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IN THE HIGH COURT OF MADRAS
R. SUBBIAH, T. KRISHNAVALLI, JJ.
Balakrishnan - Appellant
Versus
Shanmugadurai and Ors. - Respondent
O.S.A. Nos. 418, 420, 421 of 2018, C.M.P. Nos. 18946, 19042, 19036 of 2018
Decided On : 25-10-2019
Transfer of Property Act - Section 52 - Sale transaction - Claim in plaint - Defendant had suppressed factum of execution of two simple mortgages executed by him favour of second defendant-Park Town Benefit Fund Limited in respect of entire property - Though plaintiff informed first defendant that he was ready with the money to complete sale transaction first defendant was evading to produce title deeds - While so first defendant informed the plaintiff during could not produce original title deeds for verification of title by plaintiffs advocate since said title deeds had been offered as security for the mortgage loan availed before second defendant - Therefore first defendant along with his father approached plaintiff during offering to sell entire property for consideration and that would redeem mortgages over suit property executed by first defendant in second defendant and entrust title deeds to plaintiff for proceeding further in completion of sale transaction –Held, Contention of the subsequent purchaser/third party/proposed that he has no knowledge sale agreement between plaintiff and the first defendant - It is really strange and surprising to contend that subsequent purchaser who is resident of same City Chennai has not visited property even once after purchase of the property from first defendant that too after paying sale consideration Such conduct of the third party/subsequent purchaser is suspicious and the same cannot be accepted Court reported in Singh Bhatia Kant Robinson and others wherein Apex Court observed that plaintiff cannot be forced to add party against whom he does not want to fight and could not be compelled a person in suit for specific performance against his wish and with respect to person against whom no relief had been claimed by him - As of present case are similar to one in said decision of Supreme Court reported SCALE cited supra same is squarely applicable to the case on hand plaintiff is - of suit filed by him and he cannot be forced to add party against his will unless there is compulsion of law - Moreover suit for specific performance of contract of sale between the vendor and purchaser only shall be gone into and it not open Court to decide as to whether third party had acquired any title possession - Therefore Court are of opinion that from the conduct of the subsequent purchaser as well as following judgments relied on by the learned counsel for appellant/plaintiff as discussed – Order accordingly
The legal document discusses a complex case involving a suit for specific performance of a sale agreement, along with issues related to transfers during the pendency of the suit, and the rights of subsequent purchasers or transferees.
Key points include:
The plaintiff filed a suit for specific performance based on a sale agreement with the first defendant, who had initially agreed to sell a specified portion of the property for a certain consideration and had paid an advance (!) (!) .
The first defendant later entered into a second sale agreement, treating the previous advance as part of the new consideration, and agreed to sell the entire property for a higher amount (!) .
During the pendency of the suit, the first defendant executed a sale deed in favor of a third party, the subsequent purchaser, despite an existing injunction order restraining such alienation (!) (!) .
The first defendant also redeemed mortgages and transferred the property to the third party without informing the plaintiff, which was done during the pendency of the suit and in violation of court orders (!) (!) .
The court examined the conduct of the first defendant, noting contradictions in his affidavits regarding knowledge of the suit and the sale agreement, which indicated mala fide intent and lack of bona fides (!) (!) .
The applications to condone delay in setting aside the ex-parte decree and to implead the subsequent purchaser were considered, with the court finding that the reasons provided were inadequate and lacked credibility, leading to the rejection of those applications (!) (!) .
It was emphasized that transfers during the pendency of a suit are generally subject to the rights of the parties and the decree, and such transfers are not automatically void but are subordinate to the court’s decision (!) (!) .
The court reaffirmed that a plaintiff’s right to enforce a specific performance contract is exclusive, and the court cannot compel the plaintiff to add third parties as parties unless legally required (!) (!) .
The doctrine of Lis-Pendens is recognized as a principle that prevents parties from dealing with the property in a manner that affects the rights of the litigants, and transfers in violation of court orders or during the pendency of a suit can be challenged (!) (!) .
The court also noted that a subsequent transferee who is aware of the ongoing litigation and the plaintiff’s possession cannot claim to be a bona fide purchaser without notice, especially if the transfer was made in violation of court orders (!) (!) .
Ultimately, the court set aside the impugned orders allowing the applications to set aside the ex-parte decree and to implead the subsequent purchaser, affirming the rights of the plaintiff and the importance of respecting court orders and the principles governing transfers during ongoing litigation (!) .
These points collectively underscore the importance of good faith, adherence to court orders, and the legal principles governing transfers and suits for specific performance.
JUDGMENT :
R. SUBBIAH, J.
1. All the three appeals have been filed as against the order dated 13.07.2016 passed by the learned Single Judge of this Court in allowing the applications, namely, A. Nos. 910 and 911 of 2016 in C.S. No. 624 of 2005 and A. No. 2693 of 2011 in C.S. No. 624 of 2005, respectively.
2. While A. No. 2693 of 2011 was filed by the first defendant in C.S. No. 624 of 2005 for condoning the delay of 675 days in filing the application to set aside the ex-parte judgment and decree dated 15.06.2010 in C.S. No. 624 of 2005, the other two applications in A. Nos. 910 and 911 of 2016 were respectively filed by third party to set aside the ex-parte decree dated 15.06.2010 in C.S. No. 624 of 2005 decreeing the suit in favour of the plaintiff and to implead the third party-Shanmugadurai as fourth defendant in the said suit.
3. For the purpose of convenience, the parties will be hereinafter referred to as per their ranking in the suit in C.S. No. 624 of 2005, as plaintiff and defendants.
4. The appellant/plaintiff filed the said suit in C.S. No. 624 of 2005 as against the defendants 1 to 3 for the relief of specific performance.
5. Brief facts of the case leading to the filing of the above said three applications, are as follows:
(b) The first defendant had suppressed the factum of execution of two simple mortgages executed by him in favour of the second defendant-Park Town Benefit Fund Limited in respect of the entire property. Though the plaintiff informed the first defendant that he was ready with the money to complete the sale transaction, the first defendant was evading to produce the title deeds.
(c) While so, the first defendant informed the plaintiff during March 2001 that he could not produce the original title deeds for verification of title by the plaintiffs advocate, since the said title deeds had been offered as security for the mortgage loan availed before the second defendant. Therefore, the first defendant, along with his father M. Vedachalam and his mother Premavathy, approached the plaintiff during March 2001, offering to sell the entire property for a consideration of Rs. 33 lakhs and that he would redeem the mortgages over the suit property executed by the first defendant in favour of the second defendant and entrust the title deeds to the plaintiff for proceeding further in completion of the sale transaction.
(d) The first defendant informed the plaintiff that the amounts paid under the sale agreement, dated 08.10.1999 could be treated as advance for the sale consideration of the second sale agreement. The first defendant entered into second sale agreement with the plaintiff on 21.03.2001 in respect of the entire property and the said agreement was attested by the first defendant's father Vedachalam and mother Premavathy, agreeing to sell the suit property for a consideration of Rs. 33 lakhs to the plaintiff. Thus, the first agreement of sale, dated 08.10.1999 got merged with the second agreement of sale, dated 21.03.2001. After the sale agreement, the plaintiff is residing as purchaser of the property. At the request of the first defendant, the plaintiff paid a sum of Rs. 1,25,000/- to the second defendant-Park Town Benefit Fund Limited on various dates, which was to be adjusted towards sale consideration. It was promised by the first defendant that he would release the title deed(s) by discharging the mortgage loan executed in favour of the second defendant, after
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