JUDGMENT :

Dr. G. Jayachandran, J.

(The case has been heard through Video Conferencing)

1. The Suit under Appeal was filed before the Principal Sub-Court, Erode and numbered as O.S. No. 679/1998. Later transferred to Fast Track Court, Erode and renumbered as O.S. No. 11/2004.

2. The Suit initially filed against the sole Defendant Dhandapani for Specific Performance of the Agreement to Sell the immovable property morefully described in the plaint schedule or in alternate to repay the advance amount of Rs. 6,00,000 with interest and for creation of charge over the Suit property till its realisation. Later, the Plaint was amended and Defendants 2 to 7 were impleaded. After trial, the Court below, granted the alternate relief viz., refund of advance money of Rs. 6,00,000 with 6% Interest payable from 30.10.1997 till the date of realisation. It directed the First Defendant to pay the Suit claim to the Plaintiffs and created charge over the Suit property to the extent of the Plaintiffs' share in it. The Defendants 5 to 7 in the Suit are the Appellants herein. They are the purchasers of the Suit property from the First Defendant under two Sale Deeds subsequent to the Suit Sale Agreement.

3. The Trial Court Judgment creating charge over the property is assailed by the Appellants on the ground that, the Trial Court erred in creating charge over the property which was sold to the Appellants prior to the Suit. The Appellants are the bona fide purchasers and had no knowledge about the transactions between the First Defendant and the Plaintiffs. The Trial Court ought not to have created charge over the property, since on the Date of Decree, the First Defendant had no right in the Suit property. The Trial Court, after dismissing the Suit against the Appellants, ought not to have created charge over the property of the Appellants for realisation of money payable by the First Defendant.

4. The point for determination in this Appeal is whether the trial Court can create a charge over the Suit property for realisation of the advance money after holding that the Plaintiffs not proved their readiness and willingness to complete the Contract and when the Appellants had proved that they had purchased the said property prior to the institution of Suit for Specific Performance?

5. The brief facts of the case as found in the amended Plaint:

The Suit Sale Agreement, dated 8.11.1996 was entered between the First Defendant Dhandapani and Plaintiffs for a consideration of Rs. 7,00,000. Advance of Rs. 4,00,000 paid on the Date of Agreement and time to pay the balance Rs. 2,00,000 was fixed as one year. Thereafter, another one year to pay the remaining Rs. 1,00,000 was fixed. Accordingly, a sum of Rs. 4,00,000 on 8.11.1996 and a sum of Rs. 2,00,000 on 30.10.1997 were paid towards part Sale consideration. After gathering the balance Sale consideration of Rs. 1,00,000 when the Plaintiffs demanded the First Defendant to execute the Sale Deed, he evaded the due execution of the deed. Hence, pre Suit Notice, dated 30.10.1998 was issued and Suit for Specific Performance with alternate relief of refund of advance money was filed on 6.11.1998. After filing the Suit, the First Defendant issued reply notice with false averments denying the execution of the Suit Sale Agreement. Further, he had stated that the Suit property comprised in the Agreement was partitioned on 27.4.1996 among himself and Defendants 2 to 4. Thereafter, he sold his share to the Defendants 5 to 7 on 5.11.1998.

6. On getting the encumbrance Certificate, the Plaintiffs came to know that the Defendants 1 to 4 had entered into two Partition Deeds in respect of Suit Schedule property and got it registered on 5.11.1998. Thereafter, on the same date, the First Defendant sold his share in the property to Defendants 5 to 7. These transfers are done to defeat the lawful right of the Plaintiffs. Hence, the Plaint was amended alleging these records are created subsequent to the Sale Agreement and will not bind the Pl