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Hari Steel and General Industries Ltd. v. Daljit Singh

Civil Appeal · 2019 INSC 569Decided 24 Apr 2019
Civil Appeal No. 4265 of 2019
Justice R. Banumathi · Justice R. Subhash Reddy

Background

The respondents (buyers) sued the appellant company and its managing director for specific performance of an agreement to sell a commercial property and an associated car-dealership business (Toyota franchise) in Delhi for about Rs. 55.5 crores. The appellants disputed the genuineness of the agreement, alleging that key pages recording receipt of Rs. 3 crores in cash had been forged and substituted. Relying on statements made by the appellants' lawyer in an unrelated bail application and on the company's balance sheets, the buyers sought a decree straightaway on the basis of alleged "admissions," without a full trial. A single judge of the Delhi High Court rejected this request, but a Division Bench reversed that decision and decreed the suit, directing the buyers to pay the balance amount and the sellers to execute the sale deed.

Decision Breakdown

The Supreme Court held that a judgment on admissions under Order XII Rule 6 CPC can only be given when the admission is clear, categorical, and unconditional, not when there is a genuine factual dispute going to the root of the case, as here (whether Rs. 3 crores in cash was actually paid, and whether certain pages of the agreement were forged). Since the appellants had consistently disputed the authenticity of key parts of the agreement and raised a serious triable issue, the Division Bench had erred in treating isolated statements and balance-sheet entries as unconditional admissions sufficient to decree the suit without trial. The Court set aside the High Court's Division Bench judgment, restored the single judge's order dismissing the application, and directed that the dispute be resolved only after a full trial with evidence from both sides.

Lesson Learnt

Courts should decide property and contract disputes on genuinely contested facts only after a full trial with evidence: a party cannot obtain an instant decree on "admissions" unless those admissions are clear, unconditional, and do not leave open a real dispute about the facts of the case.

Official source (sci.gov.in)View Judgment (PDF)

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