vil Appeal Nos
1893 and 1894 of 1989
From the Judgment and Order dated 249
1987 of the Andhra Pradesh High Court in CCCA No 152 of 1984 and CCCA No 150 of 1984
K Parasaran Shanti Bhushan ADN Rao and A Subba Rao for the Appellants
MC Bhandare K Madhava Reddy Subodh Markandeya Mrs Chitra Markandeya WA Nomani GS Giri Rao AK Raina and D Prakash Reddy for the Respondents
The Judgment of the Court was delivered by KASLIWAL J
The Plaintiffs by Special Leave have filed these appeals against the Judgment of Andhra Pradesh High Court Hyderabad dated 24th September 1987
The four plaintiffs who are brothers filed the present suit on 17th July 1979 for specific performance of oral contract for sale of a building known as Roshan Manzil located in an area of 4165 sq
yards in Saifabad Hydera bad
Ms Gopi Hotel was the tenant in the premises
Accord ing to the case as set up in the plaint the first plaintiff Brij Mohan learnt some time in the first week of April 1979 that the defendant No 1 Smt
Mahboobunnisa Begum since deceased was contemplating the sale of the property in question and that Shri Arif Ali her Advocate and income tax practitioner was assisting her in finding a purchaser
Shri Arif Ali had mentioned the above intention of the first defendant to Sh
Ibrahim Moosa of Ms J Moosa  Company who was known to the first plaintiff
On learning from Shri Ibrahim Moosa the first and second plaintiffs namely Brij Mohan and Jagmohan along with Sh
Ibrahim met Sh
Arif Ali
Arif Ali gave the details of the property and also showed the plans of the property to them
Arif Ali stated that the defendant was expecting the price of Rs 1000000
The plaintiffs Nos 1 and 2 offered Rs700000
Shri Arif stated that he will ascertain from the defendant her reaction to the said offer
A fortnight later ie in the third week of April 1979 the plaintiffs Nos 1 and 2 along with Sh
Ibrahim Moosa and Sh
Arif Ali went to the residence of the defendant who was insisting on the payment of Rs 1000000 as the sale price
At the said meeting the husband of the defendant was also present
The plaintiffs Nos 1 and 2 418 increased their price from Rs700000 to Rs800000
The first defendant said that she would think over and inform the plaintiffs Nos 1 and 2 through Sh
Arif Ali
On 3rd May 1979 the plaintiffs Nos 1 and 2 along with Shri Ibra him Moosa met Sh
Arif Ali
Arif Ali stated that the defend ant was agreeable to sell the property to plaintiffs only for Rs 1000000 and not a pie less
Thereupon the plain tiffs agreed to pay Rs 1000000 as the sale price
Shri Arif Ali after getting the confirmation of acceptence of the said offer of the plaintiffs Nos 1 and 2 from the first defendant said that the plaintiffs Nos 1 and 2 should meet the defendants on 6th May 1979 and that she would in the meanwhile purchase the stamp papers for making the formal agreement for sale incorporating the oral agreement arrived at
It was further alleged in the plaint that on 6th May 1979 the first and second plaintiffs along with Shri Ibrahim Moosa met the first defendant and her husband in the presence of the said Sh
Arif Ali
In the said meeting the amount of earnest money to be paid time for registration of the sale deed etc were decided
The said Shri Arif Ali prepared in his own handwriting a draft of the receipt incorporating the terms of the orally concluded agreement for sale
The draft was scrutinised by the husband of the first defendant who suggested some alterations
The said Shri Arif Ali thereupon prepared final draft of the receipt in his own hand
He handed over the first and the final draft to the first plaintiff to get the later typed and duly stamped
He also delivered the stamp papers to the first plaintiff for being used for typing of the formal agreement of sale
It was further stated in the plaint that during the said meeting held on 6th May 1979 the plaintiffs Nos 1 and 2 were permitted to proceed with the publication of the no tices in the newspapers
Accordingly the contents of the publication were got prepared by them bonafidely anticipat ing that the first defendant will execute the receipt after receiving the stipulated earnest money in the course of the day ie
6579
However for reasons known to herself the first defendant deliberately and wantonly evaded meeting the first and second plaintiffs to receive the advance and execute the receipt
It was further stated in the plaint that after the public notice was published in the newspapers taking advan tage of her wanton and deliberate act of evasion the first defendant got a reply notice published in the newspaper and got issued a legal notice dated 8579 through her Advocate falsely alleging that there was no agreement for sale
Thereafter the first and second plaintiff made sincere and repeated attempts 419 to convince the first defendant that the false and baseless pleas taken by her were detrimental to the interest of all concerned and there is inexistence a concluded contract for sale of the suit property and that the execution of the agreement of sale was a mere formality as well the receipt for the advance
Since the first defendant persisted in her illegal conduct
the plaintiffs got issued a final notice dated 27th June 1979 calling upon the first defendant to execute the agreement receive the earnest money and issue a valid receipt within three days of the receipt of the notice thus giving the first defendant one more opportunity
The plaintiffs neither received any reply nor the first defend ant complied with the demands made in the notice
It was further alleged in the plaint that the plaintiffs Nos 1 and 2 had negotiated for the purchase of the property on behalf of themselves and plaintiffs Nos 3 and 4 who were their younger brothers
The concluded contract for sale entered into with the first defendant was for the benefit of all the four plaintiffs
Hence all the four plaintiffs had joined in the filing of the suit
The second defendant was Ms Gopi Hotel who was the tenant of the first defendant in the suit premises
The plaintiffs further averred that they have been and are ready and willing to pay to the first defendant the sale consider ation of Rs 1000000
