Full Judgment Text
2026 INSC 214
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3255 OF 2026
(ARISING OUT OF S.L.P. (CIVIL) NO. 6453 OF 2024)
MUDDAM RAJU YADAV APPELLANT(S)
VERSUS
B. RAJA SHANKER (D)
THROUGH LRS. & ORS. RESPONDENT(S)
J U D G M E N T
PRASHANT KUMAR MISHRA, J.
1. Leave granted.
2. The present Appeal is preferred by the appellant/plaintiff whose suit
for specific performance of agreement of sale dated 4.6.2002 was decreed by
the Trial Court. However, in appeal by the respondent(s)/defendant(s), the
High Court has set aside the judgment and decree of the Trial Court.
Resultantly, the suit filed by the appellant/plaintiff stands dismissed.
3. The sale agreement dated 4.6.2002 was in respect of house property
bearing No.1-91/1 (Old No.1-17/2) constructed on Plot No.l admeasuring
406.33 square yards in Survey No. 1 situated at Medchal Village and
Mandal, Ranga Reddy District. The agreement was for a total sale
consideration of Rs.13,00,000/- (Rupees Thirteen Lakh) and defendant(s)
Signature Not Verified
Digitally signed by
NISHA KHULBEY
Date: 2026.03.10
16:59:05 IST
Reason:
had received a sum of Rs.6,00,000/- (Rupees Six Lakh) as advance. The
agreement was registered on the same day with the Office of the Sub-
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 1 of 6
Registrar, Medchal, Ranga Reddy District. As per the terms of agreement,
the plaintiff had to pay the balance amount of sale consideration of
Rs.7,00,000/- (Rupees Seven Lakh) to the defendant(s) at the time of
execution of the sale deed within 11 months from the date of agreement. As
per the plaintiff, he was always ready and willing to pay the balance amount
of sale consideration; however, the defendant(s) avoided to receive the
amount and execute the sale deed on one pretext or the other. The plaintiff
issued a legal notice dated 25.4.2003 calling upon the defendant(s) to
execute the sale deed. However, despite the receipt of legal notice, the
defendant(s) neither submitted any reply nor executed the sale deed,
necessitating filing of the subject suit.
4. According to the defendant(s), the plaintiff is an unlicensed money
lender and he lent an amount of Rs.6,00,000/- (Rupees Six Lakh) towards
hand loan to the defendant(s) holding the original sale deed of the
defendant(s) in respect of the suit schedule property with an understanding
that within 12 months from the date of the agreement, the defendant(s)
would return Rs.6,00,000/- (Rupees Six Lakh) and the plaintiff would return
the original title deeds and would also get the registered agreement
cancelled. It was also agreed that in the event of non-discharge of the loan
amount within 12 months, the defendant(s) would transfer the suit schedule
property in favour of the plaintiff as per the prevalent market value, until
which time, the plaintiff had undertaken and declared that he would not
exercise any right, interest, title or claim over the suit property. The
understanding was reduced into writing, signed by the plaintiff on the same
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 2 of 6
day i.e., 4.6.2002 followed by the registered agreement of sale dated
4.6.2002 and, thus, the agreement was nothing but a sham and nominal
document. Pursuant to the written understanding dated 4.6.2002, the
plaintiff acknowledged the receipt of Rs.1,00,000/- (Rupees One Lakh) on
25.9.2002 towards part repayment of the loan amount, but successfully
evaded to pass a receipt acknowledging the payment of Rs.1,50,000/-
(Rupees One Lakh and Fifty Thousand) paid on two occasions in the months
of the November and December 2002. When the defendant and his sons
insisted for receipt of the said repayments of the loan amount, the plaintiff
issued a legal notice presenting a new version that he was a bona fide
purchaser on the strength of sale agreement and suppressing the true fact
of loan transaction. It was, therefore, pleaded by the defendant(s) that as
per the understanding, the sale consideration was determinable only after
12 months from the date of the agreement of sale and that too in the event
of the defendant(s) failing to return the loan amount of Rs.6,00,000/-
(Rupees Six Lakh) to the plaintiff. Thus, as per the defendant(s), the sale
agreement is not enforceable, being a sham and nominal document. The
defendant(s) also stated that the market value of the suit property was much
higher than what has been quoted in the agreement.
