The Calcutta High Court has set aside a trial court order refusing temporary injunction in a suit for specific performance founded on an oral agreement for sale of immovable property, holding that the plaintiff established a prima facie case and the alternative prayer for damages did not disentitle it to interim relief. The Division Bench also ruled that the suit, though connected to an industrial park development, was not a "commercial dispute" under the Commercial Courts Act, 2015, and was properly maintainable in the ordinary civil court.
Background & Facts
The Dispute
The appellant, Alok Niwas Private Limited, purchased multiple plots of land in Howrah district, West Bengal, to construct an industrial park. The appellant entered into an oral agreement on 7th May 2013 with respondent No.1, Debasish Pal, for the conveyance of 3.8680 acres of land held by the Pal family. The agreement involved reciprocal obligations: the appellant would convey 65.640 decimals of land in Mouza Bipannapara and Mouza Mohiary to respondent No.1 for Rs.1.24 crore; respondent No.1 would then convey 6.540 decimals for Rs.1.46 crore; and finally, respondent No.1 would convey 151.46 decimals of partitioned land to the appellant for Rs.3,36,88,554/-. The appellant was also to facilitate development, provide electricity and drainage, and permit usage of a common passage for ingress and egress.
Key Facts
- 07.05.2013: Oral agreement allegedly entered between appellant and respondent No.1
- 25.04.2014: Respondent No.1 executed deed of conveyance for 62.787 decimals in Mouza Bipannapara to appellant for Rs.75,97,200/-
- 01.11.2015: Two deeds executed same day - (i) appellant conveyed 65.640 decimals to respondent No.1 for Rs.1.24 crore; (ii) respondent No.1 conveyed 65.640 decimals in Mouza Mohiary to appellant for Rs.1.46 crore
- 12.07.2016: Development agreement executed between appellant and respondent No.4 (developer) for industrial park
- 23.09.2016: Appellant wrote to respondent No.1 requesting transfer of remaining 150.229 decimals, referencing part performance and co-owners' transfers
- 15.02.2017 and 02.11.2017: Reminder letters sent by appellant
- 15.11.2017: Joint letter to Block Land and Land Reforms Officer for mutation clarification
- 03.08.2017: Alleged subsequent agreement for completion within two years (pleaded in plaint)
- April 2019: Title Suit No.187 of 2019 filed by appellant for specific performance and permanent injunction
- 03.10.2019: Learned Civil Judge (Senior Division), 1st Court, Howrah rejected temporary injunction application
Procedural History
- April 2019: Title Suit No.187 of 2019 instituted before Civil Judge (Senior Division), Howrah
- 03.10.2019: Trial court rejected application under Order 39 Rules 1 and 2 read with Section 151 CPC
- 2020: CAN 2 of 2020 filed (likely appeal memorandum)
- 2021: CAN 3 of 2021 filed
- 2025: FMA 916 of 2025 (First Miscellaneous Appeal) filed before Calcutta High Court
- 2026: CAN 4 of 2026 filed
- 07.04.2026: Coordinate Bench (presided by Justice Sabyasachi Bhattacharyya) admitted appeal and granted interim injunction restraining construction on common passage and hindrance to ingress/egress
- 27.08.2026: Final hearing
- 03.09.2026: Judgment delivered allowing appeal
The Parties' Positions
Appellant (Plaintiff): Oral agreement evidenced by conduct - reciprocal conveyances executed on same day, part performance, letters acknowledging obligation, and development agreement referencing phased acquisition. Prima facie case made out; balance of convenience and irreparable injury favour injunction. Suit not commercial as property not used exclusively for trade/commerce at relevant time.
Respondent No.1 (Defendant): No oral agreement existed; letters were unilateral desires. Conveyances were independent market-value transactions. Reciprocal obligations not reflected in deeds. Suit is commercial (industrial park) and ordinary civil court lacks jurisdiction. Alternative prayer for Rs.127 crore damages bars injunction. Delay of three years defeats equity.
Relief Sought
Appellant sought: (1) Setting aside of order dated 03.10.2019; (2) Temporary injunction restraining respondents from changing nature/character of suit property, construction, alienation, restricting ingress/egress from NH-6 via common passage, creating nuisance/obstruction/parking on common passage; (3) Expeditious disposal of suit.
