Shree Sai Samarth Buildcon vs Tricon Project India Ltd. Through Authorised Singnatory Rahul
- Court
- Madhya Pradesh High Court
NEUTRAL CITATION NO. 2026:MPHC-IND:25933
1 FA-513-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VINAY SARAF
FIRST APPEAL No. 513 of 2025
ATMARAM AND OTHERS
Versus
TRICON PROJECT INDIA LIMITED THROUGH AUTHORISED
SIGNATORY RAHUL SHARMA AND OTHERS
Appearance:
Mr. R. B. Singh with Mr. K. K. Gupta - Advocates for
appellants.
Mr. Yogesh Kumar Mittal - Advocate for respondent No. 1 /
Caveator.
Mr. Manish Sankhla - Govt. Advocate for the respondent No.
2 / State.
Mr. Ashok Kumar Sethi - Senior Advocate with Mr. Aayush
Gupta - Advocate for the respondents No. 3 and 4.
WITH
FIRST APPEAL No. 736 of 2025
SHREE SAI SAMARTH BUILDCON AND OTHERS
Versus
TRICON PROJECT INDIA LTD. THROUGH AUTHORISED
SIGNATORY RAHUL AND OTHERS
Appearance:
Mr. Ashok Kumar Sethi - Senior Advocate with Mr. Aayush
Signature Not Verified
Signed by: TEJPRAKASH
VYAS
Signing time: 2026-09-17
5:18:03 PM
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Gupta - Advocate for the appellants.
Mr. Yogesh Kumar Mittal - Advocate for respondent no. 1 /
Caveator.
Mr. R. B. Singh with Mr. K. K. Gupta - Advocates for
respondents No. 2 to 4.
Mr. Manish Sankhla - Govt. Advocate for the respondent No.
5 / State.
RESERVED ON : 12/08/2026
DELIVERED ON : 17/09/2026
JUDGMENT
This judgment will govern the disposal of First Appeal Nos. 513
of 2025 and 736 of 2025, as both the appeals are arising out of one and
same judgment and decree delivered by IV District Judge, Dr. Ambedkar
Nagar, District Indore (M.P.) in RCSA 66/2023 on 11/03/2025, by
which the suit filed by respondent No. 1 Tricone Project India Limited
has been decreed for specific performance of contract, perpetual
injunction, possession and declaration of registered sale deed dated
12/04/2023 as void and ineffective, executed by original defendants No.
1 to 3 (Atmaram Patel, Radhabai and Nandkishore) in favour of
defendants No. 4 and 5 (Shri Sai Samarth Buildcon). Challenging the
judgment and decree these appeals have been filed by original
defendants No. 1 to 3 (First Appeal No. 513/2025) and defendants No. 4
Signature Not Verified
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VYAS
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and 5 (First Appeal No.736/2025).
SHORT FACTS OF THE CASE:
2) The facts of the case in narrow compass are that the respondent
No. 1 / plaintiff (hereinafter for short referred to as, 'plaintiff') Tricone
Project India Limited entered into an agreement on 17/02/2021 with
appellants of First Appeal No. 513/2025 (hereinafter for short referred to
as, 'sellers') to purchase the land bearing survey No. 361/4 admeasuring
1.04 acre (0.568 hectare), survey No. 361/2 admeasuring 1.04 acre
(0.569 hectare), survey No. 361/1/2 admeasuring 0.024 acre (0.101
hectare), survey No. 361/3 admeasuring 1.89 acre (0.767 hectare) total
admeasuring 4.95 acre (2.005 hectares) of Village Datoda, Tehsil Dr.
Ambedkar Nagar, District Indore @ Rs. 75,00,000/- per acre for total
sale consideration of Rs. 3,71,46,900/-, out of which Rs. 5,00,000/- were
paid by the plaintiff to the seller No. 1 by cheque number 808110 dated
15/02/2021 drawn on IndusInd Bank and acknowledging the receipt of
the advance amount, the agreement was executed by the sellers in favour
of the plaintiff.
2.1) As per the terms of the agreement, it was agreed between the
parties that within two months, part payment of Rs. 45,00,000/- will be
made by the plaintiff to the sellers and after receipt of Rs. 50,00,000/-,
the sellers will obtain the NOC from the Bank of India, Branch Datoda,
with whom the subject lands were mortgaged. It was agreed that the
sellers will take steps for deletion of the entry of mortgage from the
Signature Not Verified
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VYAS
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revenue records i.e. Khasra. Thereafter, the sellers will obtain the
diversion order of the lands. The balance sale consideration of Rs.
3,21,46,900/- will be payable in six equal quarterly installments to be
started after 09 months of the date of execution of the agreement. The
total 24 months period was fixed for payment of total sale
consideration.
2.2) As per the plaintiff, the plaintiff paid total Rs. 1,58,11,469/- to
the sellers till 16/09/2022, however, no intimation was given to the
plaintiff by sellers that the lands have been released by the Bank of India
and the Bank has issued NOC. No intimation of diversion of the lands
was forwarded to the plaintiff.
2.3) As per the plaintiff, the measurement and demarcation was
also not carried out, which was essential, because as per the terms of the
agreement, if the land would found short at spot, the proportionate sale
consideration was payable.
2.4) The plaintiff pleaded in the plaint that when the sellers failed
to comply with the aforesaid terms, a notice was issued by the plaintiff
through lawyer to the sellers on 13/12/2022 intimating them that the
plaintiff is ready to pay the balance sale consideration and called upon
the sellers to execute the sale deed in favour of the plaintiff, however,
the sellers avoided to execute the sale deed and receive the balance sale
consideration, therefore, the plaintiff filed the suit for specific
performance of the contract, declaration, possession and perpetual
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VYAS
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injunction.
2.5) The defendants No. 1 to 3 / sellers filed their written
statement and denied the plaint allegations in toto. They denied the
execution of agreement in favour of the plaintiff and receipt of advance
amount of Rs. 5,00,000/- through cheque. They further denied the receipt
of Rs. 1,58,11,469/- under the agreement from the plaintiff and the
responsibility of the sellers to obtain NOC from the Bank and diversion
order from the competent authority and to get demarcation of the lands.
The sellers denied the receipt of the notice and prayed for dismissal of
the suit.
2.6) It is further pleaded by the sellers in their written statement
that the plaintiff practiced fraud with them and obtained their signatures
on the blank papers and later on prepared sale agreement, which was
drafted without the knowledge and consent of the sellers and therefore,
treated by them as cancelled. It is further pleaded that as alleged
agreement is not registered, it cannot be accepted in evidence.
2.7) The suit was filed by the plaintiff on 16/03/2023, however,
immediately thereafter, on 13/04/2023 the sellers executed the sale deed
in favour of the appellants of First Appeal No. 736/2025 (hereinafter for
short referred to as, 'subsequent purchaser') Shri Sai Samarth Buildcon
and transferred the lands to them. Consequently, the plaintiff moved an
application under Order I Rule 10 r/w Order VI Rule 17 and Section 151
of Code of Civil Procedure, 1908 (hereinafter for short referred to as,
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'CPC') for impleading the subsequent purchaser as party in the suit and
bringing the subsequent purchaser on record and seeking decree of
declaration in respect of sale deed executed by the sellers in favour of
the subsequent purchaser to be ineffective, null and void and not binding
on the plaintiff.
2.8) The Trial Court by order dated 26/07/2023 directed the parties
to maintain status quo in respect of the suit lands. The subsequent
purchaser remained ex parte after service of notice by substituted mode
of service. After amendment in the plaint and impleading subsequent
purchaser as party in the suit and decision upon the application filed by
the plaintiff under Order I Rule 10 r/w Order VI Rule 17 and Section
151 of CPC, fresh notices for settlement of issues were served upon the
subsequent purchaser by substituted mode of service of publication,
however the subsequent purchaser continued to remained absent even
after publication of notice in the daily news paper 'Agniban', therefore,
the Trial Court proceeded ex parte against the subsequent purchaser /
defendants No. 5 and 6 by order dated 09/12/2024.
2.9) After settlement of issues, the Trial Court put the parties to
trial. The plaintiff examined Rahul Sharma (PW-1) in support of its case
and the sellers examined Nandkishore Patel (DW-1) in favour of their
case. The Trial Court after hearing the final arguments of both the
parties vide judgment and decree dated 11/03/2025 decreed the suit and
passed the decree of specific performance of contract in favour of the
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VYAS
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plaintiff with a direction that the sellers / defendants No. 1 to 3 will
execute the sale deed in favour of the plaintiff upon payment of balance
sale consideration of Rs. 2,17,06,900/- and will handover the peaceful
possession of the suit lands to the plaintiff and thereafter, will not
interfere in the possession of the plaintiff themselves or through anyone
else. The sale deed executed by the sellers / defendants No. 1 to 3 in
favour of the subsequent purchaser i.e. defendants No. 5 and 6 has been
declared null and void and ineffective to the rights of the plaintiff.
3) First Appeal No. 513/2025 has been preferred by the
defendants No. 1 to 3 assailing the judgment and decree passed by the
Trial Court and First Appeal No. 736/2025 is preferred by the
defendants No. 5 and 6 impugning the same judgment and decree.
4) Heard Mr. Ashok Kumar Sethi, learned Senior Advocate with
Mr. Aayush Gupta, Advocate on behalf of the appellants of First Appeal
No. 736/2025, Mr. R. B. Singh, learned Advocate on behalf of the
appellants of First Appeal No. 513/2025, Mr. Yogesh Kumar Mittal,
Advocate for the respondent / plaintiff and Mr. Manish Sankhala, Govt.
Advocate for the respondent / State for the purpose of final disposal of
the appeals in compliance of the order passed by the Supreme Court in
Special Leave to Appeal (C) No. 1785/2026, wherein by order dated
04/05/2026 the Supreme Court has directed this Court to decide the First
Appeal as early as possible and disposed the same expeditiously.
Signature Not Verified
Signed by: TEJPRAKASH
VYAS
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ARGUMENTS ON BEHALF OF THE SELLERS:
5) Mr. R. B. Singh, learned Advocate appearing on behalf of the
defendants No. 1 to 3 submits that the Trial Court has erred in not
considering that the suit was filed by an unauthorized person and no
authorization letter was submitted by Mr. Rahul Sharma, who filed the
suit on behalf of the plaintiff Company though he is not a Director or
shareholder of the Company.
5.1) To buttress his arguments, Mr. Singh relied on the judgment
delivered by the Bombay High Court in the matter of Uttamram
Vithaldas Vs. Thakur Das Parshottamdas reported in AIR 1922 Bombay
113 (1), wherein the Bombay High Court has held that if a plaint is not
presented by duly authorized person, the suit is liable to be dismissed.
Mr. Singh further submits that as Mr. Rahul Sharma was not authorized
by the plaintiff Company, he had no authority to give statement on
behalf of the plaintiff company and he could appear as witness only.
5.2) To bolster his arguments, he placed reliance on the judgment
delivered by the Supreme Court in the case of Janki Vashdeo Bhojwani
and Another Vs. Indusind Bank Ltd. and Others reported in AIR 2005
SC 439, wherein the Supreme Court has held as under:
"17. On the question of power of attorney, the High Courts have
divergent views. In the case of Shambhu Dutt Shastri Vs. State of
Rajasthan, 1986 (2) WLL 713 it was held that a general power of
attorney holder can appear, plead and act on behalf of the party but he
cannot become a witness on behalf of the party. He can only appear
in his own capacity. No one can delegate the power to appear in
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VYAS
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witness box on behalf of himself. To appear in a witness box is
altogether a different act. A general power of attorney holder cannot
be allowed to appear as a witness on behalf of the plaintiff in the
capacity of the plaintiff."
5.3) Learned counsel further relied on the judgment of Gujrat
High Court delivered in the matter of Ajay Kiritakant Ghelani & Ors.
Vs. Mathureshnagar Co-operative Housing Society Ltd. & Anr. reported
in AIR 2008 Gujarat 44, wherein the Gujarat High Court after relying on
the judgment of the Supreme Court in Janki Vashdeo Bhojwani
(Supra) has held as under:
"15. However, it is clarified that permitting the
petitioners to place on record the Power-of-Attorney shall not
be construed as permission to do all acts as stated in the said
Power-of-Attorney. The clarification is necessitated in view
of the fact that the document of Power-of-Attorney also
empowers the petitioner No. 3 to depose on behalf of the
petitioner Nos. 1 and 2, which is not permissible under law as
held by the Supreme Court in the case of Janki Vashdeo
Bhojwani (supra). Therefore, under the said Power-of-
Attorney the petitioner No. 3 shall be entitled to appear, plead
and act on behalf of the petitioner Nos. 1 and 2, but shall not
appear as a witness on behalf of the petitioner Nos. 1 and 2."
5.4) With the aid of the aforesaid judgments delivered by the
Bombay High Court, Supreme Court and Gujarat High Court Mr. Singh
submits that firstly, Rahul Sharma was not authorized to institute the suit
on behalf of the plaintiff Company, Secondly, he has not filed any
Authority Letter or Board Resolution to prove his authorization and
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thirdly, he was not competent to depose on behalf of the plaintiff
Company, thus, the plaintiff failed to prove its case as no one else was
examined by the plaintiff in support of it's case.
5.5) He further submits that Rahul Sharma was not even
authorized to serve any notice on behalf of the plaintiff Company and
even no document has been filed in the case to demonstrate that he was
in service of the plaintiff Company, even though the Trial Court passed
the judgment in favour of the plaintiff Company, ignoring all the
aforesaid legal grounds.
