An oral agreement lacks enforceability without valid consideration and conclusive proof, especially when contradicted by a non-binding MoU, justifying exemption from the doctrine of lis pendens.

JUDGMENT

HARISH VAIDYANATHAN SHANKAR, J.

1. The present appeal, filed under Order XLIII Rule 1 and Section 151 of the Code of Civil Procedure, 1908 1, read with Section 10 of the Delhi High Court Act, 1966 , assails the Order dated 02.06.20222passed by the learned Single Judge in CS(OS) No. 287/2022, titled ‘Earthz Urban Spaces Pvt. Ltd. vs. Ravinder Munshi & Ors.’.

2. By the Impugned Order, while the learned Single Judge directed issuance of summons to the Defendants/Respondents herein, the Plaintiff/Appellant’s application under Order XXXIX Rules 1 and 2 CPC for grant of an interim and temporary injunction was dismissed. In addition, the learned Single Judge held that the property bearing No. B-8, Pamposh Enclave, New Delhi-1100483would stand exempted from the applicability of the doctrine of lis pendens as embodied under Section 52 of the Transfer of Property Act, 1882 4.

BRIEF FACTS:

3. The Appellant’s case is that negotiations for the sale and purchase of the suit property commenced with the Respondents in April 2021. These discussions primarily took place through electronic means such as WhatsApp messages and Zoom meetings, owing to restrictions imposed during the COVID-19 pandemic.

4. The Appellant contends that a binding oral agreement was concluded on 27.04.2021, wherein the essential terms were settled, including a sale consideration of Rs. 26 crores and a three-month timeline for completion of the transaction.

5. Subsequently, on 02.06.2021, the parties executed a Memorandum of Understanding5. According to the Appellant, this MoU was intended only to facilitate the Respondents in securing the most favourable tax treatment and did not affect the binding nature of the oral agreement already concluded. The Respondents, however, rely upon the express clauses of the MoU to argue that it was non-binding in nature.

6. The Appellant claims to have acted in furtherance of the agreement by arranging finances through a loan and making part-payment of Rs. 12 lakhs on 11.08.2021. This payment, as alleged, comprised two cheques, Rs. 5 lakhs issued to Respondent No. 1 and Rs. 2 lakhs to Respondent No. 3, and a cash payment of Rs. 5 lakhs to Respondent No. 2. The Respondents, however, dispute both the receipt and encashment of these amounts.

7. The Appellant further alleges that by late August 2021, it came to light that the Respondents were seeking to renege from the agreement and instead negotiate with third parties for a higher price. In response, the Appellant issued a legal notice dated 27.08.2021, calling upon the Respondents to perform their obligations. The Respondents, by reply dated 30.08.2021, categorically denied the existence of any concluded agreement and also refuted receipt of the alleged advance payment.

8. Thereafter, the Appellant approached the Delhi High Court Mediation and Conciliation Centre for Pre-Litigation Mediation. However, since the Respondents refused to participate, the mediation was declared a “Non-Starter” vide Conciliation Report dated 04.10.2021.

9. Premised on these, the Appellant instituted CS(OS) No. 287/2022 before the learned Single Judge, seeking specific performance of the oral agreement to sell dated 27.04.2021 and the MoU dated 02.06.2021 in respect of the suit property, seeking the following substantive relief:

“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