Shingara Singh vs Daljit Singh

2024 INSC 770 REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5919 OF 2023

SHINGARA SINGH …. APPELLANT

VERSUS

DALJIT SINGH & ANR ...RESPONDENTS

JUDGMENT

PRASHANT KUMAR MISHRA, J.

1. The defendant No. 2 in the suit has preferred this appeal

challenging the judgment and decree passed by the High Court

allowing the appeal preferred by the plaintiff/Daljit Singh to set

aside the judgment and decree of the Trial Court and the First Signature Not Verified Digitally signed by

Appellate Court which concurrently decreed the suit partially Deepak Singh Date: 2024.10.14 16:24:42 IST Reason:

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only for the alternative relief of recovery of Rs. 40,000/- along

with interest while dismissing the suit in respect of specific

performance of the agreement dated 17.08.1990.

2. The facts of the case emerging from the pleadings of the

parties are that plaintiff/Daljit Singh instituted the suit on

24.12.1992 claiming specific performance of the agreement to

sell dated 17.08.1990 in respect of the land measuring 79

Kanals 09 marlas @ of Rs. 80,000/- per acre against the

payment of earnest money of Rs. 40,000/- and the balance

amount of Rs. 7,54,000/- at the time of execution and

registration of the sale deed on or before 30.11.1992.

3. According to the plaintiff, he remained present in the office

of the Sub-Registrar on 30.11.1992 with the balance sale

consideration and all the expenses for stamp papers but

defendant no. 1 did not turn up to perform his part of the

agreement. The plaintiff marked his presence by submitting an

affidavit before the Executive Magistrate. The suit was

preferred within 23 days as stipulated in the agreement.

Defendant no. 1 initially denied the execution of the agreement 3

to sell, much less, receipt of the earnest money with further

averment that the subject land was a Joint Hindu Family

property. During the pendency of the suit, the present

appellant/defendant no. 2/Shingrara Singh was impleaded on

25.01.1993 on the basis that defendant no. 1/ Janraj Singh

executed a sale deed in his favour on 08.01.1993 in respect of

the suit land on the basis of alleged agreement to sell dated

19.11.1990 for a sum of Rs. 6,45,937.50. It is to be noted that

the Trial Court passed an order of status quo on 24.12.1992

qua alienation with regard to the share of defendant no. 1.

4. Defendant No. 2/appellant filed his separate written

statement stating that defendant no. 1 has sold the property to

him by executing a registered sale deed on 08.01.1993 and

delivered possession after which mutation has also been carried

out. According to the appellant/defendant no. 2, the

agreement, basing which the suit is filed, is a fabricated ante-

dated document because defendant no. 1 did not disclose the

factum of this agreement while executing the sale deed in his

favour and thus, the appellant/defendant no. 2 is a bona fide

purchaser.

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5. In the Trial Court plaintiff examined himself as PW-2, Deed

Writer/ Kulwant Singh as PW-1, Jasjit Singh as PW-3 whereas

defendants examined Kirpan Singh as DW 1, Shangara Singh

as DW 2, B.M. Sehgal as DW 3 and Subhash Chander as DW 4.

The Trial Court vide its judgment dated 27.04.2007 held that

the plaintiff has proved the agreement to sell wherein

defendant no. 2 has failed to prove that the agreement is a

result of fraud and fabricated document. However, the Trial

Court denied the decree for specific performance on the ground

that since defendant no. 2 is the owner in possession of the suit

land upon execution of the sale deed dated 08.01.1993,

defendant no. 1 has left with no right or title of the suit land.

Thus, he is unable to execute the sale deed in favour of the

plaintiff and moreover the plaintiff and defendant no. 1 are

close relative. The Trial Court also held that the plaintiff was

ready and willing to perform his part of the contract. It was

also held that defendant no. 2 is a bona fide purchaser as he

was not having any knowledge about the agreement to sell

between the plaintiff and defendant no. 1. The Trial Court 5

eventually dismissed the suit in respect of the specific

performance but allowed the alternative prayer for recovery of

Rs. 40,000/- with interest @ 12% per annum.

6. The First Appellate Court maintained the Trial Court’s

judgment and decree by holding that the subject sale

agreement is a result of fraud and collusion between the

plaintiff and defendant no. 1. The First Appellate Court

observed that in his first written statement he denied the

execution of the agreement but subsequently after amendment

in the plaint and impleadment of the appellant, he admitted the

claim of the plaintiff. The First Appellate Court further observed

that the doctrine of lis pendens is not applicable in the facts of

the present case.