5.6) Mr. Singh submits that the Trial Court erred in not accepting
the plea of the defendants No. 1 to 3 that no agreement was executed
between the plaintiff and defendants No. 1 to 3 and the agreement
produced by the plaintiff is a forged document. The suit filed on the
basis of the said agreement could not have been decreed by the Trial
Court. He further submits that as the suit has been filed on the basis of
forged and fabricated agreement, it was not maintainable at all and the
Trial Court erred in passing the decree in favour of the plaintiff. It is
further submitted by the defendants No. 1 to 3 that even on the date of
filing of the appeal i.e. 21/03/2025, they were cultivating the land and are
still in the possession of the suit lands.
5.7) Mr. R. B. Singh, learned counsel prays for setting aside the
judgment and decree passed by the Trial Court and for dismissal of the
suit filed by the plaintiff.
Signature Not Verified
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VYAS
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ARGUMENTS ON BEHALF OF THE PENDENTE LITE
TRANSFEREE:
6) Mr. A. K. Sethi, learned Senior Counsel appearing on behalf of
the defendants No. 5 and 6 raises the issue of service of notice upon
defendants No. 5 and 6 in the original suit and submits that the complete
and correct addresses of the defendants No. 5 and 6 were not mentioned
by the plaintiff and there was no proper and valid service of summons
upon the defendants No. 5 and 6 thus, they were wrongly proceeded ex
parte. He submits that before allowing the service of notice through
substituted mode, the Trial Court has not recorded its satisfaction that by
ordinary mode of service, notices would not be served upon defendants
No. 5 and 6.
6.1) Learned Senior Counsel further submits that the notice of the
amendment application dated 07/11/2024 was never issued to
the defendants No. 5 and 6 and no efforts had been made by the plaintiff
to serve the defendants No. 5 and 6 through due process of service for
application filed under Order VI Rule 17 of CPC on 07/11/2024, though
the said application was not pressed by the plaintiff on 12/12/2024.
6.2) Mr. Sethi forcefully argued that the plaint has not been signed
by any authorized signatory and even in support of the application filed
under Order V Rule 20 of CPC, no affidavit of any authorized person of
plaintiff was filed and as such the application could not have been
allowed and the Trial Court illegally ordered to serve the notice through
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VYAS
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substituted mode of service upon the defendants No. 5 and 6 by paper
publication and in the absence of effective service, the Trial Court could
not have ordered to proceed against them ex parte, which is bad in law
and consequently, the judgment and decree are liable to be set aside on
this ground alone.
6.3) Mr. Sethi submits that an ex parte decree can be challenged in
First Appeal apart from filing application under Order IX rule 13 of
CPC and to support his contention, he relied on the judgment of
Supreme Court in the matter of Neerja Realtors Pvt. Ltd. (M/s.) Vs.
Janglu (Dead) Thr. LR reported in 2018 (1) RN 194, wherein the
Supreme Court after relying upon the judgment in the matter of Bhanu
Kumar Jain Vs. Archana Kumar and Another reported in (2005) 1 SCC
787 has held that an appeal against an ex parte decree in terms of
Section 96(2) of CPC could be filed on the grounds that the materials
brought on record in the ex parte proceedings in the suit by the plaintiff
would not entail a decree in his favour, and the suit could not have been
posted for ex parte hearing. He further relied on the judgment by the
Supreme Court in the matter of Bhanu Kumar Jain (Supra) to support his
contentions.
6.4) Learned Senior Advocate further submits that the Trial Court
has wrongly exercised the discretion for granting a decree of specific
performance without considering the fact that there are no pleading and
proof with respect to readiness and willingness on the part of the
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plaintiff, which is required to be pleaded and proved as per Section 16(c)
of Specific Relief Act, 1963 and Form No. 47 and 48 of Appendix 'A'.
He pointed out from the pleadings of the plaint that in the plaint, it is
nowhere stated that the plaintiff was ready and willing to perform his
part of the contract and the plaintiff witness has also not stated anything
in this respect in his statement. Thus, the Trial Court committed error in
passing the decree of specific performance of contract in favour of the
plaintiff. He submits that the suit itself was not maintainable in the
absence of pleading of readiness and willingness.
6.5) To bolster his arguments, learned Senior Counsel relied upon
the judgment delivered by the Supreme Court in the matter of J. Samuel
and Others Vs. Gattu Mahesh and Others reported in (2012) 2 SCC
300 and referred the following paragraphs:
"14. Before proceeding further, it is also useful to refer
Section 16(c) of Specific Relief Act which reads as under:
"16. Personal bars to relief.- Specific performance
of a contract cannot be enforced in favour of a person-
(a) - (b) xxx
(c) who fails to aver and prove that he has
performed or has always been ready and willing to
perform the essential terms of the contract which
are to be performed by him, other than terms the
performance of which has been prevented or
waived by the defendant.
Explanation.- For the purposes of clause (c),-
(i) where a contract involves the payment of
money, it is not essential for the plaintiff to actually
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tender to the defendant or to deposit in Court any
money except when so directed by the Court;
(ii) the plaintiff must aver performance of, or
readiness and willingness to perform, the contract
according to its true construction."
It is clear that in a suit for specific performance of a contract,
unless there is a specific averment that he has performed or
has always been ready and willing to perform the essential
terms of the contract, the suit filed by him is liable to be
dismissed. In other words, in the absence of the above said
claim that he is always ready and willing to perform his part
of the contract, the decree for specific performance cannot be
granted by the Court.
15. In this legal background, we have to once again
recapitulate the factual details. In the case on hand, Suit O.S.
No. 9 of 2004 after prolonged trial came to an end in
September, 2010. The application for amendment under Order
VI Rule 17 CPC was filed on 24.09.2010 that is after the
arguments were concluded on 22.09.2010 and the matter was
posted for judgment on 04.10.2010. We have already
mentioned that Section 16(c) of the Specific Relief Act
contemplates that specific averments have to be made in the
plaint that he has performed and has always been willing to
perform the essential terms of the Act which have to be
performed by him. This is an essential ingredient of Section
16(c) and the form prescribes for the due performance. The
proviso inserted in Rule 17 clearly states that no amendment
shall be allowed after the trial has commenced except when
the court comes to the conclusion that in spite of due
diligence, the party could not have raised the matter before the
commencement of the trial.
16. As stated earlier, in the present case, the amendment
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application itself was filed only on 24.09.2010 after the
arguments were completed and the matter was posted for
judgment on 04.10.2010. On proper interpretation of proviso
to Rule 17 of Order VI, the party has to satisfy the Court that
he could not have discovered that ground which was pleaded
by amendment, in spite of due diligence. No doubt, Rule 17
confers power on the court to amend the pleadings at any
stage of the proceedings. However, proviso restricts that
power once the trial has commenced. Unless the Court
satisfies that there is a reasonable cause for allowing the
amendment normally the court has to reject such request.
17. An argument was advanced that since in the legal
notice sent before filing of the suit, there is reference to
readiness and willingness and the plaintiff has also led in
evidence, nothing precluded the court from entertaining the
said application with which we are unable to accept in the
light of Section 16(c) of the Specific Relief Act as well as
proviso to Order VI Rule 17. The only reason stated so in the
form of an affidavit is omission by "type mistake".
Admittedly, it is not an omission to mention a word or an
arithmetical number. The omission is with reference to
specific plea which is mandated in terms of Section 16(c) of
the Specific Relief Act."
6.6) Learned Senior Counsel further relied on the judgment of
Supreme Court delivered in the matter of Abdul Khader Rowther Vs. P.
K. Sara Bai and Others reported in (1989) 4 SCC 313 and relied on the
following paragraph:
"12. In Ouseph Varghese v. Joseph Aley and Ors. [(1969) 2
SCC 539, 543], this Court stated (SCC p. 543, para 9)-
"This takes us to the decree passed by the High Court in
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respect of plaint item No. 1. This decree is purported to
have been passed on the basis of the admission made by
the defendant. It may be noted that the agreement
pleaded by the defendant is wholly different from that
pleaded by the plaintiff. They do not refer to the same
transaction. The plaintiff did not at any stage accept the
agreement pleaded by the defendant as true. The
agreement pleaded by the the plaintiff is said to have
been entered into at the time of the execution of Exh. P-1
whereas the agreement put forward by the defendant is
one that is said to have been arrived at just before the
filing of the suit. The two are totally different
agreements. The plaintiff did not plead either in the
plaint or at any subsequent stage that he was ready and
willing to perform the agreement pleaded in the written
statement of defendant. A suit for specific performance
has to conform to the requirements prescribed in Forms
47 and 48 of the 1st Schedule in the Civil Procedure
Code. In a suit for specific performance it is incumbent
on the plaintiff not only to set out agreement on the basis
of which he sues in all its details, he must go further and
plead that he has applied to the defendant specifically to
perform the agreement pleaded by him but the defendant
has not done so. He must further plead that he has been
and is still ready and willing to specifically perform his
part of the agreement. Neither in the plaint nor at any
subsequent stage of the suit the plaintiff has taken those
pleas. As observed by this Court Pt. Prem Rai v. The
D.L.F. Housing and Construction (Private) (Ltd.) and
Anr. [(1968) 3 SCR 648 : AIR 1968 SC 1355] that it is
well settled hat in a suit for specific performance the
plaintiff should allege that he is ready and willing to
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perform his part of the contract and in the absence of
such an allegation the suit is not maintainable."
6.7) He further relied on the judgment of co-ordinate Bench of
this Court delivered in the matter of Shubh Laxmi Grih Nirman Sahakari
Sanstha Maryadit Vs. Suresh@ Gopal and Others reported in 2018 (2)
JLJ 159 and relied on the following paragraphs:
"17. This Court has carefully gone through the entire
record of the case and has also given a patient hearing to all
the parties. The plaint before this Court reveals that with
respect to readiness and willingness to perform contract /
agreement by the appellant, Sec. 16(1)(c) of the Specific
Relief Act, 1963 read with Form 47 is very material in the
peculiar facts and circumstances of the case. In a suit for
specific performance of contract the plaintiff has to plead and
prove readiness and willingness who is seeking performance
of the contract against the defendant and in case and readiness
and willingness of fact is not pleaded in the plaint then no
evidence can be adduced in support of such pleadings nor any
findings can be recorded by the trial Court for want of
pleadings, meaning thereby, if there are no pleadings, no
evidence can be adduced or can be looked into to prove the
case.
25. This Court is of the considered opinion that after
going through the plaint, this Court has not been able to
notice such averment much less proper averments in respect
of readiness and willingness of the plaintiff in relation to the
contract in question. It was certainly obligatory upon the
plaintiff to have pleaded that he was throughout ready and
willing to perform his part of the contract and, therefore, in
absence of the aforesaid material pleadings, the trial Court
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was justified in dismissing the suit, as basic requirement of
pleadings, as provided u/S. 16(1)(c) of the Specific Relief Act,
1963 read with Form 17 Appendix A of the Code of Civil
Procedure, 1908 was not fulfilled."
6.8) Mr. Sethi further relied on the judgment of Chhattisgarh High
Court in the matter of Ajit Singh and Others Vs. Baijnath
Agrawal reported in 2005 (4) MPHT 20 (CG) and relied on following
paragraph:
"12. As per plaint averment, agreement to sell was executed
on 28.7.1984 and as per agreement the sale to be completed
by 6.10.1984 by respondent receiving the balance of the
consideration of Rs. 51,000/- Only when the respondent
served a notice on appellants who are admittedly tenants of
the suit house for eviction and arrears of rent vide notice dated
4.7.1987 thereafter on 9.7.1987 the appellants agitated to it
and called the respondent to execute the sale deed and to
receive the balance amount. Neither any specific averment
unveiling the date, month or year when the appellants called
on respondent to receive the amount and execute the sale deed
has been made by the appellants, nor any evidence in specific
term has been adduced by them. Therefore, it can be accepted
that the appellants since the date or agreement i.e, 28.7.1984
till receipt of notice dated 4.7.1987, never asked the
respondent to receive the balance of the consideration of Rs.
51,000/- and to execute the registered sale deed. Even to
establish that all along since 28.7.1984 to 4.7.1987 appellants
were in possession of Rs. 51,000/- no substantial evidence has
been adduced. To prove their willingness and readiness
neither they made any effort to purchase stamps nor get the
recital of sale written on the stamp paper. Even the statement
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of Samir Jeet Singh (P.W/2) in para 4 of his statement, did not
say that on 28.7.1984 any agreement to sell the suit house
took place. Therefore, no doubt, agreement (Ex. P/4) has been
executed under the signature of respondent, but the said
evidence only suggests that as a result of Rs. 24,000/- given to
respondent, the said document has been obtained."
6.9) Mr. Sethi submits that the remaining sale consideration was
neither paid nor tendered nor deposited in the Court and the plaintiff has
not proved that the remaining sale consideration was available with the
plaintiff and therefore, in the absence of pleading and proof to this effect
that the plaintiff is having the monetary potential to pay the balance
consideration and mental preparedness to perform the part under the
contract, no decree for specific performance of contract can be passed.
6.10) He further relied on the judgment delivered by the co-
ordinate Bench of this Court in the matter of Gyaneshwar Vs. Smt.
Moongabai @ Muneshwaribai and Another reported in (2006) 2 JLJ
170, wherein the co-ordinate Bench has held that if the availability of
fund is not pleaded and proved, no decree for specific performance of
contract can be granted, which is a discretionary relief.
