The Kerala High Court has reiterated that a decree for specific performance cannot be granted based on an oral agreement unless there is cogent evidence to prove such agreement in the first place.
The single-judge bench of Justice K. Babu in view of the above allowed an appeal wherein the suit was decreed in favour of the plaintiff-respondent relying on an oral agreement.
Submissions of Counsels
The learned counsel for the appellant/defendant has contended that subject sale deed, a registered document, carries a mandatory presumption under Section 34(2) of the Registration Act with regard to execution and registration and in the absence of pleadings and cogent evidence tendered from the side of the respondent/plaintiff to rebut such a presumption, the First Appellate Court was not justified in granting a decree for specific performance.
He further contended that the First Appellate Court ignored the settled principle that there must be cogent and reliable evidence to grant the specific performance based on an oral agreement. As the defendant established that he has title over the plaint schedule property by virtue of Ext.B1 the principle that `possession follows title’ is applicable to the facts of this case. In the absence of convincing and cogent evidence, the plaintiff is not entitled to adduce evidence invoking the proviso to Section 92 of the Evidence Act, he averred.
On the other hand, the Learned Counsel for the plaintiff contended that the plaintiff could adduce sufficient evidence to enter into a conclusion that there was an earlier agreement for re-conveyance between the parties at the time of execution of Ext.B1 sale deed and there is no prohibition in adducing oral evidence in regard to the nature of the document.
Contending that plaintiff could establish the possession of the plaint schedule property, the Counsel stressed that the circumstances relied on by the First Appellate Court to enter into the conclusion that there was an oral contract between the parties agreeing re-conveyance on payment of the amount borrowed are probable.
High Court's Analysis
The Court at the ouset stated that what is evident is that an outright sale as provided under Section 54 of the Transfer of Property Act had taken place. The specific case of the defendant is that he had no money transaction as pleaded by the plaintiff.
The Court noted that apart from his and his wife's statement, there is no other convincing evidence or circumstance to enter into a conclusion that an oral agreement in respect of the sale of the property had taken place put forth by the plaintiff.
Looking into various precedents with regard to 'signing of a document' such as M/s. Grasim Industries Ltd. Vs. Union of India, 2011 Latest Caselaw 766 SC Apex Court held that when a person signs a document, there is a presumption, unless there is proof of force or fraud, that he has read the document properly and understood it and only then he has affixed his signature thereon, otherwise no signature on a document can ever be accepted.
It mentioned Prem Singh & Ors Vs. Birbal & Ors, 2006 Latest Caselaw 262 SC wherein the Apex Court held that there is a presumption that a registered document is validly executed. The registered document, therefore, prima facie would be valid in law. The onus of proof, thus, would be on a person who leads evidence to rebut the presumption.
Acceptability of the oral agreement for sale
The Court was of the view that it is trite that a sale agreement can also be oral and it is not necessary that the agreement be written, however, what is more important is that it should be within the ambit of Section 10 of the Indian Contract Act, and all oral and written agreements shall fulfill the conditions specified in Section 10 of the Act. (Ouseph Varghese Vs. Joseph Aley & Ors, 1969 Latest Caselaw 185 SC)
The Court also reffered to Brij Mohan & Ors Vs. Smt. Sugra Begum & Ors, 1990 Latest Caselaw 208 SC wherein the Apex Court held that in a case where the plaintiffs come forward to seek a decree for specific performance of a contract of sale of immovable property on the basis of an oral agreement alone, a heavy burden lies on the plaintiffs to prove that there was consensus ad idem between the parties for a concluded oral agreement for the sale of immovable property.
In the case on hand, the plaintiff failed to establish evidence on the touchstone of the principles discussed above to establish the existence of an oral contract as pleaded, the Court observed. Apart from the interested testimonies of the plaintiff and his wife, no other convincing evidence is available to show that there was an oral agreement, it remarked.
The Court agreed with the contentions of the learned counsel for the plaintiff that he plea of an oral contract for reconveyance can be accepted if there is cogent and convincing evidence to establish it, however it added that the plaintiff failed to do so.
"It was open to the plaintiff to adduce oral evidence in regard to the nature of the document. But, in the present case, the plaintiff did not discharge the burden of proof in respect of the property thereof, which was certainly on him."
Conclusion
The Court didn't agree to First Appellate Court's view and set aside the impugned jugdement:
"The First Appellate Court misconstrued the evidence and failed to draw necessary presumptions and inferences on the pleadings and evidence. The First Appellate Court lost sight of the settled principle that a decree for specific performance could not be granted based on an oral agreement unless there was cogent evidence to prove the same. The finding of the First Appellate Court that the plaintiff is in possession of the plaint schedule property is contrary to the evidence available. The First Appellate Court was not justified in reversing the decree and judgment of the trial Court. The Court also lost sight of the evidentiary burden on the plaintiff by invoking the proviso under Section 92 of the Evidence Act assailing the execution of Ext.B1."
Case Title: BHASY vs THOMAN
Case Details: RSA NO. 529 OF 2015
Coram: Justice K. Babu
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