S.T. Kharche, J.
1. By invoking the jurisdiction of this Court under Section 100 of the Code of Civil Procedure, this second appeal takes an exception to the judgment and decree dated 27-9-1991 passed by the learned Joint District Judge, Nagpur in Regular Civil Appeal No. 104 of 1985, whereby the appeal came to be dismissed and the judgment and decree passed by the learned 15th Joint Civil Judge, Junior Division in Regular Civil Suit No. 1663 of 1982 has been confirmed by which the legal representatives of original defendant No. 1 have been directed to execute the sale deed of the suit house described in Schedule annexed to the plaint in favour of the plaintiff within one month from the date of that order with further direction to the plaintiff to deposit an amount of Rs. 25,000/- as consideration or value of the suit house in the Court within 25 days from the date of that order.
2. On hearing the learned counsel for the respective parties, the following substantial question of law is formulated by this Court;
(1) Whether both the Courts below have committed an error of law by holding that the oral agreement without consideration is valid and enforceable in law?
3. Brief facts are as under:
(A) Defendant No. 1 (deceased) is owner of the house bearing No. 315 situated on plot No. 47, Central Avenue Road, Nagpur. The plaintiff was inducted as tenant in one of the block of the suit house since 1960 on the rent of Rs. 16/- per month and the rest of the house was in possession of Pratapsingh Harbaji Bais. It is contended by the plaintiff that on 17-11-1981 defendant No. 1 had offered to sell the suit house to him for consideration of Rs. 25,0007- and this offer was accepted by defendant No. 1. The agreement was oral which had taken place in presence of two witnesses namely; Mohammad Ibrahim Mohd. Ismail and Chandramani Marotrao Godbole. As per the agreement, the plaintiff was to bear the expenses of the sale deed such as stamp, typing, registration, etc. The plaintiff had also agreed to pay Rs. 5,0007- to defendant No. 1 within a week from 17-11-1981 and to get the agreement reduced into writing on the requisite stamp paper and that the amount of Rs. 20,0007- was agreed to be paid before the Sub Registrar at the time of execution of the sale deed within three months from 17-11-1981. The plaintiff continued to be tenant in the suit premises and he was ever ready and willing to perform his part of the contract. He had purchased the general stamp paper as the earnest money was to be paid on 18-11-1981. He approached to defendant No. 1 and requested him to execute the agreement of sale in his favour to which he had refused and told that defendant No. 2 had offered him the price of Rs. 30,0007-. It is contended that defendant No. 1 has thus committed breach of the contract. Therefore, the plaintiff had served notice dated 4-12-1981 and called upon him to perform his part of contract, but in vain. On 25-12-1981 a public notice was also published in daily 'Nav Bharat' alarming the public to refrain from purchasing the suit house from defendant No. 1. Ultimately, defendant No. 1 did not execute the agreement of sale or sale deed in favour of the plaintiff, and therefore, he was constrained to file the suit for specific performance of the oral contract.
(B) Defendant No. 1 died during the pendency of the suit and his legal representatives were brought on record. LRs. of defendant No. 1 resisted the suit and contended that defendant No. 2 has purchased the suit house for Rs. 30,0007- in the name of defendant No. 3 who is wife of defendant No. 2 on 29-4-1982 and they are bona fide purchaser for value without notice, and therefore, the provisions of Section 52 of the Transfer of Property Act, 1882 would not be attracted.
(C) The learned Joint Civil Judge, Junior Division on consideration of the evidence, recorded the finding that the plaintiff has proved that there was agreement to purchase the suit house with defendant No. 1 on 17-11-1981 for consideration of Rs. 25,0007- and that the plaintiff was ready and willing to perform his part of contract and therefore, he is entitled to the relief of specific performance of the contract. Consistent with this finding, the trial Judge decreed the suit and directed the legal representatives of defendant No. 1 to execute the sale deed of the suit house in favour of the plaintiff.
(D) Original defendants No. 2 and 3 challenged the judgment and decree passed by the learned civil Judge, Junior Division by filing Regular Civil Appeal No. 104 of 1985 before the learned Joint District Judge. Learned Joint District Judge, on consideration of the submissions of the learned counsel for the parties and on reappreciation of the evidence dismissed the appeal on 27-9-1991. Being aggrieved by the judgment and decree passed by the trial Court which was confirmed by the appellate Court, the present second appeal has been filed.