7. The High Court, under the impugned judgment in this

appeal, opined that the sale deed executed by defendant no. 1

in favour of defendant no. 2/appellant is hit by doctrine of lis

pendens and that defendant no. 2/appellant is not a bona fide

purchaser. The High Court noted that the suit was filed on

24.12.1992 and the next date before the Trial Court was fixed 6

on 12.01.1993. However, the sale deed was executed by

defendant no. 1 in favour of defendant no. 2 on 08.01.1993.

Both defendant no. 1 and defendant no. 2 being the residents

of same village, it is unbelievable that he was not having the

knowledge of the agreement, for, the sale deed in favour of

defendant no. 2 was for a lesser amount than the subject

agreement. The agreement was for a sale consideration of Rs.

7,94,000/- whereas the sale deed was for Rs. 6,45,937.50. It is

also held that mere relationship between the plaintiff and

defendant no. 1 would not be a ground to deny the

discretionary relief and moreover, when both the courts below

have found that the plaintiff was always ready and willing to

perform his part of the contract.

8. Mr. Hrin P. Raval, learned senior counsel appearing for the

appellant argued that the High Court ought not to have

disturbed the concurrent judgment and order passed by the

Trial Court and the Appellate Court.

On the other hand, Mr. Manoj Swarup, learned senior

counsel appearing on behalf of the respondents argued that the 7

judgment and order passed by the Trial Court and the Appellate

Court being based on perverse findings and reasoning, the High

Court has rightly set aside the same for decreeing the plaintiff’s

suit in respect of specific performance. According to him, the

High Court has rightly applied the doctrine of lis pendens.

9. Before proceeding to deal with the applicability of doctrine

of lis pendens, it is significant to note that Issue no. 5 framed

by the Trial Court was to the effect as to whether the

agreement dated 17.08.1990 is a result of fraud and collusion,

therefore, not binding on defendant no. 1. This issue was

decided against the defendant. When the plaintiff preferred first

appeal, the defendant did not move any cross-appeal or cross-

objections, yet the first Appellate Court entered into this aspect

of the matter to hold that the subject agreement was collusive

between the plaintiff and defendant no. 1. This is not

permissible in view of the law laid down by this Court in

Banarsi vs. Ram Phal1 wherein this Court held thus in paras

10 & 11:

1

(2003) 9 SCC 606 8

“10. The CPC amendment of 1976 has not materially or substantially altered the law except for a marginal difference. Even under the amended Order 41 Rule 22 sub-rule (1) a party in whose favour the decree stands in its entirety is neither entitled nor obliged to prefer any cross-objection. However, the insertion made in the text of sub-rule (1) makes it permissible to file a cross-objection against a finding. The difference which has resulted we will shortly state. A respondent may defend himself without filing any cross-

objection to the extent to which decree is in his favour; however, if he proposes to attack any part of the decree, he must take cross-

objection. The amendment inserted by the 1976 amendment is clarificatory and also enabling and this may be made precise by analysing the provision. There may be three situations:

(i) The impugned decree is partly in favour of the appellant and partly in favour of the respondent.

(ii) The decree is entirely in favour of the respondent though an issue has been decided against the respondent.

(iii) The decree is entirely in favour of the respondent and all the issues have also been answered in favour of the respondent but there is a finding in the judgment which goes against the respondent.

11. In the type of case (i) it was necessary for the respondent to file an appeal or take cross- objection against that part of the decree which is against him if he seeks to get rid of the same though that part of the decree which is in his favour he is entitled to support without taking any cross-objection. The law remains so post- 9

amendment too. In the type of cases (ii) and

(iii) pre-amendment CPC did not entitle nor permit the respondent to take any cross-

objection as he was not the person aggrieved by the decree. Under the amended CPC, read in the light of the explanation, though it is still not necessary for the respondent to take any cross- objection laying challenge to any finding adverse to him as the decree is entirely in his favour and he may support the decree without cross-objection; the amendment made in the text of sub-rule (1), read with the explanation newly inserted, gives him a right to take cross- objection to a finding recorded against him either while answering an issue or while dealing with an issue. The advantage of preferring such cross-objection is spelled out by sub-rule (4). In spite of the original appeal having been withdrawn or dismissed for default the cross-

objection taken to any finding by the respondent shall still be available to be adjudicated upon on merits which remedy was not available to the respondent under the unamended CPC. In the pre-amendment era, the withdrawal or dismissal for default of the original appeal disabled the respondent to question the correctness or otherwise of any finding recorded against the respondent.”

10. In the case at hand, the Trial Court had partly decreed the

suit to the extent of recovery of Rs. 40,000/-. This part of the

decree was not challenged by the defendants either by filing a

separate appeal or by way of cross objections. They did not

prefer any cross objection challenging the finding on issue no. 10

5. In this situation the defendants have conceded to the decree

for refund and finding on issue no. 5. Therefore, in absence of

cross-appeal or cross-objections by the defendants, the First

Appellate Court could not have recorded a finding that the

subject agreement was a result of collusion between the

plaintiff and defendant no. 1.

