Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(SC) 418

SUPREME COURT OF INDIA
SUDHANSHU DHULIA, PRASANNA B. VARALE, JJ.
Chander Bhan (D) Through Lr Sher Singh – Appellant
Versus
Mukhtiar Singh & Ors. – Respondents
Civil Appeal No. 2991 of 2024(ARISING OUT OF SLP (CIVIL) NO. 4134 OF 2020)
Decided on : 03-05-2024

Advocates appeared:
For the Appellant(s) : Mr. Rameshwar Singh Malik, Sr. Adv. Mr. Jitesh Malik, Adv. Mr. Abhaya Nath Das, Adv. Mr. Anurag Kumar Mittal, Adv. Mr. Pravin Sharma, Adv. Mr. Vimal Rathi, Adv. Mr. Neeraj Sharma, Adv. Mr. Rahul Kumar, Adv. Mr. Kanishk Arora, Adv. Mr. Ashish Aggarwal, Adv. Mr. Satish Kumar, AOR
For the Respondent(s): Mr. Narender Hooda, Sr. Adv. Mr. Shaurya Lamba, Adv. Mr. Shiv Bhatnagar, Adv. Ms. Rashi Choudhary, Adv. Dr. Surender Singh Hooda, AOR

IMPORTANT POINT
Subsequent purchasers will be bound by lis pendens.

Headnote:
Transfer of Property Act, 1882 – Sections 41 and 52 – Agreement to Sell – Suit for Specific Performance – Appeal by unsuccessful plaintiff – Even if Section 52 of T.P Act is not applicable in its strict sense in present case then too principles of lis-pendens, which are based on justice, equity and good conscience, would certainly be applicable – Alienation made by respondents cannot operate against interests of appellant considering he had obtained order of temporary injunction in his favour – Once it has been held that transactions executed by respondents are illegal due to doctrine of lis pendens defence of respondents that they are bonafide purchasers for valuable consideration and entitled to protection under Section 41 of Act of 1882 is liable to be rejected – Subsequent purchasers will be bound by lis pendens and cannot claim they are bonafide purchasers because they were not aware of injunction order – Respondents have also claimed they have made substantial alterations to property by investing money and they have also installed a submersible pump – However, this cannot be basis for respondents to claim any sort of compensation or stake any sort of claim against property – Decree in favour of appellant upheld. (Paras 17, 20, 21, 22, 23, 24 and 25)
Facts of the case:
Appeal filed by appellant challenges Judgment and order dated 03.10.2019, passed in a second appeal by Punjab and Haryana High Court. Impugned Judgment of High Court has reversed concurrent findings of trial court and first appellate court and has consequently dismissed suit of specific performance filed by appellant-plaintiff, although a partial relief was granted to appellant by return of the earnest money to appellant, with interest.
Findings of Court:
Respondent no. 3 is directed to accept balance sale consideration of Rs.5,50,000 from appellant and execute agreement to sell dated 10.11.2002 in favour of appellant, within 3 months from today.
Result : Appeal allowed.

1. The appeal filed by the appellant presently before us challenges the Judgment and order dated 03.10.2019, passed in a second appeal by the Punjab and Haryana High Court. The impugned Judgment of the High Court has reversed the concurrent findings of the trial court and the first appellate court and has consequently dismissed the suit of specific performance filed by the appellant-plaintiff, although a partial relief was granted to the appellant by return of the earnest money to the appellant, with interest.

2. The facts leading to this appeal are that on 10.11.2002 appellant and respondent no. 3 entered an agreement to sell relating to 16 “Kanals” of land for a total consideration of Rs. 8 lakhs, where Rs. 2.50 lakhs was paid at the time of agreement and remaining Rs. 5.50 lakhs was to be paid at the time of execution of sale deed, which was to be executed on or before 10.11.2004.

3. After the agreement to sell but before the date of the execution of the sale deed the present appellant having received the knowledge that respondent no. 3 was likely to alienate the suit property, files a suit for permanent injunction on 21.07.2003 against respondent no. 3 where an order of temporary injunction was passed in his favour on 28.07.2003. On the very same day, i.e., 28.07.2003 respondent no. 3 though executes a “release deed” in favour of his son, Harvinder Singh (respondent no. 4), for which mutation was also sanctioned.

4. Subsequent to the Release Deed, respondent no. 4, son of respondent no.3, executed a registered sale deed dated 16.06.2004 in favour of Mukhitar Singh and Baljeet Singh (respondent nos. 1-2) for the suit land.

5. The appellant then files a suit for specific performance before the Additional Civil Judge, Senior Division, Jind, as the defendant i.e. present respondent No.3 did not come forward even on the last day i.e. 10.11.2004 to execute the sale deed. In his Written Statement, respondent no. 3, takes the defence that the agreement for sale was signed by him, but under a “misconception”. It is contended that the appellant/plaintiff had taken the defendant to a shop for being a witness and had fraudulently obtained his signatures on the agreement to sell. Respondents 1 and 2, on the other hand, claimed to be bonafide purchasers for valuable consideration and sought protection under Section 41 of the Transfer of Property Act, 1882 (hereafter “Act of 1882”).

6. The Trial Court, nevertheless decreed the suit of the appellant with costs and directed respondent no. 3 to accept balance sale consideration and execute the agreement to sell. It was held that respondent no. 3 had admitted about the execution of the agreement to sell in the earlier suit for injunction filed by the appellant, and further Vijay Singh (PW-5) had verified the execution of the agreement. The Trial Court did not give any credence to the objections of the defendants (present respondents No. 3 and 4). Both these defendants, father and son respectively, had refused to depose in the witness box. An adverse inference was drawn against them by the Court, on this aspect as well.

7. An interesting development, meanwhile took place before the Trial Court. PW-7 who was the lawyer of the appellant in the injunction suit, had become an attesting witness of the “sale deed” executed by respondent no. 4 in favour of respondent nos. 1-2. The Trial Court, thus observed that from the deposition of PW-7 during cross-examination, PW-7 had committed a breach of privileged communication and violated Section 126 of the Evidence Act, 1872.

8. No appeal against this Judgment was filed by respondents 3 and 4. All the same, an Appeal was filed by respondents 1 and 2 before the Additional District Judge, Jind which was dismissed on 06.03.2012. While reiterating the findings of the Trial Court, the First Appellant Court had observed that since PW-7 was the attesting witness of the sale deed in favour of respondent 1-2 and also the advocate of the appellant in the injunction suit,