Specific performance of agreement to sell

When a party seeks a decree of specific performance for the sale of immovable property based solely on an oral agreement, the onus is on that party to demonstrate that there was a mutual agreement and consensus between both parties regarding the terms of the oral contract

A person entering into an oral agreement has to prove the oral agreement according to the definition of agreement in Section 2(h) of the Contract Act, 1872

A party claiming the existence of an oral agreement must clearly specify the date, time, place, and names of witnesses in their pleadings, such as the plaint or written statement

These requirements are sine qua non to prove an oral agreement to sell.

Alleged agreement to sell lacked mandatory requirements under Arts.17 and 79 of Qanun-e-Shahadat, 1984 and the same could not be used as evidence

Continuation of proceedings before Trial Court would be nothing but futile exercise of abuse of process of Court, which could not be allowed at the expense of public time, which should be consumed by Court meaningfully in other matters requiring its urgent attention and serious consideration

High Court set aside orders passed by Trial Court and Lower Appellate Court and rejected the plaint filed by respondent / plaintiff

Constitutional petition was allowed in circumstances.

Scriber of a document can only be a competent witness if he has put his signature as an attesting witness of the document and not otherwise

Name of scriber was written as scriber, who did not sign the agreement as an attesting witness rather put his signature as Wasiqa Nafees, thus, he could not be qualified as a marginal witness.

The discretionary relief can be extended to a person whose actions are anchored in bona fide while pursuing a contract, and he is seen to be making genuine efforts to perform his part of the agreement

Anyone whose action speaks otherwise will not be held entitled to such a relief.

Suit filed by appellant/plaintiff was dismissed by High Court as first page of the agreement did not contain signatures and thumb impression

Validity

If first page of agreement was taken out of consideration, as it did not contain signatures/thumb impressions of any of the parties as well as of the witnesses, the suit for specific performance could not be decreed

Supreme Court declined to interfere in findings of High Court which were the result of thorough examination of documentary as well as oral evidence

Appeal was dismissed.

In a suit for specific performance of agreement to sell, it is always of paramount consideration that plaintiff seeking equitable remedy of specific performance must be always willing and ready to perform his part of contract, and his conduct must satisfy the court that he is entitled to seek relief

Tests to be satisfied are his ability and readiness and willingness

Wisdom behind directing vendee deposit balance sale consideration is not only aimed to verify vendee's seriousness but it also safeguards rights of vendor

Such direction strikes a balance between two contracting parties.

Suit for specific performance instituted by the petitioner was dismissed by the trial as well as appellate courts concurrently

Contention of the petitioner was that since the scribe of the document had been produced, therefore, requirement of Arts. 17 and 79 of the Qanun-e-Shahdat, 1984 (Order) had been fulfilled

Validity

Out of four witnesses to the document only one attesting witness was produced, who too was disbelieved by the courts below and there was no explanation for non-production of the other marginal witnesses

Mandatory requirement of Art. 79 of the Order had not been met as such document could not be proved nor could the petitioner produce admissible or credible evidence to prove the existence of any bargain of sale between the parties or about the payment for consideration, thus, the opinion of expert even if brought on record could not serve any purpose as a substitute for the mandatory requirements of law of evidence

Testimony of the scribe could not be equated with that of an attesting witness as both of them had signed the document in different capacities and with a different state of mind and such scribe did not meet the requirement of Art. 79 of the Order

Adverse presumption under Art. 129(g) of the Order against the person intending to prove the document had to be drawn against the petitioner

Petitioner could not make out any case for interference in the concurrent findings of facts recorded by the courts below and the findings of the courts below were based on correct analysis and appreciation of evidence

Civil revision was dismissed, in circumstances.

This is a discretionary relief and even in case where agreement to sell has been proved, exercise of discretion can be withheld by Court.

Petitioner was plaintiff/tenant in suit property and contended to be owner in possession on the basis of agreement to sell

Lower Appellate Court passed eviction order against petitioner on the basis of ejectment proceeding initiated by respondent / defendant / landlord

Validity

Original tenancy was not disputed and plaintiff/tenant took the defense that he had purchased the property through a sale agreement

Onus to prove a genuine and bona fide sale transaction was on plaintiff/tenant to avoid adverse consequences mentioned in Art. 114 of Qanun-e-Shahadat, 1984, [an estoppel]

Rule enunciated through judgments of Superior Courts was that in such a situation, first possession should be delivered to landlord and then tenant could contest his case for specific performance

High Court in exercise of Constitutional jurisdiction declined to interfere in judgment passed by Lower Appellate Court as no illegality was pointed out by plaintiff/tenant

High Court directed that demised premises should be vacated or writ of possession would be issued by Rent Controller acting as Executing Court

Constitutional petition was dismissed, in circumstances.

