Supreme Court of India· 29 September 2026

Does a suit for specific performance based on an oral agreement require strict proof of a concluded contract, not mere inference?

Bombay Garage Ahmedabad Limited & Ors v. J P Iscon Private Ltd. & Anr

2026 INSC 1066 · Special Leave Petition (C) No.25909 of 2024
Coram: Justice J. B. Pardiwala · Justice K. Vinod Chandran

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Answer

A suit for specific performance based on an oral agreement requires strict proof of a concluded contract, not mere inference.

Yes. Though a suit for specific performance can be based on an oral agreement, a heavy burden lies on the plaintiff to prove that the vital and fundamental terms were concluded orally; there should be proof beyond doubt of a concluded contract between the parties, strict proof being the norm and a mere inference impermissible. Here the plaintiff failed to establish a concluded contract, and the concurrent findings were held perverse.

Headnote

Code of Civil Procedure, 1908 — Order II Rule 2 — Suit for specific performance — Oral agreement — Concluded contract — Pleadings — Code of Civil Procedure, 1908 — Order II Rule 2 — Fresh suit for specific performance — Leave at first suit — Held: A fresh suit for specific performance is barred by Order II Rule 2 where the relief was available when the first suit for injunction was instituted and no leave was then taken; a fresh suit permitted after withdrawal covers only the injunction. (¶11, 23, 27) Code of Civil Procedure, 1908 — Order II Rule 2(3) — Cause of action — Earlier plaint — Held further: The bar in Order II Rule 2(3) is a technical plea that must be established satisfactorily and cannot be presumed by inferential reasoning; identity of the cause of action with the earlier suit must be shown from the earlier plaint. (¶8, 9, 10) Code of Civil Procedure, 1908 — Oral agreement — Specific performance — Strict proof — Held further: A suit for specific performance can rest on an oral agreement, but a concluded contract must be proved strictly. Inconsistent pleadings and interested testimony are not sufficient proof, and evasive defence witnesses cannot lead to an inference of a concluded contract. (¶3, 34, 36) Code of Civil Procedure, 1908 — Order II Rule 2 — Concluded oral contract not proved — Appeal allowed — On facts, held: No concluded oral contract was proved and the second suit was barred. Appeal allowed; orders of the Trial Court and the High Court set aside and the suit dismissed. (¶27, 39, 40)

Headnote

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In the Court's own words

Paragraph 3In Brij Mohan[^1], on facts, as stated in paragraph Nos.21 and 22 it was found that there was no proof of a concluded contract arrived at and there were many lacunae which would commend the Court to find otherwise. In K. Nanjappa[^2], this Court found the reliance on an agreement written in a quarter sheet of paper, merely for the reason of it having been produced before the Magistrate’s Court in a criminal proceeding, to be improper, especially when an earlier agreement referred to therein was not produced. Hence, though reliance could be on an oral agreement, there should be proof beyond doubt of a concluded contract between the parties; strict proof being the norm and a mere inference impermissible.

Paragraph 39We are of the opinion that the plaintiff has failed to establish a concluded contract and the Trial Court, and the First Appellate Court have egregiously erred in granting specific relief, which findings borders on perversity. We are not convinced that the meetings occurred, as pleaded by the plaintiff, and in that circumstance, we are unable to find even the token advance of Rs.5,11,000/- having been paid to the defendants and, hence, there is no question of refund of any advance amounts, especially, since the cheque alleged to have been handed over of Rs.5,00,00,000/-, is not presented to the bank on which it is drawn. We are not dealing with the authority of the 9th respondent to deal with the assets of the Company since it is no longer necessary, the suit having been found to be not maintainable and the contract having failed to be established as a concluded contract. The concurrent findings of the Trial Court and the High Court, according to us are perverse. The plaintiff could not establish a concluded contact and emphasis in the impugned judgments, were more on the dishonest and evasive stance of the defendants who mounted the box, which cannot lead to any adverse inference against them. The defendants have stoutly denied the claim of the successive meetings and that of a concluded contract for sale of the land and the plaintiff miserably failed to prove any one of the points urged by them.

Acts & Sections

Order II Rule 2 Code of Civil Procedure, 1908Order XXIII Rule 1(3) Code of Civil Procedure, 1908

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Also decided in this judgment

Does Order II Rule 2 CPC bar a fresh suit for specific performance where no leave was taken when the first suit for injunction was instituted?Does inconsistent or evasive testimony of defence witnesses lead to a finding in favour of the plaintiff?Can proof be offered without pleadings where an oral contract is attempted to be established?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections