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Agreement of sale enforceable even if signed by one party

J. Venkatesan

Agreement signed only by vendor is enforceable
Agreement can also be by a document in two parts

New Delhi: An agreement of sale is complete, valid and enforceable even if it is not signed by both parties, the Supreme Court has held. An agreement signed only by the vendor is enforceable by the purchaser.

A Bench of Justice R.V. Raveendran and Justice P. Sathasivam in a recent judgement said: “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 by exchange of communications which may or may not be signed. It may be by a single document signed by both parties.”

Justice Sathasivam pointed out that “the agreement 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 purchaser. Or it can be by the vendor executing the document and delivering it to the purchaser who accepts it.”

Settling a nearly three-decade old dispute, the Bench said the argument that unless the agreement was signed both by the vendor and purchaser, it was not a valid contract was not a sound argument.

In the instant case, Kanika Bose – since deceased – entered into an agreement with Parmatma Devi, first respondent to sell his house in Giridih Municipality in Bihar in September 1979 and received consideration on condition that the sale agreement would be executed in three months.

Since Mr. Bose failed to execute it, Ms. Devi filed a suit for specific performance and it was decreed in her favour. On appeal from Mr. Bose, a single judge of the Patna High Court reversed the order and on second appeal by her, a Division Bench restored the trial court’s decision.

During the proceedings, Mr. Bose died and his wife Alka Bose filed the present appeal in the apex court.

The Bench said “it is clear [from the agreement] that the intention of the parties was that it should be 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.”

The Bench said the trial court as well as the Division Bench of the High Court, on analysis of the materials in the form of oral and documentary evidence, concluded that the vendee had performed her part by paying the sale consideration.

“We are, therefore, of the view that there is no valid reason to disturb the factual finding of the trial court based on acceptable materials. The learned Single Judge of the High Court committed an error in taking a contrary view,” the Bench said and dismissed the appeal.

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