The Legal Issue
The central questions were: (1) Whether the suit for specific performance of an oral agreement for sale of immovable property, connected to an industrial park development, constitutes a "commercial dispute" under Section 2(c) of the Commercial Courts Act, 2015, requiring adjudication by a Commercial Court; (2) Whether the trial court was justified in refusing temporary injunction where the plaintiff established a prima facie case based on oral agreement and part performance, but also prayed for alternative damages of Rs.127 crore.
Arguments Presented
For the Appellant
Learned senior counsel Mr. Indranil Ray submitted that the reciprocal conveyances executed on 01.11.2015 demonstrated consensus ad idem and part performance. The deed where respondent No.1 was vendor recorded execution on "agreed terms" while the appellant's deed referenced "highest available market price," indicating pre-agreed exchange. The letter dated 23.09.2016 acknowledged balance land transfer pending co-owners' conveyances. The development agreement's "may" language reflected phased acquisition intent, not absence of agreement. The trial court erred in: (a) excluding common passage from suit property despite its inclusion in schedule and Annexure B sketch map; (b) requiring stamp duty on oral agreement, which is impossible; (c) disbelieving oral agreement solely for absence of date/place in letter; (d) treating alternative damages prayer as bar to injunction. Precedents cited - Brij Mohan v. Sugar Begum (1990) 4 SCC 147 (decided after trial, distinguishable); Shivaji Yallappa Patil v. Ranajeet Appasaheb Patil (2018) 16 SCC 725 (Section 53A TPA requires possession, absent here); Ambalal Sarabhai v. KS Infraspace (2020) 5 SCC 410 (emails formed contract, factually distinct); Ramen Roy v. Samriddhi Real Estate 2026 SCC Online Cal 7528 (commercial suit, inapplicable as present suit not commercial).
For the Respondent
Mr. Kushal Chatterjee argued that oral agreement for immovable property requires heavy burden of proof (Brij Mohan). The 25.04.2014 deed recited "urgency of money," negating oral agreement. The 01.11.2015 deeds reflected market-value transactions with no reference to oral agreement. The 23.09.2016 letter, written three years post-alleged agreement and after reciprocal obligations ceased, was a unilateral desire, not acceptance. Non-reply does not constitute acceptance. Development agreement clause 4.2 ("may") and 9.1 (phase-wise independent deals) showed no concluded contract. Joint letter of 15.11.2017 was for mutation only. Suit is commercial under Section 2(c)(vii) (immovable property used exclusively in trade/commerce) and Section 2(c)(vi) (construction/infrastructure contracts); ordinary civil court lacks jurisdiction (Ramen Roy). Delay of three years (deeds in 2015, suit in 2019) defeats equity (Ambalal Sarabhai). Alternative damages prayer of Rs.127 crore confirms adequacy of monetary remedy.
The Court's Analysis
The Division Bench, per Justice Sandip Kumar De, first addressed the jurisdictional challenge. Examining Section 2(c) of the Commercial Courts Act, 2015, the Court noted that the plaint prayers centred on specific performance for transfer of suit property with ancillary reliefs. The development agreement was with a third-party developer and unrelated to respondent No.1. Crucially, "at the relevant juncture, the subject property of the agreement in question was not used exclusively in trade or commerce." The explanation to Section 2(c) - that a dispute does not cease to be commercial merely because it involves recovery of immovable property - did not apply because the property was not exclusively used for trade or commerce at the time of agreement. The suit was therefore maintainable in the ordinary civil court, and Ramen Roy was inapplicable.
On the injunction refusal, the Court found the trial judge's reasoning "palpably misconceived and perverse." The trial judge himself recorded that "the plaintiff is willing to purchase the suit property and further, the defendant had orally agreed to sell the said property." This admission constituted a prima facie case for trial. The conduct of parties - reciprocal conveyances on same day, same land extent, exchange mechanism - evidenced consensus ad idem.
