- (1.) This appeal is directed against the order dated 19.10.2000 passed by the Division Bench of the Madras High Court whereby the Division Bench has dismissed the appeal affirming the judgment and decree passed by learned Single Judge. Hence the present appeal.
(2.) Brief facts which are necessary for disposal of this appeal are a suit for specific performance was filed on the basis of an agreement for sale dated 4.7.1974 under which the first defendant in the suit had through her husband and power of attorney holder contracted to sell a house property in sum of Rs.30,000/-. A sum of Rs.5,000/- was given as advance and the remaining Rs.25,000/- was to be paid before 31.7.1974. The said amount was not paid by 31.7.1974. The owner again sold the suit property to the appellant herein on 5.5.1975 for a sum of Rs.45,000/- and possession in question was handed over to the appellant herein. Therefore, the plaintiff filed the aforesaid suit for enforcement of the specific performance of contract. The trial court dismissed the suit holding that the agreement was genuine but a false story was put up by the defendant/owner that he signed the agreement under the influence of liquor and it further held that the defendant who is appellant before us purchased the suit property for bona fide consideration. Therefore, no decree for specific performance could be passed in favour of the plaintiff & learned trial court dismissed the suit. On appeal the learned Single Judge reversed the judgment and the decree passed by the trial court and decreed the suit for specific performance. Aggrieved against the order passed by learned Single Judge, an appeal was preferred by the second purchaser (the appellant herein) before Division Bench and that appeal of the second purchaser was dismissed by the Division Bench by its order dated 19.10.2000 and hence the present appeal on grant of leave.
(3.) We have heard learned counsel for the parties and perused the record. It will be relevant to mention here that the second purchase by the appellant was on 5.5.1975 i.e. two days after the filing of the suit for specific performance on 3.5.1975. Though the applicability of Section 52 of the Transfer of Property Act, 1882 was not considered by the trial court, however, the first appellate court i.e. learned Single Judge while granting the decree for specific performance found that the subsequent purchase made by the appellant- defendant was also bona fide for value and without notice of the agreement to sell but the said sale was subordinate to the decree that could be made in the suit for specific performance which was instituted prior to the sale in favour of the second purchaser. The main argument which was advanced before learned Single Judge was that Section 19 of the Specific Relief Act, 1963 provides that a decree for specific performance against a subsequent purchaser for bona fide who has paid the money in good faith without notice of the original contract can be enforced as the same is binding on the vendor as well as against the whole world. As against this, it was contended by the respondents that Section 52 of the Transfer of Property Act which lays down the principle of lis pendens that when a suit is pending during the pendency of such suit if a sale is made in favour of other person, then the principle of lis pendens would be attracted. In support of this proposition a Full Bench decision of the Allahabad High Court in Smt. Ram Peary and others v. Gauri and others [ AIR 1978 All. 318] as well as a Division Bench judgment of the Madras High Court was pressed into service. Therefore, the question before us in this case is what is the effect of the lis pendens on the subsequent sale of the same property by the owner to the second purchaser. Section 19 of the Specific Relief Act clearly says subsequent sale can be enforced for good and sufficient reason but in the present case, there is no difficulty because the suit was filed on 3.5.1975 for specific performance of the agreement and the second sale took place on 5.5.1975. Therefore, it is the admitted position that the second sale was definitely after the filing of the suit in question. Had that not been the position then we would have evaluated the effect of Section Section 52 of the Transfer of Property Act. But in the present case it is more than apparent that the suit was filed before the second sale of the property. Therefore, the principle of lis pendens will govern the present case and the second sale cannot have the overriding effect on the first sale. The principle of lis pendens is still settled principle of law. In this connection, the Full Bench of the Allahabad High Court in Smt. Ram Peary (supra) has considered the scope of Section 52 of the Transfer of Property Act. The Full Bench has referred to a decision in Bellamy v. Sabine[(1857) 44 ER 842 at p.843)wherein it was observed as under: " 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. Where a litigation is pending between a plaintiff and a defendant as to the right to a particular estate, the necessities of mankind required that the decision of the Court in the suit shall be finding, not only on the litigant parties, but also on those who derive title under them by alienations made pending the suit, whether such alienees had or had not notice of the pending proceedings. If this wsere not so, there could be no certainty that the litigation would ever come to an end." Similarly the Privy Council in Faiyaz Husain Khan v. Munshi Prag Narain [(1907) 34 Ind App 102] where the Court lay stress on the necessity for final adjudication and observation that otherwise there would be no end to litigation and justice would be defeated. The Full Bench of Allahabad High Court further referred to the work of Story on Equity IIIrd Edition,(para 406) which expounded the doctrine of lis pendens in the terms as follows: " Ordinarily, it is true that the judgment of a court binds only the parties and their privies in representations or estate. But he who purchases during the pendency of an action, is held bound by the judgment that may be made against the person from whom he derives title. The litigating parties are exempted from taking any notice of the title so acquired; and such purchaser need not be made a party to the action. Where there is a real and fair purchase without any notice, the rule may operate very hardly. But it is a rule founded upon a great public policy; for otherwise, alienations made during an action might defeat its whole purpose, and there would be no end to litigation. And hence arises the maxim pendent elite, nihil innovetur; the effect of which is not to annul the conveyance but only to refer it subservient to the rights of the parties in the litigation. As to the rights of these parties, the conveyance is treated as if it never had any existence; and it does not vary them." Normally, as a public policy once a suit has been filed pertaining to any subject matter of the property, in order to put an end to such kind of litigation, the principle of lis pendens has been evolved so that the litigation may finally terminate without intervention of a third party. This is because of public policy otherwise no litigation will come to an end. Therefore, in order to discourage that same subject matter of property being subjected to subsequent sale to a third person, this kind of transaction is to be checked. Otherwise, litigation will never come to an end.;