Proving an Agreement to Sell in Indian Property Law: Statutory Framework, Evidentiary Standards, and Judicial Approaches

Proving an Agreement to Sell in Indian Property Law: Statutory Framework, Evidentiary Standards, and Judicial Approaches

1. Introduction

An agreement to sell (often described as an “agreement for sale” or “agreement of sale”) is the foundation of most conveyancing transactions in India. While it does not, per se, transfer title, it creates valuable contractual rights, most notably the right to sue for specific performance. Inevitably, litigation centres on whether such an agreement is proved in fact and enforceable in law. This article critically analyses the Indian statutory and case-law matrix governing proof of an agreement to sell, synthesising leading Supreme Court and High Court authority with the doctrinal tensions between form (registration, writing, signatures) and substance (intention, performance, equity).

2. Conceptual and Statutory Background

2.1 Nature of an Agreement to Sell

Section 54 of the Transfer of Property Act, 1882 (“TPA”) defines a “contract for sale” as a contract that a sale of immoveable property shall take place on terms settled between the parties, expressly clarifying that such contract “does not of itself create any interest in or charge on such property.”[1]

2.2 Form Requirements

  • Writing and Registration: Neither Section 54 TPA nor any central statute mandates that an agreement to sell be in writing or registered (save certain State amendments). Consequently, even an oral contract may be enforceable.[2]
  • Best Evidence Rule: Where, however, parties reduce the terms to writing, Sections 91–92 of the Indian Evidence Act, 1872 (“IEA”) treat the document as the primary evidence of the bargain, restricting oral variance while permitting oral proof on matters on which the instrument is silent or ambiguous.[3]
  • Registration Act, 1908: Section 17 does not require registration of an agreement to sell; section 49 permits an unregistered document to be received as evidence of a contract in a suit for specific performance.[4]

2.3 Equitable & Statutory Remedies

The Specific Relief Act, 1963 (“SRA”) makes specific performance a discretionary remedy (ss. 10, 20; post-2018 amendment, s. 10 renders it more of a rule). Section 16(c) further predicates relief on the plaintiff’s continuous “readiness and willingness,” a matter that must likewise be proved. Section 53-A TPA gives a statutory shield of part performance once the written agreement (though unregistered) and other ingredients are established.

3. Evidentiary Burden and Standard of Proof

3.1 Allocation of Burden

Sections 101–103 IEA place the initial onus on the party asserting the contract – normally the plaintiff seeking specific performance – to establish ex facie existence, execution, and essential terms. Once a document is produced and execution prima facie shown, the burden may shift to the defendant to discredit genuineness or raise statutory defences (fraud, forgery, limitation, etc.).[5]

3.2 Proving Execution

  • Signature Requirements: The Supreme Court in Aloka Bose v. Parmatma Devi clarified that an agreement signed only by the vendor, but accepted by the purchaser through conduct (e.g., payment of earnest money), is still bilateral and enforceable.[6]
  • Attesting/Handwriting Evidence: Where signature or thumb impression is disputed, the plaintiff should ideally lead the scribe, attestors, fingerprint or handwriting experts (Thiruvengadam Pillai v. Navaneethammal).[7]
  • Oral Evidence to Fill Gaps: Proviso 2 to s. 92 IEA permits proof of a separate oral agreement on matters the instrument is silent upon, provided not inconsistent (Delhi High Court line of cases such as Ravinder Singh v. Chuckles Kohli).[8]

3.3 Certainty and Completeness of Terms

An agreement too vague on essential particulars – especially property description – may fail. In Vimlesh Kumari Kulshrestha v. Sambhajirao, the Supreme Court refused specific performance where the “subject-matter” lacked adequate definiteness.[9]

3.4 Readiness and Willingness

Proof extends beyond the historic fact of agreement to the plaintiff’s continuing ability and intention to perform. In P. D’Souza v. Shondrilo Naidu the Court emphasised conduct such as timely payments, demand for documents, and absence of default as indicators.[10] Recent reiterations (Satish Kumar v. Karan Singh) demonstrate judicial scepticism where lapse of time, price escalation, or statutory prohibitions suggest inequity.[11]

3.5 Part Performance as Evidence

Acts such as delivery of possession or substantial payment may corroborate existence of the contract. Yet, Section 53-A TPA protection requires a written agreement, limiting invocation where only oral terms are alleged (Nathulal v. Phoolchand).[12]

4. Doctrinal Issues and Leading Precedents

4.1 Oral versus Written Contracts

In Anil Kumar v. Seema Thakur the Delhi High Court, relying on Supreme Court authority (V.R. Sudhakara Rao), reiterated that the absence of writing does not, by itself, defeat enforceability, provided the plaintiff can prove consensus ad idem.[13] However, proving an oral contract inevitably imposes a heavier evidentiary burden, often hinging on conduct (payment receipts, possession, correspondence).

