High Court Of Delhi
PELIKAN ESTATES PVT.LTD. - Appellant
Versus
KAMAL PAL SINGH - Respondent
C.S.(O.S.) 904 of 2004
Decided On : 08/20/2004
SPECIFIC PERFORMANCE - ORAL AGREEMENT - AIR 1968 SUPREME COURT 1028, 61 (1996) DELHI LAW TIMES 790, 63 (1996) DELHI LAW TIMES 52, AIR 1981 DELHI 291 - The court discussed the essential requirements for the formation of a contract, the need for a written agreement for the sale of immovable property, and the burden of proof on the plaintiff to establish a concluded oral agreement for the sale of immovable property. The judgment emphasized the importance of vital and fundamental terms being concluded between the parties orally and the subsequent written agreement incorporating those terms. The court rejected the application for ad interim injunction and directed the defendants to file the agreement to sell and lease deed in the registry of the court.
Fact of the Case:
The case involved an action for specific performance related to a property in New Delhi. The plaintiff claimed that an oral agreement had been reached with the defendants for the sale of the property, while the defendants denied any such agreement.
Finding of the Court:
The court found that no prima facie case existed for the evolution of a binding contract for the sale of the property. It rejected the application for ad interim injunction and directed the defendants to file the agreement to sell and lease deed in the registry of the court.
Issues: The central question was whether an oral agreement had been reached between the parties for the sale of the property, and whether the plaintiff had established a prima facie case for specific performance.
Ratio Decidendi: The judgment emphasized the need for vital and fundamental terms to be concluded between the parties orally and the subsequent written agreement incorporating those terms. It also highlighted the burden of proof on the plaintiff to establish a concluded oral agreement for the sale of immovable property.
Final Decision: The court rejected the application for ad interim injunction and directed the defendants to file the agreement to sell and lease deed in the registry of the court.
( 1 ) A CHALLAN HAS BEEN FILED SHOWING THAT A SUM OF RS. 8,72,565/- HAS BEEN DEPOSITED IN THE TREASURY. COUNSEL FOR THE PETITIONER UNDERTAKES THAT COURT FEES SHALL BE AFFIXED ON THE PLAINT WITHIN SEVEN DAYS.
( 2 ) THE APPLICATION STANDS DISPOSED OF IN THESE TERMS. IA NO. 5341/2004
( 3 ) THIS ACTION FOR SPECIFIC PERFORMANCE RELATES TO PROPERTY BEARING MUNICIPAL NO. 18, HAILEY ROAD, NEW DELHI. THE PLAINTIFF ASSERTS THAT AFTER NEGOTIATIONS BETWEEN THE PARTIES, AN ORAL AGREEMENT HAD BEEN ARRIVED AT BETWEEN THEM ON 28. 7. 2004. THESE AVERMENTS ARE TO BE FOUND IN PARAGRAPH 5 OF THE PLAINT WHICH READ AS FOLLOWS:
