1 IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL CIVIL CIVIL APPELLATE APPELLATE APPELLATE JURISDICTION JURISDICTION JURISDICTION SECOND SECOND SECOND APPEAL APPEAL APPEAL NO. 516 OF 2007 NO. 516 OF 2007 NO. 516 OF 2007 Anant Anant Anant Mallu Lale Mallu Lale Mallu Lale ...... Appellant Appellant Appellant (Orig.Defendant) (Orig.Defendant) (Orig.Defendant) vs vs vs 1.1.1. Balu Bhuji Lale,Decd Balu Bhuji Lale,Decd Balu Bhuji Lale,Decd ...... Respondents Respondents Respondents thr.Lrs thr.Lrs thr.Lrs ( ( ( 1) Prakash Balu Lale & ors(Orig.Plff) 1) Prakash Balu Lale & ors(Orig.Plff) 1) Prakash Balu Lale & ors(Orig.Plff) Mr.T.S.Ingole Mr.T.S.Ingole Mr.T.S.Ingole for Appellant for Appellant for Appellant Mr.S.S.Shah Mr.S.S.Shah Mr.S.S.Shah for Respondent nos. 1 (1) to 1 (4) for Respondent nos. 1 (1) to 1 (4) for Respondent nos. 1 (1) to 1 (4) CORAM CORAM CORAM : : : A.S.OKA, A.S.OKA, A.S.OKA, J J J DATED DATED DATED : : : 31st 31st 31st January, 2008 January, 2008 January, 2008 P.C. P.C. P.C. 1.1.1. Submissions of the Advocate for the parties Submissions of the Advocate for the parties Submissions of the Advocate for the parties were were were heard on the last date. heard on the last date. heard on the last date. 2.2.2. The appellant is the original defendant no.4. The appellant is the original defendant no.4. The appellant is the original defendant no.4. Respondent Respondent Respondent no.1 is the original plaintiff and no.1 is the original plaintiff and no.1 is the original plaintiff and respondent respondent respondent nos. 2 to 4 are the original 1st to 3rd nos. 2 to 4 are the original 1st to 3rd nos. 2 to 4 are the original 1st to 3rd defendant. defendant. defendant. 3.3.3. The 1st respondent filed a suit for specific The 1st respondent filed a suit for specific The 1st respondent filed a suit for specific performance performance performance of an agreement for sale dated 29th of an agreement for sale dated 29th of an agreement for sale dated 29th September, September, September, 1994 executed by the 2nd respondent (1st 1994 executed by the 2nd respondent (1st 1994 executed by the 2nd respondent (1st defendant) defendant) defendant) in favour of the 1st respondent. in favour of the 1st respondent. in favour of the 1st respondent. According According According to the case of the 1st respondent, the to the case of the 1st respondent, the to the case of the 1st respondent, the agreed agreed agreed consideration was of Rs.45,000/- and out of consideration was of Rs.45,000/- and out of consideration was of Rs.45,000/- and out of the the the said amount a sum of Rs.30,000/- was paid at said amount a sum of Rs.30,000/- was paid at said amount a sum of Rs.30,000/- was paid at the the the time time time of execution of the agreement. As the 2nd of execution of the agreement. As the 2nd of execution of the agreement. As the 2nd respondent respondent respondent failed to comply with the notice of failed to comply with the notice of failed to comply with the notice of demand demand demand dated 29th March, 1995, a suit for specific dated 29th March, 1995, a suit for specific dated 29th March, 1995, a suit for specific performance performance performance was filed by the 1st respondent. was filed by the 1st respondent. was filed by the 1st respondent. During During During the pendency of the suit, the plaint was the pendency of the suit, the plaint was the pendency of the suit, the plaint was 2 amended amended amended by pointing out that the appellant (4th by pointing out that the appellant (4th by pointing out that the appellant (4th defendant) defendant) defendant) purchased purchased purchased the suit property from the 2nd the suit property from the 2nd the suit property from the 2nd respondent respondent respondent by by by a sale deed dated 22nd July, 1996. A a sale deed dated 22nd July, 1996. A a sale deed dated 22nd July, 1996. A prayer prayer prayer was also incorporated for setting aside the was also incorporated for setting aside the was also incorporated for setting aside the said said said sale deed. sale deed. sale deed. 4.4.4. The suit was contested by the present appellant The suit was contested by the present appellant The suit was contested by the present appellant by by by filing written statement. After the amendment filing written statement. After the amendment filing written statement. After the amendment of of of the plaint, additional written statement was the plaint, additional written statement was the plaint, additional written statement was filed filed filed by the appellant. A stand was taken by the by the appellant. A stand was taken by the by the appellant. A stand was taken by the appellant appellant appellant that an agreement was executed on 16th that an agreement was executed on 16th that an agreement was executed on 16th February, February, February, 1994 by the 2nd respondent in favour of 1994 by the 2nd respondent in favour of 1994 by the 2nd respondent in favour of the the the appellant appellant appellant and on accepting a sum of Rs.13,600/- and on accepting a sum of Rs.13,600/- and on accepting a sum of Rs.13,600/- the the the 2nd respondent placed him in possession. It 2nd respondent placed him in possession. It 2nd respondent placed him in possession. It was was was contended that the sale deed was executed on contended that the sale deed was executed on contended that the sale deed was executed on 22nd 22nd 22nd July, 1996 in favour of the appellant by the July, 1996 in favour of the appellant by the July, 1996 in favour of the appellant by the 2nd 2nd 2nd respondent respondent respondent after accepting Rs.30,000/-. It was after accepting Rs.30,000/-. It was after accepting Rs.30,000/-. It