Summary of the Judgment
Case Name: Lakha Singh v. Balwinder Singh & Anr.
Date of Judgment: 27th September 2024
Court: Supreme Court of India
Judges: Hon’ble Justice Pamidighantam Sri Narasimha and Hon’ble Justice Sandeep Mehta
Acts and Sections:
Specific Relief Act, 1963
 Section 136 of the Constitution of India
Cited Judgments:
Sukhbiri Devi v. Union of India, 2022 SCC OnLine SC 1322
State of Rajasthan v. Shiv Dayal, (2019) 8 SCC 637
Mekala Sivaiah v. State of A.P., (2022) 8 SCC 253
Bharwada Bhoginbhai Hirjibhai v. State of Gujarat, (1983) 3 SCC 217
Introduction
In the recent Supreme Court judgment of Lakha Singh v. Balwinder Singh & Anr., the Court delved into the intricacies of a specific performance suit related to an agreement for the sale of agricultural land. The judgment sheds light on the nature of such transactions, the importance of evidence in proving agreements, and the limitations of judicial intervention under Article 136 of the Constitution of India. The judgment also questions the legitimacy of agreements involving large sums of money, particularly when forged or deceitfully prepared documents are in play.
Hon'ble Justice Pamidighantam Sri Narasimha and Hon'ble Justice Sandeep Mehta delivered the judgment, emphasising that courts must not interfere with concurrent factual findings unless there is manifest perversity or substantial miscarriage of justice. This judgment provides clarity on how courts must handle claims of fraud and forged agreements in property transactions.
Background of the Case
The dispute in this case arose when the respondent-plaintiff, Balwinder Singh, filed a suit for specific performance of an agreement to sell agricultural land, which he claimed was executed by Lakha Singh, the appellant-defendant. The agreement, dated 7th May 2007, pertained to land measuring 30 Kanals 8 Marlas located in Village Amrike, Tehsil Patti, Punjab. Balwinder Singh claimed to have paid a sum of ₹16,00,000 as earnest money, with a stipulation that the balance would be paid by 19th September 2008, the date set for the execution of the sale deed.
The respondent-plaintiff alleged that despite his presence at the Registrar’s Office on the stipulated date, the appellant-defendant failed to appear, breaching the agreement. He further claimed that possession of the land had already been handed over to him at the time of executing the agreement. In the alternative, Balwinder Singh sought recovery of ₹19,00,000, which included the earnest money and damages.
However, Lakha Singh denied all allegations, asserting that the agreement was fraudulently created on blank stamp papers and that he had not received any money. The appellant contended that the transaction was an attempt by Balwinder Singh to exploit him, an illiterate farmer.
Issues for Consideration
The primary legal issue was whether the courts below had correctly upheld the validity of the disputed agreement and whether the respondent-plaintiff was entitled to specific performance or recovery of the amount claimed. The Supreme Court also had to consider whether the concurrent findings of the lower courts were perverse and warranted interference under Article 136 of the Constitution of India.
Analysis of the Court’s Findings
1. Nature of the Agreement
At the core of this case was the disputed agreement, which Balwinder Singh claimed had been executed with Lakha Singh for the sale of agricultural land. However, upon close scrutiny, the Supreme Court found several irregularities in the document. Notably, the stamp papers used for the agreement were not purchased by Lakha Singh but by Balwinder Singh’s brother, Amarjeet Singh. This, coupled with the fact that the thumb impressions of the appellant only appeared on the last page, raised suspicions about the document's authenticity.
The Court observed that the blank spaces on the first two pages of the agreement suggested that the appellant's thumb impressions might have been obtained fraudulently, and the document was completed at a later date. The judgment stressed:
"The disputed agreement runs into three pages, and the first and second pages do not bear the signature or thumb impression of the appellant-defendant. The large blank spaces at the foot of these pages suggest that the agreement may have been prepared on a blank stamp paper on which the appellant-defendant’s thumb impression was taken."
2. Possession of the Land and Payment of Consideration
One of the respondent-plaintiff’s key claims was that he had taken possession of the land upon executing the agreement. However, the Court found this assertion to be unsubstantiated. The respondent admitted in cross-examination that possession had not been delivered, contradicting the terms of the agreement. Moreover, the fact that Balwinder Singh, a government employee, did not report the ₹16,00,000 transaction in his income tax returns raised further doubts about the legitimacy of the payment.
The Court remarked:
"The respondent-plaintiff did not provide any credible evidence to show that the amount was withdrawn from a bank or that it was reported in his income tax returns, which casts serious doubt on the veracity of the transaction."
3. Timing of the Sale Deed Execution
Another questionable aspect of the case was the unusually long period (16 months) between the execution of the agreement and the scheduled date for the execution of the sale deed. The Court found it implausible that the respondent-plaintiff would agree to such a lengthy delay, especially after parting with a significant portion of the sale consideration.
"It defies logic that the respondent-plaintiff would pay such a large sum of money and agree to defer the execution of the sale deed by more than a year without any substantial reason."
4. Fraudulent Transaction
Given the inconsistencies in the respondent-plaintiff’s claims and the suspicious nature of the agreement, the Court concluded that the transaction was likely fraudulent. The lower courts had failed to appreciate these key facts, leading to erroneous conclusions. The judgment pointed out:
"The entire case of the respondent-plaintiff regarding the execution of the disputed agreement appears to be a fabrication, with several facts pointing towards a fraudulent transaction designed to deceive the appellant-defendant."
Judicial Precedents and Article 136
The Court also discussed the limitations of its powers under Article 136 of the Constitution of India, which allows for special leave to appeal. While the Supreme Court typically refrains from interfering with concurrent findings of fact, it highlighted that exceptions are made in cases where the findings are perverse or where vital evidence has been overlooked.
Citing precedents such as Sukhbiri Devi v. Union of India and Mekala Sivaiah v. State of A.P., the Court reiterated that interference is warranted only when the judgment under appeal results in a grave miscarriage of justice. In this case, the concurrent findings of the lower courts were deemed perverse due to their failure to properly evaluate the evidence and the suspicious nature of the agreement.
Conclusion
In setting aside the judgments of the trial court, the First Appellate Court, and the High Court, the Supreme Court quashed the decree granting recovery of ₹16,00,000 to the respondent-plaintiff. The Court found that the agreement in question was a likely fabrication, and the lower courts had erred in accepting the respondent’s version of events.
The judgment in Lakha Singh v. Balwinder Singh & Anr. serves as a crucial reminder that courts must remain vigilant in detecting fraudulent transactions, especially in property disputes involving illiterate or vulnerable parties. It also underscores the Supreme Court's reluctance to interfere with factual findings, except in cases of manifest injustice or perversity.
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