5. In the course of trial, the plaintiff examined himself as PW-1 and got
marked Exhibits A-1 to A-7 on his behalf, out of which, the following are the
material documents:
i. Exhibit A-1 was the agreement of sale dated 4.6.2002;
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 3 of 6
ii. Exhibit A-2 was a no objection letter executed by the sons of the
defendant;
iii. Exhibit A-3 was an office copy of the legal notice dated 25.4.2003;
and
iv. Exhibit A-7 was the statement of account of the plaintiff issued by
the State Bank of Hyderabad, Old Bowenpally.
6. On the other hand, the defendant examined his sons namely, Dr. B.
Venuprakash and Shri B. Shyamsunder as DW-1 and DW-2 respectively.
He got marked Exhibit B-1 – a photocopy of the receipt for Rs.1,00,000/-
1
(Rupees One Lakh) and Exhibit B-2 – the Memorandum of Understanding
dated 4.6.2002.
7. The Trial Court decreed the suit on the reasoning that the
defendant(s) has not denied the execution of the agreement and receipt of
the legal notice and since the plaintiff was in possession of required fund for
payment of the balance sale consideration as reflected in Exhibit A-7, the
bank account statement of the plaintiff, he was always ready and willing to
perform his part of the contract and was entitled for decree of specific
performance. Under the impugned judgment, the High Court has allowed
the defendants’ appeal to set aside the judgment of the Trial Court.
8. We have heard the learned counsel for the parties and perused the
material papers.
9. Since the High Court has recorded a finding that in view of Exhibit B-
2 – Memorandum of Understanding dated 4.6.2002 executed by the parties
1
For short, “the MoU”
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 4 of 6
on the same day on which the agreement was entered into between them,
the sale agreement appears to be a sham and nominal document, we shall
examine the correctness of the said finding of the High Court.
10. It is the case of the defendant(s) from the very beginning that the sale
agreement was executed by way of security for a loan of Rs.6,00,000/-
(Rupees Six Lakh) advanced by the plaintiff to the defendant(s) and the same
was clearly reflected as recited in the MoU (Exhibit B-2). It is to be seen that
said MoU was on a non-judicial stamp paper bearing document no.47663
and the no objection letter (Exhibit A-2) executed by the sons of the
defendant was on Rs.100/- non-judicial stamp paper bearing document
no.47662. Both the documents were dated 4.6.2002 and purchased from
the same stamp vendor. The witnesses to both the documents were also one
and the same. All these would probablise the defence of the defendant(s)
that the agreement of sale was not a genuine transaction but was executed
as a security for a loan transaction.
11. Although Exhibit B-1, the photocopy of the receipt executed by the
plaintiff while receiving a sum of Rs.1,00,000/ (Rupees One Lakh) towards
repayment of loan from the defendant(s), has been found not admissible
and, hence, cannot be relied upon, yet the execution of the MoU (Exhibit B-
2) clearly makes out a very strong probable case to prove that the subject
agreement was a sham and nominal document.
12. In a suit for specific performance, the conduct of the parties is
significant as it assists the Court in evaluating the evidence to find out the
bona fides of the parties at the time of execution of the agreement. Even a
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 5 of 6
slight doubt in the mind of the Court that the plaintiff was not acting
bonafidely and that the material facts, having bearing on the agreement,
have been withheld in the agreement itself and from the Court also, the
equitable and discretionary relief has to be denied. A plaintiff approaching
the Court with uncleaned hands, like in the present case—the plaintiff
having withheld the document i.e., MoU (Exhibit B-2), as the same was
nowhere mentioned in the plaint, the present was a fit case for denial of
relief of specific performance and the High Court has rightly allowed the
appeal preferred by the respondent(s)/defendant(s) to set aside the judgment
and decree passed by the Trial Court.
13. For the foregoing reasons, we do not find any substance in this
Appeal. Hence, the Appeal fails and the same is, accordingly, dismissed.
………………………………………J.
(PRASHANT KUMAR MISHRA)
………………………………………J.
(PRASANNA B. VARALE)
NEW DELHI;
MARCH 10, 2026.
