1968 (5) TMI 64 - HC - Indian Laws

Summary

Issues Involved:

1. Specific performance of a contract
2. Bona fide purchaser for value without notice
3. Doctrine of lis pendens
4. Good faith and notice
5. Possession and inquiry obligations
6. Genuineness of the agreement

Issue-wise Detailed Analysis:

1. Specific Performance of a Contract:
The plaintiff sought specific performance of a contract to sell three rooms of a house for Rs. 4,500/-. The agreement was executed on June 15, 1959, with an advance payment of Rs. 500/-. However, the defendant No. 1 sold two of the rooms to defendant No. 2 for Rs. 4,800/- on July 10, 1959, and registered the sale. The trial court found the agreement not genuine and held defendant No. 2 as a bona fide purchaser without notice. The appellate court reversed the finding on the genuineness but still denied specific performance, affirming defendant No. 2's status as a bona fide purchaser.

2. Bona Fide Purchaser for Value Without Notice:
The appellate court held that defendant No. 2 was a bona fide purchaser for value without notice of the agreement between the plaintiff and defendant No. 1. The plaintiff's suit for specific performance was refused on this ground. The court emphasized that the defendant No. 2 had paid the consideration money in good faith and without notice of the original contract.

3. Doctrine of Lis Pendens:
The plaintiff argued that the sale deed executed on July 10, 1959, by defendant No. 1 in favor of defendant No. 2 was not registered before the suit's institution and should be hit by the doctrine of lis pendens. The court, however, clarified that under Section 47 of the Indian Registration Act, a registered document becomes operative from the date of its execution, not from the date of registration. Thus, defendant No. 2's title was effective from July 10, 1959, before the suit was instituted.

4. Good Faith and Notice:
The court addressed the plaintiff's contention that there was no clear finding on whether defendant No. 2 paid the consideration money in good faith. The court concluded that both the trial and appellate courts found defendant No. 2 had paid in good faith without notice of the original contract. The term "bona fide purchaser" was used to signify this good faith.

5. Possession and Inquiry Obligations:
The plaintiff argued that his possession of the property should have prompted defendant No. 2 to inquire about the nature of his possession. The court noted that both the plaintiff and defendant No. 2 were tenants in the same house, and defendant No. 2 was aware of the plaintiff's possession. There was no change in the nature of the plaintiff's possession to warrant suspicion. Thus, the absence of inquiry did not affect defendant No. 2's good faith.

6. Genuineness of the Agreement:
The defendant No. 1 filed a cross-objection challenging the appellate court's finding of the agreement's genuineness. The trial court had found the agreement not genuine, partly because it was not explained to defendant No. 1, an illiterate pardanashin lady. The appellate court, however, found the agreement genuine after careful consideration of the evidence. The court dismissed the cross-objection, noting that the defendants had not raised the issue of the agreement not being explained to defendant No. 1 in their written statement or evidence.

Conclusion:
The appeal was dismissed, affirming the judgment and decree of the lower court. The plaintiff's suit for specific performance was denied, and the cross-objection by defendant No. 1 was also dismissed. The court upheld the findings that defendant No. 2 was a bona fide purchaser for value without notice and that the agreement was genuine.