Whether subsequent Purchaser Can Challenge Readiness & Willingness Of Plaintiff In A Specific Performance Suit?

 It must be stated here that the principles laid down in

Jugraj Singh and Another (supra) were not accepted by a larger

Bench of this Court. The relevant discussion in paragraph 6 in the

case of Ram Awadh (Dead) by Lrs. and Others vs.Achhaibar Dubey and

Another [(2000) 2 SCC428] was as under:

“6. The obligation imposed by Section 16 is upon the

court not to grant specific performance to a plaintiff

who has not met the requirements of clauses (a), (b)

and (c) thereof. A court may not, therefore, grant to a

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. There is, therefore, no

question of the plea being available to one defendant

and not to another. It is open to any defendant to

contend and establish that he mandatory requirement of

Section 16(c) has not been complied with and it is for

the court to determine whether it has or has not been

complied with and, depending upon its conclusion,

decree or decline to decree the suit. We are of the

view that the decision in Jugraj Singh case [(1995) 2

SCC 31] is erroneous.”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.543 OF 2021

KADUPUGOTLA VARALAKSHMI  Vs VUDAGIRI VENKATA RAO 

Dated: February 16, 2021.

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Whether subsequent purchaser can be treated as bonafide purchaser if he fails to make inquiry about original title deeds prior to purchase of property?

Now, this takes the Court to decide whether one of the subsequent purchasers i.e. the appellant herein is a bona fide purchaser of the subject land or not. In order to examine this aspect, it is necessary to consider the conduct of the subsequent purchasers before execution of sale deed dated 03.09.2014. It is settled principle of law under Section 19(b) of the Specific Relief Act that specific performance of contract may be enforced against any other person claiming under him by a title arising subsequently to the contract. If a person, as an owner of the property, has entered into an agreement to sale, he cannot, thereafter, convey the same property to any other person, as after prior agreement to sale, he cannot be said to be free owner of the property. If the owner alienates the property, he can alienate it only subject to the rights created under the prior agreement to sale. It is the case of the appellant i.e. subsequent purchaser that he has no knowledge about execution of sale agreement inter se between plaintiff and defendant No. 1 and, therefore, they have bona fidely entered into the registered sale deed dated 03.09.2014 without notice of prior sale agreements and paid full value in good faith. Upon re-appreciation of the events, which occurred before and after registered sale deed dated 03.09.2014, it shows that the defendants with unusual haste, carried out the sale deed. The obvious reason is such that the sale deed executed and registered on 03.09.2014 discloses that the appellant was aware of pending proceedings being Special Civil Suit No. 405 of 2008 between defendant No. 1 and his predecessor in title. Admittedly, the dispute came to be resolved between the parties to the said suit on 12.09.2014 and prior to it, the sale deed was executed and registered. The said sale deed indicates that the appellant and respondent No. 3 herein have paid amount of consideration by way of various cheques of the date 01.09.2014 to 04.09.2014. Admittedly, the amounts of cheques were withdrawn by defendant No. 1 on 16.09.2014 and 17.09.2014 as per the statement of account annexed with the affidavit produced before this Court during the course of hearing. It is a matter of fact that though the dispute has been resolved on 12.09.2014, the suit was disposed of only on 02.10.2014. Normally, there is no reason to consider about withdrawal of the amounts on the part of the original owner - defendant No. 1 but, in view of the peculiar facts of this case, conduct of the defendants goes to suggest that before the issue is resolved in a pending suit between defendant No. 1 and his predecessor in title, the sale deed was executed and registered and meanwhile, the amounts of consideration were withdrawn in cash by the original owner i.e. defendant No. 1 and thereafter, the Court has passed the order of disposal of the suit on 02.10.2014. This speaks a lot about conduct of the defendants, who in collusion, joined hands to frustrate the sale agreements in question. It requires to be considered here that the defendants with unusual haste, carried out the sale deed, where such transactions, as a rule, are carried out with appropriate inquiry and, more particularly, after obtaining title clearance certificate and also by publishing notice in newspaper before purchase. Admittedly, no such steps have been taken by the subsequent purchasers i.e. the appellant and respondent No. 3 herein. Not only that, they have not bothered to inquire about the whereabouts of the original title deeds. One more significant aspect of the case required to be considered is such that defendant No. 1 agreed to sale the subject land to the plaintiff for consideration of Rs. 51 lacs which was fixed in the year 2008 whereas, the defendants inter se fixed the sale price of the subject land of Rs. 17,50,000/- in the year 2014. Meaning thereby, from 2008 to 2014, price of the subject land has been reduced to about 66% which can never be believed by any prudent man dealing in the transaction of the immovable property and further, the Court cannot overlook or ignore the existing scenario in the market about the prices of the land during the period in question.

