AGREEMENT OF SALE A SHEER PIECE OF FRAUD & CONCOCTION : SUPREME COURT SETS ASIDE DECREE FOR SPECIFIC PERFORMANCE
Category: Commercial Law
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THE BACKGROUND OF THE CASE
The concurrent findings of the Trial Court, First Appellate Court, and High Court that had upheld the sale agreement transcribed on one of the blank stamp papers on which the defendant's (illiterate) thumb impression had been taken prior to its transcription were overturned by the Supreme Court, which was acting in accordance with Article 136 of the Constitution.
The Court deduced from the facts that the disputed agreement may have been
typed on blank stamp paper after the appellant-defendant's thumb impression was
taken there.
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According to the contested sale agreement, the plaintiff had given the appellant-defendant a sizable portion of the consideration money in exchange for the purchase of the suit property; the remaining fifteen percent was due on the registry date. The date of registration, which is September 19, 2008, was set nearly sixteen months after the agreement's execution date.
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Due to the appellant-defendant's failure to appear before the Registrar's Officer as stipulated in the disputed agreement to sell, the plaintiff requested specific performance of the contract for the execution of the sale deed.
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KEY ASPECTS
The Supreme Court of India set aside a decree for specific performance, labelling the agreement of sale as a “sheer piece of fraud and concoction.” Here are the key aspects of the case:
2.   Fraudulent Agreement: The Court found that the agreement to sell was transcribed on blank stamp papers on which the thumb impression of the illiterate defendant had been taken beforehand. This practice was deemed fraudulent.
3.   Lack of Signatures: The disputed agreement lacked signatures on the first and second pages, which had large blank spaces. Only the last page bore the signatures and thumb impressions, further indicating that the agreement was concocted.
4.   Plaintiff’s Conduct: The plaintiff, a police constable, did not obtain departmental permission before entering into the transaction. The Court noted that the plaintiff’s actions, including appearing directly before the registrar without approaching the defendant for sixteen months, were suspicious.
The bench comprising Justices PS Narasimha and Sandeep Mehta observed
that such a practice of the plaintiff to take the signature of the defendant on
the blank paper before the transcription of the agreement is nothing but a
"sheer piece of fraud and concoction."
The plaintiff, a police constable, entered into a transaction without first obtaining permission from the department, as the court also noted.
The Court noted his
direct appearance before the registrar's office on the registry date, without
even contacting the defendant once during the allotted sixteen months to have
the sale deed executed in accordance with the contested agreement.
It is acknowledged that the respondent-plaintiff failed to notify the appellant-defendant in advance pleading with him to accept the remaining funds and sign the sale agreement on September 19, 2008, or at any other time after that. Rather, he went ahead and filed the relevant lawsuit in December 2008, during which the court noted that two different prayers were made: one for the execution of the sale deed and the other for the return of the earnest money.
Simply by virtue of his appearance in the Registrar's Office, the plaintiff claimed he was prepared and willing to execute the sale agreement, but the court rejected this argument. According to the court, there was a presumption that the plaintiff was not prepared and willing to execute the sale agreement because he did not demonstrate that he had the remaining consideration to pay the defendant on the date of the registry.
"The lower courts completely ignored these crucial factual details when
they decided the lawsuit, the first appeal, and the second appeal. The court
stated, "Given these facts and circumstances, we believe it is appropriate
to use our authority under Article 136 of the Indian Constitution to interfere
with the contested judgements.
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THE CONCLUSION
The court came to the
conclusion that there was no way to avoid the conclusion that the trial court's
judgment and decree from February 18, 2013, the First Appellate Court's
judgment from March 20, 2017, and the High Court's judgment from April 25,
2018, were all based on perversity in the record and could not be upheld.
The appeal succeeded and was hereby allowed.
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WRITTEN BY: YASH BHARDWAJ
GUIDED BY: ADVOCATE ANIK
