Holding

A written contract cannot be contradicted by oral evidence under Section 91 of the Indian Evidence Act, and the respondent failed to establish payment of the balance, so the District Forum's order stands.

Summary

The appellant, Bhandari Construction Company, sold an office space to the respondent, Narayan Gopal Upadhye, for Rs.7,75,000 as per a written agreement dated 27‑7‑1997. The respondent paid Rs.5,00,000 by cheque but claimed to have paid the remaining balance, including Rs.4,00,000 in cash, for which no receipt or documentary proof was produced. The District Consumer Redressal Forum held that the balance was unpaid and ordered the respondent to pay the outstanding amount to obtain possession. The State and National Consumer Commissions reversed that order despite the lack of evidence of the alleged cash payment. The Supreme Court held that, under Section 91 of the Indian Evidence Act, once a transaction is reduced to writing, oral evidence cannot contradict its terms, and the respondent failed to prove the extra payment; consequently, the appellate courts' decisions were set aside and the District Forum's order restored.

Issues considered

When can oral evidence be admitted to contradict the terms of a written contract under Section 91 of the Indian Evidence Act?
Whether the respondent proved payment of the balance consideration, including the alleged cash payment of Rs.4,00,000, in the absence of a receipt or other documentary evidence.
Whether the State Consumer Commission and the National Consumer Disputes Redressal Commission erred in overturning the District Forum's order.
Whether the written agreement governs the parties' rights and obligations, precluding any variation by subsequent oral statements.

Legislation cited

Indian Contract Act, 1872
Indian Evidence Act, 1872s. 91, s. 92

Subjects

written contractsection 91 evidenceconsumer disputesale of propertybalance paymentreceiptpossessionIndian Evidence ActIndian Contract Act

Judgment

A MIS. BHANDARI CONSTRUCTION COMPANY
V.

NARA YAN GOPAL UPADHYE

'' FEBRUARY 20, 2007

B [B.P. SINGH AND P.K. BALASUBRAMANYAN, JJ.]

,Indian Contract Act, 1872/Indian Evidence Act, 1872; Ss.91 and 92: )-

'Sale-purchase agreement-Selling of Office room-Payment of
c consideration amount in full by purchaser-Revision 'n cost-Return of
amount to purchaser-Vendor company allegedly demanding revised price
partly in cash and partly through cheque-Vendee making payment-Issuance
of receipt against the payment made through cheque-Company raising
demand for payment oj balance amount - Not paid by purchaser-Cancellation
D of allotment and return of amount by the company-Complaint-District
Forum directing the purchaser to pay the balance amount with interest to
get t.he possession of office premises in question--:-Reversed by State ••
Commission-Affirmed by National Commission-On appeal, Held: When
terms of a transaction reduced in writing, it is impossible to lead evidence
to contradict its terms in view of s. 91 of Evidence Act-Case as set up by
E the purchaser in his evidence not established-No document produced to
show that balance payment was made by him in cash-Hence, no evidence
adduced to show that the balance amount due under the agreement was
paid-Neither the State Commission nor the National Commission gave
sustainable reasons· differing from conclusion of the District Forum-Hence,
order of both the National Commission and the State Commission set aside f
F
and :hat of District Forum restored.
....
Appellant-Vendor is a construction company and respondent sought to
purchase an office from it. The parties agreed to sell and purchase an office.
Terms of the transaction were redivised to writing. According to the vendor,
G the purchase price. was fixed at Rs.7,75,000/-. In addition, documentation,
registration and other expenses were to be borne by the vendee. A sum of Rs.
5,00,000/- was paid by the Vendee and the balance due, was Rs. 3,41,190/-.
:.__
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Since, the vendee did not pay the sum due, the sale transaction was not
complete, and therefore the room was not put in the possession of the vendee. ,..
H 924
BHANDARI CONSTRUCTION COMPANY,.. NARAYAN GOPAL UPADHYE 925

