Reportability Reportable
Bench Division Bench (2)
Importance Significant
Result Appeal Allowed
Verified source: Supreme Court judgment dated 29.09.2026 in Civil Appeal arising out of SLP (C) No. 25909 of 2024 — full text on Indian Kanoon. Bench, date, figures and directions checked against the judgment on 01.10.2026.
⚖ Case at a Glance
Case TitleBombay Garage Ahmedabad Ltd. v. J P Iscon Pvt. Ltd.
Citation2026 INSC 1066 · C.A. @ SLP (C) No. 25909 of 2024
Court & BenchSupreme Court — Justices J.B. Pardiwala & K. Vinod Chandran (authored by Vinod Chandran, J.)
Date of Decision29 September 2026
ProvisionOrder II Rule 2 and Order XXIII Rule 1 CPC; Specific Relief Act, 1963
OutcomeConcurrent decrees for specific performance set aside; suit dismissed
ResultAppeal Allowed
Status: Good law as on the date of review — not reported as overruled or stayed.
Court Journey — Stage by Stage
Stage 12007Withdrawn
Earlier suit — Special Civil Suit No. 173 of 2007
The plaintiff first sued only for a permanent injunction restraining the defendant company from alienating or constructing on the land, pleading an oral agreement and a refusal on 08.05.2007. No leave was taken to sue later for specific performance. The suit was withdrawn on the plea that settlement talks were on.
Stage 225 Nov 2021Decreed
City Civil Court, Ahmedabad
In Civil Suit No. 2515 of 2007 (filed 06.12.2007 and amended in 2011), the trial court decreed specific performance of the alleged oral agreement and directed execution of a registered sale deed.
Stage 323 Aug 2024Appeal dismissed
High Court of Gujarat
In First Appeal No. 1734 of 2022, a Division Bench (Justices Biren Vaishnav and Nisha M. Thakore) affirmed the decree, rejecting the Order II Rule 2 objection.
Final29 Sep 2026Present JudgmentAllowed
Supreme Court of India
The Supreme Court set aside both decrees and dismissed the suit, holding it barred by Order II Rule 2 CPC and finding no concluded oral contract proved. Parties to bear their own costs.
Facts in Brief
The plaintiff company claimed that the defendant company had orally agreed to sell a parcel of land in Ahmedabad, that the price was first fixed and later enhanced to ₹20.50 crore, and that it had paid ₹5,11,000 in cash as token advance and handed over a cheque of ₹5 crore. It relied on meetings with a relative of the person in charge of the defendant company and on a letter of 25.11.2006 by which the company sent property documents to its own officer.
The first suit, for injunction simpliciter, was withdrawn. A fresh suit for specific performance followed. Both courts below decreed it, relying largely on oral testimony and on the evasive answers of the defence witnesses. Before the Supreme Court the defendants argued that the second suit was barred by Order II Rule 2 and that no concluded contract had been proved.
Questions Before the Court
1
Whether a suit for specific performance is barred under Order II Rule 2(3) CPC when an earlier suit, based on the same cause of action, sought only a permanent injunction without leave of the Court, and was later withdrawn with a request to file afresh.
2
Whether a concluded oral agreement for sale of immovable property was proved by the plaintiff.
What the Court Decided
On maintainability, the Court held that the cause of action for specific performance had already arisen when the first suit was filed, because the defendant had refused to perform on 08.05.2007. The plaintiff neither claimed that relief nor obtained leave under Order II Rule 2(3) at the time of institution. Liberty sought at the time of withdrawal does not cure the absence of leave at institution, and Order XXIII Rule 1(3) permits a fresh suit only for the same subject-matter, not a new relief. The second suit was therefore barred.
On merits, the Court found that no concluded oral contract was proved. The pleadings were inconsistent across the two plaints and the amendment; there was no date fixed for execution; the ₹5 crore cheque said to be the advance was never presented; the main independent witness spoke to matters not pleaded and his account of a telephonic acceptance was hearsay; and the other witness had no direct knowledge. Evasive answers by defence witnesses cannot fill the gap in the plaintiff’s own proof. The concurrent findings were held to border on perversity, and the suit was dismissed.
