Case Note & Summary
The dispute arose from an agreement dated 9 July 1996 between the plaintiff-appellant and the defendant-respondent concerning a shop in Aurangabad. The plaintiff claimed that the defendant agreed to sell the shop for Rs.75,000, paid in full, and handed over possession, but later failed to execute the sale deed. He filed Regular Civil Suit No. 1291 of 2001 seeking specific performance. The defendant pleaded that the transaction was not a sale but a leave and licence arrangement, and the amount of Rs.75,000 was a deposit, against which the shop was given on leave and licence. The trial court found that the agreement, though styled as a sale agreement, was a sham and the real transaction was a leave and licence; it dismissed the suit but ordered refund of Rs.75,000 with 6% interest. The first appellate court confirmed this finding. In the second appeal, the plaintiff argued that the written agreement was conclusive and that oral evidence to contradict it was barred under Sections 91 and 92 of the Evidence Act, that admissions of his witness should not be read in isolation, and that adverse inference should be drawn against the defendant for not examining herself. The High Court framed substantial questions of law and examined the scope of Sections 91 and 92. It held that under the proviso to Section 92, when the true character of a document is questioned, extrinsic evidence is admissible to show the real nature of the transaction. The court found that the plaintiff and his witness had made clear admissions in cross-examination that the transaction was a leave and licence, which were binding and could not be ignored. It further held that the burden of proof lay on the plaintiff to establish his case, and having failed to do so, no adverse inference could be drawn against the defendant. The concurrent findings of fact were not perverse, and no substantial question of law warranted interference. Accordingly, the second appeal was dismissed, and the defendant was directed to refund the amount as ordered by the trial court.
Headnote
A) Evidence - Admissibility of Oral Evidence - Section 92 Proviso of Indian Evidence Act, 1872 - When true character of document is questioned, extrinsic evidence is admissible to show real nature of transaction - Courts below correctly considered oral evidence and admissions to hold that the written agreement of sale was a sham and the real transaction was leave and licence, despite the document being unambiguous on its face (Paras 5-6) B) Evidence - Admissions as Best Evidence - Section 31 of Indian Evidence Act, 1872 - Admissions are substantive evidence and can be relied upon to prove the opponent's case - Plaintiff and his witness openly admitted in cross-examination that the transaction was one of leave and licence; these admissions were not stray but clear and conscious, thus binding on the plaintiff (Paras 6) C) Burden of Proof - Specific Performance Suit - Section 101 of Indian Evidence Act, 1872 - Plaintiff must prove his own case and cannot rely on weakness of defence - Plaintiff failed to prove that the agreement was a genuine sale; defendant's plea of leave and licence was established through plaintiff's admissions, so no adverse inference could be drawn against defendant for not entering the witness box (Paras 6) D) Civil Procedure - Second Appeal - Section 100 of Code of Civil Procedure, 1908 - Concurrent findings of fact by lower courts not to be disturbed unless perverse - The High Court found no substantial question of law as the factual findings were based on proper appreciation of evidence and thus dismissed the second appeal (Paras 4-6)
Issue of Consideration
Whether the written agreement of sale (Exh.68) could be treated as a leave and licence transaction based on oral evidence and admissions, and whether the lower courts correctly applied Sections 91 and 92 of the Evidence Act; whether adverse inference should be drawn against the defendant for not entering the witness box; and whether the plaintiff discharged the burden of proof.
Final Decision
The High Court dismissed the second appeal and upheld the concurrent judgments of the lower courts. It held that the agreement Exh.68, though styled as a sale agreement, was a sham, and the real transaction was a leave and licence. The plaintiff was not entitled to specific performance; the defendant was directed to refund the amount of Rs.75,000 with 6% per annum interest as ordered by the trial court. No substantial question of law arose to interfere with the findings.
Law Points
- Section 91 and 92 of Indian Evidence Act
- 1872
- extrinsic evidence admissible to show real nature of transaction when true character of document is questioned
- admission as best evidence
- burden of proof on plaintiff
- no adverse inference against defendant unless plaintiff discharges initial burden
- concurrent findings of fact not interfered in second appeal unless perverse
