Supreme Court of India
BASAVARAJversusPADMAVATHI & ANR.
- Citation
- 2023 INSC 19
- Decided
- 5 January 2023
- Disposal
- Appeal(s) allowed
- Bench
- M R SHAH
Holding
The High Court materially erred in reversing the trial court’s findings; the decree for specific performance is restored, with the appellant directed to pay a further Rs 10 lakhs and the seller to execute the sale deed.
Summary
The appellant, Basavaraj, entered into an agreement to sell dated 13 March 2007 with respondent Padmavathi for Rs 12.74 lakhs, paying Rs 3 lakhs as earnest money. The seller failed to execute the sale deed, prompting the appellant to sue for specific performance on 14 February 2008. The trial court decreed specific performance, finding the appellant ready and willing to pay the balance, but the Karnataka High Court set aside the decree, holding that the appellant had not proved he possessed the funds, drawing an adverse inference from the non‑production of a passbook. On appeal, this Court held that, following the precedents of Indira Kaur and Ramrati Kuer, an adverse inference cannot be drawn unless the plaintiff is ordered or asked to produce such documents. Consequently, the High Court’s reversal was a material error and the trial court’s decree was restored, subject to the appellant paying an additional Rs 10 lakhs and the seller executing the sale deed. The appeals were allowed.
Issues considered
- The appellant's readiness and willingness to perform the contract and pay the balance consideration
- Whether an adverse inference can be drawn against a plaintiff for not producing a passbook or bank statements absent a specific court order
- Whether the High Court erred in setting aside the trial court's decree for specific performance
Subjects
specific performancereadiness and willingnessadverse inferencesale deedcontract lawcivil appealspecific relief
Judgment
[2023] 1 S.C.R. 231 231
BASAVARAJ A
v.
PADMAVATHI & ANR.
(Civil Appeal Nos. 8962-8963 of 2022)
JANUARY 05, 2023 B
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Specific performance – Suit for specific performance –
Respondent No.1 executed agreement to sell dated 13.03.2007 in
favour of appellant-buyer agreeing to sell the land in question on
or before 31.07.2007 for a sale consideration of Rs.12.74 lakhs - C
Rs. 3 lakhs were paid as earnest money – Respondent No.1 however
did not execute the sale deed – Appellant-buyer filed suit for specific
performance on 14.02.2008 – Trial court decreed the suit – High
Court set aside the judgment of trial court, mainly on ground that
appellant–plaintiff was not ready and willing to perform his part of D
the contract – Held: On facts, the High Court materially erred in
reversing the findings of the trial court on readiness and willingness
of the appellant – Reasoning given by the High Court was that
plaintiff had not proved that he had cash and/or amount and/or
sufficient funds/means to pay the balance sale consideration, as no
E
passbook and/or bank accounts was produced – However, in view
of law laid down by Supreme Court in Indira Kaur and Ramrati Kuer
cases, unless the plaintiff was called upon to produce the passbook
either by the defendant or, the Court ordered him to do so, no adverse
inference could have been drawn by the High Court – Judgment of
High Court therefore unsustainable – However, for complete justice, F
appellant to pay to respondent no.1 a further sum of Rs.10 lakhs
and on such payment, respondent no.1 to execute sale deed in favour
of appellant.
Allowing the appeals, the Court
G
HELD:1. Considering the facts and circumstances of the
case, the High Court materially erred in reversing the decree by
reversing the findings of the Trial Court on readiness and
willingness of the appellant. [Para 6][238-F]
H
231
232 SUPREME COURT REPORTS [2023] 1 S.C.R.
A 2.1. It appears that the reasoning given by the High Court
is that the plaintiff has not proved that he had the cash and/or
amount and/or sufficient funds/means to pay the balance sale
consideration, as no passbook and/or bank accounts was
produced. [Para 6.1][238-G]
B 2.2. However, in the case of Indira Kaur, this Court after
considering the observations made by this Court in the case of
Ramrati Kuer set aside the findings recorded by three courts
below whereby an adverse inference had been drawn against the
plaintiff therein for not producing the passbook and thereby
C holding that the plaintiff was not ready and willing to perform his
part of the agreement. It was observed and held that unless the
plaintiff was called upon to produce the passbook either by the
defendant or, the Court orders him to do so, no adverse inference
can be drawn. Applying the law laid down by this Court in the
D aforesaid two cases to the facts of the case on hand, no adverse
inference could have been drawn by the High Court. The High
Court seriously erred in reversing the findings recorded by the
Trial Court on the readiness and willingness of the appellant.
