Case Note & Summary
The appellant, original plaintiff, filed an appeal against the judgment of a learned Single Judge of the Bombay High Court in Suit No.590 of 1980, whereby the suit was partly decreed for refund of the consideration amount with interest, but the main relief for specific performance of the agreement of sale of the suit shop was dismissed. The dispute relates to Shop No.21 situated on the ground floor of a building called 'Sahyadari Apartments and Shopping Centre' at Borivali (West), Mumbai. The plaintiff claimed to have entered into an oral agreement with the defendant Nos.1 to 3 to purchase the suit shop for a consideration of Rs.18,000/-, which he paid in full under two cheques issued in November 1973 and March 1974. The plaintiff intended to run a floor mill in the shop, but the BMC did not grant permission. The defendants gave a letter dated 20th March 1974 stating that the shop would be given after obtaining BMC approval. The plaintiff filed the suit for specific performance. The trial court dismissed the claim for specific performance but ordered refund of the consideration with interest. The plaintiff appealed. The Division Bench held that an oral agreement for sale of immovable property is not enforceable under Section 54 of the Transfer of Property Act, 1882 and Section 17 of the Registration Act, 1908. The plaintiff also failed to prove readiness and willingness as required under Section 20 of the Specific Relief Act, 1963. The court dismissed the appeal, confirming the trial court's decision.
Headnote
A) Specific Relief - Specific Performance of Contract - Oral Agreement for Sale of Immovable Property - Section 20 Specific Relief Act, 1963 - The plaintiff claimed specific performance of an oral agreement for sale of a shop. The court held that an oral agreement for sale of immovable property is not enforceable as it does not comply with Section 54 of the Transfer of Property Act, 1882 and Section 17 of the Registration Act, 1908. The plaintiff failed to prove readiness and willingness. The appeal was dismissed. (Paras 1-20) B) Transfer of Property Act - Sale of Immovable Property - Mode of Transfer - Section 54 Transfer of Property Act, 1882 - The court held that a sale of immovable property can only be effected by a registered instrument. An oral agreement does not create any right in the property. (Paras 10-15) C) Registration Act - Documents Requiring Registration - Section 17 Registration Act, 1908 - The court held that an agreement for sale of immovable property must be in writing and registered to be enforceable. An oral agreement is not admissible in evidence. (Paras 10-15) D) Specific Relief - Readiness and Willingness - Section 20 Specific Relief Act, 1963 - The plaintiff failed to prove that he was ready and willing to perform his part of the contract. The court noted that the plaintiff did not produce any evidence of financial capacity or steps taken to complete the sale. (Paras 16-20)
Issue of Consideration
Whether an oral agreement for sale of immovable property can be specifically enforced in the absence of a written contract and whether the plaintiff was ready and willing to perform his part of the contract.
Final Decision
Appeal dismissed. The judgment of the learned Single Judge dismissing the suit for specific performance is confirmed. No order as to costs.
Law Points
- Specific performance of oral agreement for sale of immovable property not enforceable
- Section 54 Transfer of Property Act
- 1882
- Section 17 Registration Act
- 1908
- Section 20 Specific Relief Act
- 1963
- readiness and willingness
- part performance
- Section 53A Transfer of Property Act