6.11) Mr. Sethi raised the issue of the registration of the sale
agreement and submits that the sale agreement was neither properly
stamped nor registered and therefore, on the basis of the said document,
the suit for specific performance of contract could not have been filed
and the decree of specific performance of the contract could not be
passed in favour of the plaintiff and therefore, the decree passed by the
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learned Trial Court in favour of the plaintiff is liable to be set aside. Mr.
Sethi submits that the Trial Court has committed error in granting the
decree of permanent injunction and declaring the sale deed executed by
the defendants No. 1 to 3 in favour of the defendants No. 5 and
6 null and void and ineffective to the rights of the plaintiff.
6.12) Mr. Sethi submits that the Trial Court wrongly shifted the
burden upon the defendants to disprove the contract. The plaintiff has
not come with the clean hands and filed the suit for specific performance
of the contract with ulterior motive and mala fide intention and
therefore, no decree of equitable relief could be granted in favour of the
plaintiff. He submits that neither the agreement was duly proved nor the
same was admissible in evidence. Mr. Sethi prays for allowing the
appeal and setting aside the judgment and decree passed by the Trial
Court.
ARGUMENTS ON BEHALF OF THE PLAINTIFF:
7) Mr. Yoesh Kumar Mittal, learned counsel appearing on behalf
of the plaintiff opposed the appeals and submits that the agreement to
sell was executed between the plaintiff and defendants No. 1 to 3 for sale
of suit lands for a total sale consideration of Rs. 3,71,46,900/- on
17/02/2021 and all the conditions had been duly recorded therein and
sum of Rs. 1,58,11,469/- were paid to the defendants / sellers by the
plaintiff as part performance of their part of the contract between
15/02/2021 to 16/09/2022 and these amount were paid through bank
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transfers and it has been duly proved and can be verified from the bank
statement submitted by the plaintiff before the Court and exhibited as
Ex.-P/5.
7.1) Mr. Mittal submits that to show the bona fides plaintiff sent a
notice on 13/12/2022 to the defendants to perform their part of the
agreement and requested the defendants for the execution of the sale
deed of the suit lands in favour of the plaintiff, which was served upon
the defendants on 16/12/2022. However, the defendants failed to
respond to the notice and consequently, the plaintiff filed the suit for
specific performance of the contract without wasting the time on
16/03/2023 before the Trial Court.
7.2) He further submits that within a period of one month from the
date of filing of the suit on 12/04/2023, the defendants No. 1 to 3
transferred the suit lands by executing a sale deed in favour of the
defendants No. 5 and 6 and they purchased the land having knowledge
of the fact that a civil suit is pending between the plaintiff and the
defendants. The execution of sale deed was even not disclosed by the
defendants No. 1 to 3 in their written statement dated 09/12/2024, more
so, the written statement was not signed by any of the defendants and
thus, the pleadings of the defendants are not considerable according to
the provision of Order VI Rule 14 of CPC. The Trial Court after
considering the pleadings and evidence of the parties, duly decreed the
suit in favour of the plaintiff.
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7.3) Mr. Yogesh Kumar Mittal, learned counsel submits that the
objection in respect to the non-filing of the authorization letter was not
raised by the defendants before the Trial Court and this objection has
been raised for the first time in the instant appeal. In fact Mr. Rahul
Sharma entered into the contract with the defendants on behalf plaintiff
Company, signed the agreement, filed the suit and he was duly
authorized to act on behalf of the plaintiff Company. He submits that as
the agreement was also signed by Mr. Rahul Sharma on behalf of the
plaintiff Company, there was no need to submit any formal document of
authorization, thus, the objection raised by the defendants that the suit
filed by the person, who purportedly lacked authorization, is wholly
untenable. In the absence of pleading of the defendants, no issue was
framed by the Trial Court in respect of authorization of Mr. Rahul
Sharma and the same cannot be examined for the first time at appellate
stage.
7.4) Mr. Mittal further submits that Mr. Rahul Sharma is an
employee of the plaintiff Company and was duly authorized to represent
the Company, as all dealings and communications with the defendants
were done by him in his capacity as the Company's local authorized
representative. He submits that the plaintiff Company's Headquarter is
situated in Delhi.
7.5) Mr. Mittal relied on the judgment delivered by the Supreme
Court in the matter of United Bank of India Vs. Naresh Kumar and
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Others reported in (1996) 6 SCC 660 wherein the Supreme Court held as
under :
"12. The Courts below having come to a conclusion that
money had been taken by respondent no.1 and that respondent
no.2 and husband of respondent no.3 had stood as guarantors
and that the claim of the appellant was justified it will be a
travesty of justice if the appellant is to be non suited for a
technical reason which does not go to the root of the matter.
The suit did not suffer from any jurisdictional infirmity and
the only defect which was alleged on behalf of the
respondents was one which was curable.
13. The court had to be satisfied that Sh. L.K. Rohatgi
could sign the plaint on behalf of the appellant. The suit had
been filed in the name of the appellant company; full amount
of court fee had been paid by the appellant bank; documentary
as well as oral evidence had been led on behalf of the
appellant and the trial of the suit before the Sub Judge,
Ambala, had continued for about two years. It is difficult, in
these circumstances, even to presume that the suit had been
filed and tried without the appellant having authorised the
institution of the same. The only reasonable conclusion which
we can come to is that Sh. L.K. Rohatgi must have been
authorised to sign the plaint and, in any case, it must be held
that the appellant had ratified the action of Sh. L.K. Rohatgi in
signing the plaint and thereafter it continued with the suit."
He submits that Supreme Court has held that substantive rights
should not be allowed to be defeated on technical grounds of procedural
irregularity so as to ensure that no injustice done by any party. He
further referred to Section 99 of CPC in this regard, which reads as
under:
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"99. No decree to be reversed or modified for error or
irregularity not affecting merits or jurisdiction.—No decree
shall be reversed or substantially varied, nor shall any case be
remanded, in appeal on account of any misjoinder or non-
joinder of parties or causes of action or any error, defect or
irregularity in any proceedings in the suit, not affecting the
merits of the case or the jurisdiction of the Court:
Provided that nothing in this section shall apply to non-
joinder of a necessary party."
7.6) Replying to the objection raised by the opposite side in
respect of the registration of the agreement, Mr. Mittal submits that in
terms of the Proviso to Section 49 of the Registration Act, 1908, an
agreement to sell, even if not registered, is admissible as evidence in a
suit for specific performance. In support of his contention, he relied on
the judgment delivered by the co-ordinate Bench of this Court in the
matter of Tahir Khan and Another Vs. Monesh Kataria and
Another reported in 2024 (2) MPLJ 78 and relied on following
paragraphs:
"12. Though the agreement to sale is unregistered and as
per Section 17(f) of Indian Registration Act the same was
required to be registered but as per the proviso to Section 49
thereof an unregistered document effecting immovable
property and required by that Act or the Transfer of Property
Act to be registered may be received as evidence of a contract
in a suit for specific performance. Thus, as per the aforesaid
proviso the agreement to sale can be received as evidence of a
contract in this suit for specific performance. This aspect of
the matter has already been considered by this Court in the
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case of Manish (supra) in which it has been held as under :-
6......
Section 17(f) of the Act has been inserted by the
Registration (Madhya Pradesh Amendment) Act, 2009
with assent of the President by way of notification dated
14th January, 2010. The relevant part of amended
Section 17 of Act reads as under:
17. Documents of which registration is
compulsory-
(1) The following documents shall be registered, if
the property to which they relate is situate in a
district in which, and if they have been executed on
or after the date on which, Act, XVI of 1864, or the
Indian Registration Act. 1866, or the Indian
Registration Act, 1871 or the or this Act came or
comes into force, namely:
......................................
......................................
17(f) any document which purports or operates to
effect any contract for sale of any immovable
property."
7. In terms of the above provision an agreement to sale is
required to be registered.
8. Section 49 of The Registration Act, which is relevant
for the present purpose provides as under:
"49. Effect of non-registration of document
required to be registered--
No document required by section 17 [or by any
provision of the Transfer of Property Act, 1882 ( 4
of 1882)], to be registered shall--
(a) affect any immovable property comprised
therein, or
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(b) confer any power to adopt, or
(c) be received as evidence of any transaction
affecting such property or conferring such power,
unless it has been registered :
Provided that an unregistered document affecting
immovable property and required by this Act or the
Transfer of Property Act, 1882 (4 of 1882), to be
registered may be received as evidence of a
contract in a suit for specific performance under
Chapter II of the Specific Relief Act, 1877 (3 of
1877), [*] or as evidence of any collateral
transaction not required to be effected by registered
instrument.
9. Under section 49 of the Act a document required to be
registered under section 17 of Act or by any provision of
Transfer of Property Act, 1882 cannot be received as
evidence of any transaction affecting such property or
conferring such power, unless it has been registered, but
an exception has been carved out by way of proviso in
respect of suit for specific performance to the effect that
such a document can be received as evidence of a
contract in a suit for specific performance or as evidence
of any collateral transaction not required to be effected
by registered instrument.
10. Supreme Court in the matter of S. Kaladevi vs. V. R.
Somasundaram and others, reported in 2010(3) MPLJ
(S.C.) 500 = AIR 2010 SC 1654 while considering
similar issue in respect of an unregistered sale deed filed
in a suit for specific performance has held as under :
"The main provision in section 49 provides that any
document which is required to be registered, if not
registered, shall not affect any immovable property
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comprised therein nor such document shall be
received as evidence of any transaction affecting
such property. Proviso, however, would show that
an unregistered document affecting immovable
property and required by 1908 Act or the Transfer
of Property Act, 1882 to be registered may be
received as an evidence to the contract in a suit for
specific performance or as evidence of any
collateral transaction not required to be effected by
registered instrument. By virtue of proviso,
therefore, an unregistered sale deed of an
immovable property of the value of Rs. 100/- and
more could be admitted in evidence as evidence of
a contract in a suit for specific performance of the
contract. Such an unregistered sale deed can also be
admitted in evidence as an evidence of any
collateral transaction not required to be effected by
registered document. When an unregistered sale
deed is tendered in evidence, not as evidence of a
completed sale, but as proof of an oral agreement
of sale, the deed can be received in evidence
making an endorsement that it is received only as
evidence of an oral agreement of sale under the
proviso to section 49 of 1908 Act."
1 3 . Thus in view of the relevant provisions and the
pronouncement as aforesaid, the agreement to sale even
though not registered can very well be received as evidence in
the present suit which is for specific performance of contract.
The document is also sufficiently stamped. The Trial Court
has rightly held so. The judgment relied upon by the learned
counsel for the petitioners are distinguishable on facts and do
not help them in any manner."
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7.7) Mr. Mittal submits that it is well settled that after the
amendment of 2018 in Specific Relief Act, 1963, the application of
Section 10 of the Specific Relief Act in a suit for specific performance
of an agreement to sell is not discretionary, but mandatory and while
granting the decree for specific performance, the Court is required to
examine only the readiness and willingness of the plaintiff, or the person
seeking performance, and the validity of the underlying contract.
7.8) He submits that in the case in hand, both the factors were duly
considered by the Trial Court before decreeing the suit and thus, the
Trial Court has not committed any error in passing the decree of specific
performance of contract. He relied on amended Section 10 of the
Specific Relief Act, 1963, which reads as under:
"10. Specific performance in respect of contracts.—The
specific performance of a contract shall be enforced by the
court subject to the provisions contained in sub-section (2) of
section 11, section 14 and section 16."
Further, Mr. Mittal relied on the amended provisions of Section
16(c) of the Specific Relief Act, 1963 and submits that after the
amendment, it is not essential to plead readiness and willingness in the
suit and the only requirement is to prove the readiness and willingness,
which can be proved by direct evidence and/or by the circumstances and
the plaintiff has proved the readiness and willingness in the case in hand.
Amended provisions of Section 16(c) of the Specific Relief Act, 1963
reads as under:
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"16. Personal bars to relief.—Specific performance of a
contract cannot be enforced in favour of a person—
(a) ..........
(b) ..........
(c) who fails to prove that he has performed or has
always been ready and willing to perform the essential
terms of the contract which are to be performed by him,
other than terms the performance of which has been
prevented or waived by the defendant.
Explanation.—For the purposes of clause (c),—
(i) where a contract involves the payment of money, it
is not essential for the plaintiff to actually tender to the
defendant or to deposit in court any money except when
so directed by the court;
(ii) the plaintiff must prove performance of, or
readiness and willingness to perform, the contract
according to its true construction."
7.9) In so far as the appeal preferred by the defendants No. 5 and 6
is concerned, the plaintiff submitted that they do not have any right to
contest the appeal as they stepped into the shoes of their vendor
a s pendente lite transferee during the pendency of the suit and the
transfer is hit by the doctrine of lis pendens and Section 52 of the
Transfer of Property Act, 1882, as all the defendants were fully aware of
the fact that the suit for specific performance of contract was pending
before the Trial Court and despite having the knowledge, the defendants
proceeded with the execution of the sale deed.
7.10) In support of his contention that principle of lis pendens
would apply irrespective of the theory of bona fide purchase and the
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principle of caveat emptor, he relied on the judgment delivered by the
Supreme Court in the case of Guruswamy Nandar V. P. Lakshmi Ammal
(Dead) Through LRs and Others reported in (2008) 5 SCC 796 and
relied on the following paragraphs:
"10. The principle of lis pendens is still settled principle
of law. In this connection, the Full Bench of the Allahabad
High Court in Smt. Ram Peary (supra) has considered the
scope of Section 52 of the Transfer of Property Act. The Full
Bench has referred to a decision in Bellamy v. Sabine [(1857)
44 ER 842 at p.843)wherein it was observed as under:
"4. . . .It is scarcely correct to speak of lis pendens as
affecting a purchaser through the doctrine of notice,
though undoubtedly the language of the Courts often so
describes its operation. It affects him not because it
amounts to notice, but because the law does not allow
litigant parties to give to others, pending the litigation,
rights to the property in dispute, so as to prejudice the
opposite party.
Where a litigation is pending between a plaintiff and a
defendant as to the right to a particular estate, the
necessities of mankind required that the decision of the
Court in the suit shall be finding, not only on the litigant
parties, but also on those who derive title under them by
alienations made pending the suit, whether such alienees
had or had not notice of the pending proceedings. If this
were not so, there could be no certainty that the litigation
would ever come to an end."
12. The Full Bench of Allahabad High Court further
referred to the work of Story on Equity 3rd Edition,(para 406)
which expounded the doctrine of lis pendens in the terms as
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follows: (Ram Peary case, AIR p. 319, para 6)
"6. . . . Ordinarily, it is true that the judgment of a
court binds only the parties and their privies in
representations or estate. But he who purchases during
the pendency of an action, is held bound by the judgment
that may be made against the person from whom he
derives title. The litigating parties are exempted from
taking any notice of the title so acquired; and such
purchaser need not be made a party to the action. Where
there is a real and fair purchase without any notice, the
rule may operate very hardly. But it is a rule founded
upon a great public policy; for otherwise, alienations
made during an action might defeat its whole purpose,
and there would be no end to litigation. And hence arises
the maxim pendent elite, nihil innovetur; the effect of
which is not to annul the conveyance but only to refer it
subservient to the rights of the parties in the litigation.
As to the rights of these parties, the conveyance is
treated as if it never had any existence; and it does not
vary them."
14. Our attention was invited to a decision of this Court
in R.K.Mohammed Ubaidullah & Ors. v. Hajee C.Abdul
Wahab (D) by L.Rs. & Ors. [AIR 2000 SC 1658]. In this case
it was observed that a person who purchased the property
should made necessary effort to find out with regard to that
property, whether the title or interest of the person from whom
he is making purchase was in actual possession of such
property. In this case, the plaintiff filed the suit for specific
performance of contract and during the pendency of the suit,
rest of the defendants brought subsequent transaction of sale
by the defendant in their favour claiming the title to the suit
property on the ground that they were the bona fide
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purchasers for value without notice of prior agreements in
favour of plaintiff and they were also aware that the plaintiff
was in possession of the suit property as a tenant for last
several years and that they did not make any inquiry if
plaintiff had any further or other interest in the suit property
on the date of execution of sale deed in their favour apart
from that he was in possession of the property as a tenant. In
that context their Lordships observed that subsequent
purchaser cannot be said to be bona fide purchaser of the suit
property for value without notice of suit agreement and
plaintiff would be entitled to relief of specific performance.
Their Lordships after considering the effect of Section 19 of
the Specific Relief Act as well as Section 52 of the Transfer of
Property Act held that subsequent purchaser has to be aware
before he purchases the suit property."
7.11) Mr. Mittal further relied on the recent judgment of the
Supreme Court delivered on 21/01/2026 in Alka Shrirang Chavan &
Anr. Vs. Hemchandra Rajaram Bhonsale & Ors. in SLP (Civil) No.
27660 of 2025 and relied on the following paragraphs:
"39. At the outset, let us advert to Section 52 of the
Transfer of Property Act on which the entire lis between the
parties are centered around. Section 52 of the Transfer of
Property Act reads thus:
52. Transfer of property pending suit relating thereto. —
During the pendency in any court having authority
within the limits of India excluding the State of Jammu
and Kashmir or established beyond such limits by the
Central Government of any suit or proceeding which is
not collusive and in which any right to immovable
property is directly and specifically in question, the
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property cannot be transferred or otherwise dealt with by
any party to the suit or proceeding so as to affect the
rights of any other party thereto under any decree or
order which may be made therein, except under the
authority of the court and on such terms as it may
impose.
Explanation.— For the purposes of this section, the
pendency of a suit or proceeding shall be deemed to
commence from the date of the presentation of the plaint
or the institution of the proceeding in a court of
competent jurisdiction, and to continue until the suit or
proceeding has been disposed of by a final decree or
order and complete satisfaction or discharge of such
decree or order has been obtained, or has become
unobtainable by reason of the expiration of any period of
limitation prescribed for the execution thereof by any
law for the time being in force.
40. This section has been subjected to judicial dissection
on numerous occasions. It is not necessary for us to advert to
the long line of precedents inasmuch as two recent judgments
of this Court have succinctly summed up the essence and
amplitude of this provision. Section 52 of the Transfer of
Property Act encapsulates the doctrine of lis pendens.
41. In Celir LLP, this Court examined the expression ‘lis
pendens’ in the following manner:
155. The term “lis pendens” as explained in the Law
Lexicon is as under:—
“Lis means a suit, action controversy, or dispute,
and lis pendens means a pending suit.The doctrine
denotes those principles and rules of law which
define and limit the operation of the common-law
maxim pendente lite nihil innovetur, that is,
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pending the suit nothing should be changed.
A pending suit.
As soon as proceedings are commenced to recover
or charge some specific property [Ex parte
Thornton [L.R.] 2 Ch. 178] there is “lis pendens” -
a pending suit, the consequence of which is that
until the litigation is at an end neither litigant can
deal with the property to the prejudice of the other.
41.1. Explaining the aforesaid doctrine, this Court has
held that nothing new can be introduced during the pendency
of a petition and if anything new is introduced, the same
would be subject to the final outcome of the petition. This
Court explained that the doctrine of lis pendens is duly
recognized in Section 52 of the Transfer of Property Act
which declares that during the pendency of any suit in which
any right to immovable property is directly and specifically in
question, the property cannot be transferred or otherwise dealt
with by any party to the suit or proceedings. Explanation to
Section 52 clarifies that pendency of a suit or proceeding shall
be deemed to commence from the date of presentation of the
plaint or institution of the proceeding in a court and shall
continue until the suit or proceeding is disposed of by a final
decree or order and complete satisfaction of the order is
obtained, unless it has become unobtainable by reason of
expiry of any period of limitation. This Court held thus:
156. As per the doctrine of lis pendens, nothing new
can be introduced during the pendency of a petition and
if at all anything new is introduced, the same would also
be subject to the final outcome of the petition, which
would decide the rights and obligations of the parties.
157. The doctrine of lis pendens is duly recognized in
Section 52 of the TPA which states that during the
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pendency in any court of any suit in which any right to
immovable property is directly and specifically in
question, the property cannot be transferred or otherwise
dealt with by any party to the suit or proceedings. The
explanation to the provision states that for the purposes
of the Section, the pendency of a suit or proceedings
shall be deemed to commence from the date of the
presentation of the plaint or institution of the proceeding
in a court, and shall continue until the suit or proceeding
is disposed by a “final decree or order” and complete
satisfaction of the order is obtained, unless it has become
unobtainable by reason of the expiry of any period of
limitation.
41.2. Elaborating further, this Court culled out five
conditions which must be fulfilled for application of the
doctrine of lis pendens. It has been noted that the only
exception to the principle of lis pendens is when the property
is transferred under the authority of the court. But where one
of the parties to the suit transfers the suit property or a portion
thereof to a third party, the latter would be bound by the result
of the proceedings even if he did not have notice of the suit or
proceeding. Relevant portion of the decision of this Court in
Celir LLP is extracted hereunder:
158. The following conditions ought to be fulfilled for
the doctrine of lis pendens to apply:—
i. There must be a pending suit or proceeding;
ii. The suit or proceeding must be pending in a
competent court;
iii. The suit or proceeding must not be collusive;
iv. The right to immovable property must be
directly and specifically in question in the suit or
proceeding;
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v. The property must be transferred by a party to
the litigation; and,
vi. The alienation must affect the rights of any
other party to the dispute.
159. In short, the doctrine of lis pendens, which
Section 52 of the TPA encapsulates, bars the transfer of
a suit property during the pendency of litigation. The
only exception to the principle is when it is transferred
under the authority of the court and on terms imposed by
it. Where one of the parties to the suit transfers the suit
property (or a part of it) to a third-party, the latter is
bound by the result of the proceedings even if he did not
have notice of the suit or proceeding.
41.3. It was canvassed on behalf of the subsequent
transferee that it was a bona fide third party purchaser of the
secured asset since it was neither arrayed as a party to the
proceedings in the main appeals nor was issued a notice of the
said proceedings either by the petitioner or by the bank.
Repelling such contention, this Court referred to its previous
decision in Sanjay Verma where it was held that the principle
of lis pendens enshrined in Section 52 of the Transfer of
Property Act is not only based on equity, good conscience and
justice but is also a principle of public policy. No party can
claim exemption from the application of this doctrine on the
ground of bona fide or good faith. Further, this Court referred
to another of its earlier decisions in Guruswamy Nadar Vs. P.
Lakshmi Ammal [(2008) 5 SCC 796] where it was held that
the principle of lis pendens will apply irrespective of whether
the subsequent purchaser had bought the property, which is a
subject-matter of a pending proceeding, in good faith or not.
42. It may be mentioned that in a recent judgment of this
Court in M/s. Siddamsetty Infra Projects Pvt. Ltd. Vs. Katta
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Sujatha Reddy [2024 SCC OnLine SC 3214] it has been held
that the doctrine of lis pendens kicks in the moment a
proceeding is instituted irrespective of whether such
institution or filing is defective or notice is yet to be issued by
the court.
43. One of the questions which fell for consideration in
Danesh Singh Vs. Har Pyari [2025 SCC OnLine SC 2805] is
whether transfer of the suit property in favour of respondent
Nos.1 and 2 is hit by Section 52 of the Transfer of Property
Act and the doctrine of lis pendens? It was in that context this
Court looked into Section 52 and held as follows:
49. Section 52 of the 1882 Act stipulates that during
the pendency of any suit in a court of competent
jurisdiction in which any right to the immovable
property is directly and specifically in question, such
property cannot be transferred or otherwise be dealt with
by any party to the suit or proceedings with a view to
affect or defeat the rights of any other party under any
decree or order. The only exception that the provision
carves out is with regard to a situation where the transfer
of the property is made permissible under the authority
of the court and in accordance with the terms imposed
by the court.
50. The explanation to the section further elaborates
that the pendency of a suit or proceeding shall be
deemed to commence from the date of the presentation
of the plaint and would continue until the suit is disposed
of by a final decree, and the “complete satisfaction or
discharge of such decree” has been obtained, unless the
same cannot be obtained due to the expiry of the
prescribed limitation period.
43.1. This Court also referred to its earlier decision in
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Celir LLP and noted the essentials of Section 52. Thereafter,
this Court held thus:
52. This Court in Celir LLP (supra) had also emphasized
that such a pendente lite transferee would be bound by
the result of the proceedings irrespective of whether they
had notice of the pending suit or not. In other words, the
lack of knowledge of the proceedings would not be a
valid defence against the application of the doctrine of
lis pendens.
44. Section 52 has undergone an amendment in the State
of Maharashtra by virtue of the Bombay Amendment Act,
1939 (Act XIV of 1939). Section 52, as amended in
Maharashtra, stands restructured in as much as there are two
sub-sections with an explanation, sub-section (2) being the
Maharashtra insertion. Section 52 as amended in Maharashtra
reads as under:
52. Transfer of property pending suit relating thereto. —
(1) During the pendency in any court having
authority within the limits of India excluding the
State of Jammu and Kashmir established beyond
such limits by the Central Government, of any suit
or proceeding which is not collusive and in which
any right to immovable property is directly and
specifically in question, if a notice of the pendency
of such suit or proceeding is registered under
Section 18 of the Indian Registration Act, 1908, the
property after the notice is so registered cannot be
transferred or otherwise dealt with by any party to
the suit or proceeding so as to affect the rights of
any other party thereto under any decree or order
which may be made therein, except under the
authority of the court and on such terms as it may
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impose.
(2) Every notice of pendency of a suit or
proceeding referred to in sub-section (1) shall
contain the following particulars, namely:
(a) the name and address of the owner of
immovable property or other person whose right to
the immovable property is in question;
(b) the description of the immovable property the
right to which is in question;
(c) the court in which the suit or proceeding is
pending;
(d) the nature and title of the suit or proceeding;
and
(e) the date on which the suit or proceeding was
instituted.
Explanation.—For the purposes of this section, the
pendency of a suit or proceeding shall be deemed to
commence from the date of the presentation of the plaint
or the institution of the proceedings in a court of
competent jurisdiction, and to continue until the suit or
proceeding has been disposed of by a final decree or
order and complete satisfaction or discharge of such
decree or order has been obtained, or has become
unobtainable by reason of the expiration of any period of
limitation prescribed for the execution thereof by any
law for the time being in force.
