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2014 Supreme(Kar) 692

IN THE HIGH COURT OF KARNATAKA AT BANGALORE
HULUVADI G. RAMESH, J.
M. Ramaiah – Appellant
Versus
C. Nagabhushana Reddy – Respondent
Regular Second Appeal No. 1640 of 2010
Decided On : 8.12.2014

Advocates Appeared:
Sri. Ramesh Aditya, Advocate.
Sri. M. Sivappa, Senior Advocate, Sri. Vyasa Kiran Upadhya & Sri. Gururaj Salur, Advocates.

The central legal point established in the judgment is the requirement for reconsideration of a property dispute due to the absence of pleading and collusion allegations, invoking the principles of lis pendens, res judicata, and the doctrine of bona fide purchaser for value without notice.

Headnote:

Specific Performance - Property Dispute - The court considered the principle of lis pendens, res judicata, and the doctrine of bona fide purchaser for value without notice in a property dispute involving specific performance. The court found that the matter required reconsideration due to the absence of pleading and collusion allegations, and remitted the case to the lower appellate court for further consideration.

Fact of the Case:

The defendant in a specific performance suit filed an appeal against the decree in favor of the plaintiff. A third party purchaser also filed a suit against the plaintiff, which was decreed. The defendant alleged collusion and fraud, invoking the principle of lis pendens and res judicata.

Finding of the Court:

The court found that the matter required reconsideration due to the absence of pleading by the respondent and allegations of collusion and fraud. The lower appellate court's order was set aside, and the case was remitted for further consideration.

Issues: The issues involved the application of lis pendens, res judicata, and the doctrine of bona fide purchaser for value without notice in a property dispute.

Ratio Decidendi: The court held that the absence of pleading and collusion allegations required reconsideration of the case. The lower appellate court was directed to consider all aspects, including the factual position with regard to lis pendens, and dispose of the matter within three months.

Final Decision: The appeal was allowed, and the parties were directed to bear their own costs in the appeal.

JUDGMENT

HULUVADI G. RAMESH, J.

1. Second appeal is by the defendant in O.S. 474 of 1994 who had filed a suit in O.S. 198 of 1991 before the trial court at Anekal for specific performance which had been decreed and ultimately in the appeals filed by the plaintiff as well as third party purchaser, both the appeals were dismissed. However, it appears, liberty is given to the third party purchaser to file an independent suit.

2. Be that as it may, in the suit filed against the order of the first appellate court by the plaintiff which is concluded, decree was ordered in favour of the plaintiff. Meanwhile, plaintiff/third party purchaser in another proceedings in view of the liberty said to have been given, filed O.S. 494 of 1994 against the plaintiff in O.S. 198 of 1991 (1st defendant herein) wherein he succeeded. However, in the appeal filed before the lower appellate court, the appeal came to be dismissed against which, parties are before this Court.

3. According to the original plaintiff who was the agreement holder in the year 1984 against the vendor, for specific performance of the same property filed a suit in the year 1991. Of course, according to the defendant, in the said suit, it appears, an ex-parte decree was passed. Despite that, when he filed an appeal against the order of the trial court decreeing the suit, in the first round of litigation, the appellate court also upheld the contention of the plaintiff, decreed the suit and confirmed the order of the trial court. However, in the peculiar circumstances on the basis of liberty granted by the first appellate court, the third party purchaser who had purchased the property before the decree was passed by the trial court in O.S. 198 of 1991, had also preferred an appeal immediately when he purchased the property just two months prior to the passing of the decree in favour of the plaintiff in O.S. 198 of 1991.

4. The main bone of contention taken by the plaintiff is, it is a collusive suit between his vendor and subsequent purchaser and the doctrine of lis pendens applies to the case and also pleaded that it acts as resjudicata on the judgment in question. According to him, the suit filed by the third party purchaser also amounts to resjudicata much less when the property is purchased during pendency of the matter before the civil court, it is hit by S.52 of the Transfer of Property Act. More over, as per the judgment of the Apex Court in the case of Usha Sinha vs. Dina Ram & Others, 2008 AIR SCW 2883, purchaser pendente lite cannot raise obstruction to execution of decree and the doctrine of lis pendens prohibits a party from dealing with the property which is the subject matter of suit. Lis pendens itself is treated as constructive notice to a purchaser that he is bound by a decree to be entered in the pending suit. Rule 102 of Order 21, CPC clarifies that there should not be resistance or obstruction by a transferee pendent elite. However, the plea of the third party purchaser is, he is a bona-fide purchaser for value without notice.

5. It transpires, the conduct of the appellant herein is he was watching the proceedings sitting on the hedges and having failed, thereafter he preferred an appeal. Further, according to the plaintiff, the third party purchaser had knowledge of the pendency of the suit and he being a pendent elite purchaser, he has to be ousted from the court and the decree passed by the trial court and confirmed by the first appellate court has to be accepted.

6. According to the respondent’s counsel, by virtue of the liberty given, the principle of resjudicata does not apply and also the question of lis pendens does not arise. Once again, on the point of lis pendens the Apex Court judgment is clear. So far as remedy under S.19(b) of the Specific Relief Act is concerned, according to the counsel, there is a fraud and accordingly, it has to be set aside. On the other hand, appellant’s counsel submitted, it is rather his vendor as well as the third party pu




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