1998 (10) TMI 548 - HC - Indian Laws

Summary

Issues Involved:
1. Specific performance of an oral agreement of sale.
2. Permanent injunction restraining interference with possession.
3. Recovery of possession and damages for use and occupation.
4. Financial capacity of the plaintiff.
5. Validity and enforceability of the oral agreement.
6. Bona fide purchase by the 7th defendant.

Issue-wise Detailed Analysis:

1. Specific Performance of an Oral Agreement of Sale:
The plaintiff claimed an oral agreement with defendants 1, 2, and 4 to 6 to sell a vacant site at Rs. 800 per sq yard, with Rs. 10,000 paid as advance. The lower court decreed in favor of the plaintiff, but the High Court emphasized the heavy burden of proof on the plaintiff in cases of oral agreements. The plaintiff's evidence, including oral testimonies and entries in his daybook and ledger, was found insufficient and unreliable. The court noted several inconsistencies and improbabilities, such as the lack of a written agreement or receipt for the advance payment and the dubious financial capacity of the plaintiff at the time.

2. Permanent Injunction Restraining Interference with Possession:
The plaintiff sought a permanent injunction against the defendants from interfering with his possession. The High Court, however, found that the plaintiff failed to establish a valid and enforceable contract, thus negating the basis for the injunction.

3. Recovery of Possession and Damages for Use and Occupation:
The 7th defendant filed a suit for recovery of possession and damages for use and occupation. The High Court decreed in favor of the 7th defendant for possession of the vacant site and allowed the defendant to remove any superstructures. The issue of damages for use and occupation was left to be determined on a separate application.

4. Financial Capacity of the Plaintiff:
The plaintiff's financial capacity to pay the advance was questioned. The High Court found that the plaintiff failed to convincingly explain or establish the source of the Rs. 10,000. The entries in the plaintiff's account books were deemed self-serving and not maintained in the ordinary course of business.

5. Validity and Enforceability of the Oral Agreement:
The High Court held that the plaintiff did not convincingly establish the oral agreement or consensus ad idem between the parties. The inconsistencies in the plaintiff's evidence and the improbability of the alleged agreement led the court to conclude that there was no valid and enforceable contract.

6. Bona Fide Purchase by the 7th Defendant:
The 7th defendant claimed to be a bona fide purchaser for value without notice of the alleged oral agreement. The High Court did not delve deeply into this issue, as the plaintiff's failure to prove the oral agreement rendered the question of the 7th defendant's bona fides less relevant. However, the court did note the suspicious circumstances surrounding the sale deeds obtained by the 7th defendant.

Conclusion:
The High Court allowed both appeals, setting aside the lower court's judgment and decrees. The plaintiff's suit (OS No.69 of 1989) was dismissed, and the 7th defendant's suit (OS No.87 of 1991) was decreed for possession of the vacant site. The plaintiff was permitted to withdraw any amount deposited pursuant to the lower court's decree. No order as to costs was made in the appeals.