Gujarat High Court
Amarlal L Daulatani & vs Hiralal Somnath Modi & 3 on 19 December, 2014
Author: Akil Kureshi
Bench: Akil Kureshi, Vipul M. Pancholi
C/FA/6443/1998 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST APPEAL NO. 6443 of 1998
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
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1 Whether Reporters of Local Papers may be allowed to see the YES
judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy of the judgment ? NO
4 Whether this case involves a substantial question of law as to the NO
interpretation of the Constitution of India, 1950 or any order made
thereunder ?
5 Whether it is to be circulated to the civil judge ? NO
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AMARLAL L DAULATANI & 1....Appellant(s)
Versus
HIRALAL SOMNATH MODI & 3....Defendant(s)
================================================================
Appearance:
(MR SB VAKIL), ADVOCATE for the Appellant(s) No. 2
MRS. KETTY MEHTA for MS ARCHANA R ACHARYA, ADVOCATE for the Appellant(s) No. 1
DELETED for the Defendant(s) No. 1 - 2.1
MR ASHISH H SHAH, ADVOCATE for the Defendant(s) No. 2.2 - 2.4 , 3 - 4
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CORAM: HONOURABLE MR. JUSTICE AKIL KURESHI
and
HONOURABLE MR. JUSTICE VIPUL M.
PANCHOLI
Date : 19,22,23/12/2014
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE AKIL KURESHI) Page 1 of 45 C/FA/6443/1998 JUDGMENT Appeal is filed by the original plaintiffs challenging the judgment and decree dated 28th August 1998 passed by the City Civil Court, Ahmedabad, in Civil Suit No. 4765 of 1989.
2. Brief facts are that the plaintiffs were engaged in the business of property development. The defendants were members of one family, and joint owners of a residential plot with superstructure thereon situated in Ellisbridge Town Planning Scheme No.3, Ahmedabad, being Final Plot No.347, Sub-Plot No.1. Defendant No.1 is one Hiralal Modi, defendant No.2 - Pushpaben (since deceased) was his wife. Defendant No.3 - Shrikant and defendant No. 4 - Pinakin are his sons. Defendant No.1 also had a daughter by the name Pallaviben. However, she did not have any share in the property, and she was, therefore not joined as a defendant. The plot had an area of 805 square yards, and it contained a superstructure of 400 square yards. The defendants desired to sell the property. Negotiations took place between the parties, principally between the plaintiff No.1 - Amarlal Daulatani and defendant No.1 - Hiralal Modi and other members of the family. According to the plaintiffs, there was an oral agreement to sell this property at the rate of Rs.4,000/- per square yard. The defendant No.1 accepted a token amount of Rs.1,100/- initially, and a further earnest money of Rs.75,000/- was Page 2 of 45 C/FA/6443/1998 JUDGMENT also paid to him towards this deal. The parties jointly approached their lawyers for drafting a formal agreement to sale. The defendants, however, later on refused to sign such document or to sell the property to the plaintiffs. The plaintiffs thereupon filed the said Civil Suit seeking a decree of specific performance of sale of the suit land.
3. In the suit, the plaintiffs averred that for the first time the plaintiffs met the defendants No.1 and 2 in the first week of March 1989 when defendant No.1 told them that in the suit land his sons also have their undivided shares, and therefore, the plaintiffs may make enquiry about a week later. He had quoted the price of the land at the rate of Rs.4,000/- per square yard. The plaintiffs suggested that the rate was on the higher side. The defendant No.1 told them that other final details would be discussed when they come next time. Thereupon, about a week thereafter, the plaintiffs met the defendant No.1 at his residence in the presence of defendant No.2 - Shrikant and Pallaviben who held the power of attorney of defendant No.4. There were other family members also present. Once again, defendant No.1 quoted the price of Rs.4,000/- per square yard. The plaintiffs requested him to be reasonable, upon which, he told them that they may leave that to him, and he would consider some reduction, upon which, the plaintiffs gave Rs.1,100/- by way of a token, and confirmed the deal. Since other formalities were to be completed, the Page 3 of 45 C/FA/6443/1998 JUDGMENT parties decided to execute a written agreement shortly.
During the said meeting, the parties agreed to the following conditions:-
(a) the defendants would provide a title clearance certificate at their cost,
(b) they would provide income-tax clearance certificate at their cost,
(c) they would execute a sale deed in favour of the plaintiffs or any other person of their choice, and if need be, they would also execute separate sale deeds,
(d) the sons of the defendants No.1 and 2 were residing outside India, they, therefore, needed permission from the Reserve Bank of India, and only after they obtained such permission, the sale deed would be executed,
(e) whatever permissions may be needed under the Income Tax Act, the defendants would obtain at their cost,
(f) the expenses for stamp, registration, advocate's charges, etc. would be borne equally by both sides,
(g) the cheque that may be issued towards earnest money would be deposited in a nationalized bank in the joint account of the plaintiffs and the defendants in a fixed deposit, till the permission from the Reserve Bank of India was obtained.
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C/FA/6443/1998 JUDGMENT During the said meeting, it was also conveyed that defendant No.3
- Shrikant would be returning to India, and defendant No.4 - Pinakin would send his power of attorney from America in favour of Pallaviben, upon receipt of which, the agreement to sale would be executed.
Thereafter, towards the end of March, the plaintiffs met the advocate along with defendants No. 1 and 3 and Pallaviben. The terms of the agreement were conveyed to the advocate. He was instructed to prepare a draft agreement accordingly. In April 1989, the plaintiffs paid a sum of Rs.75,000/- by cash for purchase of the property at the rate of Rs.4,000/- per square yard on the condition of sharing the expenses for the sale.
In April 1989, the advocate also prepared a draft agreement. By the end of March 1989, the power of attorney from defendant No.4 in favour of Pallaviben drafted by the advocate of the plaintiffs was also received and duly stamped at Ahmedabad Stamp Office. As instructed by the defendants, Jani and Company, Solicitors, also issued a public advertisement on 16th April 1989 in the local daily Sandesh for title clearance. The draft agreement underwent certain changes from both sides.
The defendants thereafter delayed execution of agreement to sale Page 5 of 45 C/FA/6443/1998 JUDGMENT on one pretext or the other. Initially, indifferent health of defendant No.1 and 2 was cited as a reason. Later on, the internal disputes between the family members, and the need for advice from the Income-tax consultant were cited as reasons. The plaintiffs repeatedly requested the defendants to execute such document. They deposited on 11 th September 1989 a sum of Rs.8,00,000/- in their bank account, which would cover the earnest money. Final draft of the agreement was prepared on 13 th September 1989. The defendants, however, refused to executed the document since there were other offers of higher price for the land.
