Specific performance of an oral agreement involving construction cannot be rejected under Order VII Rule 11.

The Plaintiff, a real estate developer, filed a suit for specific performance of an oral Agreement to Sell (ATS) dated 26.10.2019 regarding portions of property M-1, Green Park, New Delhi, for ₹14 Crores.

The Plaintiff alleged the ATS was memorialized in a handwritten note by Defendant No. 3 (broker) and that he paid ₹11,00,000 as part-performance.

Relying on the ATS, the Plaintiff obtained statutory approvals (ASI, SDMC) costing approximately ₹17,00,000 with the active cooperation of Defendant No. 1.

Defendant No. 1 subsequently stopped communicating, leading to this suit.

Defendant No. 1 filed I.A. 3505/2023 under Order VII Rule 11 CPC, seeking rejection of the plaint on the grounds that it disclosed no cause of action and was barred by Section 14(b) of the Specific Relief Act (SPA).

Whether the plaint should be rejected under Order VII Rule 11(a) and (d) of the CPC for failing to disclose a cause of action or being barred by Section 14(b) of the Specific Relief Act.

Whether an oral agreement for the sale/development of property that purportedly requires continuous supervision by the Court is enforceable through specific performance at the pre-trial stage.

The Court applied Order VII Rule 11 of the CPC, which mandates the rejection of a plaint if it does not disclose a cause of action or is barred by law.

It relied on the principle from Indian Evangelical Lutheran Church Trust Assn. v. Sri Bala & Co. (2025) that for Order VII Rule 11 purposes, only the averments in the plaint must be considered, and they must be read as a whole rather than in isolation.

Regarding specific performance, the Court referred to Section 14(b) of the Specific Relief Act, 1963, which states that contracts involving the performance of a continuous duty which the Court cannot supervise shall not be specifically enforced.

It also considered the criteria for enforcing building contracts established in Sushil Kumar Agarwal v. Meenakshi Sadhu (2019).

The Court observed that while the ATS was oral, the Plaintiff produced documentary evidence of part-performance, including the exchange of draft Sale Deeds by Defendant No. 1’s lawyer and shared efforts in obtaining municipal sanctions.

The Court rejected the Defendant's argument that the contract was hit by Section 14(b) of the SPA at this preliminary stage, noting that whether the contract requires "constant supervision" is a matter of evidence to be determined during trial.

The Court emphasized that under Order VII Rule 11, the court cannot look at the defense or the written statement; it must take the plaint's averments as true.

Since the Plaintiff spent substantial sums on approvals based on the alleged agreement, the Court held that the suit could not be "nipped in the bud".

The Court clarified that if evidence later reveals that constant monitoring is indeed required, the Defendant may move for dismissal under Order XII Rule 6 CPC.

The application for rejection of the plaint was dismissed, and the suit was ordered to be listed for further proceedings on 20.07.2026.