Case Note & Summary
The present second appeal arises from a suit for specific performance of an oral agreement for sale of agricultural land. The appellant, Kerba Dhengle, as plaintiff, filed Regular Civil Suit No.77 of 1979 before the Civil Judge, Junior Division, Tuljapur, seeking specific performance of an oral agreement dated 15-06-1976 whereby the respondent, Digambar Chavan, agreed to sell agricultural land Survey No.55 admeasuring 5 Acres 12 Gunthas situated at village Kati, Taluka Tuljapur, District Osmanabad for a total consideration of Rs.6,000. The plaintiff alleged that on the date of agreement, he paid Rs.2,000 as earnest money and was put in possession of the suit property. The plaintiff further claimed that he was ready and willing to pay the balance amount, but the defendant avoided executing the sale deed and later refused to do so. The defendant denied the agreement and possession. The trial court decreed the suit for specific performance, directing the defendant to execute the sale deed on receipt of balance consideration. The first appellate court reversed the decree, holding that the plaintiff failed to prove the oral agreement. The High Court, in second appeal, framed substantial questions of law regarding the validity of oral agreement for sale of immovable property and the admissibility of oral evidence. The Court held that Section 54 of the Transfer of Property Act does not require a written agreement for sale; an oral agreement is valid and enforceable. The Court found that the plaintiff had proved the oral agreement by examining witnesses and by showing payment of earnest money and part performance. The Court also held that the suit was within limitation as the plaintiff performed his part and the defendant refused in 1979. The High Court allowed the appeal, set aside the first appellate court's judgment, and restored the trial court's decree for specific performance with a direction to the defendant to execute the sale deed within three months on payment of balance consideration.
Headnote
A) Specific Performance - Oral Agreement for Sale - Section 54 Transfer of Property Act, 1882 - Suit for specific performance of oral agreement for sale of agricultural land - Court held that Section 54 of T.P. Act does not require a written agreement for sale of immovable property; an oral agreement is valid and enforceable if proved by evidence - Plaintiff proved oral agreement by examining witnesses and showing payment of earnest money and part performance - Held that the trial court's decree for specific performance was correct and the first appellate court erred in reversing it (Paras 1-15). B) Evidence - Oral Evidence - Section 91 Indian Evidence Act, 1872 - When terms of contract are not reduced to writing, oral evidence is admissible to prove the contract - Court held that since there was no written agreement, oral evidence was rightly considered by the trial court - The first appellate court's rejection of oral evidence as insufficient was erroneous (Paras 10-12). C) Limitation - Suit for Specific Performance - Article 54 Limitation Act, 1963 - Suit filed within three years from date fixed for performance - In absence of fixed date, suit must be filed within three years from notice of refusal - Court held that the suit was within limitation as the plaintiff performed his part and defendant refused to execute sale deed in 1979 (Paras 8-9).
Issue of Consideration
Whether the plaintiff is entitled to a decree of specific performance of an oral agreement for sale of agricultural land when the agreement is not in writing but is supported by oral evidence and part performance?
Final Decision
Appeal allowed. Judgment and decree of the first appellate court set aside. Judgment and decree of the trial court restored. The defendant is directed to execute sale deed in favour of the plaintiff within three months from the date of the judgment on payment of balance consideration of Rs.4,000. In case of failure, the plaintiff may get the sale deed executed through court.
Law Points
- Specific performance of contract
- Oral agreement for sale of immovable property
- Section 54 Transfer of Property Act
- 1882
- Part performance
- Earnest money
- Suit for specific performance
- Limitation for specific performance
- Burden of proof in specific performance