Plaintiffs, therefore, prayed for a decree of specific performance of the sale of the suit land, and in the alternative prayed for damages of Rs.32,00,000/-.
4. The defendants filed separate written statements. One filed by defendant No.1 being more exhaustive, we may refer to the averments therein. The averments in the plaint were denied. It was denied that a final agreement to sell the land was ever arrived at with the conditions (a) to (g) mentioned in the plaint. He did admit to have received Rs.1,100/-, but stated that the same was insisted by the plaintiffs, and tendered by way of a token. Receipt of Rs.75,00,000/- in cash was also admitted, but it was clarified that the same was offered to ensure that the defendants do not negotiate the sale with any other party. The said defendant had Page 6 of 45 C/FA/6443/1998 JUDGMENT serious issues with execution of the agreement, which contained the conditions of allowing the plaintiffs to put up a board of the proposed scheme for developing the property or to allow them to accept bookings or to present the plans before the Municipal Corporation or to give possession of the land till the final sale deed. He also had objection to the earnest money being deposited in a joint account of the plaintiffs and the defendants. He stated that once the negotiations broke down, he reminded the plaintiffs repeatedly to take back the sum of Rs.75,00,000/-, which they did not.
Other defendants have adopted a similar line. Additionally, the defendant No.3 - Shrikant in his written statement has stated that he was not present when his father might have received the token money or any further sum. He had never agreed to sell his share of the land. He was once dragged to the office of advocate Shri Pathak, where nothing was decided. He had flatly refused to sell his share of the land. He had not agreed to any oral terms.
5. On the basis of such pleadings on record, the trial court raised the following issues:
"1. Whether the plaintiffs prove that there was a valid, legal and concluded contract to sell suit property to the plaintiffs by the defendants?
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2. If yes, what are the terms and conditions of such a contract?
3. Whether such a contract is legally enforceable?
4. Whether defendant No.1 proves that this suit is not maintainable?
5. Whether the plaintiff is entitled to specific performance of contract of sale of property as alleged?
6. In the alternative, whether the plaintiffs are entitled to decree of Rs.32,00,000/- or any as claimed?
7. Whether the defendant No.1 proves the averments made in paras 8 & 9 of written statement exh. 23?
8. Whether the defendants prove that there is no privity of contract between the parties to the suit?
9. Whether the plaintiff is ready and willing to perform his part of contract?
10. What decree and order?"
6. In the impugned judgment, the trial court answered such issues in the following manner:
"1. In the negative.
2. Does not arise.
3. Does not arise.
4. In the affirmative.
5. In the negative.
6. In the negative.
7. In the affirmative.
8. As per final order.
9. As per final order.
10. As per final order.
7. The trial court was of the opinion that final agreement was never Page 8 of 45 C/FA/6443/1998 JUDGMENT arrived at between the parties, and there were differences on factual terms of the agreement, such as whether the possession of the property should be in favour of the plaintiffs at the time of agreement to sale. The plaintiffs had admitted that the defendants were not agreeable on this condition. Interalia on such grounds, the learned Judge held that the parties were not ad idem on important conditions of agreement to sale. Since no final agreement was arrived at, the same could not be enforced. According to the plaintiffs, the agreement took place when they paid a sum of Rs.1,100/- to Hiralal Modi, which was in the presence of defendant No.3 - Shrikant. However, this took place in the second week of March 1989 when Shrikant was not present. The defendant No.1 was also not agreeable to the earnest money being deposited in a joint account. As the defendants after consulting the legal adviser did not agree to certain terms of the agreement, it cannot be stated that he backed out from the promise. The learned Judge concluded that till June 1989 there were differences between the parties. This was in contrast to the plaintiffs' assertion that the agreement took place sometime in the second week of March 1989. The trial court dismissed the suit on such basis. It is this judgment and decree which the plaintiffs have challenged in this appeal.
8. We may record the gist of the evidence. Plaintiff No.1 was examined at Exh.63. He stated that he and plaintiff No.2 are friends and Page 9 of 45 C/FA/6443/1998 JUDGMENT partners in business. They are engaged in the business of trading in clothes and developing properties. They had previously developed property in Navrangpura area of the city of Ahmedabad. They were also doing the work of project consulting. They had done such work in various properties. In the first week of March 1989, they met defendants No. 1 and 2 at their residence. They had given the details of the property, and quoted the sale price of Rs.4,000/- per square yard. The plaintiffs requested them to reduce the price. The defendants stuck to the price, but stated that the final price may be left to them. He was prepared for the same. He was also prepared to purchase the land at Rs.4,000/-. It was stated that the property was already divided in four shares. They decided to meet a week later. They visited again after a week when Hiralal Modi
- defendant No.1, his wife Pushpaben - defendant No.2, their daughter - Pallaviben and other relatives were present. They again discussed the deal. When the sale price of Rs.4,000/- per square yard was quoted again, he agreed to purchase at such price, but requested for reduction, and even if such request was not accepted, he was prepared to purchase the land. Other conditions were also discussed, which pertain to sharing of the cost of sale, requirement of title clearance, Reserve Bank of India permission and Income-tax clearances. Sale was to be executed within three months from execution of sale agreement. It was conveyed that it would take two-three months to get permission from the Reserve Bank of India. Both Page 10 of 45 C/FA/6443/1998 JUDGMENT sides agreed to such terms, and thus, the deal was confirmed, upon which, he gave an amount of Rs.1,100/- by way of token. They had ice-cream and sweets. They decided to execute an agreement incorporating the agreed conditions.
Couple of days later, he and defendant No.1 - Hiralal went to meet advocate Shri Girish Pathak in the Court compound, and conveyed to him the terms of agreement, and asked him as to how much amount could be taken towards earnest money. He stated that it is ordinarily 10% as earnest money would be paid. They decided to meet Girishbhai Pathak at his office couple of days later. Accordingly, he and defendant No.1 went to his office, and once again asked about how much money could be paid at the time of execution of agreement. The advocate told them that normally there is a practice to pay 10%. However, if higher amount is to be paid, it should be deposited in a joint account, i.e. in the name of the plaintiffs and defendant No.1. This is also because the defendants No. 3 and 4 were residing abroad, which may delay the execution of the documents.
