Unless The Plaintiff Was Called Upon To Produce The Passbook Either By The Defendant Or By The Court, No Adverse Inference Can Be Drawn Against The Plaintiff Regarding Non-Willingness To Pay: Basavaraj Versus Padmavathi & Anr

CAUSE TITLE: 
Basavaraj Vs Padmavathi & Anr

DATE OF ORDER:  
5 January 2023

JUDGE(S):
M.R. Shah, C.T. Ravikumar 

PARTIES: 
Petitioner: Basavaraj
Respondent: Padmavathi &Anr

BRIEF FACTS

• The original defendant No. 1 in this case, respondent No. 1, signed an agreement to sell on March 13 in favour of the original plaintiff, appellant, who agreed to purchase the property in question on or before July 31, 2007, for a price of Rs. 12,74,000/-. As a deposit, Rs. 3 lakhs were made. Respondent No. 1 provided the receipt in exchange for the same.
• After respondent No. 1 — the seller — failed to sign the sale deed, the appellant received a legal notice dated November 20, 2007, requesting that the respondent(s) accept the remaining sale money and sign the sale deed. With a letter dated 03/12/2007, the seller denied the execution of a purchase agreement in response to the legal notification. After that, on February 14, 2008, via O.S. No. 17/2008, the appellant-buyer filed the lawsuit for specific performance. Sellers who were the original defendants in the case submitted a written statement opposing the lawsuit.
• The defendants disputed that a sale agreement had been executed. The plaintiff was not prepared to fulfill his obligation under the contract, according to the defendants' written argument. As a result, the defendants denied that the plaintiff-buyer was prepared and willing to fulfill his obligations under the contract.
• Both sides presented evidence before the Trial Court. By questioning witnesses, the plaintiff provided testimony regarding his readiness and willingness to carry out his contractual obligations. It was stated that the plaintiff attempted to pay the seller in cash, but the merchant refused to accept it.
• After considering the facts, the learned Trial Court subsequently dismissed the specific performance lawsuit in a judgment and order dated September 30, 2011.
• The Learning Trial When it came to the execution of a sale agreement, the court accepted the plaintiff's argument. buyer's The learned Trial Court accepted the plaintiff's argument regarding the 3 lakh rupee earnest money made to the seller. Additionally, the plaintiff-buyer was prepared and eager to carry out his obligation under the contract, according to the learned Trial Court. The buyer, the original plaintiff, placed an amount of Rs. 9,74,000/- before the learned Trial Court y the decision and decree made by that court, and it is still believed to be there as of this writing.
• The respondents in this case—the sellers—preferred to appeal before the High Court because they felt wronged and unsatisfied by the decision and decree made by the learned Trial Court. By the contested decision and order, the High Court upheld the aforementioned appeal and threw out the ruling and decree rendered by the learned Trial Court, primarily because the plaintiff was not prepared and willing to fulfill his obligation under the contract. The High Court's contested decision and order are the focus of the current appeals.

QUESTIONS RAISED

If the Trial Court's conclusions regarding the appellant's readiness and willingness were reversed by the High Court, did this constitute a significant error that caused the decree to be set aside?

ARGUMENTS ADVANCED BY THE APPELLANT

• Learned counsel appearing on behalf of the appellant has strongly submitted that in the facts and circumstances of the case, the Hon’ble High Court has materially erred in reversing the findings of the Trial Courton readiness and willingness of the appellant. It is submitted that on appreciation of the entire evidence on record, the learned Trial Court recorded findings as to the readiness and willingness of the appellant, in favour of the appellant, and such findings were not required to be interfered with by the High Court.
• legal counsel for the appellant has strongly argued that the Honourable High Court committed a significant error by overturning the Trial Court's conclusions regarding the appellant's readiness and willingness is given the facts and circumstances of the case. It is argued that after carefully considering all of the available information, the learned Trial Court made judgments about the appellant's readiness and willingness that were favorable to the appellant, and that the High Court was not necessary to overturn those conclusions.
• It is further argued that the appellant-buyer was prepared and eager to carry out his obligation under the contract from start to finish.
• Furthermore, it was argued that by denying that the agreement had been executed, the defendant had lied before the learned Trial Court. It is further argued that the defendants' particular position in the written declaration was that the parties had not executed a sale agreement. However, it is argued that defendant No. 1 later acknowledged receiving Rs. 3 lakhs, and a receipt dated 13.03.2007 was given in support of that claim.
• Furthermore, it is claimed that even the vendor, defendant No. 1, entered into false and inconsistent pleas. She originally denied that the agreement had been executed before claiming that it was merely an agreement regarding a loan transaction and not a sale deal.
• The lawyer representing the appellant then claims that concurrent findings have been made by the learned Trial Court and the High Court regarding the execution of the agreement to sell by defendant No. 1 and to the effect that Rs. 3 lakhs were paid by the buyer as earnest money and that the agreement to sell was not for security and/or a loan transaction but was for an outright sale.
• On the issue of the buyer's readiness and willingness, learned counsel appearing on behalf of the appellant heavily cited this Court's decisions in the cases of Indira Kaur and Ors. v. Sheo Lal Kapoor (1988) 2 SCC 488 (paras 8, 9, and 10), and Beemaneni Maha Lakshmi v. Gangumalla Appa Rao (2019) 6 SCC 233 (para. 14). It is claimed that in the instance of Indira Kaur (above), it was decided that the absence of a passbook, account statements, or other documentary evidence did not allow for an unfavorable inference to be made about the plaintiff's ability to pay the remaining price.
• It is claimed that this Court observed and decided in the Beemaneni Maha Lakshmi case (above) that the vendee's failure to "show" that he had enough money on hand to pay the remaining sale consideration on the date of his evidence is of little relevance.
• Furthermore, it is claimed that this Court observed and decided in the case of Ramrati Kuer v. Dwarika Prasad Singh (1967) 1 SCR 153 (para. 9) that no adverse inference could be made in the absence of an express prayer requesting that the party furnish accounts and their subsequent refusal to do so.

