Once Transactions Are Illegal Due To Doctrine Of Lis Pendens, Defence Of Being Bona Fide Purchasers Has To Be Rejected: Supreme Court

The Court was hearing a Civil Appeal challenging the judgment and decree passed by the High Court allowing the appeal preferred by the plaintiff to set aside the judgment and decree of the Trial Court and the First Appellate Court which concurrently decreed the suit partially only for the alternative relief of recovery of Rs. 40k along with interest while dismissing the suit in respect of specific performance of the agreement.

The bench comprising Justice Hrishikesh Roy and Justice Prashant Kumar Mishra referring to an earlier decision in Chander Bhan (D) vs. Mukhtiar Singh noted that, “once it has been held that the transactions executed by the respondents are illegal due to the doctrine of lis pendens the defence of the respondents 1 – 2 that they are bona fide purchasers for valuable consideration and thus, entitled to protection under Section 41 of the Transfer of Property Act, 1882 is liable to be rejected.”

Brief Facts-

In the present case, a suit for specific performance of a land sale agreement was filed in which Rs. 40k as earnest money was paid, but defendant no 1 failed to complete the sale. During the case, another defendant was added after he bought the land from defendant no. 1. Defendant no. 2 claimed to be a bona fide purchaser unaware of the prior agreement. The Trial Court confirmed the agreement but denied specific performance since the land had already been sold, awarding only a refund of Rs. 40,000. The High Court ruled that the sale to defendant no. 2 was invalid under the doctrine of lis pendens.

The Court mentioned the decision of the Supreme Court in Usha Sinha vs. Dina Ram where according to the Court it was held, “that the doctrine of lis pendens applies to an alienation during the pendency of the suit whether such alienees had or had no notice of the pending proceedings.”

The Court said that the High Court has not committed any error of law in rendering the judgment impugned.

Accordingly, the Court dismissed the Civil Appeal.