15. The plain language of Sub-Section (b) of Section 19 of the Specific Relief Act shows that subsequent transferee can retain the benefit of transfer by purchase, which prima facie, he had right to get, only after satisfying two conditions i.e. (1) he must have paid the full value for which, he purchased the property and; (2) he must have paid it in good faith and without notice of prior contract. The burden of proof is upon the subsequent purchaser to establish existence of these two conditions in order to see that his right prevails over the prior agreement of sale. In the case on hand, the conduct of the defendants themselves indicates that the appellant herein is not a bona fide purchaser because, the sale deed came to be executed and registered with unusual rapidity. Normal procedure for sale/purchase of immovable property as a rule is not such which is adopted in the present case. Hence, required ingredients of Section 19(b) of the Specific Relief Act are missing in this case and hence, protection of Section 19(b) is not available to the subsequent purchaser i.e. appellant herein.

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

Appeal From Order No. 457 of 2016 and Civil Application No. 12575 of 2016 in Appeal From Order No. 457 of 2016

Decided On: 10.01.2017

Ghnshyambhai Dhirubhai Barvaliya Vs. Rasikbhai Dhirubhai Ambaliya and Ors.

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When plaintiff is not entitled to get specific performance of contract against subsequent purchaser?

Though initially the plaintiff had obtained an order of injunction from this Court, subsequently, it was vacated and the second defendant had been in possession of the property. The second defendant had purchased the property few days prior to the filing of the suit. So, in the strict sense, the second defendant cannot be termed as pendente lite purchaser. Furthermore, the plaintiff also has not asked for either setting aside the sale or for declaration that the sale by the first defendant in favour of the second defendant is not binding on him. Therefore, this Court holds that the second defendant is a bona fide purchaser and issue No. 3 finds favour with the second defendant.

23. With respect to the reliefs that the plaintiff is entitled to are concerned, as discussed earlier, the plaintiff seems to have parted with some money as advance towards the sale consideration. It is also admitted in the written statement made by the first defendant that certain amounts have been received by him. Subsequently, the second defendant has purchased the property, but prior to the institution of the suit. Admittedly, the plaintiff has not sought for any relief against the second defendant. That being so, even presuming for a moment, a decree for specific performance can be granted in the absence of the such prayer, the same cannot be granted against the second defendant in the present suit.

IN THE HIGH COURT OF MADRAS

C.S. No. 52 of 2002

Decided On: 13.07.2016

Amitav Mukherji

Vs.

 Lakshana Holdings Pvt. Limited and Ors.

Hon'ble Judges/Coram:

Pushpa Sathyanarayana, J.

Citation: AIR 2017(NOC) 428 MAD

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Whether party who is added at first appellate stage can be permitted to adduce evidence?

 The appellants are the purchasers of various extent of plots in the suit
property from the second respondent-Defendant under various sale deeds
dated 22.11.19958, 29.09.1995, 29.03.1996, 07.08.1995, 20.11.2008 and
03.07.2007. The appellants moved I.A. No. 5250/2010 in F.A. No. 230/2007
before the High Court for their impleadment under Order I Rule 10 of CPC and
the said application was allowed by the High Court vide order dated
02.08.2010. After the appellants were impleaded as parties in the appeal, the
appellants were not given any opportunity to adduce any evidence or make
their submission. The High Court has only referred to the evidence adduced
by the first respondent-Plaintiff and simply held that failure on the part of
second respondent-Defendant to establish his title over the suit properties
precludes the appellants from claiming any title or interest over the suit
scheduled properties, as they had derived the title from the defendants. We
are of the view that having impleaded the appellants as parties to the first
appeal, it seems inappropriate to record such a finding without affording an