was contended contended contended that the appellant was a bonafide that the appellant was a bonafide that the appellant was a bonafide purchaser purchaser purchaser without notice of the alleged suit without notice of the alleged suit without notice of the alleged suit agreement. agreement. agreement. Other defendants did not contest the Other defendants did not contest the Other defendants did not contest the suit. suit. suit. The learned trial Judge held that the suit The learned trial Judge held that the suit The learned trial Judge held that the suit agreement agreement agreement was proved by the 1st respondent and was proved by the 1st respondent and was proved by the 1st respondent and payment payment payment of consideration of Rs.30,000/- was also of consideration of Rs.30,000/- was also of consideration of Rs.30,000/- was also established established established by by by the 1st respondent. The trial Court the 1st respondent. The trial Court the 1st respondent. The trial Court held held held that the appellant has established that he is that the appellant has established that he is that the appellant has established that he is a bonafide purchaser without notice of the suit bonafide purchaser without notice of the suit bonafide purchaser without notice of the suit agreement. agreement. agreement. Therefore, the trial Court declined to Therefore, the trial Court declined to Therefore, the trial Court declined to grant grant grant relief relief relief of specific performance, but, passed a of specific performance, but, passed a of specific performance, but, passed a decree decree decree of refund of consideration with interest. of refund of consideration with interest. of refund of consideration with interest. An An An Appeal Appeal Appeal was preferred by the 1st respondent. The was preferred by the 1st respondent. The was preferred by the 1st respondent. The said said said appeal had been allowed by the impugned appeal had been allowed by the impugned appeal had been allowed by the impugned judgment judgment judgment and decree. The appellate Court passed a and decree. The appellate Court passed a and decree. The appellate Court passed a 3 decree decree decree for specific performance in favour of the for specific performance in favour of the for specific performance in favour of the 1st 1st 1st respondent respondent respondent after holding that the appellant has after holding that the appellant has after holding that the appellant has failed failed failed to establish that he was a bonafide to establish that he was a bonafide to establish that he was a bonafide purchaser. purchaser. purchaser. The appellate Court also held that the The appellate Court also held that the The appellate Court also held that the transaction transaction transaction was hit by lis pendens. was hit by lis pendens. was hit by lis pendens. 5.5.5. Submission of the learned counsel for the Submission of the learned counsel for the Submission of the learned counsel for the appellant appellant appellant (4th respondent) is that section 52 of (4th respondent) is that section 52 of (4th respondent) is that section 52 of the the the Transfer of Property Act, 1882 will have no Transfer of Property Act, 1882 will have no Transfer of Property Act, 1882 will have no application application application as as as the summons of the suit filed by the the summons of the suit filed by the the summons of the suit filed by the 1st 1st 1st respondent was served on 3rd September, 1996 respondent was served on 3rd September, 1996 respondent was served on 3rd September, 1996 and and and whereas the 2nd respondent had already executed whereas the 2nd respondent had already executed whereas the 2nd respondent had already executed the the the sale deed in favour of the appellant on 29th sale deed in favour of the appellant on 29th sale deed in favour of the appellant on 29th July, July, July, 1996. He has pointed out that on 16th 1996. He has pointed out that on 16th 1996. He has pointed out that on 16th February, February, February, 1994 there was a transaction between the 1994 there was a transaction between the 1994 there was a transaction between the 2nd 2nd 2nd respondent and the appellant in respect of the respondent and the appellant in respect of the respondent and the appellant in respect of the suit suit suit property in the nature of a mortgage and the property in the nature of a mortgage and the property in the nature of a mortgage and the 2nd 2nd 2nd respondent agreed to execute a sale deed in respondent agreed to execute a sale deed in respondent agreed to execute a sale deed in favour favour favour of of of the appellant in the event of non-payment the appellant in the event of non-payment the appellant in the event of non-payment of of of mortgage amount by the 2nd respondent. He mortgage amount by the 2nd respondent. He mortgage amount by the 2nd respondent. He submitted submitted submitted that the said agreement dated 16th that the said agreement dated 16th that the said agreement dated 16th February, February, February, 1994 was executed even before execution 1994 was executed even before execution 1994 was executed even before execution of of of the suit agreement. He submitted that the the suit agreement. He submitted that the the suit agreement. He submitted that the decree decree decree for specific performance has been passed for specific performance has been passed for specific performance has been passed after after after the period of 12 years from the date of the period of 12 years from the date of the period of 12 years from the date of execution execution execution of of of the suit agreement. He submitted that the suit agreement. He submitted that the suit agreement. He submitted that the the the trial Court was right in holding that the trial Court was right in holding that the trial Court was right in holding that the appellant appellant appellant was a bonafide purchaser of the suit was a bonafide purchaser of the suit was a bonafide purchaser of the suit property property property without notice of the suit agreement. without notice of the suit agreement. without notice of the suit agreement. 