Mere Admission of Signature on Agreement Does Not Prove a Valid Contract’—Specific Performance Suit Fails Without Cogent Evidence: Supreme Court

“Plaintiff Must Do More Than ‘Parade Self-Serving Testimony’; Burden of Proof ‘Cannot Be Discharged by Signature Alone’”, Delivering a significant ruling, the Supreme Court of India has set aside a High Court decree for specific performance, underscoring a fundamental principle in property law: “Mere admission of a signature does not dispense with proof of consensus ad idem or the existence of a valid contract.”
Bench of Justices S.V.N. Bhatti and Ahsanuddin Amanullah restored the findings of the Trial and First Appellate Courts, and highlighted that in suits for specific performance, the onus is squarely on the plaintiff to prove the execution and enforceability of the agreement through credible evidence—not just their own statements or the defendant’s admission of signature.

“A Dispute of Signatures and Substance: The Case Background”

The litigation arose from a dispute over a residential house in Patiala. The respondents—represented by their legal heirs—claimed the appellant Harish Kumar had entered into an agreement to sell his house for Rs. 70,000, and that Rs. 55,000 had already been paid. They further alleged the property had been delivered and Harish Kumar continued as a tenant, paying Rs. 700 per month until sale completion.

Harish Kumar denied ever entering such an agreement, asserting instead that he had borrowed Rs. 50,000 at interest from the respondents (who were established moneylenders), and that his signatures were taken on blank stamp papers, later misused to fabricate the suit agreement. He further maintained that he had repaid the loan and never intended to sell his only house.

The Trial Court and the First Appellate Court both rejected the claim for specific performance. Both courts found the plaintiffs’ story improbable, especially considering the house’s market value (over Rs. 4 lakh) and the lack of any real evidence apart from the respondents’ own statements. The lower courts also noted that the so-called attesting witnesses to the agreement had given affidavits disavowing any knowledge of its execution, but were not produced by the plaintiffs for cross-examination.

Yet, the Punjab & Haryana High Court reversed these findings, relying heavily on the appellant’s admission that the signatures on the agreement and certain endorsements were his own, and on the presence of a rent note and rent receipts in the record.

“Who Bears the Burden? The Legal Issues and Supreme Court’s Scrutiny”

At the heart of the appeal was the classic question: Does an admitted signature alone establish a binding contract, or must the plaintiff establish more—especially in a specific performance suit?

The Supreme Court was unequivocal:
“The evidence of the respondent, as PW1, remains self-serving evidence and cannot be wholly relied upon as evidencing the execution of Exhibit P1—the Suit Agreement.”
The Court pointedly observed that “the respondents did not examine the witnesses to the alleged Suit Agreement or the rent deed,” and noted that the law requires the plaintiff to prove the existence of a valid agreement and his own readiness and willingness to perform the contract.

Referring to Man Kaur (Dead) by LRs. v. Hartar Singh Sangha, the Bench reiterated:
“To succeed in a suit for specific performance, the plaintiff has to prove (a) the existence of a valid agreement of sale, (b) that the defendant committed breach of contract; and (c) that the plaintiff was always ready and willing to perform his part of the obligations in terms of the contract.”

The Supreme Court rejected the High Court’s approach:
“Mere admission of signature does not dispense with the proof of consensus ad idem or the existence of a valid contract. In the absence of examination of attesting witnesses or credible evidence regarding movement of possession and payment of rent, the respondents have failed to discharge their onus.”

The Court also quoted from Anil Rishi v. Gurbakshi Singh, clarifying that the “burden of proof” is more than a formality and cannot be shifted by the defendant’s signature alone, especially where the contract’s very existence and terms are in dispute.

“High Court’s Limited Jurisdiction: ‘Re-appreciation of Evidence Not Permissible in Second Appeal’”

The Supreme Court delivered a stinging reminder regarding second appeals:
“High Court’s interference with concurrent factual findings is limited to cases of misreading, non-appreciation, or perversity; not justified on mere re-appreciation of evidence or admission of signature alone.”

The Court thus restored the dismissal of the suit, finding no legal justification for the High Court’s intervention.

“Money Lending or Sale? Court Accepts Loan Transaction, Orders Refund”

While ruling in favor of the appellant, the Supreme Court noted that Harish Kumar had admitted to having borrowed money from the respondents and failed to produce proof of repayment.
“The appellant, to stay clear from the enforcement of the said debt, must prove discharge of the debt, in the manner known and accepted by the law. There is no evidence on the discharge of debt by the appellant…Therefore, we hold that the respondents are entitled to receive a sum of Rs. 3,00,000/- from the appellant, within four weeks from today.”

The direction to refund the debt underscores the Court’s nuanced approach—rejecting a fabricated specific performance suit, yet ensuring no injustice is done regarding admitted monetary transactions.

Summing up, the Supreme Court has sent a clear message that self-serving statements and admitted signatures are not enough to claim specific performance. Plaintiffs must “prove, not merely plead,” and the burden of proof remains a serious legal requirement.

As the Court concluded:
“Mere admission of signature does not dispense with the proof of consensus ad idem or the existence of a valid contract… The burden not discharged by self-serving testimony alone.”

Date of Decision: 5 August 2025