The plaintiffs undertake to deposit the same in the court at any time during the pendency of the suit or within a time fixed by the Hon ble Court for the deposit of the same after passing the decree or at the time of execution and registration of the sale deed
The plain tiffs on the above allegations sought the relief of specific performance of the agreement of sale in respect of the suit property after payment of sale consideration of Rs 1000000 The first defendant Smt
Mahaboobunnisa Begum filed a written statement on 21st January 1980 stating that certain negotiations took place between her and plaintiffs Nos 1 and 2 but no contract was finalised with them and the negotiations failed
According to her under an agreement of sale dated 22nd June 1979 she agreed to sell the property in question to defendants Nos 3 and 4 namely Smt
Sugra Begum and Smt
Saira Banu
It was submitted in the reply that it was wholly incorrect to suggest of an oral contract of sale on 3rd May 1979 in respect of sale of the suit property in favour of the plaintiffs
There was a proposal of sale of the suit property and plaintiffs did approach for negotiations
However the allegation of the plaintiffs approaching during first week of April 1979 with Arif Ali Income Tax practitioner was wholly erroneous
In fact plaintiff No 1 approached 420 No 1 with Arif Ali and Ibrahim Moosa for negotiations and plaintiffs Nos 1 and 2 came along with them somewhere during the last week of April 1979 and tried to negotiate and thereafter again they approached on 6th May 1979 but negotiations could not be finalised and the answering de fendant did not agree to sell the suit property to the plaintiffs Nos 1 and 2
In fact details have been men tioned in the counter filed in IA pertaining to injunc tion bearing No 67979 which may be read as part of the written statement
There was no concluded or enforceable contract arrived at on 3rd May 1979 as alleged and con tended
It was further alleged that there was no price settled or agreed and even the payment for advance was not settled and other terms and conditions were not agreed upon even on 6th May 1979 and the negotiations failed and noth ing was settled
There was no concluded contract and the plaintiffs had no cause of action to file the present suit for specific performance
The parties never intended to have an oral agreement and the negotiations if any never re sulted in a concluded contract and even if the negotiations had been finalised it had to be reduced into a written agreement and the writing contemplated was not formal as alleged and contended by the plaintiffs but was a condition and a term of contract
The plaintiffs with ulterior motive had taken the plea of oral contract It was further submitted in the written statement that it was true that plaintiffs Nos 1 and 2 did approach the answering defendant on 6th May 1979 along with Ibrahim and Arif and even in the said meeting negotiations failed and the parties did not and could not arrive at a concluded contract and even in the said negotiations on 6th May 1979 matters remained unsettled and were not concluded
It was plaintiff No 1 who attempted to prepare receipt it was wholly erroneous to suggest of any draft receipt or a final receipt being prepared after scrutiny made by the husband of the answering defendant
There was no final document pre pared and there was no final settlement of terms and condi tions of contract
The answering defendant was not aware of the purchase of stamp paper and she never asked for the purchase of the stamp papers
The blank stamp papers and incomplete and unsigned draft receipts in no way spell out a concluded contract and the suit is untenable
It was also alleged in the reply that even on 6th May 1979 there was no completed or concluded contract and nego tiations failed
Consequently the plaintiffs took away the blank incomplete papers and rushed with utmost haste to get it published in the newspaper making false allegations of having paid Rs50000 as advance under the sale 421 agreement etc and immediately the answering defendant sent a suitable reply contradicting the said allegations
There was no bonafides in their action
It was done with ulterior motive to cause loss and damage to the defendant
When no earnest money had been paid or received the plain tiffs Nos 1 and 2 had no right to make false allegations and mislead the public and consequently the answering de fendant suffered heavy loss
The second defendant Ms Gopi Hotel only took the plea in the written statement that he was a tenant in the build ing
Defendants Nos 3 and 4 supported the case of the first defendant and claimed ownership in the suit property by virtue of a registered sale deed dated 19th November 1979 executed in their favour
It may be made clear at this stage that according to defendant No 1 an agreement to sell the property in question was made by the first defendant in favour of defendants Nos 3 and 4 on 22679
After the injunction being vacated by the High Court the first defend ant sold the suit property for a sum of Rs 1000000 in favour of defendants Nos 3 and 4 by a registered sale deed dated 19th November 1979
Defendant No 1 died on 3rd November 1982 during the pendency of the suit as such defendants Nos
5 to 9 were impleaded as legal representa tives of defendant No 1
The Learned Trial Court recorded the summary of the findings which are reproduced in its own words
Summary of the findings On the facts and circumstances of the case it is estab lished that the plaintiffs entered into an oral contract of sale with D 1 on 3579
The terms settled were that D 1 should sell the suit property for a sum of Rs 1000000 and D 1 should obtain permissions from the authority under Land Ceiling Act and also income Tax Act
The sale deed should be executed within six months from 6579
It is also settled that vacant possession was not to be given on the date of contract of sale and the parties are aware that the defend ant No 2 was only a tenant in the premises
The only aspect left open on 3579 is that mode of payment should be fixed on 6579
On 6579 it was agreed that D1 should receive Rs50000 as advance and these terms were reduced into writing in Ems