6.6.6. I have given careful considerations to the I have given careful considerations to the I have given careful considerations to the submissions submissions submissions made by the learned Advcoate for the made by the learned Advcoate for the made by the learned Advcoate for the 4 appellant. appellant. appellant. There are concurrent findings of fact There are concurrent findings of fact There are concurrent findings of fact as as as regards execution of the suit agreement by the regards execution of the suit agreement by the regards execution of the suit agreement by the 2nd 2nd 2nd respondent in favour of the 1st respondent. respondent in favour of the 1st respondent. respondent in favour of the 1st respondent. Sub-section Sub-section Sub-section (b) of section 19 of the Specific (b) of section 19 of the Specific (b) of section 19 of the Specific Relief Relief Relief Act, Act, Act, 1963 provides that specific performance 1963 provides that specific performance 1963 provides that specific performance of of of a contract may be enforced against a party to a contract may be enforced against a party to a contract may be enforced against a party to the the the contract as well as against any other person contract as well as against any other person contract as well as against any other person claiming claiming claiming under a party to the contract by title under a party to the contract by title under a party to the contract by title arising arising arising subsequent to the contract except a subsequent to the contract except a subsequent to the contract except a transferee transferee transferee for for for value who has paid his money in good value who has paid his money in good value who has paid his money in good faith faith faith and without notice of the original contract. and without notice of the original contract. and without notice of the original contract. In In In the present case, the alleged agreement of dated the present case, the alleged agreement of dated the present case, the alleged agreement of dated 16th 16th 16th February, 1994 executed by the 2nd defendant February, 1994 executed by the 2nd defendant February, 1994 executed by the 2nd defendant inin in favour of the appellant is not a document of favour of the appellant is not a document of favour of the appellant is not a document of title title title as an agreement for sale does not create any as an agreement for sale does not create any as an agreement for sale does not create any interest interest interest in in in the property. The document of title on the property. The document of title on the property. The document of title on which which which the title is being claimed by the appellant the title is being claimed by the appellant the title is being claimed by the appellant isisis the sale deed dated 22nd July, 1996. Therefore, the sale deed dated 22nd July, 1996. Therefore, the sale deed dated 22nd July, 1996. Therefore, unless unless unless the appellant establishes that he is a the appellant establishes that he is a the appellant establishes that he is a bonafide bonafide bonafide purchaser i.e.he has purchased the purchaser i.e.he has purchased the purchaser i.e.he has purchased the property property property by paying the money in good faith without by paying the money in good faith without by paying the money in good faith without notice notice notice of the suit agreement of the suit agreement of the suit agreement, the decree for the decree for the decree for specific specific specific performance can be passed against the performance can be passed against the performance can be passed against the appellant. appellant. appellant. 7.7.7. I have perused the examination-in-chief of the I have perused the examination-in-chief of the I have perused the examination-in-chief of the appellant. appellant. appellant. A perusal of the examination-in-chief A perusal of the examination-in-chief A perusal of the examination-in-chief shows shows shows that the appellant has not taken due care that the appellant has not taken due care that the appellant has not taken due care which which which any purchaser of ordinary prudence ought to any purchaser of ordinary prudence ought to any purchaser of ordinary prudence ought to have have have taken. There is nothing particular stated in taken. There is nothing particular stated in taken. There is nothing particular stated in the the the deposition as regards the efforts made by the deposition as regards the efforts made by the deposition as regards the efforts made by the appellant appellant appellant to ascertain whether there was any to ascertain whether there was any to ascertain whether there was any 5 encumberance encumberance encumberance on the property. It is not the case on the property. It is not the case on the property. It is not the case of of of the appellant that he had given a public notice the appellant that he had given a public notice the appellant that he had given a public notice or or or had taken a search. had taken a search. had taken a search. 