Oral Admission and Unchallenged Partial Endorsements Establish the Validity of an Entire Specific Performance Sale Agreement

The Plaintiff/Appellant entered into a sale agreement dated 11.07.1999 (Ex.P1) with Defendant Nos. 1 and 2 for land in Sy.No. 75/2, Huskur Village, for a consideration of Rs. 1,22,500/-

The Plaintiff paid an advance of Rs. 25,000/- and subsequently paid the balance through various installments, including a payment of Rs. 45,000/- via cheque to a previous agreement holder, Dayananda Reddy (PW5), with the Defendants' consent

Though possession was handed over, the formal sale deed was delayed as the khatha (land record) was not in the Defendants' names until 23.08.2004

Upon the khatha transfer, Defendant Nos. 1 and 2 clandestinely executed a sale deed in favor of Defendant No. 3 on 05.10.2004 (Ex.D2), claiming a prior agreement dated 03.02.1999 (Ex.D1)

The Trial Court initially decreed the suit for specific performance, but the First Appellate Court reversed the decree, ordering only a refund of Rs. 77,500/- with 15% interest, doubting the payment to Dayananda Reddy and the validity of the full agreement

1. Whether the Lower Appellate Court was justified in reversing the Trial Court’s findings and dismissing the suit for specific performance despite vacillatory statements by DWs regarding the prior agreement (Ex.D1)

2. Whether the Lower Appellate Court was justified in eschewing the conduct of Defendant No. 2, who failed to subject herself to cross-examination

3. Whether the Courts erred in accepting part of a payment endorsement (Rs. 2,000/-) while rejecting the other part (Rs. 45,000/-) within the same document

Section 100 of the Code of Civil Procedure (CPC), which limits second appeals to substantial questions of law, while permitting interference if the lower court's findings are perverse or ignore material evidence

Section 16(c) of the Specific Relief Act, 1963, regarding the Plaintiff's readiness and willingness to perform the contract

The principle that the content of a document and the intention of parties must be gathered from the language and circumstances, rather than just the title (M S Ananthamurthy v. Manjula)

Under Section 114 of the Indian Evidence Act, an adverse inference can be drawn when a party (Defendant No. 2) refuses to testify

The High Court found the First Appellate Court's reasoning "perverse" and "vacillatory"

While Defendant No. 1 admitted his signatures on the sale agreement (Ex.P1) and several payment endorsements (Ex.P1(d)-(h), (j), (k)), he only denied the final shara regarding the Rs. 45,000/- payment to Dayananda Reddy

The Court held that since the cheque for Rs. 45,000/- belonged to the Plaintiff and was handed over in his presence to PW5, the Appellate Court erred in rejecting the endorsement simply because Defendant No. 1 physically handed it over

Regarding the "prior agreement" (Ex.D1) with Defendant No. 3, the Court noted glaring contradictions: DW1 claimed the consideration was Rs. 5,25,000/-, whereas the document (Ex.D1) stated only Rs. 1,00,000/-

Defendant No. 2’s failure to stand for cross-examination necessitated an adverse inference against the defense

The Court concluded that Ex.D1 was a "sham document" created in collusion to defeat the Plaintiff’s rights

It set aside the First Appellate Court's judgment and restored the Plaintiff's right to specific performance

The Court held that the subsequent sale to Defendant No. 3 was collusive/sham and did not require a separate prayer for cancellation

The Plaintiff is entitled to the relief of specific performance; Defendant Nos. 1 and 2 are directed to execute the sale deed in favor of the Plaintiff, failing which the Plaintiff may enforce the agreement through the law