THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No. 3699 of 2000 JUDGMENT: The defendants 1, 2, 3, 7 and 9 in O.S.No.567 of 1993 on the file of the I Additional Senior Civil Judge, Ranga Reddy District, are the appellants herein. The suit is one filed for specific performance of the contract of sale. The allegations in the plaint go to show that the 1st defendant partnership firm represented by the Managing Partner one Madhusudan entered into an agreement of sale of 10 acres of land located in Sy.Nos.55, 56, 57 and 58 at Serilingampalli village and a sum of Rs.3,50,000/- was paid on 07.04.1990 and on 24.05.1990 a receipt was passed, which is also an agreement. The other defendants are the partners of the firm. It is provided that the said 10 acres of land to be sold by the defendants. As per the agreement the land to be sold by the defendant will be finalised. While finalising the actual agreement, sale consideration and if any further amount is due and payable, it will be paid by the plaintiff on or before 30.07.1990 and 31.12.1990 as stated in the said agreement. By 31.12.1990, the sale transaction has to be completed. But, however, the plaintiff came to know subsequently that there was a litigation in respect of the said property and one Manikonda Pochamma initiated proceedings against the defendant-firm and she claimed the property. This was brought to the notice of the defendants. It was further alleged that on 06.04.1992 the interim terms of sale as evident by receipt-cum-agreement dated 24.05.1990 referred to above were finally settled between the parties. The defendants agreed to sell 10 acres of land from out of the Sy.Nos.55, 56, 57 and 58 of Gachibowli villoage, Serilingampally Mandal, Ranga Reddy District to the plaintiff and that the 10 acres of land to be sold will be according to the choice of the defendants themselves and the plaintiff has to accept the same as may be pointed out and specified by the defendants from out of the said survey numbers. The plaintiff accepted the same accordingly. In view of the choice given to the vendor-firm, defendants, it was also decided and settled that the consideration amount for the sale of 10 acres of land will be Rs.3,00,000/- and the entire amount of consideration having been already received by the defendants through cheques, an amount of Rs.50,000/- was found in excess having been already paid as per receipt-cum-agreement dated 24.05.1990 and this excess amount was agreed to be refunded by the defendants to the plaintiff. The defendants therefore, on the same day i.e. 06.04.1992 refunded excess amount of Rs.50,000/- to the plaintiff through cheque No.953812 dated 06.04.1992 drawn on Vysya Bank Limited, Hyderabad in favour of the plaintiff. The only obligation on the part of the plaintiff as per the final oral agreement entered on 06.04.1992 was to incur and pay all the expenses i.e. stamp duty, registration charges, T.P. charges and all other incidental charges for execution and registration of the sale deed or deeds in favour of the plaintiff and or his nominees. The plaintiff submits that the cheque for Rs.50,000/- dated 06.04.1992 has been encashed by him. The defendants having received the consideration, delayed the execution of the sale deed in spite of the repeated demands and the partners did not evince interest and a legal notice was given on 16.05.1993 calling upon the defendants to execute the sale deed. Therefore, the suit was filed for specific performance of the contract of interim agreement of sale dated 24.05.1990 as finalised on 06.04.1992. The 3rd defendant filed written statement that the partner N.Manibushan died during the pendency of the suit and no steps were taken to bring his legal representatives. It was further pleaded that the plaintiff is put to strict proof of the allegations in the plaint and the agreement dated 24.04.1990 and the terms stipulated therein. There is no agreement, which is enforceable by virtue of the said receipt dated 24.05.1990. The plaintiffs promised to settle the claim of Pochamma. But, however, it is the defendant that has paid a sum of Rs.50,000/- and it was given to the plaintiff as they promised to encash with her. It was also further pleaded that the Urban Land Ceiling clearance could not be obtained because of a claim by Muthaiah and a suit in O.S.No.72 of 1992 was filed against Muthaiah. Thereafter the settlement was arrived at and the suit was withdrawn. The issue of the legal notice is also denied. The defendant further pleaded that there was no sale agreement at all. It was also further pleaded that on 06.04.1992 the amount was returned for payment to Pochamma and the plaintiff promised that the plaintiff will come forward with a concrete proposal of reducing agreement of sale and it will not be finalised because of the proceedings before the Mandal Revenue Officer. Therefore, the defendants have denied the transaction, which is said to have been finalised on 06.04.1992. A reading of the paras 6 and 7 of the written statement only refers that on 06.04.1992, Rs.50,000/- was returned for payment to Pochamma and the oral agreement of sale in continuation of the earlier agreement of sale has not taken place. Therefore, the defendant pleaded for dismissal of the suit. The other defendants adopted the written statement of the 3rd defendant. On the above pleadings, the following issues have been framed for trial: 1. Whether the agreement of sale deed dated 24.05.1990 is true and correct and executed by the defendants? 2. Whether the defendants received Rs.3,50,000/- as earnest money for the said consideration? 3. Whether the plaintiff is willing to perform his part of performance under the suit agreement? 4. Whether the plaintiff is entitled to recover an amount of Rs.3,00,000/- with interest @ 25% per annum from the defendants? 