45. The aforesaid amendment has been examined in Celir
LLP. This Court has held that the requirement of registration
of notice of pendency of suit or proceeding is to prevent any
undue or unwarranted hardship to a third party who even after
a reasonable due diligence has bona-fidely purchased the
property believing it to be free from the encumbrances of any
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pending proceeding only to later face the adverse
consequences of losing the rights by a mechanical application
of lis pendens. This additional requirement is only for
effective application of the doctrine of lis pendens. The
objective is to discourage any thwarting or frustration of
rights of the litigating parties by unscrupulous and
unanticipated transactions. This Court cautioned against
mechanical application of the aforesaid rule because if it is
held that absence of notice registration would render the
doctrine of lis pendens inapplicable, it would encourage
exploitation of procedural gaps and thereby undermine the
very sanctity of the judicial process. Such an interpretation
would lead to a very chilling effect whereby third parties
despite being expected to verify the title and status of the
property would simply abdicate their duty to conduct
thorough due diligence in transactions involving immovable
properties or mischievously execute back dated agreements in
collusion with a party to a lis prior to registration of such
notice of pendency to circumvent the due court process. This
Court held thus:
171. We have carefully gone through the aforesaid state
amendment made to Section 52 of the TPA. The
amended Section 52 sub-section (1) of the TPA casts
upon a party who is claiming any right to a property
which is a subject matter of any pending suit or
proceeding an additional duty to register a notice of
pendency in respect of such property so as to
caution and put to notice any third-party who might
otherwise be unaware of such proceeding or litigation
despite the best of due diligence either due to
inadvertence or deliberate misleading by one of the
parties to the lis and as result might be genuinely
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considering to purchase or acquire any right in the
subject-matter proceeding. The requirement of
registration of notice of pendency is to prevent any
undue or unwarranted hardship to such third-parties who
even after a reasonable due diligence have bona-fidely
purchased the property believing it to be free from the
encumbrances of any pending proceeding only to later
face the adverse consequence of losing their rights by a
mechanical application of lis pendens.
172. This additional requirement of registration of notice
of pendency is for the benefit of the party claiming any
right in such subject-matter property and also for the
benefit of any third-party interested in such subject-
matter property by enabling the former to claim the
benefit of lis pendens as an absolute right after having
duly taken steps towards ensuring that the public is well-
aware of the impeding litigation in respect of such
property by registering a notice of pendency and to
enable the latter to ascertain the veracity of title of such
property by exercise of its due diligence. Although, the
said provision is for the benefit of the third-party, yet
such subsequent purchasers cannot as a matter of
absolute right claim any title to such property solely on
the ground of want of any notice of pendency being
registered. To hold otherwise would undermine the
object and purpose of the doctrine of lis pendens
which is based on the principle of equity, good
conscience, and public policy and discourage any
thwarting or frustration of rights of the parties so
litigating by unscrupulous and unanticipated
transactions.
173. The vital essence of this additional duty imposed
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upon the party claiming a right to a property which is a
subject matter of a pending proceeding, is only to aid a
third-party to exercise its due diligence and obviate the
possibility of any dishonesty, misrepresentation or fraud
by a party in order to gain an undue advantage or benefit
despite the pendency of proceedings. However, if the
absence of notice registration were to render the doctrine
entirely inapplicable, it would lead to exploitation of
procedural gaps by parties who deliberately delay or
avoid registering such notices to defeat substantive
rights of the parties and undermine the very sanctity of
judicial proceedings. Such an interpretation would lead
to a very chilling effect whereby, third parties despite
being expected to verify the title and status of the
property would simply abdicate their duty to conduct
thorough due diligence in transactions involving
immovable properties or that despite being fully aware
of the pendency of such proceedings would be able to
deviously claim absolute rights to such property or
worse, mischievously execute back-dated agreements in
collusion with a party to a lis prior to registration of such
notice of pendency to circumventing the very
proceedings and render them infructuous.
46. At this stage, we may also advert to the provisions of
Section 19 of the Specific Relief Act, 1963 (‘the Specific
Relief Act’ hereinafter). Section 19 is included in Chapter II
of the Specific Relief Act which deals with specific
performance of contracts. Heading of Section 19 is ‘Relief
against parties and persons claiming under them by
subsequent title’. Section 19 reads thus:
19. Relief against parties and persons claiming under
them by subsequent title.- Except as otherwise provided
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by this Chapter, specific performance of a contract may
be enforced against—
(a) either party thereto;
(b) any other person claiming under him by a title
arising subsequently to the contract, except a
transferee for value who has paid his money in
good faith and without notice of the original
contract;
(c) any person claiming under a title which, though
prior to the contract and known to the plaintiff,
might have been displaced by the defendant;
(ca) when a limited liability partnership has entered
into a contract and subsequently becomes
amalgamated with another limited liability
partnership, the new limited liability partnership
which arises out of the amalgamation;
(d) when a company has entered into a contract and
subsequently becomes amalgamated with another
company, the new company which arises out of the
amalgamation;
(e) when the promoters of a company have, before
its incorporation entered into a contract for the
purpose of the company and such contract is
warranted by the terms of the incorporation, the
company:
Provided that the company has accepted the
contract and communicated such acceptance to the
other party to the contract.
46.1. The only clause which may be of some relevance is
clause (b) of Section 19. It says specific performance of a
contract may be enforced against any other person claiming
under him by a title arising subsequently to the contract except
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a transferee for value who has paid his money in good faith
and without notice of the original contract.
46.2. Section 19 in general and clause (b) thereof in
particular acknowledges the claim of a person to a contract
qua a subsequent transferee. But clause (b) carves out an
exception when a subsequent transferee acts in good faith and
without notice of the original contract.
47. In K.S. Manjunath Vs. Moorasavirappa [2025 SCC
OnLine SC 2378], the subsequent purchasers were seeking to
bring themselves within the status of bona fide purchaser
under Section 19(b) of the Specific Relief Act. It was in that
context, this Court examined Section 19(b) as under:
68. ………Section 19 provides for the categories of
persons against whom specific performance of a contract
may be enforced. Amidst all, Clause (b) of Section 19
states that specific performance may be enforced against
any other person claiming under him by a title arising
subsequently to the contract except a transferee for value
who has paid his money in good faith and without notice
of the original contract. Thus, a transferee for value who
has paid his money in good faith and without notice of
the original contract is excluded from the purview of the
said clause. In the case of Ram Niwas Vs. Bano [(2000)
6 SCC 685], this Court had set out three factors that a
subsequent transferee must show to fall within the
excluded class: (a) he has purchased for value the
property, which is the subject matter of the suit for
specific performance; (b) he has paid his money to the
vendor in good faith; and (c) he had no notice of the
earlier contract for sale specific performance of which is
sought to be enforced against him. The Court observed
that “notice” can be (i) actual notice or (ii) constructive
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notice, or (iii) imputed notice. As per Section 3 of
Transfer of Property Act, 1882, a person is said to have
notice of a fact when he actually knows that fact or when
but for wilful abstention from inquiry or search which he
ought to have made, or gross negligence, he would have
known it……..
47.1. Thereafter, this Court referred to a decision of the
Madhya Pradesh High Court and held thus:
69. Similarly, in Durg Singh Vs. Mahesh Singh [2004
SCC OnLine MP 9], the Madhya Pradesh High Court
had observed that there are two factors that are necessary
for the adjudication of suit for specific performance of
the contract where the subject matter property has been
sold to a subsequent purchaser: (i) that whether the
plaintiff remained always ready and willing to perform
his part of the contract to purchase the suit property and
the readiness and willingness should exist till the date of
the passing of the decree, and (ii) that whether
subsequent transferee was having prior knowledge of the
earlier agreement executed in favour of the plaintiff.
Both these factors need to have nexus with the facts of
each case and conduct of parties……….
47.2. This Court analysed the expressions ‘wilful
abstention from inquiry or search’, ‘notice’ and ‘good faith’
and concluded that to claim protection under Section 19(b),
the purchaser must show three things: (a) purchase for value,
(b) payment in good faith, and (c) absence of notice of the
earlier contract. ‘Notice’, it has been emphasized, includes not
merely actual knowledge but also constructive and imputed
knowledge.
48. However, it is evident that Section 19(b) of the
Specific Relief Act operates at a stage prior to institution of a
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suit or proceeding.
49. We have already analysed Section 52 of the Transfer
of Property Act and the interpretation given thereto by this
Court. In our view, the interpretation and understanding of
clause (b) of Section 19 has to align with the interpretation
given to Section 52 of the Transfer of Property Act as any
other interpretation would lead to an incongruous and
anomalous situation which should be avoided.
50. As pointed out above, Section 19(b) of the Specific
Relief Act would be available to a party to a contract who
suffers a subsequent transfer of property. However, the
moment a suit or proceeding is instituted by a party to the
contract whereafter there is transfer of the suit property,
Section 19(b) of the Specific Relief Act would have to give
way to Section 52 of the Transfer of Property Act in which
event the doctrine of lis pendens would come into force."
7.12) Mr. Mittal further submits that the part payment of the sale
consideration of Rs. 1,58,11,469/- was transferred in the account of
defendant No. 1 Atmaram and it was duly proved by the plaintiff,
however, defendant No.1 Atmaram did not step into the witness box and
not appeared before the Court to depose his oral statement or evidence
and therefore, the factum of non-examination of the defendant Atmaram
should be considered for drawing adverse inference against the
defendants.
7.13) He further submits that the issue of proceeding ex parte in a
suit cannot be raised in an appeal under Section 96 of CPC and for that
purpose, he relied upon the judgment delivered by the Supreme Court in
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the matter of Bhanu Kumar Jain (Supra) and relied on following
paragraph:
"38. The dichotomy, in our opinion, can be resolved by
holding that whereas the defendant would not be permitted to
raise a contention as regards the correctness or otherwise of
the order posting the suit for ex-parte hearing by the Trial
Court and/ or existence of a sufficient case for non-
appearance of the defendant before it, it would be open to him
to argue in the First Appeal filed by him against Section 96(2)
of the Code on the merit of the suit so as to enable him to
contend that the materials brought on record by the plaintiffs
were not sufficient for passing a decree in his favour or the
suit was otherwise not maintainable. Lack of jurisdiction of
the court can also be a possible plea in such an appeal. We,
however, agree with Mr. Choudhari that the 'Explanation'
appended to Order 9 Rule 13 of the Code shall receive a strict
construction as was held by this court in Rani Choudhury
(supra), P. Kiran Kumar (supra) and Shyam Sundar Sarma
Vs. Pannalal Jaiswal and Others [2004 (9) SCALE 270]."
7.14) To support his contention, Shri Mittal has further relied on
the judgment of Division Bench of this Court in the matter of Lee Anne
Elton Vs. Arunoday Singh delivered in First Appeal No. 445 of 2020 on
09/07/2022 and relied on the following paragraphs:
"23. The Division Bench of this Court in Ramlal
Chaurasia and others Vs. Rewa Coal Fields Ltd., Calcutta
reported in 1966 M.P.L.J. 11, 507 opined as under:-
'7. In our opinion, it is open to a defendant, who had
filed an appeal against an ex parte decree under section
96 (2) of the Code, to show from the record as it stands
that there is, in the order proceeding ex parte against
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him, any error, defect or irregularity which has affected
the decision of the case. If he succeeds in so doing, the
ex parte decree will be set aside and the case will be
remitted for retrial. But, in the appeal against the ex
parte decree he cannot be allowed to show that he was
prevented by any sufficient cause from appearing at the
hearing. For that purpose, he must have recourse to the
special procedure under Order 9, rule 13 of the Code for
setting aside the said decree.'
(Emphasis Supplied)
24. The Supreme Court in Bhanu Kumar Jain Vs.
Archana Kumar and another reported in (2005) 1 SCC 787,
poignantly held as under :-
"38. The dichotomy, in our opinion, can be resolved by
holding that whereas the defendant would not be
permitted to raise a contention as regards the correctness
or otherwise of the order posting the suit for ex parte
hearing by the trial court and/or existence of a sufficient
case for non- appearance of the defendant before it, it
would be open to him to argue in the first appeal filed by
him under Section 96(2) of the Code on the merits of the
suit so as to enable him to contend that the materials
brought on record by the plaintiffs were not sufficient for
passing a decree in his favour or the suit was otherwise
not maintainable. Lack of jurisdiction of the court can
also be a possible plea in such an appeal. We, however,
agree with Mr Chaudhari that the "Explanation"
appended to Order 9 Rule 13 of the Code shall receive a
strict construction as was held by this Court in Rani
Choudhury [(1982) 2 SCC 596] , P. Kiran Kumar
[(2002) 5 SCC 161] and Shyam Sundar Sarma v.
Pannalal Jaiswal [(2005) 1 SCC 436 : (2004) 9 Scale
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270]."
(Emphasis Supplied)
25. As per ratio of this judgment, we find substance in
the argument of learned Senior Counsel for the respondent
that in this regular first appeal which is analogous to a first
appeal under Section 96 (2) of CPC, it is not open to the
appellant to argue that the family court has committed an error
in proceeding ex parte. The appellant can only attack the
findings given on merits or on the aspect of jurisdiction of
Court below as per the material available on record. For this
reason, even otherwise, the order of proceeding ex parte by
the Court below cannot be a subject matter of judicial review
in this appeal."
7.15) Mr. Mittal submits that in view of the aforesaid judgments,
the defendants No. 5 and 6 cannot raise the issue of correctness of
proceeding ex parte in the suit, in the appeal. The Trial Court has not
committed any error in passing the decree of specific performance,
permanent injunction and declaration. He prays for dismissal of both the
appeals filed by the defendants No. 1 to 3 and defendants No. 5 and 6.
CONSIDERATION:
8) Heard the arguments at length and perused the record of the
Trial Court. The Trial Court after considering the pleadings of the
parties framed the following issues and recorded its findings as under :
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9) The following questions are involved in these appeals:
(A) Whether, the finding recorded by the Trial Court
are based on due appreciation of evidence ?
(B) Whether, the suit was filed by an authorized person
on behalf of the plaintiff ?
(C) Whether, the plaintiff has proved the readiness and
willingness and entitled for the decree of specific performance
of contract ?
(D) Whether, the Trial Court was justified in decreeing
the suit filed by the plaintiff ?
QUESTION 'A':
10) The plaintiff approached to the Court with the pleading that
the plaintiff entered into an agreement with the defendants No. 1 to 3 to
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purchase the suit lands @ Rs. 75,00,000/- per acre and paid advance of
Rs. 5,00,000/- on 15/02/2021. As per the plaintiff, defendants No. 1 to 3
executed the agreement, wherein the total time period of 24 months was
fixed for payment of consideration and total sale consideration of Rs.
3,71,46,900/- was decided. It was also decided that the seller will obtain
the NOC from Bank of India and will take appropriate steps for deletion
of entry of mortgage from the revenue records with further action for
diversion of lands, demarcation and measurement to ascertain the actual
amount of consideration.
10.1) The plaintiff pleaded that though the plaintiff paid Rs.
1,58,11,469/- to the defendant No. 1 Atmaram in furtherance of the
agreement till 16/09/2022, but the defendants No. 1 to 3 failed to
provide any intimation in respect of release of the lands by Bank of
India. No NOC was provided to the plaintiff, no intimation of diversion,
measurement and demarcation was served and when the plaintiff issued
a notice on 13/12/2022, the same was not replied, therefore, the suit for
specific performance of the contract, declaration, possession and
perpetual injunction was filed.
10.2) The defendants No. 1 to 3 denied the execution of the
agreement, receipt of Rs. 5,00,000/- as advance amount and total amount
of Rs. 1,58,11,469/- from the plaintiff and prayed for dismissal of the
suit on the basis of written statement of denial of all the facts.
10.3) The plaintiff impleaded defendants No. 5 and 6 as they
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purchased the suit lands during the pendency of the suit, however, they
remained ex parte.
10.4) The plaintiff examined Rahul Sharma (PW-1), who stated
that the plaintiff Company entered into an agreement with the defendants
No. 1 to 3 through him and total amount of Rs. 1,58,11,469/- was paid to
the defendants in furtherance of the agreement, however, the defendants
failed to perform their part of contract and therefore, after issuance of
notice the suit for specific performance of contract was filed. In the
cross-examination of Rahul Sharma (PW-1), nothing could be brought
on record to disbelieve him, however, his authority to file the suit on
behalf of the plaintiff Company was challenged in the cross-
examination.
10.5) The defence of the defendants was that they did not enter
into any contract, but at the same time the suggestion was given to the
plaintiff witness that upon demand of balance sale consideration by the
defendants, the same was not paid to the defendants by the plaintiff and
therefore, they executed the sale deed in favour of third party.
10.6) The defendant No. 1 Atmaram did not appear in witness
box. The plaintiff transferred all the amounts in the Bank account of
Atmaram. As he did not depose in the case, adverse inference can be
drawn against him. The defendant examined Nandkishore Patel (DW-1),
who accepted the signatures of the sellers, however, stated that the
signatures were obtained by the plaintiff Company on blank Stamp
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Papers and the dialogues could not be concluded and therefore, no
contract for sale of suit lands was entered between the parties. In the
chief examination he himself stated that they demanded the amount of
consideration as mentioned in the agreement from the plaintiff several
times, but as the plaintiff failed to pay the remaining amount of
consideration, they executed the sale deed in favour of the defendants
No. 5 and 6.
10.7) When this question was asked to Nandkishore Patel (DW-1)
that on different dates amounts were transferred in the account of
Atmaram, he had shown his ignorance. He accepted the signatures on the
agreement and in the course of examination accepted that no action was
taken by them for demarcation and measurement. No other witness was
examined by the defendants.
10.8) The Trial Court after considering the pleadings of the parties
and oral as well as documentary evidence has held that the plaintiff has
able to proved his case that the agreement was executed, part payment
was made and the defendants failed to perform their part of contract. The
plaintiff has proved payment of Rs. 1,58,11,469/-, which were paid by
the plaintiff through bank transaction. The Trial Court considered the
conduct of the defendants that on the one hand they denied the execution
of the agreement and on the other hand stated in the Court that the
plaintiff failed to make the payment of balance sale consideration
despite several demands made by the defendants.
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10.9) The defendants tried to avoid the liability to perform the
contract on the basis of technicalities only and they could not brought
any material on record to establish that payment was not made by the
plaintiff, as claimed. The Trial Court has recorded that the plaintiff's
witness Rahul Sharma remained constant on the issue of execution of the
agreement, payment of part consideration and issuance of notice. These
facts were proved by cross-examination of the defendant also and
therefore, in view of this Court the Trial Court has not committed any
error in recording the finding that the plaintiff proved the execution of
contract, payment of part consideration, in the case. The findings
recorded by the Trial Court are based on due appreciation of evidence
and do not require any interference by this Court in appeal.
QUESTION 'B':
11) The main objection raised by the appellant is that Rahul
Sharma, who filed the suit on behalf of the plaintiff Company has not
filed any Authorization Letter in the case. It is submitted on behalf of the
appellant that the Rahul Sharma is neither a Director nor authorized
person, therefore, the suit filed by the unauthorized person could not
have been decreed by the Trial Court.
11.1) This objection was neither raised by the appellants before
the Trial Court in written statement and nor issue was framed by the
Trial Court. There is no finding of the Trial Court in this regard.
However, from perusal of the record, pleadings of the plaint and
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statement of Rahul Sharma (PW-1), it appears that Rahul Sharma
entered into a contract on behalf of the plaintiff Company with the
sellers and notice was issued to the sellers at his instance on behalf of the
plaintiff Company. The suit was filed by Rahul Sharma on behalf of the
plaintiff Company and he appeared as a witness on behalf of the
appellant Company.
11.2) All these acts were done by Rahul Sharma on behalf of the
plaintiff Company, which is a registered Company and a juristic person.
A juristic person is required to be represented by a living person.
Though the plaintiff ought to have submit the document of authorization
of Rahul Sharma, but in the absence of any document of authorization,
at the stage of appeal, the judgment and decree passed by the Trial Court
can not be set aside on this ground. The provision of Section 99 of CPC
are relevant, which provides that no decree shall be reversed or
substantially varied, nor shall any case be remanded, in appeal on
account of any error, defect or irregularity in any proceedings in the suit,
not affecting the merits of the case or the jurisdiction of the Court.
11.3) The filing of authorization letter is required only for the
purpose of satisfying the Court that plaint has been filed by a competent
person on behalf of the plaintiff. However, in the case in hand, the plaint
was filed on behalf of the Company, by a person, who entered into an
agreement to purchase the lands and conducted all the acts on behalf of
the plaintiff company. After considering the facts and circumstances of
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the case, the Trial Court has decreed the suit. The defect of non filing of
authorization is a curable defect and could have been cured during the
trial, if the defendants would have raised the objection in written
statement. Now at the stage of appeal, they are raising this objection. The
decree has already been passed against them and this objection does not
affect the merits of the case or jurisdiction of the Court, therefore, in
view of this Court any technical objection raised by the party at the
appellate stage, which does not affect the merits of the case, cannot be
accepted to reverse the judgment on the technical grounds.
11.4) The Supreme Court in the matter of Kiran Singh and Others
Vs. Chaman Pawan and Others reported in (1954) 1 SCC 710 has held
that the judgment and decree should not be reversed purely on technical
grounds, unless it had resulted in failure of justice.
11.5) The Supreme Court in the matter of Kuldeep Kumar Dubey
& Ors. Vs. Ramesh Chandra Goyal (D) Through LRs reported in (2015)
3 SCC 525 has held that District Judge was not justified in reversing the
decree of Trial Court on such technicalities, which did not in any
manner affects the merits of the case. Section 99 of the CPC provides
that a judgment cannot be reversed on the technicalities.
11.6) Reference may be had to K. P. Ranga Rao Vs. K. V.
Venkatesham and Others reported in (2015) 13 SCC 514, wherein the
Supreme Court considering the judgment of Kiran Singh (Supra) has
held that a judgment cannot be reversed purely on technical grounds,
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unless there is a failure of justice. The relevant paragraphs reads as
under:
"9. In a classic exposition of the law, in Kiran Singh and
Others Vs. Chaman Paswan and Others 1955 SCR 117, after
stating that a defect of jurisdiction strikes at the very authority
of the Court to pass any decree and such a defect cannot be
cured even by consent of parties, the law has been laid down
as follows:
“......The policy underlying Sections 21 and 99 of
the Civil Procedure Code and Section 11 of the Suits
Valuation Act is the same, namely, that when a case had
been tried by a Court on the merits and judgment
rendered, it should not be liable to be reversed purely on
technical grounds, unless it had resulted in failure of
justice, and the policy of the Legislature has been to treat
objections to jurisdiction both territorial and pecuniary
as technical and not open to consideration by an
appellate Court, unless there has been a prejudice on the
merits”.
10. In the present case, we find this statement of law
would apply on all fours. The judgment of the Trial Court has
been decided issue wise, on the merits, after hearing both
parties. The suit has finally been decreed. Consequently this
judgment cannot be reversed purely on technical grounds
unless there is a failure of justice, which we have seen, is
nobody's case."
11.7) Considering the aforesaid proposition of law, this Court is of
the view that the failure to file Authorization Letter by the person, who
filed the suit on behalf of the plaintiff Company, cannot be a ground to
set aside the judgment or remand the matter as the same does not cause
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any prejudice to the opposite side and there is no case of failure of
justice. Consequently, the issue is decided accordingly.
11.8) It is also objected by the appellants that seller Rahul Sharma
could have deposed on behalf of the plaintiff Company. Counsel for the
seller relied upon the judgment delivered by the Supreme Court in the
matter of Janki Vashdeo Bhojwani (Supra), the judgment of Bombay
High Court in the matter of Uttamram Vithaldas (Supra) and Gujarat
High Court in the Ajay Kiritakant Ghelani (Supra).
11.9) These judgments are not helpful to the appellants as the
Supreme Court in the matter of Janki Vashdeo Bhojwani (Supra) has
held that a Power of Attorney holder can file a suit on behalf of the
plaintiff, but cannot appear in the capacity of the plaintiff. In the case in
hand, the plaintiff is a registered Company and all the transactions were
done by Rahul Sharma on behalf of the plaintiff Company, therefore, he
was the best person to appear on behalf of the plaintiff Company and
depose in the Court. He has not deposed more than his personal
knowledge, therefore, the judgment delivered in the matter of Janki
Vashdeo Bhojwani (Supra) is not helpful to the appellants.
QUESTION 'C':
12) The subsequent purchaser raised an objection that the plaintiff
has not pleaded in the suit that the plaintiff was ready and willing to
perform the contract and therefore, in the absence of pleading and proof
on behalf of the plaintiff that plaintiff is ready and willing to perform the
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contract, no decree for specific performance of contract can be granted
as Section 16(c) of the Specific Relief Act, 1963 specifically requires the
same.
12.1) Mr. A. K. Sethi, learned Senior Advocate relied on the
judgments delivered by the Supreme Court in the matter of J. Samuel
(Supra) and Abdul Khader Rowther (Supra) and the judgment delivered
by co-ordinate Bench of this Court in the matter of Shubh Laxmi Grih
Nirman Sahakari Sanstha Maryadit (Supra), the judgment
of Chhattisgarh High Court in the matter of Ajit Singh (Supra) and
submits that in the absence of specific pleading of readiness and
willingness, no decree of specific performance of contract could be
passed.
12.2) This specific objection of Mr. A. K. Sethi, learned Advocate
was replied by Mr. Yogesh Kumar Mittal, learned Advocate appearing
on behalf of the plaintiff. He submits that after the amendment in Section
16(c) of the Specific Relief Act, 1963, the word 'pleading' has been
omitted, therefore, it is not essential to plead the readiness and
willingness and the same will be judged by the Court from the facts and
circumstances of the case and conduct of the parties. He submits that
judgment relied by Mr. A. K. Sethi, Senior Advocate have not dealt with
amended provision of Specific Relief Act and are of prior to the
amendment, thus not applicable to the case in hand.
12.3) Mr. Mittal submits that after amendment it is not essential to
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plead the readiness and willingness. The plaintiff has proved the
readiness and willingness from the evidence produced on record,
therefore, the Trial Court has not committed any error in passing the
decree of specific performance of contract.
12.4) By way of amendment, the provision of Section 10 and 16
of the Specific Relief Act have been amended. Now as per the amended
provision of Section 10 the relief of specific performance is not a relief
of discretion and amended provision of Section 16 have omitted the
requirement to aver the readiness and willingness. Legislature has
intentionally omitted the word 'aver' from Section 16(c) and the present
suit was filed after amendment, therefore, if the readiness and
willingness has not been pleaded in clear words, the relief of specific
performance cannot be denied to the plaintiff.
12.5) By evidence the plaintiff has proved that the plaintiff was
ready and willing to get execute the sale deed in its favour as the
plaintiff has paid an amount of Rs. 1,58,11,469/- to the defendants in
furtherance of the agreement. The notice was issued immediately. The
defendants were intimated to execute the sale deed after receipt of
balance sale consideration and the suit was also filed without any delay
within limitation.
