Point of Law: Oral agreement - in order to determine the binding nature of a contract between the parties, the mere acceptance of the sale price is not sufficient.

JUDGMENT :

1. The plaintiff/Ashwani Kumar has filed the present suit for specific performance of an oral agreement to sell property bearing No.E-63, Vasant Marg, Vasant Vihar, New Delhi 110057, measuring 1240 sq. yds. (hereinafter referred to as the “Suit Property”). The four defendants are the owners of the suit property. It is to be noted that summons in the suit had not been issued as Ms.Malavika Rajkotia, learned counsel for the defendant No.1, appearing on advance notice, submitted that the suit was without cause of action and deserves to be rejected. In between, the parties were referred to the Delhi High Court Mediation and Conciliation Centre to enable them to work out an amicable settlement. However, the Mediation Centre reported that the efforts had failed.

2. Mr. Jayant Mehta, learned senior counsel for the plaintiff, submitted that the question of maintainability could be raised by the defendants after the summons and the notice were issued and if necessary, a preliminary issue in this regard could also be framed. There was no occasion to allow the defendants to raise objections to the maintainability of the suit without even the defendants being summoned in this suit. It was submitted that the defendants could not be heard at this juncture. It was also submitted that the question of existence and non-existence of an oral agreement would be a matter of trial and evidence. Relying on the various emails placed on the record at pages No.6 to 28 and 30 to 34 in the “Documents Folder” of the E-file filed by the plaintiff, it was submitted that it was clear that the defendants were interested in selling the suit property and the plaintiff was interested in its purchase. The sale price was fixed at Rs.70 crores. However, subsequently on 10th November, 2020, the defendant No.1 became dishonest and sought a higher sale consideration of Rs.80 crores, which derailed the entire process. It was submitted by the learned senior counsel that at all times, the plaintiff was ready and willing to perform its part of the contract and had kept the required amount in the bank for immediate payment of the consideration, as was reflected in the Certificate dated 11th January, 2021 issued by the State Bank of India.

3. Learned senior counsel for the plaintiff also pointed out that the law recognized oral agreements to sell and the courts had enforced such oral agreements directing the vendor to execute sale deeds in terms of the said oral agreements. Learned senior counsel argued that the court can consider only the averments made in the plaint and look into the documents that were relied upon by the plaintiff to determine this question as to whether there was a cause of action disclosed, and could not consider the stand taken by the defendants at this juncture. Reliance has been placed on several judgments being, Kollipara Sriramulu v. T. Aswatha Narayana, (1968) 3 SCR 387, Aloka Bose v. Parmatma Devi, (2009) 2 SCC 582, Brij Mohan v. Sugra Begum, (1990) 4 SCC 147, Nathulal v. Phoolchand, (1969) 3 SCC 120, Devender Singh v. Malik Buildcon Pvt. Ltd., 2018 SCC OnLine Del 10920, Ravinder Singh v. Chuckles Kohli, 2010 SCC OnLine Del 4271 and Chuckles Kohli v. Ravinder Singh, 2012 SCC OnLine Del 2135, in support of these contentions. In this regard, it was also submitted that the plaintiff had filed an application under Order VII Rule 14(3) the Code of Civil Procedure, 1908 (“CPC” for short) seeking to place on record a recorded conversation between the plaintiff, Sh.Virendra Sahlot and the defendants No.1 and 2, along with its transcript, to show that in actual fact an oral agreement had been reached between the parties, which the plaintiff could legitimately seek to enforce. Thus, it was submitted that the suit was maintainable and the summons be issued, the pleadings be completed and the interim protection be granted restraining the defendants from creating any third party interests in the suit property.

4. Learned counsel for the defendant No.1