Holding

An agreement of sale signed only by the vendor, delivered to and accepted by the purchaser, is a valid contract enforceable by specific performance under Section 16(c) of the Specific Relief Act.

Summary

The appellant Aloka Bose (representing the heirs of the deceased vendor) appealed against a decree of specific performance granted to the plaintiff Parmatma Devi for the sale of a portion of a house. The dispute centered on whether a written agreement of sale signed only by the vendor, without the purchaser's signature, constituted a valid contract, and whether the plaintiff had satisfied the conditions for specific performance under Section 16(c) of the Specific Relief Act, 1963. The Supreme Court held that an agreement of sale signed solely by the vendor and delivered to the purchaser, and subsequently accepted by the purchaser through payment of earnest money and a notice of readiness to pay the balance, is a valid and enforceable contract. The Court rejected the claim of forgery, finding the vendor's signature genuine, and affirmed that the plaintiff had fulfilled the statutory requirements for specific performance. Consequently, the decree of specific performance was upheld and the appeal dismissed.

Issues considered

Whether an agreement of sale executed only by the vendor and not signed by the purchaser is a valid and enforceable contract.
Whether the plaintiff satisfied the conditions of Section 16(c) of the Specific Relief Act, 1963 to obtain a decree of specific performance.

Legislation cited

Indian Contract Act, 1872s. 10
Specific Relief Act, 1963s. 16(c)

Subjects

agreement of salespecific performancecontract validityunilateral contractbilateral contractforged signatureearnest moneySection 10 Contract ActSection 16(c) Specific Relief Act

Judgment

•
I
[2008] 17 S.C.R. 822

A ALOKA BOSE
v.
PARMATMA DEVI & ORS.
(Civil Appeal No. 6197 of 2000)

DECEMBER 17,2008
B
[R.V. RAVEENDRAN AND P. SATHASIVAM, JJ.]

Contract Act, 1872: s. 10 - Agreement Jo sell signed only
· by vendor an'd not by purch·aser - Suit for specific
c performance ~ Maintainability of, challenged on the ground
that agreement was not valid/concluded - Held: Agreement
to sell signed by vendor alone and· delivered to purchaser,
and accepte<;f by purchaser was a valid contract - Moreover,
vendor acknowledged receipt.of earnest money and further
receipt of part of consideration amount - Evidence of
D witnesses also .show that it was concluded contract- Notice
by purcha$er conveying willingness and readiness to pay-
balance sale consideration - ·Plaintiff entitled to decree for
specific performance - Specific relief Act, 1963 - s.16(c).
E The appellant-defendants agreed to sell suit property
on 7 .9.1979 for a consideration of Rs.34,5001-.
Respondent-Plaintiff paid Rs.20011- as earnest money
and further sum of Rs.20001- on 10.10.1979 to plaintiff on
a condition that the sale deed would be executed within
three months and balance consideration would be pa{d
F at the time of execution of the sale deed. As th e 0

defendant did not execute the sale deed, plaintiff
instituted suit tor specific performance. Trial court
decreed the suit, which was set aside by Single Judge
of High Court. On appeal, Division Bench of High Court
G restored the judgment of trial court.
In appeal to this Court, it was cofttended for the
appellant that the signature found in the agreement was
forged and in any event in the absence of signature of
the purchaser, an agreement to s.ale was neither
H 822
ALOKA BOSE v. PARMATMA DEVI & ORS. 823

