Sunday, 20 October 2019

Whether purchaser pendente lite can put evidence on record to prove that he was unaware of pendency of litigation?

The learned senior counsel appearing for the
petitioners was not justified in contending that even if it
was to be held that there was a presumption against
the petitioners about being aware of the litigation
initiated by respondent nos. 1 and 2 before a competent
Court, such a presumption was rebuttable and that if the
view taken by the Executing Court was accepted,
Section 19(b) of the Specific Relief Act, 1963 would be
rendered otiose. A proper reading of the judgments of
the Hon’ble Supreme Court in the case of Usha

Pvt. Ltd. .vs. Rajiv Trust (supra) would show that a
presumption referred to therein is not a presumption in
the sense of it being rebuttable, but a situation where a
transferee who purchases property during the pendency
of the suit, is deemed to be aware of a litigation
pertaining to the said property pending before the
competent Court. Such a transferee , cannot claim a
right to show evidence that he was actually not aware or
put to notice about pendency of such a litigation. In
fact, Rules 98 and 100 of Order 21 as amended by the
Bombay Amendment, addressed this very mischief that
can be indulged in by transferees pendente lite.
Therefore, the petitioners cannot claim that they had a
right at least to place on record evidence to show that
they were actually not aware about the pendency of the
litigation, even if they had purchased the property
during the pendency of the suit filed by respondent nos.
1 and 2 or that there was a rebuttal presumption that
arose in the present matter. Similarly, the petitioners
are not entitled to claim that Section 19(b) of the
Specific Relief Act, 1963 would be rendered otiose,
because they cannot be said to be transferees who paid
money in good faith and without notice of the original
contract, because they were deemed to be aware of the
same as they had purchased the property during the
pendency of the suit filed by respondent nos. 1 and 2.
Therefore, there is no substance in the contentions
raised on behalf of the petitioners.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR.
Writ Petition No.4406 OF 2018

(M/s Sharma Construction Company, Nagpur vs. Praveenkumar Lilapat Bansal and others. )

CORAM : MANISH PITALE, J.

DATED : APRIL 10, 2019
Citation: 2019(5) MHLJ 499

By this writ petition, the petitioners have
challenged the order dated 26.06.2018 passed by the
Court of 4th Joint Civil Judge, Junior Division, Nagpur
(Executing Court), whereby an application moved by the
petitioners to intervene in execution proceedings, has
been rejected. The petitioners claimed right of
intervention in the execution proceedings initiated by
respondent Nos. 1 and 2 (decree holders), on the basis
that they had purchased the very same properties by
registered sale deeds, in respect of which respondent
Nos. 1 and 2 were seeking to execute decree of specific
performance . According to the petitioners, they have a
vital interest in the matter and the Executing Court
ought to have allowed their application for intervention.
2. Respondent Nos. 1 and 2 herein had filed
Special Civil Suit No. 185 of 2005 against respondent

Nos. 3 to 8 seeking specific performance of agreement
dated 16.10.1998, whereby respondent nos. 3 to 8 had
agreed to sell the suit properties to respondent Nos. 1
and 2. By judgment and order dated 05.01.2008, the
Court of Joint Civil Judge, Senior Division, Nagpur (trial
Court) decreed the suit in favour of respondent nos. 1
and 2, thereby directing respondent nos. 3 to 8 to
execute sale deeds in terms of the aforesaid agreement
executed between the parties. Respondent Nos. 3 to 8
filed appeal before the Court of District Judge, Nagpur
(appellate Court), but by judgment and order dated
13.12.2016 appeal stood dismissed and the decree was
confirmed. Second Appeal No.23 of 2017 filed by
respondent Nos. 3 to 8 against the said order of the
Appellate Court was also dismissed by this Court,
thereby further confirming the decree and it attained
finality.
3. In the meanwhile, respondent nos. 1 and 2
had initiated execution proceedings before the
Executing Court bearing Regular Darkhast No. 1184 of
2012. On 03.11.2017, the petitioners moved application
in the said execution proceedings bearing Exh.59 before
the Executing Court, claiming that they had purchased
the very same suit properties by registered sale deeds
dated 02.01.2006 and 20.10.2007 and that, therefore,
they were entitled to intervene in the said execution
proceedings. The said application was opposed by
respondent Nos. 1 and 2. By the impugned order dated
26.06.2018, the executing Court rejected the said
application, holding that the said sale deeds were

