Case Note & Summary
The plaintiff, a company registered under the Companies Act, 1956, engaged in developing resorts and health clubs, entered into an agreement to purchase suit lands from the first defendant on 17.2.2001 for Rs.74,80,000, with an advance of Rs.25 lakh paid partly in cash and partly by cheque. A second agreement on the same day showed a lower consideration of Rs.52,50,000, allegedly to conceal the cash component. The contract required the first defendant to obtain land conversion and income tax clearance. The plaintiff alleged that the first defendant failed to fulfill these conditions and unilaterally terminated the agreement, while the plaintiff remained ready and willing. The first defendant contested, asserting that the plaintiff was not ready and willing, and subsequently sold the land to the second defendant on 26.11.2005. The second defendant claimed bona fide purchase without notice. The trial court, after framing eight issues and recording evidence, partly decreed the suit by denying specific performance but directing the first defendant to refund Rs.25 lakh with 6% interest from the date of agreement. Both the plaintiff (for denial of specific performance) and the first defendant (for the refund direction) appealed. The High Court, upon hearing the parties, framed eight questions for consideration and reserved judgment. In its analysis, the High Court up to the point of the excerpt held that the execution of the first agreement (Ex.P2) was proved, and the second agreement (Ex.P4) was admitted. The final outcome of the appeals is not contained in the provided text.
Headnote
A) Evidence - Proof of Execution of Agreement - Admission by Witness - Indian Evidence Act, 1872 - The first defendant’s husband, DW1, admitted the signatures on the first agreement to sell (Ex.P2) and the endorsements (Ex.P3 and P5); the court observed that Ex.P3 was on the back of Ex.P2 and Ex.P5 on the back of Ex.P4, and held that execution of Ex.P2 is proved (Paras 6-6.1). B) Evidence - Admission of Agreement - Indian Evidence Act, 1872 - The second agreement to sell (Ex.P4) was admitted by the parties in their pleadings and evidence, thus its execution is not in dispute (Para 6.1).
Issue of Consideration
Whether execution of first agreement dated 17.2.2001 (Ex.P2) proved; whether second agreement (Ex.P4) constituted novation; what were respective obligations of parties; whether plaintiff was ready and willing to perform; whether defendant performed her obligations; whether defendant’s sale of suit property pendente lite affected the suit; whether second defendant, a purchaser pendente lite, is entitled to retain the land; and whether trial court was justified in rejecting defendant’s application for amendment of written statement.
Law Points
- proof of execution of agreement
- admission of signatures
- readiness and willingness to perform contract
- novation of contract
- obligations of parties
- pendente lite transfer
- amendment of written statement