complete nor a valid agreement and accordingly the A
·--t plaintiff was not entitled to endorse the same; and that a
contract of. sale like any other contract is bilateral in
nature under which both vendor and purchaser have
rights and obligations.
Dismissing the appeal, the Court 8
HELD: 1. There was no valid reason to disturb the
factual finding based on acceptable materials. The Single
" ........ Judge of the High Court committed an error in taking a
contrary view. [Para 4) [828-D]
2. All agreements of sale are bilateral contracts as c
promises are made by both - the vendor agreeing to sell
and the purchaser agreeing to purchase. An agreement
of sale comes into existence when the vendor agrees to
sell and the purchaser agrees to purchase, for an agreed
consideration on agreed terms. It can be oral. It can be D
by exchange of communications which may or may not
be signed. It may be by a single document signed by both
parties. It can also be by a document in two parts, each
party signing one copy and then exchanging the signed
copy as a consequence of which the purchaser has the i;
copy signed by th~ vendor and a vendor has a copy
'signed by the purchaser. Or it can be by the vendor
executing the document and delivering it to the
purchaser who accepts it. 5.10 of the Contract Act, 1872
provides all agreements are contracts·-if they are made by
· tfle free consent by the parties competent to contract, for F
a la'l{ful consideration and with a lawfld object, and are
not expressly declared to be void. The proviso to s.10 of
the Act makes it clear that the section will not apply to
contracts which are required to be made;jn writing or in
the presence of witnesse~ or any law relating to G
registration of documents. Even an oral agreement to sell
is valid. If so, a written agreement signed by one of the
-~
parties, if it evidences such an oral agreement will also
be valid. In any agreement of sale, the terms are always
negotiated and thereafter reduced in the form of an H
;
824 SUPREME COURT REPORTS [2008] 17 S.C.R.

A agreement of sale and signed by both parties or the
vendor alone (unless it is by a series of offers and
counter-offers by letters or other modes of recognized
communication). In India, an agreement of sale signed by
the vendor alone and delivered to the purchaser, and
8 accepted by the purchaser, has always been considered
to be a valid contract. In the event of breach by the
vendor, it can be specifically enforced by the purchaser.
There is, however, no practice of purchaser alone signing
an agreement of sale. [Para 7) [829-H; 830-A-G]
c 3. The testimonium portion in the agreement in
question is in an archaic form which has lost its meaning.
Parties no longer 'subscribe their respective hands and
seals'. It is true that the format obviously contemplates
signature by both parties. But it is clear that the intention
of the parties-was that it should be complete on signatur~
D by only the vendor. This is evident from the fact that the
document is signed by the vendor and duly witnessed
by four witnesses and was delivered to the purchaser.
Apart from a separate endorsement made on the date of
the agreement itself (7 .9.1979) by the vendor
E acknowledging the receipt of Rs.2001 as advance, it also
;;• contains a second endorsement (which is also duly
witnessed) made on 10.10.1979 by the vendor,
acknowledging the receipt of _a further sum of Rs.2000
and confirming that the total earnest money received was
F Rs.4001. This shows that the purchaser accepted and
acted in terms of the agreement which was signed,
witnessed and delivered to her as a complete instrument
and that she then obtained an endorsement thereon by
the vendor, in regard to second payment. If the agreement
G was not complete, the vendor would not have received
a further amount and endorsed an acknowledgement
thereon on 10.10.1979. Apart from the above, the
evidence of the witnesses'.also shows that there was a
concluded contract. Therefore, even though the
draftsman who prepared the agreement might have used
H a forn:iat intended for execution by both vendor and •
ALOKA BOSE v. PARMATMA DEVI & ORS. 825