opportunity to the appellants and without examining the claim of the present
appellants. After impleading them as parties, without affording an opportunity
to the appellants, the High Court skirted the claim of the appellants by
observing that the appellants having purchased the suit property subsequent
to filing of the suit and if the second respondent-Defendant had no title then
there is no question of transferring any title or interest or possession by the
second respondent-Defendant to the transferee arises. We find substance in
the contention of the appellants that having been impleaded as parties in the
High Court, they ought to have been given an opportunity to adduce additional
evidence and make their submission to substantiate their claim that they are
bona fide purchasers for value. In our view, having impleaded the appellants,
in terms of Order XLI Rule 27 CPC, the High Court ought to have given an
opportunity to the appellants to adduce additional evidence and make their
submission.
REPORTABLE
 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4426 OF 2011
LALITESHWAR PRASAD SINGH & ORS.
V
S.P. SRIVASTAVA (D) THR. LRS. 
Dated:December 15, 2016.
Citation:(2017) 2 SCC 415

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When subsequent purchaser will not get title to property?

 This issue is as to whether defendant nos. 3 to 5 can claim to have title to the suit property as bona fide purchasers without notice in spite of the plaintiffs having title rights in the suit property by virtue of the documents dated 12.5.2004 and 16.6.2004. This issue also will have to be answered in favour of the plaintiffs and against the defendants for the reasons as given hereinafter.

25(i). A claim of bona fide purchaser for value without notice is in terms of Section 19(b) of the Specific Relief Act. This provision of Section 19(b) of the Specific Relief Act requires that before rights are claimed under this particular principle, it is necessary for the subsequent purchasers have to plead and prove that their actions are firstly bona fide and secondly that they do not have any notice of a previous transaction of transfer of title with respect to the suit property.

(ii) It is noted that in the written statement of the defendant nos. 3 to 5 they have not even whispered about their purchase of rights as being bona fide and that they purchased the rights in the suit property without notice of the earlier title in favour of the plaintiff no.1. Not only there is no pleading but even in the evidence led on behalf of defendant nos. 3 to 6 there is not even a whisper that defendant nos. 3 to 6 have purchased rights in the suit property without having notice of the title created in favour of plaintiff no.1 by the documentation dated 12.5.2004 and 16.6.2004. It is also seen that once the Agreement to Sell dated 16.6.2004 in favour of the plaintiff no.1 was a registered document, defendant nos. 3 to 6 are deemed to have notice of this agreement by virtue of Explanation I to Section 3 of the Transfer of Property Act which provides that registration of a document operates as a notice. Therefore, neither there is any pleading nor any evidence that defendant nos.3 to 6 have purchased the rights in the suit property without notice of the prior title in favour of the plaintiff no.1 and which pleading the defendant nos. 3 to 6 cannot legally take up in view of Explanation I to Section 3 of the Transfer of Property Act.

(iii) Though learned counsel for the defendant nos. 3 to 6 argued that in the affidavit by way of evidence filed on behalf of defendant nos. 3 to 6, they have used the expression 'bona fide', however, not only no amount of evidence can be looked into on the plea of bona fide action of the defendant nos. 3 to 6 which is not pleaded in the written statement, but also that even assuming there is a plea of bona fides, the same is not sufficient because the same had to be accompanied by pleadings and proof of defendant nos. 3 to 6 having purchased rights in the suit property without having notice of the title of plaintiff no.1, and which the defendant nos. 3 to 6 have miserably failed to plead and prove as so discussed above.

