An oral agreement to sell immovable property exceeding Rs. 10.00 lakhs and an option to purchase immovable property without a concluded agreement on material terms are not enforceable in law.

( 1 ) IN the suit for permanent injunction, seeking to restrain the defendants from selling or otherwise transferring Plot No. 48, admeasuring 25 acres of land situated at Kaventras Land, Sardar Patel Marg, Chanakya Puri, New Delhi (hereinafter referred to as "the suit property") without first offering the same to the plaintiff, defendant No. 2, by this IA, under Order 7, Rule 11, CPC prays for rejection of the plaint stating that the plaintiff has alleged that the defendants had entered into an oral agreement with the plaintiff to sell the suit property to the plaintiff for a sum of Rs. 24. 50 crores, further alleging that in terms of the said oral agreement and the subsequent discussion, the defendants had unequivocally and unconditionally undertaken an obligation to give the plaintiff the first option to purchase the suit property and that the plaintiff alleged to have acquired a legal right to enforce the agreement and also negative covenant regarding the said first option, further alleging that the plaintiff is ready and willing to perform his part of the agreement and the defendants are not performing their part of the agreement and that the defendants will sell or otherwise transfer the suit property in breach of the agreement with the plaintiff and contended that the present suit is not maintainable at law; that the suit and the entire documents on record filed by the plaintiff, which form the basis of the alleged claim in respect of the alleged contract, do not represent a concluded contract, that there merely existed an agreement to enter into an agreement between the plaintiff and the defendants, which is legally not enforceable; that by the said suit, the plaintiff is purporting inter alia to seek specific performance of the alleged oral agreement for sale of immovable property which is legally not maintainable in law; that the suit is liable to be rejected inasmuch as the same is barred by law; that by virtue of the provisions of Chapter XX-C of Income-tax Act, 1961, all agreement, claims for transfer of immovable property, when the value of such property exceeds Rs. 10. 00 lakhs, are compulsorily required to be reduced in writing and registered before the authorities; that all agreement exceeding on the date of the coming into force of the said provisions, viz. 1-10-1986, are also compulsorily required to be registered with the Income-tax Authorities within the stipulated period, that the alleged agreement, referred to by the plaintiff, has not been reduced into writing, nor has the same been registered/filed before the Income-tax Authorities as per law; that assuming that there was an agreement of first option, defendants gave the first option to the plaintiff by sending Telex dated 18-9-1986 and in the reply thereto, the plaintiff gave a conditional offer which was never accepted by the defendants; that the first option without agreement on material terms like price, time and alike, is not enforceable in law; that the agreement of option relied upon by the plaintiff, at best amounts to an agreement to negotiate or an agreement to enter into a contract which are both not enforceable in law.

( 2 ) FOR the purpose of attracting Order 7, Rule 11, CPC, it has to be seen whether the plaint discloses cause of action or not? In plaint para 4, it has been averred that ". . . . . . . . . . Shri Om Prakash Navani, Director of the plaintiff met the defendants 1 and 2 at Delhi on or about 2nd week of June, 1986. Talks were initiated by defendant No. 1 and 2 through defendant No. 3. The plaintiff offered Rs. 24. 50 crores which was accepted by Defendant Nos. 1 and 2. It was agreed that a formal agreement would be entered into between the parties shortly. . . . . . . . As far as the plaintiff was concerned, the price being settled the rest was a mere formality. " In para 5, it is averred that ". . . . . . . . . Defendant No. 2 stated that he was a man of his word and in any case, he was willing to make a further commitment on

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