-
(

purchaser, the manner in which the parties had A
proceeded, clearly demonstl'.ated that it was intended to
-t be executed only by the vendor alone. Thus the
agreement of sale (Ext. 2) signed only by the vendor was
valid and enforceable by the purchaser. [Para 8] (831-C-
H; 832-A]
B
4. The trial Court as well as the Division Bench of the
High Court on the analysis of the materials in the form of
oral and documentary evidence concluded that the
. ,""' purchaser had performed her part by paying the earnest
money and sent a notice conveying her willingness and
readiness to pay the balance of sale consideration. The c
trial Court and the Division Bench also concluded that the
plaintiff had fulfilled the conditions as stated in s.16(c) of
the Specific Relief Act and in that event the plaintiff is
entitled decree for specific performance which was rightly
granted by the trial Court. The agreement of sale was D
enforceable and the trial Court has rightly granted decree
which was affirmed by the Division Bench of the High
....
Court. Looked at from any angle, the judgment of the
Division Bench of the High Court setting aside the order
of the Single Judge and affirming the judgment and
E
decree of the trial Court, does not warrant any
interference by this Court. [Paras 9 and 11] [825-B-C-0;.E-F]
S. M. Gopal Chetty v. Raman AIR (1998) Madras 169
and Md. Mohar Ali v. Md. Mamud Ali AIR (1998) Gauhati 92,
referred to.
F
Case Law Reference:
. -i AIR (1998) Madras 169 referred to Para 6
AIR (1998) Gauhati 92 referred to Para 6
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6197 of 2000.
G
From the final Judgment and Order dated 7.9.1999 of the
High Court of Patna, Ranchi Bench, Ranchi in Letters Patent
Appeal No. 29 of 1993 (R).
Ranjan Mukherjee and S.C. Ghosh for the Appellant.
Shekhar Prit Jha for the Respondents. H
826 SUPREME COURT REPORTS [2008] 17 S.C.R.
(--

A The Judgment of the Court was delivered by
P. SATHASIVAM, J. 1. Challenge in this appea! is to the
order dated 7.9.1999 passed by the Division Bench of the High
f- •
Court of Patna, Ranchi Bench allowing LP.A. No.29 of 1993
(R) filed by Smt. Parmatma Devi - first respondent herein.
B 2. The facts of the case, in a nutshell, are as follows:
By virtue of a written agreement of sale on 7 .9.1979, one
Kanika Bose (since deceased) had agreed to sell to the first
respondent the southern portion of house being Holding No. y
786-C, Ward No.1, Mohalla Barmasia under Giridih Municipality
c for a consideration of Rs.34,500/-. The first respondent paid a
sum of Rs.2001/- as earnest money and part payment and a
further sum of Rs.2000/- on 10.10.1979 to Kanika Bose on a
condition that ttie sale deed would be executed within three
months and balance consideration money would be paid at the
D ·time of execution of the sale deed. As Kanika Bose did not
execute the sale deed, on 6.12.1979, the first respondent
instituted suit being T.S. No. 54 of 1979 for specific ;.-
performance in the Court of Subordinate Judge, Giridih, Bihar.
In the said suit, the defendant - Kanika Bose filed her written
E statement denying the ave,rments made in the plaint. By
judgment dated 28.09.1983, the subordinate Judge, Giridih
decreed the suit against the defendant: Challenging the said
decree; the defendant preferred a first appeal befo~e the High
Court of Patna, Ranchi Bench and the same was registered
as First Appeal No. 111 of 1983 (R). By judgment dated
F 04.10.1993, learned single Judge allowed the first appeal and
dismissed the suit. Against the said judgment, the first )'- -"
respondent herein filed LP.A. No. 29 of 1993(R). A Division
Bench of the High Court, by the imp:Jgned judgment dated
7.9.1999 allowed the said LP.A. by setting aside the judgment
G dated 4.10.1993 passed by the learned single Judge and
restoring the judgment and decree of the trial court. Aggrieved
by the said judgment, _Kanika Bose-the defendant has preferred
this appeal by way of special leave before this Court. Pending r
appeal, Kanika Bose died on 27.5.2007. On an application for
H bringing the legal heirs on record, three legal representatives ,.\

~

'
ALOKA BOSE v. PARMATMA DEVI & ORS. 827
[P. SATHASIVAM, J.]

