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Ganga Charan Vs. Bans Bahadur Singh and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 317 of 1971
Judge
Reported inAIR1975All25
ActsTransfer of Property Act, 1882 - Sections 52; Specific Relief Act, 1877 - Sections 27; Specific Relief Act, 1963 - Sections 19
AppellantGanga Charan
RespondentBans Bahadur Singh and anr.
Appellant AdvocateMohd. Hussain, Adv.
Respondent AdvocateP.C. Misra and ;B.A. Naqvi, Advs.
DispositionAppeal dismissed
Excerpt:
.....of having notice of the suit as well as agreement had got a sale deed executed in his favour from girja baksh singh on 27-1-1968. he was, therefore, impleaded and a relief was claimed that he may be asked to execute the sale deed along with girja baksh singh in his favour. --except as otherwise provided by this chapter, specific performance of a contract may be enforced against--(a) .(b) any other person claiming under him, by a title, arising subsequently to the contract, except a transferee for value who had paid his money in good faith and without notice of the original contract. --except as otherwise provided by this chapter, specific performance of a contract may be enforced against, (a) .(b) any other person claiming under him by a title arising subsequently to the contract,..........outset. the suit was filed by respondent no. 1 bans bahadur singh on the grounds that defendant girja baksh singh, who was respondent no. 2 in this appeal, owned chak no. 30 which included plots nos. 269 and 318. the aforesaid chak was known as ameliya chak no. 30. on 8-1-1965 defendant girja baksh singh entered into an agreement with the plaintiff to sell the aforesaid plots for a sum of rs. 3,100 in favour of the plaintiff. rs. 150 were paid as earnest money and a receipt was duly executed. thereafter, on further demand by girja baksh singh rs. 50 was paid by the plaintiff as further earnest money on 15-2-1965. receipt of the same was also executed by aforesaid girja baksh singh. plaintiff subsequently on several occasions asked girja baksh singh to execute the sale deed and accept.....
Judgment:

S.K. Kaul, J.

1. Facts giving rise to this appeal may be set out at the outset. The suit was filed by respondent No. 1 Bans Bahadur Singh on the grounds that defendant Girja Baksh Singh, who was respondent No. 2 in this appeal, owned Chak No. 30 which included plots Nos. 269 and 318. The aforesaid Chak was known as Ameliya Chak No. 30. On 8-1-1965 defendant Girja Baksh Singh entered into an agreement with the plaintiff to sell the aforesaid plots for a sum of Rs. 3,100 in favour of the plaintiff. Rs. 150 were paid as earnest money and a receipt was duly executed. Thereafter, on further demand by Girja Baksh Singh Rs. 50 was paid by the plaintiff as further earnest money on 15-2-1965. Receipt of the same was also executed by aforesaid Girja Baksh Singh. Plaintiff subsequently on several occasions asked Girja Baksh Singh to execute the sale deed and accept the remaining sale consideration but Girja Baksh Singh went on delaying the matter on one pretext or the other. Ultimately, on 24-12-1967 he flatly refused to execute and register the sale deed as well as to accept the remaining sale consideration. Suit was filed on 8-1-1968 for specific performance by the plaintiff praying that Girja Baksh Singh be ordered to execute sale deed in respect of the plots in question for Rs. 3,100, out of which the plaintiff was willing to pay the balance i.e. Rs. 2,900. It was prayed in the alternative that in case relief for specific performance was disallowed then plaintiff be given a refund of Rs. 200/- by Girja Baksh Singh. Subsequently, the plaint was amended and the present appellant was impleaded as defendant No. 2 on the grounds that he in spite of having notice of the suit as well as agreement had got a sale deed executed in his favour from Girja Baksh Singh on 27-1-1968. He was, therefore, impleaded and a relief was claimed that he may be asked to execute the sale deed along with Girja Baksh Singh in his favour. The suit was contested by the newly added defendant, namely, appellant on the grounds that he was a bona fide purchaser for value without notice. He further pleaded that Girja Baksh Singh had taken a loan from him in February 1964 in connection with marriage of his daughter and had executed a pronote on 5-2-1964 for a sum of Rs. 400. Later on he executed another pro-note on 17-4-1966 for Rs. 1,000. Actually the agreement was in between him and Girja Baksh Singh that Girja Baksh Singh would sell the plots to him as he needed money in connection with his daughter's marriage. Since there was delay in execution of the sale deed Girja Baksh Singh executed an agreement in his favour on 28-10-1966, and ultimately executed sale deed in his favour on 27-1-1968 for Rs. 3,500 and also gave possession to him. On these grounds, the suit of the plaintiff was resisted.

2. The learned Civil Judge, who tried this case, held that there was an agreement to sell between the plaintiff and Girja Baksh Singh and that defendant No. 2 was not a bona fide purchaser for value without notice and that in any case his defence was barred by Section 52 of the Transfer of Property Act. Consequently, he decreed the suit of the plaintiff. An appeal was preferred by Ganga Charan before the learned District Judge but the same was dismissed.