At the time of execution of agreement to sell, the respondent/defendant handed over possession of suit property to appellant/ plaintiff

Trial Court and Lower Appellate Court without determining title of suit property dismissed suit and appeal filed by appellant/plaintiff on the ground that respondent/defendant did not have any title in suit property

Validity

In the event a finding would be given that title of respondent/defendant to suit property was deficient, the appellant/ plaintiff was to be indemnified to the extent of losses that had occurred to him on account of respondent's/defendant's improper title to suit property

To decide such fact and enforcement of such term available in the agreement between the parties, issue was to be determined in terms of S. 19 of Specific Relief Act, 1877

High Court in exercise of jurisdiction under O. XLI, R. 25, C.P.C. framed additional issues and remanded the matter to Trial Court for recording additional evidence on the issues so framed

High Court directed Trial Court to return the evidence together with its findings thereon and reasons thereof to High Court for decision on appeal

Second Appeal was remanded accordingly.

Appellant / plaintiff got an apartment booked with respondent / defendant who despite receiving a substantial amount had cancelled the booking

Contention of respondent / defendant was that the apartment had further been sold to a third party

Trial Court decreed the suit in favour of appellant / plaintiff but Lower Appellate Court dismissed the same

Validity

Person seeking specific performance has to establish that he is enthusiastic and vehement to act upon his obligations as per the contract whereas the opponent is refusing or delaying its execution

Valid contract between the parties has an essential condition of consensus ad idem for settling all the terms of contract

Both the parties had consented to the terms and conditions of application form

Witness produced by respondent / defendant admitted to have not exhibited any original document regarding allotment of apartment in question to third party

Respondent / defendant did not receive any payment from third party in installment, whereas third party admitted to have paid price in lump sum

Such fact created serious doubts in the version of respondent / defendant and Trial Court considered such fact but Lower Appellate Court ignored the same

Subsequent vendee avowing bona fide intention could not be absolved from the duty of making investigations as to title of vendor, which inquiries included but were not limited to inviting objections through public notices in order to determine that there was no deception or foul intentions in transactions and he / she acted in good faith and with bona fide intention without knowledge or notice of earlier sale agreement at the time of his transaction and proceeded in the matter as a person of ordinary prudence before signing on the dotted line

High Court set aside judgment and decree passed by Lower Appellate Court and restored that of Trial Court

Second appeal was allowed accordingly.

Predecessor of the respondents filed suit alleging that the predecessor of petitioners/defendant purchased the suit house in auction; that no proprietary rights were granted to him by settlement department; that predecessor of respondents purchased the same house from the predecessor of petitioners through agreement to sell but he refused to execute the sale deed

Suit was concurrently decreed

Validity

Respondent/plaintiff admitted in plaint that sale deed could not be registered because proprietary rights of the suit property were not conferred by the Settlement Department

Evacuee property was owned by provincial government but the respondents had not impleaded the Settlement Department/Chief Settlement Commissioner as party in suit

Revision petition was allowed and suit of the respondents was dismissed, in circumstances.

Appellant/plaintiff sought specific performance of agreement to sell regarding suit property on the plea that he was ready to perform the agreement

Trial Court dismissed the suit to the extent of specific performance of agreement to sell and decreed the same to the extent of recovery of earnest money

Validity

Crossing out clause of right of specific performance before execution of agreement, indicated that while setting the terms, at the final stage, parties agreed and they were mindful that consequence of breach was not specific performance but penalty

Parties at the time of execution were not to get agreement specifically performed but showed contentment to penalty clauses

Throughout trial no plausible evidence could be given by appellant/plaintiff that he ever had balance consideration amount at the time of filing the case

Remaining consideration amount was not deposited and no attempt was made to bring on record statement of Bank account or any other evidence to show that appellant/plaintiff had adequate money at the requisite time

To seek discretionary and equitable relief of specific performance it was incumbent upon appellant/plaintiff to show his readiness, willingness as well as capacity to perform agreement

High Court in exercise of appellate jurisdiction under S.100, C.P.C. declined to interfere in concurrent findings of facts by two Courts below as no material issue could be determined nor any substantial defect or error in procedure could be shown by appellant/plaintiff

Second appeal was dismissed, in circumstances.

