http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

CASE NO.: Appeal (civil)  6764 of 2001

PETITIONER: Guruswamy Nadar

RESPONDENT: P.Lakshmi Ammal(D) through LRs. & Ors

DATE OF JUDGMENT: 01/05/2008

BENCH: A.K.MATHUR & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T  CIVIL APPEAL NO.6764  OF 2001

A.K. MATHUR, J.

1.      This appeal is  directed against the order dated  19.10.2000  passed by the Division Bench of the Madras  High  Court whereby the Division Bench has dismissed the appeal  affirming the judgment and decree passed by learned Single  Judge. Hence the present appeal.

2.       Brief facts which are necessary for disposal of this  appeal are a suit for specific performance was filed on the  basis of an agreement for sale dated 4.7.1974 under which   the first defendant in the suit had through her husband and  power of attorney holder contracted to sell a house property  in sum of Rs.30,000/-. A sum of Rs.5,000/- was given as  advance and the remaining Rs.25,000/- was to be paid before  31.7.1974. The said amount was not paid by 31.7.1974. The  owner again sold the suit property to the appellant herein  on 5.5.1975 for a sum of Rs.45,000/-  and possession in  question was handed over to the appellant herein. Therefore,  the plaintiff filed the aforesaid suit for enforcement of  the specific performance of contract. The trial court  dismissed the suit holding that the agreement was genuine  but a false story was put up by the defendant/owner that he  signed the agreement under the influence of liquor and it  further held that  the defendant who is appellant before us  purchased the suit property for bona fide consideration.  Therefore, no decree for specific performance could be  passed in favour of the plaintiff & learned trial court  dismissed the suit.  On appeal the learned Single Judge  reversed the judgment and the decree passed by the trial  court and decreed the suit for specific performance.  Aggrieved against the order passed by learned Single Judge,  an appeal was preferred by the second purchaser (the  appellant herein) before Division Bench and that appeal of  the second purchaser was dismissed by the Division Bench by  its order dated 19.10.2000 and hence the present appeal on  grant of leave.  

3.              We have heard learned counsel for the parties and  perused the record. It will be relevant to mention here that  the second purchase by the appellant was on 5.5.1975 i.e.  two days after the filing of the suit for specific  performance on 3.5.1975. Though the applicability of Section  52 of the Transfer of Property Act, 1882 was not considered

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

by the trial court, however, the first appellate court i.e.  learned Single Judge while granting the decree for specific  performance found that the subsequent purchase made by the  appellant- defendant was also bona fide for value and  without notice of the agreement to sell but the said sale  was subordinate to the decree that could be made in the suit  for specific performance which was instituted prior to the  sale  in favour of the second purchaser. The main argument  which was advanced before learned Single Judge was that   Section 19 of the Specific Relief Act, 1963 provides that a  decree for specific performance against a subsequent  purchaser for bona fide who has paid the money in good faith  without notice of the original contract can be enforced as  the same is binding on the vendor as well as against the  whole world. As against this, it was contended by the  respondents that Section 52 of the Transfer of Property Act  which lays down the principle of lis pendens that when a  suit is pending during the pendency of such suit if a sale  is made in favour of other person, then the principle of lis  pendens would be attracted. In support of this proposition a  Full Bench decision of the Allahabad High Court  in Smt. Ram  Peary and others v. Gauri and others [ AIR 1978 All. 318]   as well as a Division Bench judgment of the Madras High  Court  was pressed into service.  Therefore, the question  before us in this case is what is the effect of the lis  pendens on the subsequent sale of the same property by the  owner to the second purchaser. Section 19 of the Specific  Relief Act clearly says subsequent sale can be enforced for  good and sufficient reason but in the present case, there is  no difficulty because the suit was filed on 3.5.1975 for  specific performance of the agreement  and the second sale  took place on 5.5.1975. Therefore, it is the admitted  position that the second sale was definitely after the  filing of the suit in question. Had that not been the  position then we would have evaluated the effect of Section  Section 52 of the Transfer of Property Act. But in the  present case it is more than apparent that the suit was  filed before the second sale of the property. Therefore, the  principle of lis pendens will govern the present case and  the second sale cannot have the overriding effect on the  first sale. 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:                   " 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,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

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  wsere not so, there could be no certainty  that the litigation would ever come to an  end."