3. Feeling dissatisfied he has now come up in appeal to this Court.

4. Sri S. N. Misra who argued this case on behalf of the appellant urged three points before me. The first point was that Section 52 of the Transfer of Property Act did not apply in this case; secondly that no issue had been framed on the point that the appellant was a bona fide purchaser, for value without notice with the result that his client's case had been prejudiced; and lastly that in any case since the appellant had been ordered to join Girja Baksh Singh in executing the sale deed and since the appellant has paid full consideration to Girja Baksh Singh, Rs. 2,900 if deposited by the plaintiff should be paid to the appellant.

5. Coming to the first submission Sri S. N. Misra argued that the old Specific Relief Act was passed in the year 1877 having received assent of the Governor General on 7th February, 1877. Section 27(b) of the old Act ran thus:--

'Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against--

'(a) ...........

(b) any other person claiming under him, by a title, arising subsequently to the contract, except a transferee for value who had paid his money in good faith and without notice of the original contract.'

6. The new Specific Relief Act came into force in 1963 having received assent of the President on 13th December, 1963. It was published in the Gazette of India, dated 18-1-1964. Section 19(b) of the new Act runs thus:--

'Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against,

(a) ............

(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.'

7. Sri Misra's contention was that there being no distinction in the old Section 27 (b) as compared to the new Section 19(b) the provisions of the Transfer of Property Act if not applicable to old Section 27 (b) could not be applied to the new Section 19(b) of the Specific Relief Act. The argument advanced on these lines was that the Transfer of Property Act was initially passed in the year 1882, meaning thereby that it was a subsequent Act as compared to the old Specific Relief Act of 1877. Section 2 of the Transfer of Property Act was taken help of by the learned counsel for the appellant to show that the provisions which were not repealed by the Transfer of Property Act should be deemed to continue to apply.

8. Section 2 of the Transfer of Property Act reads thus:--

'In the territories to which this Act extends for the time being the enactments specified in the schedule hereto annexed shall be repealed to the extent therein mentioned. But nothing herein contained shall be deemed to affect--

(a) the provisions of any enactment not hereby expressly repealed;

(b) any terms or incidents of any contract or constitution of property which are consistent with the provisions of this Act, and are allowed by the law for the time being in force;

(c) any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any right or liability; or

(d) save as provided by Section 57 and Chapter IV of this Act, any transfer by operation of law, or by, or in execution of, a decree or order of a Court of competent jurisdiction;

And nothing in the second chapter of this Act shall be deemed to affect any rule of Muhammadan Law.'

In the Schedule of this Act, the Acts repealed are noted. What was repealed in Specific Relief Act was the words 'in writing' in Sections 35 and 36. The contention was that since Section 27 of the old Act was not repealed by the Transfer of Property Act and that Act being prior to the Transfer of Property Act, Section 52 of the Transfer of Property Act would have no application to a case of specific performance of contract and as such it was the duty of the two courts below to have come to a conclusion independently of Section 52 of the Transfer of Property Act whether appellant of this case was or was not a bona fide purchaser for value without notice.

9. This argument, however, does not appeal to me. Section 52 of the Transfer of Property Act reads thus:--

'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.'

10. The words 'and in which any right to immovable property is directly and specifically in question' are broad enough to include a suit for specific performance inasmuch as in such suits right to immovable property is directly and specifically in question. There is a consensus of opinion on this point that Section 52 of the Transfer of Property Act would apply to suits for specific performance of the contract.

11. In Gouri Datt Maharaj v. Sukur Mohammad their Lordships of the Privy Council observed at page 149 that:--

'In the opinion of their Lordships there can be no doubt that in suit No. 229 a right to immovable property -- the leasehold on which the cinema was erected-- was, in the words of the section, 'directly and specifically in question' both on the claim for specific performance and alternative claim for the declaration of a charge in respect of the sum advanced. The broad purpose of Section 52 is to maintain the status quo unaffected by the act of any party to the litigation pending its determination. The applicability of the section cannot depend on matters of proof or the strength or weakness of the case on one side or the other in bona fide proceedings. To apply any such test is to misconceive the object of the enactment, and in the view of the Board, the learned Subordinate Judge was in error in this respect in laying stress, as he did, on the fact that the agreement of 8-6-1932, had not been registered. Had the question now under consideration fallen to be determined before the compromise and final decree in suit No. 229 the appellant's mortgage would clearly have been subject to the provision of the section as, whatever course the suit might ultimately have taken, no one could then have said, without prejudging the issue, that 'the mortgage would not affect the decretal rights which the plaintiffs might yet obtain in the proceedings.'

12. In Smt. Vraj Kunwar Bai v. Kunjbiharilal Krishnachandra : AIR1971MP109 the Bench held that 'the doctrine of lis pendens applies to suit for specific performance of contract to execute sale deed in respect of land.'

