Back
PRASHANT KUMAR MISHRA, PRASANNA B. VARALE
Muddam Raju Yadav – Appellant
Versus
B. Raja Shanker (D) Through Lrs. – Respondent
The Supreme Court dismissed the appellant/plaintiff's appeal against the High Court's order setting aside the Trial Court's decree for specific performance of a registered sale agreement dated 4.6.2002 for a house property in Medchal Village, Ranga Reddy District, with a total consideration of Rs.13 lakhs (Rs.6 lakhs paid as advance). (!) (!) (!) (!)
Plaintiff's Case: The plaintiff claimed readiness and willingness to pay the balance Rs.7 lakhs within 11 months, issued a legal notice on 25.4.2003, and filed the suit when defendants failed to execute the sale deed. Trial evidence included the agreement (Ex. A-1), no-objection letter from defendants' sons (Ex. A-2), legal notice (Ex. A-3), and bank statement (Ex. A-7) showing funds. (!) (!) (!) (!) (!)
Defendants' Case: The agreement was a sham document securing a Rs.6 lakh hand loan from the plaintiff (an alleged unlicensed moneylender), evidenced by a contemporaneous Memorandum of Understanding (MoU, Ex. B-2) dated 4.6.2002. Under the MoU, defendants could repay the loan within 12 months to retrieve title deeds and cancel the agreement; otherwise, property transfer would occur at market value. Partial repayments (Rs.1 lakh receipt, Ex. B-1; others unacknowledged) supported this. The agreement's low sale price below market value was also noted. (!) (!)
Trial Court: Decreed specific performance, finding no denial of agreement execution, notice receipt, and plaintiff's readiness via bank funds. (!)
High Court: Reversed, holding the MoU (Ex. B-2) proved the agreement was sham/nominal. (!) (!)
Supreme Court's Reasoning: Upheld High Court. The MoU (Ex. B-2), on matching stamp paper (doc. no. 47663) from the same vendor as the no-objection letter (Ex. A-2, doc. no. 47662), same date (4.6.2002), and witnesses, strongly probablized the loan-security defense. Though Ex. B-1 (photocopy receipt) was inadmissible, MoU sufficed. Plaintiff's suppression of MoU (unmentioned in plaint) showed unclean hands, warranting denial of discretionary specific performance relief, as conduct and withheld facts cast doubt on bona fides. (!) (!) (!) (!) (!)
Outcome: Appeal dismissed; suit stands dismissed. (!)
JUDGMENT :
PRASHANT KUMAR MISHRA, J.
1. Leave granted.
2. The present Appeal is preferred by the appellant/plaintiff whose suit for specific performance of agreement of sale dated 4.6.2002 was decreed by the Trial Court. However, in appeal by the respondent(s)/defendant(s), the High Court has set aside the judgment and decree of the Trial Court. Resultantly, the suit filed by the appellant/plaintiff stands dismissed.
3. The sale agreement dated 4.6.2002 was in respect of house property bearing No.1-91/1 (Old No.1-17/2) constructed on Plot No.l admeasuring 406.33 square yards in Survey No. 1 situated at Medchal Village and Mandal, Ranga Reddy District. The agreement was for a total sale consideration of Rs.13,00,000/- (Rupees Thirteen Lakh) and defendant(s) had received a sum of Rs.6,00,000/- (Rupees Six Lakh) as advance. The agreement was registered on the same day with the Office of the Sub-Registrar, Medchal, Ranga Reddy District. As per the terms of agreement, the plaintiff had to pay the balance amount of sale consideration of Rs.7,00,000/- (Rupees Seven Lakh) to the defendant(s) at the time of execution of the sale deed within 11 months from the date of agreement. As per the plain
Agreement to Sell – In a suit for specific performance, conduct of parties is significant as it assists Court in evaluating evidence to find out bonafides of parties at the time of execution of agree....
Admitted unregistered sale agreement enforceable if defendant fails to prove sham; plaintiff readiness via notice and deposit suffices for specific performance.
The court clarifies that subsequent conduct indicating unwillingness to perform a contract negates entitlement for specific performance, necessitating a return of advance amounts instead.
Sale agreement treated as loan security based on WhatsApp evidence and party conduct; appeal allowed with refund.
The court confirmed that an executed sale agreement constitutes a binding contractual obligation, dismissing claims that it functioned solely as a loan security.
A registered sale agreement may be deemed a loan transaction if its terms are inconsistent with a true sale, supported by the burden of proof on the party disputing its intended meaning.
The validity of a sale agreement is upheld where the plaintiff proves readiness to perform, and defenses lacking evidence do not suffice to challenge concurrent findings.
The court affirmed that a registered agreement for sale is binding unless the party asserting otherwise provides credible evidence to the contrary.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
