No decree could have been obtained behind back of bona fide purchaser, if transaction had taken place prior to institution of suit for specific performance: SC

Read Judgment: Seethakathi Trust Madras V. Krishnaveni 

Pankaj Bajpai

New Delhi, January 18, 2022: The Supreme Court has opined that the subsequent purchasers would fall within the exception set out in Section 19(b) of the Specific Relief Act, being transferees who had paid money in good faith and without notice of the original contract. 

A Division Bench of Justice Sanjay Kishan Kaul and Justice M.M. Sundresh refused to accept that a decree could have been obtained behind the back of a bona fide purchaser, more so when the transaction had taken place prior to the institution of the suit for specific performance. 

The controversy insofar as the present case is concerned arose from a suit filed by the Krishnaveni (Respondent) before the Court of District Munsif, Chengalpattu against Seethakathi Trust (Appellant) praying for declaration of title and delivery in her favour to the extent of 0.08 cents of the land and delivery of the same. The suit was predicated inter alia on a rationale that the Respondent had taken possession of 50 acres by way of the execution proceedings, and that the Appellant had trespassed over 0.08 cents of the same. The suit was, however, dismissed opining that the Respondent was estopped from questioning the appellant’s purchase. 

The plea of sale being hit by lis pendens was rejected and the appellant was held to have adverse possession of the land as confirmed by the Panchayat Board President, who appeared as a witness and deposed that the Appellant had been enjoying the land for more than 30 years. The Appellant had no knowledge of the earlier proceedings in respect of the suit for specific performance filed by the Respondent.

The appeal preferred by the Respondent was dismissal on a dual finding, i.e., that the appellant was in adverse possession of the land, and as per Section 114(3) of the Indian Evidence Act, 1872 the expression “may be presumed” showed that the court can infer the reality from available evidence and documents. The delivery receipt was found to be not a real document of delivery of possession, but of mere paper delivery.

On second appeal, the High Court set aside the judgments passed by the courts on the ground that they did not properly appreciate the evidence particularly with respect to the execution proceedings. The delivery of 50 acres of land by the admin in accordance with the surveyor’s plans was found to be proof of possession by the Respondent. The plea of adverse possession was also rejected. 

After considering the arguments, the Apex Court found that there is an element of dispute with respect to possession raised by the two parties qua their respective 50 acres. 

Insofar as 70 acres of land is concerned that undisputedly vests with the Appellant, as the dispute sought to be raised by the Respondent does not pertain to 50 acres but only to 0.08 cents, a fraction of an acre, added the Court. 

Speaking for the Bench, Justice Kaul noticed that according to the Respondent the small area is important for the enjoyment purposes, but, it is not necessary to go into the issue of adverse possession as both parties are claiming title.

The crucial aspect is the decree obtained for specific performance by the Respondent and the manner of obtaining the decree, as the Respondent was fully aware of the prior registered transaction in respect of the same property originally in favour of Niraja Devi, added the Bench. 

“the Respondent did not even step into the witness box to depose to the facts. It is the manager who stepped into the witness box that too without producing any proper authorisation. What he deposed in a way ran contrary to the interest of the Respondent as it was accepted that there was knowledge of the transaction with respect to the same land between third parties and yet the Respondent chose not to implead the purchasers as parties to the suit. Thus, the endeavour was to obtain a decree at the back of the real owners and that is the reason, at least, in the execution proceedings that the original vendor did not even come forward and the sale deed had to be executed through the process of the Court”, observed the Division Bench. 

Accordingly, the Apex court concluded that the High Court ought not to have interfered with the concurrent findings of the trial court and the first appellate court.