4. Learned counsel for the appellants contended that the substantial question of law that arises in this appeal is; whether the oral agreement which is said to have been entered into by defendant No. 1 with the plaintiff is void in view of Sections 10 and 25 of the Indian Contract Act, 1872 (for short, the Contract Act). He contended that defendant No. 3 is a bona fide purchaser of the suit house for value without notice. He contended that both the Courts below misread the evidence and recorded findings which are inconsistent with the provisions of Sections 10 and 25 of the Contract Act and the doctrine of Us pendens is not applicable to the facts and circumstances of the present case. Both the Courts below have committed error of law in recording the finding that the sale transaction between defendant No. 1 and defendant No. 3 is hit by Section 52 of the Transfer of Property Act. He contended that the so-called oral agreement dated 17-11-1981 is not enforceable in law as no earnest amount or any consideration was paid at the time of entering into the contract of sale. He contended that therefore, the substantial question of law that arises in this appeal deserves to be considered. He contended that in view of the provisions of Sections 10 and 25 of the Contract Act, the impugned judgments cannot be sustained in law and the same may kindly be set aside and the suit be dismissed.
5. Learned counsel for the plaintiffs contended that defendant No. 1 is admittedly the owner of the suit house and on 17-11-1981 he had orally agreed to sell this house to the plaintiff for consideration of Rs, 25,000/-. He contended that the earnest amount of Rs. 5,000/- was payable within a week from 17-11-1981 and it was agreed that on receiving the balance consideration of Rs. 20,000/-before the Sub Registrar, defendant No. 1 would execute the sale deed within three months from the date of oral agreement. He contended that the plaintiff was ready and willing to perform his part of contract and he had purchased the stamp paper on 18-11-1981 and went to the defendant and asked him to execute the agreement of sale but he refused to execute the agreement of sale on the contention that defendant No. 3 had offered him the consideration of Rs. 30,000/-. Thereafter, the plaintiff served notice dared 4-12-1981 to which a false reply was given by the defendant on 15-12-1981 and thereafter a public notice was also published in daily 'Nav Bharat' dated 25-12-1981.
6. Learned counsel for the plaintiffs further contended that if the series of the act of the plaintiff are considered along with the evidence adduced by the parties, it would follow that defendant No. 1 had agreed to sell the suit house to the plaintiff for consideration of Rs. 25,0007- and that the plaintiff was ready and willing to perform his part of contract and was also willing to pay the consideration before the Sub Registrar. He contended that in such circumstances, no substantial question of law is involved in this appeal and the sale transaction with defendant No. 3 which took place on 29-4-1982 during the pendent of the suit is hit by the doctrine of lis pendens under Section 52 of the Transfer of Property Act, and therefore, the appeal may kindly be dismissed. In support of these submissions the learned counsel for the plaintiff relied on the decisions of the Supreme Court in the case of Kollipara Sriramulu v. T. Aswatha Narayana : [1968]3SCR387 , Veerayee Ammal v. Seeni Ammal : AIR2001SC2920 and Ram Kumar Agrawal v. Thawar Das : AIR1999SC3248 .
7. This Court has given thoughtful consideration to the contentions canvassed by the learned counsel for the parties. The Supreme Court in the case of Kollipara Sriramulu v. T. Aswatha Narayana (cited supra) observed that; 'A mere reference to a future formal contract in an oral agreement will not prevent a binding bargain between the parties. The fact that the parties refer to the preparation of an agreement by which the terms agreed upon are to be put in a more formal shape does not prevent the existence of a binding contract. There are, however, cases where 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 fact of a subsequent agreement being prepared may be evidence that the previous negotiation did not amount to a concluded agreement, but the mere fact that persons wish to have a formal agreement drawn up does not establish the proposition that they cannot be bound by a previous agreement.'
8. In the present case on close scrutiny it would reveal that there was no concluded agreement of sale between defendant No. 1 and the plaintiff and whatever was the talk between them in presence of two witnesses was in the nature of negotiations. This Court is of the considered opinion that both the Courts have misread the evidence and recorded the findings which are inconsistent with the provisions of Sections 10 and 25 of the Contract Act.
9. Section 10 and 25 of the Contract Act contemplate as under :
10. What agreements are contract :- All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void.
Nothing herein contained shall affect any law in force in India and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witness, or any law relating to the registration of documents.'
25. Agreement without consideration :- An agreement made without consideration is void; unless,:
(1) Agreement without consideration void, unless it is in writing and registered:- It is expressed in writing and registered under the law for the time being in force for the registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other, or unless
(2) or is a promise to compensate for something done :- It is a promise, to compensate, wholly or in part, a person who has already voluntarily done something for the promise, or something which the promise was legally compellable to do, or unless
(3) or is a promise to pay a debt barred by limitation law :- It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.
In any of these cases, such an agreement is a contract.
Explanation 1:- Nothing in this Section shall affect the validity, as between the donor and donee, of any gift actually made. Explanation 2:- An agreement to which the consent of the promise is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promise was freely given.