13. In Pancham Palodar v. Kandhai Palodar : AIR1934All713 Kendall, J. observed that 'Section 52 will cover eases where only an agreement to execute a transfer has been carried out. Hence a lease of property pending a suit for specific performance of an agreement to lease the property is affected by Section 52.'

14. In a Madras case Vedachari v. Narasimha Mudali, 76 Ind Cas 793 (AIR 1924 Mad 307) the Bench clearly held that 'the doctrine of lis pendens applies to suits for specific performance or agreements to sell immovable properties just as much as to suits for possession of the same.'

15. In AIR 1924 Mad 307 similarly the Bench held that 'the doctrine of lis pendens applies as regards suits for specific performance of agreements to sell immovable properties just as much as to suits for possession of immovable properties.''

16. In a Calcutta case Mati Pal v. Preo Nath Mitra, (1866) 13 Cal WN 226 the Bench quoted the case of Hadlev v. The London Bank of Scotland Ltd., (1865) 3 De GJ and Section 63 wherein it was distinctly affirmed by way of general principle that in a suit for specific performance the purchaser pendente lite is bound by the result of the suit. I would also like to quote what Turner, L.J. observed in that judgment.

17. The observation reads as thus:

'I have always understood the rule of the Court to be that if there is a clear valid contract for sale, the Court will not permit the vendor afterwards to transfer the legal estate to a third person, although such third person would be affected by lis pendens. I think this rule well founded in principle for the property is in equity transferred to the purchaser by the contract, the vendor then becomes a trustee for him and cannot be permitted to deal with the estate so as to inconvenience him.'

18. Similarly, in Jahar Lal Bhutra v. Bhupendra Nath Basu, ILR 49 Cal 495 : (AIR 1922 Cal 412 (2)) the Bench observed that 'in a suit against the lessor of immovable property for specific performance, a transfer made after the suit was brought, would not suspend the proceeding or defeat the title under the decree of the Court; that title relates back to the date of the agreement on which the suit is based and the decree cannot be rendered nugatory by intermediate conveyances.'

19. In a Madras case in 45 Mad LJ 825 = (AIR 1924 Mad 307) it was similarly held that 'the doctrine of lis pendens applies to suits for the specific performance of agreements to sell immovable properties'.

20. Similarly in Baskar Mahadev Parsekar v. Shankar Vithal Padnekar, AIR 1924 Bom 467 the same proposition was reiterated.

21. In a Full Bench case of this Court in Mahesh Prasad v. Mundar : AIR1951All141 it was observed at page 51 by Agarwal J. that,: --

'The principle on which the doctrine rests was spoken of by Cranworth, L. C. in the leading case of Bellamy v. Sabine, (1857) 1 De G & J 566 at p. 578 as follows:--

It is not correct to speak of lis pendens as affecting a purchase through the doctrine of notice though undoubtedly the language of the Court often so described its operation. It affects him not because it amounts to a 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 require that the decision of the Court in the suit shall be binding, 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. Section 52 of the Transfer of Property Act was amended by the Transfer of Property Amendment Act, 1923. By that amendment the pendency of the lis has been made to continue till the satisfaction or discharge of the decree. The transfers in the present case in favour of the appellant were either made, or have been, with common consent, assumed to have been made, after the coming into force of the Amending Act.

The transferees will, therefore, be bound by the principle embodied in Section 52, as amended, provided that there was 'a right to immovable property directly and specifically in question in the suit' -- the other conditions of the section having been admittedly fulfilled.'

22. In view of the consistent view practically of all the courts in India as well as the view of the Privy Council I am not prepared to accept this argument that Section 52, Transfer of Property Act would not apply simply because an exception has been made in the Specific Relief Act relating to a person who can be deemed to be a bona fide purchaser for value without notice. I would, therefore, hold that doctrine of lis pendens applies to suits for specific performance and that the defendants transferee cannot take advantage of old Section 27 (b) or new Section 19(b) of the Specific Relief Act nor was there any necessity for the courts below to go into the question whether the transferee during the pendency or a suit is a bona fide purchase for value without notice or not?

23. Having taken this view, I do not think it necessary for me to enter into the second submission made before me as it automatically fails.

24. Coming to the last submission it is clear that the appellant has been ordered to join Girja Baksh Singh in executing sale deed in favour of plaintiff-respondent. The appellant's case was that he had paid entire consideration of Rs. 3,500 to Girja Baksh Singh. There is no controversy between him and Girja Baksh Singh relating to sale consideration of appellant's sale deed. Equity, therefore, demands that instead of Rs. 2,900 being paid to Girja Baksh Singh it should be paid if and when deposited by the plaintiff, to the appellant. To this extent, the judgment of the trial court is modified.

25. As a result, I would dismiss this appeal with costs with the modification noted above.


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