Bombay High Court Allows Second Appeal in Specific Performance Suit — Holds That Payments Made to Authorized Representatives of Partnership Firm Are Valid Under Contract Act. Burden of Proof Shifts to Defendants When Plaintiff Proves Payment to Persons Held Out as Authorized in Brochure.

Second appeal against reversal of decree for specific performance of agreement to sell flat.

Appellant sought restoration of Trial Court's decree for specific performance of agreement dated 2/8/1985.

Appellant challenged the First Appellate Court's judgment reversing the Trial Court's decree, on grounds of erroneous burden of proof and misconstruction of evidence.

Trial Court decreed the suit for specific performance; First Appellate Court reversed and dismissed the suit.

Whether the courts below could legally interpret that payments made by the Plaintiff to G.A.Naik and Y.G.Naik on instructions of Defendant No.5 were not in terms of the Agreement dated 2/8/1985, when the burden of proof shifted on the Defendants once the Plaintiff had discharged his burden by proving payment to said persons who were authorized representatives of Defendant No.1 as held out in its brochure, in the absence of the Defendants to examine Defendant No.5? Whether it is impermissible for a Respondent, in the absence of cross objections, to challenge any finding of the Trial Court's Judgment and Decree? Whether the First Appellate Court has misconstrued the document at Exhibit PW1/8 executed between the parties to conclude that the appellant was not entitled for the relief sought in the suit?

Appellant argued that the plaintiff had discharged his burden by proving payments to G.A.Naik and Y.G.Naik, who were held out as authorized representatives in the brochure, and the burden shifted to defendants to disprove authorization; failure to examine Defendant No.5 warranted adverse inference. Respondents argued that payments were not made to the firm and the agreement was not validly executed; they also challenged the Trial Court's finding on validity of agreement without filing cross-objections.

Once the plaintiff proves payment to persons held out as authorized representatives of a partnership firm in its brochure, the burden of proof shifts to the defendants to disprove such authorization. Failure to examine the defendant who instructed the payments leads to an adverse inference. A respondent cannot challenge a finding of the Trial Court without filing cross-objections under Order 41 Rule 22 CPC.

Once the plaintiff had discharged his burden by proving that fact of payment of the money to the said G.A.Naik and Y.G.Naik, who were the authorized representatives of Defendant No.1, as held out by Defendant No.1 in its brochure, in the absence of the Defendants to examine Defendant No.5, the burden of proof shifted on the Defendants. It is impermissible for a Respondent, in the absence of cross objections, to challenge any finding of the Trial Court's Judgment and Decree. The First Appellate Court has misconstrued the document at Exhibit PW1/8 executed between the parties to come to the conclusion that the appellant was not entitled for the relief sought in the suit.

The plaintiff filed a suit for specific performance of an agreement dated 2/8/1985. The Trial Court decreed the suit. The defendants appealed to the First Appellate Court, which reversed the decree and dismissed the suit. The plaintiff then filed the present second appeal before the High Court of Bombay at Goa, which was admitted on 2/5/2003 on substantial questions of law. An additional substantial question of law was framed on 31/3/2016. The High Court heard the appeal and pronounced judgment on 31/3/2017.

• Code of Civil Procedure, 1908 (CPC): Order 41 Rule 22
• Indian Contract Act, 1872: