Summary of the Judgment
Case Name: Shingara Singh vs. Daljit Singh & Anr.
Date: 14th October 2024
Court: Supreme Court of India
Judges: Hon'ble Justice Hrishikesh Roy and Hon'ble Justice Prashant Kumar Mishra
Advocates: Mr. Hrin P. Raval (for appellant), Mr. Manoj Swarup (for respondents)
Acts and Sections:
Transfer of Property Act, 1882 (Section 52 - Doctrine of Lis Pendens)
Specific Relief Act, 1963
Cited Judgements:
Banarsi vs. Ram Phal (2003)
Usha Sinha vs. Dina Ram (2008)
Sanjay Verma vs. Manik Roy (2006)
Guruswamy Nadar vs. P. Lakshmi Ammal (2008)
Introduction
The case of Shingara Singh vs. Daljit Singh & Anr. (Civil Appeal No. 5919 of 2023) brings forth important considerations regarding the application of the doctrine of lis pendens in property law. The Supreme Court of India has rendered a judgement focusing on whether the sale of land during the pendency of a suit was valid and the rights of a subsequent purchaser when the doctrine of lis pendens is invoked.
This analysis delves into the legal principles at play, particularly how the Supreme Court evaluated the competing claims between the original plaintiff seeking specific performance and the subsequent buyer of the property.
Facts of the Case
In 1990, Daljit Singh (plaintiff/respondent) entered into an agreement with Janraj Singh (defendant no. 1) to purchase a piece of land for a sum of ₹7,94,000, of which ₹40,000 was paid as earnest money. The sale was to be executed by 30th November 1992. However, when Daljit Singh arrived at the Sub-Registrar's office on the agreed date with the balance amount, the defendant failed to appear. In response, Daljit Singh filed a suit for specific performance of the agreement on 24th December 1992.
During the pendency of this suit, Janraj Singh sold the land to Shingara Singh (appellant/defendant no. 2) on 8th January 1993 for ₹6,45,937.50. The appellant contended that he was a bona fide purchaser, unaware of the prior agreement between the plaintiff and defendant no. 1.
Issues Before the Court
Applicability of the Doctrine of Lis Pendens: Was the sale to Shingara Singh during the pendency of the suit for specific performance valid?
Specific Performance: Should the court grant specific performance of the original agreement to sell the property to Daljit Singh?
Bona Fide Purchaser: Did Shingara Singh qualify as a bona fide purchaser without knowledge of the prior agreement?
Findings of the Lower Courts
The Trial Court partially decreed the suit, awarding Daljit Singh recovery of the ₹40,000 paid as earnest money but denying the decree for specific performance. It reasoned that since Shingara Singh was already in possession of the property through a valid sale deed, the original seller (Janraj Singh) no longer had any right to transfer the property to the plaintiff.
The First Appellate Court upheld the Trial Court's findings, going further to suggest that the original agreement between the plaintiff and defendant no. 1 might have been collusive. The doctrine of lis pendens, in the court’s view, did not apply.
Supreme Court’s Analysis
The Supreme Court undertook a thorough examination of the facts, particularly the validity of the sale to Shingara Singh during the pendency of the suit.
Doctrine of Lis Pendens
The doctrine of lis pendens is codified under Section 52 of the Transfer of Property Act, 1882. It prevents any party from transferring property that is the subject matter of litigation during the pendency of such litigation. The doctrine ensures that the outcome of the litigation is binding not only on the parties to the suit but also on any third-party purchasers who acquire the property during the suit.
Hon'ble Justice Prashant Kumar Mishra remarked,
“The doctrine of lis pendens applies to an alienation during the pendency of the suit, regardless of whether the alienee had notice of the pending litigation.”
In this case, the Supreme Court observed that the sale to Shingara Singh was executed on 8th January 1993, while the suit was already pending. The Court ruled that the subsequent sale was hit by the doctrine of lis pendens, rendering it void against the plaintiff’s claim for specific performance.
Specific Performance
The Supreme Court reinstated Daljit Singh’s claim for specific performance, holding that the plaintiff had fulfilled his obligations under the contract, including being ready and willing to complete the transaction. The trial and appellate courts had erred in denying the specific performance based on the subsequent sale to Shingara Singh.
The court quoted from Usha Sinha vs. Dina Ram (2008):
“A purchaser of suit property during the pendency of litigation has no right to resist or obstruct execution of the decree passed by a competent court.”
Bona Fide Purchaser
Shingara Singh’s defence rested on his assertion that he was a bona fide purchaser without notice of the prior agreement. However, the Supreme Court rejected this claim, pointing out that both the plaintiff and defendant no. 1 were from the same village, and it was implausible that Shingara Singh had no knowledge of the ongoing dispute.
The Court also took into consideration that the sale price in Shingara Singh’s transaction was significantly lower than the original agreement between Daljit Singh and Janraj Singh. This raised doubts about the bona fides of the subsequent purchase.
Hon'ble Justice Hrishikesh Roy observed,
“The lesser sale consideration is a clear indicator that the subsequent purchaser was not acting in good faith and had knowledge of the prior agreement.”
Conclusion
The Supreme Court’s ruling in Shingara Singh vs. Daljit Singh & Anr. serves as a vital reaffirmation of the doctrine of lis pendens and its role in protecting the interests of litigants. It underscores the principle that property transactions during the pendency of a suit are fraught with legal consequences for subsequent buyers.
The Court’s emphasis on specific performance and the dismissal of the bona fide purchaser defence also highlights the importance of due diligence in property transactions.
As Hon'ble Justice Prashant Kumar Mishra aptly noted,
“The doctrine of lis pendens is an equitable doctrine that ensures the integrity of the judicial process and prevents multiplicity of litigation.”
This judgment will serve as a crucial reference for legal professionals dealing with property disputes, particularly those involving competing claims to ownership during litigation.
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