A 1 and A 2 but before the ink could dry the defendant No 1 on the evening of 422 6579 refused to receive the amount
This resulted in the breach of contract on the part of D 1
So the plaintiffs are entitled to specific performance of oral contract of sale concluded on 3579
Subsequent sale to defendants 3 and 4 do not create any rights in favour of them and in order to prevent D 3 and D 4 from claiming any rights in future they should also be made to join D 5 to D 9 in executing the registered sale deed
Defendant No 2 is admittedly not entitled to any proprietary rights in the property and he is only a tenant
As to whether D 2 is liable to be evicted or not it is held that the Plaintiffs are entitled to seek eviction at an appropriate time when they become full owners of the property
Defendants 3 and 4 shall not be liable to contribute any thing towards expenses for the executing of the registered sale deed and defendants 5 to 9 as legal representatives of D 1 are bound to perform their part of contract by obtaining permission required under the Urban Land Ceiling Acts and Income Tax act and any other Act required execute the sale deed and register the sale upon receiving the entire consideration of Rs 1000000
The expenses for registration of the sale deed shall be borne out in equal halls by defendants 5 to 9 on the one hand and the plaintiffs on the other hand
As a result of the above findings the trial court de creed the plaintiffs suit for specific performance
Two separate appeals one by defendants Nos 5 to 9 and the other by defendants Nos 3 and 4 were filed in the High Court challenging the decree passed by the trial court
A Division Bench of the High Court by Judgment dated 24th September 1987 allowed both the appeals and set aside the decree passed by the trial court
As two separate appeals Nos 150 and 152 of 1984 were disposed of by one single order the plaintiffs filed the above two civil appeals before this Court by Special Leave
The High Court observed that the only question which arose for consideration in both the appeals was whether there was a concluded oral contract between the parties namely plaintiffs 1 and 2 on one side and the first defend ant on the other on 3rd May 1979 as alleged by the plain tiffs According to the High Court to decide this question the only available oral evidence was that of PW 1 Brij Mohan PW 3 Jagmohan and DW 2 Arif Ali
As regard the negotiations which took place between the parties in the third week of April 1979 the High court observed that the negotiations which took place between the 423 parties in the third week of April 1979 were not in dispute and which were to the effect that when the first defendant was insisting on payment of Rs 1000000 plaintiffs 1 and 2 increased their offer from Rs700000 to Rs800000 and the first defendant promised them to think over and inform the plaintiffs through Arif Ali
The High Court then consid ered the bargain that took place between the parties on 3rd May 1979
The plaintiffs apart from their own statements as PW 1 and PW 3 had also examined PW 2 the Income Tax Inspector B Ward Circle No 4 Hyderabad to show that de fendant No 1 was an income tax and wealth tax assessee and Sh
Arif Ali Advocate and Income tax practitioner used to look after her tax matters
The plaintiffs had also examined PW 4 Mohd Yusuf a stamp vendor to prove Exhibit X 25 sales register of stamps and Exhibit X 26 an entry of sale of exhibit A 3 non judicial stamps for Rs5 to defendant No 1 Smt
Mahboobnissa Begum
Similarly plaintiffs had examined PW 5 Sheikh Ismail another stamp vendor for having sold a stamp Exhibit A 4 to one Abdul Khalik on behalf of Smt
Mehboobnissa Begum vide entry exhibit X 27 in the register of stamps
The plaintiffs by the aforesaid evidence wanted to establish that one stamp was purchased by Smt
Mehboobnissa Begum herself and another through Mohd Khalik for executing the agreement for sale in favour of plaintiffs
The High Court in this regard observed that it was not necessary to discuss the evidence of PW 4 as to whether the first defendant personally went to him and purchased the stamp paper
The first defendant who is a lady from aristocratic family would not have gone all the way to Chotta Bazar to purchase a non judicial stamp worth Rs5
PW 4 deposed that he cannot identify whether the person who came for purchase of the stamp paper was Smt
Mehboobnissa Begum or not
It may be that some person by name Smt
Mehboobnissa purchased the stamp papers
PW 5 simply stated that he sold exhibit A 4 to one Adbul Khalik on behalf of Smt
Mehboobnissa Begum
DW 2 Arif Ali however said that neither any transaction nor talks took place between the plaintiffs 1 and 2 and himself on 3rd May 1979
The High Court did not agree with the submission of the Learned counsel for the plaintiffs made before them that the pur chased of the stamps Exhibit A 3 and A 4 was a strong cri cumstance in favour of a concluded contract
The High Court in this regard observed that first of all it was not firmly established that the purchase of the stamps was for the purpose of this transaction only
In view of the evidence of DW 2 much weight cannot be given to the evidence of PWs 4 and 5
The High Court further observed that even assuming that these two stamps were purchased pursuant to the talks that took place between DW 2 and PWs 1 and 3 it would not improve the case of the plaintiffs
The 424 stamps were blank and nothing was engrossed on them
This circumstances at the most would show that meeting on 6th May 1979 was fixed between the plaintiffs 1 and 2 and the first defendant for further negotiations
The High Court then observed that as regards the meeting which took place on 6th May 1979 and the fact that the negotiations fell through was admitted by both the parties
Therefore the crucial question for determination was whether all the terms of the oral contract were entered into between the parties on 3rd May 1979 or any terms were left open to be dis cussed and determined in the meeting to be held on 6th May 1979
The High Court then considered the argument of the plaintiffs according to whom Exhibit A 1 draft receipt was written by DW 2 Sh