12.6) The Supreme Court in a recent judgment delivered in the
matter of A. Shahul Hameed Vs. N. Malligarjuna and Ors. reported
in 2026 SCC OnLine SC 969 has held that the readiness and willingness
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of the purchaser is to be gathered from the entirety of facts and
circumstances of the case, including the overall conduct of the parties
prior and subsequent to the filing of the suit. The relevant paragraphs of
this judgment reads as under:
"17. Insofar as the second issue regarding readiness and
willingness under Section 16(c) SPA 1963 is concerned, we
find it difficult to sustain the findings returned by the First
Appellate Court and as affirmed by the High Court vide the
impugned judgment. It is trite law that in order to obtain a
decree for specific performance, the plaintiff must aver and
prove that he was always ‘ready and willing’ to perform the
terms of the contract which are to be performed by him. Such
readiness and willingness of the plaintiff is to be gathered
from the entirety of facts and circumstances of the case,
including the overall conduct of the parties prior and
subsequent to the filing of the suit. [See: Syed Dastagir v.
T.R. Gopalakrishna Setty13; Sughar Singh v. Hari Singh14;
and Janardan Das v. Durga Prasad Agarwalla, (2024) 19 SCC
276]
17.1. In C.S. Venkatesh v. A.S.C. Murthy [(2020) 3 SCC
280 : (2020) 2 SCC (Civ) 90], this Court, on
consideration of various decisions, culled out what is
implied by the words ‘ready and willing’. It was held:
“16. The words “ready and willing” imply that the
plaintiff was prepared to carry out those parts of the
contract to their logical end so far as they depend
upon his performance. The continuous readiness
and willingness on the part of the plaintiff is a
condition precedent to grant the relief of
performance. If the plaintiff fails to either aver or
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prove the same, he must fail. To adjudge whether
the plaintiff is ready and willing to perform his part
of contract, the court must take into consideration
the conduct of the plaintiff prior, and subsequent to
the filing of the suit along with other attending
circumstances. The amount which he has to pay the
defendant must be of necessity to be proved to be
available. Right from the date of the execution of
the contract till the date of decree, he must prove
that he is ready and willing to perform his part of
the contract. The court may infer from the facts and
circumstances whether the plaintiff was ready and
was always ready to perform his contract.
17. In N.P. Thirugnanam v. R. Jagan Mohan Rao
[N.P. Thirugnanam v. R. Jagan Mohan Rao, (1995)
5 SCC 115], it was held that continuous readiness
and willingness on the part of the plaintiff is a
condition precedent to grant of the relief of specific
performance. This circumstance is material and
relevant and is required to be considered by the
court while granting or refusing to grant the relief.
If the plaintiff fails to either aver or prove the same,
he must fail. To adjudge whether the plaintiff is
ready and willing to perform his part of the
contract, the court must take into consideration the
conduct of the plaintiff prior to and subsequent to
the filing of the suit along with other attending
circumstances. The amount of consideration which
he has to pay to the defendant must necessarily be
proved to be available.
18. In Pushparani S. Sundaram v. Pauline
Manomani James [Pushparani S. Sundaram v.
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Pauline Manomani James, (2002) 9 SCC 582], this
Court has held that inference of readiness and
willingness could be drawn from the conduct of the
plaintiff and the totality of circumstances in a
particular case. It was held thus: (SCC p. 584, para
5)
“5. … So far these being a plea that they were
ready and willing to perform their part of the
contract is there in the pleading, we have no
hesitation to conclude, that this by itself is not
sufficient to hold that the appellants were
ready and willing in terms of Section 16(c) of
the Specific Relief Act. This requires not only
such plea but also proof of the same. Now
examining the first of the two circumstances,
how could mere filing of this suit, after
exemption was granted be a circumstance
about willingness or readiness of the plaintiff.
This at the most could be the desire of the
plaintiff to have this property. It may be for
such a desire this suit was filed raising such a
plea. But Section 16(c) of the said Act makes
it clear that mere plea is not sufficient, it has
to be proved.””
17.2. In Madhukar Nivrutti Jagtap v. Pramilabai
Chandulal Parandekar [(2020) 15 SCC 731], this Court
held that ‘readiness and willingness’ of the plaintiff to
perform his part of the contract has to be examined with
reference to all the facts and circumstances and held as
under:
“13. When the agreements in question were for the
sale of suit property, the plaintiffs were entitled to
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take up the action seeking specific performance.
However, in order to succeed in their claim, the
plaintiffs were required to aver and prove that they
were always ready and willing to perform their part
of the contract. …
… … …
13.2. The question as to whether the plaintiff
seeking specific performance has been ready and
willing to perform his part of the contract is
required to be examined with reference to all the
facts and the surrounding factors of the given case.
The requirement is not that the plaintiff should
continuously approach the defendant with payment
or make incessant requests for performance. For the
relief of specific performance, which is essentially
a species of equity but has got statutory recognition
in terms of the Specific Relief Act, 1963 [Its
forerunner being the Specific Relief Act, 1877.], the
plaintiff must be found standing with the contract
and the plaintiff's conduct should not be carrying
any such blameworthiness so as to be considered
inequitable. The requirement of readiness and
willingness of the plaintiff is not theoretical in
nature but is essentially a question of fact, which
needs to be determined with reference to the
pleadings and evidence of parties as also to all the
material circumstances having bearing on the
conduct of parties, the plaintiff in particular. …
… … …
13.5. … when the plaintiffs had the limitation of
three years for filing the suit for specific
performance, it cannot be said that during the
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aforesaid period, the plaintiffs were required to
show overt act by them in furtherance of the
agreement in question. … In Pushparani S.
Sundaram [Pushparani S. Sundaram v. Pauline
Manomani James, (2002) 9 SCC 582], the basic
requirements of Section 16 of the 1963 Act were
reiterated. In contrast to what is suggested on
behalf of the appellants, we may point out that
recently, in R. Lakshmikantham v. Devaraji [R.
Lakshmikantham v. Devaraji, (2019) 8 SCC 62],
this Court has again explained that when the suit
for specific performance is filed within the period
of limitation, delay cannot be put against the
plaintiff. This Court has said: (SCC p. 66, para 11)
“11. … In the aforesaid circumstances, the
High Court was also incorrect in putting a
short delay in filing the suit against the
plaintiff to state that he was not ready and
willing. In India, it is well settled that the rule
of equity that exists in England, does not
apply, and so long as a suit for specific
performance is filed within the period of
limitation, delay cannot be put against the
plaintiff — See Mademsetty Satyanarayana v.
G. Yelloji Rao [Mademsetty Satyanarayana v.
G. Yelloji Rao, 1964 SCC OnLine SC 33 :
AIR 1965 SC 1405] (para 7) which reads as
under: (AIR p. 1409)
‘7. Mr Lakshmaiah cited a long catena of
English decisions to define the scope of
a court's discretion. Before referring to
them, it is necessary to know the
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fundamental difference between the two
systems—English and Indian—qua the
relief of specific performance. In
England the relief of specific
performance pertains to the domain of
equity; in India, to that of statutory law.
In England there is no period of
limitation for instituting a suit for the
said relief and, therefore, mere delay—
the time lag depending upon
circumstances—may itself be sufficient
to refuse the relief; but, in India mere
delay cannot be a ground for refusing the
said relief, for the statute prescribes the
period of limitation. If the suit is in time,
delay is sanctioned by law; if it is beyond
time, the suit will be dismissed as barred
by time; in either case, no question of
equity arises.’””
(emphasis supplied)
18. In the present case, the plaintiff had specifically
pleaded that he was always ready and willing to perform his
part of the contract. The principal defence set up by the
defendant(s) throughout was not that the plaintiff lacked
readiness and willingness, but rather that the agreement itself
was merely a nominal/security agreement executed in relation
to another transaction involving Bangalore Buyers. Once such
a defence has concurrently been held to be improbable by the
Trial Court and First Appellate Court, there appears no logical
reason to hold that the plaintiff lacked readiness and
willingness to perform its part under the contract, particularly
when a substantial amount of Rs. 9,00,000/-, out of the total
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consideration of Rs. 9,30,000/- already stood paid by him.
Only a nominal amount of Rs. 30,000/- was left, which was
payable at the time of execution of the sale deed. If the
plaintiff was unwilling to perform the contract, he would not
have paid nearly 93% of the sale consideration.
19. Merely because the legal notice came to be issued
after expiry of four months from the stipulated period
mentioned in the agreement, the same by itself cannot lead to
an inference that the plaintiff was not ready and willing to
perform the contract, especially when the suit itself was
instituted well within the prescribed period of limitation. The
readiness and willingness of the plaintiff must be assessed in
light of the overall conduct of the parties and the attending
circumstances of the particular case.
20. The plaintiff, in the present, has consistently pleaded
and deposed that he approached the defendant(s) within the
stipulated period for completion of the transaction, however,
they sought further time. When the plaintiff again approached
the defendant(s) in December 2010, they became evasive and
demanded additional money. It was only thereafter that the
plaintiff issued a legal notice dated 01.02.2011 calling upon
the defendant(s) to execute the sale deed upon receipt of the
balance consideration. Thus, the legal notice was issued soon
after the defendant(s) refused to honour their part of the
agreement. Such conduct clearly demonstrates continuous
willingness of the plaintiff to perform his part of the contract.
21. It is also pertinent to note that despite admittedly
receiving the legal notice, the defendant(s) failed to issue any
reply denying the agreement or disputing the assertions made
by the plaintiff therein. An adverse inference, therefore, arises
against the defendant(s), particularly when the defence sought
to be raised appears to be an afterthought. In view of the
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above discussion, we are of the considered opinion that the
plaintiff has sufficiently established continuous readiness and
willingness within the meaning of Section 16(c) SPA 1963."
12.7) Considering the legal position on the issue of readiness and
willingness and considering the evidence available on record as well as
conduct of the parties, in view of this Court, the Trial Court has not
committed any error in deciding the issue of readiness and willingness in
favour of the plaintiff. The plaintiff entered into agreement and
thereafter, paid substantial amount and even before expiry of the total
period stipulated for payment of the sale consideration, had shown its
intention by issuing a notice to the defendants demanding execution of
the sale deed in its favour and in that way has proved the readiness and
willingness.
12.8) On the contrary, the conduct of the defendants are highly
objectionable. They entered into agreement, obtained an amount of
Rs. 1,58,11,469/- through bank transaction, thereafter, filed the written
statement of denial of the execution of the agreement, receipt of the
amount and after filing the civil suit by the plaintiff executed the sale
deed in favour of a third person.
12.9) In view of the above facts, the plaintiff has rightly been held
entitled for the decree of specific performance of contract by the Trial
Court.
QUESTION 'D':
13) As discussed hereinabove, the plaintiff was entitled for decree
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of specific performance of the contract. During the pendency of the suit
the seller transferred the lands to the subsequent purchaser by the
registered sale deed dated 13/04/2023. Though the subsequent
purchasers remain ex parte before the Trial Court, but the subsequent
purchasers have challenged the judgment and decree passed by the Trial
Court in First Appeal and as per the provisions of Section 96(2) of the
CPC they are entitled to challenge the decree to the extent that plaintiff
failed to prove his case and no decree could be granted in favour of the
plaintiff. The sale deed executed by the sellers in favour of the
subsequent purchasers have been declared void and ineffective to the
rights of the plaintiff by the Trial Court.
13.1) Learned Senior Advocate appearing on behalf of the
purchasers submits that the subsequent purchasers are the bona
fide purchasers and purchased the property for consideration without
knowledge of the pendency of the suit, therefore, their rights to be
protected. In this regard, evidence available on record are required to be
considered.
13.2) The first point, which is not in favour of the subsequent
purchasers is that the sellers entered in to an agreement with the plaintiff
for total sale consideration of Rs. 3,71,46,900/-, whereas they executed
the sale deed in favour of the subsequent purchasers for a lessor amount
of Rs. 3,18,00,000/-, meaning thereby, the subsequent purchasers
purchased the property for a lessor consideration.
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13.3) In the cross-examination Nandkishore Patel (DW-1) has
accepted that the subsequent purchaser Shri Sai Samarth Buildcon has
not paid the entire sale consideration to the sellers, even after the
execution of the sale deed (Ex.-P/6) by the sellers and the sellers have
filed the suit for cancellation of the sale deed executed by the sellers in
favour of the subsequent purchasers. When this suggestion was put to
him during the course of cross-examination that whether, the subsequent
purchaser withheld the amount of sale consideration upon the allegation
that the sellers did not disclose them the fact of pendency of the subject
suit, he denied the suggestion and voluntarily stated that the subsequent
purchasers were having the knowledge of the transaction with the
plaintiff. In the cross-examination he further stated that possession of the
suit lands have not been delivered to the subsequent purchasers. Even in
the appeal, it is argued on behalf of the original sellers that they are still
in possession.
13.4) A subsequent purchaser can claim the plea of bona
fide purchaser in accordance with Section 19(b) of the Specific Relief
Act, but for the purpose of claiming the status of the bona
fide purchaser, it is essential to prove that the transferee has purchased
the property for value and paid the money in good faith and without
notice of the original contract. In the case in hand, Nandkishore Patel
(DW-1) in his cross-examination admitted that the subsequent purchaser
has not paid the consideration despite execution of the sale deed,
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therefore, he has filed a suit for cancellation of sale deed, possession is
with the seller and the subsequent purchaser was having knowledge in
respect of the transaction with plaintiff.
