# KALIANNA GOUNDER v. PALANI GOUNDER & ANR

- **Citation:** [1970] 2 S.C.R. 455
- **Court:** Supreme Court of India
- **Decided:** 1969-09-17
- **Bench:** J. C. Shah, V. Ramaswami, A. N. Grover
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kalianna-gounder-v-palani-gounder-anr-4843
- **Pages:** 7

## Headnote

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D-eed-Construcrion of-Allegatio11 of subsequent <1/l~ration to incor
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porate sellers obligation to clear land e11cu1nbra11ces-lf a n1arer(al alteration vitiaring agreement.
'
The appellant agreed on July 4, 1956 to purchase certain lands from !
the respondents for Rs. 12,000.
A memctrandum reciting that Rs. 2,000 .
were paid as advance by the appellant to the res.pendents was executed
by both parties.
Three days later the respondents informed the plaintiff
by a letter that only a sum of Rs. 350 was paid by the appellant and not
Rs. 2,000 as recited in the memorandum and since the balance of Rs. 1,650
which was promised to be paid within three days was not paid, the agreement stood cancelled.
The appellant thereafter immediately. instituted a
suit for a decree for specific performance of the agreement and deposited
in court a sum of Rs. 10,000 on account of the balance purchase price due
from tiim.
In their written staten1ent
the
respondents
claimed that
Rs. 1,650 out of Rs. 2,000 not having been so paid, the agrellment was
canceUed; and that in any event the agreement
having been altered
in
material particulars after its execution by the addition o'f the words; "cl_ear
the debts and execute the sale deed free from encumbrances", the suit \V3.."'i
not maintainable.
The Trial Court upheld the appellant's clainl and decreed the suit. The
High Court in appeal, reveised 1he decree.
On appeal to this Court,
HELD: Allowing the appeal: (i) On the evidence and in view of the
express recital in the agreement that a sum of Rs. 2,000 was paid by the
appellant and received by the respondents, the respondents' story that only
Rs. 350 was in fact paid was untrue and had been put up as an excuse for
resiling from the agreement.
·
(ii) Even assuming that the words in question \\·ere introduced in the
memorandum after its execution since the respondents ~·ere liable to clear
any encumbrances subsisting on the land before executing the sale deed,
it cannot be regarded as a material alteration for, it did not alter the rights
or liabilities of the parties or the legal effect of the instlurnent [463 AJ
Nathu L<il and Ors. v. M11ssamat/Go1nti Kuflr and Others, L.R. 67 Li\.
3'18; referred to.
•
CIVIL APPELLATE JUR!SDICTfON : Civil Appeal No. 1360 c,f
1966.
Appeal from the judgment and decree dated January
19,
1962 of the Madras High Court in Appeal No. 351 of 1958.
H
M. C. Chagla, M. K. Ramaml'rthi, S. Setlwrarnam, J. Ramam11rthy and Vineet Kumar, for the appellant.
A.' V. V. Nair, for the respondent.
4 56
SUPREME COURT REPORTS
[ 1970] 2 S.C.R.

## Text

455
A
KALIANNA GOUNDER
v.
PALANI GOUNDER & ANR.
September 17, 1969
B
[J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.J
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D-eed-Construcrion of-Allegatio11 of subsequent <1/l~ration to incor
4
porate sellers obligation to clear land e11cu1nbra11ces-lf a n1arer(al alteration vitiaring agreement.
'
The appellant agreed on July 4, 1956 to purchase certain lands from !
the respondents for Rs. 12,000.
A memctrandum reciting that Rs. 2,000 .
were paid as advance by the appellant to the res.pendents was executed
by both parties.
Three days later the respondents informed the plaintiff
by a letter that only a sum of Rs. 350 was paid by the appellant and not
Rs. 2,000 as recited in the memorandum and since the balance of Rs. 1,650
which was promised to be paid within three days was not paid, the agreement stood cancelled.
The appellant thereafter immediately. instituted a
suit for a decree for specific performance of the agreement and deposited
in court a sum of Rs. 10,000 on account of the balance purchase price due
from tiim.
In their written staten1ent
the
respondents
claimed that
Rs. 1,650 out of Rs. 2,000 not having been so paid, the agrellment was
canceUed; and that in any event the agreement
having been altered
in
material particulars after its execution by the addition o'f the words; "cl_ear
the debts and execute the sale deed free from encumbrances", the suit \V3.."'i
not maintainable.
