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2023 Supreme(Cal) 1599

IN THE HIGH COURT AT CALCUTTA
AJOY KUMAR MUKHERJEE, J.
Sri Sourav Chowdhury - Appellant
Versus
Sri Nalini Gopal Banerjee @ N. G Banerjee, Since Deceased, rep. by Smt. Namita Banerjee & Ors. – Respondents
S.A 312 of 1999 with S.A 313 of 1999 with CAN 3 of 2023
Decided On : 03-10-2023

Advocates Appeared:
For the Appellant : Mr. Sagar Bandyopadhyay, Mr. Debdatta Saha, Mr. Subhamay Dewanji.
For the Respondents: Mr. Indrajeet Dasgupta, Ms. Puspita Bhowmick.

Oral agreements for transferring cooperative society flats are unenforceable without written documentation, and jurisdiction for such disputes is vested in the Registrar under the West Bengal Cooperative Societies Act.

Headnote:(A) West Bengal Cooperative Societies Act, 1983 - Sections 95(1)(b) and 134(2)(d) - Specific performance of contract - Plaintiff sought specific performance of an unproven oral agreement for sale of a flat, which was held to be unenforceable as there was no written contract and jurisdiction was barred under Cooperative Act - The First Appellate Court’s decree for specific performance was set aside. (Paras 17, 19, 20)

(B) Contract Act, 1872 - Section 25 - In the absence of payment of consideration, the alleged oral agreement is void - The existence of a valid agreement and delivery of possession corroborated by written authorization is essential. (Paras 5, 11, 12, 16)

Facts of the case:
The appeal arises from two related suits concerning ownership claims over a flat. The plaintiff claimed a right to specific performance based on an alleged oral contract for sale while the appellant sought eviction alleging lack of any valid agreement. The Trial Court dismissed the claim but the First Appellate Court reversed this judgment, leading to the present appeal.

Findings of Court:
The plaintiff's suit was held not maintainable as the agreement was not substantiated with evidence of consideration or formal contract, and no jurisdiction of civil court existed.

Issues: The main issues included whether verbal agreements suffice for transfer of a cooperative housing flat, and the enforceability of claims without written contracts.

Ratio Decidendi: The court highlighted that oral agreements for the sale of cooperative society flats are unenforceable unless formalities, including written consent and documentation, are met; jurisdiction to entertain such disputes lies with the Registrar under the act.

Result: The appeals are allowed, judgments of the First Appellate Court are set aside, the plaintiff's suit is dismissed, and the appellant has the right to eviction.

Table of Content
1. description of factual background of the legal dispute. (Para 1 , 2 , 3 , 4)
2. court's observations on agreements and possession rights. (Para 5 , 11 , 12)
3. submission of appeals based on previous court decisions. (Para 6 , 7 , 8)
4. arguments regarding the nature of the oral agreement. (Para 9 , 10)
5. court's assessment of contractual enforceability. (Para 13 , 14 , 15)
6. jurisdictional issues surrounding dispute under cooperative society act. (Para 16 , 18)
7. final decision on entitlement for eviction. (Para 19)
8. conclusion and order of the court. (Para 20 , 21)

JUDGMENT :

(Ajoy Kumar Mukherjee, J.)

1. The instant second appeal has arisen out of common judgment and decree dated 26th, September 1997 passed by the First Appellate Court reversing the common judgment and decree dated 20th December, 1996 passed by the Trial Court. One Nalini Gopal Banerjee is the plaintiff in Title Suit No. 17 of 1992 and defendant no. 1 in Title Suit No. 89 of 1994. Said Nalini Gopal filed Title Suit No. 17 of 1992 for specific performance of contract against defendants, (Smt. Manju Banerjee is defendant no.1 and Chetla Housing Co-operative society is defendant no. 2. Defendant no. 3 is the Secretary of the society) contending that defendant no.1 Smt. Manju Banerjee along with others formed a Housing Cooperative Society for the purpose of construction of multi-storeyed building comprising of several flats for residential purpose and after completion of the said building, one flat namely flat no. B-6/3, which is the suit property, was allotted to said defendant no.1. Further contention is that defendant no.1 at the material point of time did not have enough money to pay instalments as against the price of the flat and for that defendant no.1 offered to sell the flat to the plaintiff at a consideration of Rs. 60,000/- on condition that the plaintiff would pay the balance loan amount and thereafter on full payment, the defendant no.1 would arrange for transfer of flat through defendant no.2/ society in favour of aforesaid plaintiff.

2. Further contention of the plaintiff in the said suit is that said arrangement was duly approved by the defendant no.2/society and a Sum of Rs. 4,500/- was paid by plaintiff to defendant no.1 by cheque dated 21.06.1976 and subsequently a further sum of Rs. 11,000/- was paid by the plaintiff to the defendant no.1 and the husband of the defendant no.1 acknowledged the said amount by mentioning it as a loan. It has been stated that after completion of construction of the multi-storeyed building, the plaintiff was put to possession of the said flat by the defendant No.1 on 07.07.1976 and since then the plaintiff has been living in the suit flat by paying user charges. Plaintiff states that he had paid a sum of Rs. 41,945.20/- to the society as against the consideration money of the said flat as agreed upon in the name of defendant no.1. Defendant no. 2/society by it’s letter dated 25.05.1988 informed the plaintiff that the managing committee of the defendant no.2/ society had decided to offer the suit flat to the said plaintiff and asked for consent of the plaintiff and the plaintiff by his letter dated 03.06.1988 accepted the said offer. It is further alleged in the plaint that there had been several correspondences between the parties for completion of the transaction of payment of balance consideration money and despite the plaintiff being ready and willing to complete the transaction, on payment of the balances consideration money, the defendant no.1 had refused to execute the deed in his favour. Plaintiff further stated that on 23.10.1991, plaintiff received an intimation from the defendant no.1 that she had arranged to disburse the suit flat to defendant no.4 and on the basis of such information plaintiff filed aforesaid Title suit no. 17 of 1992 for specific performance of contract.

3. On the other hand the present appellant Sourav Chowdhury filed suit for eviction being T.S No. 89 of 1994 against s

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