Summary and Analysis of Harish Kumar vs. Amar Nath & Anr (Civil Appeal Nos. 308 of 2015)

1. Heading of the Judgment

Harish Kumar vs. Amar Nath & Anr. (Deceased through LRs)

Civil Appeal Nos. 308 of 2015

Supreme Court of India

Decided on: August 05, 2025

Judges: Hon’ble Mr. Justice S.V.N. Bhatti & Hon’ble Mr. Justice Ahsanuddin Amanullah

Outcome: Appeal Allowed

2. Relevant Laws & Legal Principles

The judgment applies and interprets the following legal provisions and principles:

• Specific Relief Act, 1963 (Sections 10 & 20): Governs suits for specific performance of contracts. Requires the plaintiff to prove:
  A valid and enforceable agreement.
  Readiness and willingness to perform their part.
  Breach by the defendant.

• Indian Evidence Act, 1872 (Sections 101-104): Pertains to the burden of proof and onus of proof.
  The initial burden lies with the plaintiff to prove the existence of a valid agreement.
  Once admitted signatures are established, the onus may shift to the defendant to explain the context if alleging fraud/misuse.

• Burden vs. Onus of Proof (Ref: Anil Rishi v. Gurbakshi Singh (2006) 5 SCC 558): Clarified that the "burden of proof" is static (who must prove a fact), while the "onus of proof" is dynamic (who must lead evidence first, which can shift during trial).

• Essentials for Specific Performance (Ref: Man Kaur (Dead) by LRs. v. Hartar Singh Sangha (2010) 10 SCC 512): Reiterated that the plaintiff must prove:
  A valid agreement of sale.
  Breach by the defendant.
  Continuous readiness and willingness to perform their obligations.

3. Basic Judgment Details

• Parties:
  Appellant (Original Defendant): Harish Kumar (alleged seller/borrower).
  Respondents (Original Plaintiffs): Amar Nath & Another (deceased, represented by Legal Representatives - alleged buyers/moneylenders).

• Subject Property: House No. B-35/229 (D.No. 522), Jattanwala Chauntara, Sirhindi Bazar, Patiala.

• Core Dispute: Validity of an alleged Agreement to Sell dated 12.02.1999 ("Suit Agreement").

• Plaintiffs' Claim (Trial Court):
  Executed Suit Agreement for ₹70,000.
  Paid ₹55,000 as advance.
  Given possession initially, then appellant continued as tenant @ ₹700/month.
  Defendant failed to execute sale deed on 20.10.2000 despite notice.
  Sought specific performance and possession.

• Defendant's Defence (Trial Court):
  Borrowed ₹50,000 from Respondent No. 1 at 2.25% monthly interest.
  Signed blank stamp papers at the time of loan.
  Repaid the loan on 25.07.2000.
  Suit Agreement was fabricated by misusing the signed blank papers.
  No genuine agreement to sell existed.

• Lower Courts' Decisions:
  Trial Court: Dismissed the suit. Found no valid agreement; plaintiffs were moneylenders who misused blank papers; consideration too low; plaintiff failed to prove execution.
  First Appellate Court: Upheld dismissal. Found Suit Agreement not genuine; attesting witnesses supported fraud claim; plaintiffs' money-lending practice involved blank papers.
  High Court (P&H): Reversed lower courts. Allowed specific performance. Relied on defendant's admission of signatures and handwriting on agreement; discredited defendant's witnesses/affidavits; relied on rent deed.

• Supreme Court Decision: Allowed the appeal. Set aside the High Court's decree for specific performance. Directed the Appellant to pay ₹3,00,000 to the Respondents within 4 weeks.

4. Explanation of the Judgment (Core Reasoning)

The Supreme Court carefully reviewed the entire case record and reversed the High Court's decision, primarily because the Respondents (Plaintiffs) failed to prove the existence of a valid and enforceable agreement for sale. Here's a step-by-step explanation of the Court's reasoning:

1. Failure to Prove the Agreement Itself:
   The core requirement for specific performance is a valid agreement (Man Kaur case). The Respondents relied solely on the testimony of PW1 (original plaintiff Amar Nath) and documents (Ex. P1 - Agreement, P3 - Rent Note, P4 - Rent Receipts).
   Crucially, the Respondents did not examine the two attesting witnesses (Devinder Dhaman and Harnek Singh) named in the Suit Agreement (Ex. P1). These witnesses had submitted affidavits (Ex. D5 & D6) stating their signatures were obtained fraudulently and the agreement was not executed in their presence.
   The Respondents did not cross-examine these witnesses on their affidavits or take steps to challenge their claims. This left the evidence of PW1 as largely "self-serving" (meaning his testimony benefited only his own case without strong independent support).
   The Supreme Court held that without examining the attesting witnesses or properly challenging their affidavits, the Respondents failed to discharge their initial burden of proving the valid execution and existence of the Suit Agreement.

2. Issues with Possession Story:
   The Respondents claimed they were given possession under the agreement and then leased the property back to the Appellant via a rent deed (Ex. P3).
   The Supreme Court found no evidence provided by the Respondents to substantiate this transfer of possession back and forth. The Appellant was admittedly in possession throughout. The Court viewed this lack of evidence as weakening the Respondents' claim about the agreement's authenticity.

3. High Court's Errors:
   The Supreme Court agreed with the Appellant that the High Court overstepped its limits in a Second Appeal (RSA). The High Court essentially re-appreciated evidence on facts, which is generally not permitted in an RSA unless there is a substantial question of law or perversity.
   While the Appellant admitted his signatures and some handwriting (receipt of ₹55,000) on Ex. P1, the Supreme Court emphasized that this admission alone did not automatically prove the entire agreement was genuine. The Appellant consistently claimed these were obtained on blank papers during a loan transaction. The Respondents still needed to prove the context and content of the agreement beyond the signatures.
   The High Court placed heavy reliance on the Rent Deed (Ex. P3). However, the Supreme Court noted that the existence of a rent deed assumes the prior valid agreement. Since the agreement itself wasn't proven, the rent deed couldn't independently validate it.
   The High Court dismissed the affidavits of the attesting witnesses (Ex. D5, D6) because they weren't examined in court. The Supreme Court countered that the Respondents had the opportunity and responsibility to summon and cross-examine these witnesses if they disputed the affidavits. Their failure to do so meant the affidavits remained unchallenged evidence supporting the Appellant's fraud claim.

4. The Loan Aspect and Final Relief:
   The Supreme Court accepted the Appellant's admission that he borrowed ₹50,000 from the Respondents. However, the Appellant failed to prove he repaid this loan (as claimed on 25.07.2000). No evidence of repayment was presented.
   Since the Respondents failed to prove the sale agreement, they were not entitled to specific performance.
   However, because the Appellant admitted borrowing ₹50,000 and failed to prove repayment, the Court held it would be unjust to let him keep that money. To settle the dispute fairly ("give quietus"), the Court exercised its discretion under Article 136 of the Constitution and moulded the relief.
   Considering the passage of time (loan taken in 1999) and likely interest, the Court directed the Appellant to pay the Respondents ₹3,00,000 within four weeks as repayment for the admitted debt.

In Simple Terms: The Supreme Court decided that the buyers (Respondents) couldn't force the seller (Appellant) to hand over the house because they didn't properly prove that a real sale agreement ever existed. Key witnesses weren't called, and the main evidence was just the word of one of the buyers. However, since the seller admitted borrowing money from the buyers and couldn't prove he paid it back, the Court ordered him to pay them ₹3,00,000 to settle that debt instead. The High Court was wrong to order the house transfer without stronger proof of the agreement.