Pallaviben had the power of attorney on behalf of defendant No.4. Girishbhai told her that the document was not proper, and the property could not be sold on the basis of such a document. At his request, Girishbhai prepared a fresh power of attorney, which was sent to Page 11 of 45 C/FA/6443/1998 JUDGMENT defendant No.4 in America. It was returned duly executed in U.S.A.on 20th March and registered at Ahmedabad on 29th March 1989. In such power of attorney, specific authority was granted to Pallaviben to sell the property.
Instructions were given to the advocate for preparing a draft on the basis of previous terms agreed between the parties. The draft of the agreement was prepared in the beginning of April. On 16 th April 1989, public advertisement was issued in the newspaper for title clearance.
He also referred to the tendering of a sum of Rs.7,40,000/- in all, which would be arrived at by deduction of the cost to be borne by the defendants from the sale consideration of Rs.32,20,000/- for the land calculated at the rate of Rs.4,000/- per square yard. He also referred to the efforts made by him to persuade the defendants to execute the agreement to sale. But they refused to do so. He also referred to the telephonic conversation he had with defendant No.1 - Hiralal Modi, defendant No.3 - Shrikant and Pallaviben, which he had tape-recorded, transcripts of which were also produced before the court.
In the cross-examination, he admitted that during the second meeting when the agreement was finalised, the sons of Hiralal Modi were not present. He denied that during such meeting there was no final Page 12 of 45 C/FA/6443/1998 JUDGMENT agreement. He insisted that during this second meeting, the deal was confirmed. Only written agreement had to be executed, which was also decided during such meeting, at which time he had paid a token of Rs.1,101/-, and later on paid a further sum of Rs.75,000/- in presence of the advocate.
He stated that at the time of the deal it was decided how much money would be paid towards earnest money. He, however, clarified that it was decided to pay the earnest money, but not the amount. He was offering 10% as earnest money. Defendant No.1 was demanding Rs.12,00,000/-. The final draft of agreement was prepared in September 1989. He had agreed that he wanted the earnest money to be deposited in a joint account along with the defendants, and that the defendants were not agreeable to such condition. During these negotiations, defendant No.4 was in U.S.A., and never came to India. Pallaviben held his power of attorney given in the year 1985. Such power of attorney was read by his advocate, and he had opined that such power of attorney would be invalid, and no procedure can be followed under such document, and therefore, new power of attorney would have to be executed. He agreed that in the draft agreement prepared by his advocate there were many changes made by both the sides.
9. Plaintiffs examined Paresh Jani, advocate and solicitor at Exh.180 Page 13 of 45 C/FA/6443/1998 JUDGMENT for the limited purpose of establishing that on behalf of the defendants he was instructed to issue public advertisement at Exh.79 for title clearance.
10. The plaintiffs examined Harishkumar Rajput at Exh.195, who was at the relevant time an advocate attached to the office of advocate Shri Girish Pathak. His deposition was limited to the issue of getting fresh power of attorney executed by defendant No.4 in favour of Pallaviben from U.S.A. stamped before the local authorities.
11. Another advocate Baldevbhai Gohil was examined at Exh.207. He was also at the relevant time associated with Shri Girish Pathak. He deposed that the plaintiffs and defendants met him at the office of Girishbhai for preparation of draft agreement. He had taken the details for preparing such a document. Girishbhai had told him that the properties were to be sold at the rate of Rs.4,000/- per square yard. He also referred to the power of attorney of defendant No.4, which was defective, and therefore, a new power of attorney had to be executed.
First time when he met Hiralal Modi and Pallaviben, they told him that the amount of earnest money would be decided at the time of executing the agreement to sale. He referred to the draft agreement Exh.97, which the parties had collected, and suggested changes, upon which, the second draft was prepared. With reference to this draft, Hiralal Page 14 of 45 C/FA/6443/1998 JUDGMENT Modi had conveyed to him that as per the deed, possession of part of the property is to be given to the plaintiffs, to which he was not agreeable. Since plaintiffs insisted that the money should be deposited in the joint account of the plaintiffs and the defendants, Hiralal Modi was not happy because under such arrangement he would not receive any money, and the plaintiffs would take possession and start developing the land and admitting members receiving money from them, and may not pay him in future. He, therefore, prepared a fresh draft making changes with respect to the possession. During this period, once plaintiff No.1 paid Rs.75,000/- in his presence to Hiralal and Pallaviben. Later on, Amarlal did tell him that Hiralal has turned around, and therefore, he would have to file a suit.
In the cross-examination, he agreed that between the parties certain terms of the draft agreement were contentious. He agreed that the parties did not agree to certain terms of the agreement, due to which, it had to be redrafted. He stated that on the question of possession of the land, the parties were not agreeable. He agreed that in the draft agreement he had not mentioned about the token of Rs. 1,100/- or Rs.75,000/-.
12. In addition to such depositions, the plaintiffs relied on the telephonic conversations the plaintiff No.1 had with Hirabhai, Pallaviben and Shrikant. Transcripts of these conversations were produced at Exhs. 128, 126 and 141 with Hirabhai, at Exh.127 with Pallaviben and at Page 15 of 45 C/FA/6443/1998 JUDGMENT Exh.137 with Shrikant.
22nd December 2014:
Since these are in the form of conversations, we may record the gist thereof. Exh. 126 is a telephonic conversation between plaintiff No.1 and Hiralal - defendant No.1 in July 1989, in which Hiralal agreed to finalise everything within a week, but emphatically stated that not all conditions would be acceptable. Hiralal also conveyed to the caller that he does not want any middleman and does not want to part the money with anyone else. Amarlal once again told him that full money can be paid if at the time of execution of the document possession is given. Hiralal told him that it would not be possible since the procedure has to be followed. He also conveyed to Amarlal that a way could be found, and that they should meet for such purpose. He once again said that if the cheque is issued, agreement to sale would be executed. Amarlal reminded him of Rs..75,000/- paid in April. Hiralal did not deny this.
Exh. 127 is a conversation between plaintiff No.1 and Pallaviben, which took place on 27th July 1989. Amarlal reminded her that the deal was finalised, and Rs.75,000/- was also paid. She agreed to this. She also showed her inability to persuade her father. She conveyed that she tried to reason with him that in future nobody would stand by them. Page 16 of 45
C/FA/6443/1998 JUDGMENT Exh.128 pertains to the telephonic conversation between the plaintiff No.1 and Shrikant - defendant No3, which took place on 23 rd July 1989 in which there was reference to payment of Rs.75,000/-. Shrikant, of course, was not present at that time. There is also a reference to higher demand by Hiralal, Shrikant showing his inability to persuade him to reduce the same. He clarified that he was not in India when the negotiations were finalised, and had gone to the advocate's chamber only as a formality. He had never participated in any discussions. He confessed his inability to persuade his father.