[Para 6.2 and 6.3][239-F-H; 240-A]
E 3. The impugned judgment passed by the High Court is
unsustainable. However, at the same time, to do complete justice,
the plaintiff is directed to pay to defendant No. 1 a further sum of
Rs. 10 lakhs and on such payment, defendant No. 1 is directed to
execute the sale deed in favour of the original plaintiff – appellant.
F [Para 7][240-B-C]
Indira Kaur and Ors. v. Sheo Lal Kapoor, (1988) 2 SCC
488 and Ramrati Kuer v. Dwarika Prasad Singh, (1967)
1 SCR 153 – relied on.
Beemaneni Maha Lakshmi v. Gangumalla Appa Rao,
G
(2019) 6 SCC 233 : [2019] 7 SCR 490; J.P. Builders
and Anr. v. A. Ramadas and Anr., (2011) 1 SCC 429 :
[2010] 15 SCR 538 and U.N. Krishnamurthy v. A.M.
Krishnamurthy, 2022 SCC OnLine SC 840 – referred
to.
H
BASAVARAJ v. PADMAVATHI & ANR. 233
Case Law Reference A
(1988) 2 SCC 488 Para 3.6 relied on
[2019] 7 SCR 490 Para 3.6 referred to
(1967) 1 SCR 153 Para 3.8 relied on
B
[2010] 15 SCR 538 Para 4.4 referred to
2022 SCC OnLine SC 840 Para 4.4 referred to
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 8962-
8963 of 2022.
C
From the Judgment and Order dated 06.12.2021 of the High Court
of Karnataka at Kalaburagi Bench in RP No.200036 of 2021 and dated
27.11.2020 in R.F.A. No.5033 of 2011 (SP).
K. Parmeshwar, Nishanth Patil, Ayush P. Shah, Advs. for the
Appellant. D
Shailesh Madiyal, Rajan Parmar, Mrigank Prabhakar, Ms. Sakshi
Banga, Akshay Kumar, Advs. for the Respondents.
The Judgment of the Court was delivered by
M. R. SHAH, J. E
1. Feeling aggrieved and dissatisfied with impugned judgment(s)
and order(s) dated 27.11.2020 and 06.12.2021 passed by the High Court
of Karnataka at Kalaburagi Bench in Regular First Appeal (RFA) No.
5033/2011 and Review Petition (RP) No. 200036/2021 respectively, by
which, the High Court has allowed the said appeal preferred by F
respondents herein – original defendants and has quashed and set aside
the judgment and decree passed by the learned Trial Court decreeing
the suit for specific performance, the original plaintiff has preferred the
present appeals.
2. The facts leading to the present appeals in a nutshell are as
G
under: -
2.1 That respondent No. 1 herein – original defendant No. 1
executed an agreement to sell dated 13.03.2007 in favour of the appellant
herein – original plaintiff – buyer agreeing to sell the land in question on
or before 31.07.2007 for a sale consideration of Rs. 12,74,000/-. Rs. 3
H
234 SUPREME COURT REPORTS [2023] 1 S.C.R.
A lakhs were paid as earnest money. The receipt was issued by respondent
No. 1 for the same. That thereafter, as respondent No. 1 – seller did not
execute the sale deed, the appellant got issued a legal notice dated
20.11.2007 asking the respondent(s) to receive the balance sale
consideration and execute the sale deed. The seller replied to the legal
notice vide reply dated 03.12.2007 denying the execution of agreement
B
to sell. That thereafter, the appellant – buyer filed the suit for specific
performance on 14.02.2008 vide O.S. No. 17/2008. The original
defendants – sellers filed their written statement and opposed the suit.
The defendants denied the execution of agreement to sell. It was also
the case of the defendants in the written statement that the plaintiff was
C not ready to perform his part of the contract. Therefore, the defendants
denied readiness and willingness on the part of the plaintiff – buyer to
perform his part of the contract.
2.2 Both the parties led evidence before the Trial Court. The
plaintiff led evidence by examining witnesses, on his readiness and
D willingness to perform his part of the contract. It was brought on record
that plaintiff went with cash to the seller but the seller did not accept the
same. That thereafter, on appreciation of evidence the learned Trial Court
decreed the suit for specific performance vide judgment and decree
dated 30.09.2011. The learned Trial Court believed the case of the plaintiff
– buyer as to the execution of agreement to sell. The learned Trial Court
E also believed the plaintiff’s case as to the payment of earnest money of
Rs. 3 lakhs to the seller. The learned Trial Court also held that the plaintiff
– buyer was ready and willing to perform his part of the contract. That
pursuant to the judgment and decree passed by the learned Trial Court,
the buyer – original plaintiff deposited an amount of Rs. 9,74,000/- before
F the learned Trial Court which is still reported to be lying with the Trial
Court.