executed in favour of the petitioners after the suit was
filed by respondent nos. 1 and 2 and that, therefore,
being purchasers pendente lite they were not entitled
to intervene and raise objection in the aforesaid
execution proceedings. The said order is subject matter
of the present writ petition.
4. Mr. A.S. Jaiswal, learned senior counsel
appearing with Mr. S.V. Bhutada, Advocate for the
petitioners, contended that the Executing Court had
committed a grave error in rejecting the said application
filed on behalf of the petitioners because the decree
passed in favour of respondent nos. 1 and 2 was
collusive and it was after the property was agreed to be
sold to the petitioners and further that the petitioners
clearly had a right to intervene and raise objection in
the execution proceedings. The learned senior counsel
placed emphasis on judgment of the Hon’ble Supreme
Court in the case of Thomson Press (India)
Limited .vs. Nanak Builders and Investors Private
Ltd. reported in (2013) 5 Supreme Court Cases 397
in respect of the said contention. In fact, this Court
referred to the said judgment of the Hon’ble Supreme
Court, while issuing notice in the present writ petition
and granting stay of further proceedings before the
Executing Court. The learned senior counsel contended
that the Hon’ble Supreme Court in the aforesaid
judgment had clearly spelt out the principles that would
govern an application for impleadment in similar
circumstances and that the case of the petitioners was
clearly covered under the same. It was further

submitted that while the Executing Court had placed
much emphasis on the petitioners being purchasers
pendente lite while applying Section 52 of the Transfer
of Property Act, 1882, the Executing Court had failed to
appreciate the effect of Section 19(b) of the Specific
Relief Act, 1963, on the facts and circumstances of the
present case. It was submitted that the petitioners were
transferees of the suit property for value and that they
had paid money in good faith and without notice of the
agreement, specific performance of which was sought to
be enforced by respondent nos. 1 and 2. It was
submitted that if the approach adopted by the Executing
Court was to be accepted, Section 19 (b) of the Specific
Relief Act, 1963 would be rendered otiose.
5. Per contra, Mr. C.S. Kaptan, learned senior
counsel appearing along with Mr. P.K. Mohta, Advocate
for respondent Nos. 1 and 2, submitted that the
petitioners were not entitled to intervene and object in
the execution proceedings because they were
admittedly purchasers pendente lite and they could not
claim ignorance of the proceedings initiated by
respondent nos. 1 and 2, leading to decree in their
favour which had attained finality. It was submitted that
reliance placed on behalf of the petitioners on the
judgment of the Hon’ble Supreme Court in the case of
and Investors Private Ltd.(supra) was misplaced
because the said case concerned an application moved
by certain persons under Order 1 Rule 10 of the Code of
Civil Procedure, 1908 during the pendency of the suit

before the trial Court, while the present case concerned
execution proceedings after decree passed in favour of
respondent nos. 1 and 2 had attained finality. The
learned senior counsel appearing for respondent nos. 1
and 2 relied upon judgments of the Hon’ble Supreme
Court in the case of Usha Sinha .vs. Dina Ram and
others reported in (2008) 7 Supreme Court Cases
and another reported in (1998) 3 Supreme Court
Cases 723, as also judgment of this Court in the case of
Vithabai Sayanna Battin and ors. .vs. Daljitsingh
Dilipsingh Ramgadiya and another - judgment and
order dated 13.10.2010 in Second Appeal No. 438 of
2010, to emphasize that under Order 21 Rule 98
(Bombay Amendment) of the CPC, the petitioners had
no right to claim that they ought to be permitted to
intervene in execution proceedings, because the sale
deeds executed in their favour were admittedly after the
suit for specific performance was filed by respondent
nos. 1 and 2. On this basis, the learned senior counsel
sought dismissal of the writ petition.
6. Before examining the position of law as
canvassed by the rival parties, it would be necessary to
first refer to certain dates and events in the present
case. The documents in the present case show that in
February 2005, suit was filed by respondent nos. 1 and 2
against respondent nos. 3 to 8 for specific performance
of an agreement dated 16.10.1998. The written
statement of respondent nos. 3 to 8 was filed before the
trial Court on 21.04.2005. The registered sale deeds

executed in favour of the petitioners in respect of the
suit property are dated 02.01.2006 and 20.10.2007.
Therefore, it is undisputed that the two sale deeds
executed in favour of the petitioners were after the suit
for specific performance was filed by respondent Nos. 1
and 2 against respondent Nos. 3 to 8, in respect of the
very same property. It is not as if the said sale deeds
were never brought to the notice of any Court during
the proceedings leading to the decree in favour of
respondent nos.1 and 2 and the said decree attained
finality. It is noted in the impugned order by the
Executing Court that the said two sale deeds were
placed before the trial Court and marked as Exhs. 80
and 81. The trial Court took the said sale deeds into
consideration and observed in paragraph nos. 24 and 25
as follows:-
“24. At this stage it is argued by the
learned counsel for defendants that the
defendants have already alienated the
properties to M/s Sharma Construction
Co. The certified copy of the saledeeds
are produced at Exhs. 80 and 81.
Now the defendants are no more the
legal owners of the suit property. And,
therefore, the specific performance of
contract cannot be enforced at all.
25. It is pertinent to note that
during the pendency of this suit, the
defendants alienated the suit property
in the year 2006-2007. Therefore, their
defence is not at all bonafide. On the
contrary, in order to defraud the
plaintiffs from getting relief of specific
performance of contract, intentionally
the defendants seems to have
alienated the property during the
pendency of suit. And, therefore, the
transactions entered into by

