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MADRAS HIGH COURT
S. Vimala, J.
Arumugam —Appellant
versus
Natarajan and Anr. —Respondents
Second Appeal No.1348 of 1997
Decided on 9.10.2012

Advocates:
Counsel for the Parties:
For the Appellant:Mr. S. Parthasarathy, Sr. Advocate for M/s. Sarvabhauman Associates.
For the Respondent No.1:Mr. A.K. Kumarasamy, Advocate.

IMPORTANT POINT
In event of conflict between doctrine of lis pendens enshrined in Section 52 of T.P. Act and rule protecting a subsequent transferee without notice as contained in Section 19 (b) of Specific Relief Act, it is only Section 52 of T.P. Act which prevails.

Headnote:(i) Specific Relief Act, 1963—Section 19(b)—Transfer of Property Act, 1882—Section 52—Transfer pendente lite—Plea/defence of bona fide purchaser for value without notice of earlier transaction—Just because subsequent purchaser takes property subject to result of litigation, it does not mean that he is not entitled to challenge result of litigation—Still it is open to him to challenge and to abide verdict available after challenge—When owner of property who is bound to speak with regard to transaction entered into by him and when erstwhile owner remains ex parte then, it is futile to contend that subsequent purchaser has no right to file appeal—Law cannot facilitate battle field from becoming play field for parties and it cannot be a platform for erstwhile owner to earn profits by entering into transaction between both parties—When law endeavour to put an end to litigation through Section 52 of T.P. Act, procedure cannot facilitate creation/generation of litigation. (Paras 9 and 11.2)

       (ii) Specific Relief Act, 1963—Section 19(b)—Transfer of Property Act, 1882—Section 52—Transfer pendente lite—Plea/defence of bona fide purchaser for value without notice of earlier transaction—In event of conflict between doctrine of lis pendens enshrined in Section 52 of T.P. Act and rule protecting a subsequent transferee without notice as contained in Section 19 (b) of Specific Relief Act, it is only Section 52 of T.P. Act which prevails—In principle this is legal position—But factually considering as plaintiff has been non-suited pending litigation did not have adverse impact upon rights of subsequent purchaser—Subsequent purchaser succeeds—Second appeal dismissed with cost. (Paras 12 and 13)

       Result: Second Appeal dismissed

       

JUDGMENT

S. Vimala, J.— The locus standi of the pendente lite purchaser to raise the plea/defence of bona fide purchaser for value without notice of earlier transaction (a plea which is available to a purchaser, but not during the pending litigation) is under challenge. The protection under Section 19(b) of the Specific Relief Act is not available to a pendente lite purchaser by virtue of Section 52 of the Transfer of Property Act, is the main contention raised in the second appeal. In other words, the contention is that Section 19 (1) of the Specific Relief Act, does not override Section 52 of the Transfer of Property Act.

1.1. There may be innocent purchasers who purchase the property bona fide without notice of the earlier agreement/transaction. These purchasers might have purchased it either during pending litigation or no litigation pending. With regard to pending litigation, the subsequent purchasers may have notice or may not have the notice of the lis. Still the protection available to a purchaser during non-litigation period is not available to a purchaser during litigation is the main contention raised in this second appeal.

1.2. In the event of conflict between, the doctrine of lis pendence enshrined in Section 52 of the T.P. Act and the rule protecting a subsequent transferee without notice as contained in Section 19 (b) of the Specific Relief Act, which, would prevail is the issue?

2. The plaintiff Arumugam filed the suit in O.S.No.180 of 1988 before the Additional District Munsif, Tindivanam, seeking the relief of specific performance pursuant to the sale agreement dated 24.12.1987. The suit was filed on 17.2.1988. The second defendant purchased the same property on 14.3.1988, but, based on the earlier sale agreement dated 10.12.1987 (Ex.B1), as assignee of the agreement from one Muthuvel. The following issues were framed:

1. Whether the sale agreement dated 24.12.1987 is true, valid, enforceable?

2. Whether the plaintiff is in possession of the suit property in pursuance of part performance of the agreement?

3. Whether the plaintiff was ready and willing to perform his part of contract?

4. Whether the agreement dated 24.12.1987 is unenforceable because of its unconscionable nature?

5. Whether the agreement dated 10.12.1987 between the first defendant and Muthuvelu is true?

6. Whether the sale deed dated 14.3.1988 in favour of the second defendant is true and valid?

7. The second defendant is the bona fide purchaser is a value without notice of the agreement in favour of the plaintiff?

8. To what other relief?

3. With reference to issue Nos. I and 4, it was held that the sale agreement in favour of the plaintiff was true, valid, enforceable and not unconscionable. With regard to 5, 6 and 7, the findings were:

(a) The sale agreement dated 10.12.1987 was brought into existence in order to defeat the sale agreement in favour of the plaintiff. No witness was examined to speak about the agreement dated 10.12.1987.

(b) The second defendant is not the bona fide purchaser for value without notice of plaintiff’s agreement and hence, the sale deed is not valid.

So far as issue No.3 is concerned, it was held that plaintiff was ready and willing to perform his part of contract. So far as issue No.2 is concerned, it was held that plaintiff did not prove his possession pursuant to agreement of sale. The trial Court took note of change of patta in the name of the second defendant under Ex.B3 and payment of kist under Exs. B4 to B6 and the evidence of PW4 that he came to know about the purchase by the second defendant when the second defendant started ploughing the land. Based on that, it was held that plaintiff did not prove his possession. Ultimately, the suit was decreed, granting two months time to the plaintiff to pay the balance of sale consideration of Rs.2,500.

4. Though the agreement is said to have been executed by the first defendant, he did not file any written statement. She was also not examine

































































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