ARGUMENTS ADVANCED BY THE RESPONDENT

• The learned lawyer representing the respondent-seller claimed that the High Court had assigned compelling justifications for overturning the judgment and decree made by the learned Trial Court and for overturning its conclusions regarding the appellant's preparedness and willingness.
• It is also argued that the original plaintiff, the appellant, has not proven or presented any evidence that he has the resources necessary to cover the remaining selling amount. It is argued that the High Court correctly determined that the buyer, the original plaintiff, failed to establish and prove readiness and willingness on his side to implement the agreement dated 13.03.2007 in the lack of such proof.
• It is claimed that the defendants' precise argument that the plaintiff was not prepared and willing to carry out his obligation under the agreement was made in the written statement itself.
• In support of his request to dismiss the current appeals, counsel representing respondents - original defendants have cited the court's rulings in the cases of J.P. Builders and Anr. v. A. Ramadas and Anr. (2011) 1 SCC 429 and U.N. Krishnamurthy v. A.M. Krishnamurthy; 2022 SCC OnLine SC 840.

ANALYSIS BY THE COURT

• Since neither passbook nor bank accounts were supplied, it appears from the impugned decision and order of the High Court that the logic behind it is that the plaintiff has not demonstrated that he has the cash and/or quantity and/or adequate funds/means to pay the outstanding sale consideration. It was noted in the matter of RamratiKuer (above), which this Court explicitly reviewed in the case of Indira Kaur (supra), that the respondents failed to submit any accounts despite arguing that they were maintained.
• The findings made by three courts below in the case of Indira Kaur (supra), whereby an adverse inference had been drawn against the plaintiff therein for not producing the passbook and by implication holding that the plaintiff was not ready and willing to perform his part of the agreement, have been set aside by this Court after taking into account the observations made by this Court in the case of RamratiKuer (supra). No adverse inference may be drawn, it is noted and agreed upon, unless the plaintiff was asked to present the passbook either by the defendant or the Court ordered him to do so.
• No unfavorable inference could have been made by the High Court based on the facts of the case at hand and the law established by this Court in the aforementioned two cases. In overturning the learned Trial Court's conclusions about the appellant's readiness and willingness, the High Court committed a grave error.
• Given the facts described above, we conclude that the High Court made a significant error when it reversed the findings on the appellant's readiness and willingness and quashed and set aside the judgment and decree issued by the learned Trial Court. The High Court's contested judgment(s) and order(s) are/are considered to be unsupportable in light of the situation and should be quashed and reversed. However, to provide full justice, we believe that ordering the plaintiff to pay an additional sum of Rs. 10 lakhs as a selling consideration will accomplish this.
• The present appeals are successful in light of the foregoing explanation and for the aforementioned causes. The High Court's challenged decision(s) and order(s) are hereby reversed and quashed. Specifically, the agreement to sell dated 13.03.2007 is to be performed by the judgment and decree made by the learned Trial Court, which is therefore reinstated. To be completely fair, however, we order the plaintiff to deposit an additional sum of Rs. 10 lakhs with defendant No. 1 within eight weeks of today. Upon receipt of this payment, defendant No. 1 is then instructed to execute the sale deed in favour of the original plaintiff-appellant within two weeks. By the judgment and order rendered by the learned Trial Court, Defendant No. 1 shall also be permitted to withdraw the sum of Rs. 9,74,000/- deposited by Plaintiff on October 31, 2011, along with the interest accrued thereon, which shall be paid to Defendant No. 1 by an account payee cheque.

CONCLUSION

The High Court's challenged decision(s) and order(s) were reversed and quashed. Specifically, the agreement to sell is to be performed by the judgment and decree made by the learned Trial Court, which is therefore reinstated. To be completely fair, however, the court orders the plaintiff to deposit an additional sum.

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