Find a Lawyer

Civil Revision No. 2128/D of 1986, decided on 22nd November, 1986

‑‑‑S. 27(b)‑‑Specific performance of contract‑‑Rights of transferee for value without notice of original contract‑‑Enforcement of‑‑Provision of S. 27(b) caters for situation where transferee had acquired property in good faith without notice of original contract, before institution of a suit for specific performance, and not during its pendency.

Syed Mithal Shah v. Kh. Rafi Ullah P L D 1975 Kar. 930 and Muhammad Sharif v. Sughran Bano 1984 S C M R 1139 ref.

‑‑‑S. 52‑‑Specific Relief Act (I of 1877), S. 27(b)‑‑Principle of "lis pendens", whether applicable to a suit for specific performance‑‑Principle of "lis pendens" being in consonance with principle of equity, good conscience and justice, held, could be invoked in a suit for specific performance of contract.

Mst. Saeeda Akhtar and others v. Lal Din and others P L D

1981 Lah. 623; Beli Ram and Brothers v. Ram Lal and others A I R

1925 Lah. 644(2) and Muhammad Ishaq v. Muhammad Siddique P L D

1975 Lah. 909 ref.

Jahar Lal Bhutra and others v. Bhupendra Nath Basu and others A I R 1922 Cal. 421(2) ; Moti Lal Pal v . Priya Nath Mitra (1908) 13 CWN. 226‑(9) C L J 96; Atar Ali v. Abed Ali and others 1 L D 1964 Dacca 158; Bellamy v. Sabine (1857) 1 De G. & J 566; Maharaj Bahadur Singh v. Sh. Abdul Rahim A I R 1922 Pat. 394; Krishanji Pandharinath v. Anusayabai and another A I R 1959 Bom. 475; Pir Abdullah Shah and 8 others v. Humayon and 5 others P L D 1957 Lah. 1054 and Haider Ali and another v. Akbar Ali and another P L D 1973 Lah. 546 rel.

‑‑‑S. 115‑‑Transfer of Property Act (IV of 1882), S. 52‑‑Specific Relief Act (I of 1877), S. 27(b)‑‑Suit for specific performance of contract‑ Revisional jurisdiction, exercise of‑‑Where Appellate Court had rightly applied principle of lis pendens in a suit for specific performance of contract, no exception, held, could be taken by High Court in its revisional jurisdiction.

Ch. Muhammad Rafiq Iqbal for Petitioner.

This Civil Revision arises out of a suit instituted on 23‑6‑1976 by the petitioner against respondent No. 1 in the Civil Court at Lahore for a declaration that the petitioner was an owner of one‑half of House No. 7 Street No. 9, Dharampura, Lahore alongwith a prayer for a permanent injunction restraining respondent No. 1 from dispossessing her alleging that she purchased the said house in consideration of Rs.20,000 from Mst. Khurshid Begum respondent No. 2, widow of Safdar Hussain, through a Registered Sale Deed, dated 1‑1‑1976, respondent No. 1 had nothing to do with the property so vesting in her as he had no right to the same.

2. Respondent No. 1 controverted the suit by claiming that he was an owner of one half of the house in question while Mst. Khurshid Begum, respondent No. 2, was the owner of the other half. Respondent No. 2 executed an agreement, dated 8‑5‑1974 to sell her share of the house in consideration of Rs.17,250 towards which respondent No. 1 had paid Rs.10,000. Since respondent No. 2 did not perform the agreement, respondent No. 1 instituted a suit for specific performance of the agreement to sell which suit was decreed in his favour after a full contest by Malik Rustam Ali, Civil Judge, Lahore, vide judgment, dated 26‑7‑1976. It was further maintained that during the pendency of the suit on his application for temporary injunction, the learned Civil Judge, seized of the matter, had issued on 5‑3‑1975 an interim injunction restraining respondent No. 2 from alienating the property in question. An such respondent No. 2 was not competent to sell the second half of the house on 1‑1‑1976 to the petitioner. After the written statement so made the petitioner filed an amended plaint i.e. on 3‑10‑1978. The petitioner in her amended plaint took up a ground that the decree, dated 26th of July, 1976 in favour of respondent No. 1 and the Sale Deed executed and registered through the Court under the said decree in favour of respondent No. 1 were void ab initio being based on fraud, misrepresentation active concealment of facts, collusive, mala fide without lawful authority and inoperative as such against the very rights of the petitioner. She also stated that the decree obtained by respondent No. 1 was not binding upon her as she was a bona fide purchaser for consideration without notice and in possession of the suit property under the Registered Sale Deed, dated 1‑1‑1976.