were brought on record i.e.,Aloka Bose as appellant and other A
_,,,, two legal heirs as proforma respondent Nos. 2 & 3.
3. We have heard Mr. Ranjan Mukherjee, learned counsel
appearing for the appellant. On the contentions urged, the
following points arise for considmation in this appeal:
(i) Whether an agreement of sale (Ext.2) executed only B
by the vendor, and not by the purchaser, is valid?
(ii) Whether the plaintiff has satisfied and established
~
her case for decree for specific performance under
~
Section 16(c) of the Specific Relief Act, 1963.
4. The main contention urged on behalf of the defendant
c
is that the signature found in the agreement was forged and in
any event, in the absence of signature of the purchaser, Ext.2
is neither a complete nor a valid agreement; and consequently
the plaintiff is not entitled to enforce the same. In this respect,
it is relevant to point out that the learned trial Judge framed D
specific issues, namely, Issue Nos. 5 and 6 and discussed the
same in detail. In the plaint, the plaintiff has asserted that an
agreement of sale was duly executed by the defendant and she
had put her signature in token of its execution after receiving
the earnest money. In order to prove the genuineness of the E
agreement of sale (Ext.2), the plaintiff has asserted that
defendant had executed the said agreement. She also got the
signature of the defendant in the agreement of sale Ext.2
examined and compared with the admitted signature of the
defendant through handwriting expert P.W.1 Syed Ekbal Taiyab F
Hussain Raza who opined that the signature on the agreement
·r of sale as well as specimen signatures of the defendant are
one and the same. Apart from the expert evidence, plaintiff has
also produced P.W.3 - Shankar Lal, a land broker, who
asserted on oath that the defendant had put her signature in
the agreement of sale. Apart from this, P.W. 4- Jagdish Prasad, G
brother of the plaintiffs husband and P.W. 9 - lshwari Prasad
Budholia, husband of the plaintiff also asserted that the
...,._~

defendant Kanika Bose had put her signature in the agreement
of sale in their presence. As stated earlier, it is not the case of
• the defendant that she did not put any signature in the H
.,
I

828 SUPREME COURT REPORTS [2008] 17 S.C.R.

A agreement of sale. On the other hand, she had given an
explanation how her signature ~as obtained on a blank paper. :
Though defendant has also examined one expert D.W. 2 S.K.
Chatterjee, the trial Court has concluded that the said D.W.2
has ·not compared all the signatures alleged to have been put
B by the defendant in the agreement of sale nor examined those
endorsements which are alleged to be made by the defendant
Kanika Bose. Since the trial.Court analyzed and compared the
opinion of two experts with materials placed before them and
preferred to accept the opinion of expert examined by the side
of the plaintiff, there is no reason to dispute the said conclusion. "
·i
C In the light of the controversy the, Division Bench of the High }-

