Specific performance of oral agreement for sale denied for want of prima facie case and delay.

The Appellants (original plaintiffs) filed a suit for specific performance of an alleged oral agreement to sell two parcels of land in Bardoli, Surat

They relied on a Board Resolution of Defendant No. 1 and an undated Memorandum of Understanding (MoU) signed by some directors (Defendant Nos. 4-6)

The Plaintiffs alleged they incurred expenses to clear title and relocate the company's peon as part of the deal

Defendant No. 1 subsequently sold one parcel to Respondent Nos. 12 & 13 via a registered sale deed

The Trial Court rejected the Plaintiffs' application for an interim injunction (Exhibit-5), prompting this appeal under Order XLIII Rule 1(r) of the CPC

1. Whether the Plaintiffs established a prima facie case for specific performance based on an oral agreement and the undated MoU

2. Whether the Trial Court's application of principles like res ipsa loquitur and "approbate and reprobate" rendered the dismissal of the injunction application perverse

3. Whether the delay in filing the suit and the subsequent development of the land by third-party purchasers disentitled the Plaintiffs to equitable relief

The Court applied the trio of principles for granting an injunction—prima facie case, balance of convenience, and irreparable injury—under Order XXXIX Rules 1 & 2 of the CPC

Section 19(b) of the Specific Relief Act, 1963 regarding the rights of subsequent purchasers

Section 52 of the Transfer of Property Act, 1882 regarding lis pendens

Ambalal Sarabhai Enterprise Ltd. v. KS Infraspace LLP Ltd. (2020), which mandates considering the conduct and delay of the party seeking equitable relief

Ramakant Ambalal Choksi v. Harish Ambalal Choksi (2024), which restricts the Appellate Court’s power to interfere with discretionary orders unless they are perverse or against settled law

The Court found that the Plaintiffs failed to prove a prima facie case because the MoU was undated, lacked an agreed purchase price, and was signed by directors without proven authorization from the company

Notably, the Plaintiffs omitted any reference to the MoU in their pre-suit legal notices, casting doubt on its genuineness

Furthermore, the Plaintiffs failed to demonstrate they had performed their part of the contract, such as clearing the title or providing alternate housing for the peon

Regarding the third-party defendants (12 & 13), the Court noted that they had already begun substantial development on the land

The Court held that even though the suit was within the limitation period, the delay in approaching the court after the defendants issued a public notice in 2023 made the grant of an injunction inequitable

The misuse of legal terms like res ipsa loquitur by the Trial Court did not invalidate the order since the factual conclusions regarding the lack of a prima facie case were sound

The Court held that the Plaintiffs failed to meet the evidentiary threshold for an interim stay and that the balance of convenience favoured the subsequent purchasers who had already commenced construction

The Court clarified that while lis pendens was registered, it did not automatically entitle the Plaintiffs to an injunction where a prima facie case was absent

The Trial Court was directed to decide the suit on its merits based on evidence without being influenced by the observations at the interlocutory stage