Arif Ali on 6th May 1979 stating that the suit premises was agreed to be sold for Rs 1000000 and the permission for Urban Land Ceiling Authority will be obtained by the first defendant and the registration will be completed within six months from that date
The plaintiffs further case was that the first defendant s husband who was present suggested some alterations basing on which Exhibit A 2 fair draft was prepared and that when the plaintiffs took the agreed advance amount of Rs50000 in the evening the first defendant refused to accept the advance amount and resiled from the contract
As against the above contentions of the plaintiffs DW 2 Sh
Arif Ali who is the represen tative of the first defendant deposed that in the meeting between the parties which took place in April 1979 the vendor did not take the responsibility of obtaining clear ance under the Urban Land Ceiling Act
He denied the sugges tion that in the third week of April 1979 the first defend ant offered to sell the suit property for Rs 1000000 and that she would obtain the clearance under the Urban Land Ceiling Act
On the other hand he deposed that when the plaintiffs offered Rs800000 the first defendant told them that she would consider and communicate her view through DW 2 some time later
The High Court in this regard clear ly observed that the contention of the plaintiffs that even in the third week of April 1979 before the parties could agree upon the sale price for the suit building there was discussion about the obtaining of clearance under the Urban Land Ceiling Act and that the first defendant undertook to obtain that clearance certificate cannot be believed
The High Court further observed as under As seen from their own evidence by the 3rd week of April 1979 plaintiffs 1 and 2 increased theft offer from Rs700000 to Rs800000
At the time of the earlier 425 negotiations when the plaintiffs offered Rs700000 seven lakhs and the 1st defendant was not willing to accept that offer there was no stipulation as to who should obtain the clearance under the Urban Land Ceiling Act
If so it is unbelievable that in the 3rd week of April 1979 when still there was a wide gap of Rs200000 in the price payable for the suit building the parties would have stipulated about the condition as to who should obtain the permission under the Urban Land Ceiling Act
Therefore the evidence of PWs 1 and 3 can be believed to the extent that they approached Arif Ali on 35 1979 and Arif Ali in his turn communicated their willingness to pay the price of Rs 1000000 for the suit premises and the 1st defendant accepted that offer
 The High Court on the basis of the above finding then held that in order to determine the binding nature of the contract between the parties the mere acceptance of sale price is not sufficient
It was not the case of the plain tiffs that the other terms of the contract were also dis cussed by DW 2 over the phone and their acceptance was communicated to them by the 1st defendant through DW 2
It was obviously for that reason that a further meeting was fixed at the house of the 1st defendant in the morning of 6th May 1979 which had admittedly taken place
The High Court further held that it must be remembered that this agreement is in respect of a valuable property and the main intention was to reduce the terms of agreement into writing and when the parties are very much relying on the alleged oral agreement dated 3rd May 1979 there would definitely have been a reference in Exhibits A 1 and A 2 to the oral agreement said to have taken place on 3rd May 1979
The absence of the same in Exhibits A 1 and A 2 against throws a serious doubt about the alleged agreement dated 3rd May 1979
In any event the mere fact that there was a meeting between the plaintiffs Nos 1 and 2 and DW 2 on 3rd May 1979 does not establish that there was a con cluded contract between the parties on that day because admittedly the first defendant was not present at that time
What all had happened according to PWs 1 and 3 is that they offered to pay Rs 1000000 for the suit building and DW 2 having contacted the 1st defendant over the phone conveyed to them her acceptance of the price fixed
In the absence of evidence that the other terms also were discussed over the phone and settled at that time and the 1st defend ant agreed for the terms it cannot be said that there is a con 426 cluded contract on 3rd May 1979
The fixation of price is only one of the terms of the contract and by mere acceptance of the price it cannot be said that there is a concluded contract between the parties in the absence of proof of fixation of other conditions mentioned in Exhibits A 1 and A 2 viz undertaking by the 1st defendant to obtain per mission from Urban Land Ceiling Authority and the amount of advance to be paid
It is not the case of the plaintiffs 1 and 2 that prior to 6579 there was an agreement between the parties as to the amount of advance to be paid
The High Court thus held that in the absence of any consensus being arrived at between the two contracting parties about these important aspects of the agreement it cannot be said that there is a concluded oral contract between the parties on 3579
It is important to note that even exhibit B 4 an agree ment of sale dated 22679 executed between the 1st defend ant and defendants Nos 3 and 4 does not impose the condi tion that the 1st defendant the vendor should obtain the clearance from the Urban Land Ceiling Authority within the stipulated period of six months
The High Court in this regard observed that this evidence showed that the conten tion of the 1st defendant that the agreement fell through by reason of the plaintiffs insisting on her obtaining the permission from the Urban Land Ceiling Authority and the expression of her inability to comply with that demand appeared to be correct
The High Court clearly held that there was no clinching evidence to show that this stipula tion was thought of by the parties on any day prior to 6579