Directions / Final Order
- Judgments of the trial court and the Gujarat High Court set aside.
- Suit for specific performance dismissed.
- Parties to bear their respective costs.
The Key Principle
Ratio / Key Principle
Where the relief of specific performance was available on the cause of action pleaded in an earlier suit for injunction, and the plaintiff omitted it without obtaining leave of the Court at the time of institution, a later suit for specific performance is barred by Order II Rule 2 CPC; permission to withdraw with liberty to file afresh does not supply that leave. A suit on an oral agreement to sell requires strict proof of consensus ad idem on all essential terms; it cannot rest on inference or on the weakness of the defence.
The Court observed that small discrepancies in pleadings “assume massive proportions in a civil suit especially when it is an oral contract that is attempted to be established.”
Reasoning & Analysis
Oral agreement — heavy burden. Reiterating Brij Mohan v. Sugra Begum, (1990) 4 SCC 147 and K. Nanjappa v. R.A. Hameed, (2016) 1 SCC 762, the Court held that an agreement to sell immovable property need not be in writing, but a plaintiff relying on an oral agreement must prove that the vital terms were concluded; strict proof is the norm and mere inference is impermissible.
Three conditions of Order II Rule 2(3). Following the Constitution Bench in Gurbux Singh v. Bhooralal (1964), the Court noted that the bar requires identity of cause of action, entitlement to more than one relief, and omission of a relief without leave. Unlike Gurbux Singh, the earlier plaint here was on record, produced by the plaintiff itself, and showed that the refusal and the complete cause of action had already arisen.
Leave at withdrawal is not leave at institution. The Court declined to follow the inference drawn in Gurinderpal v. Jagmittar Singh, (2004) 11 SCC 219 as contrary to the Constitution Bench, and aligned itself with Virgo Industries, (2013) 1 SCC 625 and Vurimi Pullarao, (2020) 14 SCC 110. It distinguished Inbasagaran, Rathnavati, Sucha Singh Sodhi and Cuddalore Powergen, where the relief of specific performance was not available when the first suit was filed.
Order XXIII Rule 1(3) distinguished. That provision allows a fresh suit on the same subject-matter or part of the claim with the Court’s leave; it does not allow a plaintiff to add in the second suit a relief which Order II Rule 2 deems relinquished.
Evidence. An uncashed ₹5 crore “advance” cheque was treated as a clear indication that there was no concluded contract. A witness’s public status does not raise any presumption of truth. A go-between with no authority from the company could not bind it, and a plaintiff who relied on such a person did so at its own peril.
How It Sits With Earlier Law
The judgment follows Gurbux Singh v. Bhooralal (Constitution Bench, 1964), Virgo Industries (Eng.) Pvt. Ltd. v. Venturetech Solutions, (2013) 1 SCC 625, Vurimi Pullarao v. Vemari Vyankata Radharani, (2020) 14 SCC 110 and Cuddalore Powergen Corporation Ltd. v. Chemplast Cuddalore Vinyls Ltd., 2025 INSC 73. It expressly declines to follow the reasoning in Gurinderpal v. Jagmittar Singh, (2004) 11 SCC 219 on inferred liberty, as running contrary to the Constitution Bench. On oral agreements, it reaffirms Brij Mohan (1990) and K. Nanjappa (2016).
How to Use This Judgment
Before filing an injunction suit on an agreement to sell, check whether the seller has already refused to perform. If he has, the specific performance relief should be claimed in the same suit, or leave under Order II Rule 2(3) must be obtained at the time of filing. Withdrawing the suit later “with liberty” will not save a fresh suit for specific performance, though an amendment of the pending suit may be considered.
For buyers relying on oral understandings, this judgment underlines the need for documentary proof: a written agreement, receipts, and encashed payments. Consistency between the notice, the earlier plaint, any amendment and the evidence is critical. This note is shared for general legal awareness and is not legal advice.
