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Latest › Supreme Court › Civil › Civil Procedure & Limitation › 29 September 2026

Supreme Court Notable

Supreme Court: Fresh suit for specific performance barred under Order II Rule 2 where the first suit sought only an injunction

Court
Supreme Court of India
Date of judgment
29 September 2026
Case
C.A. No. 13255/2026
Parties
Bombay Garage Ahmedabad Limited Vs J P Iscon Private Ltd.
Outcome
Set aside

Summary

The Supreme Court on 29 September 2026 set aside concurrent decrees for specific performance of an alleged oral agreement to sell land and dismissed the suit on two independent grounds. A bench of Justices J.B. Pardiwala and K. Vinod Chandran (judgment by Justice Vinod Chandran) held that the second suit was barred by Order II Rule 2 of the Code of Civil Procedure, because the plaintiff had earlier sued only for an injunction on the same oral contract, when the right to seek specific performance had already arisen, and had not obtained leave. It also held, for completeness, that the plaintiff had failed to prove a concluded oral contract.

The plaintiffs, J P Iscon Private Ltd. and another, said they had struck an oral bargain with the first defendant company and others to buy a property. The price was said to have been fixed at Rs 18.51 crore, with a token advance, and then raised to Rs 20.50 crore at the defendants' insistence, with Rs 5,11,000 paid in cash and a cheque of Rs 5 crore handed over in January 2007. They first filed a suit at Mirzapur seeking only a permanent injunction against alienation of the property, and withdrew it on the footing of settlement talks, after which they filed the present suit for specific performance in 2007. The pleadings were amended in 2011. The Trial Court and the High Court decreed the suit, and the defendants, Bombay Garage Ahmedabad Limited and others, appealed.

The question before the court

What each side argued

The court's decision

On the law, the Court first accepted that a suit for specific performance can rest on an oral agreement, relying on Brij Mohan v. Sugra Begum and K. Nanjappa v. R.A. Hameed. But where a plaintiff relies on an oral agreement alone, a heavy burden lies on him to prove consensus ad idem on a concluded agreement, with the vital terms settled orally, and strict proof is the norm, a mere inference being impermissible.

On maintainability, it turned to Order II Rule 2. The Constitution Bench in Gurbux Singh v. Bhooralal requires the defendant to show that the second suit is on the same cause of action as the first, that the plaintiff was entitled to more than one relief on it, and that he omitted a relief without leave of the court. The earlier plaint was on record (it was produced by the plaintiffs themselves), and it listed the same three meetings, the cheque of Rs 5 crore and a refusal on 8 May 2007, accompanied by a challenge that the property would be sold at a higher price. The claim for specific performance was therefore available then, yet only an injunction was sought and no leave was taken. The Court noted that Order II Rule 2(3) lets a plaintiff reserve reliefs only with the leave of the court obtained when the suit is instituted, so a liberty sought at the time of withdrawal does not cure the defect. The pursis could be read as seeking liberty, but that did not help. Order XXIII Rule 1(3) only lets a plaintiff file a fresh suit for the same subject matter, not a new relief such as specific performance. The respondents could have sought an amendment of the first suit but did not. The second suit was barred.

The Court held that the three-Judge Bench decision in Gurinderpal v. Jagmittar Singh, which had inferred a wish to seek specific performance from a withdrawal with liberty, was an impermissible inference contrary to the Constitution Bench, which it was bound to follow. It followed the Constitution Bench in Vurimi Pullarao, and noted Virgo Industries, where the bar had applied. It found Vimlesh Kumari Kulshrestha inapplicable, and noted that in Inbasagaran, Rathnavati, Sucha Singh Sodhi and Cuddalore Powergen the bar did not apply on the facts, because the right to seek specific performance had not yet arisen or was not available when the first suit was filed.

On the merits, the Court found no concluded contract. The pleadings shifted between the first and second plaints and the 2011 amendment (two meetings, then three), no date was pleaded for execution of the agreement, and the Rs 5 crore cheque, said to be an advance, was not shown to have been presented, which itself weighed against a concluded contract. PW1's evidence was interested and uncorroborated. PW2, a former State Minister and later a Governor, was introduced without pleadings, and his account of a telephone conversation was hearsay. His stature had no bearing, as there is no presumption that a person of political status speaks the truth. PW3 had no direct knowledge. The letter of 25 November 2006 merely sent documents, and the person who negotiated, a relative of the person in charge of the company, had no authority over the company's assets. The evasive answers of the defence witnesses could not stand in for proof the plaintiff had to give. The concurrent findings bordered on perversity.

The appeal was allowed, the orders of the Trial Court and the High Court set aside and the suit dismissed. The Court did not decide the authority of the person who dealt with the company's assets, as it was no longer necessary. The parties will bear their own costs.

Precedents referred to

Provisions referred to

Read the full judgment (PDF) ↗

Official source: Supreme Court of India. The PDF above is a copy from an open dataset of the court's public records.

This summary is prepared for general assistance only. It may contain errors and is not legal advice — rely on the full judgment.

Civil ProcedureOrder Ii Rule 2Specific PerformanceOral AgreementProperty Law

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