(iv). Also, in law, once title rights are transferred pursuant to Section 53A of the Transfer of Property Act, there does not arise application of Section 19(b) of the Specific Relief Act and which applies if there is only an ordinary agreement to sell which requires specific performance and not an agreement to sell under Section 53A of the Transfer of Property Act. Object of Section 19(b) of the Specific Relief Act is to give precedence to a later sale deed of bona fide purchases for value without notice and not for giving precedence to transfer of later rights although rights in an immovable property has earlier already been validly transferred and in such a case it is theSection 48 of the Transfer of Property Act that will apply and not Section 19(b) of the Specific Relief Act.

Delhi High Court

Mrs. Vaneeta Khanna And Anr. vs Mr. Rajiv Gupta And Ors. on 1 October, 2015

Author: Valmiki J. Mehta

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Whether subsequent purchaser can be permitted to added as party in second appeal?

 Thus, pending disposal of the suit or the proceedings,
right to immovable property is directly and specifically in question;
the suit property cannot transferred or disposed of so as to affect
the   right   of   the   other   party   under   any   decree   or   order.     The
explanation   to   Section   52   of   the   Transfer   of   Property   Act   also
clarifies that  pendency of the suit  commences from  the date of
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.
18.  In   my   view,   the   respondents­defendants   in   the   suit
cannot   be   allowed   to   create   a   situation   whereby   right   of   the
appellant­plaintiff   in   the   suit   is   defeated   due   to   transaction
between the alleged subsequent purchasers and the respondentsdefendants.
    The   subsequent   purchasers   claiming   under   the
respondents­defendants   may   have   their   remedy   as   against   the
respondents­defendants to claim damages for breach of agreement,
if   any,   with   the   respondents­defendants,   but   such   subsequent
purchasers   claiming   under   the   respondents­defendants   in   the
absence of privity of contract with the appellant­plaintiff are not
entitled   to   defeat   otherwise   sustainable   decree   by   seeking   to
intervene and participate at the hearing of the second appeal.  That
being so, Civil Application No.2848 of 2004 for grant of permission
to add the subsequent purchaser as respondent preferred by the

appellant must be rejected with costs. 
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
SECOND APPEAL NO.218 OF 2000
Purushottam S/o Devidas Bhoyar,

             V
 Sau. Sheelabai W/o Kishor Shrungare,
    
CORAM : A. P. BHANGALE, J. 

DATED : September 10, 2015
Citation:2016(3) ALLMR105

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When subsequent purchaser will not acquire title in property purchased by him?

As indicated hereinbefore, the High Court accepted the evidence of DW.4 Lakshmamma and came to a finding that by virtue of Ex.B2 she had transferred all her rights, title and interest in the suit properties in favour of Thondolu Mahaboob Basha and having divested her of the title to the suit properties, she was no longer competent to execute a further sale deed in respect of the same property in favour of Syed Ghouse Bi on 16.3.1974 (Ex.A1). The High Court having accepted the sale deed dated 22.5.1968 in favour of Thondolu Mahaboob Basha as being genuine, it came to the conclusion that since the said document was prior in point of time in relation to the subsequent document executed in favour of Syed Ghouse Bi, the plaintiff/petitioner, who had acquired his title through Syed Ghouse Bi alias Chand Begum, did not acquire any title to the suit properties. On such finding, the High Court reversed the judgment and decree of the first Appellate Court.

 The factual aspect having been dealt with in detail by the Courts below, ending in the findings of the High Court, we are not inclined to delve into the facts any further. As indicated by the trial Court, Ext.B2 is a crucial document and was admittedly anterior in point of time to Ext.A1 subsequently executed by DW.4 in favour of Syed Ghouse Bi when she had already divested herself of title to the suit properties. The petitioner did not, therefore, acquire any title to the suit property and the suit was rightly dismissed.

  REPORTABLE

Supreme Court of India

Atla Sidda Reddy vs Busi Subba Reddy & Ors on 6 May, 2010

Bench: Altamas Kabir, Cyriac Joseph

Citation:2010(6)MHLJ 13

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Whether seller can execute second sale deed after cancellation of first sale deed?