13.5) In view of the above, this Court is of the considered view
that the subsequent purchasers are not bona fide purchasers and cannot
claim the status of bona fide purchaser. Even otherwise the theory
o f bona fide purchaser is not applicable in a case of pendente
lite transferee and provisions of Section 52 of the Transfer of Property
Act, 1882 apply in the said situation.
13.6) The Supreme Court in a recent judgment delivered in the
matter of Alka Shrirang Chavan (Supra) has held that the moment a suit
or proceeding is instituted by a party to the contract whereafter there is
transfer of the suit property, Section 19(b) of the Specific Relief Act
would have to give way to Section 52 of the Transfer of Property Act, in
which event the doctrine of lis pendens would come into force,
therefore, the Trial Court has not committed any error in declaring the
sale deed executed in favour of the subsequent purchasers as void and
not binding on the plaintiff.
13.7) The subsequent purchasers are bound by the judgment and
decree passed in the suit and they cannot take any benefit of their own
wrong. Section 52 of the Transfer of Property Act provides that during
the pendency of any proceeding or suit, if any property is transferred by
any party to the suit, the transferee will be bound by the judgment of the
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suit.
13.8) The Trial Court has passed the decree for execution of the
sale deed by original defendants No. 1 to 3 in favour of the plaintiff,
whereas in a case of pendente lite transfer, the proper course should be
the execution of the sale deed in favour of the plaintiff by original sellers
as well as the subsequent purchasers as held by three Judges' Bench of
the Supreme Court in the matter of Lala Durga Prasad and Another Vs.
Lala Deep Chand and Others reported in (1953) 2 SCC 509, wherein the
Supreme Court after considering the provisions of law has held that the
subsequent transferee steps in the shoes of the original defendants, and is
also liable to execute the sale deed and honour the decree of specific
performance of contract in favour of the plaintiff. The relevant part of
the judgment reads as under:
"37. The practice of the courts in India has not been
uniform and three distinct lines of thought emerge. (We are of
course confining our attention to a Purchaser's suit for specific
performance). According to one point of view, the proper
form of decree is to declare the subsequent purchase void as
against the plaintiff and direct conveyance by the vendor
alone. A second considers that both vendor and vendee should
join, while a third would limit execution of the conveyance to
the subsequent purchaser.
38. The only statutory provisions which bear on this
point are section 91 of the Indian Trusts Act, 1882, section 3
of the Specific Relief Act, 1877, illustration (g), and section
27 of that Act, and section 40 of the Transfer of Property Act.
39. Section 91 of the Trusts Act, does not make the
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subsequent purchaser with notice a trustee properly so called
but saddles him with an obligation in the nature of a trust
(because of section 80) and directs that he must hold the
property for the benefit of the prior "contractor", if we may so
describe the plaintiff,
"to the extent necessary to give effect to the contract."
Section 3 illustration (g) of the Specific Relief Act makes him
a trustee for the plaintiff but only for 'the purposes of that Act.
Section 40 of the Transfer of Property Act enacts that this
obligation can be enforced against a subsequent transferee
with notice but not against one who holds for consideration
and without notice. Section 27 of the Specific Relief Act does
not carry the matter any further. All it says is that specific
performance may be enforced against
" 27.(a) either party thereto;
(b)any other person claiming under him by a title arising
subsequently to the contract, except a transferee for
value who has paid his money in good faith and without
notice of the original contract".
None of this helps because none of these provisions directly
relate to the form of the decree. It will there- fore be necessary
to analyse each form in the light of other provisions of law.
40. First, we reach the position that the title to the
property has validly passed from the vendor and resides in the
subsequent transferee. The sale to him is not void but only
voidable at the option of the earlier "contractor". As the title
no longer rests in the vendor it would be illogical from a
conveyancing point of view to compel him to convey to the
plaintiff unless steps are taken to revest the title in him either
by cancellation of the subsequent sale or by reconveyance
from the subsequent purchaser to him. We do not know of any
case in which a reconveyance. to the vendor was ordered but
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Sulaiman C. adopted the other course in Kali Charan v. Janak
Deo [AIR 1932 All 694 : 1932 SCC OnLine All 154]. He
directed cancellation of the subsequent sale and conveyance to
the plaintiff by the vendor in accordance with the. contract of
sale of which the plaintiff sought specific performance. But
though this sounds logical the objection to it is that it might
bring in its train complications between the vendor and the
subsequent purchaser. There may be covenants in the deed
between them which it would be inequitable to disturb by
cancellation of their deed. Accordingly, we do not think that
is a desirable solution.
41. We are not enamoured of the next alternative either,
namely, conveyance by the subsequent purchaser alone to the
plaintiff. It is true that would have the effect of vesting the
title to the property in the plaintiff but it might be inequitable
to compel the subsequent transferee to enter into terms and
covenants in the vendor's agreement with the plaintiff to
which he would never have agreed had he been a free agent;
and if the original contract is varied by altering or omitting
such terms the court will be remaking the contract, a thing it
has no power to do; and in any case it will no longer be
specifically enforcing the original contract but another and
different one.
42. In our opinion, the proper form of decree is to direct
specific performance of the contract between the vendor and
the plaintiff and direct the subsequent transferee to join in the
conveyance so as to pass on the title which resides in him to
the plaintiff. He does not join in any special covenants made
between the plaintiff and his vendor; all he does is to pass on
his title to the plaintiff. This was the course followed by the
Calcutta High Court in Kafiladdin v. Samiraddin [AIR 1931
Cal 67 : 1930 SCC OnLine All 154], and appears to be the
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English practice. See Fry on Specific Performance, 6th
edition, page 90, Paragraph 207; also Potter v. Sanders
[(1846) 6 Hare 1 : 67 ER 1057]. We direct accordingly."
13.9) The ratio decided by the Supreme Court in the matter of
Lala Durga Prasad (Supra) has been reiterated by the Supreme Court
recently in a judgment delivered in the matter of Maharaj Singh and
Others Vs. Karan Singh (Dead) Through LRs and Others reported
in (2024) 8 SCC 83, wherein the Supreme Court has held that the plea
of bona fide purchase by subsequent purchaser is impermissible and the
proper relief in such case is that buyer under the prior agreement to sell
may claim decree of specific performance against such subsequent
purchasers also, rather then cancellation of the subsequent sale deeds.
The relevant para reads as under:
"20. Now, we deal with another argument that the
plaintiffs ought to have prayed in the suit to cancel the
subsequent sale deeds executed by the first defendant. On this
aspect, the law has been laid down by a Bench of three
Hon’ble Judges of this Court in the case of Lala Durga Prasad
& Ors. v. Lala Deep Chand & Ors.[(1953) 2 SCC 509],.
Paragraphs 40 to 42 of the said decision read thus: (SCC p.
532)
“40. First, we reach the position that the title to the
property has validly passed from the vendor and resides
in the subsequent transferee. The sale to him is not void
but only voidable at the option of the earlier
“contractor”. As the title no longer rests in the vendor it
would be illogical from a conveyancing point of view to
compel him to convey to the plaintiff unless steps are
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taken to revest the title in him either by cancellation of
the subsequent sale or by reconveyance from the
subsequent purchaser to him. We do not know of any
case in which a reconveyance to the vendor was ordered
but Sulaiman, C.J. adopted the other course in Kali
Charan Singh v. Janak Deo Singh [Kali Charan Singh v.
Janak Deo Singh, AIR 1932 All 694 : 1932 SCC OnLine
All 154]. He directed cancellation of the subsequent sale
and conveyance to the plaintiff by the vendor in
accordance with the contract of sale of which the
plaintiff sought specific performance. But though this
sounds logical the objection to it is that it might bring in
its train complications between the vendor and the
subsequent purchaser. There may be covenants in the
deed between them which it would be inequitable to
disturb by cancellation of their deed. Accordingly, we do
not think that is a desirable solution.
41. We are not enamoured of the next alternative
either, namely, conveyance by the subsequent purchaser
alone to the plaintiff. It is true that would have the effect
of vesting the title to the property in the plaintiff but it
might be inequitable to compel the subsequent transferee
to enter into terms and covenants in the vendor's
agreement with the plaintiff to which he would never
have agreed had he been a free agent; and if the original
contract is varied by altering or omitting such terms the
court will be remaking the contract, a thing it has no
power to do; and in any case it will no longer be
specifically enforcing the original contract but another
and different one.
42. In our opinion, the proper form of decree is to
direct specific performance of the contract between the
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vendor and the plaintiff and direct the subsequent
transferee to join in the conveyance so as to pass on the
title which resides in him to the plaintiff. He does not
join in any special covenants made between the plaintiff
and his vendor; all he does is to pass on his title to the
plaintiff. This was the course followed by the Calcutta
High Court in Kafiladdin v. Samiraddin [Kafiladdin v.
Samiraddin, AIR 1931 Cal 67 : 1930 SCC OnLine Cal
46] and appears to be the English practice. See Fry on
Specific Performance, 6th Edn., p.90, Para207;also
Potter v. Sanders [Potter v. Sa nders, (1846) 6 Hare 1 :
67 ER 1057]. We direct accordingly.”
(emphasis added)
21. Reliance is placed by the appellants on the decision
of this Court in the case of B. Vijaya Bharathi3. In paragraph
17 of the said decision, this Court held thus:
“17. It must also be noted that though aware of two
conveyances of the same property, the plaintiff did not
ask for their cancellation. This again, would stand in the
way of a decree of specific performance for unless the
sale made by Defendant 1 to Defendant 2, and thereafter
by Defendant 2 to Defendant 3 are set aside, no decree
for specific performance could possibly follow. While
Mr Rao may be right in stating that mere delay without
more would not disentitle his client to the relief of
specific performance, for the reasons stated above, we
find that this is not such a case. The High Court was
clearly right in finding that the bar of Section 16(c) was
squarely attracted on the facts of the present case, and
that therefore, the fact that Defendants 2 and 3 may not
be bona fide purchasers would not come in the way of
stating that such suit must be dismissed at the threshold
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because of lack of readiness and willingness, which is a
basic condition for the grant of specific performance.”
(emphasis added)
22. A bench of two Hon’ble Judges has rendered this
decision. Unfortunately, the attention of the Bench was not
invited to binding precedent in the form of a decision of a
larger bench in the case of Lala Durga Prasad & Ors.4. Hence,
the decision in the case of B. Vijaya Bharathi3 is not a binding
precedent. Therefore, there was no requirement to make a
prayer in the plaint for cancellation or setting aside the
subsequent sale deeds.
23. Clause (a) to (c) of Section 19 of the Specific Relief
Act read thus:
“19. Relief against parties and persons claiming under
them by subsequent title.— Except as otherwise
provided by this Chapter, specific performance of a
contract may be enforced against—
(a) either party thereto;
(b) any other person claiming under him by a title
arising subsequently to the contract, except a
transferee for value who has paid his money in
good faith and without notice of the original
contract;
(c) any person claiming under a title which, though
prior to the contract and known to the plaintiff,
might have been displaced by the defendant;”
(emphasis added)
24. In view of clause (b) of Section 19, the defendants
who are claiming under the sale deeds executed after the
execution of the suit agreement can be subjected to a decree
of specific performance as the suit agreement can be enforced
specifically against such defendants unless they are bona-fide
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purchasers without the notice of the original contract. When,
in a given case, the defendants, who are subsequent
purchasers, fail to prove that they entered into the sale deed in
good faith and without notice of the suit agreement, in view of
Section 19(b), a decree for specific performance can be passed
against such defendants. Therefore, in such a case where
Section 19(b) is applicable, under the decree of specific
performance, the subsequent purchasers can be directed to
execute the sale deed along with the original vendor. There is
no necessity to pray for the cancellation of the subsequent sale
deeds."
13.10) In view of the above, the Trial Court has not committed
any error in passing the decree of specific performance of contract,
delivery of possession and declaration, however, the decree of specific
performance of contract is required to be modified to the extent as held
by the Supreme Court in the matter of Maharaj Singh (Supra).
CONCLUSION:
14) In the above prospectus, this Court is of the view that the
judgment and decree passed by the Trial Court are based on due
appreciation of evidence and the Trial court has applied provisions of
law correctly and no interference is required in the judgment and decree
passed by the Trial Court.
15) Consequently, both the appeals failed and are hereby
dismissed. No order as to costs. The judgment and decree passed by the
Trial Court are affirmed and slightly modified to the following extent:
(a) The original defendants No. 1 to 3 and 5 and 6 shall
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execute and register the sale deed of the suit lands in favour of the
plaintiff after receipt of the balance sale consideration by defendant
Nos. 1 to 3 from the plaintiff;
(b) The defendants No. 1 to 3 and 5 and 6, whosoever are
in possession, shall deliver the vacant possession of the suit lands
to the plaintiff after execution of the registered sale deed;
(c) The defendants Nos. 1 to 3 and 5 and 6 shall not
interfere in the possession of the plaintiff themselves or through
anyone else after delivery of possession ; and
(d) The sale deed executed by defendant Nos. 1 to 3 in
favour of the defendant Nos. 5 and 6 is ineffective and not binding
on the plaintiff.
16) Decree be drawn accordingly. Record of the Trial Court be
returned along with copy of the judgment and decree.
17) Let a copy of this judgment be kept in the record of connected
appeal also.
(VINAY SARAF)
JUDGE
Tej
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