Aggrieved, vendee approached the District Consumer Redressal Forum with A
· a complaint. However, his case as per amended complaint was that the vendor
agreed to sell a room for a price ofRs.9,00,110/-. The amount was paid by
him in a lump and receipt was issued. Though, the vendor issued an allotment
letter, but in spite of repeated demands after completion of the construction,
the vendor did not put him in possession and an extra amount was demanded B
from him. It issued a notice intending to terminate the agreement. Since
possession was not given and the company attempted to sell the premises to
someone else, he suffered losses. The payment by the purchaser was to be
the essence of the contract. The total purchase price shown in the agreement
was Rs.7,75,000/-. in his evidence before the District Forum, the respondent-
purchaser made a departure from the complaint regarding consideration, C
admitting that a sum ofRs.9,00,000/- paid by way of two cheques by him was
returned to him; that he had agreed to destroy the receipt; that the cheques
were returned because the vendee wanted a portion nf the consideration in
cash. He handed over a cheque for Rs.5,00,000/-, as agreed on all hands. The
same day, he withdrew from the bank a sum ofRs.4,00,000/- and handed over
the cash to an agent of the vendor-company. But he could not produce receipt D
for payment thereof. The District Forum took the view that it would be proper
to leave the respondent to approach the Civil Court for relief in view of the
nature of the dispute. The vendee went up in appeal to the State Commission.
The State Commission remanded the complaint to the District Forum to decide
the dispute. The District Forum passed an order giving liberty to the E
respondent to pay a sum of Rs.3,40,890/- along with interest at 15% per
annum till the date of payment and to obtain possession of the office premises
in question within a period of two months from the date of receipt of that
judgment and directed the company to handover vacant possession of the
premises. Aggrieved, the respondent appealed to the State Commission. The
> .
company filed a belated appeal but the delay was refused to be condoned. F
Therefore, the decision of the District Forum as against the company became
final. The company filed a revision before the National Commission, which
was dismissed by it. Hence the present appeal.

Allowing the appeal, the Court G
HELD: 1.1. When the terms of the transaction are reduced to writing,
it is impossible to lead evidence to contradict its terms in view of Section 91
of the Evidence Act. There is no case that any of the provisos to Section 92 of
the Act are attracted in this case. Why the case that was sought to be spoken
to by the respondent was not set up by him in the complaint was not explained. H
926 SUPREME COURT REPORTS [2007] 2 S.C.R.

A The case set up in evidence was completely at variance with the case in the
complaint. There was no evidence to show that the consideration was to be
Rs.9,00,000/-, especially, in the light of the recitals in the registered
agreement. There was also no document to show the payment of
Rs.4,00,000/- by way of cash. Hence, there was no evidence to show that the
B balance amount due under the agreement after the admitted payment of
Rs.5,00,000/- was paid. The affidavit produced before the State Forum and
the evidence of the colleague of the respondent is clearly inadmissible and
insufficient to prove any such payment. Thus, the case set up by the respondent
in his evidence was not established. (Para 15) (931-C-F( l-

c given 1.2. Neither the State Commission, nor the National Commission has
any sustainable reason for differing from the conclusion of the District
Forum ..A mere suspicion that builders in the country are prone to take a
part of the sale amount in cash, is no ground to accept the story of payment
of Rs.4,00,000/- especially when such a payment had not even been set up in
the complaint before the District Forum. Not only that, there was no
D independent evidence to support the payment of such a sum of Rs.4,00,000/-
except the ipse dixit of the respondent. The affidavit of the bank employee
filed in the State Commission cannot certainly be accepted as evidence of such
,.
a payment. Payment of such a sum had clearly been denied by the company.
The respondent had, therefore, to prove such a payment. (Para 15)
(931-G-H; 932-AJ
E
1.3. Not only that the respondent did not have a receipt for evidencing
the payment of Rs.4,00,000/- and if the amount was paid on 5.7.1997 or
8.7.1997, as claimed by him, he would certainly have ensured that the payment
was acknowledged in the agreement for sale executed on 27.7.1997. The
F agreement for sale actually speaks of his obligation to pay the balance to make 1"-
up Rs.7,75,000/- after acknowledging receipt of Rs. 5,00,000/-. The . ~
respondent is not a layman. He is a practising advocate. According to him, he
specialises in documentation. He cannot, therefore, plead ignorance about the
existence of the recital in the agreement. He cannot plead ignorance of its
implications. Hence, the decision of the National Commission and that
G of the State Commission are set aside and that of the District Forum restored.
(Paras 15 and 17) (932-B-C-EJ

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 866 of2007.

From the Judgment and Final Order dated 12.10.2006 of the National
H Consumer Disputes Redressal·Commission, New Delhi in R.P. No. 2630/06.
BHANDARI CONSTRUCTION COMPANY c. NARAYAN GOPAL UPADHYE [BALASUBRAMANYAN, l) 927

Shyam Divan, S.U.K. Sagar, Bina Madhavan and Hari Kumar G. (for A
Lawyer's Knit & Co.) for the Appellant.

Narayan Gopal Upadhye, Caveator-ln-Person.