2.3 Feeling aggrieved and dissatisfied with the judgment and decree
passed by the learned Trial Court, respondents herein – sellers preferred
the appeal before the High Court. By the impugned judgment and order
G the High Court has allowed the said appeal and has set aside the judgment
and decree passed by the learned Trial Court, mainly on the ground that
the plaintiff was not ready and willing to perform his part of the contract.
The impugned judgment and order passed by the High Court is the subject
matter of present appeals.
H
234
BASAVARAJ v. PADMAVATHI & ANR. [M. R. SHAH, J.] 235
2.4 The appellant also filed a review petition which came to be A
dismissed by the High Court, and the judgment passed in the review
petition is also the subject matter of one of the appeals.
3. Shri K. Parmeshwar, learned counsel appearing on behalf of
the appellant has vehemently submitted that in the facts and circumstances
of the case, the Hon’ble High Court has materially erred in reversing B
the findings of the Trial Court on readiness and willingness of the appellant.
3.1 It is submitted that on appreciation of entire evidence on record
the learned Trial Court recorded findings as to readiness and willingness
of the appellant, in favour of the appellant, and such findings were not
required to be interfered with by the High Court. C
3.2 It is further submitted that all through, out and right from the
very beginning, the appellant – buyer was ready and willing to perform
his part of the contract. He has prayed that the following aspects emerging
from the evidence on record be considered, while considering the issue
as to readiness and willingness on the part of the appellant to perform
D
his part of the agreement dated 13.03.2007: -
(i) That the appellant specifically averred in the plaint that he
is ready and willing to perform the agreement dated
13.03.2007;
(ii) That in the suit notice dated 20.11.2007 the plaintiff
E
specifically averred that he is ready and willing to pay the
balance sale consideration;
(iii) The plaintiff in his evidence stated that he is ready and
willing to perform the agreement. In the deposition it was
further stated that he approached the defendant – seller in
the month of June, 2007 and again in July, 2007 with the F
balance sale consideration. That there is no cross-
examination in this regard;
(iv) The plaintiff examined PW2 and PW3, the attestors to the
agreement to sell, who specifically stated that in June, 2007,
the plaintiff approached the defendants and asked them to G
take the balance sale consideration in cash. That there is
no cross- examination in this regard;
(v) That the DW-1 – first defendant admitted in her cross-
examination that she executed the agreement and that she
was the owner of the said property; H
236 SUPREME COURT REPORTS [2023] 1 S.C.R.
A (vi) That she had affixed her signatures on the agreement and
that she received Rs. 3 lakhs;
(vii) That the appellant had deposited the balance consideration
of Rs. 9,74,000/- before the learned Trial Court on
31.10.2011.
B 3.3 Learned counsel appearing on behalf of the appellant – buyer
has further submitted that as such the defendant took a dishonest stand
before the learned Trial Court and denied the execution of the agreement.
It is further submitted that in the written statement, the specific stand
taken by the defendants was that no agreement to sell was executed
C between the parties. It is contended that however, defendant No. 1
subsequently admitted that Rs. 3 lakhs were received by her, and a
receipt dated 13.03.2007 was issued in that regard.
3.4 It is further contended that even the seller – defendant No. 1
took contradictory and dishonest pleas. She initially denied the execution
D of the agreement, then denied that it was an agreement to sell but only
an agreement in respect of a loan transaction.
3.5 It is next contended by learned counsel appearing on behalf of
the appellant that as such there are concurrent findings recorded by the
learned Trial Court as well as the High Court on execution of the
E agreement to sell by defendant No. 1 and to the effect that Rs. 3 lakhs
were paid by the buyer by way of earnest money and that the agreement
to sell was not in respect of security and/or a loan transaction but it was
for an outright sale.
3.6 Learned counsel appearing on behalf of the appellant has
F heavily relied upon the decision of this Court in the case of Indira Kaur
and Ors. Vs. Sheo Lal Kapoor; (1988) 2 SCC 488 (para 8, 9 and
10) and the subsequent decision of this Court in the case of Beemaneni
Maha Lakshmi Vs. Gangumalla Appa Rao; (2019) 6 SCC 233 (para
14) on the aspect of readiness and willingness on the part of the buyer.