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 6 of 6
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3255 OF 2026
(ARISING OUT OF S.L.P. (CIVIL) NO. 6453 OF 2024)
MUDDAM RAJU YADAV APPELLANT(S)
VERSUS
B. RAJA SHANKER (D)
THROUGH LRS. & ORS. RESPONDENT(S)
J U D G M E N T
PRASHANT KUMAR MISHRA, J.
1. Leave granted.
2. The present Appeal is preferred by the appellant/plaintiff whose suit
for specific performance of agreement of sale dated 4.6.2002 was decreed by
the Trial Court. However, in appeal by the respondent(s)/defendant(s), the
High Court has set aside the judgment and decree of the Trial Court.
Resultantly, the suit filed by the appellant/plaintiff stands dismissed.
3. The sale agreement dated 4.6.2002 was in respect of house property
bearing No.1-91/1 (Old No.1-17/2) constructed on Plot No.l admeasuring
406.33 square yards in Survey No. 1 situated at Medchal Village and
Mandal, Ranga Reddy District. The agreement was for a total sale
consideration of Rs.13,00,000/- (Rupees Thirteen Lakh) and defendant(s)
Signature Not Verified
Digitally signed by
NISHA KHULBEY
Date: 2026.03.10
16:59:05 IST
Reason:
had received a sum of Rs.6,00,000/- (Rupees Six Lakh) as advance. The
agreement was registered on the same day with the Office of the Sub-
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 1 of 6
Registrar, Medchal, Ranga Reddy District. As per the terms of agreement,
the plaintiff had to pay the balance amount of sale consideration of
Rs.7,00,000/- (Rupees Seven Lakh) to the defendant(s) at the time of
execution of the sale deed within 11 months from the date of agreement. As
per the plaintiff, he was always ready and willing to pay the balance amount
of sale consideration; however, the defendant(s) avoided to receive the
amount and execute the sale deed on one pretext or the other. The plaintiff
issued a legal notice dated 25.4.2003 calling upon the defendant(s) to
execute the sale deed. However, despite the receipt of legal notice, the
defendant(s) neither submitted any reply nor executed the sale deed,
necessitating filing of the subject suit.
4. According to the defendant(s), the plaintiff is an unlicensed money
lender and he lent an amount of Rs.6,00,000/- (Rupees Six Lakh) towards
hand loan to the defendant(s) holding the original sale deed of the
defendant(s) in respect of the suit schedule property with an understanding
that within 12 months from the date of the agreement, the defendant(s)
would return Rs.6,00,000/- (Rupees Six Lakh) and the plaintiff would return
the original title deeds and would also get the registered agreement
cancelled. It was also agreed that in the event of non-discharge of the loan
amount within 12 months, the defendant(s) would transfer the suit schedule
property in favour of the plaintiff as per the prevalent market value, until
which time, the plaintiff had undertaken and declared that he would not
exercise any right, interest, title or claim over the suit property. The
understanding was reduced into writing, signed by the plaintiff on the same
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 2 of 6
day i.e., 4.6.2002 followed by the registered agreement of sale dated
4.6.2002 and, thus, the agreement was nothing but a sham and nominal
document. Pursuant to the written understanding dated 4.6.2002, the
plaintiff acknowledged the receipt of Rs.1,00,000/- (Rupees One Lakh) on
25.9.2002 towards part repayment of the loan amount, but successfully
evaded to pass a receipt acknowledging the payment of Rs.1,50,000/-
(Rupees One Lakh and Fifty Thousand) paid on two occasions in the months
of the November and December 2002. When the defendant and his sons
insisted for receipt of the said repayments of the loan amount, the plaintiff
issued a legal notice presenting a new version that he was a bona fide
purchaser on the strength of sale agreement and suppressing the true fact
of loan transaction. It was, therefore, pleaded by the defendant(s) that as
per the understanding, the sale consideration was determinable only after
12 months from the date of the agreement of sale and that too in the event
of the defendant(s) failing to return the loan amount of Rs.6,00,000/-
(Rupees Six Lakh) to the plaintiff. Thus, as per the defendant(s), the sale
agreement is not enforceable, being a sham and nominal document. The
defendant(s) also stated that the market value of the suit property was much
higher than what has been quoted in the agreement.