"that AFTER NEGOTIATIONS BETWEEN THE PARTIES AN ORAL AGREEMENT WAS ARRIVED AT BETWEEN THE PARTIES ON 28. 7. 2004 BY THE DEFENDANTS THROUGH DEFENDANT NO. 3 WHEREBY ALL THE DEFENDANTS AGREED TO SELL THE LEASEHOLD BUILT UP PROPERTY ADMEASURING 1872 SQ YARDS AT 18, HAILEY ROAD, NEW DELHI, TO THE PLAINTIFF FOR A TOTAL CONSIDERATION OF RS. 8. 25 CRORES TO BE PAID IN THE FOLLOWING MANNER:- i) RS. 1. 65 CRORES TO BE PAID BY THREE PAY ORDERS OF RS. 55 LAKHS EACH DRAWN IN FAVOUR OF DEFENDANTS 1,2 AND 3 ON OR BEFORE 12. 8. 2004. (II) BALANCE RS. 6. 60 CRORES TO BE PAID WITHIN 90 DAYS FROM 12. 8. 2004 AGAINST DELIVERY OF VACANT POSSESSION OF THE SAID PROPERTY AND EXECUTION OF SALE DEED WHICH IS TO BE EXECUTED AFTER RECEIVING PERMISSION FROM Landdo. IN ADDITION TO THE AFORESAID CONSIDERATION, THE PLAINTIFF IS ALSO LIABLE TO PAY ALL THE CHARGES FOR TRANSFER AND CONVERSION CHARGES AND STAMP DUTY REQUIRED FOR EXECUTION OF THE SALE DEED. "
( 4 ) THE PLAINTIFF FURTHER ASSEVERATES THAT THE PAYMENT OF THE ALLEGED EARNEST MONEY OF RS. 1. 65 CRORES WAS DEFERRED TO 12th AUGUST, 2004 ON THE REQUEST OF DEFENDANT NO. 3 THAT THAT THIS DATE WAS AUSPICIOUS FOR THE TRANSACTION. THE PLAINTIFF HAS FILED PHOTOCOPIES OF THREE PAY ORDERS IN FAVOUR OF EACH OF THE DEFENDANTS FOR A SUM OF RS. 55 LAKHS DATED 9. 8. 2004 AND DRAWN ON THE CANARA BANK, CONNAUGHT CIRCUS, NEW DELHI BRANCH AGGREGATING TO THE SUM OF RS. 1. 65 CRORES. THE PLAINTIFF HAS ALSO PLACED ON RECORD THE DRAFTS OF A PROPOSED AGREEMENT TO SELL WHICH IS STATED BY IT TO CONTAIN THE HANDWRITING OF DEFENDANT NO. 3. OTHER DOCUMENTS PURPORTING TO HAVE BEEN EDITED BY THE SAID DEFENDANT AND HIS WIFE HAVE ALSO BEEN PLACED ON RECORD IN ORDER TO SHOW THAT THERE WERE ACTIVE NEGOTIATIONS BETWEEN THE PARTIES. IT IS FURTHER ASSEVERATED THAT IN A TELEPHONIC CONVERSATION BETWEEN THE PLAINTIFF AND DEFENDANT NO. 3, THE LATTER INFORMED THE PLAINTIFF ON 12. 8. 2004 THAT THE DEFENDANTS HAD DECIDED NOT TO SELL THE PROPERTY TO THE PLAINTIFF. THIS RESULTED IN A LEGAL NOTICE BEING ISSUED TO THE DEFENDANTS WHICH HAD THE CONSEQUENCE OF THE LODGING OF CAVEAT NO. 1240/2004 BY THE DEFENDANTS.
( 5 ) THE DEFENDANTS CASE IS THAT DEFENDANT NO. 3 HAS TO UNDERGO DIALYSIS EVERY SECOND DAY AND HIS HEALTH PRECLUDE HIM FROM PARTICIPATING IN THE ACTIVE NEGOTIATIONS DEPICTED BY THE PLAINTIFF. MRS. NALINI SINGH WIFE OF DEFENDANT NO. 3 IS PRESENT IN COURT. SHE DENIES THAT THE AGREEMENT TO SELL CONTAINS THE HANDWRITING OF EITHER HER HUSBAND OR HERSELF OR OF ANY OTHER PERSON KNOWN TO THEM. HER ANSWER IS THE SAME IN RESPECT OF OTHER DOCUMENTS WHICH THE PLAINTIFF ASSERTS CONTAIN HANDWRITING OF DEFENDANT NO. 3. LEARNED COUNSEL FOR THE DEFENDANT STATES THAT HE HAS RECEIVED CATEGORICAL INSTRUCTIONS FROM DEFENDANT NO. 3 AND HIS WIFE THAT NO PARLEYS TOOK PLACE BETWEEN THE PLAINTIFF AND ANY OF THE DEFENDANTS. HE ASSERTS THAT THE PROPERTY HAS BEEN ON THE MARKET FOR SOME TIME AND THE DOCUMENTS WHICH ARE CLAIMED TO HAVE BEEN DELIVERED BY THE DEFENDANT TO THE PLAINTIFF MUST HAVE BEEN PROCURED BY THE LATTER FROM SOME OTHER SOURCE.
( 6 ) THE CENTRAL QUESTION TO BE INVESTIGATED IS WHETHER AN ORAL AGREEMENT HAD BEEN ARRIVED AT BETWEEN THE PARTIES I. E. WHETHER THE ALLEGED NEGOTIATIONS HAD REMAINED INCHOATE OR HAD FRUCTIFIED INTO CONSENSUS AD IDEM ON ALL THE INGREDIENTS NECESSARY FOR THE FORMATION OF A CONTRACT. LEARNED COUNSEL FOR THE PLAINTIFF
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