Respondent No. 2 who was joined at that stage as defendant admitted the claim of the petitioner in her written statement. Respondent No. 1 reiterated the defence as already taken by him and denied the allegations made by the petitioner as to fraud etc. He maintained that respondent No. 2 was not competent to sell the other half of the house to the petitioner since she had been restrained through a temporary injunction from alienating the property during the pendency of the suit.

3. The learned Civil Judge was of the view that the sale by respondent No. 2 of the property in question in favour of the petitioner stood proved and as the petitioner and respondent No. 2 had denied any knowledge as to the previous suit so respondent No. 1 ought to have put to them all the relevant documents, when they denied the facts and proved the same in accordance with law. According to him, the documents relied upon by respondent No. 1 could not be availed of against the petitioner and respondent No. 2. The petitioner had been put into possession of the property in dispute by respondent No. 2 under the sale which was completed, on 31‑12‑1975 in which circumstance that was for respondent No. 1 to implead her as a party to the suit with the result that the decree passed in favour of respondent No. 1 had no legal effect against the petitioner. Respondent No. 1 could seek the cancellation of the sale‑deed in favour of the petitioner. The case was not covered by section 47, C.P.C. The learned Civil Judge further entertained that section 52 of the Transfer of Property Act as to the doctrine of lis pendens had no application to the facts of the case. He decreed the suit of the petitioner vide his judgment, dated 9‑6‑1984.

4. The respondent No. 1 feeling aggrieved thereby filed an appeal in the Court of the learned District Judge, Lahore. The learned District Judge observed as to the observation of the learned Civil Judge that respondent No 1 should have sued for the cancellation of the deed of sale in favour of the petitioner, that the decision Syed Mithal Shah v. Kh. Rafi Ullah P L D 1975 Kar. 930 upon which the learned Civil Judge had relied was not approved by the august Supreme Court in Muhammad Sharif v. Sughran Bano 1984 S C M R 1139. He was of the view that, that was not a case in which respondent No. 1 had merely set up a previous agreement to sell and had based his claim to the ownership of the property in question in preference to Mst. Jhandi plaintiff on that agreement alone, but that was a case which took the support from the decree, dated 26‑7‑1976 having been passed for the specific performance of the said agreement against respondent No. 2 which suit had been duly contested by respondent No. 2 in which the temporary injunction had been issued on the assurance of Ch. Habib Ullah Advocate that his client Mst. Khurshid Begum was not minded to alienate the property in dispute. The agreement to sell in favour of respondent No. 1 had merged into the decree passed, on 26‑7‑1976 in favour of respondent No. 1 and as that was the case of the petitioner that the decree, dated 26‑7‑1976 had been obtained by fraud and misrepresentation, that was for her to have proved the facts which constituted fraud and misrepresentation which was not done except that there was a bald assertion. The petitioner had stepped into the shoes of respondent No. 2, so she could not escape the consequence of the decree; dated 26‑7‑1976 merely by saying that she was not a party to the suit resulting in the decree. The failure of respondent No. 1 to confront her with the documents was not fatal since the onus to prove that the impugned decree, dated 26‑7‑1976 was a result of fraud and misrepresentation under issue No. 2 was on the petitioner because her claim was founded upon a deed of sale which had been executed during the pendency of respondent No. 1's suit. There was overwhelming evidence that the suit filed by respondent No. 1 was hotly contested by respondent No. 2 which militated against the proceedings being in any way collusive. The petitioner had‑ admitted that she had learnt of the suit instituted by respondent No. 1 from her Mohalladars yet according to her she chose instead of becoming a party, to file her suit when the suit of respondent No. 1 was still pending which fact tended to support the case of respondent No. 1 that in point of fact the petitioner not only knew of the suit but had applied for being joined as a party and her application was rejected by the learned Civil Judge's order, dated 8‑7‑1976.

