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2025 Supreme(Mad) 4961

IN THE HIGH COURT OF JUDICATURE AT MADRAS
R.Sakthivel, J.
S.R.K.Jayachandran (Died) and ors. - Appellant
Versus
B.Bhaskaran (Died) and ors. - Respondents
S.A.NO.75 OF 2018 AND CMP NO.1650 OF 2018
Decided On : 02-01-2025

Advocates Appeared:
For the Appellant : Mr.N.Murali Kumaran Senior Counsel for Mr.R.Gopinath
For the Respondent: Mr.K.Bijai Sundar

Presumption of refund arises when original sale documents are returned; burden lies on plaintiff to prove consideration not refunded and possession for specific performance under unregistered sale agreement.

Headnote:(A) Specific Relief Act, 1963 - Section 41 - Indian Evidence Act, 1872 - Section 114(i) - Code of Civil Procedure, 1908 - Order XLI Rule 31 - Registration and Other Related Laws (Amendment) Act, 2001 - Amended Section 53-A of Transfer of Property Act, 1882 - Specific performance of contract - Sale Agreement - Burden of proof - Presumption of refund of sale consideration on return of original documents - No time fixed for performance in Sale Agreement - Unregistered document and possession - Injunction - Plaintiff's delay and conduct examined. (Paras 13-17, 19, 20)

(B) Evidence - Burden of proof lies on party pleading discharge of liability - Presumption under Section 114(i) rightly invoked by First Appellate Court - Plaintiff failed to produce original Sale Agreement and General Power of Attorney - Conduct of parties relevant in equity-based remedy. (Paras 14, 15, 16, 18)

Facts of the case:
The plaintiff entered into a Sale Agreement dated February 2, 2005 with defendants 1 and 2 for purchase of property, paid Rs.6,00,000/- and possession was alleged to be handed over. Defendants executed a General Power of Attorney in favor of plaintiff. Plaintiff claims defendants failed to execute Sale Deed and wrongfully revoked Power of Attorney after reclaiming original Sale Agreement and Power of Attorney, attempting sale to third parties. Defendants claim refund of Rs.6,00,000/- plus Rs.3,00,000/- damages paid to plaintiff and rescission of contract. Trial Court decreed Suit for specific performance except for recovery of possession. First Appellate Court set aside Trial Court's decree holding plaintiff failed to discharge burden as original documents were not produced and presumption of refund stood. Plaintiff preferred Second Appeal.

Findings of Court:
The court upheld First Appellate Court’s finding that possession was not proven by plaintiff and refund of sale consideration by defendants is presumed from defendants having custody of original documents. The plaintiff’s delay and conduct undermined claim. Unregistered Sale Agreement precluded injunction under amended Section 53-A. Thus, Suit for specific performance was rightly dismissed. Findings complied with procedural requirements under CPC Order XLI Rule 31. (Paras 13-19)

Issues: Whether the presumption under Section 114(i) of the Evidence Act is rightly invoked by appellate court; whether first appellate court complied with procedural mandates of CPC Order XLI Rule 31; whether plaintiff entitled to specific performance and injunction when possession not established and refund of consideration presumed.

Ratio Decidendi: The court held that when the original Sale Agreement and Power of Attorney are returned to defendants, there arises a presumption of refund of consideration onus of proof upon plaintiff failed, and specific performance cannot be granted without clear proof of possession. Equity and conduct of parties are relevant in specific relief claims. The appellate court's reliance on statutory presumptions and evidentiary burden was proper, and procedural compliance was confirmed. (Paras 14-18)

Result: Second Appeal dismissed.

Table of Content
1. factual background and parties’ respective cases (Para 1 , 2 , 3 , 4 , 5)
2. trial and first appellate court findings and procedural postures (Para 6 , 7 , 8 , 9 , 13 , 14 , 17)
3. parties’ detailed contentions and reliance on case law (Para 10 , 11)
4. court’s analysis on burden of proof and document handling (Para 12 , 15 , 16 , 18)
5. ratio decidendi on substantial questions of law (Para 19)

JUDGMENT :

R.Sakthivel, J.

This Second Appeal is directed against the Judgment and Decree dated September 12, 2017 passed in A.S.No.26 of 2016 by the 'II Additional District and Sessions Court, Vellore at Ranipet, Vellore District' [henceforth 'First Appellate Court'] reversing the Judgment and Decree dated January 22, 2016 passed in O.S.No.108 of 2014 by the 'Subordinate Court, Arakonam' [henceforth 'Trial Court'].

2. Pending the Second Appeal, the 1st appellant herein / sole plaintiff in O.S.No.108 of 2014 passed away and his legal heirs were brought on record as legal representatives of the deceased 1st appellant / sole plaintiff.

3. For the sake of convenience, hereinafter, the parties will be referred to as per their array in the Original Suit.

PLAINTIFF’S CASE

4. The plaintiff entered into a Sale Agreement with defendants 1 and 2 on February 2, 2005 to purchase the Suit Property for Rs.6,00,000/- (Rupees Six Lakhs only), which was paid in full, and possession was handed over on the same date to the plaintiff by defendants 1 and 2. The defendants 1 and 2 also executed a General Power of Attorney on the same day in favour of plaintiff in respect of Suit Property. Based on the General Power of Attorney, plaintiff entered into a registered Sale Agreement with his mother - Janakiammal.

4.1. The defendants 1 and 2 promised to execute the Sale Deed after receiving the Title Deed pertaining to Suit Property pending before the Sub-Registrar Office. But they have failed to do so. On October 30, 2007, the defendants 1 and 2 on the pretext that they received the Title Deed from the Sub Registrar Office, sought for the Original Sale Agreement as well as the Original General Power of Attorney, which were under the plaintiff’s custody, for perusal. The plaintiff believed them and handed over the same. Subsequently, the defendants 1 and 2 revoked the said Power of Attorney without plaintiff’s knowledge and attempted to sell the Suit Property to third parties for a higher value. Despite several notices and demands, the defendants 1 and 2 neither executed the Sale Deed nor returned the consideration amount nor provided any compensation. The plaintiff is in possession of the Suit Property. Hence, the plaintiff seeks specific performance of the Sale Agreement and injunctions.

DEFENDANTS' CASE

5. Defendants 1 and 2 filed written statement which was adopted by defendants 11 to 13. In their written statement, they asserted that the plaintiff voluntarily rescinded the Sale Agreement dated February 2, 2005 and received refund of the sale consideration viz., Rs.6,00,000/- (Rupees Six Lakhs only) along with Rs.3,00,000/- (Rupees Three Lakhs only) as damages. They have denied that they handed over possession of the Suit Property to the plaintiff and claimed that the plaintiff fraudulently executed a Sale Agreement with his mother on May 4, 2007 without legal authority. They contended that the plaintiff was aware of the revocation of the Power of Attorney in 2005 itself. They further contended that the Suit is barred by limitation, lacks merit, and is an attempt to extort money. They seek dismissal of the Suit. Further, the defendants 1 and 2 claimed mandatory injunction against 3rd defendant to delete the fraudulent Sale Agreement dated April 5, 2007 entered by the plaintiff with his mother from official records by way of a counter-claim.

TRIAL COURT

6. At trial, the plaintiff - Jayachandran was examined as P.W.1 and Ex-A.1 to Ex-A.10 were marked on the side of the plaintiff. On the side of the defendants, the defendant - Bhaskaran was examined as D.W.1 a

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