The Trial Court upheld the appellant's clainl and decreed the suit. The
High Court in appeal, reveised 1he decree.
On appeal to this Court,
HELD: Allowing the appeal: (i) On the evidence and in view of the
express recital in the agreement that a sum of Rs. 2,000 was paid by the
appellant and received by the respondents, the respondents' story that only
Rs. 350 was in fact paid was untrue and had been put up as an excuse for
resiling from the agreement.
·
(ii) Even assuming that the words in question \\·ere introduced in the
memorandum after its execution since the respondents ~·ere liable to clear
any encumbrances subsisting on the land before executing the sale deed,
it cannot be regarded as a material alteration for, it did not alter the rights
or liabilities of the parties or the legal effect of the instlurnent [463 AJ
Nathu L<il and Ors. v. M11ssamat/Go1nti Kuflr and Others, L.R. 67 Li\.
3'18; referred to.
•
CIVIL APPELLATE JUR!SDICTfON : Civil Appeal No. 1360 c,f
1966.
Appeal from the judgment and decree dated January
19,
1962 of the Madras High Court in Appeal No. 351 of 1958.
H
M. C. Chagla, M. K. Ramaml'rthi, S. Setlwrarnam, J. Ramam11rthy and Vineet Kumar, for the appellant.
A.' V. V. Nair, for the respondent.
4 56
SUPREME COURT REPORTS
[ 1970] 2 S.C.R.
The Judgment of the Court was delivered by
Shah, J.
Palani Gounder and his son T. P. Sengottaiahhereinafter collectively called "the defendants··-own Survey No.
7 65-B in Kugallur village.
Kalianna Gounder-hereinafter called "the plaintiff"-agreed on July 4, 1956 to purchase from the
defendants that land for Rs. 12,000.
A memorandum reciting
that Rs. 2,000 were paid as advance by the plaintiff to the defendants was executed by the plaintiff and the defendants.
The
memorandum was written by one Ramamurthy Iyer and the signatures thereon were attested by one Kaliyanna Gounder.
On July 7, 1956, the defendants informed the plaintiff by
a letter that only a smn of Rs. 350 was paid by the plaintiff w
the defendants and not Rs. 2,000 as recited in the memorandum,
and since the balance of Rs. 1,650 which was promised to be
paid within three days was not paid, the agreed stood cancelled.
The plaintiff on receipt of the letter instituted an actlon in the
Civil Court for a decree for specific performance of the agreement,
~md deposited in Court Rs. 10.000 which according to him was
the balance of the purchase price due by him.
The defendants
Jiled their Y1ritten statement contending. inter a/ia, that they were
in urgent need of money. and they had agreed to sell the land
to the plaintiff, but the plaintiff paid only Rs. 350 on July 4.
1956, and obtained possession of the memorandum on a represenfation that he will pay the balance of Rs. 1,650 within three
days and since the amount was not paid the agreement was cancdled, and that in any event the agreement having been altered
in material particulars. after it was executed, by adding the words:
'·Clear the debts and execute the sale deed free from encut:1orance"'.
the suit was not maintainable.
The Court of First Instance upheld the plaintiff's claim and
decreed the suit for specific performance of the agreement.
In
appeal to the High Court of Madras the decree was reversed.
The High Courf held that the p)aintiff pajd Rs. 350 only on July
4. 1956, and on a representation that he will pay the balance of
Rs. 1,650 payable as advance obtained possession of the agreement of sale, and the plaintiff not having paid the amount payable
by him the suit for specific performance of the agreement was
maintainable.
The High Court also held that the agreement was
altered in material particulars by adding the covenant relating to
'·clearance of encumbrance" after the memorandam was executed.
With certificate granted by the High Court this appeal is preferred
by ihe plaintiff.
Two questions fall to be determined in this appeal; (I) whether the plaintiff paid Rs. 350 only as contended by the defendant,
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KALIANNA v. PALANI (Shah, J.)
45 7
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on July 4, 1956, and obtained possession of the agreement on <
false representation: and (2) whether the memorandum was alterec
in materfal paticulars after execution, and was on that accounl
discharged ?
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The phintiff in his statement before the Court asserted th at hi
paid the full amount of Rs. 2,000 on July 4, 1956 to the defen·
dants.
He was supported by his witness Ramamurthy Iyer-th<
writer of the document.
On the side of the ·defendants there i1
the evidence cf T.P. Sengottaiah who asserted that only Rs. 350
were paid at the time of the execution of the memorandum, and
when the balance was demanded the plaintiff promised to pay the
same within three days.