 In the case in hand, as has been concurrently held by both the Courts, the Defendant Nos. 6 and 7 executed and registered the sale deed in favour of the Plaintiff on 30.9.1974 and handed over possession. Subsequently on 5.10.1974, they have cancelled the sale deed by execution of another deed and alienated the property once again to Defendant No. 1 and father of Defendant Nos. 2 to 5. In view of the earlier registered sale deed executed in favour of the Plaintiff on 30.9.1974, Defendant Nos. 6 and 7 lost their title. Thus, by virtue of 2nd sale deed dated 10.10.1974, Defendant No. 1 and father of Defendant Nos. 2 to 5 derived no title.

IN THE HIGH COURT OF ORISSA

Decided On: 19.01.2009

 Laxmidhar Naik and Ors.
Vs.
 Sridhar Naik and Ors.

Hon'ble Judges/Coram:
A.S. Naidu, J.

Citation;2009(2) Civil LJ 643

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When subsequent purchaser can not be permitted to be added as party in second appeal for specific performance of contract?

  In   my   view,   the   respondents ­defendants   in   the   suit
cannot   be   allowed   to   create   a   situation   whereby   right   of   the
appellant ­plaintiff   in   the   suit   is   defeated   due   to   transaction
between the alleged subsequent purchasers and the respondents defendants.
    The   subsequent   purchasers   claiming   under   the
respondents ­defendants   may   have   their   remedy   as   against   the
respondents ­defendants to claim damages for breach of agreement,
if   any,   with   the   respondents ­defendants,   but   such   subsequent
purchasers   claiming   under   the   respondents ­defendants   in   the
absence of privity of contract with the appellant ­plaintiff are not
entitled   to   defeat   otherwise   sustainable   decree   by   seeking   to
intervene and participate at the hearing of the second appeal.  That
being so, Civil Application No.2848 of 2004 for grant of permission
to add the subsequent purchaser as respondent preferred by the

appellant must be rejected with costs.  
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
SECOND APPEAL NO.218 OF 2000
Purushottam S/o Devidas Bhoyar,

           ::  VERSUS  ::
Sau. Sheelabai W/o Kishor Shrungare,
  
CORAM : A. P. BHANGALE, J. 

DATE OF PRONOUNCING JUDGMENT : September 10, 2015
Citation;2016(3) ALLMR 105

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When specific performance of contract should not be enforced against transferees?

 The last contention urged is whether defendant Nos. 12 to 15 (the appellants herein) are protected under Section 19(b) of the Specific Relief Act as they being the bona fide purchasers. Learned counsel for defendant Nos. 12 to 15 has rightly invited our attention that the non-compliance of the contract regarding payment of balance consideration to defendant Nos. 1 to 11 on the part of the plaintiff within nine months is an undisputed fact and further the agreement of sale is not registered, as is evidenced from the encumbrance certificate obtained by defendant Nos. 12 to 15 before they entered into an agreement (Exhibit B-1). Both the Courts below have erroneously recorded an erroneous finding on the non existent fact holding that the agreement of sale in favour of the plaintiff is a registered document which, in fact, is not true. The same is evidenced from the encumbrance certificate. More so, defendant Nos. 12 to 15 before entering into the agreement with defendant Nos. 1 to 11 have made proper verification from the competent authority to purchase the part of the suit schedule property and got the agreement of sale (Exhibit B-1) executed in their favour, from defendant Nos. 1 to 11 and thereafter, they got the sale deed registered by paying sale consideration amount. As could be seen from the agreement of sale and registered sale deed, which is marked as Exhibit B-3, it is very clear that defendant Nos. 12 to 15 have paid the sale consideration amount of the property, therefore, the reliance placed upon Section 19(b) of the Specific Relief Act as they being the bona fide purchasers, the specific performance of contract cannot be enforced against the transferees. Defendant Nos. 12 to 15 being the transferee as they have purchased the suit schedule property for value and have paid the money in good faith and without notice of the original contract.

Supreme Court of India

Padmakumari & Ors vs Dasayyan & Ors on 7 April, 2015

Bench: V. Gopala Gowda, C. Nagappan

REPORTABLE

Citation; 2016(2) MHLJ 307 SC

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Whether subsequent purchaser is necessary party in suit for specific performance of contract?