Exh.141 is a conversation between the plaintiff No1 and Hiralal - defendant No.1, which took place in August 1989 in which the discussion was somewhat more heated. Hiralal insisted on re-negotiating the terms. Amarlal reminded him that Rs.4,000/- was the price already fixed. Hiralal threatened him that he would sell the land somewhere else, since he wanted the market price and not at old price.
13. This in a nutshell is the evidence on record. On behalf of the appellants, Mrs. Mehta raised the following contentions:
(1) From the evidence on record it was established that there was an oral agreement to sell immovable property between the plaintiffs and the defendants.
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C/FA/6443/1998 JUDGMENT (2) To execute an agreement to sale was a mere formality, failure on the part of parties to do so, would not make the oral agreement non enforceable.
(3) The defendants had admitted to have received Rs.1100/- towards token money, and further sum of Rs.75,000/- by way of earnest money deposit. They had contacted the advocates for drawing an agreement to sale. Drafts of such agreements were produced on record. Such drafts indicated sale particulars of Rs.4,000/- per square yard The defendants did not dispute this term. They had through their solicitors issued a public notice for obtaining title clearance. These facts would establish that agreement to sale had taken place as suggested by the plaintiffs, and the defendants were trying to back out since there had been a price rise in the meantime.
14. The counsel further submitted that the trial court committed an error in appreciating the evidence. It was not the case of the plaintiffs that such oral agreement took place in the second week of March 1989 during the second meeting between the parties. Such oral agreement took place later on when earnest money of Rs.75,000/- was paid and accepted.
15. In support of her contentions, she relied on the following decisions:
(1) Bhagwandas Goverdhandas Kedia Vs. M/s. Girdharlal Page 18 of 45 C/FA/6443/1998 JUDGMENT Parshottamadas and Co. and others reported in AIR 1966 SC
543.
(2) Dr. Jiwan Lal and others Vs. Brij Mohan Mehra and another reported in AIR 1973 SC 559.
(3) Silvey and others Vs. Arun Varghese and another reported in 2008 (3) GLH (N.O.C.) 7.
(4) Aloka Bose Vs. Parmatma Devi and others reported in AIR 2009 SC 1527.
(5) Taraben D/o. Nanubhai Kasanbhai Patel and W/o.
Navinkumar Patel and another Vs. Shaileshbhai Rangilbhai Patel and others 2013 (2) GLH 252.
16. On the other hand, learned advocate Shri Ashish Shah for the original defendants opposed the appeal contending that, (1) There was no oral agreement between the parties. All material conditions including the price of the land was not finalised. This would be gathered from the evidence on record, particularly the fact that series of drafts of agreement were prepared by the advocate and numerous changes were suggested by both sides. He would point out that even in the telephonic conversation there was no mention of final agreement between the parties.
(2) As per the plaintiffs, the oral agreement took place in the second week of March 1989. This was disproved through evidence on record. The learned trial Judge, therefore, correctly held that no such agreement Page 19 of 45 C/FA/6443/1998 JUDGMENT as alleged had taken place.
(3) Counsel contended that for an agreement to sale to be binding, it is not merely necessary that the parties should agree to a certain sale price. The parties must agree to all essential conditions of sale, which would include the and manner of payment, the period during which the sale would be completed, what amount would be paid at the time of executing the agreement to sale, and whether possession would be handed over at that time. All these terms were never finalised. No agreement to sale therefore could be stated to have come into existence.
17. In support of his contention, counsel relied on the following decisions:
(1) P. Prabhakara Rao Vs. P. Krishna reported in AIR 2007 A.P. 163 (2) M/s. Rickmers Verwaltung Gimb H. Vs. Indian Oil Corporation Ltd. reported in AIR 1999 SC 504. (3) Speech and Software Technologies (India) Private Limited Vs. Neos Interactive Limited reported in (2009) 1 SCC 475. (4) Ouseph Varghese Vs. Joseph Aley and others reported in 1969 (2) SCC 539 (5) Ganesh Shet Vs. Dr. C.S.G.K. Setty and others reported in AIR 1998 SC 2216.
(6) Brij Mohan and others Vs. Sugra Begum and others reported in (1990) 4 SCC 147.
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18. Section 10 of the Indian Contract Act, 1872 pertains to what agreements are contracts, and reads as under:
"10. What agreements are contracts.--All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void." Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents."
As per this provision, therefore, all agreements would be contracts if they are made by the free consent of the parties competent to contract for a lawful consideration, and with a lawful object, and which are not expressly declared to be void. Section 10, thus, does not provide that every agreement must be in writing. In fact, second portion of Section 10 clarifies that nothing contained in the said Section shall affect any law in force in India by which any contract is required to be made in writing or in the presence of witnesses or any law relating to the registration of the documents. Conversely, if therefore, there is no law which requires a certain contract to be in writing, nothing stated in Section 10 of the Contract Act would provide otherwise. As would be discussed hereafter, the courts in India have, subject to strict proof, accepted agreements which are oral, and held that such agreements also form binding contracts, and would be enforceable through the suit for specific performance. Page 21 of 45
C/FA/6443/1998 JUDGMENT While discussing this aspect, we would also have to judge whether there was any oral agreement entered into between the parties, and that therefore, mere failure to execute an agreement in writing would not prevent its enforcement through a decree of specific performance.
19. In the case of Brij Mohan and others (supra) the Supreme Court held that a contract of sale may be oral, and specific performance of such an oral agreement would be enforceable, but observed that the heavy burden would be on the plaintiff to prove existence of oral agreement. The plaintiffs would have to establish that the vital and fundamental terms of sale of immovable property were concluded between the parties orally, and a written agreement, if any to be executed subsequently, would only be a formal agreement incorporating such terms, which have already been settled and concluded in the oral agreement. It was held and observed as under:
"20. We have given our careful consideration to the arguments advanced by Learned Counsel for the parties and have thoroughly perused the record. We agree with the contention of the Learned counsel for the appellants to the extent that there is no requirement of law that an agreement or contract of sale of immovable property should only be in writing. However, in a case where the plaintiffs come forward to seek a decree for specific performance of contract of sale of immovable property on the basis of an oral agreement alone, heavy burden lies on the plaintiffs to prove that there was consensus ad-idem between the parties for a Page 22 of 45 C/FA/6443/1998 JUDGMENT concluded oral agreement for sale of immovable property. Whether there was such a concluded oral contract or not would be a question of fact to be determined in the facts and circumstances of each individual case. It has to be established by the plaintiffs that vital and fundamental terms for sale of immovable property were concluded between the parties orally and a written agreement if any to be executed subsequently would only be a formal agreement incorporating such terms which had already been settled and concluded in the oral agreement."