5. The learned District Judge was also of the view that section 47, C . P. C . was a bar to the suit in so far as that asked the relief that respondent No. 1 was not entitled to get possession of the suit property in pursuance of the impugned decree, dated 26‑7‑1976. As transferee from Mst. Khurshid Begum, the petitioner was her representative and the decree was, therefore, binding upon her. The relief then related to the execution and satisfaction of the decree. Further the learned District Judge observed that that was of a little consequence that the petitioner was not a party to the previous suit for she had stepped into the shoes of respondent No. 2 and as the latter during the pendency of the suit, was not competent to sell the house in question to the petitioner, the sale‑deed, dated 1st January, 1976 must have been held to be hit by the doctrine of lis pendens and, therefore, of no legal effect as against respondent No. 1. Then in summing up the case, the learned District Judge was of opinion that, that was amply proved that respondent No. 2 had herself contested the suit through Ch. Habib Ullah, Advocate and the petitioner having taken the risk of purchasing the property during the pendency of respondent No. 1's suit, she must have been held to be bound by the decree. The petitioner had learnt of the suit and that implied that. she had also learnt of the agreement, dated 8th May, 1974. As to the assertion that the petitioner had been given the physical possession of the house at the time of the sale in her favour, respondent No. 1 was not a party to the sale‑deed and the recital as to the possession therein was not binding on him so as to make it for respondent No. 1 to implead the petitioner in his suit. The learned District Judge was not prepared in the circumstances of the case to take the words of the petitioner and respondent No. 2 on the face value that the petitioner had been given possession by respondent No. 2. The learned District Judge in accepting the appeal set aside the judgment and decree appealed from and dismissed the suit as brought by the petitioner with costs. This is vide judgment, dated 12‑10‑1986.

6. The learned counsel for the petitioner has contended that the petitioner is a bona fide purchaser without notice of the agreement in favour of respondent No. 1, therefore, the said agreement cannot be enforced against her. The learned counsel has referred to the provision of section 27 of the Specific Relief Act and has relied upon clause (b) to the section wherein it has been said that the specific performance of a contract may be enforced against "any other person claiming under him by a title arising subsequently to the contract except a transferee for value who has paid his money in good faith and without notice of the original contract". This provision of law caters for the situation A where the transferee acquires the property in good faith without having notice of the original contract before the institution of the suit for specific performance and not during its pendency.

7. The second contention of the learned counsel is that the sale made by respondent No. 2 to the petitioner even in violation of the temporary injunction does not impair the position of the petitioner as a bona fide transferee without notice. For this he has relied upon Mst. Saeeda Akhtar and others v. Lal Din and others P L D 1981 Lah. 623 wherein it has been held that the violation of a prohibitory interim order preventing the sale of property merely entails penal consequences for the persons who violate the same but the order by itself does not detract from the validity of the sale.

No benefit can be drawn from the decision so relied upon since, in the said decision the suits instituted were from the recovery of money on the basis of pronotes during the pendency of which an interim injunction restraining the defendant from alienating his land had been passed but despite that he executed a sale‑deed transferring all his land to another, suffice it to note that there the land which was sold was not subject‑matter of the suit and there arose no implications as to the transaction having been hit on the principle of lis pendens. As to the decision Beli Ram and Brothers v. Ram Lal and others A I R 1925 Lah. 644(2), next relied upon, the said observation holds true. This decision has also been referred to in Mst. Saeeda Akhtar and others v. Lal Din and others P L D 1981 Lah. 623.

8. The next position taken up by the learned counsel for the petitioner is that the principle of lis pendens is not applicable in a suit for possession through specific performance, since a decree for specific performance declares the right of the decree‑holder to have the property transferred in his favour covered by the decree and so long as the sale‑deed is not executed in favour of the decree‑holder either by the judgment‑debtor or the Court, the title of the property remains vested in the judgment‑debtor. The reliance is placed on Muhammad Ishaq v. Muhammad Siddique P L D 1975 Lah. 909. in this case in an application filed for ejectment by one Muhammad Ishaq against Muhammad Siddique, the learned District Judge had accepted the appeal of Muhammad Siddique on the ground that since a decree for specific performance of the agreement with regard to sale of the property in question had been passed in favour of Muhammad Siddique, therefore, the question of occupying the shop in question by him as a tenant did not arise. He had further held that in view of the principle laid down in section 53‑A of the Transfer of Property Act, the possession of the respondent over the shop would be that of an owner. It is in this regard that while disagreeing the learned Judge observed that "according to law a decree for specific performance only declares the right of the decree‑holder to have the property transferred in his favour covered by the decree and so long as the sale‑deed is not executed in favour of the decree‑holder by the judgment‑debtor or by the Court, the title of the property remains vested in the judgment‑debtor".