The High Court therefore did not agree with the contention of the Learned Counsel for the plaintiffs that all the terms of contract including the stipulation with regard to the payment of advance amount and that the vendor alone should obtain the permission from the Urban Land Ceiling Authority were settled by 3579 and what was left to be done on 6579 was merely to incorporate the terms already arrived at into a formal document on Exhibits
A 3 and A 4 stamp papers
It was further observed that had there been a meeting between plaintiffs Nos 1 and 2 and the first defendant on 3579 and there was a direct conversation between them there may be a possibility for drawing such an inference
But as observed already what all had happened on 3579 was that plaintiffs Nos 1 and 2 expressed their willingness to pay a consideration of Rs 1000000 for the suit building and the first defendant expressed her accept ance of that offer through D W 2
The other terms could not have been settled between the parties in the third week of April 1979 because by that time there was no agreement between the parties with respect to the sale consideration
Without the price being settled and especially when there was a gap of Rs200000 427 in the price accepted by the first defendant and the price offered by the first plaintiff the parties would not have discussed the other terms of the agreement such as the advance money to be paid and the responsibility of the vendor to obtain the permission from the Urban Land Ceiling Authority
It was submitted by the learned counsel for the appel lants that the High Court itself has arrived to a finding that D W 2 Sh
Arif Ali on 3579 after having a talk with defendant No 1 on phone had conveyed her acceptance to sell the property for a sum of Rs 1000000
It was submitted that an agreement for sale of immovable property could be made orally and so far as mode of payment of consideration is concerned can be settled subsequently
It was submitted that in the facts and circumstances of the present case all the fundamental and vital terms of the contract were settled and concluded on 3579 itself and even if the other details like mode of payment of consideration obtaining of no objection certificate from Land Ceiling Authorities etc
remained unsettled the same could be determined in accord ance with Sec
55 of the Transfer of Property Act
Oral contract is permissible and so far as other terms which remain unsettled the same can be determined by operation of law
It was contended that the only vital terms for a valid agreement of sale of an immovable property were the identity of the property and the price
Both these vital terms were settled and concluded on 3579 and when the plaintiffs were always ready and willing to perform their part of the con tract a decree for specific performance should have been passed in their favour
It was further contended that the stand taken by the defendant No 1 and tried to be supported by Sh
Arif Ali DW 2 that no meeting took place on 3579 at all was held not believable by the High Court itself
It was further contended that the act of purchasing stamps on 3579 by defendant No 1 and the draft receipts Exhibits A 1 and A 2 prepared by Sh
Arif Ali DW 2 himself clearly lend support to the case of the plaintiffs
Reliance in support of the above contention was placed on Kollipara Sriramulu vs T Aswathanarayana  Ors  and Nathulal vs Phoolchand 1970 2 SCR 854
On the other hand it was contended on behalf of the respondents that no vital or fundamental terms of the con tract were discussed agreed or settled on 3579
It was contended that even if the case of the plaintiffs is be lieved all that happened on 3579 was that plaintiffs had agreed to purchase the property for Rs 10 lakhs to which the defendant N 1 had conveyed her acceptance through DW 2
Neither 428 any earnestadvance money to be paid was settled nor any time for the payment of such money or time for execution of agreement of sale or final sale deed and its registration was settled
It was argued that even if the time may not be an essence of a term of contract for sale of immovable property it is a vital term without which no concluded contract can be arrived at
Admittedly no meeting was held on 3579 in the presence of the defendant No 1 and it was agreed to have a meeting of the plaintiffs and defendant No 1 on 6579
It was also an admitted position that neither any consideration passed nor any documents were signed by the parties on 3579
So far as 6579 is concerned admit tedly the negotiations failed between the parties on that day
It was further contended that if the terms had already settled on 3579 itself where was the necessity of execut ing draft receipts on 6579 and in any case if it was a mere formality then the plaintiffs should have brought a typed agreement on the stamps for formal signature of the parties
It was also argued that the plaintiffs failed to examine Ibrahim Moosa who was an independent and a very important witness in the whole transaction and an adverse inference should be drawn against the plaintiffs for not examining Ibrahim Moosa
The defendant No 1 had produced a counter affidavit Exhibit C 1 dated 27779 in reply to injunction application filed by the plaintiffs and she had taken a clear stand that no terms were settled or concluded on 3579
It was further argued that admittedly the plain tiffs had not paid any earnestadvance money to the defend ant No 1 towards the alleged transaction but still they malafidely stated in the notice of 7579 published in the Newspaper that an amount of Rs50000 had been paid to defendant No 1
The defendant No 1 in these circumstances had immediately got published a contradiction on 8579 and this clearly goes to show the malafide and ulterior motive of the plaintiffs
It was also argued that any agreement in the third week of April 1979 to the effect that defendant No 1 would bring the no objection certificate from the Urban Land Ceiling Authorities was found not proved by the High Court and as such there is no question of applying any principles contained in Sec
55 of the Transfer of Property Act
It was also contended that the findings recorded by the High Court are supported by evidence and this Hon
Court should not interfere against such finding in the exercise of its jurisdiction under Article 136 of the Constitution of India