The Judgment of the Court was. delivered by
B
P.K. BALASUBRAMANYAN, J. 1. Leave granted.

2. This appeal challenges the decision of the National Consumer Disputes
Redressal Commission.

3. The appellant is a construction company. The respondent sought to C
purchase an office room in the third floor of a building being constructed by
the appellant. The parties agreed to sell and purchase. According to the
company the purchase price was fixed at Rs.7,75,000/-. Documentation,
registration and other expenses were to be borne by the respondent
Rs.5,00,000/- was paid by cheque. The balance due, was Rs. 3,41, 190/-. The
respondent had not paid the said sum. The sale transaction was, therefore, D
not complete. The room was not put in the possession of the respondent. The
terms of the transaction were reduced to writing by an agreement dated
27.7.1997.
•
4.The respondent approached the District Consumer Redressal Forum
with a complaint. His case as per his amended complaint was as follows: E

On 4.7.1997 the company agreed to sell a room having an area of 260
sq.ft. for a price of Rs.9,00, 110/-. The amount was paid in a lump. Receipt for
Rs.9,00,110/- was issued. The company issued an allotment letter dated 22.7.1997.
On 31. 7.1997 the agreement was executed. In spite of repeated demands after F
completion of the construction, the company did not put him in possession.
The company was demanding extra amounts. It avoided handing over of
possession. It issued a notice intending to terminate the agreement. Since
possession was not given and the company attempted to sell the premises
to someone else, he suffered losses which were shown as amounting to
Rs.4,84,000. He was, therefore, entitled to recover a sum of Rs.4,84,000/- as G
compensation. He was entitled to an order restraining the company from
> _,. transferring the office room bearing No.309, to any other person. The company
was liable to be directed not to create any obstruction in his taking possession
of office room No.309. The company was to be directed to remove the lock
it had put at the door of the room.
H
928 SUPREME COURT REPORTS [2007] 2 S.C.R.

A 5. It is seen that on 4.7.1997 the respondent handedover two cheques
bearing No.299667 and 299678 to the company for a total sum of ·t
· Rs.9,00,000/-. He paid a sum of Rs. I I0/- in cash. He obtained a receipt. Cheque·
No.299667 was for Rs.7,50,000/- and cheque No.299668 was for
Rs.1,50,000/-. The parties agree that these two cheques were not encashed,
but were returned to the respondent. According to the company, the
B respondent agreed to destroy the receipt for Rs.9,00, 110/- issued in that
behalf, by the company. The case of the company is that the cheques were
returned because the purchase price was something less than Rs.9,00,000/-
and it was found to be only Rs.7,75,000/-. In view of this, the respondent on
8.7.1997, issued a fresh cheque to the company, bearing No.299669, for a sum
C of Rs.5,00,000/-. That cheque was encashed by the company. The parties
reduced the transaction into writing. As per that agreement, the payment of
Rs.5,00,000/- by cheque dated 8.7.1997 and its receipt was acknowledged. A
sum of Rs. I ,25,000/- was to be paid by 15.8.1997. Another sum of
Rs.1,25,000/- was to be paid by 19.9.1997. Rs.25,000/- was to be paid at the
time of transfer of possession. A sum ofRs.150/- per sq. ft. by way of deposit
D for meeting the maintenance charges, was also to be paid. The payment by
the purchaser was to be the essence of the contract. The total purchase price
was shown in the agreement as Rs.7,75,000/-.
..
6. Before the District Forum, the company denied the case of the '
E respondent and set up in defence the written agreement between the parties.
It pleaded that in spite of being called upon to do so, the respondenthad not
paid .the balance amount due. The company, therefore, terminated the
agreement. The respondent was not entitled to any relief. The sum of
Rs.5,00,000/- received by cheque had been returned to the respondent and the
cheque issued in that behalf was received by him.
F
7. In his evidence before the District Forum, the respondent made a ....
departure from the complaint regarding consideration. He admitted that the
sum OfRs.9,00,000/- paid by way of two cheques by him on 4.7.1997, was
returned to him. He had agreed to destroy the receipt. He said that the
cheques were returned because the Director of the company wanted a portion
G of the consideration in cash. He wanted Rs.5,00,000/- by way of cheque and
Rs.4,00,000/- by way of cash. The respondent handed over a cheque for
Rs.5,00,000/-, as agreed on all hands. The same day, he withdrew from the
bank a sum ofRs.4,00,000/- by cash and handed it over to one Thanekar who
was an agent of the company. But the respondent produced no receipt for
H payment of this amount, though such a payment was denied by the company.
BHANDARI CONSTRUCTION COMPANY "· NARAYAN GOP AL UPADHYE [BALASUBRAMANYAN. J.] 92 9

