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2025 Supreme(Online)(Gau) 8361

IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
Susmita Phukan Khaund, J
KHURSIDA AHMED – Appellant
Versus
ENUISH ALI – Respondent
RSA/52/2023



Important Points

The execution of agreements under fraudulent misrepresentation invalidates contractual obligations, affirming the principle that contracts based on deceit are void.

Subject

Civil Law - Contract Law

Act Referred

Headnote

(A) Indian Contract Act, 1872 - Sections 23 and 73 - Appeal against decree of lower court in a money suit regarding fraudulent execution of sale agreement - Evidence led by appellant insufficient to negate fraud claims - Trial and appellate courts found agreement void due to misrepresentation and breach of contract. (Paras 7, 8, 11)

(B) Legal standards - The execution of agreements during the subsistence of loans poses ownership challenges and contractual validity considerations. (Paras 8, 9)

Facts of the case:
The appellant challenged the decree in Money Suit No.2/2014 regarding the sale of a truck, alleging fraud due to unpaid dues by the defendant.

Findings of Court:
The lower court correctly identified the agreement as void due to fraudulent misrepresentation and upheld the plaintiff's right to recover advance payment with interest.

Issues: Legality of agreement and liability due to fraudulent statements regarding prior payments.

Ratio Decidendi: Courts held the agreement void as it was made under the influence of fraudulent claims, reaffirming that consent induced by misrepresentation renders a contract void under the Contract Act.

Result: Appeal dismissed.

Advocates:
For the Appellants/Petitioners: MR. M H RAJBARBHUIYAN, MR. A S ALI, MR. A MANNAF
For the Respondents: MR. A WAHAB, MS F N ZAMAN, MS. R CHOUDHURY, MR A ALIM SK

JUDGEMENT AND ORDER (CAV)

1. This appeal was admitted on the following substantial question of law:

"Whether the Money Suit No. 02/2014 filed by the respondents/plaintiffs against the appellant/defendant in the facts and circumstances of the agreement, 16.10.2012(Ext. 1) and on the failure to abide by the agreement, dated 16.10.2012, by the respondents/plaintiffs;

the decree drawn in the Money Suit No. 02/2014 pursuant to judgment, dated 15.03.2021, passed by the Court of the learned Civil Judge, Goalpara, is sustainable in law?"

Factual Matrix

2. The appellant in this case is Khurshida Ahmed, who was the defendant in the original Money Suit No.2/2014. The respondent is the original plaintiff Md.Enuish Ali whereas proforma respondent Nos. 2 and 4 are Sayed Ali and Sriram Transport Finance Corporation, Bongaigaon. The name of the respondent No.3, Ali Driver was struck off vide order of this Court dated 01.04.2024. The plaintiff and the defendants will be referred to according to their original standing in the original Money Suit No.2/2014. A Money Suit No.2/2014 was brought up by Md.Enuish Ali and Khurshida Ahmed, who is the present appellant and was arrayed as defendant No. 1 whereas the other respondents Nos. 2 and 3 Sayed Ali and Sriram Transport Finance Corporation, Bongaigaon were arrayed as proforma defendant Nos. 1 and 3, in the original money suit.

3. The plaintiff's case in brief is that he entered into an agreement with the defendant for sale of a public carrier truck bearing registration No. AS-19A-6722 which is also described in the schedule of the plaint. On 16.10.2012, the agreement was executed for a consideration amount of Rs. 8,90,000/- to be paid to the defendant and out of the said consideration, the plaintiff paid Rs. 4,90,000/- as advance to the defendant. The plaintiff was to pay the balance amount of Rs. 4,00,000/- at monthly installment @ Rs. 13,500/- to the finance company. It was also included in the recitals of the agreement that the defendant had already paid Rs. 1 lac to the finance company and the plaintiff would have to pay Rs. 1 lac to the defendant which was in addition to the earnest money and on failure of the plaintiff to pay Rs. 1 lac to the defendant, the earnest money of Rs. 4,90,000/- shall be forfeited and the defendant shall have the right to take back the vehicle. On the premise of this agreement, the defendant handed over the vehicle to the plaintiff.

4. It is averred by the plaintiff that on 05.11.2012, when he went to pay the monthly installment of Rs. 13,500/- to Sriram Transport Finance Corporation at Bongaigaon, he learnt that an amount of Rs. 67,500/- was lying as outstanding dues against the defendant's account. The finance company informed the plaintiff that the defendant had paid only one installment on 05.05.2011. It is thus contended that the defendant fraudulently executed the agreement for sale, stating that she had paid Rs. 1,00,000/- (Rs.1 lac) to the finance company.

5. It is further contended that on 08.11.2011, the plaintiff approached the defendant and requested her to take back the vehicle and return the earnest money which he had already spent in maintaining the vehicle, but the defendant did not respond. The vehicle was seized in connection with Goalpara PS Case No.200/2013 and the same was given in Zimma to the defendant. The defendant contested the money suit by filing a written statement and challenging the maintainability of the suit, and vehemently denied borrowing money from the plaintiff. The defendant has averred that the plaintiff failed to perform his part of the contract as per the agreement and denied any fraudulent act on her part.

Decision of the learned Trial Court

6. The learned Trial Court relied on the evidence adduced by the plaintiff. The plaintiff adduced the evidence of 5 witnesses, whereas the defendant adduced the evidence of 3 witnesses. Documents were exhibited by both the sides. The execution of the deed of agreement was an admitted fact, but the

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