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.

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.