A pendente lite transferee must join the vendor in conveying title under a specific-performance decree.

The plaintiff, Tricone Project India Limited, entered into an agreement dated 17 February 2021 with defendants 1–3 to purchase approximately 4.95 acres of land situated at Village Datoda, District Indore, for a total consideration of ₹3,71,46,900.

The plaintiff paid ₹5,00,000 initially and subsequently paid an aggregate amount of ₹1,58,11,469 through banking channels.

The agreement required the sellers to obtain a bank NOC, remove the mortgage entry, obtain diversion orders, and undertake measurement and demarcation of the land.

The plaintiff alleged that the sellers failed to perform their obligations and, despite receiving substantial part-payment, did not execute the sale deed. A legal notice dated 13 December 2022 was issued, followed by a suit for specific performance, possession, declaration and permanent injunction filed on 16 March 2023.

During the pendency of the suit, the sellers executed a registered sale deed dated 13 April 2023 in favour of Shree Sai Samarth Buildcon, the subsequent purchasers.

The subsequent purchasers were impleaded but remained absent despite substituted service and were proceeded against ex parte.

The Trial Court decreed the suit, directed execution of the sale deed in favour of the plaintiff upon payment of the balance consideration, ordered delivery of possession and declared the subsequent sale deed void and ineffective against the plaintiff’s rights.

The sellers and subsequent purchasers filed separate first appeals under Section 96 CPC.

Whether the Trial Court’s findings regarding execution of the agreement, payment of consideration and breach by the sellers were based on proper appreciation of evidence?

Whether the suit instituted by Rahul Sharma was validly instituted on behalf of the plaintiff-company despite the absence of a formal authorisation letter or board resolution?

Whether the plaintiff proved readiness and willingness to perform its part of the contract as required under Section 16(c) of the Specific Relief Act, 1963, particularly after the 2018 amendment?

Whether the subsequent purchasers could resist the decree as bona fide purchasers and whether the transfer made during the pendency of the suit was affected by the doctrine of lis pendens?

What was the proper form of relief against the subsequent purchasers in view of the transfer pendente lite?

The Court applied Section 16(c) of the Specific Relief Act, 1963, holding that the plaintiff must prove performance, or continuous readiness and willingness to perform, the essential terms of the contract; such readiness and willingness must be assessed from the pleadings, evidence and overall conduct of the parties.

Section 19(b) of the Specific Relief Act permits specific performance against a subsequent transferee unless the transferee proves purchase for value, payment in good faith and absence of notice of the prior contract.

Section 52 of the Transfer of Property Act, 1882 embodies the doctrine of lis pendens: a transfer made during the pendency of litigation concerning immovable property remains subject to the result of the litigation, irrespective of the transferee’s alleged bona fides or notice.

Under Lala Durga Prasad v. Lala Deep Chand, the proper form of decree is ordinarily to direct the original vendor to specifically perform the contract and the subsequent transferee to join in the conveyance so as to pass the title to the plaintiff.

This principle was reaffirmed in Maharaj Singh v. Karan Singh, which also held that cancellation of the subsequent sale deed need not necessarily be separately sought where specific performance is enforceable against the subsequent purchasers.

The Court further relied on Sections 96(2) and 99 CPC, holding that an ex parte decree may be challenged on merits in first appeal, but a decree should not be reversed for a curable procedural defect that does not affect merits or jurisdiction.

The proviso to Section 49 of the Registration Act permits an unregistered agreement to sell to be received as evidence of a contract in a suit for specific performance.

The Court upheld the finding that the agreement was genuine and that substantial consideration had been paid. The plaintiff’s bank records established payment of ₹1,58,11,469, while the sellers’ defence was internally inconsistent: they denied the agreement but also suggested that the plaintiff had failed to pay the balance consideration under it.

Defendant Atmaram, into whose account the payments were made, did not enter the witness box, permitting an adverse inference. The testimony of Rahul Sharma remained consistent, and the sellers failed to rebut the documentary and oral evidence.

The absence of a formal authorisation letter was treated as a curable procedural defect rather than a jurisdictional infirmity.

Rahul Sharma had negotiated and signed the agreement, issued communications, instituted the suit and testified regarding transactions within his personal knowledge. Since the objection was not raised in the written statement, no issue was framed, and no prejudice or failure of justice was shown, the decree could not be disturbed under Sections 99 CPC and the principles in United Bank of India v. Naresh Kumar and Kiran Singh v. Chaman Paswan.

The Court distinguished Janki Vashdeo Bhojwani, observing that Rahul Sharma was not merely a power-of-attorney holder speaking about matters outside his knowledge; he was the person who had conducted the company’s relevant transactions.

On readiness and willingness, the Court held that the plaintiff’s conduct demonstrated a continuing intention to complete the transaction. It had paid a substantial portion of the consideration, issued a notice demanding execution of the sale deed before expiry of the contractual period, and instituted the suit without undue delay.

The amended Section 16(c) requires proof rather than a separately worded averment of readiness and willingness; in any event, the plaintiff’s pleadings, evidence and conduct sufficiently established the statutory requirement.

The sellers’ failure to reply to the legal notice and their subsequent transfer of the property after institution of the suit further supported the plaintiff’s case.

The subsequent purchasers could not claim protection as bona fide purchasers. The sale took place after institution of the suit and was therefore subject to Section 52 of the Transfer of Property Act.

In addition, the evidence indicated that the purchasers had not paid the entire consideration, had not obtained possession, and had knowledge of the prior transaction.

The Court consequently held that the subsequent sale could not defeat the plaintiff’s pre-existing contractual and litigating rights. However, following Lala Durga Prasad and Maharaj Singh, it modified the form of the decree so that both the original sellers and subsequent purchasers would execute and register the sale deed, rather than merely treating the subsequent sale deed as void.

The decree was modified in form: defendants 1–3 and defendants 5–6 were directed jointly to execute and register the sale deed in favour of the plaintiff after receipt of the balance consideration by defendants 1–3; whoever was in possession was directed to deliver vacant possession; all defendants were restrained from interfering with the plaintiff’s possession; and the sale deed executed in favour of the subsequent purchasers was declared ineffective and non-binding against the plaintiff.

No order as to costs was made.