In the case of Dresser S.A. Vs. M/s. Bindal Agro Chem Ltd. and another reported in AIR 2006 SC 871, the Supreme Court observed that it is well settled that a letter of intent merely indicates a party's intention to enter into a contract with the other party in future. A letter of intent is not intended to bind either party ultimately to enter into any contract. It was further observed that if the letter of intent is one communicating the acceptance of the offer, and asking the contractor to start work with a stipulation that the detailed contract would be drawn up later, such a letter may be termed as a letter of intent, which will amount to acceptance of the offer, resulting in a concluded contract between the parties. But the question whether the letter of intent is merely an expression of intent to place an order in future or whether is a final acceptance of the offer leading to a contract, is a matter that has to be decided with reference to the terms of the letter.
In case of Kollipara Sriramulu (dead) by his legal
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representative (in both the appeals) Vs. T. Aswatha Narayana (dead) by his legal representative and others reported in 1968 SC 1028, it was observed as under:
"3. .... It is well established that a mere reference to a future formal contract will not prevent a binding bargain between the parties. The fact that the parties refer to the preparation of an agreement by which the terms agreed upon are to be put in a more formal shape does not prevent the existence of a binding contract. There are, however, cases where the reference to a future contract is made in such terms as to show that the parties did not intend to be bound until a formal contract is signed. The question depends upon the intention of the parties and the special circumstances of each particular case. As observed by the Lord Chancellor (Lord Cranworth) in Ridgway v. Wharton, (1857) 6 HLC 238 at p. 263, the fact of a subsequent agreement being prepared may be evidence that the previous negotiation, did not amount to a concluded agreement, but the mere fact that persons wish to have a formal agreement drawn up does not establish the proposition that they cannot be bound by a previous agreement."
20. In Currimbhoy & Co. Ltd. Vs. L.A. Creet and others reported in AIR 1933 Privy Council 29, it was observed that where the documents or letters relied on as constituting a contract contemplate the execution of a further contract is a question of construction. Whether the execution of the further contract is a condition, or the term of the bargain, or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to, will in fact, go through. In the former Page 24 of 45 C/FA/6443/1998 JUDGMENT case, there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the later case, there is a binding contract, and the reference to the more formal document may be ignored.
21. In the case of L.C. Sitlani Vs. Viroosing Ramsing and another reported in AIR (34) 1947 Sind 6, it was observed that where the essential terms of a bargain are agreed upon between the parties, which, however, it is intended to incorporate in a formal document to be later executed, the contract is a concluded contract, even though no formal document has been executed. But where it is the condition of the bargain itself, the agreement made between the parties is to be subject to a document being further drawn up, agreed to, and executed by the parties, there is no concluded agreement until the final agreement is executed.
22. In the case of Amritlal Maganlal Vs. Harkisandas Kahandas reported in AIR (33) 1946 Bombay 149, it was observed that if the document relied upon as constituting a contract contemplates the execution of a further document between the parties, it is always a question of construction, whether the execution of the further contract is a condition, or term of the bargain, or whether it is a mere expression of the desire of the parties to the manner in which transaction already agreed to, will in fact go through.
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C/FA/6443/1998 JUDGMENT Similar opinion was expressed in the decision in the case of Gujjar Mal Ram Rattan Puri Vs. Governor-General of India through Post- Master General, Punjab & N.W.F. Circle and others reported in AIR (29) 1942 Peshawar 33.
23. In the case of Gostho Behari Sirkar Vs. Surs Estates Ltd. Vs. Surs Estates Ltd. reported in AIR 1960 Cal 762, a Division Bench of the High Court observed that whether a concluded contract has been made or not is a question of fact to be determined in each case by a consideration of all the relevant circumstances and facts cannot be concluded by the parties or the solicitors description of the situation either as a contract or negotiation.
24. In the case of Akoojee Jadwet and Co. Vs. A.V. And Son reported in AIR 1939 Rangoon 423, the Court observed that the burden to prove that there was a concluded contract is on the plaintiff. When it was found that only certain terms of contract were settled while others were left open, the Court held that there was no concluded contract.
25. In the case of Shankarlal Narayandas Mundade Vs. The New Mofussil Co. Ltd. and others reported in AIR (33) 1946 Privy Council 97, it was observed as under:
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C/FA/6443/1998 JUDGMENT "By the law of India, an oral contract is valid and enforceable; but in such a case it is a question of construction whether the execution of the further written contract is a condition or term of the bargain, or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through." 23rd December 2015:
In the case of Ganesh Shet (supra), the Supreme Court observed that it is well settled that in a suit for specific performance, the evidence and proof of the agreement must be absolutely clear and certain.
Likewise in the case of Ouseph Varghese (supra) the Supreme Court observed that before a court can grant a decree for specific performance, the contract pleaded must be a specific one, and the same must be established by convincing evidence. Rarely a decree for specific performance is granted on the basis of an agreement supported solely by oral evidence.
In the case of Speech and Software Technologies (India) Private Limited (supra), the Supreme Court observed that it is well settled legal position that an agreement to enter into an agreement is not enforceable nor does it confer any right upon the parties.
In the case of M/s. Rickmers Verwaltung Gimb H. (supra), the Supreme Court observed as under:
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C/FA/6443/1998 JUDGMENT "In this connection the cardinal principle to remember is that it is the duty of the court to construe correspondence with a view to arrive at a conclusion whether there was any meeting of mind between the parties, which could create a binding contract between them but the Court is not empowered to create a contract for the parties by going outside the clear language used in the correspondence, except insofar as there are some appropriate implications of law to be drawn. Unless from the correspondence it can unequivocally and clearly emerge that the parties were ad idem from that material to infer whether the intention as expressed in the correspondence was to bring into existence a mutually binding contract. The intention of the parties is to be gathered only from the expressions used in the correspondence and the meaning it conveys and in case it shows that there had been meeting of mind between the parties and they had actually reached an agreement, upon all material terms, then and then alone can it be said that a binding contract was capable of being spelt out from the correspondence." In the case of P. Prabhakara Rao (supra), the learned Single Judge of the Andhra Pradesh High Court observed as under:
"15. In an agreement for sale of immovable property, certain salient features, which are common to all contracts, can be listed. They include,
a) identity of the property; b) consideration for sale; c) mode of payment thereof; d) the timing and method of delivery of possession; e) the period, within which the contract must be concluded; and f) the consequences must ensue, on account of non-compliance with the conditions. While in a written contract, these conditions are, by and large, reflected with clarity and certainty, in an oral agreement, they must be proved through reliable evidence."
