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HIGH COURT OF MADRAS
Hon`ble Mr.Justice R.VIJAYAKUMAR
ASHOK KUMAR – Appellant
Versus
AMSU – Respondent
Specific Performance - Ownership Dispute - Specific Relief Act 19(b), Transfer of Property Act 52 - The court interpreted Sections 19(b) of the Specific Relief Act and 52 of the Transfer of Property Act to determine that a pendente lite purchaser cannot claim independent title post-litigation initiation, impacting the enforcement of the sale agreement.
Fact of the Case:
The appellant sought specific performance of an unregistered sale agreement with the defendant, who alienated the property to a third party during pending litigation. The trial court ruled in favor of the appellant, but the appellate court favored the third party as a bonafide purchaser under Section 19(b) of the Specific Relief Act, leading to the current appeal.
Issues: Whether the courts below rightly allowed the application under Order 21 Rule 97 of C.P.C by a pendente lite purchaser while it is restricted under Order 21 Rule 102 of C.P.C.
Ratio Decidendi: The court held that a pendente lite purchaser has no standing to claim independent title against a decree or suit filed earlier; decisions emphasized the precedence of the doctrine of lis pendens over claims of bonafide purchasers.
Final Decision: The appellate court's judgment was set aside, restoring the trial court's decree in favor of the appellant.
J U D G E M E N T
The decree holder in a suit for specific performance in O.S.No.
508 of 2010 on the file of the Principal Subordinate Court, Dindigul is the appellant herein.
(A)Facts leading to the filing of this second appeal are as follows:
2.The defendant in the suit namely Pitchaimuthu is the absolute owner of the property. The plaintiff had entered into an unregistered sale agreement with the said Pitchaimuthu on 03.11.2009 for purchasing the said property. Since the defendant had not executed a sale deed pursuant to the sale agreement, the plaintiff had filed O.S.No.508 of 2010 seeking specific performance of the contract.
3.The defendant had received summon in the suit and had appeared through an Advocate. Along with the suit, the plaintiff had filed I.A.No.578 of 2010 seeking interim injunction restraining the defendant from alienating the suit schedule property. In the said application, the defendant sought time on 24.01.2011, 14.03.2011 and 15.04.2011 for filing a counter. However, counter was not filed. The defendant had executed a sale deed in favour of the third party, who is the claim petitioner herein, on 18.05.2011. Thereafter, the defendant was set exparte and an order of interim injunction was granted on 15.07.2011. A decree for specific performance was passed on 12.11.2011.
4.The decree holder had filed E.P.No.34 of 2012 for execution of sale deed and a sale deed came to be executed by the Court on 07.03.2013. Thereafter, the decree holder had filed E.P.No.95 of 2013 for delivery of possession. The judgment debtor was served through paper publication. The Ameen had returned the delivery warrant on the ground that a third party is in possession of the property.
5.One Amsu had filed an application under Order 21 Rule 97 of C.P.C in E.A.No.23 of 2014 contending that she is a bonafide purchaser for valuable consideration from the judgment debtor through a sale deed dated 18.05.2011. However, the said application was dismissed by the Execution Court on the ground that she is a pendente lite purchaser.
6.The obstructor had filed C.M.A.No.7 of 2017 before the Additional District Judge, Dindigul. The appeal was allowed by the learned District Judge on 08.08.2019 on the ground that the plaintiff is a bonafide purchaser for valuable consideration and therefore, Section 19(b) of the Specific Performance Act prevails over Section 52 Transfer of Property Act. It further found that when the plaintiff had entered into an unregistered agreement with the defendant, already registered sale agreement was in favour of one Paulraj, who is the husband of the present claim petitioner. Therefore, the suit for specific performance has been filed in collusion with the plaintiff.
7.Based upon the above said observations, the appeal came to be allowed. Challenging the same, the present second appeal has been filed by the decree holder.
8.The second appeal was admitted on the following substantial question of law:
Whether the Courts below are right in entertaining the application filed under Order 21 Rule 97 of C.P.C in view of the prohibition contained under Order 21 Rule 102 C.P.C barring pendente lite purchaser from setting up independent title in execution proceedings?
(B)Contentions of the counsels appearing on either side are as follows:
9.According to the learned counsel appearing for the appellant, the present claim petitioner is not a bonafide purchaser for valuable consideration. After receipt of notice in the suit and in the interim injunction application, the defendant had not filed a counter and he was set exparte and thereafter, he had alienated the property in favour of the present claim petitioner. Therefore, when the sale was effected by the defendant, suit was pending and the defendant had knowledge about the pendency of the interim injunction application also.
10.The learned counsel had further contended that though a registered sale agreement was standing in the name of one Paulraj on 16.02.2010 it would not create any right in
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