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1989 Supreme(P&H) 980

PUNJAB & HARYANA HIGH COURT
G.R.Majithia, J.
Bhajan Kaur And Others
Versus
Kanwar Devinder Singh
Civil Revision No. 290 of 1989,
Decided On : DECEMBER 18, 1989

A sale of property during the pendency of a suit relating to that property is void as against the rights of any other party to the suit under the decree or order that may be made in the suit, but the sale is valid and operative as between the parties to the transfer.

Headnote:

LIS PENDENS - TRANSFER OF PROPERTY ACT, 1882 - SECTION 52 - SALE DURING PENDENCY OF SUIT - EFFECT - MERGER OF LEASEHOLD RIGHTS WITH OWNERSHIP RIGHTS - VALIDITY OF SALE BETWEEN PARTIES.

Fact of the Case:

The respondent filed a suit for specific performance of an agreement to sell land against the vendor and the petitioners, who were subsequent purchasers. The trial court decreed specific performance, but the appellate court reversed the decision, holding that the decree-holder was not entitled to actual physical possession of the land. The petitioners then filed a revision petition in the High Court, arguing that the sale in their favor was valid and that they were entitled to possession as tenants.

Finding of the Court:

The High Court dismissed the revision petition, holding that the sale in favor of the petitioners was valid between the parties but that the leasehold rights of the petitioners merged with the ownership rights when they purchased the property from the landowner. The court also held that the petitioners could not claim to be both landlord and tenant at the same time.

Issues: (i) Whether the sale effected in favor of the judgment-debtors during the pendency of the civil suit filed by the decree-holder is hit by the rule of lis pendens and wipe out the sale altogether? (ii) On lessee s ownership rights the lease hold rights stand extinguished?

Ratio Decidendi: Section 52 of the Transfer of Property Act, 1882 provides that a transfer of property during the pendency of a suit relating to that property is void as against the rights of any other party to the suit under the decree or order that may be made in the suit. However, the transfer is valid and operative as between the parties to the transfer. The leasehold rights of the petitioners merged with the ownership rights when they purchased the property from the landowner. This is because the leasehold rights are smaller rights than the ownership rights, and the smaller rights merge with the bigger rights.

Final Decision: The revision petition was dismissed.

Judgment

1. This revision petition is directed against the order of the learned Senior Subordinate Judge, Patiala, who rejected the objections filed by the petitioners and held that the respondent-decree holder was entitled to recover actual physical possession pursuant to the decree for specific performance passed in his favour.

2. The matrix of the case is as under :-

Capt. Chuni Lal was owner of land measuring 96 Bighas 6 Biswa. He entered into an agreement to sell this land with the respondent for Rs. 26,000.00 on September 27, 1966 through his daughter and attorney Neena Ahuja. Rs. 10,000.00 was paid as earnest money and the balance was to be paid at the time of the registration of the sale deed which was to be executed on or before February 28, 1967. The vendor did not execute the sale deed even by the extended date. The vendor entered into an agreement to sell, with the petitioners (hereinafter referred to as the judgment-debtors) on July 21, 1967 with regard to the suit land. The sale was to be executed on or before January 1, 1968.

3 The respondent (hereinafter referred to as the decree holder) filed a suit for specific performance on the basis of agreement to sell, dated September 27, 1966 against the vendor Capt. Chuni Lal. The judgment-debtors were also made party defendants in the suit. The suit for specific performance was decreed and it was held that the decree-holder would be entitled to actual physical possession of the disputed land in execution of the decree for specific performance. On appeal, the first appellate Court reversed this finding and that the decree-holder would not be entitled to actual physical possession of the suit land in execution of the decree for specific performance. The decree-holder will only be entitled to a simple decree of specific performance. The judgment-debtors still aggrieved against the judgment and decree of the first appellate Court came to this Court in Regular Second Appeal No. 821 of 1981 which was dismissed by judgment and decree dated March 13, 1984. The High Court negatived their plea that the agreement to sell executed in their favour was in recognition of their pre-existing right to pre-empt the land in suit. It was also held that they were not bona fide purchasers for value and consideration and that the sale in their favour was hit by the Rule of lis pendens. However, in the concluding paragraph, it was observed that the question whether the decree-holder is entitled to actual physical possession or not, will be decided by the executing Court. On the basis of these observations made in the judgment by this Court, the judgment-debtors filed objections in the executing Court, inter alia, on the ground that they were in possession as tenants before they entered into an agreement to sell with the landowner on July 21, 1967 and that the decree-holder was not entitled to actual physical possession from them.

4. The learned executing Court on evidence found that some of the judgment-debtors were in possession as tenants on the land sold to them. The sale effected by the landowner in their favour was valid between the parties thereto and that on their acquiring ownership rights, the lessee rights merged with the bigger rights of ownership and they could not claim that they were still the tenants on the suit land and defeat the claim of the decree-holder for recording actual physical possession in execution of the decree for specific performance.

5. The finding recorded by the learned executing Court that some of the judgment-debtors were tenants on the land sold to them was not assailed before me and I do not find any ground to take a different view than the one executed by the learned executing court.

6. The principal questions which arise for determination are :-

(i) Whether the sale effected in favour of the judgment-debtors during the pendency of the civil suit filed by the decree-holder is hit by the rule of lis pendens and wipe out the sale altogether?

(ii) On lessee








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