The Court strongly rejected the trial judge's stamp duty observation: "We fail to understand how an oral agreement could be stamped and in what manner. It was also nobody's case that the developer should include the defendant No.1 in the development agreement." Disbelieving the oral agreement solely because the 23.09.2016 letter lacked date and place of agreement was erroneous; such questions require trial on evidence.
The Court held that Section 10 of the Indian Contract Act, 1872 does not bar oral agreements, and Aloka Bose v. Parmatma Devi (2009) 2 SCC 582 was misconstrued. The alternative prayer for damages "cannot be a bar to seek temporary injunction" - such a finding was "misdirected, perverse and contrary to law."
The Court distinguished all cited precedents on factual grounds: Brij Mohan decided after full trial; Shivaji Yallappa required possession for Section 53A TPA; Ambalal Sarabhai involved emails as concluded contract; Ramen Roy concerned commercial suit jurisdiction.
The Court also noted its own interim order of 07.04.2026 (by a coordinate Bench including Justice Bhattacharyya) which had already found a prima facie case and restrained construction on the common passage.
"From the conduct of the parties, as evident from the deeds of conveyances executed between them, it is clear that the parties were at consensus ad idem regarding the transfer of plots of land by way of exchange."
"The finding of the Learned Trial Judge regarding the alternative prayer for damages for refusing the prayer for temporary injunction is misdirected, perverse and contrary to law. An alternative prayer cannot be a bar to seek temporary injunction."
The Verdict
The appeal (FMA 916 of 2025) was allowed on contest. The judgment and order dated 03.10.2019 of the Civil Judge (Senior Division), 1st Court, Howrah, was set aside. Respondents No.1 and 2 are restrained till disposal of the suit from: (i) changing nature/character of suit property and making further construction; (ii) alienating, transferring, encumbering, or creating third-party interests in suit property; (iii) restricting free ingress and egress through common passage from NH-6 to suit property and appellant's plots; (iv) creating nuisance/obstruction/parking vehicles on common passage. The interim order of 07.04.2026 was confirmed and modified to this extent. CAN 2 of 2020, CAN 3 of 2021, and CAN 4 of 2026 were disposed of. No order as to costs. The trial court was requested to hear and dispose of the suit (of 2019) expeditiously, preferably within one year from 03.09.2026, without unnecessary adjournments.
What This Means For Similar Cases
Oral Agreement Can Support Prima Facie Case for Injunction
The judgment reinforces that an oral agreement for sale of immovable property, though unenforceable as a deed without registration, can establish a prima facie case for temporary injunction when corroborated by conduct - reciprocal conveyances, part performance, correspondence acknowledging obligations, and exchange of lands. Practitioners should meticulously document and plead such conduct. The absence of date and place of oral agreement in subsequent correspondence is not fatal at the interim stage; it is a matter for trial.
Alternative Damages Prayer Does Not Bar Injunction
The Court categorically rejected the notion that an alternative prayer for damages disentitles a plaintiff to temporary injunction in a specific performance suit. This clarifies a recurring trial court error. Lawyers should confidently include alternative reliefs without fear of prejudicing interim protection, and cite this judgment when trial courts conflate the two.
Commercial Courts Act Jurisdiction Requires Exclusive Trade/Commerce Use at Agreement Time
The ruling provides a clear test: for a suit to be a "commercial dispute" under Section 2(c)(vii), the immovable property must be used exclusively in trade or commerce at the relevant juncture (i.e., at the time of the agreement in question). A subsequent development agreement with a third party for an industrial park does not retroactively convert a land purchase agreement into a commercial dispute. This limits forum-shopping objections in land acquisition disputes.
Stamp Duty Cannot Be Demanded on Oral Agreements
The Court's observation that requiring stamp duty on an oral agreement is "patently absurd" settles a practical point. Trial courts cannot reject prima facie case findings on the ground that an oral agreement was not stamped. This removes a spurious objection often raised by defendants.
Expeditious Disposal Directive for Old Suits
The Court's direction to dispose of the 2019 suit within one year (by 03.09.2027) without unnecessary adjournments signals judicial impatience with delay in specific performance suits. Practitioners can cite this in case management hearings to resist adjournment applications.
