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Synopsis

The Supreme Court on September 27, 2024 observed that its powers under Article 136 of the Constitution should only be invoked when lower courts' factual findings are either perverse or fail to account for crucial evidence on record.

The apex court in the case at hand set aside the judgments in a suit for specific performance and subsequent appeals regarding an agreement to sell agricultural land. Court found the case to be a blatant fraud, with significant aspects of the matter overlooked, necessitating exercise of its jurisdiction under Article 136.

A bench of Justices P S Narasimha and Sandeep Mehta said that the scope of an appeal by special leave under Article 136 of the Constitution against concurrent findings is well established and can be undertaken when the findings are based on no evidence, are perverse, or when some vital piece of evidence has been overlooked, disregarded, or wrongly discarded.

In the present case, the bench noted that the respondent-plaintiff, Balwinder Singh, a head constable in the Punjab Police, filed the suit with the key claim that the disputed agreement dated May 7, 2007, was executed by the appellant-defendant, Lakha Singh, an illiterate farmer, for the sale of his agricultural land measuring 30 Kanals and 8 Marlas in Tarn Taran at a rate of Rs 5,00,000 per Killa. According to the agreement, the respondent-plaintiff paid Rs 16,00,000 in cash to the appellant-defendant at the time the agreement was signed.

However, the court highlighted a very crucial fact, noticeable from the agreement that the stamp papers were not purchased by the appellant defendant, and rather Amarjeet Singh, brother of the respondent plaintiff was the person who bought it. The brother ran a commission agent shop at Mandi Amarkot, where the appellant defendant used to sell his produce. 

Court observed that a visual overview of the disputed agreement, typed in Gurmukhi, revealed that it spanned three pages. The signature of the respondent-plaintiff and the thumb impression of the appellant-defendant were found only on the last page.

The first and second pages of the agreement do not contain the signature of the respondent-plaintiff or the thumb impression of the appellant-defendant. There are substantial blank spaces at the bottom of these two pages, beneath the typed text. These observations lead to a strong inference supporting the argument of the appellant-defendant’s counsel that the thumb impression of the appellant-defendant may have been placed on a blank stamp paper, with the disputed agreement being typed on it afterward, the court noted.

The appellant-defendant argued that the respondent-plaintiff acknowledged filing Income Tax returns as an employee of the Punjab Government, yet he failed to report the amount of Rs 16,00,000 in his return. Additionally, he admitted that he did not obtain any permission from the department to purchase the disputed land. Furthermore, he conceded that the amount in question was not withdrawn from any bank, and the currency notes used for the transaction were kept in his house.

"It cannot be denied that the respondent-plaintiff being a Police Constable was mandatorily required to seek permission from his department before entering into an agreement to purchase property of such a high value. However, admittedly, he did not seek any such permission from the department," the bench said.

As per the agreement, the appellant-defendant agreed to sell the suit land at the rate of Rs 5,00,000 per Killa, just about half of the market rate of the land at the relevant point of time, as admitted by the respondent-plaintiff, court noted. 

A lion’s share of the consideration was claimed to have already been paid at the time of the execution of the agreement, it pointed out. 

"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 bench said.

The court found no rhyme or reason as to why, the respondent-plaintiff would agree to defer the execution of the sale deed to a date more than a year and four months after the execution of the disputed agreement. 

"Thus, the disputed agreement i.e., the agreement to sell read in entirety is highly suspicious and does not inspire confidence at all," the bench held.

It also noted that the respondent plaintiff did not even once, during the period of 16 months, approach the appellant-defendant for getting the sale deed executed in terms of the disputed agreement. 

The respondent plaintiff had claimed that he straight away proceeded to the Sub-Registrar’s office on September 19, 2008 and remained present there from 09:00 am to 05:00 pm waiting for the appellant-defendant to turn up and get the sale deed registered. However, the appellant-defendant had failed to appear at the office of the Sub-Registrar on the scheduled date. 

The bench also recorded that admittedly, the respondent-plaintiff did not give any advance intimation to the appellant-defendant imploring him to receive the balance consideration and execute the sale deed on the scheduled date or anytime thereafter. Instead, he directly proceeded to file the subject suit in the month of December, 2008 wherein, alternative prayers, one for the execution of the sale deed and the other for the refund of the earnest money were made.

"Ex facie, the averments set out in the plaint and the evidence do not bear an iota of truth and appear to be nothing but a sheer concoction," the bench held.

Court noted that the circumstances, the evidence of the respondent-plaintiff; the disputed agreement and the plaint clearly indicated that the agreement had been prepared on a blank stamp paper on which, the thumb impressions of the illiterate appellant defendant 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, court held.

Noting another very significant fact, the bench said that the respondent-plaintiff did not even make a whisper in his deposition affidavit that when he proceeded to the office of the Sub-Registrar, he was carrying the balance sale consideration with him. Furthermore, it is not the case of the respondent-plaintiff that he ever offered the balance sale consideration in terms of the disputed agreement to the appellant-defendant at any point of time, court pointed out. 

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 appellant defendant were on such close terms that he would readily agree to give cash loan to the appellant-defendant without any security, court highlighted.

Therefore, the court opined that these factors were sufficient 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 May 7, 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 was nothing but a sheer piece of fraud and concoction. 

The bench held these vital factual aspects were glossed over by the courts below while deciding the suit, the first appeal and the second appeal. 

"In these facts and circumstances, we find it to be a fit case to exercise our powers under Article 136 of the Constitution of India so as to interfere with the impugned judgments," the bench held.

Accordingly, the bench quashed and set aside the judgment and decree of February 18, 2013 rendered by the trial court, judgments of March 20, 2017 by the first appellate court and of April 25, 2018 by the high court, as those suffered from perversity on the face of the record and could not be sustained.

Case Title: Lakha Singh Vs Balwinder Singh & Anr