10. Bare reading of the aforesaid provisions of law it would clearly reveal that an agreement without consideration is void unless it is in writing and registered or is a promise to compensate for something done or a promise to pay a debt barred by law of limitation. However, no agreement is complete and all agreements are contracts if they are made by free consent of the parties competent to contract, for a lawful consideration and with a lawful object, and are not expressly declared to be void. In the present case, whatever acts were performed by the plaintiff were only in the nature of negotiations and it is not possible to conclude that there was a bona fide agreement of sale of the suit house by defendant No. 1 in favour of the plaintiff. Simply because the plaintiff had purchased the stamp paper on 18-11-1981; served notice dated 3-12-1981 and also published, a public notice in the newspaper on 2.5-12-1981 are not sufficient to show that there is evidence to show that there was a concluded agreement of sale between the parties. Even the earnest amount was not paid though it was in the nature of negotiations that Rs. 5,0007- would be paid within a week. When the stamp paper was purchased on 18-11-1981 and if the plaintiff was willing to pay the earnest amount, he ought to have paid it on the same day itself. But, fact remains that neither the earnest amount was paid nor the agreement of sale was reduced into writing signed by the parties in accordance with the provisions of Sections 10 and 25 of the Contract Act.
11. The essential requirements are crystallized by the Apex Court in the case of Shrimant Shamrao Suryavanshi and Anr. v. Pralhad Bhairoba Suryavanshi reported in : [2002]1SCR393 and those are;
1) there must be a contract to transfer for consideration any immovable property;
2) the contract must be in writing, signed by the transferor, or by someone on his behalf;
3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained:
4) the transferee must in part performance of the contract take possession of the property, or of any part thereof;
5) the transferee must have done some act in furtherance of the contract. And
6) the transferee must have performed or be willing to perform his part of the contract.' All these essential requirements are not fulfilled in the present case.
12. Defendant No. 3, has no doubt purchased the suit house during the pendency of the suit on 29-4-1982 but the facts and circumstances of this case would show that the said transaction is not hit by Section 52 of the Transfer of property Act because it has been brought on record in the evidence that defendant No. 3 is a bona fide purchaser of the suit house and before the purchase of the suit house she had made full inquiry about the house from defendant No. 1 and when she was fully satisfied that no prior agreement of sale is subsisting between defendant No. 1 and the plaintiff or with any other person, then only she purchased the suit house in her own name. Therefore, the doctrine of Us pended is obviously not applicable in the present case.
13. In the case of Veerayee Ammal v. Seeni Ammal (cited supra) it has been observed as under:
The question of law formulated as substantial question of law in the instant case cannot, in any way, be termed to be a question of law much less as substantial question of law. The question formulated in fact is a question of fact. Merely because of appreciation of evidence another view is also possible would not clothe the High Court to assume the jurisdiction by terming the question as substantial question of law. In this case Issue No. 1, as framed by the trial Court, was, admittedly, an issue of fact which was concurrently held in favour of the appellant-plaintiff and did not justify the High Court to disturb the same by substituting its own finding for the findings of the Courts below, arrived at on appreciation of evidence.
14. In the case of Ram Kumar Agrawal v. Thawar Das (cited supra), it has been observed as under:
In our opinion, the judgment of the High Court suffers from serious infirmities. It also suffers from the vice of exercise of such jurisdiction as did not vest in the High Court under the law. Under Section 100 of the Civil Procedure Code (as amended in 1976) the jurisdiction of the High Court to interfere with the judgments of the Courts below is confined to hearing on substantial question of law. Interference with finding of fact by the High Court is not warranted if it involves re-appreciation of evidence.
15. The observations made by the Supreme Court in the afore cited two decisions are not applicable to the facts and circumstances of the present case. No doubt, at the time of admission of the appeal, substantial question of law has not been formulated but the learned counsel for defendants has mentioned in the appeal memo as to what substantial question of law will arise in this appeal and on hearing the learned counsel for the parties, this Court is of the considered opinion that the substantial question of law sought to be raised by the learned counsel for the defendants deserves consideration and there is no question of re-appreciation of the evidence in this case. When the trial Court as well as the Appellate Court has misread the evidence and recorded the findings, which are inconsistent with the provisions of Sections 10 and 25 of the Contract Act, the substantial question of law formulated in this appeal deserves to be answered in the affirmative as it follows that both the Courts below have committed an error by holding that oral agreement without consideration is valid and enforceable in law.
16. In the circumstance, this Court is of the considered opinion that the judgment and decree passed by the Courts below cannot be sustained in law and are liable to be upset. In that view of the matter, the appeal is allowed. The impugned judgment and decree is set aside and the suit of the plaintiff is dismissed. No costs.