Mere Offer to Return Double the Advance Cannot Override a Binding Contract: P&H High Court

“Once Signatures and Consideration Are Admitted, Burden Shifts on Defendant to Prove Fraud – Which He Failed To Do”, In a strongly worded judgment reiterating settled principles of contract and evidence law, the Punjab and Haryana High Court refused to interfere with concurrent findings of the trial and appellate courts which had decreed a suit for specific performance of an agreement to sell dated 19.06.2018, observing that admitted signatures and encashed consideration render baseless the defence of intoxication or fraud.

Justice Deepak Gupta, dismissing the second appeal, emphasised that no substantial question of law arose and that “equity does not assist a party who is himself in breach.”

The appellant, Beant Singh, had contested an agreement to sell, claiming that it was obtained while he was intoxicated and unaware, and that the plaintiffs had committed fraud. However, both lower courts had decreed the suit in favour of the plaintiffs, and the High Court saw no reason to disturb these concurrent factual findings.

“Admissions Seal the Execution – Fraud Must Be Proved, Not Merely Alleged”

The suit concerned a sale agreement for agricultural land at ₹19 lakh per killa, out of which ₹16 lakh was paid through cheques, duly encashed by the defendant. The agreement bore Beant Singh’s signatures on every page, including the reverse of the stamp papers purchased by him. While other co-owners (his relatives) executed sale deeds for their shares, Beant Singh failed to appear before the Sub-Registrar on the appointed date, despite the plaintiffs' presence and continuous readiness.

The High Court observed:

“Once receipt of consideration and signatures on the document are admitted, the burden to prove fraud or incapacity squarely shifts upon the defendant… The finding of both Courts that this defence was a mere afterthought is well-reasoned and founded on record.”

Despite alleging fraud and intoxication, Beant Singh did not lead any medical or documentary evidence to support these claims. His own cross-examination and the testimony of his wife (DW2) negated any suggestion of incapacity or coercion.

“Non-Examination of Scribe or Relationship of Witnesses Cannot Vitiate Execution”

Rejecting the procedural objections raised by the appellant, the Court held that:

“Non-examination of the scribe does not vitiate execution once attesting witnesses and parties’ admissions establish the document… Relationship of one witness to a party is also no ground to discard attestation in absence of proven animus or contradiction.”

The appellant had contended that one attesting witness was related to the plaintiff, and another was not fully cross-examined. The Court found these arguments legally untenable.

“Place of Execution or Rate Variation Has No Legal Consequence Once Agreement is Valid”

Another contention that the agreement was signed at Amloh instead of Fatehgarh Sahib, and that the rate of consideration was lower than subsequent sale deeds, was also rejected outright. Justice Gupta held:

“The place of execution being Amloh rather than Fatehgarh Sahib is immaterial, as parties are free to execute contracts at any convenient place. Variation in the rate of land vis-à-vis subsequent sale deeds does not render the agreement invalid.”

“No Hardship Proven – Financial Stability and Prior Land Sales Negate Plea”

The defendant attempted to invoke hardship, offering to refund double the earnest money, and claimed that executing the sale deed would cause financial distress. But the Court, affirming the findings below, held:

“The defendant’s family was financially stable, his son being settled abroad and daughter well-educated… His continuous sale of other parcels and stable background negate this plea.”

More importantly, the Court clarified that mere offer to refund does not negate a valid contract:

“Specific performance is an equitable but discretionary remedy… The defendant cannot, by an unilateral offer of refund, defeat the plaintiffs’ contractual right.”

“It has been the consistent position of law that mere readiness to return the advance does not extinguish the plaintiffs’ right to specific performance.”

The Court found that the plaintiffs had always been ready and willing, whereas the defendant had defaulted without justification.

“No Substantial Question of Law Arises in Appeal Against Well-Reasoned Concurrent Findings”

Citing Order 41 Rule 31 CPC and Sections 101–102 of the Indian Evidence Act, the Court concluded that no perversity or legal error existed in the findings of the courts below. Justice Gupta remarked:

“The settled principle is that concurrent findings of fact cannot be interfered with in a second appeal unless they are palpably perverse or founded on no evidence. None of these contingencies arise herein.”

Appeal Dismissed, Specific Performance Decree Upheld

In dismissing the appeal, the High Court upheld the decrees of both the trial court (dated 09.03.2023) and the first appellate court (dated 09.10.2025), affirming the plaintiffs’ right to enforce the agreement:

“This Court finds no substantial question of law arising for determination. The appeal is accordingly dismissed.”

With this, the Court reaffirmed the sanctity of contractual obligations, and warned against frivolous defences lacking evidentiary basis.

Date of Decision: 10 November 2025