Case Note & Summary
The dispute arose from an agreement to sell dated 17.08.1990 executed by defendant no. 1 (Janraj Singh) in favour of the plaintiff (Daljit Singh) for sale of 79 kanals 9 marlas of land at Rs. 80,000 per acre, with earnest money of Rs. 40,000 paid. The balance consideration of Rs. 7,54,000 was to be paid at the time of execution and registration of the sale deed on or before 30.11.1992. The plaintiff claimed he remained present before the Sub-Registrar on the stipulated date with the balance amount, but defendant no. 1 failed to appear. The plaintiff filed a suit for specific performance on 24.12.1992. During the pendency of the suit, defendant no. 1 executed a registered sale deed in favour of defendant no. 2 (Shingara Singh) on 08.01.1993 for a lesser consideration of Rs. 6,45,937.50. Defendant no. 2 was impleaded and claimed to be a bona fide purchaser without notice. The Trial Court decreed the suit partially, granting only the alternative relief of recovery of Rs. 40,000 with interest, but denied specific performance on the ground that defendant no. 2 was a bona fide purchaser and defendant no. 1 had no title left. The First Appellate Court affirmed the decree, additionally holding that the agreement was a result of fraud and collusion. The High Court, in second appeal, reversed the concurrent findings and decreed the suit for specific performance, holding that the sale deed in favour of defendant no. 2 was hit by the doctrine of lis pendens and that defendant no. 2 was not a bona fide purchaser. The Supreme Court upheld the High Court's decision, finding that the First Appellate Court erred in recording a finding on fraud and collusion without cross-objections by the defendants, and that the doctrine of lis pendens clearly applied as the sale deed was executed after the suit was filed. The Court allowed the appeal of defendant no. 2 but set aside the impugned judgment of the High Court only to the extent of the finding on lis pendens, and remanded the matter to the High Court for fresh consideration on the issue of lis pendens and bona fide purchaser.
Headnote
A) Civil Procedure - Cross-objections by Respondent - Order 41 Rule 22 CPC - A respondent who does not challenge a decree by way of cross-appeal or cross-objections cannot attack findings adverse to him when the decree is entirely in his favour - The First Appellate Court erred in recording a finding that the agreement was collusive when the defendants did not file cross-objections against the finding on issue no. 5 (Paras 9-10). B) Transfer of Property Act - Doctrine of Lis Pendens - Section 52 - An alienation made during the pendency of a suit is void against the decree-holder, irrespective of whether the alienee had notice of the pending proceedings - The sale deed executed by defendant no. 1 in favour of defendant no. 2 on 08.01.1993, after the suit was filed on 24.12.1992, is hit by lis pendens (Paras 11-12). C) Specific Relief Act - Specific Performance - Readiness and Willingness - The concurrent finding of the Trial Court that the plaintiff was ready and willing to perform his part of the contract was not challenged by the defendants - The High Court rightly decreed specific performance as the plaintiff had proved his readiness and willingness (Paras 5-7).
Issue of Consideration
Whether the High Court was justified in reversing the concurrent findings of the Trial Court and First Appellate Court and decreeing the suit for specific performance by applying the doctrine of lis pendens, and whether the First Appellate Court could record a finding on fraud and collusion in absence of cross-objections by the defendants.
Final Decision
The Supreme Court allowed the appeal, set aside the impugned judgment of the High Court, and remanded the matter to the High Court for fresh consideration on the issue of lis pendens and bona fide purchaser.
Law Points
- Doctrine of lis pendens
- Section 52 of Transfer of Property Act
- 1882
- Order 41 Rule 22 CPC
- Cross-objections by respondent
- Bona fide purchaser without notice
- Specific performance of contract
- Readiness and willingness of plaintiff
