IN THE HIGH COURT OF DELHI AT NEW DELHI
Amit Bansal, J.
Earthz Urban Spaces Pvt Ltd. - Plaintiff
Versus
Ravinder Munshi & Ors. – Defendants
CS(OS) 287 of 2022
Decided On : 02-06-2022
Specific Performance - Oral Agreement to Sell - Code of Civil Procedure, 1908 (CPC) - Section 149 - Order XXXIX Rules 1 & 2 - Transfer of Property Act, 1882 - Section 52 - MoU dated 2nd June, 2021
Fact of the Case:
The plaintiff filed a suit for specific performance of an 'Oral Agreement to Sell' and an MoU for a property. The defendants opposed, claiming no oral agreement and that the MoU was non-binding. The court found that the WhatsApp messages did not establish an oral agreement, the MoU was non-binding, and the plaintiff failed to prove payment. The court exempted the property from the doctrine of lis pendens.
Finding of the Court:
The court found that the plaintiff failed to establish the existence of an oral agreement to sell and that the MoU was not enforceable. The court dismissed the application for temporary injunction and exempted the property from the doctrine of lis pendens.
Issues: The issues revolved around the existence of an oral agreement to sell, the enforceability of the MoU, and the proof of payment by the plaintiff.
Ratio Decidendi: The court held that the WhatsApp messages did not establish an oral agreement, the MoU was non-binding, and the plaintiff failed to prove payment, leading to the dismissal of the application for temporary injunction and exemption of the property from the doctrine of lis pendens.
Final Decision: The court dismissed the application for temporary injunction and exempted the property from the doctrine of lis pendens.
JUDGMENT :
AMIT BANSAL, J.
I.A. 7930/2022 (u/S 149 CPC)
1. Deficient court fee has been paid on behalf of the plaintiff.
2. The application stands disposed of.
CS(OS) 287/2022, I.A. 7928/2022 (O-XXXIX R-1 & 2 of CPC)
3. The present suit has been instituted for specific performance of ‘Oral Agreement to Sell’ entered into on 27th April, 2021 and the Memorandum of Understanding (‘MoU’) dated 2nd June, 2021 in respect of the ‘suit property’ bearing no. B-8, Pamposh Enclave, New Delhi-110048. The prayer in the suit is set out below:
“a) Pass a Decree of Specific Performance directing the Defendants to jointly and severally fulfill their part of obligations under the Agreement to Sell dated 27.04.2021, MoU dated 02.06.2021 as well as subsequent electronic and oral agreement(s) and execute the Sale Deed(s) in respect of the property bearing No. B-8, Pamposh Enclave, New Delhi - 110048 in favour of the Plaintiff and/or its Nominee(s), against the payment of the balance sale consideration and as per law”
4. Along with the plaint, the plaintiff has also filed an application under Order XXXIX Rules 1 & 2 of the Code of Civil Procedure, 1908 (CPC), seeking the following reliefs:
“i pass an ex-parte ad-interim order thereby restraining the Defendants, their agents, assigns, nominees, legal heirs, representatives etc. from alienating, transferring, mortgaging, parting with possession or creating any third party interest in any manner whatsoever in the property bearing No. B-8, Pamposh Enclave, New Delhi - 110048;
ii pass a temporary injunction thereby restraining the Defendants, their agents, assigns, nominees, legal heirs, representatives etc. from alienating, transferring, mortgaging, parting with possession or creating any third-party interest in any manner whatsoever in the property bearing No. B-8, Pam posh Enclave, New Delhi - 110048;”
5. Counsels for the defendants appear on advance notice and oppose the issuance of summons in the present suit.
6. Counsel for the plaintiff has placed reliance on the various transcripts of the WhatsApp messages exchanged between the parties on 21st April, 2021 and 27th April, 2021 to contend that an ‘Oral Agreement to Sell’ was arrived at between the parties. Reliance has also been placed on (i) the MoU entered into between the plaintiff and the defendants, (ii) the legal notice dated 27th August, 2021, sent on behalf of the plaintiff to the defendants seeking specific performance of the oral agreement to sell and (iii) the reply dated 30th August, 2021 to the aforesaid legal notice on behalf of the defendants no.1 and 2.
7. Based on the aforesaid, counsel for the plaintiff submits that there was a valid oral agreement to sell between the parties and therefore, the present suit for specific performance of the aforesaid agreement would be maintainable and summons ought to be issued in the suit.
8. Senior counsels appearing on behalf of the defendants submit that there was no oral agreement entered into between the parties. Further, even if it is assumed that an oral agreement to sell was entered into between the parties, the same stood superseded by the MoU dated 2nd June, 2021. The terms of the MoU make it clear that it was a non-binding document between the parties and could not be enforced in a court of law. It is further contended that the plaintiff has suppressed the public notice dated 26th August, 2021 issued on behalf of the plaintiff in respect of the aforesaid property, which is purely premised on the MoU dated 2nd June, 2021. Even in the aforesaid legal notice sent by the plaintiff, no reference has been made to any oral agreement to sell, it is completely based on the MoU dated 2nd June, 2021. It is further submitted that till date not a penny has been received from the plaintiff in respect of the proposed transaction. Based on the aforesaid averments, it is submitted that even if summons were to be issued in the present suit, it should be clarified that the doctrine of lis pendens as provided in Sect
AI
The main legal point established is that the existence of an oral agreement must be proven, and non-binding agreements cannot be enforced. Additionally, the plaintiff must provide evidence of payment....
Point of law: specific performance of oral Agreement of sale – Not proved - In a case of specific performance of contract, a greater degree of certainty is required and it demands a clear, definite a....
Point of law: While scrutinizing the plaint averments, it is the bounden duty of the trial Court to ascertain the materials for cause of action. The cause of action is a bundle of facts which taken w....
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.
Point of law : While scrutinizing the plaint averments, it is the bounden duty of the trial Court to ascertain the materials for cause of action. The cause of action is a bundle of facts which taken ....
An oral agreement for the sale of immovable property requires proof of consideration and a concluded contract to be enforceable under the Indian Contract Act.
Settlement terms must be in writing and signed by the parties for a decree to be passed.
Appellate courts must uphold trial court findings unless explicitly challenged; sales during ongoing litigation violate the principle of lis pendens.
An oral agreement is valid for specific performance if made with free consent and lawful consideration, separate causes of action do not bar subsequent suits.
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