2006 Supreme(SC) 638

2006(6) Supreme 299
SUPREME COURT OF INDIA
(From Delhi High Court)
Arijit Pasayat and S.H. Kapadia, JJ.
Mrs. Vijaya Shrivastava — Appellant
versus
M/s Mirahul Enterprises & Others — Respondents
Civil Appeal Nos. 1209-1210 of 2003
With
Civil Appeal Nos. 1211-1212 of 2003
Decided on 19-7-2006
Counsel for the Parties :
For the Appellant : A.K. Ganguli, Sr. Advocate and Rajiv Talwar, Advocates.
For the Respondents : K.K. Mohan, A.T.M. Sampath, V. Balaji, Mrs. T.S. Shanthi, Mrs. R. Meena Kumari and Mrs. S.L. Lesi, Advocates.

Headnote:Specific Relief Act, 1963 — Section 16 — Transfer of Property Act, 1882 — Section 52 — Suit for specific performance of agreement and for refund of alleged loan amount extended by vendees to developers — Defendant’s plea was that agreement was a provisional which plaintiff required to avail of loan from Bank — Single Judge decreed suit for specific performance but refused to grant decree for refund of loan — During pendency of suit, suit flat was alleged to have been transferred by sale in favour of defendant No. 6 — Single Judge found defendant No. 6 not to be a bona fide purchaser for value without notice — Appeals before Division Bench — Division Bench allowed appeal filed by developers holding that suit agreements were provisional agreements, in conclusive and plaintiffs were not entitled to claim specific performance — None of other issues were answered by Division Bench — Appeal — Division Bench ought to have answered all the issues as all issues were inter-connected — Though defendant No. 6 had not filed written statement, issue whether sale in favour of defendant was vitiated on account of collusion and issue was answered in favour of plaintiff — Doctrine of lis pendense — Court could refuse specific performance if subsequent purchaser was found to be a bona fide purchaser for value without notice.

       Held : In our view, the division bench ought to have answered all the issues which were framed by the trial court. All the issues are inter-connected. For example, in the suit, the plaintiff-appellant has alleged that there were two separate transactions – one for sale of the flat and another for specific performance of the agreement under which interest-free loan was extended to the developers. Whether the loan amount was adjustable towards the price payable to the developers was an important issue which has a linkage with the agreement for sale of flats. We do not wish to express any opinion on any of the said issues.(Para 5)

       It was vehemently urged on behalf of the original plaintiffs who are the appellants before us that the findings on other issues need not be called for particularly in view of the fact that defendant no.6 had not filed the written statement in the suit. We do not find any merit in this argument. In the said suit, a specific issue was framed by the single judge – as to whether the sale deed dated 9.6.1987 in favour of defendant no.6 stood vitiated on account of collusion between the developer and the subsequent purchaser. This issue was answered in favour of the plaintiff. The suit was decreed inter alia on that basis. Defendant no.6 was also asked to join in execution of conveyance with defendant nos.1 to 5 in favour of the plaintiffs. Aggrieved by the decision of the learned single judge, all the six defendants preferred RFAs. They have challenged all the findings of the learned single judge. In the appeals, defendant no.6 has categorically submitted that he was a bona fide purchaser for value without notice. Therefore, we are of the view that the division bench ought to have given its findings not only on the conclusiveness of the suit agreement but also on the remaining issues including the finding on the issue of collusion between the developer and defendant no.6, as alleged by the plaintiffs.(Para 7)

       The doctrine of lis pendens was invoked by the learned counsel appearing on behalf of the plaintiffs-appellants. He submitted that the alienation in favour of defendant no.6 had taken place during the pendency of the suit and, therefore, the decree passed by the single judge was binding on defendant no.6. We do not find any merit in this argument.(Para 8)

       In the case of Jayaram Mudaliar v. Ayyaswamy reported in AIR 1973 SC 569, it has been held as follows:

       "....The purpose of section 52 of the Transfer of Property Act is not to defeat any just and equitable claim but only to subject them to the authority of the Court which is dealing with the property to which claims are put forward."

       To the same effect is the judgment of the Kerala High Court in K.A. Khader v. Rajamma reported in AIR 1994 Kerala 122.(Para 9)

       In the present case, it may also be noted that the plaintiffs have alleged that the sale deed dated 9.6.1987 is vitiated by collusion and, therefore, not binding on the plaintiffs. As stated above, this issue is decided against defendant no.6 by the single judge. Decree has been passed against defendant no.6. He has preferred RFA to the division bench, in which he has categorically stated that he was a resident of Madras; that, he had given power of attorney to the managing partner of M/s. Mirahul Enterprises; and that, he was a bona fide purchaser for consideration and without notice. This issue is very relevant because even if in a given case, the contract is found to be concluded, still the Court can refuse specific performance if the subsequent purchaser is found to be a bona fide purchaser for value without notice. On this point, we do not wish to express any opinion. We have only given reasons in respect of our conclusion that the division bench of the High Court should have decided all the above quoted issues which the single judge has decided while passing the decree in favour of the plaintiffs.(Para 10)