A pendente lite sale obtained through a collusive decree for specific performance cannot defeat a prior agreement holder’s rights.

The Plaintiff (Respondent No. 1) filed a suit for specific performance against Defendant Nos. 1–4 based on an agreement to sell dated 19.05.2006 for a consideration of Rs. 1,75,000/-, having paid an advance of Rs. 50,000/-.

Defendant Nos. 1–4 denied the agreement, alleging fraud by a broker named Venkatappa.

During the pendency of the suit (O.S. No. 64/2014), the Appellant (Defendant No. 5) filed a separate suit (O.S. No. 362/2011) against the owners based on a purportedly prior agreement dated 18.03.2005.

Without impleading the Plaintiff, Defendant No. 5 obtained a compromise decree via Lok Adalat and subsequently secured a sale deed through a Court Commissioner in execution proceedings (E.P. No. 7/2012).

Both the Trial Court and First Appellate Court decreed the Plaintiff's suit, holding the Lok Adalat decree non-binding.

1. Whether the Courts were justified in decreeing specific performance without rendering a finding on the validity of the sale agreement dated 18.03.2005.

Section 52 of the Transfer of Property Act (Lis Pendens).

Specific Relief Act, 1963 regarding the discretionary nature of specific performance.

The court examined whether a pendente lite sale obtained through a collusive decree for specific performance can defeat a prior agreement holder’s rights.

The court scrutinized the sequence of events where Defendant No. 5 obtained a compromise decree without impleading the Plaintiff who had a pending suit.

The High Court upheld the decrees of the Trial Court and First Appellate Court in favor of the Plaintiff.