Introduction:

In the case of Lakha Singh vs. Balwinder Singh & Anr., the Supreme Court of India overturned the decisions of the lower courts, which had validated a disputed sale agreement. The appellant, Lakha Singh, argued that the agreement was fabricated by the respondent, Balwinder Singh. The apex court found the evidence flawed and concluded that the sale agreement was fraudulent, having been concocted without the appellant’s knowledge or consent. This case centered around the misuse of a blank stamp paper on which the illiterate appellant’s thumb impression had been taken.

Background of the Case:

Lakha Singh, an illiterate individual, claimed that his thumb impression was taken on a blank stamp paper, which was later used by Balwinder Singh, a police constable, to create a sale agreement for property. According to the agreement, a portion of the sale price had been paid, with the remaining amount due on the registration date, September 19, 2008. Lakha Singh denied any such agreement and argued that the document was fabricated. Following his non-appearance at the Registrar’s Office on the date of registration, Balwinder Singh filed a suit for specific performance or the return of the earnest money.

Plaintiff-Respondent’s Arguments (Balwinder Singh):

• Execution of Agreement: The respondent argued that a valid sale agreement was executed, and the appellant had agreed to sell his property. A significant portion of the payment had been made in advance, with the remainder to be paid upon registration.
• Readiness and Willingness: The plaintiff maintained that he was ready to complete the transaction, having appeared at the Registrar’s Office on the scheduled date, expecting the appellant to execute the sale deed.
• Legal Right to Specific Performance: Asserting the validity of the agreement and his compliance with it, the plaintiff sought either the enforcement of the sale or the return of the earnest money.

Defendant-Appellant’s Arguments (Lakha Singh):

• Fraudulent Agreement: The appellant contended that the sale agreement was fraudulent. He claimed that his thumb impression had been taken on a blank stamp paper without his knowledge and that the agreement was fabricated afterward.
• Lack of Consent and Execution: Lakha Singh denied any consent or involvement in the execution of a sale agreement, emphasizing his illiteracy and inability to comprehend the documents.
• No Advance Intimation by Plaintiff: He further argued that the plaintiff did not communicate with him during the 16-month period between the alleged agreement and the scheduled registration date, raising doubts about the plaintiff’s bona fides.
• Absence of Payment Evidence: Lakha Singh also pointed out that the plaintiff did not provide any proof of having the remaining sale consideration at the time of registration, undermining the claim of readiness.

Supreme Court’s Observations and Judgment:

The Supreme Court bench of Justices PS Narasimha and Sandeep Mehta found significant flaws in the lower courts’ handling of the case. The key observations of the Court were:

• Fraudulent Nature of the Agreement:

The Court noted that the disputed sale agreement was created using blank stamp paper that bore the appellant’s thumb impression. There were large blank spaces and missing signatures on key pages, which indicated fraudulent activity. The Court concluded that the agreement had been concocted without the appellant’s knowledge.

• Irregularities in the Agreement:

The stamp papers had been purchased by the respondent, not the appellant, which raised further suspicion. Additionally, inconsistencies in the agreement, which was written in Gurmukhi, suggested it had been drafted after the appellant’s thumb impression was obtained.

• Plaintiff’s Conduct:

The plaintiff’s failure to communicate with the appellant for 16 months before the registration date demonstrated a lack of bona fides. The plaintiff made no effort to notify or engage with the appellant, further weakening his case.

• No Proof of Payment Readiness:

The Supreme Court emphasized that the plaintiff did not provide evidence of having the remaining sale consideration on the date of the registry. The lack of proof and mention of this in the plaintiff’s deposition diminished his claim of readiness to complete the transaction.

• Lower Court’s Errors:

The Court criticized the Trial Court, First Appellate Court, and High Court for overlooking critical evidence and failing to address the fraudulent nature of the agreement. The Supreme Court deemed their judgments perverse and unsound.

• Exercise of Article 136 Jurisdiction:

The Court invoked Article 136 of the Constitution, citing the serious errors in the lower courts’ findings and reasoning. The apex court ruled that the judgments of the lower courts were unsustainable given the evidence on record.

• Judgment and Conclusion:

The Supreme Court allowed Lakha Singh’s appeal, overturning the judgments of the lower courts. It declared that the sale agreement was fraudulent and unenforceable. The Court ruled that the appellant was not liable to perform the contract, reinforcing the need for strict scrutiny of agreements involving illiterateand vulnerable individuals.