A) ABSTRACT / HEADNOTE

The Supreme Court dealt with the enforceability of a disputed agreement to sell involving agricultural land between Lakha Singh (appellant) and Balwinder Singh (respondent). The case centered on alleged fraud in the execution of the agreement, a claim for specific performance, and alternative reliefs for recovery of earnest money. The Court analyzed the evidentiary gaps and inconsistencies in the execution of the agreement, as well as the actions and omissions by the respondent. It found that the respondent’s claims of specific performance were fabricated and the agreement was suspiciously created. Consequently, the appeal was allowed, overturning the concurrent findings of lower courts and declaring the agreement as fraudulent.

Keywords: Agreement to sell, Specific performance, Fraudulent transaction, Agricultural land, Earnest money recovery.

B) CASE DETAILS

i) Judgement Cause Title
Lakha Singh v. Balwinder Singh & Anr.

ii) Case Number
Civil Appeal No. 10893 of 2024.

iii) Judgement Date
27 September 2024.

iv) Court
Supreme Court of India.

v) Quorum
Pamidighantam Sri Narasimha and Sandeep Mehta, JJ.

vi) Author
Justice Sandeep Mehta.

vii) Citation
[2024] 10 S.C.R. 79.

viii) Legal Provisions Involved

• Article 136 of the Indian Constitution – Special Leave to Appeal.
• Indian Contract Act, 1872 – Sections related to Specific Performance.
• Evidence Act, 1872 – Evaluation of documentary and oral evidence.

ix) Judgments overruled by the Case
Judgments of the Trial Court, First Appellate Court, and the Punjab & Haryana High Court.

x) Case is Related to which Law Subjects
Contract law, Property law, Civil Procedure.

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

This appeal emerged from concurrent decisions by the Trial Court, First Appellate Court, and the Punjab & Haryana High Court, which granted partial relief to the respondent. The respondent had sought specific performance of an agreement to sell agricultural land, claiming payment of Rs. 16,00,000/- as earnest money. The appellant contended that the agreement was fraudulent, alleging misuse of blank signed stamp papers. Despite lower courts favoring the respondent to some extent, the Supreme Court revisited the evidence, finding substantial procedural and factual inconsistencies, leading to reversal of the findings.

D) FACTS OF THE CASE

1. Agreement Details
   The respondent claimed an agreement was executed on 7 May 2007, where the appellant agreed to sell 30 Kanals 8 Marlas of land for Rs. 5,00,000/- per Killa. Rs. 16,00,000/- was allegedly paid as earnest money.

2. Disputed Execution
   The agreement bore thumb impressions on the last page only, with substantial blank spaces on earlier pages. The appellant alleged fraudulent use of pre-signed blank stamp papers.

3. Market Discrepancy
   The land was valued at half its market rate, raising suspicion over the agreement’s genuineness.

4. Actions of the Respondent
   The respondent did not inform the appellant before appearing at the Sub-Registrar’s office and filed the suit three months after the scheduled date for execution of the sale deed.

5. Relief Sought
   The respondent sought either specific performance or refund of the earnest money with damages.

E) LEGAL ISSUES RAISED

1. Whether the agreement was valid and enforceable?
2. Whether the respondent was entitled to specific performance or refund of the earnest money?
3. Whether the alleged agreement was a fraudulent and concocted document?

F) PETITIONER/APPELLANT’S ARGUMENTS

1. Fraudulent Execution
   The appellant argued that the agreement was fabricated using blank signed papers, as evidenced by unsigned and blank pages.

2. Unjustified Delay
   The respondent’s three-month delay in filing the suit and lack of advance intimation to the appellant raised doubts about his intent.

3. Lack of Consideration
   The appellant contended he never received the earnest money and was coerced into signing blank documents by the respondent’s brother.

4. Market Valuation
   The appellant highlighted the unreasonable valuation of land at half the market rate, discrediting the agreement’s authenticity.

G) RESPONDENT’S ARGUMENTS

1. Execution of Agreement
   The respondent claimed valid execution, supported by attesting witnesses and marked presence at the Sub-Registrar’s office.

2. Earnest Money
   He asserted payment of Rs. 16,00,000/- in cash as earnest money on the agreement date.

3. Breach by Appellant
   The respondent argued the appellant willfully breached the agreement by failing to appear for the sale deed execution.

4. Possession and Readiness
   The respondent claimed possession of the land and readiness to perform contractual obligations.

H) JUDGEMENT

a. Ratio Decidendi
The Supreme Court held that the agreement was fraudulent and concocted due to glaring inconsistencies in execution, lack of prior intimation, and questionable financial transactions.

b. Obiter Dicta
The Court underscored the importance of meticulous evaluation of evidence when assessing allegations of fraud in property transactions.

c. Guidelines

1. Advance Notice: Parties must provide clear, documented communication before execution dates.
2. Evidence Scrutiny: Courts must critically evaluate the authenticity of agreements, especially in property disputes involving financial irregularities.

I) CONCLUSION & COMMENTS

The Supreme Court emphasized due diligence in evaluating contractual disputes, especially when fraud is alleged. The judgment highlights the necessity for courts to prioritize substantive evidence over procedural precedents, ensuring justice prevails in cases of manipulation.

J) REFERENCES

a. Important Cases Referred

1. Sukhbiri Devi v. Union of India, [2022] 13 SCR 523.
2. Mekala Sivaiah v. State of A.P., [2022] 6 SCR 989.

b. Important Statutes Referred

1. Indian Contract Act, 1872.
2. Evidence Act, 1872.
3. Constitution of India – Article 136.