It was also argued that Sh
Arif Ali was not holding general power of attorney on behalf of defendant No 1 and he had no authority to settle or conclude any terms in respect of a transaction of immovable property on behalf of defendantlll No 1
No objection certificate was necessary to be obtained from Urban Land Ceiling Authorities and the defendant No 1 and her husband being old person 429 had clearly taken the stand that they would not bring such certificate and no final and concluded contract took place on any date
We have given our careful consideration to the arguments advanced by Learned Counsel for the parties and have thor oughly 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 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 agree ment
Now we shall examine the facts and circumstances of the present case in order to find whether the plaintiffs have been able to prove that there was a concluded oral agreement between the parties on 3579 in order to seek decree for specific performance of contract in their favour
Admitted facts of the case are that the transaction in question related to a sale of an immovable property for no less than a sum of Rs 1000000 in May 19793579 is the crucial date on which the oral agreement is alleged to have been concluded
Admittedly on that date even earnestadvance money had not been settled
It was also not settled as to when the earnestadvance amount and the balance amount of sale consideration would be paid
It was also not settled as to when the final sale deed would be executed and regis tered
No talk with regard to any terms of the oral agree ment took place in the presence of the vendor defendant No 1 on 3579
It was also not decided whether actual posses sion or only symbolical possession of the premises in ques tion would be given by the vendor
No consideration actually passed even on 6579 and negotiations failed
Apart from the above admitted facts of the case we would consider as to what happened on 3579
The plaintiffs have alleged in the plaint that in the 3rd week of April 1979 plaintiffs Nos 1 and 2 along with Sh
Ibrahim Moosa and Sh
Arif Ali went to the residence of the defendant who 430 was insisting on the payment of Rs 1000000 as the sale price
At the said meeting the husband of the defendant was also present
The plaintiffs Nos 1 and 2 increased their price from Rs700000 to Rs800000
The first defendant said that she would think over and inform the plaintiffs Nos 1 and 2 through Sh
Arif Ali
On 3579 the plaintiffs 1 and 2 along with Shri Ibrahim Moosa met Shri Arif Ali
He stated that the defendant was agreeable to sell the plan schedule property to plaintiffs only for Rs 1000000 and not a pie less
Thereupon the plaintiffs agreed to pay Rs 1000000 as the sale price
Shri Arif Ali after getting the confirmation of acceptance of the said offer of the plain tiffs No 1 and 2 from the first defendant said that the plaintiffs Nos 1 and 2 should meet the defendants on 6579 and that she would in the meanwhile purchase the stamp papers for making the formal agreement for sale incorporat ing the oral agreement arrived at
Then there is an averment with regard to the meeting of 6579 between the first and second plaintiffs along with Shri Ibrahim Moosa and the first defendant and her husband in the presence of Sh
Arif Ali
It has been alleged that in the said meeting of 6579 the amount of earnest money to be paid time for registra tion of the sale deed etc were decided
Now it is an admit ted case of the plaintiffs themselves that negotiations failed on 6579 and the defendant No 1 resiled to sign any of the receipts nor accepted any earnestadvance money nor any agreement was even typed on the stamp papers nor signed by defendant No 1
In the oral evidence PW 1 Shri Brij Mohan plaintiff No 1 stated that in the meeting arranged in the 3rd week of April 1979 Shri Ibrahim and Shri Arif Ali came to the plaintiff s shop and then they all went to the residence of defendant No 1
The second plaintiff also accompanied them
The husband of defendant No 1 Shri Yunus was also present at the meeting
He was introduced to them as the retired Law Secretary
Defendant No 1 insisted for Rs 1000000 as consideration of the suit property and told the plaintiffs that she would obtain the permission from the ceiling au thority
Shri Brij Mohan then stated that they raised their offer to Rs800000 defendant No 1 told them that she would think over for two or three days and inform them through Shri Arif Ali Thereafter Shri Brij Mohan states regarding the bargain held on 3579
According to him he himself second plaintiff and Mr Ibrahim Moosa went to Shri Arif Ali on 3579
Shri Arif Ali told them that defendant No 1 was not willing to sell the suit property for less than Rs 1000000
And if they were willing to purchase for Rs 1000000 then they were welcome to do so at any time
Shri Brij Mohan then said that they agreed to purchase the suit property for Rs 1000000 and asked Shri Arif Ali to get the confirmation from 431 defendant No 1
Shri Arif Ali spoke to defendant No 1 on telephone and then informed that defendant No 1 was willing to sell the property to them for Rs 1000000
Shri Arif Ali then said that they would buy the stamps for agreement and fixed 6579 morning for a meeting with defendant No 1
From a perusal of the above evidence it would be abundantly clear that nothing was settled on 3579 except the fact that the plaintiffs had conveyed their approval to purchase the suit property for Rs 1000000 and Shri Arif Ali after speaking to defendant No 1 was willing to sell the property for Rs 1000000
Admittedly at the same time a meeting was fixed with defendant No 1 on the morning of 6579
Accord ing to the case set up by defendant No 1 she had never agreed to obtain the permission from the ceiling Authority
It would be important to note that no averment was made in the plaint that defendant No 1 had agreed to obtain the permission from the ceiling Authority in the meeting held in the third week of April 1979
However Shri Brij Mohan plaintiff has sought to introduce this fact for the first time in his statement in the Court that defendant No 1 had told them in the meeting held in the third week of April 1979 that she would obtain the permission from the ceiling Authority
We are unable to accept the above statement of Shri Brij Mohan that in the meeting held in the third week of April 1979 itself the defendant No 1 had agreed that she would obtain the permission from the ceiling Authority
It is an admitted position that till the meeting held in the 3rd week of April 1979 the plaintiffs had offered Rs800000 and the first defendant had told them that she would consider and communicate her views through Shri Arif Ali some time later
We agree with the conclusion of the High Court in this regard that without first determining the sale price it was quite unlikely that the parties would have bargained as to who should obtain the clearance under the Urban Land Ceiling Act
It was known
to the parties that until the clearance under the Urban Land Ceiling Act and the Income Tax clearance the property will not be registered
The High Court was right in concluding that it is unbelievable that in the third week of April 1979 when still there was a wide gap of Rs 200000 in the price payable for the suit building the parties would have stipu lated about the condition as to who should obtain the per mission under the Urban Land Ceiling Act
It is further pertinent to mention that even in Exhibits A 1 and A 2 which are drafts of agreement of sale there is no reference to the oral agreement said to have taken place on 3579
In case all the terms had already been concluded in the oral con tract between the parties on 3579 and only a formal agree ment was to be reduced in writing on 6579 then in that case there ought to have been a mention in the draft agree ment exhibits A 1 and A 2 regarding the oral agreement of 432 3579
According to the statement of Shri Brij Mohan plain tiff No 1 himself nothing was discussed with defendant No 1 herself and for that reason a further meeting was fixed at the house of the first defendant in the morning of 6579
Shri Arif Ali may have been an Income Tax Advocate looking after the income tax and wealth tax matters of defendant No 1 but he was not a General Power of Attorney holder to negotiate or settle any terms with regard to any transaction of immovable property belonging to defendant No 1
It is further important to note that even in the agree ment to sell exhibit B 4 dated 22679 between defendent No 1 and defendants Nos 3 and 4 no responsibility had been taken by the defendant No 1 for obtaining the clearance from the Urban Land Ceiling Authority
The High Court in these circumstances rightly believed the contention of the defendant No 1 that the agreement fell through because the plaintiffs insisted that defendant No 1 should obtain the permission from the Urban Land Ceiling Authority while defendant No 1 did not agree for the same
There was no clinching evidence to show that this stipulation was thought of by the parties on any day prior to 6579
Thus in the above circumstances when the parties were consciously nego tiating about the bringing of no objection certificate from the Urban Land Ceiling Authority and the case put forward by defendant No 1 in this regard has been believed there is no question of applying the principle contained in Section 55 of the Transfer of Property Act
The general principle contained in Sec
55 of the Transfer of Property Act regard ing rights and liabilities of buyer and seller can only apply in the absence of a contract to the contrary and not in a case where the parties consciously negotiated but failed in respect of any term or condition as a result of which the agreement itself could not be settled or conclud ed
Once it is held established in the present case that no agreement was finally concluded or settled on 6579 and negotiations failed and before this date it was never set tled that defendant No 1 would bring the no objection certificate from Urban Land Ceiling Authority there is no question of applying general principles contained in Sec
55 of the Transfer of Property Act
In Kollipara Sriramula vs T Aswathanarayana  Ors
supra was a case where in 1953 respondent No 1 filed a suit alleging that all the partners of the firm except the appellant had entered into an oral agreement with him on July 6 1952 to sell 137 shares in the site except the 23 shares belonging to appellant No 1 that 98 shares had actually been sold to him that 39 shares had not been sold to him and had been instead sold to appellant No 1
Re spondent No 1 in these circumstances claimed specific performance of the agreement to sell the 433 aforesaid 39 shares by their owners and contended that the sale of those shares in favour of appellant No 1 was not binding upon him
The Trial Court decided against respondent No 1 but the High Court decided in his favour
On the basis of above facts this Court held that the High Court was right in holding that there was an agreement to sell 137 shares in the site to respondent No 1
A mere reference to a future formal contract does not prevent the existence of a binding agreement between the parties unless 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
The evidence did not show that the drawing up of a written agreement was a pre requisite to the coming into effect of the oral agreement nor did the absence of a specific agreement as to the mode of payment necessarily make the agreement ineffective since the vital terms of the contract like the price and area of the land and the time for completion of the sale were all fixed
The facts of the above case clearly show that it related to sale of 137 shares and that in pursuance of the agreement partners who owned 98 shares had already executed sale deeds in favour of the plaintiffsrespondents and the other partners owning 39 shares did not do so
The High Court as well as this Court believed the evidence of the plaintiffrespondent for con veying the entire 137 shares by an oral agreement dated July 6 1952
This Court also found that the plaintiff respond ents had built a valuable cinema theatre building on the disputed site and yet very strong reasons to make an out right purchase of the site otherwise he would be placed in a precarious legal position Negotiations for purchase were going on for several years passed and considering this background the case of the respondent with regard to the oral agreement appeared highly probable
