Absence of Witness Box Appearance or Rebuttal Evidence Validates Specific Performance of Oral Property Agreement

The plaintiff (respondent herein) filed a suit for specific performance of an oral agreement to purchase suit property (Sub-plot 1A, Mahagujarat Saurabh Cooperative Housing Society) from the defendants for ₹5,50,000/- plus transfer fees.

The plaintiff claimed to have paid the full consideration to Defendant No. 1 (Rajiv Shukla), who issued receipts and handed over possession of the ground floor and open land.

Defendant No. 2 (appellant) later issued a public notice for title clearance, asserting absolute ownership of the superstructure via a 1985 sale deed.

The Trial Court decreed the suit, holding that Defendant No. 1 acted as an agent for the other family members and that a concluded contract existed.

Defendant No. 2 challenged this decree on the grounds that she never received consideration and that Defendant No. 1 had no authority to sell her property.

1. Whether a concluded oral agreement for sale existed between the plaintiff and the defendants based on the authority of Defendant No. 1.

2. Whether the plaintiff proved payment of full consideration and valid transfer of possession.

3. Whether a decree for specific performance can be passed for property requiring government permission for transfer.

The court applied Section 96 of the Code of Civil Procedure regarding first appeals.

It relied on the principle that the burden of proving a concluded oral agreement lies on the plaintiff.

Regarding specific performance of restricted tenure land, the court applied the doctrine that an agreement to sell is not void ab initio due to a lack of prior permission; rather, a decree can be granted subject to obtaining necessary permissions from the Collector/State Government.

The court also invoked the principle of "adverse inference" where a material witness (Defendant No. 1) fails to enter the witness box to deny assertions of agency and receipt of money.

The Court found that while Defendant No. 2 held a sale deed for the superstructure, the land itself remained in the name of Defendant No. 1 in Society records.

Evidence from a bank officer and a tenant established that Defendant No. 1 managed the property, collected rents, and received the plaintiff's payments via demand drafts and cash, even using those funds to settle a prior cancelled agreement with a third party.

The Court determined that the defendants, by implied consent, allowed Defendant No. 1 to act as their agent.

Crucially, Defendant No. 1 did not contest the suit or provide evidence to deny the oral agreement.

The Court noted that Defendant No. 2 never sought to recover possession of the ground floor from the plaintiff, indicating the possession transfer was recognized.

Consequently, the Trial Court’s finding of a valid agreement was not perverse.

The court held that the plaintiff proved the oral agreement and payment of consideration to Defendant No. 1, who held implied authority to manage and sell the property.

The Court directed the defendants to apply for the necessary Collector's permission within one month and execute the sale deed within one month of receiving such permission.

All connected civil applications were disposed of.