 In the case of Dwarka Prasad Singh v. Harikant Prasad
Singh – (1973) 1 SCC 179, the Supreme Court observed thus:
“There appears to be some divergence between the
High Courts on the question whether in a suit for
specific performance against a purchaser with notice
of a prior agreement of sale the vendor is a necessary
party or not. In other words the conflict has arisen
on the question whether the decree in a suit for
specific performance when the property in dispute has
been sold to a third party should be to only direct the
subsequent purchaser to execute a conveyance or
whether the subsequent purchaser and the vendor
should both execute a conveyance in favour of the
plaintiff : See Gourishankar & Others v. Ibrahim Ali

and Kafiladdin & Others v. Samiraddin & Others.
This Court has, however, held in Lala Durga Prasad
& Another v. Lala Deep Chand & Others that in a suit
instituted by a purchaser against the vendor and a
subsequent purchaser for specific performance of the
contract of sale the proper form of the decree is to
direct specific performance of the contract between
the vendor and the plaintiff and further direct the
subsequent transferee to join in the conveyance so as
to pass on the title which resides in him to the
plaintiff. This was the course followed by the Calcutta
High Court in the above case and it appears that the
English practice was the same. Thus according to this
decision, the conveyance has to be executed by the
vendor in favour of' the plaintiff who seeks specific
performance of the contract in his favour and the
subsequent transferee has to join in the conveyance
only to pass his title which resides in him. It has been
made quite clear that he does not join in any special
covenants made between the plaintiff and his vendor.
All that he does is to pass on his title to the plaintiff.
In a recent decision of this Court in R. C. Chandiok &
Another v. Chunni Lal Sabharwal & Others while
passing a decree for specific performance of a
contract a direction was made that the decree should
be in the same form as in Lala Durga Prasad's case
(supra). It is thus difficult to sustain the
argument that the vendor is not a necessary
party when, according to the view accepted by
this Court, the conveyance has to be executed by
him although the subsequent purchaser has also
to join so as to pass on the title which resides in
him to the plaintiff.”
(emphasis supplied)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.42 OF 2014
IN
CHAMBER SUMMONS NO.2087 OF 2011
IN
SUIT NO.1241 OF 2007

Nitin Gandhi & anr. Vs  Dinyar Pheroz Dubash & ors.


CORAM: MOHIT S. SHAH, C.J. &
M.S.SONAK, J.

JUDGMENT PRONOUNCED ON : 09 Oct. 2014

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When burden of proof is on subsequent purchaser?

 As noted earlier, the expression 'bona fide purchaser'

means and implies a purchaser who purchases a property without

notice, actual or constructive of any adverse rights, claims, interest

or equities of other in and to the property sold. Therefore, at the

stage of seeking leave to implead/carry out consequential

amendment, in our opinion, there was no question of adverting to

any evidence or the lack of it in determining whether the

subsequent purchaser was indeed a bona fide purchaser for value

and without notice of the original contract.

35] The provision contained in section 19(b) of the said

Act which affords protection to a subsequent purchaser who

purchases the contracted property in good faith and for value

without notice of the original contract, is in the nature of an

exception to the general rule. Therefore, it is a settled position in
law that the onus of proof of good faith is upon the subsequent
purchaser who takes a plea that he is an innocent or bona fide
purchaser for value and without notice of the original contract. In

the case of Shankarlal Narayandas Mundade v The New Mofussil

Co. Ltd. & ors. AIR (33) 1946 Privy Council 97, in the context of

section 27 of the Specific Relief Act, 1877, which corresponds to

section 19 of the Specific Relief Act 1963, the Privy Council, by

relying upon its earlier authority in the case of Bhup Narain Singh

V. Gokul Chand Mahton AIR

1934 PC 68 has held thus:

“Their Lordships have found it unnecessary to

examine the evidence which was called on behalf of

the plaintiff to show that these defendants in fact had

notice of the earlier contract, since a decision of this

Board is clear authority for the proposition that the

burden of proving good faith and lack of notice lay

upon the defendants”.

36] In the case of R.K.Mohaammed Ubadullah Vs. Hajee C.