5. Whether the defendants are entitled to exemplary costs of Rs.50,000/-? 6. To what relief? On behalf of the plaintiff, P.W.1 was examined and marked Exs.A- 1 to A6. On behalf of the defendants, D.W.1 was examined and no documents were marked. After considering the evidence on record, the learned Senior Civil Judge decreed the suit of the plaintiff for specific performance though alternative prayer was made for refund of the consideration of Rs.3,00,000/-. Even before the lower Court the suit against the defendants 4 to 6 and 10 was dismissed. During the pendency of the appeal, some of the alienees came on record claiming title and interest in the schedule property thought their rights may not be different and cannot have any effect if the agreement of sale is found to be enforceable as the plaintiff is a prior purchaser. The points that arise for consideration are: 1. Whether the decree of specific performance granted by the learned Senior Civil Judge is valid and enforceable? 2. Whether the judgment and decree passed by the lower Court is legal and sustainable? POINTS: Before considering the contentions of both sides, the law on the relief of specific performance is quite clear and evidently, it is the burden of the plaintiff to prove that there was a concluded and enforceable contract of sale. It is also to be pleaded about the particulars of the consideration, the identity of the property and the manner in which the agreement is to be performed. In cases of oral agreement of sale, it is further necessary to plead all the facts specifically in order to enforce the agreement of sale. It is also well settled that the terms of agreement of sale shall be clearly set out in the plaint and the persons, who were present and the persons with whom such an agreement of sale has taken place is to be specifically mentioned. In this connection, it will be useful to refer to the following decisions: 1. Brij Mohan v. Sugra Begum[1] 2. Ouseph Varghese v. Joseph Aley and others[2] 3. V.R.Sudhakara Rao and others v. T.V.Kameswari[3] 4. Gomi Bai and others v. Uma Rastogi and another[4] 5. Ameer Mohammed v. Barkat Ali[5] All these decisions unequivocally laid down that it is the duty of the plaintiff to make clear unambiguous pleading about the oral agreement of sale. It is further to be noted, according to the case of the plaintiff, initially on 24.05.1990 a receipt-cum-agreement is said to have been accepted and subsequently it has culminated into the final agreement of sale on 06.04.1992. The learned counsel for the appellant contends that if the principles laid down in decisions referred to above are applied, the plaint is silent as to on 06.04.1992, who are the persons that were present and on behalf of the 1st defendant, who has entered into the agreement of sale and who gave the authorisation for such a transaction, is absolutely silent. According to him, Ex.A-1 is not at all an agreement and it is inchoate document, which does not attract the requirements of an executable or enforceable agreement for specific performance. In this case, in view of the rival contentions, it will be useful to extract the contents of Ex.A-1: Grams: PRECON THE PIONEER COMMERCIAL ENTERPRISES 1-2-593, Gagan Mahal Colony, Domalguda, Hyderabad – 500 029. State Office: 6-3-653, Somajiguda, Hyderabad-500 004. Date: 24-5-1990 This is to acknowledge the receipt of Rs.3,50,000/- (Rupees three lac fifty thousand only) by Cheque Nos.0103377 dated 7-4-1990 (Dev. Coop. Bank) and 01386 500016003 dated 25-5-1990 (Central Bank BB Branch) as advance from Mr.Shahabuddin S.Chandrani for the sale of 10.00 Acres of land from the Survey Nos.55, 56, 57, 58 of Gachibowli village, Sherlingampally Mandal, R.R.District belonging to M/s Pioneer Commercial Enterprises the portion of the land is to be finalised after negotiations. The balance advance amount of Rs.50,000/- (Rupees Fifty Thousand only) is agreed to be paid before 30-7-1990. The balance amount payable after negotiations and finalisation will have to be paid before 31-12-1990 and transfer of the land done before such date. On finalisation of the rate and on payment of the balance payment I agree to register the land in full or in parts to the nominees put forward by Mr.Shahabuddin S.Chandrani whenever called upon before 31-12-1990. For THE PIONEER COMERCIAL ENTERPRISES (N.MANI BUSHAN) MANAGING PARTNER. It is needless to say that every contract is the basis of consensus ad idem and the parties should fix the price and the identity of the property. If the parties only initiated the proceedings by way of preliminary talks and postponed the determination of the material factors for enforcing a contract a document of the nature like Ex.A-1 can never be said to be an interim agreement of sale or an agreement of sale. Evidently, for the purpose of sale of the property, the price is to be fixed, the property is to be identified and the time for performance is also to be provided. If the consideration is not paid the method of payment of the consideration is to be mentioned. A reading of Ex.A-1 clearly goes to show that a sum of Rs.3,50,000/- is said to have been received by the managing partner of the 1st defendant though he is not a party to the suit at present and I could not find any material as to when he ceased to be a managing partner. It shows that 10 acres of land is to be identified after negotiations and Rs.3,50,000/- is paid and balance of advance amount shall be paid on or before 30.07.1990 and it also further stipulates on finalisation of the rate and on payment of the balance amount, the land has to be registered on or before 31.12.1990. Therefore, the document is only a receipt for advance and all the essential terms for an effective agreement of sale to be