Petitioner/defendant applied to the authorities to change his address, to that of respondent/plaintiff after he had entered into agreement in question

Intention behind change of address was that all future correspondence regarding suit plot should be made by authorities at the address of respondent/plaintiff

Subsequent to the agreement, installments for suit plot were also paid by respondent/plaintiff and receipts in that regard were duly exhibited

Petitioner/ defendant had filed application before authorities for transfer of suit plot in favour of nominee of respondent/ plaintiff

Execution of the agreement between parties was duly proved through production of its marginal witness, Notary Public and stamp vendor

High Court declined to interfere in concurrent findings of facts by two Courts below as there was no anomaly or contradiction in evidence produced by respondent/plaintiff nor there was any jurisdictional infirmity or misreading or non-reading of evidence by Courts below

Revision was dismissed in circumstances.

Claim for specific performance of contract seeks grant of discretionary relief in terms of Ss. 12 & 22 of Specific Relief Act, 1877

Such relief has to be granted only in the interest of fairness and to dispense justice in accordance with law

One who seeks equity must do equity

Conduct of claimant before and after filing of suit should be such that it does not disentitle him from being recipient of equitable relief.

Where plaintiff is seeking enforcement of a contract in relation to immovable property and any consideration in lieu of such property remains outstanding, even if due to steps that remain to be taken on part of the counter party in such contract, it is for the plaintiff to seek permission to deposit balance consideration or valid financial security in lieu thereof to establish within the meaning of S.24(b) of Specific Relief Act, 1877, that he is not incapable of performing his/her end of the bargain

Non-deposit of balance consideration after seeking court permission would not result in automatically dismissal of suit.

Agreement without consideration void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law

Contract caused by mistake of one party as to matter of fact

Scope

Dispute arose between the defendant and plaintiff due to consolidation proceedings

Dispute resulted into litigation, which remained pending before various forums

Plaintiff alleged that the parties entered into compromise regarding land measuring 20 kanals

Defendant failed to attest mutation in furtherance of compromise despite several requests

Plaintiff in consequence of the said denial filed suit for declaration and specific performance with consequential relief

Contention of defendant was that compromise was not enforceable because no money was paid to the defendant hence no consideration was given to buy the promise of the defendant; that the claim of plaintiff was doubtful and that even without the alleged forbearance the defendant would have successfully obtained his land

Validity

Concept of consideration as envisaged in S.2(d) of the Contract Act, 1872 did not necessarily mean or imply any monetary benefit or anything susceptible to valuation in terms of money

Defendant had admitted litigation with the plaintiff regarding consolidation proceedings and had further admitted that he had promised to give the suit land to the plaintiff

Evidence clearly reflected that at the desire of the defendant and because of abstinence or forbearance on the part of the plaintiff, litigation having spread over decades had ended

Defendant had failed to prove fraud with respect to the agreement and make out a case requiring interference in the findings of two Courts below

Revision petition was dismissed, in circumstances.

Petitioner-plaintiff sought specific performance of agreement to sell executed by respondent-defendant who had onward sold the property to a third person

Lower Appellate Court directed petitioner-plaintiff to deposit balance consideration amount in Court

Validity

No justification existed to bound down petitioner-plaintiff to deposit a massive sale amount, who purportedly had already paid healthy amount but was out of picture to receive any benefit

Petitioner-plaintiff was yet to prove not only his own case but also to rebut stance of his vendor, besides to shatter claim of third party

Deposit of balance amount was not in aid of justice to either promote case of plaintiff nor even beneficial to other party who till the time was disputing settlement of sale and vendee could not be forced in such behalf

High Court set aside the order passed by Lower Appellate Court directing petitioner-plaintiff to deposit remaining balance consideration

Constitutional petition was allowed, in circumstances.

When authenticity of sale agreement is seriously disputed, onus is on the person who produces it to prove the agreement by at least examining two attesting / marginal witnesses.

Trial Court dismissed the suit on the ground that plaintiff failed to deposit balance consideration amount during the time fixed by Court

Validity

When the time fixed in sale agreement had approached, plaintiff should have been ready and had shown his bona fide by depositing total sale consideration in Court to demonstrate his readiness for performance of sale agreement

Plaintiff issued legal notice at his own on 24-4-2007 for performance of sale agreement that too with certain conditions in respect of which he was required to issue that notice in August, 2005

Plaintiff first time intimated his intention with some excuses in April, 2007 after about two years of the date of his obligation

Defendant vigilantly issued legal notice in September, 2005 i.e. the same year in which sale agreement was executed

Defendant demanded performance of agreement but it was plaintiff who put forth conditions in his belated response dated 18-1-2006 and in further belated legal notice dated 24-4-2007

Inference against plaintiff was that he was not willing all along to deposit sale consideration

Ample discretion lay with Court to deny relief to a purchaser of an immovable property keeping in view circumstances of each case as he could not claim specific performance of a contract as a matter of right even where it was lawful to do so

High Court directed defendant to return earnest money along with interest / markup at Bank rate calculated from February, 2005 till the date of payment in two equal installments within a period of six months

High Court modified judgment and decree passed by Trial Court

Appeal was dismissed accordingly.