Abdul Wahab (D) by L.Rs. AIR

2001 SC 1658 , in the context of

section 19 of the Specific Relief Act, 1963, the Supreme Court has

observed thus :

14. ….........

As can be seen from Section 19(a) and (b)

extracted above specific performance of a contract

can be enforced against (a) either party thereto and

(b) any person claiming under him by a title arising

subsequent to the contract, except a transferee for

value who has paid his money in good faith and

without notice of the original contract. Section 19(b)

protects the bona fide purchaser in good faith for

value without notice of the original contract. This

protection is in the nature of exception to the general

rule. Hence, the onus of proof of good faith is on

the purchaser who takes the plea that he is an

innocent purchaser. Good faith is a question of

fact to be considered and decided on the facts of

each case.

(emphasis supplied)

37] The pleadings in the context of the proposed

amendment have therefore to be construed in the light of legal

position that the protection afforded to the subsequent purchaser

by section 19(b) of the said Act is in the nature of an exception to

the general rule and therefore, the onus of proving good faith is
on the purchaser who takes the plea that he is an innocent
purchaser. Ultimately, good faith is also question of fact to be
considered and decided on the facts of each case. For this purpose,
an opportunity has to be afforded to the parties to lead evidence
in the course of trial. We are, therefore, unable to share the view

taken by the learned Single Judge that in the facts and

circumstances of the present case there were insufficient pleadings

or evidence on the aspect of the subsequent purchaser not being a

bona fide purchaser for value and without notice of the original

contract.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.42 OF 2014
IN
CHAMBER SUMMONS NO.2087 OF 2011
IN
SUIT NO.1241 OF 2007

Nitin Gandhi  vs. Dinyar Pheroz Dubash 

CORAM: MOHIT S. SHAH, C.J. &
M.S.SONAK, J.

JUDGMENT PRONOUNCED ON : 09 Oct. 2014
Citation;2015(2) MHLJ850

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Whether it necessary to produce material to show that subsequent purchaser is bonafide purchaser at the time of amendment of plaint?

At the stage of considering the chamber summons
seeking leave to implead/amend, the Court is really not concerned
with the veracity or otherwise of the statements made in the
proposed text of the amendment. Therefore, at that stage,
pleadings to the effect that the subsequent purchaser is not a bona
fide purchaser would suffice. There is no requirement of
producing any material or evidence for establishing that the
subsequent purchaser is not a bona fide purchaser, at the stage
when leave for impleadment/consequential amendments is beingapplied for. As noted earlier, the expression 'bona fide purchaser'
means and implies a purchaser who purchases a property without
notice, actual or constructive of any adverse rights, claims, interest
or equities of other in and to the property sold. Therefore, at the
stage of seeking leave to implead/carry out consequential
amendment, in our opinion, there was no question of adverting to
any evidence or the lack of it in determining whether the
subsequent purchaser was indeed a bona fide purchaser for value
and without notice of the original contract.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.42 OF 2014
IN
CHAMBER SUMMONS NO.2087 OF 2011
IN
SUIT NO.1241 OF 2007
Nitin Gandhi & anr. ..Appellants
vs.
Dinyar Pheroz Dubash & ors. .. Defendants.

CORAM: MOHIT S. SHAH, C.J. &
M.S.SONAK, J.

JUDGMENT PRONOUNCED ON : 09 Oct. 2014
Citation;2015(2) MHLJ850

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Whether subsequent purchaser can be restrained from dispossessing co-oparcener from joint family property?