enforced are all postponed to a later date. Therefore, this agreement Ex.A-1 by itself is not enforceable, unless there was a further concluded contract between the parties. According to the case of the plaintiff on 06.04.1992 there was an oral agreement of sale whereunder the terms have been settled and 10 acres of land according to the choice of the defendant was entered into. Therefore, in order to substantiate the right of enforcement of the contract and relief of specific performance, this is the agreement that has to be proved by the plaintiff. But, unfortunately, in spite of the fact that in the written statement at paras 6 and 7 clearly disowns its concluded contract on 06.04.1992 in so many terms no issue was framed on this aspect. In fact, the lower Court proceeded in the premise that the parties were not at variance with regard to Ex.A-1. The lower Court did not frame the necessary issue with regard to the contract on 06.04.1992, the observation of the learned Judge in para No.16 that as to what purpose the amount of Rs.50,000/- was returned is not specifically pleaded is not correct. Except referring to this aspect, there is no finding of the learned judge with regard to the truth and validity of the agreement dated 06.04.1992. One has to visualize as to whether this 10 acres of land could have been sold only for a sum of Rs.3,00,000/- after refund of Rs.50,000/- when Ex.A-1 itself refers that the price is not settled and it is to be subsequently determined. If really Rs.3,50,000/- is the value of the property agreed between the parties, there is no need to postpone the fixation of the value of the land. This is an improbability which the Court overlooked. The framing of a necessary issue with regard to the specific contract, which is oral, pleaded by the plaintiff and denied by the defendant and a clear finding about the truthfulness cannot be ignored. A relief of specific performance can be granted only if the contract dated 06.04.1992 is established. In fact, the allegations in the plaint on this contract are as vague as Ex.A-1 and except the interested evidence of P.W.1, there is no other evidence. In fact an attempt was also made to show that there was some variations in the evidence and also the allegations in the plaint. The learned counsel for the appellant relied on a decision reported i n Nahar Singh v. Harnak Singh[6], whereunder it was held that the property must be identifiable in order to avail the relief under the Act. It was also sought to be canvassed by relying on a decision reported in K.S.Vidyanadam and others v. Vairavan[7], wherein it was held that the property located in urban area has got a potential of steep rise in prices and such contract should be performed within a reasonable period. The learned counsel for the appellant also contended that the agreement is said to have been executed under Ex.A-1 by the firm represented by its managing partner and it is not a legal entity and such contract cannot be enforced and reliance is placed on the decisions reported in Addanki Narayanappa and another v. Bhaskara Krishnappa (dead) and thereafter his heirs and others[8] and V.Subramaniam v. Rajesh Raghuvandra Rao[9], wherein it was held that a partnership firm is not a legal entity and the partners of the firm are co-owners of the firm unlike shareholders in a company. It was also contended by the learned counsel for the appellant that the 1st defendant or its partners have no right or interest to an extent of property of 10 acres in view of the subsequent disputes raised by Pochamma and Muthaiah. All these contentions have to be definitely decided afresh as new contentions have been raised. The further contention as to whether the contract can be enforced when the suit against some of the partners has been dismissed is also to be determined. Therefore, it is quite clear that the judgment and decree of the lower Court is not sustainable legally. It may be true as contended by the appellant that this Court can mould the relief but in the peculiar circumstances of the case, where the nature of the evidence and the enforceability of the contract are to be assessed on evidence by the first Court alone. I feel the ends of justice would meet if the matter is remanded to the lower Court for disposal according to law after giving opportunity to both the parties and framing the following issues: 1. Whether the oral contract of sale dated 06.04.1992 pleaded by the plaintiff is true and enforceable? 2. Whether the suit as framed and whether the agreement on behalf of the firm is not valid? 3. Whether the relief of specific performance can be granted in view of the legal infirmities claimed by the defendants? Any other issue can be framed. It is also a matter, that has to be determined by the lower Court, if at all the relief of specific performance is to be granted as to what extent it should be granted and if not what is the relief that can be granted. Accordingly, the points are answered. Therefore, the appeal is allowed by setting aside the judgment and decree of the lower Court and the matter is remanded to the lower Court for fresh disposal according to law after giving opportunity to both the parties in the suit to adduce further evidence. The lower Court shall dispose of the suit within six months from the date of this judgment. No costs. ________________________ N.R.L.NAGESWARA RAO, J DATE: 27-10-2011 MR THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No. 3699 of 2000 DATE: 27-10-2011 MR [1] (1990) 4 Supreme Court Cases 147 [2] 1969 (2) Supreme Court Cases 539 [3] (2007) 6 Supreme Court Cases 650 [4] 2005 (2) ALD 631 [5] AIR 2002 Rajasthan 406 [6] (1996) 6 Supreme Court Cases 699 [7] (1997) 3 Supreme Court Cases 1 [8] AIR 1966 Supreme Court 1300 [9] (2009)5 Supreme Court Cases 608