As the application of the principle of lis pendens is in issue in the present case, therefore, the said decision is not conclusive of the matter as nothing of the sort was in issue in it.

In .Jahar Lal Bhutra and others v. Bhupendra Nath Basu and others A I R 1922 Cal. 421(2), the plaintiff had sued Srinarayan Santra and others for specific performance of an agreement, the suit was decreed on the 25th of April, 1910. It was during the pendency of the suit instituted that the Santras sold away their interest to the defendants, it was held that the defendants were manifestly the purchasers pendente lite and the interest they purchased was bound by the decree in the suit for specific performance. The learned Division Bench in turn relied on Moti Lal Pal v: Priya Nath Mitra (1908) 13 CWN 226 = (9) C L J 96, in which it was held that a suit for specific performance of a contract for transfer of immovable property operated as lis pendens. The said decision of the Calcutta High Court was relied upon in Atar Ali v. Abed Ali and others P L D 1954 Dacca 158. In view of the above decisions, there is no force in the contention of the learned counsel that the principle of lis pendens is not applicable to a suit for specific performance.

9. The last contention of the learned counsel is that the petitioner had no notice of the pendency of the suit, therefore, the sale to the petitioner remained unaffected.

The finding of fact has been returned by the learned District Judge that the petitioner had the knowledge of the suit. As to the notice, reference can conveniently be made to Bellamy v. Sabine (1857) 1 De. G & J 566 in which Lord Cranworth, apart from the observation made as to the principle of lis pendens by Turner, L J observed:

"It is scarcely correct to speak of lis pendens as affecting a purchaser through the doctrine of notice, though undoubtedly the language of the Courts often so describes its operation. It affects him not because it amounts to notice, but because the law does not allow litigant parties to give to others, pending the litigation, rights to the property in dispute, so as to prejudice the opposite party".

Malkharaj Bahadur Singh v, Sh. Abdul Rahim A I R 1922 Patna 3994 where it has been held that no notice is necessary in order to appeal these principle of lis pendens whictZ principle applies to immovabfale prooperty. In Krishanji Pandharinath v. Anusayabai and another A I : R 195'59 Bom. 475, it has been held that the application of the doctrine c of us pendens does not depend upon the purchaser having notice of the suit, even if the transferee pendente lite from a party has no notice of thee suit, the rights of the other patrty to a suit in which a right to imovable property is directly and specifically in question under the decree cannot be prejudicially affected by the transfer.

10. The idea behind the doctrine files pendens has been expoundeed by Turner L.J. in the above‑said case i.e. Bellamy v. Sabine (1857) De G. & J. 566 saying "it is as I think a doctrine common to the Courts both of Law and Equity, and rests, as I apprehend, upon this foundation‑‑that it would plainly be impossible that any action or suit could be brought to a successful teurination, if alienations, pendente lite a were permitted to prevail. The plaintiff would be liable in every caste to be defeated by the defendant's alienating before the judgment or decree, and would be driven to commence his proceedings de novo, subject again to be defeated by the same course of proceeding.

Though the provision of section 52 of the Transfer of Property Act: has not been specifically made applicable to Punjab yet the principle enunciated by the section has been Invoked from time to time since it is tin consonance with the principles of equity, good conscience and justice. The said principle has been invoked in Pir Abdullah Shah anjil 8 others v. Humayon and 5 others P L D 1957 Lah. 1054 wherein it has been said that the principle underlying section 52 of the Transfesr of Property Act is applicable to the case since no interest which its created during the pendency of the suit can affect any decree passed in the suit. To the same effect as to the application of the principle theme stands as an authority Haider Ali and another v. Akbar Ali an1d another P L D 1973 Lah. 546 which has been relied upon by the Tearned District Judge.

11,. The learned District Judge hats rightly applied the principle of lis pendens to which no exception cad be taken as the suit for specific L performance was not a collusive one, that was vigorously contested by respondent No. 2. This civil revision is, therefore, dismissed in limint being without any substance.

A . A , Revision dismissed

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.