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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Alka Sarin, J.
Jagmohan Bakshi – Appellant
Versus
M/s Sumeet Enterprises & Ors. – Respondents
Civil Revision No. 1345 of 2021 (O&M)
Decided On : 09-11-2022
Lis Pendens - Property Dispute - Section 52 of the Transfer of Property Act, 1882 - The court discussed the application of the doctrine of lis pendens and its limitations in the context of a property dispute. The court emphasized the finality of an arbitral award and the need for a prima facie case, balance of convenience, and irreparable injury for granting temporary injunction.
Fact of the Case:
The plaintiff-respondent No.1 applied for an industrial plot in 1984, which was later cancelled and resumed. After a series of transfers, the defendant No.1-petitioner purchased the plot and commenced construction. The plaintiff-respondent No.1 filed a suit for permanent injunction and mandatory injunction, accompanied by an application under Order 39 Rules 1 and 2 CPC for restraining the defendant from construction and alienation of the property.
Finding of the Court:
The court found that the plaintiff-respondent No.1 failed to establish a prima facie case, balance of convenience, or irreparable injury in its favor. The court emphasized the finality of the arbitral award, the lack of challenge to the award, and the continuous representations made by the plaintiff-respondent No.1 for re-allotment of the property despite the award's recommendation for an alternate plot.
Issues: The court analyzed the application of the doctrine of lis pendens, the limitations of interference in a revision petition, and the requirements for granting temporary injunction under Order 39 Rules 1 and 2 CPC.
Ratio Decidendi: The court held that the doctrine of lis pendens did not apply after the finality of the arbitral award, and the plaintiff-respondent No.1 failed to establish a prima facie case, balance of convenience, or irreparable injury for granting temporary injunction. The court also emphasized the need for a party to challenge an arbitral award if dissatisfied with the outcome.
Final Decision: The court partly allowed the revision petition, setting aside the orders passed by the lower courts and clarifying that any construction by the defendant No.1-petitioner during the suit's pendency would be at his risk and responsibility. The defendant No.1-petitioner was also restrained from creating third-party rights during the suit's pendency.
JUDGMENT
Alka Sarin, J. - The present revision petition under Article 227 of the Constitution of India has been filed by the defendant No.1-petitioner against the order dated 28.05.2021 (Annexure P-1) passed by the Appellate Court dismissing his appeal against the order dated 02.04.2021 (Annexure P-2) passed by the Trial Court on an application filed by the plaintiffrespondent No.1 under Order 39 Rules 1 and 2 CPC.
2. The brief facts relevant to the present lis are that in 1984 the plaintiff-respondent No.1 applied for an industrial plot in Sector 18, Gurugram. A regular allotment letter was issued in it's favour on 17.03.1986 qua Plot No.49, Sector 18, Gurugram measuring 450 sq. meters. On 08.03.1991 the letter of allotment dated 17.03.1986 was cancelled by Haryana Urban Development Authority (HUDA) for nonconstruction and the suit property was resumed. On 02.04.1991 the plaintiff-respondent No.1 approached the civil court for the appointment of an Arbitrator. On 24.11.1992, HUDA allotted the suit property to one M/s Vishal Exports for valuable consideration which is stated to have been duly paid. On 01.02.1994 the Conveyance Deed was also executed in favour of M/s Vishal Exports. On 15.07.1996 M/s Vishal Exports transferred the suit property to one Mohan Gandhi and Harbans Gandhi vide a registered sale deed, transfer fee was also paid to HUDA. On 10.01.2005 the Civil court directed HUDA to appoint an Arbitrator. On 19.02.2007 an arbitral award was passed rejecting the prayer of the plaintiff-respondent No.1 for reallotment. However, the plaintiff-respondent No.1 was directed to make a representation to HUDA for allotment of an alternate plot and HUDA was directed to consider the case sympathetically. The said arbitral award attained finality in as much as the same was not challenged by the plaintiffrespondent No.1. On 04.06.2007 a representation was sent by the plaintiffrespondent No.1 to HUDA requesting for the re-allotment of the same plot. Meanwhile, on 31.05.2018 Mohan Gandhi transferred his share in the suit property in favour of Harbans Gandhi vide a registered deed. On 11.07.2018 Harbans Gandhi transferred his share in the suit property in favour of his son Rahul Gandhi under a registered deed. On 29.10.2018 the defendant No.1-petitioner purchased the suit property from Rahul Gandhi by way of a registered sale deed. On 17.12.2018 the defendant No.1-petitioner was recorded as an owner and was issued a fresh letter of allotment in his favour by HUDA. In 2019 the plaintiff-respondent No.1 filed an execution petition praying for execution of the Award dated 19.02.2007. On 20.02.2021 the defendant No.1-petitioner is stated to have commenced construction on the suit property. On 25.03.2021 the present suit was filed by the plaintiff-respondent No.1 for permanent injunction and mandatory injunction. The plaint was accompanied with an application under Order 39 Rules 1 and 2 CPC for inter-alia restraining the defendant No.1-petitioner from raising any construction on the suit property and from creating any third party interests. The Trial Court vide order dated 02.04.2021 granted ad interim injunction in favour of the plaintiffrespondent No.1 and directed the parties to maintain status-quo qua alienation and construction over the suit property. The said order was challenged in appeal by the defendant No.1-petitioner and vide the impugned order dated 28.05.2021 his appeal was also dismissed.
3. Learned counsel for the defendant No.1-petitioner has addressed oral arguments and also filed written submissions. It is contended that the plaintiff-respondent No.1 has based his claim on the doctrine of lis pendens. It is the contention that the defendant No.1-petitioner is a bonafide purchaser for valuable consideration as the earlier vendor had a clear title. It is further the contention that the Courts below have erroneously relied upon the doctrine of lis pendens as envisaged under Section 52 of the Transfer of Property Act, 1882 whi
The court clarified that to obtain a temporary injunction, a party must demonstrate irreparable harm, a favorable balance of convenience, and a prima facie case even without physical possession.
The main legal point established in the judgment is that the grant of interim injunction should adhere to the settled principles under Order XXXIX Rules 1 and 2 CPC, and the court should not interfer....
Subsequent purchasers will be bound by lis pendens.
A transferee pendente lite cannot maintain an application under Order XXI Rule 97 CPC, and the executing court must prioritize res judicata objections before proceeding.
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