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25. From the above judicial pronouncements, broadly the following propositions can be culled out:
(1) There is no requirement in law that an agreement of contract of sale of an immovable property should only be in writing. However, in case where the plaintiff comes forward to seek a decree for specific performance of a contract of sale of immovable property on the basis of an oral agreement alone, heavy burden lies on the plaintiff to prove that vital and fundamental terms of the sale or the property were concluded during the oral agreement and the parties were ad idem on such terms. (2) Whether there was such a concluded contract or not, would be a question of fact, to be determined in the facts and circumstances of each individual case.
(3) In a suit for specific performance, the evidence and proof of the agreement must absolutely be clear and certain.
(4) Before the court can grant a decree for specific performance, contract must be specific one, and must be established by convincing evidence, more so, when such a plea is based on oral agreement. (5) The agreement to enter into an agreement is not enforceable nor does it confer any right upon the parties.
(6) Right from the time of the decision of the Privy Council in the case of Currimbhoy & Co. Ltd. (supra), it is consistently followed that Page 29 of 45 C/FA/6443/1998 JUDGMENT whether the parties agreed to execution of the further contract which was a condition or term of the bargain or whether it was a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through, would have to be judged from the facts and circumstances emerging from the record. In the former case, there would be no enforceable contract either because the condition is unfulfilled, or because the law does not recognise a contract to enter into a contract. In the later case, there would be a binding contract, and the reference to the formal document or failure to execute such a document, would be ignored.
26. With this background, we may assess the evidence on record. As per the plaintiffs as disclosed in the plaint, after the first preliminary meeting between the plaintiffs and defendant No.1 - Hiralal in the first week of March 1989, where the reference to the sale price of the suit land at Rs.4,000/- per square yard was made, the parties decided to meet again later. Accordingly, about a week later, the plaintiffs visited defendant No.1 at his residence, when other family members, including Pallaviben, stated to be the power of attorney holder of defendant No.4, were present.
According to the plaintiff, during such meeting, further discussions took place. The plaintiffs conveyed that the rate of Rs.4,000/- per square yard was on the higher side. The defendant No1. asked them to leave it to him. Page 30 of 45
C/FA/6443/1998 JUDGMENT Eventually, the plaintiffs paid a token of Rs.1100/-, and confirmed the deal. The defendants stated that certain formalities should be completed for which a written agreement to sale would be executed later. According to the plaint, at this point of time, the parties also agreed to the terms with respect to the following issues:
(1) The title clearance to be obtained by the defendants at their own costs.
(2) Income-tax clearances had to be obtained at their cost. (3) The final sale deed would be executed in favour of the plaintiffs or such other parties they may indicate, if need be, separately by different owners.
(4) Sons of defendant No.1 were residing abroad, permission from Reserve Bank of India would be obtained, only upon which sale deed would be executed.
(5) If any permission from income-tax authorities was needed, the same also would be obtained by the defendants at their cost. (6) The cost of documentation would be shared equally. (7) The earnest money amount would be deposited in the joint bank account of the plaintiffs and the defendants, till the permission from the Reserve Bank of India is received.
27. Along these very lines, the plaintiff No.1 also gave his evidence Page 31 of 45 C/FA/6443/1998 JUDGMENT before the Court. In his deposition (Exh.63), he substantially reiterated these factual averments. He additionally stated that after striking the deal at the rate of Rs.4,000/- per square yard, and after conveying to the defendant that the plaintiffs were willing to purchase the land even at the rate of Rs.4,000/- per square yard, other conditions were discussed. A token amount of Rs.1100/- was paid towards the deal. He stated that the parties had to approach an advocate to execute an agreement along the line of which the terms were settled.
28. Though vehemently contended by Mrs. Mehta for the respondents that the trial court committed an error in appreciating that the agreement to sale according to the plaintiffs had been completed during this meeting, in our opinion, in this respect, the trial court committed no error. From the outset, the case of the plaintiffs was that the completed contract came into existence during the second meeting between the plaintiffs and the defendant No.1 at the residence, some time during the second week of March 1989. In the plaint, as well as in the deposition of the plaintiff No.1, the clear stress is on finalising of all terms and conditions of the sale agreement during this meeting. Any further developments have to be seen in light of such stand of the plaintiffs. They must stand or fail on the question of establishing this important fact of sale agreement having come into existence during this meeting.
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29. For a variety of reasons, they failed to establish this important fact. Firstly, during the first or even in the second meeting, even according to the plaintiffs, there was no clear statement that the plaintiffs offered and defendants accepted the offer for sale of the property at the rate of Rs.4,000/- per square yard. We may recall, even according to the plaintiffs, the negotiations remained inconclusive during the first meeting, when according to them the defendant No.1 quoted sale price of Rs.4,000/- and the plaintiffs found it to be high, and the parties agreed to meet again. During such second meeting, once again, the negotiations were held, and the sale price discussed. Nowhere has the plaintiff No.1 in his depositions stated that the parties agreed to this final sale consideration at the rate of Rs.4,000/- per square yard. Even the time, within which the sale would be completed upon payment of full sale consideration, was not finalised.
30. Quite apart from this, admittedly, when these negotiations took place, the defendants No. 3 and 4 were not present. Any discussion would, therefore, not bind such defendants, who either held a joint interest in the said property, or as per the partition, had a demarcated share. We may recall that though Pallaviben was stated to be present holding the power of attorney of defendant No.4, such power of attorney was executed in the year 1985, and as opined by the advocate of the plaintiffs, Page 33 of 45 C/FA/6443/1998 JUDGMENT did not include any right of the attorney to sell the immovable property. It was because of this reason that the advocate had to redraft the power of attorney, which was sent to defendant No.4 for execution, which, upon receipt later on, was stamped at Ahmedabad Stamp Office. This happened long after the meeting of March 1989. Thus, even Pallaviben at that point did not have any authority to act for and on behalf of the defendant No.4. Accordingly, neither defendant No.3 nor defendant No.4 could be bound by any negotiations, which took place during the meeting of second week of March 1989.