It is submitted that in the case of Indira Kaur (supra) it was held that
G no adverse inference can be drawn against the plaintiff as to whether he
had the means to pay the balance consideration on the grounds of non-
production of passbook, accounts or other documentary evidence.
3.7 It is submitted that in the case of Beemaneni Maha Lakshmi
(supra) it was observed and held by this Court that failure on the part of
H the vendee to “demonstrate” that he was having sufficient money with
BASAVARAJ v. PADMAVATHI & ANR. [M. R. SHAH, J.] 237
him to pay the balance sale consideration by the date of his evidence is A
not of much of consequence.
3.8 It is further submitted that in the case of Ramrati Kuer Vs.
Dwarika Prasad Singh; (1967) 1 SCR 153 (para 9), it was observed
and held by this Court that in the absence of a specific prayer asking for
the party to produce accounts and their subsequent failure to do so, no B
adverse inference could be drawn.
3.9 Making the above submissions and relying upon the afore-
cited decisions, it is submitted that the High Court has materially erred in
reversing the findings of the Trial Court on readiness and willingness on
the part of appellant. Therefore, it is prayed that the present appeals be C
allowed and the impugned judgments bet set aside.
4. Present appeals are vehemently opposed by Shri Shailesh
Madiyal, learned counsel appearing on behalf of the seller - respondents
– original defendants.
4.1 Learned counsel appearing on behalf of the respondents – D
seller submitted that cogent reasons have been assigned by the High
Court while reversing the judgment and decree passed by the learned
Trial Court and reversing the findings as to the readiness and willingness
on the part of the appellant.
4.2 It is further submitted that the appellant – original plaintiff has E
not demonstrated and/or led any evidence that he had sufficient means/
funds/cash to pay the balance sale consideration. It is submitted that in
absence of such evidence the High Court has rightly held that the buyer
– original plaintiff has failed to establish and prove readiness and
willingness on his part to perform the agreement dated 13.03.2007. F
4.3 It is submitted that in the written statement itself it was the
specific case on behalf of the defendants that the plaintiff was not ready
and willing to perform his part of the agreement.
4.4 Learned counsel appearing on behalf of respondents – original
defendants, has relied upon the decision of this Court in the case of J.P. G
Builders and Anr. Vs. A. Ramadas and Anr.; (2011) 1 SCC 429 as
well as the recent decision of this Court in the case of U.N.
Krishnamurthy Vs. A.M. Krishnamurthy; 2022 SCC OnLine SC
840 in support of his prayer to dismiss the present appeals.
H
238 SUPREME COURT REPORTS [2023] 1 S.C.R.
A 5. We have heard learned counsel appearing on behalf of the
respective parties at length.
6. At the outset, it is required to be noted that the learned Trial
Court, on appreciation of evidence on record, specifically recorded
findings on readiness and willingness on the part of the plaintiff to perform
B his part of the agreement. The findings recorded on readiness and
willingness on the part of the plaintiff were on appreciation of the entire
evidence on record. In the legal notice which was issued on 20.11.2007,
the plaintiff asked the defendant to receive the balance amount and
execute the sale deed. In reply to the legal notice, the defendant denied
the execution of agreement to sell itself. That thereafter, the plaintiff
C filed the suit for specific performance in which it was specifically averred
that he was ready and willing to perform the agreement dated 13.03.2007.
In his deposition, the plaintiff specifically stated that he was ready and
willing to perform his obligations under the agreement. He further stated
that he approached the defendant in the month of June, 2007 and again
D in July, 2007 with the balance sale consideration. There is no cross-
examination in this regard. The plaintiff also examined two witnesses,
PW-2 and PW-3, who were attestors to agreement to sell dated
13.03.2007, who specifically stated that in July, 2007, the plaintiff
approached the defendants and asked them to accept the balance sale
consideration in cash, to that also there is no cross-examination. The
E receipt of Rs. 3 lakhs by way of earnest money, has been held to be
proved by both the courts below. Within a period of one month from
passing of the decree, the plaintiff deposited the balance sale consideration
i.e., Rs. 9,74,000/- before the learned Trial Court. Considering the
aforesaid facts and circumstances of the case, it is observed that the
F High Court has materially erred in reversing the decree by reversing the
findings of the Trial Court on readiness and willingness of the appellant.