5. In the course of trial, the plaintiff examined himself as PW-1 and got
marked Exhibits A-1 to A-7 on his behalf, out of which, the following are the
material documents:
i. Exhibit A-1 was the agreement of sale dated 4.6.2002;
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 3 of 6
ii. Exhibit A-2 was a no objection letter executed by the sons of the
defendant;
iii. Exhibit A-3 was an office copy of the legal notice dated 25.4.2003;
and
iv. Exhibit A-7 was the statement of account of the plaintiff issued by
the State Bank of Hyderabad, Old Bowenpally.
6. On the other hand, the defendant examined his sons namely, Dr. B.
Venuprakash and Shri B. Shyamsunder as DW-1 and DW-2 respectively.
He got marked Exhibit B-1 – a photocopy of the receipt for Rs.1,00,000/-
1
(Rupees One Lakh) and Exhibit B-2 – the Memorandum of Understanding
dated 4.6.2002.
7. The Trial Court decreed the suit on the reasoning that the
defendant(s) has not denied the execution of the agreement and receipt of
the legal notice and since the plaintiff was in possession of required fund for
payment of the balance sale consideration as reflected in Exhibit A-7, the
bank account statement of the plaintiff, he was always ready and willing to
perform his part of the contract and was entitled for decree of specific
performance. Under the impugned judgment, the High Court has allowed
the defendants’ appeal to set aside the judgment of the Trial Court.
8. We have heard the learned counsel for the parties and perused the
material papers.
9. Since the High Court has recorded a finding that in view of Exhibit B-
2 – Memorandum of Understanding dated 4.6.2002 executed by the parties
1
For short, “the MoU”
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 4 of 6
on the same day on which the agreement was entered into between them,
the sale agreement appears to be a sham and nominal document, we shall
examine the correctness of the said finding of the High Court.
10. It is the case of the defendant(s) from the very beginning that the sale
agreement was executed by way of security for a loan of Rs.6,00,000/-
(Rupees Six Lakh) advanced by the plaintiff to the defendant(s) and the same
was clearly reflected as recited in the MoU (Exhibit B-2). It is to be seen that
said MoU was on a non-judicial stamp paper bearing document no.47663
and the no objection letter (Exhibit A-2) executed by the sons of the
defendant was on Rs.100/- non-judicial stamp paper bearing document
no.47662. Both the documents were dated 4.6.2002 and purchased from
the same stamp vendor. The witnesses to both the documents were also one
and the same. All these would probablise the defence of the defendant(s)
that the agreement of sale was not a genuine transaction but was executed
as a security for a loan transaction.
11. Although Exhibit B-1, the photocopy of the receipt executed by the
plaintiff while receiving a sum of Rs.1,00,000/ (Rupees One Lakh) towards
repayment of loan from the defendant(s), has been found not admissible
and, hence, cannot be relied upon, yet the execution of the MoU (Exhibit B-
2) clearly makes out a very strong probable case to prove that the subject
agreement was a sham and nominal document.
12. In a suit for specific performance, the conduct of the parties is
significant as it assists the Court in evaluating the evidence to find out the
bona fides of the parties at the time of execution of the agreement. Even a
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 5 of 6
slight doubt in the mind of the Court that the plaintiff was not acting
bonafidely and that the material facts, having bearing on the agreement,
have been withheld in the agreement itself and from the Court also, the
equitable and discretionary relief has to be denied. A plaintiff approaching
the Court with uncleaned hands, like in the present case—the plaintiff
having withheld the document i.e., MoU (Exhibit B-2), as the same was
nowhere mentioned in the plaint, the present was a fit case for denial of
relief of specific performance and the High Court has rightly allowed the
appeal preferred by the respondent(s)/defendant(s) to set aside the judgment
and decree passed by the Trial Court.
13. For the foregoing reasons, we do not find any substance in this
Appeal. Hence, the Appeal fails and the same is, accordingly, dismissed.
………………………………………J.
(PRASHANT KUMAR MISHRA)
………………………………………J.
(PRASANNA B. VARALE)
NEW DELHI;
MARCH 10, 2026.
Civil Appeal @ SLP (C) No.6453 OF 2024 Page 6 of 6