31. As noted above, there was no clarity that the plaintiffs and the defendants No. 1 and 2 also finally agreed to the sale price of Rs.4,000/- per square yard. The plaintiffs' proposition that the final agreement took place during such meeting, therefore, must be rejected. From the evidence, it does, however, appear that along the negotiations, which took place later on, there was a broad agreement on such price, not only on behalf of the defendants No.1 and 2, but later on also, by defendants No.3 and power of attorney holder of defendant No.4. This would be evident from the fact that during series of drafts and redrafts of the agreement to sale, none of the defendants ever objected to the sale price indicated in such drafts. However, the moot question is did the parties agree to all essential terms during the second meeting of March 1989 as alleged or Page 34 of 45 C/FA/6443/1998 JUDGMENT even thereafter? This would be in addition to our conclusions that there was no finality on the sale consideration, and in any case, there was no participation during such meeting by the defendant No.3 and 4 or any authorised attorney of defendant No.4.
32. In this context, as noted, plaintiff No.1 in his deposition has made detailed reference to various terms, which, according to him, the parties agreed in the second meeting, which took place during the second week of March 1989. However, there is sufficient evidence to discard such theory. Firstly, after the first draft was prepared by the advocate and circulated amongst the plaintiffs and the defendants, both sides suggested various changes. This process of redrafting went on on number of occasions. Such documents are on record. From the various changes suggested by both the sides, we notice that the most contentious issues pertained to how much amount should be paid towards earnest money at the time of execution of the sale agreement, and on what terms such agreement should be executed. The parties particularly had dispute about the nature of rights and privileges the plaintiffs would enjoy under such agreement to sale, till final sale deed is executed upon payment of full sale consideration.
33. First and foremost, in the deposition itself, plaintiff No.1 stated that after this meeting of second week of March 1989, they met the advocate, Page 35 of 45 C/FA/6443/1998 JUDGMENT and enquired as to how much amount could be paid at the time of execution of agreement to sell. The advocate told them that normal custom is to pay 10% of the sale consideration. Thereafter, the parties once again met at the office of the advocate Shri Girish Pathak. Defendant No.1 - Hiralal once again asked him how much amount should be paid at the time of agreement. The advocate told him that custom is of 10%, however, if 20% is to be paid, the same should be kept in a fixed deposit account in joint names, meaning the joint account of the plaintiffs and the defendants. This immediately falsifies the statement of the plaintiff No.1 that all material terms were agreed and finalised between the parties during the second meeting of March 1989. How much amount should be exchanged at the time of agreement to sale was an important condition, on which, even according to him, the parties sought opinion of the advocate when they met personally. Evidently, this condition was not settled between the parties.
Even advocate Baldev Gohil had referred to earnest money which was not decided. In the cross-examination he stated that certain terms of draft agreement were disputed between the parties. He agreed that on the question of possession the plaintiffs weer not agreeable. Thus, the question whether to hand over possession of the part of the property at the time of agreement was an important issue on which even according to the Page 36 of 45 C/FA/6443/1998 JUDGMENT witness of the plaintiff the parties could not agree.
34. The other issue pertained to the desire of the plaintiffs to keep such earnest money deposit in joint account of the plaintiffs and the defendants. They also desired that the plaintiffs be allowed to put their board of a scheme of construction, apply for necessary permissions to the Municipal Corporation, accept members, and even possession of part of the land shall be given to them. Hiralal opposed these terms suggesting that if he was not going to get the money, why should he part with possession. These aspects have clearly come on record through the drafts of the agreements as well as through the depositions of plaintiff No.1 and defendant No.1.
35. On three things thus there was no agreement. Firstly, that there was no agreement on how much amount that the plaintiffs will pay to the defendants at the time of execution of the agreement to sell. Secondly, whether the said amount would be released in favour of the defendants, or whether it should be kept in fixed deposits jointly held by the plaintiffs and the defendants, and thirdly, whether the plaintiffs would be allowed to commence the scheme of construction with part of the possession of the property being handed over.
36. These were most essential terms of the agreement to sale. These Page 37 of 45 C/FA/6443/1998 JUDGMENT terms were certainly not thrashed out between the parties during the meeting of second week of March 1989. Though the plaintiff tried to show in the plaint as well as in his deposition that all terms were finally agreed during such meeting, such assertions are quite contrary to the evidence on record. Had there been complete agreement on these terms, there was no question of parties suggesting numerous changes in the draft agreement. Even if Hiralal had suggested such changes, the plaintiffs would have objected to the same on the ground that such conditions were already previously agreed upon. At no point of time, the plaintiffs put up any such suggestion. In fact, they negotiated such conditions, and even agreed to drop the request for handing over possession of the property, or allowing them to put their board on the suit premises. The fact that the agreement to sale never referred to any earlier concluded contract with all terms and conditions on material aspects have been entered into between the parties, is also a significant factor.
37. It is undoubtedly true that the defendants never later on questioned the sale consideration of Rs.4,000/- per square yard, which was recorded in the draft agreement. It is also true that they admitted to have received initially a sum of Rs.1100/- as a token money, and a further cash payment of Rs.75,000/- from the plaintiffs. However, Hiralal in his deposition explained that such amount was paid to ensure that the defendants did not Page 38 of 45 C/FA/6443/1998 JUDGMENT enter into any negotiations with any other prospective buyers. Whatever be the validity of this defence, it is neither unknown nor inconceivable that a token amount is offered, or at times, even a sizeable amount is deposited by the prospective buyers for showing their bonafides and keen interest. Mere acceptance of such amount would not establish a concluded contract for sale of immovable property. It may, at best establish, and in this case undoubtedly, it was even otherwise established that the negotiations between the parties were at an advanced stage. We are not for a moment suggesting that the defendants did not have a keen interest to dispose of the property, and the plaintiffs had equally keen interest to purchase the same. In fact, there is every pointer to the fact that such negotiations had reached to an advanced stage. However, in our opinion, their negotiations remained only at that stage, without ever culminating into any concluded contract for sale of immovable property. On several material terms, the parties had never previously agreed. To reiterate, had there been any such agreement, the plaintiffs would have immediately objected to the defendants taking a contrary stand at the time of execution of written agreement to sale. In fact, the plaintiff No.1 himself raised a query to his advocate as to what would be the correct amount to be paid towards earnest money at the time of execution of the agreement to sale. The most contested issue was whether the plaintiffs would get certain rights to start their scheme for commercial construction Page 39 of 45 C/FA/6443/1998 JUDGMENT at the time of agreement to sale before the final sale deed, and whether in view thereof the defendants would receive any earnest money, whether 10% or more paid over to them, or would such amount remain invested in joint accounts of the plaintiffs and the defendants.
