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2012 Supreme(Mad) 4130

High Court of Judicature at Madras
S. VIMALA, J.
Arumugam
Versus
Natarajan & Another
Second Appeal No. 1348 of 1997
Decided On : 09-10-2012

Advocates Appeared:
For the Appellant:S. Parthasarathy, Senior Counsel for M/s. Sarvabhauman Associates, Advocate.
For the Respondents:R1, A.K. Kumarasamy, Advocate.

The prevailing legal position under Section 52 of the T.P. Act prevails over the rule protecting subsequent transferees without notice, and the subsequent purchaser's rights were upheld due to the non-suiting of the plaintiff.

Headnote:

pendente-lite purchaser - Specific Relief - Section 19(b) of the Specific Relief Act, Section 52 of the Transfer of Property Act - [AIR 1973 Mysore 131, (2008) 5 SCC 796, AIR 1978 Allahabad 318, (1977) 90 LW 543] - The court discussed the conflict between the doctrine of lis-pendence and the rule protecting a subsequent transferee without notice, emphasizing the prevailing legal position under Section 52 of the T.P. Act. The subsequent purchaser's rights were upheld due to the non-suiting of the plaintiff, despite the pending litigation.

Fact of the Case:

The plaintiff sought specific performance of a sale agreement, while the second defendant purchased the same property during pending litigation. The court found the sale agreement in favor of the plaintiff to be true and valid, but the second defendant was not a bonafide purchaser for value without notice.

Finding of the Court:

The court held that the plaintiff's sale agreement was valid, but the second defendant's purchase was not affected by lis pendens. The plaintiff failed to prove possession and was non-suited, leading to the second defendant's success.

Issues: Validity of sale agreements, possession, readiness and willingness to perform the contract, unconscionable nature of the agreement, and bonafide purchase by the second defendant.

Ratio Decidendi: The subsequent purchaser's rights were upheld due to the non-suiting of the plaintiff, despite the pending litigation.

Final Decision: The second appeal was dismissed, confirming the non-suiting of the plaintiff and upholding the second defendant's rights as a subsequent purchaser.

Judgment :-

1. The locus-standi of the pendente-lite purchaser to raise the plea/defence of bonafide purchaser for value without notice of earlier transaction (a plea which is available to a purchaser, but not during the pending litigation) is under challenge. The protection under Section 19(b) of the Specific Relief Act is not available to a pendente-lite purchaser by virtue of Section 52 of the Transfer of Property Act, is the main contention raised in the second appeal. In other words, the contention is that Section 19 (1) of the Specific Relief Act, does not over ride Section 52 of the Transfer of Property Act.

1.1. There may be innocent purchasers who purchase the property bonafide without notice of the earlier agreement/transaction. These purchasers might have purchased it either during pending litigation or no litigation pending. With regard to pending litigation, the subsequent purchasers may have notice or may not have the notice of the lis. Still the protection available to a purchaser during non-litigation period is not available to a purchaser during litigation is the main contention raised in this second appeal.

1.2. In the event of conflict between, the doctrine of lis-pendence enshrined in Section 52 of the T.P. Act and the rule protecting a subsequent transferee without notice as contained in Section 19 (b) of the Specific Relief Act, which, would prevail is the issue ?

2. The plaintiff Arumugam filed the suit in O.S.No.180 of 1988 before the Additional District Munsif, Tindivanam, seeking the relief of specific performance pursuant to the sale agreement dated 24.12.1987. The suit was filed on 17.2.1988. The second defendant purchased the same property on 14.3.1988, but, based on the earlier sale agreement dated 10.12.1987 (Ex.B1), as assignee of the agreement from one Muthuvel. The following issues were framed:

1. Whether the sale agreement dated 24.12.1987 is true, valid, enforceable ?

2. Whether the plaintiff is in possession of the suit property in pursuance of part performance of the agreement ?

3. Whether the plaintiff was ready and willing to perform his part of contract ?

4. Whether the agreement dated 24.12.1987 is unenforceable because of its unconscionable nature ?

5. Whether the agreement dated 10.12.1987 between the first defendant and Muthuvelu is true ?

6. Whether the sale deed dated 14.3.1988 in favour of the second defendant is true and valid ?

7. Whether the second defendant is the bonafide purchaser is a value without notice of the agreement in favour of the plaintiff ?

8. To what other relief ?

3. With reference to issue Nos. 1 and 4, it was held that the sale agreement in favour of the plaintiff was true, valid, enforceable and not unconscionable. With regard to 5, 6 and 7, the findings were

(a) the sale agreement dated 10.12.1987 was brought into existence in order to defeat the sale agreement in favour of the plaintiff. No witness was examined to speak about the agreement dated 10.12.1987.

(b) The second defendant is not the bonafide purchaser for value without notice of plaintiff's agreement and hence, the sale deed is not valid.

So far as issue No. 3 is concerned, it was held that plaintiff was ready and willing to perform his part of contract. So far as issue No.2 is concerned, it was held that plaintiff did not prove his possession pursuant to agreement of sale. The trial court took note of change of patta in the name of the second defendant under Ex.B3 and payment of kist under Exs. B4 to B6 and the evidence of P.W.4 that he came to know about the purchase by the second defendant when the second defendant started ploughing the land. Based on that, it was held that plaintiff did not prove his possession. Ultimately, the suit was decreed, granting two months time to the plaintiff to pay the balance of sale consideration of Rs.2,500/-.

4. Though the agreement is said to have been executed by the first defendant, he did not file any written statement. She was also not examined as a witnes































































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