The Madras High Court (Madras HC) has ruled that oral evidence is admissible to ascertain the “true nature” of a registered document, holding that Sections 91 and 92 of the Indian Evidence Act, 1872, do not bar a party from proving that a document purported to be a Sale Agreement was, in fact, executed as security for a loan transaction.

Justice R. Sakthivel , hearing an appeal (A.S.No.279 of 2017), upheld a Trial Court’s decision to deny specific performance of the sale agreement. However, the High Court (Madras HC) modified the final decree, granting the plaintiff’s alternative prayer for a refund of Rs. 10,00,000/-, concluding that the agreement was intended as security for this loan amount.

The appeal was filed by K. Ganesan (appellant/plaintiff) against a judgment dated March 28, 2

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