11. In Usha Sinha vs. Dina Ram2 this Court held that the

doctrine of lis pendens applies to an alienation during the

pendency of the suit whether such alienees had or had no

notice of the pending proceedings. The following has been held

I paras 18 & 23:

“18. Before one-and-half century, in Bellamy v. Sabine [(1857) 1 De G & J 566 : 44 ER 842] , Lord Cranworth, L.C. proclaimed that 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 litigating 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.

2 (2008) 7 SCC 144 11

23. It is thus settled law that a purchaser of suit property during the pendency of litigation has no right to resist or obstruct execution of decree passed by a competent court. The doctrine of “lis pendens” prohibits a party from dealing with the property which is the subject-

matter of suit. “Lis pendens” itself is treated as constructive notice to a purchaser that he is bound by a decree to be entered in the pending suit. Rule 102, therefore, clarifies that there should not be resistance or obstruction by a transferee pendente lite. It declares that if the resistance is caused or obstruction is offered by a transferee pendente lite of the judgment- debtor, he cannot seek benefit of Rules 98 or 100 of Order 21.”

12. This Court in Sanjay Verma vs. Manik Roy3 was dealing

with a suit for specific performance. During pendency of the

suit, a temporary injunction was granted in favour of the

plaintiff and different portions of the suit land were sold

whereafter the purchasers applied for impleadment, which was

rejected by the Trial Court but allowed by the High Court

against which special leave to appeal was filed. In the above

background, this Court observed the following in para 12:

“12. The principles specified in Section 52 of the TP Act are in accordance with equity, good conscience or justice because they rest upon an equitable and just foundation that it will be 3 (2006) 13 SCC 608 12

impossible to bring an action or suit to a successful termination if alienations are permitted to prevail. A transferee pendente lite is bound by the decree just as much as he was a party to the suit. The principle of lis pendens embodied in Section 52 of the TP Act being a principle of public policy, no question of good faith or bona fide arises. The principle underlying Section 52 is that a litigating party is exempted from taking notice of a title acquired during the pendency of the litigation.

The mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject-matter of the suit. The section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the court.”

13. Guruswamy Nadar vs. P. Lakshmi Ammal4 also arose

out of a suit for specific performance of agreement wherein this

Court considered the effect of subsequent sale of properties by

owner (proposed vendor) in favour of a third party. In the

above facts, this Court held thus in paras 9 & 15:

“9. 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 4 (2008) 5 SCC 796 13

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 19 of the Specific Relief Act read with 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.

15. So far as the present case is concerned, it is apparent that the appellant who is a subsequent purchaser of the same property, 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.”

14. In a recent judgment of this Court in Chander Bhan (D)

through Lr. Sher Singh vs. Mukhtiar Singh & Ors.5 it is

observed, “once it has been held that the transactions executed

by the respondents are illegal due to the doctrine of lis pendens

the defence of the respondents 1 – 2 that they are bona fide

purchasers for valuable consideration and thus, entitled to

5 204 INSC 377 14

protection under Section 41 of the Transfer of Property Act,

1882 is liable to be rejected.”

15. In the case in hand also, it is an admitted position that the

suit was filed on 24.12.1992 and the sale deed was executed

on 08.01.1993 by defendant no. 1 in favour of defendant no.

2/appellant during pendency of the suit. The doctrine of lis

pendens as contained in Section 52 of the Transfer of Property

Act, 1882 applies to a transaction during pendency of the suit.

The Trial Court found execution of agreement to be proved and

directed for refund of the amount of Rs. 40,000/- by defendant

no. 1 to the plaintiff/appellant with further finding on issue no.

5 that the agreement was not a result of fraud and collusion.

The defendant did not prefer any cross-appeal or cross-

objections against the said partial decree and allowed the

finding to become final. The plaintiff was non-suited only on the

ground that defendant no. 2 had no notice of the agreement

and is a bona fide purchaser. However, once sale agreement is

proved and the subsequent sale was during pendency of the

suit hit by the doctrine of lis pendens, the High Court was fully 15

justified in setting aside the judgment and decree of the Trial

Court and the First Appellate Court and passing a decree for

specific performance.

16. In our considered view, the High Court has not committed

any error of law in rendering the judgment impugned which is

hereby affirmed and the instant appeal deserves to be and is

hereby dismissed. No order as to costs.

………………………………………J. (HRISHIKESH ROY)

.......………………………………. J.

(PRASHANT KUMAR MISHRA) NEW DELHI;

OCTOBER 14, 2024