Atmaram & Ors. vs Tricon Project India Limited & Ors.

SHORT FACTS OF THE CASE:

ARGUMENTS ON BEHALF OF THE SELLERS:

"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 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."

"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."

ARGUMENTS ON BEHALF OF THE PENDENTE LITE TRANSFEREE:

"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-

(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 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 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."

"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 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 perform his part of the contract and in the absence of such an allegation the suit is not maintainable."

"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 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."

"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 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."

ARGUMENTS ON BEHALF OF THE PLAINTIFF:

"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."

"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."

"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 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

(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 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."

"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."

"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."

"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 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 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."

"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 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, 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 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;

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 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 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 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 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 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 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.

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;

(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.

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 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……..

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……….

"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]."

"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 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 270]." (Emphasis Supplied)

CONSIDERATION:

�. वाद �� िन कष

01.

�या वाद� के प� म� �ितवाद� कमांक 01 लगायत 03 ने �ाम दतौदा तहसील डॉ अ"बेडकर नगर %जला इंदौर म� %(थत *ववा+दत भूिम सव. कमांक 361/4 रकबा 0.568 हे�टेयर, सव. कमांक 361/2 रकबा 0.569 हे�टेयर, सव. कमांक 361/1/2 रकबा 0.101 हे�टेयर एवं सव. कमांक "सा*बत" 361/3 रकबा 0.767 हे�टेयर कुल रकबा 2.005 हे�टेयर का *व�य अनुबंध प3 +दनां+कत 17.02.2021 िन पा+दत कर �ितफल (व5प

		NEUTRAL CITATION NO. 2026:MPHC-IND:25933 50 अि�म धनरािश �ा7 क8 थी ?	FA-513-2025
NEUTRAL CITATION NO. 2026:MPHC-IND:25933 50 FA-513-2025 अि�म धनरािश �ा7 क8 थी ? 02. �या वाद� उ: *व�य अनुबंध प3 के अपने भाग का पालन करने हेतु "सा*बत" त;पर है ? 03. �या �ितवाद� कमांक 01 लगायत 03 =ारा उ: *व�य अनुबंध प3 के "सा*बत" अपने भाग का पालन करने से इंकार +कया गया है ? 04. �या �ितवाद� कमांक 01 लगायत 03 ने उ: *व�य अनुबंध प3 िनर(त "नासा*बत" कर +दया है ? 05. �या �ितवाद� कमांक 01 लगायत 03 ने उ: वाद�(त भूिम �ितवाद� कमांक 05 व 06 को र%ज(टड *वकय प3 +दनां+कत 13.04.2023 के हॉ मा?यम से *व�य कर द� है ? 06. �या �ितवाद� क. 05 व 06 के प� म� िन पा+दत र%ज(टड *वकय प3 +दनां+कत 13.04.2023 वाद� के अिधकार@ के *व5A शूBय एवं िन �भावी हॉ है ? 07. सहायता एवं खच ? िनणय क8 कं+डका 25 क, ख, ग, घ, इ, च के अनुसार वाद प3 (वीकार। 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
				�या वाद� उ: *व�य अनुबंध प3 के अपने भाग का पालन करने हेतु त;पर है ?	"सा*बत"
				�या �ितवाद� कमांक 01 लगायत 03 =ारा उ: *व�य अनुबंध प3 के अपने भाग का पालन करने से इंकार +कया गया है ?	"सा*बत"
				�या �ितवाद� कमांक 01 लगायत 03 ने उ: *व�य अनुबंध प3 िनर(त कर +दया है ?	"नासा*बत"
				�या �ितवाद� कमांक 01 लगायत 03 ने उ: वाद�(त भूिम �ितवाद� कमांक 05 व 06 को र%ज(टड *वकय प3 +दनां+कत 13.04.2023 के मा?यम से *व�य कर द� है ?	हॉ
				�या �ितवाद� क. 05 व 06 के प� म� िन पा+दत र%ज(टड *वकय प3 +दनां+कत 13.04.2023 वाद� के अिधकार@ के *व5A शूBय एवं िन �भावी है ?	हॉ
				सहायता एवं खच ?	िनणय क8 कं+डका 25 क, ख, ग, घ, इ, च के अनुसार वाद प3 (वीकार।

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.

QUESTION 'B':

"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."

QUESTION 'C':

"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 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. 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 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 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 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.’””

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 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 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 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.

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, 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 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,

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:

" 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 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 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."

"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 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 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 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 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."

CONCLUSION: