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Issues: (i) Whether the defendant could, in the face of a registered sale deed, set up an oral case that the transaction was really a loan transaction and that the sale deed was only a security; (ii) Whether the plaintiffs were entitled to a decree on admission and the defendant's counter-claim was liable to rejection for want of cause of action.
Issue (i): Whether the defendant could, in the face of a registered sale deed, set up an oral case that the transaction was really a loan transaction and that the sale deed was only a security.
Analysis: The sale deed recorded an absolute conveyance of the suit property for stated sale consideration, stated that nothing remained due out of the sale price, and conferred full ownership rights on the vendees. The defendant's plea that the money was in truth a loan and that the property was to be reconveyed on repayment directly contradicted the terms of the registered instrument. Sections 91 and 92 of the Evidence Act barred oral evidence that varied, contradicted, or added to the written terms. None of the provisos to Section 92 assisted the defendant: no pleaded fraud in the manner required by the CPC, no separate oral agreement on a silent matter, no condition precedent, and no subsequent oral modification of a registered disposition. The alleged defence was therefore inconsistent with the document itself and could not be entertained.
Conclusion: The oral defence was not tenable in law and was barred by Sections 91 and 92 of the Evidence Act.
Issue (ii): Whether the plaintiffs were entitled to a decree on admission and the defendant's counter-claim was liable to rejection for want of cause of action.
Analysis: The execution and registration of the sale deed were admitted, and once the defendant's contrary oral case was rejected, the plaintiffs' title stood established on the face of the document. The admissions were clear and unequivocal and justified relief under Order XII Rule 6 CPC. The counter-claim rested entirely on the same impermissible oral understanding and disclosed no independent factual or legal basis for cancellation of the sale deed, execution of a fresh sale deed, or return of title documents. A plaint or counter-claim founded on a legally barred and illusory defence does not disclose a real cause of action and may be rejected under Order VII Rule 11 CPC.
Conclusion: The plaintiffs were entitled to possession on admission, and the counter-claim was liable to be rejected for want of cause of action.
Final Conclusion: The plaintiffs succeeded in obtaining possession of the suit property, while the defendant's counter-claim failed at the threshold because it was founded on an impermissible oral case contrary to the registered sale deed.
Ratio Decidendi: When the terms of a registered conveyance are clear and unambiguous, a party to the instrument cannot use oral evidence to contradict or vary those terms, and a counter-claim founded solely on such a barred case discloses no cause of action.