In the above background this Court on Page 394 observed as under It is therefore not possible to accept the contention of the appellant that the oral agreement was ineffective in law because there is no execution of any formal written docu ment
As regards the other point it is true that there is no specific agreement with regard to the mode of payment but this does not necessarily make the agreement ineffective
The mere omission to settle the mode of payment does not affect the completeness of the contract because the vital terms of the contract like the price and area of the land and the time for completion of the sale were all fixed
 434 Thus even in the above case the time for completion of the sale was considered as one of the vital terms  of the contract
Further in the above case part of the agreement had been performed ie partners having 98 shares had al ready executed sale deeds and this Court had believed the oral agreement for sale of 137 shares
Thus the above case is totally distinguishable and renders no assistance to the appellants in the case before us
Thus we find no force in these appeals and the same are dismissed
In the facts and circumstances of the case we make no order as to costs
RSS Appeals dis missed


Summary:
A common question of law viz whether an order of dismissal against an employee could validly be passed by an authority lower than the appointing authority of the Bank arises for determination in these three appeals two by the State Bank of India and the third by an employee
Respondent Vijaya Kumar in Civil Appeal 3392 of 1990 was appointed as Probationary Officer by an order of the Executive Committee of the Central Board of the State Bank of India
He was charge sheeted for gross irregularities and corrupt practices and was dismissed from service by an order passed by the Chief General Manager of the Bank whereupon he flied a writ petition before the Andhra Pradesh High Court challenging the order of dismissal passed against him
A Division Bench of the High Court heard the writ petition alongwith writ appeal No 141 of 1986 involving a similar point
The High Court allowed the writ petition
The State Bank being aggrieved by the said order has filed this appeal after obtaining special leave
T Dayakar Rao respondent in Civil Appeal No 3393 of 1990 was appointed as a Clerk in the State Bank in October 1962 and while he was working as a Bank Manager he was chargesheeted for irregularities committed by him during the period from 191979 to 14680
He was dismissed under orders of the Chief General Manager being the disciplinary authority
Mr Rao flied a writ petition in the High Court and the High Court allowed the writ petition following its decision in writ appeal No 141 of 1986
Being aggrieved the State Bank has filed the instant appeal with special leave of the Court
Civil Appeal No 3394 of 1990 has been filed by an employee AK 399 Soundararajan who was appointed as Technical Officer by the Executive Committee of the Central Board of the Bank
It was specifically mentioned in the Order of appointment that Shri Soundararajan would be governed by the State Bank of India Officers  Assistants Service Rules
Shri Soundararajan was chargesheeted and dismissed under orders passed by the Chief General Manager Thereupon he filed a writ petition in the High Court challenging his order of dismissal
Learned Single Judge of the High Court allowed the writ petition
The Bank filed an appeal before the Division Bench
The Division Bench in this case took into consideration an amendment made in Regulation 55 by a resolution dated 2581988 made applicable with retrospective effect
Accord ingly the Division Bench allowed the appeal filed by the Bank Aggrieved against this order
Shri Soundararajan has flied Civil Appeal 3394 of 1990 with special leave
The contention urged by the employees is that the Chief General Manager being a lower authority than the Executive Committee he had no competence to pass the order of dis missal whereas the Bank contends that the Chief General Manager had by virtue of the amendment of Regulation 552a made retrospectively become the appointing author ity of employees in question and as such the orders of dismissal passed by him against the employees long after the amendment are valid
Allowing the appeals by the State Bank and remanding the two cases to the High Court and directing that the appeal by Soundararajan be listed for final hearing this Court HELD The hallmark of status is the attachment to a legal relationship of rights and duties imposed by the public law and not by mere agreement by the parties
Emolu ment of the Government servant and his terms of service are governed by statute or statutory rule which may be unilater ally altered by the Government without the consent of the employee
411F G Under Article 3111 of the Constitution the words used are by which he was appointed In regulation 552a there are no such words by which he was appointed and in its place the only right guaranteed is that the employee shall not be dismissed by an authority lower than the ap pointing authority
410A Thus the right guaranteed in case of the officers or employees of the State Bank is that the order of dismissal cannot he passed by an 400 authority lower than the appointing authority
410B The right whatsoever conferred on the employees of the State Bank was on the basis of Regulation 552a and the Central Board of the Bank was authorised to amend such regulations from any date under Section 502a of the Act
This provision now concludes the controversy if any and clearly provides that the appointing authority shall mean and include the authority who has been designated as such at the time when such order is passed
412B 410H State of Jammu  Kashmir vs Triloki Nath Khosa  Ors   Bishun Narain Misra vs The State of Uttar Pradesh  Ors AIR 1965 Vol
52 SC 1567 Roshan Lal Tandon vs Union of India  Anr and Kunj Behari vs Union of India  Ors AIR 1967 SC Vol 54 1889 referred to