He also stated that the amount was not
paid within three days as promised and on that account the agreement was canc~lled. His testimony was supported by the attest- .
ing witness.
The learned Trial Judge accepted the testimony of the plaintiff
and his witness Ramamurthy Iyer.
The High Court was of the
view that the testimony of T. P. Sengottiah and the attesting witness should be preferred. ln our judgment the dispute may be
resolved by considering the conflicting testimony of the witnesses
in the light of broad probabilities.
The memorandum e.xpressly recites that the defendants "have
received Rs. 2,000 as advance" and "within sixty days from today"
the plaintiff "should pay the balance of the sale price and execute
the sale deed. Failing that, besides losing the advance amount,
nothing is binding as per the agreement".
The memorandum
containing a recital that Rs. 2,000 were received by the defendants as advance was delivered to the plaintiff.
The plaintiff is
an illiterate agriculturist, whereas the defendants are educated
people, and the second defendant was at the material time President of the Local Panchayat.
The case of the defendants that
they relied upon the bare word of the plaintiff that he will pay
the balance of Rs. 1,650 within three days and on that representation they parted with the memorandum is, in our judgment, unreliable.
There was no relation between the plaintiff and the
defendants which placed the former in a position of trust or confidence. If the defendants were willing to execute an agreement
with the recital that the amount of Rs. 2,000 was received, though
in fact it was not so received, they would have insisted upon
making an endorsement at the foot of the agreement that only
Rs. 350 were paid and the plaintiff had obtained extension of time
for payment of the balance within three days. In any event they
would have, when they parted with the memorandum, insisted
upon some writing from the plaintiff that he had paid only Rs. 350
and not Rs. 2,000 as recited in the memorandum.
458
SUPREME COURT REPORTS
[1970] 2 S.C.R.
The High Court was of the view that the plaintiff was rtnable
to show that he could procure a sum of Rs. 2,000 'for payment
as advance to the defendants and thai there was no independent
evidence regarding the actual payment of Rs. 2,000.
But the
burden ol' proving in the circumstances of the case, that Rs. 2,000
were not paid lay heavily upon the defendants.
Agaiu, ihere is
strong evidence to indicate that the plaintiff had at his disposal a
substantial amount on which he could have drawn.
On July 14,
1956, exactly ten days after ihe date on which the agreement was
entered into, the plaintiff deposited in Court a sum of Rs. 10,000
in the action for specific performance commenced by. him. If the
case of the plaintiff depended merely upon his oral testimony for
payment of Rs. 2,000, absence of independent evidence evidencing paymeni may have some value ~s supportinJ1 the case of the
defendants.
But when there was an express recital in the agree-
. ment that a sum of Rs. 2,000 was paid by the plaintiff and it was
received by the defendants, it was not necessary for the plaintiff
to lead evidence as to the source from which he obtained
the money.
• The High Court observed thac ·the plaintiff did not reply to
the notice dated July 7, 1956. But it was the plaintiff's case
that he received the notice on July 14, 1956, and on ihe same
day he instit\lted the suit. Failure to reply to the notice cannot
there{or.e be a circumstance of any value in ihe present case.
It was also observed by the High Court that there was no particular reason for the defendants to resi!e from the terms of the
agreement within three days of its eJi'P,cution, and set up a false
plea, and that in "such cases evidence is given to prove that it was
a temptation of a beiter offer that 'induced the party to resile
from the a&reement".
The pfaintiff did state in his evidence that
his pangalis who were inimical to him had rriade an offer of
Rs. 16,000 for the p!'operty, and because of that offer the defendants resiled from the agreement.
In the view of the High Court
this part of the case of the plafotiff .could not be believed because
it was not expressly pleaded in the plaint.
But the plaintiff did
plead :in paragraph,6 of the plaint the ihe defendants had "with
the evil influence and instigation of Karuppa Gounden, Pongia
Goundar and Appachi Gounder of the place who are now planning to have the sμit properties for themselves are now evading to
rescind the contract". This, in our judgment, is· a sufficient plea,
.if it was necessary to plead it. in support of the case which th~
plaintiff sought to make out.
The High .Court discarded the testimony of Ramamurthy Iyer
on the view that he was inimical to the defendants.
We have been
taken through his evidence and we see no justification for holdA
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KALIANNA V. PALANI (Shah, J.)