8. Before the District Forum, the respondent gave up his claim for A
t- compensation and pressed only the relief of getting possession of the building
on the basis that he had paid the entire consideration. Of course, he tried to
say that he had already been put in possession and his possession was being
interfered with by the company. The District Forum took the view that it
would be proper to leave the respondent to approach the Civil Court for relief
in view of the nature of the dispute. The complaint was, therefore, dismissed.
B
The respondent went up in appeal to the State Commission. The State
Commission remanded the complaint to the District Forum to decide the
dispute. It took the view that it was not necessary or proper to refer the
complainant to a suit. Thus, the matter came back to the District Forum.
c
9. Before the District Forum, further evidence was taken. The complainant
and the representative of the company were cross-examined on the affidavits
filed by them. The District Forum found that the respondent had not established
that he had paid the entire consideration of Rs.7,75,000/-. According to the
District Forum, the written agreement governed the relationship between the
parties. There was also no evidence to prove the payment of Rs.4,00,000/- in
D
cash as claimed by the respondent. The payment of Rs.5,00,000/- out of the
;,; purchase price of Rs.7, 75,000/- by way of cheque alone was established.
Though the same had been returned to the respondent by way of a cheque,
he had not encashed it. The District Forum therefore passed an order giving
liberty to the respondent to pay a sum of Rs.3,40,890/- along with interest at E
15% per annum from 3.9.1999 till the date of payment and to obtain possession
of the office premises in question within a period of two months from the date
of receipt of that judgment and directed the company to handover vacant
possession of the premises within a period of two months from the date of
receipt of the amount. But alternatively, it gave liberty to the respondent to F
-~
demand from the company the refund of Rs.5,00,000/- along with interest at
.J 15% per annum from 8. 7.1997 till the date of realisation by issue of a notice
in that behalf to the company. On receipt of such a notice the amount was
to be paid by the company within two months of its receipt.

I0. The respondent, feeling aggrieved, appealed to the State Commission. G
The company, it is said filed a belated appeal but the delay was refused to
be condoned. Therefore, the decision of the District Forum as against the
,1 _.;. company became final.

11. The State Commission proceeded to accept an affidavit filed by an H
employee of the bank on which a self cheque was drawn by the respondent.
930 SUPREME COURT REPORTS (2007] 2 S.C.R.

A The allegation in that affidavit was that a self cheque for Rs.4,00,000/- was
encashed by the respondent and the amount was handed over to Thanekar, -+
an agent of the company. That allegation was accepted. No opportunity was
provided to the company to cross-examine the employee. The State Commission
modified the decision of the District Forum. It directed the company to
handover the premises to the respondent on the basis that the entire
B consideration had been paid. It also ordered that the company had to pay
interest at 6 % per annum on the sum of Rs.9,00, 110/-. The order of the State
Commission is seen to be cursory. It had not even referred to the relevant
pleadings and the evidence, before interfering with the order of the District
-~
Forum. It is difficult to understand its reasoning.
c
12. The company filed a revision before the National Commission. The
company pointed out the variance between the case set up by the respondent
in his complaint and in his evidence. It pointed out that the terms of th\:
transaction having been reduced to writing, it was not open to the respondent
to lead evidence in variation thereof. It also pointed out that the evidence
D attempted to be given was also at variance with the case set up. It pointed
out that there was no receipt evidencing the alleged payment of Rs.4,00,000/
- to the company. The payment was not proved. All the other payments had ~:

been acknowledged by receipts. The-state Forum was, therefore, in error in
inte'rfering with the order of the District Forum. It was also submitted that '·
E during the pendency of the proceedings, the premises had been transferred
to some other person and hence the company should be relieved of its
obligation to deliver the premises. The respondent reiterated his contention
that he had paid a sum of Rs.9,00,000/- to the company. He also appears to
have1made some general submissions on the tendency of builders to receive
F part of the sale price in cash.

13. The National Commission brushed aside the contentions of the t-
company. It did not place due emphasis on the case set up by the respondent
in his complaint and the total departure from that case made in his evidence.
It ignored the fact that the agreement between the parties having been
G reduced to writing there was a bar against leading evidence contradicting its
terms. Decrying what it termed the attitude of builders in demanding part of
the sale price in cash, the National Commission dismissed the revision. This
is what is challenged in this appeal by the company.

