"Supreme Court: Bona Fide Purchase or Lack of Notice Not a Defense Once Lis Pendens Applies (Section 52 of TP Act)"

The Supreme Court has confirmed that once a transaction is affected by the doctrine of lis pendens (pending litigation), the defense of being a genuine (bona fide) buyer or not knowing about the earlier sale agreement cannot be used. This ruling came from a case heard by Justices Hrishikesh Roy and Pankaj Mithal, involving an appeal against a High Court decision that ordered the specific performance of a sale agreement, even though another sale deed was executed while the lawsuit was still ongoing. The case started with a sale agreement on August 17, 1990, followed by a lawsuit filed on December 24, 1992, asking the court to enforce the agreement. The defendant denied the agreement's existence. During the case, another buyer (defendant no.2) was added because he had bought the land on January 8, 1993, claiming he was a genuine buyer who didn’t know about the earlier sale agreement. The trial court found the agreement to be genuine but didn’t order specific performance of the agreement, citing the sale deed made during the case. It ruled that defendant no.2 was a genuine buyer who didn’t know about the earlier agreement and instead ordered the recovery of the advance payment. The First Appellate Court also rejected the specific performance, calling the agreement collusive between the original buyer and seller. However, the High Court ordered specific performance of the agreement, stating that defendant no.2 was not a genuine buyer since the transaction took place just before his court appearance and he likely knew about the previous agreement because he lived in the same village. Defendant no.2 then appealed the High Court’s decision to the Supreme Court. The Supreme Court criticized the First Appellate Court for declaring the sale agreement to be a collusion between the parties without a proper cross-appeal from the defendant. The Supreme Court pointed out that the trial court had partially ruled in favor of the plaintiff by ordering the refund of ₹40,000. The defendants did not file a separate appeal or raise objections against this part of the trial court's decision. Therefore, the First Appellate Court shouldn't have ruled that the agreement was a collusion without a cross-appeal from the defendants. Regarding the concept of lis pendens (pending litigation), the Supreme Court referred to several previous cases to emphasize that this principle prevents a transaction made during a pending lawsuit from affecting the final judgment. The Court clarified that even if a buyer is unaware of the pending case or buys the property in good faith, they are still bound by the final court ruling. In this case, the Supreme Court found that the sale made to defendant no. 2 during the lawsuit was invalid because of the doctrine of lis pendens. The court ruled that the High Court was right in ordering specific performance of the sale agreement, even though the trial court and First Appellate Court had previously ruled otherwise. Senior Advocate Harin P Raval appeared for the appellant. Senior Advocate Manoj Swarup appeared for the respondent. Case : Shingara Singh v. Diljith Singh and another www.legalmeet.in