459
ing that his testimony could not be believed. If Ramamurthy Iyer
was an enemy of the de.fe11dants, it is very unlikely that they
would permi~ him to write out an important document at their
residence. The broad probabilities of the case strongly support
his testimony.
Having carefully considered the evidence we are of the view
that the story of the defendants that only Rs. 350 were paid to
them on July 4, 1956, and not Rs. 2,000 as recited in the memorandum is untrue and has been put up as an excuse for resiling
from the agreement.
The second plea that there was an alteration in the memorandum in material particulars cannot also be sustained.
The original document is nor .before us, but from the cross-examination of
the writer and the plaintiff's witnesses and also from the testimony
of T. P. Sengottiah and his witnesses it does not appear that the
words "Clear the debts and execute the sale deed free from encumbrance" were written in a cramped style.
This sentence occurs
immediately before the Schedule of property sold and after the
first three paragraphs of the
convenants of the memorandum.
There was no reason for the writer to leave any space which could
be availed of to add this sentence after the document 'o/as ·executed.
There is no denial that the sentence has been written by
· Ramamurthy. It is true that the High Cour! has observed that
the ink in which the sentence was written appeared to be slightly
different in shade from the rest of the document.
But Rainamurthy Iyer has deposed that it was not true that the portion in
the agreement relating to the encumbrance was written subsequent to the agreement in collusion with the plaintiff. He explained that the ink in his fountain-pen was exhausted when he
wrote with one pen, and he wrote the portion after reading the
document with another fountain-pen, and since the portion was
written in a hurry the ink may have differed.
According to him
he did not notice any difference in ink.
There is no reason to
disbelieve the testimony of Ramamurthy Iyer.
Even if it be assumed that the sentence regarding encumbrance
was written after the deed was executed it will not invalidate the
deed.
The second defendant and his witnesses have admitted that
there was no discussion at the time of the writing and execution
of the agreement about the encumbrances upon the land.
There
is not even evidence ,that there were any encumbrances subsisting
on the land.
Ordinarily when property is agreed to be sold for
a prke, it would be the duty of the vendor to clear i~ of all the
encumbrances before executing th~ sale deed.
The alteration, if
any, cannot therefore oo regarded as material.
As observed in
460
SUPREME C01''I'.T REPORTS
[1970] 2 S.C.R.
Halsbury's Laws of England, Vol. 11, 3rd Edn., Art. 599 at
368:
"A material alteration is one which varies the rights,
liabilities, or legal position of the parties as ascertained
by the deed in its original state, or otherwise varies the
legal effect of the instrument as originally expressed,or
reduces to certainty some provision which was originally
unascertained and as such void, or may otherwise prejudice the party bound by the deed as originally executed.
The effect of making such an alteration, without
the consent of the party bound, is exactly the same as
that of cancelling the deed."
It is also stated in Art. 604 at pp. 370 and 371 :
"An alteration made in a deed, after its execution,
i.n some particular which is not material does not in any
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way affect the validity of the deed;
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. . an alteration is not material which does not vary
the legal effect of the deed in its original state, but merely
expresses that which was implied by law in the deed as
originally written, or which carries out tlle intention of
the parties already apparent on the face of the deed, provided that the alteration does not otherwise prejudice
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the party liable thereunder"
This rule has been applied by the Privy Council in Natha Lal
and Ors. v. Mussamat Gomti Kuar and Others('). The Judicial
Committee observed in that case at :p. 331:
·
"A deed is nothing more than an im trument or
agreeme11t under seal; and the principle of those cases
is that any alteracion in a material part of any instrument or agreement avoids it, because it thereby ceases
to be the same instrument."
The Judicial Committee observed at p. 333 :
"A material alteration has been defined in the rule
as one which varies the rights, liabilities or legal position of the pariies ascertained by the deed, etc.",
and after applying that test they held that the alteration in that
case was not material in the sense of altefing the rights, liabilities
or legal position of the parties or the legal effect of the document.
(1) L. R. 67 I. A.318.
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KALJANNA V. PALANI (Shah, ]. )
461
Since the defendants were liable to dear the encumbrances,
if any, subsisting on the land before executing the sale deed, assPming that the covenant was incorporated after the execution of
the deed, it cannot be regarded as a material alteration on that
account, for it does not alter the rights or liabilities of the parties
or the legal effer• of the instrument.
The appeal is therefore allowed and the decree passed by the
High Court is set aside and the decree of the Trial Court is restored with costs in this Court and in the High Court.
R.K.P.S.
Appeal 111/owed.