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2008 Supreme(All) 1004

Mrs. POONAM SRIVASTAV, J.
Kehri Singh and Ors.
Versus
Km. Laxmi Devi and Anr.
S.A. No.427 of 2004
Decided on : 24 - 4 - 2008

Advocates appeared
Rajesh Kumar Chauhan, A.K. Gupta, for Appellant; M.K. Gupta, for Respondents.

The central legal point established in the judgment is the primacy of Section 52 of the Transfer of Property Act over Section 19(b) of the Specific Relief Act in the context of subsequent purchasers during the pendency of a suit for specific performance, emphasizing the doctrine of lis pendens and the effect of notice in property transactions.

Headnote:

Specific Relief Act - Sale of Property - Section 19(b), Section 52 of Transfer of Property Act - [Bona Fide Purchasers, Lis Pendens, Notice] - [Section 19(b), Section 52 of Transfer of Property Act] - The court discussed the applicability of Section 19(b) of the Specific Relief Act and Section 52 of the Transfer of Property Act in the context of subsequent purchasers during the pendency of a suit for specific performance. The court emphasized the doctrine of lis pendens and the primacy of Section 52 of the Transfer of Property Act over Section 19(b) of the Specific Relief Act, highlighting the rights and limitations of bona fide purchasers and the effect of notice in property transactions.

Fact of the Case:

The case involved a dispute over the sale of a property, with the appellants claiming to be bona fide purchasers during the pendency of a suit for specific performance. The trial Court dismissed the suit for specific performance but allowed refund of the earnest money along with 12% interest. The lower appellate Court allowed the appeal, leading to the instant second appeal.

Finding of the Court:

The court found that the appellants, as subsequent purchasers during the pendency of the suit, were not entitled to the benefit under Section 19(b) of the Specific Relief Act. It emphasized the doctrine of lis pendens and the primacy of Section 52 of the Transfer of Property Act over Section 19(b) of the Specific Relief Act.

Issues: The main issues revolved around the entitlement of the appellants as bona fide purchasers, the effect of notice in property transactions, and the applicability of Section 19(b) of the Specific Relief Act in the context of subsequent purchasers during the pendency of a suit for specific performance.

Ratio Decidendi: The court's decision was based on the interpretation of the doctrine of lis pendens, the rights and limitations of bona fide purchasers, and the overriding effect of Section 52 of the Transfer of Property Act over Section 19(b) of the Specific Relief Act.

Final Decision: The court dismissed the appeal, ruling that the appellants were not entitled to the benefit claimed and that no illegality had been committed by the lower appellate Court in setting aside the decree of the trial Court.

ORDER :-

Heard Sri Rajesh Kumar Chauhan and Sri A. K. Gupta, learned counsel for the defendant-appellants IInd set and Sri M. K. Gupta Advocate for the plaintiff-respondents.

2. Learned counsel for the parties state that the questions involved are legal questions and, therefore, the record of the lower Court is not required to ascertain the facts of the case; consequently this appeal is heard and decided at the stage of admission itself.

3. The instant second appeal is preferred against the judgment and decree dated 28-1-2004 passed by the Additional District Judge, Court No. 4, Aligarh allowing Civil Appeal No. 108 of 1997 arising out of Original Suit No. 546 of 1989. The trial Court dismissed the suit for specific performance but allowed refund of the earnest money along with 12% interest. The judgment and decree passed by the trial Court was challenged in appeal by the plaintiff. The suit was instituted for specific performance. Shiv Kumar defendant 1st set was the original owner of the disputed land. He entered into an agreement to sell with the plaintiff Laxmi Devi on 11-9-1987 and subsequently another agreement was also executed in favour of Munni Lal who executed a power of attorney in favour of his son Ramesh Chandra on 6-12-1989. A sale deed was executed in favour of the appellants on 3-7-1990 for a consideration of Rs. 2,70,000/-. The suit was instituted on 27-7-1989 and the appellants were subsequently impleaded as a defendant in the suit. The trial Court arrived at a conclusion that the defendant-appellants were entitled for the benefit under Section 19(b) of the Specific Relief Act. The appeal was allowed by the lower appellate Court, which is under challenge in the instant second appeal. Counsel for the appellants framed as many as three substantial questions of law which are as under :-

(i) Whether the lower appellate Court was justify in ignoring the claim of the appellant on the ground that Section 19(b) is not applicable to their case and in any case decree for refund of sale consideration be passed ?

(ii) Whether the plaintiff being bona fide purchaser for value without notice and hence their rights were protected and the transfer in their favour was not barred ?

(iii) Whether the Lower Appellate Court has erred in decreeing the suit for specific performance without upsetting the findings of the trial Court on the question of knowledge of the agreement dated 11-9-1987 in favour of plaintiff ?

4. The main thrust of the argument is that the appellants are bona fide purchasers. They are in actual physical possession of the land in question and they will suffer irreparable injury in case they are dispossessed. It is also submitted that the trial Court compensated the plaintiff by refunding the money along with 12% interest. The submission is that the appellants had sufficiently established their bona fide claim and their contention is that they tried to make necessary inquiry and despite due diligence, they were not aware about the agreement to sell and, therefore, they are liable to be accorded benefit of Section 19(b) of Specific Relief Act. It is not disputed that the sale deed in favour of the appellants was executed during the pendency of original suit No. 546 of 1989. Counsel for the appellant has placed reliance on the decision of the Apex Court in the case of Ram Prakash v. Baddal Husain, AIR 2007 All 212 : (2007 (5) ALJ 740).

5. Sri M. K. Gupta counsel appearing for the plaintiff-respondents has emphatically disputed each and every arguments advanced on behalf of the defendant-appellants. The submission is that the appellants being subsequent purchaser during the pendency of the suit for specific performance have no right or claim and the lower appellate Court was absolutely right in coming to a conclusion that they were not entitled to the benefit under Section 19(b) of the Specific Relief Act. Section 3 of Transfer of Property Act defines a person said to have notice;

"A person is said to have notice "of a fac










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