Plaintiff sought specific performance of agreement executed by deceased father of defendant with regards to suit property

Defendant claimed that he was bona fide owner of suit property and he had further sold suit property

Validity

At no stage legality and authenticity of said lease had been called in question by any party

When no such issue was framed, even proposed, then Trial Court was under no legal obligation to discuss such issue and give its findings

Appellate court could not remand matter on basis of such fact that never found mention in pleadings of parties

Claim of plaintiff was based on sale agreement whereas claim of defendant was based on registered document i.e., 'B' lease and sale deed respectively

Unregistered sale agreement did not confer any ownership right and it could not be given preference over a registered document

Deceased father of defendant did not fulfil his commitment as stipulated in sale agreement and plaintiff was provided remedy to claim compensation as agreed by himself i.e., plaintiff could not penalize defendant for alleged misdeeds and contraventions of terms and conditions of sale agreement committed by deceased father of defendant

High Court in exercise of appellate jurisdiction set aside judgment and decree passed by Lower Appellate Court

Second appeal was allowed in circumstances. [Paras. 15, 21, 24 & 27 of the judgment]

Plaintiff filed suit for possession through specific performance claiming that predecessor-in-interest/father of defendants/father-in-law of plaintiff on basis of agreement to sell and affidavit sold out suit property to him, and after paying whole consideration, he obtained possession thereof, but after his death, his legal heirs refused to execute sale deed under said agreement

Defendants contested the suit on ground that said agreement to sell and affidavit were fraudulent, forged and fabricated, and their father had neither sold out suit property to plaintiff nor received any consideration

Trial court decreed the suit

Contentions raised by defendants were that plaintiff had failed to prove both execution of the agreement and mode of payment and proved the execution of the agreement through marginal witnesses

Validity

Plaintiff did not disclose date of transaction of sale, payment of consideration and names of witnesses neither in plaint nor in examination-in-chief

Plaintiff also did not disclose his relation with the parties neither in plaint nor in agreement to sell

Plaintiff's witnesses did not mention mode of payment nor described suit property as mentioned in the agreement to sell, they were contradictory and did not support plaintiff's version

Plaintiff did not file suit in lifetime of the vendor and did not mention name of any witness or mode of payment

Witnesses who were employees of plaintiff were not trustworthy being interested witnesses

Statements of plaintiff's witnesses could not be considered as the same were beyond scope of pleadings

Plaintiff alleged to have paid payment regarding suit property but he could not prove such payment through any written receipt nor through any other mode, nor did he mention names of witnesses in whose presence the amount was paid

Agreement to sell was unilateral as it was not signed by plaintiff

Unilateral agreement which was not signed by plaintiff was not mutually enforceable

Agreement to sell and affidavit were not produced by plaintiff himself, but the same were produced by stamp-vendor, which created serious doubt as to in what capacity the stamp-vendor retained said documents in his custody and produced in court

Measurement of suit property mentioned in agreement to sell was excessive than mentioned in the exhibit

Trial Court while passing impugned judgment and decree could not grant excess land

Judgment and decree of trial court was set aside and suit dismissed

Appeal allowed in circumstances.

In terms of doctrine of indoor management, plaintiff cannot be made to suffer for any deficiency on the part of defendant to follow informal procedure internally adopted by it.

Tenant resisted ejectment proceedings on the plea that he had filed suit for specific performance of agreement to sell and possession of premises was with him as part performance of the agreement

Validity

Tenant could not be protected from ejectment merely by asserting agreement to sell in his favour or by filing suit for specific performance of agreement to sell, unless sale-deed was executed in his favour and agreement to sell had been enforced

Filing of civil suit could not vitiate title of landlord unless the same was finally decided

Only those cases could be left to be decided by civil court, where intricate and complicated questions regarding title of immovable property were involved

Neither there was any dispute regarding ownership of landlord nor there was any intricate or complicated question involved about title of leased premises

Tenant had himself admitted that landlord was owner of the premises and he agreed to sell the same to him, there was no need to leave the matter to be decided by civil court

Tenant could not protect his possession over leased house by invoking provisions of S.53-A of Transfer of Property Act, 1882

Tenant failed to point out any illegality or material irregularity or legal or factual infirmity in eviction order passed by Rent Controller

Appeal was dismissed in circumstances.