Court also compared the signature found in other documents
such as vakalatnama, written statement with that of the signature
found in Ext.2 and concluded that the signature found in the
agreement of sale was that of the defendant Ms. Kanika Bose.
D We are of the view that there is no valid reason to disturb the ,'
above factual finding based on acceptable materials. The
learned Single Judge of the High Court committed an error in +-.
taking a contrary view.
5. The defendant submitted that a contract for sale, like
E any other contract, is bilateral in nature under which both vendor
and the purchaser have rights and obligations. It is submitted
that an agreement for sale being a contract for sale, creating
a right in the purchaser to obtain a deed of conveyance in terms
of the agreement under which, the vendor agrees to convey to
F the purchaser, and the purchaser agrees to purchase, the
subject-matter of the agreement for an agreed consideration,
subject to· the ·terms and conditions stipulated in the said
agreement, it is' bilateral. It is therefore contended that an
agreement of sale is neither complete nor enforceable unless
G it is signed: by both. parties.
6. Certain amount of confusion is created on account of
two divergent views expressed by two High Courts. In S. M.
Gopaf. Chetty vs. Raman [AIR 1998 Madras '169], a learned
Single Judge held·that where the agreement of sale was not
>
H signed by the purchaser, but orily by the vendor, it cannot be
---
ALOKA BOSE v. PARMATMA DEVI & ORS. 829
[P. SATHASIVAM, J.]
,,. said that there was a contract between the vendor and the A
purchaser; and as there was no contract, the question of
-->r· specific performance of an agreement signed only by the vendor
did not arise. On the other hand, in Md. Mohar Ali vs. Md.
Mamud Ali [AIR 1998 Gauhati 92], a learned Single Judge
held that an agreement of sale was an unilateral contract (under B
which the vendor agreed to sell the immovable property to the
purchaser in accordance with the terms contained in the said
agreement), that such an agreement for sale did not require the
" .'""'< .. signatures of both parties, and that therefore an agreement for
sale signed only by the vendor was enforceable by the
purchaser.
c
7. We find that neither of the two decisions have
addressed the real issue and cannot be said to be laying down
the correct law. The obseNation in Md. Mohar Ali (supra) stating
that an agreement of sale is an unilateral contract is not correct.
An unilateral contract refers to a gratuitous promise where only D
party makes a promise without a return promise. Unilateral
. 4 contract is explained thus by John 0. Calamari & Joseph M.
Perillo in The Law of Contracts (4th Edition Para 2-10(a) at
pages 64-65):
"If A says to B, 'If you walk across the Brooklyn Bridge I E
will pay you $ 100,' A has made a promise but has not
asked B for a return promise. A has asked B to perform,
not a commitment to perform. A has thus made an offer
looking to a unilateral contract. B cannot accept this offer
by promising to walk the bridge. B must accept, if at all, F
by performing the act. Because no return promise is
requested, at no point is B bound to perform. If B does
perform, a contract involving two parties is created, but the
contract is classified as unilateral because only one party
is ever under an obligation." G
All agreemerits of sale are bilateral contracts as promises are
made by both - the vendor agreeing to sell and the purchaser
.,._~

agreeing to purchase. On the other hand, the obseNation in
.... S.M. Gopa/ Chetty (supra) that unless agreement is signed
both by the vendor and purchaser, it is not a valid contract is H
830 SUPREME COURT REPORTS [2008] 17 S.C.R.

A also not sound. An agreement of sale comes into existence
when the vendor agrees to sell and the purchaser agrees to y-
purchase, for an agreed consideration on agreed terms. It can
be oral. It can be by exchange of communications which may ,
or may not be signed. It may be by a single document signed ~
B by both parties. It can also be by a document in two parts, each '
party signing one copy and then exchanging the signed copy
as a consequence of which the purchaser has the copy signed
by the vendor and a vendor has a copy signed by the )' L

purchaser. Or it can be by the vendor executing the document y
and delivering it to the purchaser who accepts it. Section 10
c of the Act provides all agreements are contracts if they are
made by the free consent by the parties competent to contract,
for a la~ul consideration and with a lawful object, and are not
expressly declared to be void under the provisions of the
Contrabt Act. The proviso to section 10 of the Act makes it clear
D that the section will not apply to contracts which are required
to be made in writing or in the presence of witnesses or any
law relating to registration of documents. Our attention has not .... .
been drawn to any law applicable in Bihar at the relevant time,
which requires an agreement of sale to be made in writing or
E in the presence of witnesses or to be registered. Therefore,
even an oral agreement to sell is valid. l(so, a written
agreement signed by one of the parties, if it evidences such
an oral agreement will also be valid. In any agreement of sale,
the terms are always negotiated and thereafter reduced in the
form of an agreement of sale and signed by both parties or the
F
vendor alone (unless it is by a series of offers and counter-offers
by letters or other modes of recognized communication). In y- -
India, an agreement of sale signed by the vendor alone and
delivered to the purchaser, and accepted by the purchaser, has
always been considered to be a valid contract. In the event of
G breach by the vendor, it can be specifically enforced by the
purchaser. There is, however, no practice of purchas.e.r alone
signing an agreement of sale.
~-
8. The. defendant next contended that the agreement of ,,...
sale in this case (Ex.2) was clearly in a form which required
H signatures of both vendor and purchaser. It is pointed out that
ALOKA BOSE v. PARMATMA DEVI & ORS. 831
.... [P. SATHASIVAM, J.]

