In RSA-947-2016(O&M)-PUNJ HC- Though agreement to sell set up by plaintiff was not free from all suspicious circumstances but it couldnot be discarded on ground of misrepresentation: P&H HC passes decree for refund of earnest money of Rs 1.8 lakh with interest in plaintiff’s favour
Justice H.S.Madaan [22-11-2022]

Read Order: Swaran Singh v. Gurpreet Singh and Others 

Monika Rahar

Chandigarh, November 24, 2022: While dealing with a regular second appeal, the High Court of Punjab and Haryana has observed that though the agreement to sell set up by the plaintiff was not free from all the suspicious circumstances but at the same time, it cannot be discarded for the reason of being a result of fraud and misrepresentation. 

The plaintiff brought a civil suit seeking possession by way of specific performance of the 2009 agreement to sell in respect of an agricultural. In addition, the plaintiff also sought a permanent injunction restraining the defendant from alienating the said land or in the alternate, to recover Rs. 2 lakhs (Rs. 1,80,000/- as a refund of earnest money and Rs.20,000/- as damages along with interest @ 24% per annum).

The plaintiff claimed that he was always ready and willing to perform his part of the contract but the defendant backed out, giving rise to a cause of action to him to bring the suit. 

In response, the defendant denied the agreement to sell and the receipt of the earnest money (as claimed by the plaintiff). The defendant rather claimed that she borrowed a certain sum from the plaintiff, in response to which, the plaintiff obtained her thumb impressions of some blank and printed papers. It was the defendant’s claim that she was an old-illiterate woman who lived with her family in her home which was standing on the suit property. 

Thus, the defendant assailed the agreement to sell as being illegal, null and void and a result of fraud and misrepresentation besides being without consideration. 

The plaintiff’s suit was decreed by the Trial Court with costs and defendants being legal heirs of the defendant Smt. Rakesh Kaur (since deceased), were directed to execute the sale deed in favour of the plaintiff in terms of the agreement to sell after receiving the balance sale consideration within a period of three months, to the extent of the share inherited by them, failing which, the plaintiff would be at liberty for execution and registration of the sale deed through Court at the costs of defendants and the defendants were restrained from transferring, alienating, mortgaging or disposing of the suit property, except to the plaintiff. 

The LRs of the defendant filed an appeal which was allowed. Hence, the High Court was approached. 

After considering the whole case, Justice H.S.Madaan observed that neither of the two Courts arrived at the correct conclusions. The Court was of the opinion that though the agreement to sell set up by the plaintiff was not free from all the suspicious circumstances, it cannot be discarded for the reason of being the result of fraud and misrepresentation. Further, the Court observed that though the agreement was entered into by the defendant with the plaintiff, but that was basically a loan transaction and not an agreement to sell in letter and spirit, which was meant to be enforced by execution of the sale deed by the defendant in favour of the plaintiff. 

Further, regarding the defendant’s plea that her thumb impression was obtained fraudulently, the Court observed (after perusing the depositions of her son and other pieces of evidence) that it was not the case of the defendant or her legal representatives that they initiated any criminal action against the plaintiff for indulging in any alleged forgery or fabrication, thus, the defendant indirectly admitted her thumb impressions on the agreement and other writings thereon. 

“As already observed the blank paper theory set up by the defendant does not come out to be convincing”, the Court observed. 

Further, the Court went on to look into the factors which put a question mark on the genuineness of the plaintiff’s claim. Firstly, it was noted that the agreement to sell stated the defendant to be in possession of the plot in question but the revenue record (jamabandi for the year 2004-05) did not show her to be in possession of any portion of the joint land. 

“Even otherwise, she was not in possession of the land, which she had agreed to sell with the plaintiff. She could not have possibly put to him in possession thereof”, the Court observed. 

One more circumstance, which created doubt in the mind of the Court was that the plaintiff claimed the property was a vacant plot when according to the defendant her residential house was standing therein. A perusal of the cross-examination of plaintiff Swaran Singh goes to show that he was unable to tell the names of neighbouring owners to the suit land, the Court observed. 

Thus, the Court found that acceptance of the appeal in toto by Additional District Judge, Patiala and the dismissal of the suit filed by the plaintiff completely was not justified. Similarly, the judgment passed by the trial Court granting relief of specific performance to the plaintiff was held to be not sustainable.

However, the plaintiff was found entitled to alternative relief of decree for recovery. Therefore, the judgment and decree passed by Additional District Judge, Patiala were set aside and a decree for refund of earnest money of Rs.1,80,000/- with interest @ Rs.9% per annum from the date of filing of the suit till actual realization with costs throughout was passed in favour of the plaintiff and against the defendant.