Transfers of immovable property made during pending litigation are subject to the doctrine of lis pendens and are subordinate to the court's final decree. Such transferees cannot claim status as bona fide purchasers to override the rights of the original parties, especially when the transferor lacked absolute title.

Headnote:(A) Specific Relief Act, 1963 - Sections 27 and 31 - Transfer of Property Act, 1882 - Sections 41 and 52 - Agreement of Sale-cum-General Power of Attorney - Suit for declaration and cancellation - Executory contract - Reciprocal obligations - Non-payment of balance consideration - Dishonour of cheques - Doctrine of lis pendens - Held, transfer of property during pendency of suit is subject to result of final decree - Transferee pendente lite is bound by decree and cannot set up independent or superior title - Protection as bona fide purchaser under Section 41 of TP Act is unavailable where transferor lacks valid title and existence of agreement was known or constructive notice existed - Nomenclature of document is not determinative; substance governs - Agreement remains executory until conveyance, and failure to perform obligations renders transaction liable for cancellation. (Paras 39, 43, 44, 48, 54, 56, 58)

(B) Appeal - Scope and Locus Standi - Right of third party to appeal - While person aggrieved by judgment can maintain appeal, scope is limited to rights available to predecessor-in-interest - Cannot reopen facts already adjudicated. (Paras 34, 35, 36)

Facts of the case:
Plaintiffs entered into an Agreement of Sale-cum-General Power of Attorney with the defendant for the sale of agricultural land. The agreement imposed reciprocal obligations regarding survey, demarcation, and road provision. The defendant failed to pay the balance consideration, and the issued post-dated cheques were dishonoured. Plaintiffs filed a suit to declare the agreement null and void and for cancellation. Subsequent to the institution of the suit, the defendant transferred the property to third parties. Trial Court decreed the suit in favour of the plaintiffs.

Findings of Court:
The Appellate Court upheld the Trial Court's judgment, finding that the defendant failed to prove the plaintiffs' non-compliance with reciprocity by not entering the witness box to rebut evidence. The court concluded the agreement was executory and no title had passed.

Issues: The main issues were the sustainability of the decree for cancellation, the locus standi of the pendente lite purchasers, and the applicability of protection for bona fide purchasers under Section 41.

Ratio Decidendi: A contract for sale does not transfer title until a registered conveyance is executed. Transfers made pendente lite are subservient to the final court decree, and the doctrine of lis pendens binds subsequent purchasers to the outcome of the litigation. Furthermore, failure to perform essential payment obligations coupled with an adverse inference from non-appearance as a witness justifies the cancellation of the agreement.

Result: Appeal dismissed; trial court judgment confirmed.

Table of Content
1. failure to perform contract obligations validates cancellation of agreement. (Para 3 , 4 , 5 , 7 , 8 , 9 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32)
2. locus standi is derived and limited by predecessor's interest. (Para 11 , 12 , 13 , 14 , 15 , 16 , 33 , 34 , 35 , 36 , 37 , 64 , 65)
3. transfers pendente lite are subject to suit outcomes. (Para 17 , 18 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45)
4. bona fide purchaser protection unavailable without verifiable clear title. (Para 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54)
5. agreement-cum-gpa does not automatically confer ownership rights. (Para 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 66 , 67 , 68)

JUDGMENT: (Per Hon’ble Sri Justice Vakiti Ramakrishna Reddy)

This Appeal Suit is filed by the appellants, who are not parties to the suit proceedings, assailing the Judgment and Decree dated 04.09.2018 passed in O.S. No. 82 of 2013 on the file of the learned V Additional District Judge, Bhongir. By the said judgment, the suit filed by the plaintiffs (respondent Nos.1 to 4 herein) against the sole defendant, seeking cancellation of Agreement of sale-Cum-General power of Attorney with possession, vide document No. 1020 of 2012 dated 19.12.2011 registered at S.R.O., Yadagirigutta Mandal, was decreed in favour of the plaintiffs.

2. For the sake of convenience, the parties shall hereinafter be referred to as they were arrayed before the Trial Court.

I. BRIEF FACTS:

3. The plaintiffs, who are closely related, are the joint owners and peaceful possessors of the agricultural dry land bearing Sy.No.134 admeasuring Ac.38-16 guntas, situated at Yadagiripalli Village, Yadagirigutta Mandal. Owing to family and personal necessities, the plaintiffs agreed to sell their respective contiguous extents to the sole defendant for a total sale consideration of Rs.63,74,400/-. Accordingly, they executed an Agreement of Sale-cum-GPA dated 19.12.2011, under which the defendant paid Rs.43,74,400/- as part consideration to the plaintiffs.

4. It is the case of the plaintiffs that the defendant agreed to pay the balance sale consideration of Rs.20,00,000/- within a period of four months, i.e., on or before 14.03.2012, and towards the said amount, issued four post-dated cheques in favour of the plaintiffs. However, when the cheques were presented for encashment, they were dishonoured with the endorsement “payment stopped by drawer.

Despite issuance of a statutory notice under Section 138 of the Negotiable Instruments Act, the defendant neither replied to the legal notice nor paid the balance amount. The plaintiffs alleged that the defendant, with a dishonest intention, played fraud upon them by issuing post-dated cheques without any intention of honouring them. Hence, the suit was instituted seeking cancellation of the Agreement of Sale-cum-General Power of Attorney and for a declaration that the same is null and void.

5. In reply to the plaint averments, the sole defendant filed a written statement contending that the plaintiffs had, in clear and unambiguous terms, agreed to have the entire suit schedule property surveyed through an official surveyor and duly demarcated with exact boundaries on or before 20.03.2012, leaving no scope for any dispute from third parties. It was and further agreed that the plaintiffs would provide a 33-feet approach road from the main road at their own cost. It is contended that on failure of the plaintiffs to fulfil these contractual obligations, the defendant was not obliged to pay the balance sale consideration. While admitting execution of the Agreement of Sale-cum-GPA, receipt of part sale consideration, and issuance of post-dated cheques, the defendant asserts that as per the terms of the agreement, the plaintiffs were entitled to present the cheques for realization only after performing their part of the contract. The defendant, therefore, alleges breach of contract on the part of the plaintiffs and contends that they are not entitled to any relief. Accordingly,

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABADK. Lakshman, Vakiti Ramakrishna Reddy, JJA. Aarthi – AppellantVersusAileni Sravathi – RespondentAPPEAL SUIT No. 443 of 2019

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
K. Lakshman, Vakiti Ramakrishna Reddy, JJ
A. Aarthi – Appellant
Versus
Aileni Sravathi – Respondent
APPEAL SUIT No. 443 of 2019