38. Present one was a landed property with a residential unit occupied by some of the defendants. A property developer had interest in purchasing such property for construction. It had potential for development of a scheme for commercial or at least residential units. When such a property is being sold and purchased, obviously, the seller would be interested in receiving the full sale consideration to be able to purchase alternative accommodation as quickly as possible, to insulate himself from price escalation, and to invest the residue in any sound investment. The purchaser would want to put the property to commercial use by development, and to make a reasonable profit. It would be in the interest of both sides, therefore, to understand clearly within what time the sale would be completed, and the sale consideration fully paid. The duration within which all the formalities would be completed by the defendants and sale consideration paid by the plaintiffs, therefore, would be of considerable importance. Whether such period would be of the essence of the contract also or not would have to be clearly decided. None of these terms were decided between the parties during the said Page 40 of 45 C/FA/6443/1998 JUDGMENT meeting of second week of March 1989. As rightly observed by the learned Single Judge of Andhra Pradesh High Court in the case of P. Prabhakara Rao (supra), in an agreement to sale of immovable property, salient features would include not only the identity of the property and the sale consideration, but also include mode of payment, the timing and method of delivery of possession, the period within which the contract must be concluded, and the consequences must ensue on account of non-compliance with the conditions by either side.
39. In our opinion, the parties did not agree to these important conditions which were vital and fundamental. Such terms were not finalised during the second week of March 1989, or at any time thereafter. The act of the parties going through drafts of agreements must be seen as a process of advanced negotiations, which continued without ever culminating into a final agreement to sale. This can be gathered from various factors. The parties jointly approached the advocate for draft of agreement to sale. No seller would approach an advocate unless he was keen on selling the property to a prospective buyer. The defendants had also, after the meeting of March 1989, given advertisement in the newspaper inviting objections against title clearance being granted. They had accepted a sum of Rs.1100/- by way of token money, and a further sum of Rs.75000/- in cash. During the telephonic conversation also, Page 41 of 45 C/FA/6443/1998 JUDGMENT Pallaviben as well as defendant No.3 - Shrikant did not question the sale consideration of Rs.4,000/- per square yard. It was only Hiralal, who objected to this figure. The telephonic conversation between the plaintiff No.1 and different defendants does not establish anything to the contrary. It only suggests broad understanding or advanced negotiations for sale of the land. It nowhere refers to the terms and conditions on which the parties agreed to execute such a sale. The plaintiffs were engaged in the business of development of landed properties. They had already put up various schemes in the city of Ahmedabad. They were thus not novices in the business of buying and selling of land and other immovable properties. The plaintiff No. 1 drew the defendants into the phone conversation by tape-recording for creation of evidence. Even during such conversation, he did not mention about all terms of the agreement being finalised. This was, therefore, not a case where the parties had previously entered into an oral agreement to sell the property with clear understanding of all material terms and mere formality of executing a written agreement later on failed. This is a case where the parties entered into negotiations, and desired to enter into an agreement to sale, for which purpose the written agreement was to be executed. However, the parties could not agree to the important conditions, and the negotiations, therefore, failed.
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40. We may now deal with the authorities relied upon by Mrs. Mehta. In case of Taraben D/o. Nanubhai Kasanbhai Patel and W/o. Navinkumar Patel (supra), the learned Single Judge was considering a case where the parties had reduced in writing their understanding in the form of banachitti. It was this document held to be an agreement to sale.
41. In the case of Bhagwandas Goverdhandas Kedia (supra), the Apex Court observed that a contract unlike a tort is not unilateral. The Court emphasised on the requirement of meeting of minds, and observed that if there had been no meeting of minds, no contract would result. There should be an offer by one party, express or implied, and an acceptance of that offer by the other in the same sense in which it was made by the other. An agreement does not result from a mere state of mind; intent to accept an offer does not give rise to a contract.
In the present case also, we have come to such conclusion that there was no meeting of minds on the material terms of the contract.
42. In case of Dr. Jiwan Lal and others (supra), the Court noted that neither party had argued that there was no formation of the contract between the parties. In fact, it was a case where the contract was reduced into writing and delayed execution.
43. In the case of Aloka Bose (supra), the Supreme Court observed Page 43 of 45 C/FA/6443/1998 JUDGMENT that all agreements of sale are bilateral contracts, as promises are made by both the vendor agreeing to sale and the purchaser agreeing to purchase. It was further observed that even an oral agreement to sale is valid, and thus, a written agreement signed by one of the parties, if it evidences such an oral agreement, will also be valid. In an agreement to sale, the terms are always negotiated and thereafter reduced in the form of an agreement of sale and signed by both the parties or the vendor alone.
In the present case, we have held that the parties never travelled beyond the advanced stage of negotiations. The concluded contract, therefore, did not come into existence.
44. The case of Silvey and others (supra) has no application. It was a case where the agreement for sale was executed was not in dispute. The question was with respect to the conduct of the defendants whether they were ready and willing to perform their obligations in terms of the contract. Such issue does not arise in the present appeal.
45. In the result, in our opinion, the trial court committed no error in dismissing the suit. The First Appeal is, therefore, dismissed. The stay granted earlier is vacated. The amount of Rs.75,000/- stated to have been deposited by the defendants before the Court may be paid over to the plaintiff with accrued interest.
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C/FA/6443/1998 JUDGMENT At this stage, learned counsel for the appellants requested that the stay previously granted be continued for a period of 12 weeks, or that this judgment may be stayed for a suitable period to enable the appellants to pursue further remedies. As against this, the learned counsel for the respondents opposed the request, contending that the property has been under stay right from the year 1990, and more than 25 years have passed since then. When two courts have held that there was no proof of any oral agreement of sale of immovable property, we do not find it appropriate to continue the interim protection previously granted by the courts. The request is, therefore, rejected.
(AKIL KURESHI, J.) (VIPUL M. PANCHOLI, J.) sndevu Page 45 of 45