6.1 From the impugned judgment and order passed by the High
Court, it appears that the reasoning given by the High Court is that the
plaintiff has not proved that he had the cash and/or amount and/or
G sufficient funds/means to pay the balance sale consideration, as no
passbook and/or bank accounts was produced. In the case of Ramrati
Kuer (supra) which has been specifically considered by this Court in
the case of Indira Kaur (supra), it was observed and held as under: -
“Fourthly, it is urged that the respondents did not produce any
accounts even though their case was that accounts were
H
BASAVARAJ v. PADMAVATHI & ANR. [M. R. SHAH, J.] 239
maintained and that Basekhi Singh used to give maintenance A
allowance to the widows who were messing separately. It is urged
that adverse inference should be drawn from the fact accounts
were not produced by the respondents and that if they had been
produced that would have shown payment not of maintenance
allowance but of half share of the income to the widows by virtue
B
of their right to the property. Itis true that Dwarika Prasad Singh
said that his father used to keep accounts. But no attempt was
made on behalf of the appellant to ask the court to order Dwarika
Prasad Singh to produce the accounts. An adverse inference could
only have been drawn against the plaintiffs-respondents if the
appellant had asked the court to order them to produce accounts C
and they had failed to produce them after admitting that Basekhi
Singh used to keep accounts. But no such prayer was made to
the court, and in the circumstances no adverse inference could be
drawn from the non-production of accounts. But it is urged that
even so the accounts would have been the best evidence to show
D
that maintenance was being given to the widows and the best
evidence was withheld by the plaintiffs and only oral evidence
was produced to the effect that the widows were being given
maintenance by Basekhi Singh. Even if it be that accounts would
be the best evidence of payment of maintenance and they had
been withheld, all that one can say is that the oral evidence that E
maintenance was being given to widows may not be acceptable;
but no adverse inference can be drawn (in the absence of any
prayer by the appellant that accounts be produced) that if they
had been produced they would have shown that income was divided
half and half in accordance with the title claimed by the appellant.”
F
6.2 In the case of Indira Kaur (supra) this Court after considering
the observations made by this Court in the case of Ramrati Kuer (supra)
has set aside the findings recorded by three courts below whereby an
adverse inference had been drawn against the plaintiff therein for not
producing the passbook and thereby holding that the plaintiff was not
ready and willing to perform his part of the agreement. It is observed G
and held that unless the plaintiff was called upon to produce the passbook
either by the defendant or, the Court orders him to do so, no adverse
inference can be drawn.
6.3 Applying the law laid down by this Court in the aforesaid two
cases to the facts of the case on hand, no adverse inference could have H
240 SUPREME COURT REPORTS [2023] 1 S.C.R.
A been drawn by the High Court. The High Court seriously erred in reversing
the findings recorded by the learned Trial Court on the readiness and
willingness of the appellant.
7. Considering the circumstances narrated hereinabove, we are
of the opinion that the High Court has materially erred in quashing and
B setting aside the judgment and decree passed by the learned Trial Court
by reversing the findings on the readiness and willingness of the appellant.
Under the circumstances, the impugned judgment(s) and order(s) passed
by the High Court is/are held to be unsustainable and the same deserve
to be quashed and set aside. However, at the same time, to do the
complete justice, we are of the opinion that if the plaintiff is directed to
C pay a further sum of Rs. 10 lakhs towards sale consideration, it will
meet the ends of justice.
8. In view of the above discussion and for the reasons stated
above, the present appeals succeed. Impugned judgment(s) and order(s)
passed by the High Court are hereby quashed and set aside. The judgment
D and decree passed by the learned Trial Court for specific performance
of the agreement to sell dated 13.03.2007 is hereby restored. However,
to do complete justice, we direct the plaintiff to pay to defendant No. 1
a further sum of Rs. 10 lakhs to be deposited within a period of eight
weeks from today and on such payment, defendant No. 1 is directed to
E execute the sale deed in favour of the original plaintiff – appellant within
a period of two weeks therefrom. Defendant No. 1 shall also be permitted
to withdraw the amount i.e., Rs. 9,74,000/- deposited by the plaintiff on
31.10.2011, pursuant to the judgment and decree passed by the learned
Trial Court, with the interest accrued thereon, which shall be paid to
defendant No. 1 by an account payee cheque. Present appeals are
F accordingly allowed with the above further directions. No order as to
costs.
Bibhuti Bhushan Bose Appeals allowed.
G
H
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "specific performance"Sign in to search