Oral sale agreement can be binding and specifically enforceable despite a contemplated written contract and open payment mode.

An oral agreement for sale of co-sharers' shares may be specifically enforceable when proved by reliable testimony, corroborating witnesses and conduct consistent with a concluded bargain. A reference to a later formal written document does not prevent contract formation unless execution of that document was intended as a condition precedent, and an agreed mode of payment is not essential where price, subject-matter and time for completion are already settled. The note also states that notice of the prior arrangement defeats a claim to bona fide purchase for value without notice, and that an allotment direction over the cinema site could not be sustained without a Partition Act request, though equitable directions were left open at final partition.

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Issues: (i) whether the oral agreement of 6 July 1952 for sale of the co-sharers' shares was proved and enforceable by specific performance; (ii) whether the contemplated execution of a formal written agreement and the absence of an agreed mode of payment prevented the oral bargain from becoming a binding contract; (iii) whether the appellant was a bona fide purchaser for value without notice of the prior agreement; and (iv) whether the direction to allot the site on which the cinema building stood was sustainable in the absence of a request under the Partition Act.

Issue (i): whether the oral agreement of 6 July 1952 for sale of the co-sharers' shares was proved and enforceable by specific performance.

Analysis: The oral agreement was found to be established by the testimony of the respondent and supporting witnesses, including contemporaneous corroboration from respectable witnesses and conduct consistent with an earlier binding arrangement. The surrounding circumstances, including the later execution of sale deeds by other co-sharers at the same price, supported the finding that the agreement had in fact been concluded.

Conclusion: The oral agreement was proved and was capable of being specifically enforced.

Issue (ii): whether the contemplated execution of a formal written agreement and the absence of an agreed mode of payment prevented the oral bargain from becoming a binding contract.

Analysis: A mere reference to a future formal document does not negate a concluded bargain unless the parties intended execution of that document to be a condition precedent. On the facts, the evidence did not show that the written agreement was a prerequisite to contractual formation. The omission to settle the mode of payment was also not fatal because the essential terms, including price, subject-matter and time for completion, had been fixed.

Conclusion: The oral agreement was not ineffective for want of a formal written contract or for absence of a settled mode of payment.

Issue (iii): whether the appellant was a bona fide purchaser for value without notice of the prior agreement.

Analysis: The evidence supported the inference that the appellant had notice of the prior agreement before completing his purchases. The timing of the transactions, the communications made to him, and the near identity of the purchase price with the earlier agreed price negatived the plea of bona fide purchase without notice.

Conclusion: The appellant was not a bona fide purchaser for value without notice.

Issue (iv): whether the direction to allot the site on which the cinema building stood was sustainable in the absence of a request under the Partition Act.

Analysis: The direction in the preliminary decree could not stand because no application had been made under the Partition Act enabling such an allotment direction. The Court, however, left it open to the parties to make representations and for equitable directions to be issued at the stage of final partition.

Conclusion: The impugned allotment direction was deleted.

Final Conclusion: The decrees of the High Court were substantially affirmed, but the specific direction regarding allotment of the site under the cinema building was set aside, and the appeals were otherwise dismissed with costs.

Ratio Decidendi: A contemplated future formal agreement does not prevent an oral bargain from becoming binding unless execution of that document was intended as a condition precedent, and a contract is not incomplete merely because the mode of payment was left open where the essential terms have been settled.

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