4.2 Unregistered Agreements Coupled with Possession

Conflicting Punjab & Haryana precedents (Gurbachan Singh v. Raghubir Singh v. Birham Pal) were reconciled in Ram Kishan v. Bijender Mann, holding that an unregistered agreement accompanied by possession is admissible inter partes for specific performance, though not for title.[14]

4.3 GPA/SA/Will Devices

Post-Suraj Lamp, courts distinguish between an agreement to sell (contractual right) and GPA “sales” (impermissible mode of conveyance). Plaintiffs must thus prove not merely the existence of an agreement, but its compliance with the statutory mandate that only a registered conveyance can pass title.[15]

4.4 Allegations of Loan or Security

Defendants frequently contend that a document styled as an agreement is in fact a security for a loan. The Supreme Court in Parmanand v. Bajrang and Roop Singh v. Ram Singh underscores that such pleas constitute an affirmative defence; hence the defendant bears the onus once execution is admitted.[16]

4.5 Time-of-the-Essence and Limitation

Although time is generally not of the essence in immoveable property contracts (Chand Rani), recent dicta urge “greater scrutiny” where purchasers delay institution of suit (Udaychand v. Premwati Bai). Proving diligence – by notices, offers to pay, or applications for permission – increasingly influences decrees.

5. Practical Matrix for Proving an Agreement to Sell

  1. Documentary Proof: Produce the agreement; prove execution through scribe/attesting witnesses; obtain expert opinion if disputed signature.
  2. Essential Terms: Identify parties, property with precise boundaries, consideration, timetable for performance. Avoid vague recitals.
  3. Corroborative Conduct: Receipts for earnest money, possession memos, municipal tax payments, correspondence demanding execution.
  4. Compliance with Statutory Bars: Show no violation of transfer restrictions (urban ceiling, DDA lease conditions, agricultural ceiling, etc.).
  5. Readiness & Willingness: Continuous financial capacity (bank statements), tender of balance consideration, prompt legal notices.
  6. Address Defences Early: Anticipate pleas of forgery, limitation, loan/security, or absence of authority (power of attorney), marshalling affirmative evidence to negate them.

6. Conclusion

Indian jurisprudence strikes a calibrated balance between contractual freedom and formal safeguards. Courts neither insist on rigid formalities (such as bilateral signatures or registration) nor dispense with proof of certainty, authenticity, and equity. A plaintiff who seeks to enforce an agreement to sell must therefore traverse a dual evidentiary pathway: first, establishing the existence and execution of a complete and definite contract; second, demonstrating sustained readiness and compliance with statutory mandates. The emerging trend, exemplified by Satish Kumar and other recent pronouncements, shows that while substantive justice remains attainable, judicial discretion will increasingly interrogate delay, inequity, and statutory infractions. Legal practitioners must consequently adopt meticulous drafting and proactive evidentiary strategies to secure decrees for specific performance in modern Indian real-estate litigation.

Footnotes

  1. Transfer of Property Act, 1882, s. 54.
  2. Aloka Bose v. Parmatma Devi, (2009) 2 SCC 582; Anil Kumar v. Seema Thakur, Delhi HC (2010).
  3. IEA, 1872, ss. 91–92; N.M. Aboobacker v. Sunil, Kerala HC (2017).
  4. S. Kaladevi v. Somasundaram, (2010) 5 SCC 401.
  5. IEA, ss. 101–103; see Dinesh Sales Corp. v. Bansilal Bhavsar, Gujarat HC (2015).
  6. Aloka Bose v. Parmatma Devi, (2009) 2 SCC 582.
  7. Thiruvengadam Pillai v. Navaneethammal, (2008) 4 SCC 530.
  8. Ravinder Singh v. Chuckles Kohli, Delhi HC (2010).
  9. Vimlesh Kumari Kulshrestha v. Sambhajirao, (2008) 5 SCC 58.
  10. P. D’Souza v. Shondrilo Naidu, (2004) 6 SCC 649.
  11. Satish Kumar v. Karan Singh, (2016) 4 SCC 352.
  12. Nathulal v. Phoolchand, (1969) 3 SCC 120.
  13. Anil Kumar v. Seema Thakur, Delhi HC (2010).
  14. Ram Kishan v. Bijender Mann, P&H HC (2012).
  15. Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656.
  16. Parmanand v. Bajrang, (2001) 7 SCC 705; Roop Singh v. Ram Singh, (2000) 3 SCC 708.