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2026 Supreme(Mad) 424

IN THE HIGH COURT OF JUDICATURE AT MADRAS
K.GOVINDARAJAN THILAKAVADI, J.
 
Varadharajan @ Pandian – Appellant
Versus
Thayar – Respondent
S.A.No.531 of 2023 and C.M.P. No.16591 of 2023
Decided On : 02-02-2026
 

Advocates Appeared:
For the Appellant : Mr. S. Subramaniya for Mr. S. Sathish Rajan
For the Respondent: Mr. A. Muthukumar

The court determined the bonafide status of the purchaser without notice and the necessity for the plaintiff to prove readiness and willingness for specific performance.

Headnote:(A) Specific Relief Act - Section 19(b) - Second Appeal against the decree for specific performance - Plaintiff sought relief based on the sale agreement with the first defendant - The second defendant claimed to be a bonafide purchaser without notice - Courts below held in favor of the plaintiff, finding collusion between defendants - Criteria for assessing bonafide purchaser status noted - Legal notice served but plaintiff failed to establish readiness and willingness. (Paras 8, 12, 13)

(B) Doctrine of Bona Fides - The courts must consider the nature of the transaction and the awareness of the subsequent purchaser regarding prior agreements - Mere inquiries do not equate to notice of existing agreements. (Paras 12, 13)

Facts of the case:
The plaintiff entered into an agreement to purchase land, paid an advance, but the first defendant sold to the second defendant, leading to the suit for specific performance. The trial court ruled in favor of the plaintiff, confirmed by the first appellate court.

Findings of Court:
The second defendant was found to be a bonafide purchaser without notice of the prior agreement, and the decree for specific performance was not warranted.

Issues: The primary questions included whether the second defendant was a bonafide purchaser without notice and the readiness and willingness of the plaintiff.

Ratio Decidendi: The court held that the second defendant lacked knowledge of the previous agreement and therefore was entitled to protection as a bonafide purchaser; the plaintiff failed to prove readiness and willingness to execute the contract.

Result: Second appeal allowed; decree for specific performance set aside, with financial compensation ordered.

Table of Content
1. background of the second appeal regarding land sale. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7)
2. decision criteria involving bonafide purchase and compensation. (Para 8 , 11 , 13)
3. arguments regarding the bonafide purchase status. (Para 9 , 10)
4. analysis on the unregistered document admissibility. (Para 12)
5. final judgment and directives issued. (Para 14)

JUDGMENT :

K.GOVINDARAJAN THILAKAVADI, J.

1. The present Second Appeal is preferred against the decree and judgment dated 25.10.2021 passed in A.S. No.5 of 2020, on the file of the II Additional District and Sessions Court, Chidambaram, confirming the Judgment and decree dated 05.09.2019 passed in O.S. No.89 of 2013, on the file of the Subordinate Court, Chidambaram.

2. The appellant herein is the 2nd defendant in the above suit. The respondent herein is the plaintiff in the suit. The parties will be referred to in the rank assigned to them in the suit for the purpose of convenience and clarity.

3. The plaintiff instituted the suit seeking for the relief of specific performance of the Agreement of Sale dated 05.07.2013 executed by the 1st defendant in favour of the plaintiff agreeing to sell the suit land.

4. The case of the plaintiff is that the suit property was agreed to be sold for total sale consideration of Rs.1,01,000/-. Towards the said amount, the plaintiff had paid a sum of Rs.20,000/- as advance and agreed to pay the balance amount of Rs.81,000/- within a period of one month and failing which the plaintiff is entitled to file a suit to get the sale deed executed. The plaintiff approached the 1st defendant several times within a stipulated period of one month to tender balance amount and requested him to execute the sale deed, but the 1st defendant evaded with an intention to defeat the rights of the plaintiff. On 16.08.2013, the plaintiff sent a legal notice calling upon the 1st defendant to receive the balance sale consideration and to execute the sale deed. Meanwhile, the 1st defendant sold the property to the 2nd defendant. The 1st and 2nd defendants colluded together and created a sale deed knowing fully well about the agreement between the plaintiff and the 1st defendant. Hence, the suit.

5. The 1st defendant remained ex parte. The 2nd defendant resisted the claim of the plaintiff and submitted that he purchased the suit property from the 1st defendant on 20.08.2013 for a proper sale consideration of Rs.65,700/-. After purchase by the 2nd defendant, the plaintiff, being the adjacent owner, created the suit sale agreement. Hence, prayed for dismissal of the suit.

6. The trial court, decreed the suit in favour of the plaintiff and the same was confirmed by the first appellate court.

7. Challenging the same, the present Second Appeal is filed by the 2nd defendant.

8. This Second Appeal is admitted on the following substantial question of law:

“Whether the courts below are right in arriving at the conclusion that the appellant is not an innocent bonafide purchaser by not properly appreciating the evidence on record and thereby, not granting him the protection under Section 19(b) of the Specific Relief Act.”

9. Mr.S. Subramaniya, the learned counsel for the appellant / 2nd defendant contends that the 2nd defendant is the bonafide purchaser without notice of the alleged agreement between the plaintiff and the 1st defendant. He contends that the entire transaction was entered into in a bonafide manner and the sale deed having been registered, the courts below erroneously held that the 2nd defendant has no locus standi to object the case of the plaintiff. He would further submit that the suit sale agreement is an unregistered and unstamped document fabricated by the plaintiff in order to defeat the right of the 2nd defendant. Moreover, in Ex.A2 legal notice, the plaintiff has stated that the entire sale consideration was paid to the 1st defendant. Whereas, in the plaint, it is mentioned that the plaintiff has paid a sum of Rs.20,000/- as advance and balance amount

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