Material Alteration in Sale Agreement Upheld; Specific Performance Decree Set Aside

A bench of Justice Prashant Kumar Mishra and Justice K. Vinod Chandran heard an appeal against a High Court judgment that reversed a trial court decree for specific performance in a suit concerning the sale of two adjoining properties. The appellant challenged the High Court's finding of material interpolation in the sale agreement and its consequent refusal to grant specific performance.

The Court summarised that the High Court was justified in treating the agreement as tainted by clear interpolations and in setting aside the trial court's decree. It noted that the plaintiff's case on readiness and willingness failed because the recitals and the schedule in the agreement were inconsistent and the balance consideration shown by the plaintiff did not match the alleged combined sale. The Court agreed with the High Court that the alleged interpolation was "clearly discernible on a mere perusal of the document, that too written in a different ink" and that courts were not "obliged to always refer it to an expert." The Court, in its reasoning, observed: "Trite is the principle that the plaintiff should establish his case before the defendant is called upon to offer his defense by disproving the case of the plaintiff and rebutting any presumption that could have been drawn from the circumstances. The relief of specific performance was sought for, based on the agreement produced by the plaintiff himself. The High Court has looked at the agreement to find material alteration which according to the High Court is clearly discernible; especially when two inks were used in the agreement. The details of Item No.2 as also the alleged agreement to sell that plot, was found to be clearly interpolated in the agreement. The agreement, hence, was found to be tainted and in those circumstances, the suit had no legs to stand." The Court therefore found "absolutely no reason to interfere with the judgment of the High Court" and dismissed the appeal.

Background The dispute arose from an agreement dated 15.07.1984 for sale of 2.40 acres comprising two items (Item No.1 and Item No.2) for Rs.56,000, on payment of Rs.1,000 advance. Item No.1 was admitted to belong to the second respondent; Item No.2 was shown to belong to a third party but was alleged by the second respondent to have been purchased by him from the real owner. The plaintiff served a notice of readiness to execute the sale within the three-month period; subsequent correspondence included a demand for balance with 18% interest and later transfers of both properties to the second respondent and constructions thereon. The plaintiff filed suit for specific performance on 01.03.1985; the trial court decreed the suit, finding the plaintiff always ready and willing to pay the balance consideration and rejecting alleged material alteration.

On appeal the High Court reversed, holding that the sale agreement showed "clear alteration" in the recitals relating to Item No.2, written in a different ink, and relied on precedent including Seth Loonkaran Sethiya v. Ivan E. John to treat the document as materially altered. The High Court concluded that the agreement could not support specific performance. The Supreme Court analysed the agreement and the trial evidence, observed inconsistencies between recitals and the schedule as to area and consideration, noted that the plaintiff had before the trial court abandoned the claim as to Item No.2, and held that the plaintiff had not satisfactorily established readiness and willingness when the arithmetic of consideration did not correspond. The Court held that where interpolation was "so blatant" it need not always be referred to an expert under Section 73 of the Evidence Act, upheld the High Court's finding of material alteration, dismissed the appeal and directed that there would be no costs. Pending applications, if any, stood disposed of.

Case Details: Case No.: Civil Appeal No.11080 of 2014 Case Title: Syed Basheer Ahmed v. M/s. Tinni Laboratories Private Limited & Anr. Appearances: For the Petitioner(s): Mr. G. Sivabalamurugan, learned counsel For the Respondent(s): Mr. D. Ramakrishna Reddy, learned counsel