8.8.8. It will be necessary to refer to the findings It will be necessary to refer to the findings It will be necessary to refer to the findings recorded recorded recorded by the trial Court on this aspect. Even by the trial Court on this aspect. Even by the trial Court on this aspect. Even taking taking taking the said finding as correct, it is not the said finding as correct, it is not the said finding as correct, it is not possible possible possible to accept that the appellant was a to accept that the appellant was a to accept that the appellant was a bonafide bonafide bonafide purchaser because, nothing is stated to purchaser because, nothing is stated to purchaser because, nothing is stated to show show show that adequate care and caution was shown by that adequate care and caution was shown by that adequate care and caution was shown by the the the appellant. There is no reason to find fault appellant. There is no reason to find fault appellant. There is no reason to find fault with with with the finding of fact recorded by the appellate the finding of fact recorded by the appellate the finding of fact recorded by the appellate Court Court Court on this aspect. on this aspect. on this aspect. 9.9.9. It is an admitted position that the sale deed It is an admitted position that the sale deed It is an admitted position that the sale deed inin in favour of the appellant was executed during the favour of the appellant was executed during the favour of the appellant was executed during the pendency pendency pendency of the suit agreement filed by the 1st of the suit agreement filed by the 1st of the suit agreement filed by the 1st respondent. respondent. respondent. It is true that the sale deed in It is true that the sale deed in It is true that the sale deed in favour favour favour of the appellant was executed before the of the appellant was executed before the of the appellant was executed before the service service service of summons of the suit. However, on a of summons of the suit. However, on a of summons of the suit. However, on a plain plain plain reading of section 52 of the Transfer of reading of section 52 of the Transfer of reading of section 52 of the Transfer of Property Property Property Act, 1882 the date of service of summons Act, 1882 the date of service of summons Act, 1882 the date of service of summons isisis not at all relevant. What is material to be not at all relevant. What is material to be not at all relevant. What is material to be seen seen seen is whether the transfer has been effected is whether the transfer has been effected is whether the transfer has been effected during during during the pendency of the suit. Once it is the pendency of the suit. Once it is the pendency of the suit. Once it is established established established that transfer is effected during the that transfer is effected during the that transfer is effected during the pendency pendency pendency of the suit, principles of lis pendens of the suit, principles of lis pendens of the suit, principles of lis pendens will will will govern the said transaction. Therefore, there govern the said transaction. Therefore, there govern the said transaction. Therefore, there isisis no merit in the submission made in this behalf. no merit in the submission made in this behalf. no merit in the submission made in this behalf. 10. 10. 10. In the circumstances, the appellant cannot In the circumstances, the appellant cannot In the circumstances, the appellant cannot have have have a better case than the 2nd respondent. As a better case than the 2nd respondent. As a better case than the 2nd respondent. As 6 stated stated stated earlier, both the Courts have concurrently earlier, both the Courts have concurrently earlier, both the Courts have concurrently found found found that the execution of the suit agreement and that the execution of the suit agreement and that the execution of the suit agreement and payment payment payment of earnest amount of Rs.30,000/- out of of earnest amount of Rs.30,000/- out of of earnest amount of Rs.30,000/- out of consideration consideration consideration of Rs.45,000/- by the 1st respondent of Rs.45,000/- by the 1st respondent of Rs.45,000/- by the 1st respondent has has has been proved. On 29th March, 1995 the 1st been proved. On 29th March, 1995 the 1st been proved. On 29th March, 1995 the 1st respondent respondent respondent had issued notice to the 2nd respondent had issued notice to the 2nd respondent had issued notice to the 2nd respondent calling calling calling upon him to execute the sale deed. The upon him to execute the sale deed. The upon him to execute the sale deed. The suit suit suit has been filed on 18th September, 1995. There has been filed on 18th September, 1995. There has been filed on 18th September, 1995. There isisis no delay and latches on the part of the 1st no delay and latches on the part of the 1st no delay and latches on the part of the 1st respondent respondent respondent in filing the suit. Therefore, the in filing the suit. Therefore, the in filing the suit. Therefore, the submission submission submission that that that the decree for specific performance the decree for specific performance the decree for specific performance has has has been passed after 12 years will not help the been passed after 12 years will not help the been passed after 12 years will not help the appellant. appellant. appellant. 11. 11. 11. No substantial questions of law arises. No substantial questions of law arises. No substantial questions of law arises. Second Second Second Appeal is dismissed. Civil Application for Appeal is dismissed. Civil Application for Appeal is dismissed. Civil Application for stay stay stay does not survive. The same is disposed off. does not survive. The same is disposed off. does not survive. The same is disposed off. (A.S.Oka, (A.S.Oka, (A.S.Oka, J) J) J) 7