Punjab & Haryana High Court Upholds Collector’s Appointment of Ex-Serviceman as Lambardar: Preference for Service to the State Valid Tax to Be Computed at 100% Under DTVSV Act, Rejects Inclusion of Belated Grounds in Disputed Tax: Bombay High Court Petitioner’s Father Did Not Fall Within Definition of Enemy – Kerala High Court Quashes Land Classification Under Enemy Property Act Calcutta High Court Upholds Cancellation of LPG Distributor LOI for Violating Guidelines Recording 'Reasons to Believe' is a Mandatory Safeguard, Not a Mere Formality Under PMLA: P&H High Court Illegality Is Incurable, Unauthorized Constructions Cannot Be Regularized: Bombay High Court Kerala High Court Quashes Tribunal’s Order Granting Retrospective UGC Benefits to Librarians Without Required Qualifications Order XLI Rule 27 CPC | No Evidence Can Be Admitted Beyond Pleadings, And Additional Evidence Cannot Be Allowed Merely To Fill Lacunae: Jharkhand High Court Quashing | Mere Heated Exchanges Over Loan Repayment Do Not Constitute Abetment of Suicide: Supreme Court Prisoner Transfers Must Prioritize Security and Prevent Gang Violence: Supreme Court Restores Intra-State Transfer Order Jurisdiction Under Section 100 CPC Is Conditional Upon Framing Substantial Questions of Law: Supreme Court Panchayat Election | Punjab & Haryana High Court Upholds Bar on Judicial Review During Election Process Encroachment Allegation Requires Concrete Evidence, Not Mere Surmises: Bombay High Court Dismisses Plea for Disqualification of Sarpanch Order Denying Permission for Peaceful Protest Rally Set Aside: Calcutta High Court Prolonged Custody Alone Cannot Justify Bail In Cases Involving Heinous Crimes: Delhi High Court Body Shaming and Sexually Colored Remarks Are Unacceptable In A Civilized Society: Kerala High Court No Mandatory Injunction Where Failure to Prove Ownership and Possession: Punjab and Haryana High Court Supreme Court Dismisses Article 32 Petition Seeking Declaration of Bombay High Court Judgment as Illegal Specific Relief Act | Power to Extend Time Under Section 28 Is Discretionary and Must Be Exercised Prudently: Supreme Court

Registered Sale Agreement or Disguised Mortgage? AP High Court Demands Clear Proof, Upholds Specific Performance

04 September 2024 2:28 PM

By: sayum


In a significant ruling, the Andhra Pradesh High Court has dismissed an appeal challenging the decree for specific performance of a sale agreement, affirming the trial court’s decision. The judgment, delivered by Justice V. Gopala Krishna Rao, underscores the importance of clear contractual intentions and the burden of proof on defendants alleging alternate intentions such as a mortgage.

The case revolved around a property dispute where the respondent (plaintiff in the trial court) sought specific performance of a sale agreement dated September 26, 1997. The agreement involved the sale of a property in Guntur for a consideration of ₹6,39,000, of which ₹6,10,000 was paid upfront. The appellant (defendant in the trial court) contended that the agreement was not a genuine sale agreement but a disguised mortgage transaction to secure a loan.

The High Court placed significant reliance on the registered sale agreement (Ex.A1), which was central to the dispute. The Court noted that the agreement was a formally registered document, which by itself suggested the intention of a genuine sale rather than a mortgage. The Court observed, “The execution of Ex.A1 agreement of sale is not at all in dispute by the defendant, but the case of the defendant is that it is a registered mortgage deed but not an agreement of sale. As seen from the recitals in Ex.A1 agreement of sale, on the face of it itself it is clear that it is a sale agreement but not a registered mortgage deed”.

The appellant’s defense hinged on proving that the transaction was intended as a mortgage rather than a sale. However, the Court noted that the defendant failed to produce any documentary evidence to support this claim, relying solely on self-testimony. The Court highlighted that “no evidence is adduced by the defendant to prove the aforesaid defense put forth by the defendant in the written statement. Except examining himself as DW1, no other evidence is produced”.

The Court also emphasized the role of witness testimonies, particularly from those who were present during the transaction. The plaintiff successfully corroborated the agreement with testimonies from the scribe (PW2) and one of the attestors (PW3). The defendant, on the other hand, did not call his wife, the first attestor to the agreement, as a witness, which weakened his case further.

Justice Rao reiterated the legal principles governing specific performance, stating that the remedy is discretionary and should be based on clear, fair, and equitable considerations. The Court found no grounds to interfere with the trial court’s discretion, noting, “The Courts should bear in mind in granting a relief of specific performance of agreement of sale, the following circumstances and conditions has to be taken into consideration: 1. The contract must be certain unambiguous and upon a valuable consideration”.

The High Court’s judgment reaffirms the significance of documentary evidence and the necessity for clear intentions in contractual agreements, particularly in real estate transactions. By upholding the trial court’s decree for specific performance, the judgment sends a strong message regarding the enforcement of sale agreements in property disputes. The ruling also clarifies that merely alleging alternate intentions such as a mortgage without substantial proof will not suffice to invalidate a sale agreement.

Date of Decision: August 29, 2024

Attaluri Kodandaramaiah & Ors v. Kotapati Papaiah & Ors

Similar News