 In the present matter, the original plaintiff No.1
claimed that from the properties of the family, the suit property
had come to him while defendant Nos.1 to 3 claimed that it was
joint property which had not been divided. In such
circumstance, even if defendant Nos.1 to 3 sold what they
claimed to be their share to defendant Nos.4 and 5 during the
pendency of the suit, possession cannot be handed over by them
to the subsequent purchaser without following due procedure of
law. In the matter of "Gajara Vishnu Gosavi" (supra), Hon'ble
Supreme Court held that:-
"11. Thus, in view of the above, the law emerges to
the effect that in a given case an undivided share of a
co-parcener can be a subject matter of sale/ transfer,
but possession cannot be handed over to the vendee
unless the property is partitioned by metes and
bounds, either by the decree of a Court in a partition
suit, or by settlement among the co-sharers."
Thus, even if defendant Nos.1 to 3 could originally
claim to be in joint possession, the subsequent purchasers
cannot simply step into their shoes as far as regards joint
possession of the defendant Nos.4 and 5. They would have to
seek their own remedy. Once defendant Nos.1 to 3 have
admittedly given up their claim of joint possession by executing
the sale deed, the possession of plaintiff of the property, as
clearly appearing from the long standing 7/12 extracts, will have

to be protected. Plaintiffs do make out a prima facie case for
injunction in their favour. The appellants- plaintiffs, in the
application for temporary injunction to the District Judge, raised
apprehension that the defendant Nos.4 and 5 may enter their
names into record of rights on the basis of the alleged sale deeds
in respect of suit property. The plaintiffs expressed
apprehension that they may lose possession of suit property and
so, the defendant Nos.4 and 5 are required to be restrained by
issuing preventive injunction. Plaintiffs claimed that, balance of
convenience is in favour of plaintiffs and in the circumstances, if
injunction is not granted, they will suffer irreparable loss.
 The injunction sought is only against respondent
Nos.4 and 5. Looking to the judgments of the Hon'ble Supreme
Court as above, such subsequent purchasers cannot simply push
in the property. The status of defendant Nos.1 to 3 as joint
owners claimed by them was different and cannot be compared
with defendant Nos.4 and 5, who may have purchased share of
defendant Nos.1 to 3. In fact, the suit of plaintiffs claiming that
suit property came to plaintiff No.1 is still in dispute, which is to
be decided in the appeal. Defendants themselves appear to have
claimed that there are other heirs like those of Krishnabai, who
are not made party. Still they appear to have calculated their
share and executed sale deed of undivided property. Even the
claim of defendant Nos.1 to 3 that suit property is joint, the
matter is still to be finally decided and there is no reason why

possession of plaintiffs should not be protected. If the plaintiffs
lose possession of suit property or part of it, (which has not been
divided by metes and bounds), plaintiffs would suffer irreparable
injury. In such circumstance, to avoid further litigation and
looking to the rival claims, balance of convenience lies in favour
of plaintiffs.
15. (A) For the above reasons, the Appeal is allowed with
costs. The impugned order passed by the District Judge is set
aside. Respondent Nos.4 and 5 are restrained by themselves or
anybody on their behalf, from disturbing possession of the
appellants in suit property till decision of Regular Civil Appeal
No.298/2013.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD
APPEAL FROM ORDER NO.4 OF 2014 WITH
CIVIL APPLICATION NO.274 OF 2014
 Baburao s/o Namdeo Nalwade,

VERSUS
 Tukaram s/o Keshav Nalwade,

CORAM: A.I.S. CHEEMA, J.
DATED: 19th March, 2014.

Citation;2015(2) ALLMR277

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When seller is bound to refund sale consideration to subsequent purchaser?

 In a contract for sale of immovable property for consideration, if a seller fails to transfer the title to the purchaser, for any reason, on receipt of consideration towards the sale price then a seller has no right to retain the sale consideration to himself and he has to refund the same to the purchaser. When the contract fails then parties to the contract must be restored to their respective original position which existed prior to execution of contract as far as possible provided there is no specific term in the contract to the contrary.

68. The contract between defendant no.2 and defendant no.1, i.e., owner and subsequent purchaser, stands frustrated due to impugned judgment/decree because now defendant no.2 would not be in a position to sell the suit house to defendant no.1 though she has received Rs.4 lacs from defendant no.1 for such sale of suit house in her favour. It is for this reason, defendant no.2 is liable to refund Rs.4 lacs to defendant no.1.

 Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELALTE JURISDICTION

                    CIVIL APPEAL Nos. 9949-9950  OF 2014

             

       Rathnavathi   Vs          Kavita Ganashamdas                          

Citation;2015 ALLSCR 8

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