H 14. We find that the respondent had totally given up the case set up
by him in his complaint while giving evidence. The transaction on 4.7.1997
BHANDARI CONSTRUCTION COMPANY.-. NARAYAN GOPAL UPADHYE [BALASUBRAMANYAN. J] 93 J
~
as set up by the respondent was given up by him. He also admitted that the A
t- two cheques handed over for Rs.9,00,000/- that day, were not encashed by
the appellant. He admitted that they were returned. He further admitted that
the receipt for Rs.9,00,000/- issued to him was in respect of those two returned
cheques. He also admitted that he had thereafter issued a cheque for
Rs.5,00,000/-. He agreed that a sum of Rs.5,00,000/- by way of a cheque was
B
returned to him by the company. But he had not encashed it. He admitted the
agreement dated 27.7.1997 and the terms thereof and the factum of its
registration on 31.7.1997. He also admitted that he had no receipt to show the

-· -·
payment ofRs.4,00,000/- in cash.

15. When the terms of the transaction are reduced to writing, 1t 1s c
impossible to lead evidence to contradict its terms in view of Section 91 of

-
the Evidence Act. There is no case that any of the provisos to Section 92
of the Act are attracted in this case. Why the case that was sought to be
spoken to by the respondent was not set up by him in the complaint was not
explained. The case set up in evidence was completely at variance with the
D
case in the complaint. There was no evidence to show that the consideration
was to be Rs.9,00,000/-, especially, in the light of the recitals in the registered
'."! agreement. There was also no document to show the payment ofRs.4,00,000/
- by way of cash. Hence, this was no evidence to show that the balance
amount due under the agreement after the admitted payment of Rs.5,00,000/
- was paid. The affidavit produced before the State Forum and the evidence E
of the colleague of the respondent is clearly inadmissible and insufficient to
prove any such payment. Thus, the case set up by the respondent in his
evidence was not established. It is in that situation that the District Forum
taking note of the payment of Rs.5,00,000/- and the failure of the respondent
to encash the cheque for Rs.5,00,000/- that was returned by the company, F
--1 ordered the complainant to pay the balance amount due under the transaction
J as evidenced by the written instrument and take delivery of the premises in
question and in the alternative gave him the option to take back the sum of
Rs.5,00,000/- with interest. Neither the State Commission, nor the National
Commission has given any sustainable reason for differing from the conclusion
of the District Forum. A mere suspicion that builders in the country are prone G

-
.f _;,-
to take a part of the sale amount in cash, is no groun~ to accept the. story
of payment of Rs.4,00,000/- especially when such a payment had not even
been set up in the complaint before the District Forum. Not only that, there
was no independent evidence to support the payment of such a sum of
Rs.4,00,000/- except the ipse dixit of the respondent. The affidavit of the bank H
employee filed in the State Commission cannot certainly be accepted as
~---

932 SUPREME COURT REPORTS [2007) 2 S.C.R.
~
A evidence of such a payment. Payment of such a sum had clearly been denied
by the company. The respondent had, therefore, to prove such a payment. ·+
His case that the purchase price was Rs.9,00,000/-, itself stands discredited
by the recitals in the agreement dated 27.7.1997 in which the purchase price
was recited as Rs.7,75,000/-. Not only that the respondent did not have a
receipt for evidencing the payment ofRs.4,00,000/- and ifthe amount was paid
B
on 5.7.1997 or 8.7.1997, as claimed by him, he would certainly have ensured
that the payment was acknowledged in the agreement for sale executed on
27.7.1997. The agreement for sale actually speaks of his obligation to pay the
balance to make up Rs.7,75,000/- after acknowledging receipt of

c
Rs.5,00,000/-. The respondent is not a layman. He is a practising advocate.
According to him, he specialises in documentation. He cannot, therefore,
>-
--
plead ignorance about the existence of the recital in the agreement. He cannot
plead ignorance of its implications.

16. We were taken through the entire material. The respondent who
appeared in person, brought to our notice the evidence in extenso. At the end
D
of it all, we find that we cannot agree either with the State Commission or with
the National Commission. Actually, the District Forum had been indulgent to
the respondent in giving him the relief it did. Suffice it to say, we find it )i
impossible to sustain the decision of the National Commission.

E 17. Hence, we allow this 'appeal. We set aside the decision of the
National Commission and that of the State Commission. We restore the decision
of the District Forum. Normally, we would have ordered the cost of the appeal
to the company, but since the respondent appeared in-person, we refrain from
ordering it. The parties will bear their costs in this Court.
F S.K.S. Appeal allowed.
'r-·

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