Similarly the Privy Council in  Faiyaz Husain Khan v. Munshi  Prag Narain [(1907) 34 Ind App 102]  where the Court lay  stress on the necessity for final adjudication and  observation that otherwise there would be no end to  litigation and justice would be defeated. The Full Bench of  Allahabad High Court further  referred to  the work of Story  on Equity IIIrd Edition,(para 406)  which expounded the  doctrine of lis pendens in the terms as follows:

               " 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." Normally, as a public policy once a suit has been filed  pertaining to any subject matter of the property, in order  to put an end to such kind of litigation, the principle of  lis pendens has been evolved so that the litigation may  finally terminate without intervention of a third party.   This is because of public policy otherwise no litigation  will come to an end. Therefore, in order to discourage that  same subject matter of property being subjected to  subsequent sale to a third person, this kind of transaction  is to be checked. Otherwise, litigation will never come to  an end.

4.              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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

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. So far as the present  case is concerned, it is apparent that the appellant who is  a subsequent purchaser of the same property, he has  purchased in good faith but the principle of lis pendens  will certainly be applicable to the present case  notwithstanding  the fact that under section 19(b) of the  Specific Relief Act his rights could be protected.  5.              Mr.S.Ganesh, learned senior counsel appearing for  the appellant has tried to persuade us that the plaintiff  did  not prove and plead that he was ready and willing to  perform his part of the contract it is open to the second  purchaser to raise this issue and in support thereof, he  relied on a decision of this Court in Ram Awadh (Dead) by  LRs & Ors. v. Achhaibar Dubey & Anr. [(2000) 2 SCC 428]  wherein their  Lordships  have observed that there is an  obligation imposed by section 16 on the Court not to  grant  specific performance to a plaintiff who has not met the  requirements of clauses (a), (b) and (c) thereof. Their  Lordships further observes that  the Court is not bound to  grant a decree for specific performance  to the plaintiff  who has failed to aver and to prove that he has performed or  has always been ready and willing to perform his part of the  agreement the specific performance whereof he seeks.   Therefore, such plea can be raised by subsequent purchaser  of the property or his legal representatives who were  defendants in the suit. Similarly, in Jugraj Singh & Anr. V.  Labh Singh & Ors. [ (1995) 2 SCC 31], it was also emphasized  that the plea that the plaintiff was to prove that he was   ready and willing to perform his part of the contract. It is  personal to him. The subsequent purchasers  have got only  the right to defend their purchase on the premise that they  have no prior knowledge of the agreement of sale with the  plaintiff. They are bona fide purchasers for valuable  consideration, though they were not necessary parties to the   suit. But in the present case, the second purchaser was a  defendant in the suit and this plea was also considered by  learned Single Judge and it found that there was sufficient  allegation made in the plaint that the plaintiff was ready  and willing to perform his part of the contract. This aspect  was dealt with by learned Single Judge in  its order dated  24.7.1990 and learned Single Judge in paragraph 8 held as  follows:

               " On the first of these  submissions, I find that as against the  definite plea in paragraph 7 of the Plant  that Plaintiff has been and is still

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

ready and is still ready and willingly  specifically  to perform the agreement on  her part of which the 1st Defendant has  had notice. The only plea in the written  statement of the 1st Respondent is " the  allegations in Para 7 of the Plaint that  this Defendant is aware of the contract  is denied as false". Thus,  it  is found  that there is  no denial at all t the  plea that the Plaintiff was ready and  willing to perform her part of the  contract. Likewise, the 2nd Respondent  also has not denied the said plea, in his  written statement. Further, to the  specific averment in para 5 of the Plaint  "by the latter part of July, 1974, the  Plaintiff informed the Defendants of her  readiness to complete the sale", there is  no specific denial at all. There is only  a vague and evasive denial by the 1st  Respondent as follows:                 " The allegation contained in para  5 of the Plaint are frivolous and  denied." Likewise, the 2nd Respondent also  has not specifically denied the above  said averment in the Plaint."

Therefore, from this finding it is more than apparent that  the plaintiff while filed the suit for specific performance  of the contract was ready and willing to perform her part of  the contract. This argument was though not specifically  argued before the Division Bench, the only question which  was argued  was whether the principle of lis pendens will be  applicable or Section 19 of the Specific Relief Act will  have overriding effect to which we have already answered. In  the present case the principle of lis pndens will be  applicable as the second sale has taken place after the  filing of the suit. Therefore, the view taken by the  Division Bench of the High Court is correct and we do not  find any merit in this appeal and the same is accordingly  dismissed with no order as to costs.