2024 (9) TMI 1588 - SC - Indian Laws

Seeking a decree for specific performance of an agreement to sell - alternative relief of recovery of earnest money and damages - relief of permanent injunction - cause of action arisen to the plaintiff for filing of present suit or not - suit is bad for non-joinder of necessary parties or not - estoppel by own act and conduct from filing the present suit - HELD THAT - It is trite law that jurisdiction under Article 136 of the Constitution of India should not be exercised unless the findings on facts recorded by the Courts below suffer from perversity or are based on omission to consider vital evidence available on record. The respondent-plaintiff filed the subject suit with a pertinent assertion that the disputed agreement was executed by the appellant-defendant for sale of his agricultural land admeasuring 30 Kanals and 8 Marlas at the rate of Rs.5,00,000/- per Killa. As per the recital in the agreement, the respondent-plaintiff paid a sum of Rs.16,00,000/- in cash to the appellant-defendant at the time of the execution of the disputed agreement. It is not in dispute that the stamp papers were not purchased by the appellantdefendant and rather Amarjeet Singh was the person who purchased the same. The document was typed out in Gurmukhi language and the photostat copy thereof is available on record. A visual overview of the disputed agreement would show that it runs into three pages. The signature of the respondent-plaintiff, and the thumb impression of the appellant-defendant are marked only on the last page thereof. The first and second pages of the agreement, do not bear the signature of the respondent-plaintiff or the thumb impression of the appellant-defendant. There exist significant blank spaces at the foot of the first two pages below the transcription typed out on these two pages. As per the disputed agreement, the appellant-defendant agreed to sell the suit land to the respondent-plaintiff @ Rs. 5,00,000/- per Killa, which was just about half of the market rate of the land at the relevant point of time, as admitted by the respondent-plaintiff. Going by the rate as fixed in the disputed agreement, the total sale consideration would have amounted to approximately, Rs.18,87,000/-. The disputed agreement recites that the appellant-defendant had received earnest money to the tune of Rs.16,00,000/- for the purpose of doing agriculture and to buy cheaper and better land nearby. Thus, a lion s share of the sale consideration was already paid to the appellant-defendant at the time of the execution of the disputed agreement and the remaining amount was hardly 15% of the total value of the suit land as agreed upon between the parties. Therefore, it does not stand to reason that the respondent-plaintiff being a Police Constable would part with a huge sum of Rs.16,00,000/- towards a transaction to purchase land and thereafter, agree to defer the execution of the sale deed to a date almost 16 months later with the balance amount being a fraction of the total sale consideration. The circumstances, the evidence of the respondent-plaintiff; the disputed agreement and the plaint clearly indicates that the disputed agreement seems to have been prepared on a blank stamp paper on which, the thumb impressions of the illiterate appellantdefendant had been taken prior to its transcription. The large blank spaces on the first and second pages of the disputed agreement and the absence of thumb impression/signatures of the parties and the attesting witnesses on these two pages, fortifies the conclusion that the disputed agreement was transcribed on one of the blank stamp papers on which the thumb impression of the appellant-defendant had been taken beforehand. The respondent-plaintiff admitted that he did not seek permission from his department before entering into the agreement for purchase of property having high value. It is not the case of the respondent-plaintiff that he and the appellantdefendant were on such close terms that he would readily agree to give cash loan to the appellant-defendant without any security. The factors are sufficient for this Court to conclude that the entire case of the respondent-plaintiff regarding the execution of the disputed agreement; the alleged payment of Rs. 16,00,000/- in cash to the appellant-defendant on 7th May, 2007 and the alleged appearance of the respondent-plaintiff in the office of the Sub-Registrar in the purported exercise of getting the sale deed executed in terms of the disputed agreement is nothing but a sheer piece of fraud and concoction - there cannot be any escape from the conclusion that the judgment and decree dated 18th February, 2013 rendered by the trial Court, judgment dated 20th March, 2017 passed by the First Appellate Court and the judgment dated 25th April, 2018 rendered by the High Court suffer from perversity on the face of the record and hence, the same cannot be sustained. Appeal allowed.

Summary

Issues Involved:
1. Entitlement to specific performance of the agreement.
2. Entitlement to alternative relief of recovery of earnest money and damages.
3. Validity of the agreement due to allegations of fraud and misrepresentation.
4. Non-joinder of necessary parties.
5. Maintainability of the suit.
6. Locus standi of the plaintiff.
7. Cause of action for filing the suit.
8. Plaintiff's conduct and estoppel.

Detailed Analysis:

1. Entitlement to Specific Performance of the Agreement:
The trial court, first appellate court, and high court denied the respondent-plaintiff's claim for specific performance of the agreement to sell the agricultural land. The trial court found that the transaction appeared to be a loan rather than a sale, noting that the possession of the land was not handed over to the respondent-plaintiff, which contradicted the agreement's terms. The court also highlighted the improbability of the respondent-plaintiff waiting for over a year for the sale deed execution without taking possession.

2. Entitlement to Alternative Relief of Recovery of Earnest Money and Damages:
The trial court partially allowed the alternative relief, directing the appellant-defendant to refund the earnest money of Rs. 16,00,000/- with interest. This decision was upheld by the first appellate court and the high court. The courts concluded that the respondent-plaintiff was entitled to recover the earnest money as the appellant-defendant failed to execute the sale deed.

3. Validity of the Agreement Due to Allegations of Fraud and Misrepresentation:
The appellant-defendant alleged that the agreement was fraudulent, created through misrepresentation and deceit by the respondent-plaintiff, who was a police constable. The appellant-defendant claimed that his thumb impression was taken on blank stamp papers, which were later used to prepare the agreement. The Supreme Court found merit in these allegations, noting significant blank spaces in the agreement and the absence of signatures on the first two pages, suggesting that the agreement could have been prepared on blank papers.

4. Non-joinder of Necessary Parties:
The appellant-defendant argued that the suit was bad for non-joinder of necessary parties, as all co-sharers of the land were not included. The trial court did not find this argument sufficient to dismiss the suit.

5. Maintainability of the Suit:
The trial court found the suit maintainable. However, the Supreme Court noted that the respondent-plaintiff, being a government employee, did not obtain necessary departmental permission to enter into such a high-value transaction, which raised questions on the suit's maintainability.

6. Locus Standi of the Plaintiff:
The trial court affirmed the respondent-plaintiff's locus standi. However, the Supreme Court questioned the legitimacy of the plaintiff's claim, given the suspicious nature of the agreement and the lack of departmental permission.

7. Cause of Action for Filing the Suit:
The trial court found that the cause of action arose when the appellant-defendant failed to appear for the sale deed execution. The Supreme Court, however, found the respondent-plaintiff's actions and the timeline suspicious, undermining the cause of action.

8. Plaintiff's Conduct and Estoppel:
The appellant-defendant argued that the plaintiff was estopped by his conduct from filing the suit. The Supreme Court found that the plaintiff's conduct, including not showing the transaction in income tax returns and not obtaining departmental permission, discredited his claims.

Conclusion:
The Supreme Court found the judgments of the lower courts to be perverse and based on misreading of evidence. It concluded that the agreement was likely prepared fraudulently on blank stamp papers, and the respondent-plaintiff's claims were not credible. The appeal was allowed, and the judgments of the lower courts were quashed, with no order as to costs.