defendants during the pendency of this
suit are hit by principle of lis-pendence
U/s 52 of the Transfer of Property Act.
And, therefore, those transactions are
definite subject to decision of this suit.
These transactions are not binding on
the plaintiffs. Rather the subsequent
purchaser of the properties are also
bound by the decision of this suit. The
plaintiffs can enforce their relief of
specific performance of contract
against defendants as well as against
the subsequent purchasers of the suit
property from defendants equally. This
judgment and decree is binding on
defendants as well as their sucessorsin-
title. Here it is worth to mention that
before alienating the properties,
defendants never intimated this Court.
They never sought any permission from
this Court to alienate the property
during the pendency of the suit. They
were fully aware about the pending of
this suit. In such set of facts the
contention of defendants' counsel in
this respect is not acceptable or
sustainable.”
7. Thus, the said two sale deeds executed
subsequent to filing of the suit by respondent nos. 1 and
2, were noticed by the trial Court and it was specifically
held that the said transactions were hit by the principle
of lis pendens under Section 52 of the Transfer of
Property Act, 1882. The said judgment and order
passed by the trial Court stood confirmed and the
decree passed in favour of respondent nos. 1 and 2
attained finality. The events clearly show that the
decree was passed and later confirmed after contest
between the respondent nos. 1 and 2 on the one hand
and respondent nos. 3 to 8 on the other. Therefore,

there is no substance in the contention raised on behalf
of the petitioners that the decree was collusive.
8. Hence, the question that arises for
consideration is, when the aforesaid sale deeds came
into existence during the pendency of the suit filed by
respondent nos. 1 and 2 and they were hit by Section 52
of the Transfer of Property Act, 1882, whether the
petitioners could be permitted to intervene and object in
execution proceedings initiated by respondent nos. 1
and 2 in respect of the said decree that had attained
finality. The facts of the present case, clearly show that
reliance placed on the judgment of the Hon’ble Supreme
Court in the case of Thomson Press (India)
Limited .vs. Nanak Builders and Investors Private
Ltd. (supra) is misplaced. The said case was not
concerned with the right of purchasers like the
petitioners during the pendency of a suit to claim
intervention and right to raise objection in execution
proceedings. The said case was concerned only with the
question of addition of parties under Order 1 Rule 10 of
the CPC.
9. In the judgments in the cases of Usha
Sinha .vs. Dina Ram (supra) and Silverline Forum
Pvt. Ltd. .vs. Rajiv Trust (supra) of the Hon’ble
Supreme Court, the effect of Rule 102 of Order 21 of the
CPC was considered and it was emphatically laid down
that purchasers like the petitioners in the present case,
who purchased property during the pendency of a suit,
had no independent right to the property and

consequently they had no right to resist or obstruct
execution of a decree passed in respect of such
property. It was laid down that such purchasers were
presumed to be aware of pending litigation in a
competent Court and, therefore, they could not be said
to be purchasers without notice. The relevant portion
of the judgment of the Hon’ble Supreme Court in the
case of Usha Sinha .vs. Dina Ram (supra) after
relying upon earlier judgment in the case of Silverline
Forum Pvt. Ltd. .vs. Rajiv Trust (supra) reads as
follows:-
“25. We are in respectful agreement
with the proposition of law laid down by
this Court in Silverline Forum. In our
opinion, the doctrine is based on the
principle that the person purchasing
property from the judgment debtor
during the pendency of the suit has no
independent right to property to resist,
obstruct or object execution of a
decree. Resistance at the instance of
transferee of a judgment debtor during
the pendency of the proceedings cannot
be said to be resistance or obstruction
by a person in his own right and,
therefore, is not entitled to get his claim
adjudicated.
26. For invoking Rule 102, it is
enough for the decree holder to show
that the person resisting the possession
or offering obstruction is claiming his
title to the property after the institution
of the suit in which decree was passed
and sought to be executed against the
judgment debtor. If the said condition is
fulfilled, the case falls within the
mischief of Rule 102 and such applicant
cannot place reliance either on Rule 98
or Rule 100 of Order XXI.

