext.A2. But, there cannot be any proportionate reduction of the sale consideration without understanding the 29 RSA No.139 & 194/2005 potentiality of each part of the 6 ¾ cents. In that view of the matter I am not inclined to think that appellant should be allowed to recover `16,600/-. Hence the trial and first appellate courts are correct in disallowing the counter claim. Nor is there reason to interfere with the dismissal of the applications filed in the first appellate court for amendment of the counter claim since I stated that in view of Sec.92 of the Act and in the light of the decisions I have referred above, appellant cannot contend that sale consideration is not `50,000/- but `8,00,000/-. 36. The substantial questions of law are answered as above. In the result, I. R.S.A.No.139 of 2005 is allowed as under: i. Judgment and decree of the learned Principal Munsiff, Kochi in O.S.No.527 of 2000 as confirmed by the learned Principal Sub Judge, Kochi in A.S.No.130 of 2002 are set aside. ii. O.S.No.527 of 2000 of the court of learned Principal Munsiff, Kochi is dismissed. 30 RSA No.139 & 194/2005 II. R.S.A.No.194 of 2005 is dismissed in confirmation of the dismissal of the counter claim in O.S.No.527 of 2000 of the learned Principal Munsiff, Kochi as confirmed by the learned Principal Sub Judge, Kochi in A.S.No.130(A) of 2002 . III. Parties shall suffer their cost through out. All pending interlocutory applications will stand dismissed. **THOMAS P.JOSEPH, Judge.** **cks**