the agreement begins as : "Agreement for sale between Kanika A
Bose and Parmatma Devi" and not an "Agreement of sale
executed by Kanika Bose in favour of Parmatma Devi". Our
attention is also drawn to the testimonium clause (the provision
at the end of the instrument stating when and by whom it was
signed) of the agreement, which reads thus : "In witnesses 8
whereof, the parties hereto have hereunto set and subscribed
their respective hands and seals on these presents." It is
therefore contended that the agreement specifically
"" c~
contemplated execution by both parties; and as it was not so
executed, it was incomplete and unenforceable. We have
carefully examined the agreement (Ex.2), a photocopy of which
c
is produced. The testimonium portion in the agreement is in an
archaic form which has lost its meaning. Parties no longer
'subscribe their respective hands and seals'. It is true that the
format obviously contemplates signature by both parties. But it
is clear that the intention of the parties was that it should be D
complete on signature by only the vendor. This is evident from
- ~
the fact that the document is signed by the vendor and duly
witnessed by four witnesses and was delivered to the
purchaser. Apart from a separate endorsement made on the
date of the agreement itself (7.9.1979) by the vendor E
acknowledging the receipt of Rs.2001 as advance, it also
contains a second endorsement (which is also duly witnessed)
made on 10.10.1979 by the vendor, acknowledging the receipt
of a further sum of Rs.2000 and confirming that the total
earnest money received was Rs.4001. This shows that the
F
purchaser accepted and acted in terms of the agreement which
--r
was signed, witnessed and delivered to her as a complete
instrument and that she then obtained an endorsement thereon
by the vendor, in regard to second payment. If the agreement
was not complete, the vendor would not have received a further
amount and endorsed an acknowledgement thereon on G
10.10.1979. Apart from the above, the evidence of the
-+-c.;(, witnesses also shows that there was a concluded contract.
Therefore, even though the draftsman who prepared the
~

agreement might have used a format intended for execution by
both vendor and purchaser, the manner in which the parties had H
832 SUPREME COURT REPORTS (2008] 17 S.C.R.

A proceeded, clearly demonstrated that it was intended to be
executed only by the vendor alone. Thus we hold that the
agreement of sale (Ext. 2) signed only by the vendor was valid
and enforceable by the purchaser.
9. The trial Court as well as the Division Bench of the High
B Court on the analysis of the materials in the form of oral and
documentary evidence concluded that ·the vendee had
performed her part by paying the earnest money and sent a
notice conveying her willingness and readiness to pay the
balance of sale consideration. The said notice was
c acknowledged by the defendant. The clauses in the agreement
clearly show that the vendor had to perform and fulfill the terms
of agreement by executing the sale deed on receipt of the
consideration. We have already adverted to the fact that the
vendee had performed her part of the contract.

0 10. The trial Court and the Division Bench also concluded
that the plaintiff had fulfilled the conditions as stated in Section
16(c) of the Specific Relief Act and in that event the plaintiff is
entitled to decree for specific performance which was rightly
granted by the trial Court. Though learned counsel for the
appellants pointed out that the claim of the plaintiff that she was
E put in possession of a portion of the suit property in part
performance was not accepted by the trial Court, in the light of
the categorical findings about the validity of Ext. 2 and
satisfactory proof of other conditions for granting the decree for
specific performance, we are unable to accept the said
F contention. On the other hand, we agree with the conclusion
arrived at by the Division Bench and hold that the agreement
of sale was enforceable and the trial Court has rightly granted
decree which was affirmed by the Division Bench of the High
Court.
G 11. Looked at from any angle, the judgment of the Division
Bench of the High Court setting aside the order of the Single
Judge and affirming the judgment and decree of the trial Court,
does not warrant any interference by this Court. Consequently,
the appeal fails and the same is dismissed. No costs.
H · D.G. Appeal dismissed.