27. So far as the present case is
concerned, the facts are no more in
dispute. As already noted earlier, Title
Suit No. 140 of 1999 was instituted by
the respondent-plaintiff on April 10,
1999. Thus, the litigation was pending
in respect of the property and the
matter was sub-judice. The appellant
thereafter purchased the property from
original defendant Nos. 4 and 5 by a
registered sale deed on February 15,
2000 i.e. during the pendency of the
suit. It is also not in dispute that exparte
decree came to be passed against
the defendants on May 24, 2001. In the
situation, in our considered opinion, the
doctrine of lis pendens would apply to
the transaction in question, and the
High Court was wholly right in holding
that the case was covered by Rule 102
of Order XXI of the Code. The appellant
could not seek protection of pendency
of suit instituted by her. The Executing
Court was not justified in granting stay
of execution proceedings. The High
Court was, hence, right in setting aside
the order of the Executing Court.
28. Rule 29 of Order XXI of the
Code deals with cases wherein a suit
has been instituted by the judgmentdebtor
against the decree- holder and
has no relevance to cases of lis pendens
wherein transfer of property has been
effected by the judgment debtor to a
third party during the pendency of
proceedings.
29. The High Court, in our
opinion, rightly held that the appellant
could not be said to be a 'stranger' to
the suit inasmuch as she was claiming
right, title and interest through
defendant Nos. 4 and 5 against whom
the suit was pending. She must,
therefore, be presumed to be aware of

the litigation which was before a
competent Court in the form of Title
Suit No. 140 of 1999 instituted by the
present respondent against the
predecessor of the appellant.”
10. It is relevant that insofar as Rule 102 of Order
21 of the CPC is concerned, by Bombay Amendment the
same has been deleted but by the very same
amendment, sub-rule (2) was added to Rule 98 of Order
21 of the CPC. This aspect was considered in judgment
of this Court in the case of Vithabai Sayanna
Battin .vs. Daljitsingh Dilipsingh Ramgadiya
(supra) and it was laid down that even if Rule 102 of
Order 21 of the CPC was deleted by the Bombay
amendment, the very same amendment added sub-rule
(2) to Rule 98 of Order 21 of the CPC and a proviso to
Rule 100 of Order 21 thereof, which emphasize upon the
fact that a transferee of property during the pendency
of a suit shall not have any independent right and that
the decree holder shall be put in possession of the
property.
11. The learned senior counsel appearing for the
petitioners was not justified in contending that even if it
was to be held that there was a presumption against
the petitioners about being aware of the litigation
initiated by respondent nos. 1 and 2 before a competent
Court, such a presumption was rebuttable and that if the
view taken by the Executing Court was accepted,
Section 19(b) of the Specific Relief Act, 1963 would be
rendered otiose. A proper reading of the judgments of
the Hon’ble Supreme Court in the case of Usha

Sinha .vs. Dina Ram (supra) and Silverline Forum
Pvt. Ltd. .vs. Rajit Trust (supra) would show that a
presumption referred to therein is not a presumption in
the sense of it being rebuttable, but a situation where a
transferee who purchases property during the pendency
of the suit, is deemed to be aware of a litigation
pertaining to the said property pending before the
competent Court. Such a transferee , cannot claim a
right to show evidence that he was actually not aware or
put to notice about pendency of such a litigation. In
fact, Rules 98 and 100 of Order 21 as amended by the
Bombay Amendment, addressed this very mischief that
can be indulged in by transferees pendente lite.
Therefore, the petitioners cannot claim that they had a
right at least to place on record evidence to show that
they were actually not aware about the pendency of the
litigation, even if they had purchased the property
during the pendency of the suit filed by respondent nos.
1 and 2 or that there was a rebuttal presumption that
arose in the present matter. Similarly, the petitioners
are not entitled to claim that Section 19(b) of the
Specific Relief Act, 1963 would be rendered otiose,
because they cannot be said to be transferees who paid
money in good faith and without notice of the original
contract, because they were deemed to be aware of the
same as they had purchased the property during the
pendency of the suit filed by respondent nos. 1 and 2.
Therefore, there is no substance in the contentions
raised on behalf of the petitioners.
12. Another aspect brought to the notice of this

Court by the learned senior counsel appearing for
respondent nos. 1 and 2 was that the petitioners have
filed Special Civil Suit No. 874 of 2017 before the Court
of Civil Judge, Senior Division, Nagpur, being a suit for
declaration, permanent injunction and damages on the
basis of the very same sale deeds referred above. This
shows that the petitioners have already chosen a
remedy and they are pursuing the same, which will be
decided in accordance with the law.
13. In view of the above, this Court finds that
there is no merit in the present writ petition and
accordingly it is dismissed.
JUDGE
Upon pronouncement of order, the learned
counsel for the petitioners made a request for
continuing the interim relief for further period of four
weeks. For the reasons stated in the judgment
dismissing the writ petition, this Court is of the opinion
that the interim relief does not deserve to be continued.
Hence the request is rejected.

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