Specific Performance is the Rule, Refusal the Exception in Sale Contracts: PH HC

The Punjab & Haryana High Court dismissed the second appeal filed by the defendant, Ram Phal, challenging the lower courts’ decrees that directed him to perform a contract for the sale of land. The defendant contended that the agreement to sell, dated February 25, 2015, was forged and a result of fraudulent actions by the plaintiff, Inder Singh. However, the court found no merit in the defendant's appeal, affirming the trial court's decision to grant specific performance of the contract.

The court reaffirmed that in contracts involving the sale of immovable property, the default legal remedy is specific performance unless cogent reasons exist for refusal. The court ruled that the defendant had failed to present any substantive evidence to support his defense of fraud.

Inder Singh, the plaintiff, filed a suit in 2017 seeking specific performance of an agreement to sell land. The agreement, dated February 25, 2015, stipulated that the defendant would sell land to the plaintiff for ₹13,12,500, with ₹10,00,000 paid upfront as earnest money. The plaintiff claimed that he was present at the Sub-Registrar's office on November 24, 2015, ready to pay the remaining balance, but the defendant did not show up.

Ram Phal, the defendant, denied the existence of a legitimate agreement to sell and argued that the documents were created under fraudulent circumstances. He claimed that the transaction was actually a loan, for which he had provided blank signed papers, which were later misused by the plaintiff.

The trial court, after considering evidence including testimony from witnesses to the agreement, ruled in favor of the plaintiff. The court held that the agreement to sell was valid and that the plaintiff had fulfilled his obligations under the contract. The defendant's claim that he repaid a portion of the loan through a cheque was also rejected, as the court found that the cheque did not bear the plaintiff's signature.

The defendant filed an appeal along with an application to introduce additional evidence, seeking to examine his son, Ram Rattan, as a witness. The lower appellate court dismissed both the appeal and the application, and the defendant took the matter to the High Court.

The High Court, in dismissing the appeal, found no error in the judgments of the lower courts. The court observed that the defendant's failure to produce evidence at the proper stage and his attempt to introduce it later could not be allowed.

“Jurisdiction under Order 41 Rule 27 cannot be exercised to allow the defendant to fill lacunae in the case,” the court noted.

The court further emphasized that the plaintiff had demonstrated his readiness and willingness to complete the transaction by paying a significant portion of the sale price as earnest money and by being present at the Sub-Registrar's office on the agreed date for execution of the sale deed.

The court upheld the trial court’s decree for specific performance of the contract, dismissing the defendant’s appeal as well as his application for additional evidence. The ruling underscores the principle that specific performance is the default remedy in cases involving the sale of immovable property unless exceptional reasons justify refusal.

Date of Decision: September 24, 2024

Ram Phal v. Inder Singh