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1996 Supreme(P&H) 819

PUNJAB & HARYANA HIGH COURT
N.K.Sodhi, J.
Jati Ram Saini
Versus
Prithi Alias Sansi
Civil Regular Second Appeal No. 425 of 1995,
Cross Objection No. 17 of 1995,
Decided On : MAY 15, 1996

The doctrine of lis pendens applies to a transfer of property made during the pendency of a suit for specific performance, and such a transfer will not affect the rights of the plaintiff in the suit.

Headnote:

SPECIFIC PERFORMANCE - AGREEMENT TO SELL - POSSESSION OF VENDOR - TRANSFER OF PROPERTY ACT, 1882, SECTION 52 - LIS PENDENS - DOCTRINE OF LIS PENDENS APPLIES TO TRANSFER MADE BY VENDOR DURING PENDENCY OF SUIT FOR SPECIFIC PERFORMANCE.

Fact of the Case:

Prithi, the defendant, entered into an agreement to sell agricultural land to Jati Ram, the plaintiff, for Rs. 50,000 per killa. Prithi received Rs. 24,000 as earnest money, and the balance was to be paid at the time of registration of the sale deed. Prithi refused to execute the sale deed, claiming he was not in possession of the land, which was in the possession of Bansi Lal as a tenant. Jati Ram filed a suit for specific performance of the agreement or, alternatively, for recovery of the earnest money with interest and damages.

Finding of the Court:

The trial court decreed specific performance of the agreement, holding that Prithi was in possession of the land and that Jati Ram was ready and willing to perform his part of the contract. The appellate court modified the decree, holding that Jati Ram was entitled to recover the earnest money with interest but not specific performance, since Prithi was not in possession of the land.

Issues: 1. Whether Prithi was in possession of the land on the date of the agreement to sell? 2. Whether Jati Ram was ready and willing to perform his part of the contract? 3. Whether the doctrine of lis pendens applies to the transfer of the land by Prithi to Ramesh and Shashi Kapoor during the pendency of the suit for specific performance?

Ratio Decidendi: 1. The court held that Prithi was in possession of the land on the date of the agreement to sell, based on the endorsement on the mortgage deed showing that Bansi Lal had released the land to Prithi on the same day. The court rejected the khasra girdawri showing Bansi Lal in possession as not conclusive evidence. 2. The court upheld the finding of the lower courts that Jati Ram was ready and willing to perform his part of the contract. 3. The court held that the doctrine of lis pendens applies to the transfer of the land by Prithi to Ramesh and Shashi Kapoor during the pendency of the suit for specific performance, since the decree of the lower appellate court was not final and the period for filing a second appeal had not expired.

Final Decision: The appeal was allowed, and the suit for specific performance was decreed. Prithi was directed to execute the sale deed in favor of Jati Ram and have it registered on payment of the balance consideration. The sale deed was to be executed within two months, failing which it would be executed through the court.

Judgment

N.K.Sodhi, J.

1. This regular second appeal is directed against the judgment and decree passed by the Additional District Judge, Jind on 15.11.1994 modifying that of the trial Court whereby the relief for specific performance was denied to the plaintiff-appellant and his suit was decreed for refund of earnest money only along with interest from the date of the execution of the agreement till realisation.

2. Facts giving rise to this appeal which lie in a narrow compass may first be noticed.

3. Prithi defendant-respondent entered into an agreement dated 6.5.1988 to sell 16 Kanals 16 Marias of agricultural land situated within the revenue estate of Jind to Jati Ram plaintiff-appellant at the rate of Rs. 50,000/- per killa. A sum of Rs. 24,000/- is said to have been received by Prithi as earnest money at the time of the execution of the agreement and the balance amount was to be received at the time of the registration of the sale deed before the Sub Registrar. It is alleged that the plaintiff was always ready and willing to perform his part of the contract but Prithi defendant refused to execute the sale deed. On the refusal of Prithi to execute the sale deed, the plaintiff-appellant filed a suit for specific performance of the aforesaid agreement. The alternative prayer was that the suit be decreed for recovery of the earnest money along with interest and damages as referred to in the agreement. The suit was contested by the defendant. It was pleaded that he was not in possession of the suit land and that the same was in the possession of one Bansi Lal son of Bakhtawar Lal as a tenant for the last more than 30 years. The execution of the agreement to sell and the receipt of earnest money was, however, admitted by the defendant. It was further pleaded that the plaintiff was not ready and willing to perform his part of the contract and did not pay the balance amount of Rs. 81,000/- before the Sub Registrar. Pleadings of the parties gave rise to the following issues;-

"1. Whether the plaintiff is entitled to specific performance of contract dated 6.5.1988? OPP

2. Relief."

4. Prior to the execution of the agreement to sell, Prithi who was the owner in possession 6f the suit land had mortgaged the same with possession in favour of Bansi Lal and Exhibit PW5/A is the mortgage deed dated 6.6.1985 on the record. This mortgage was redeemed by Prithi on 6.5.1988 i.e. on the same day on which he executed the agreement to sell in favour of the plaintiff-appellant. Redemption of the mortgage is clear from the endorsement Exhibit PW4/a on the back of the mortgage deed. On a consideration of the entire oral and documentary evidence led by the parties, the trial Court came to the conclusion that the plaintiff was always ready and willing to perform his part of the contract and that he was present in the office of the Sub Registrar on the appointed day to pay the balance amount to the defendant who did not turn up to receive the same. It was also found that Prithi was not in possession of the suit land and that it was Bansi Lal who was in possession of the same but not as a tenant. Consequently, the suit of the plaintiff was decreed and he was held entitled to a decree for specific performance of the agreement dated 6.5.1988 with a right to recover possession from Bansi Lal in accordance with law.

5. Being dissatisfied with the decree of the trial Court, Prithi went up in appeal before the learned Additional District Judge who upheld the findings recorded by the trial Court, Since the defendant was not found in actual physical possession of the suit land, the appellate Court took the view that the plaintiff would not be in a position to obtain its possession from Prithi and, therefore, modified the decree of the trial Court holding that the plaintiff is entitled to recover the earnest money paid by him along with interest at the rate of 18% per annum from the date of the agreement till its realisation. It is against this decree of the lo




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