The Madhya Pradesh High Court affirmed a trial court's decree for specific performance of a land sale agreement, holding that subsequent purchasers who acquired suit property during litigation pendency are bound by the court's judgment under the doctrine of lis pendens, regardless of their claim to bona fide purchase without notice. The court dismissed appeals by both original sellers and subsequent purchasers, modifying the decree to require execution of the sale deed in favor of the plaintiff.
Background & Facts
The Dispute
Tricone Project India Limited (plaintiff) entered into an agreement on 17.02.2021 with Atmaram Patel, Radhabai, and Nandkishore Patel (defendants Nos. 1-3, original sellers) to purchase agricultural land in Village Datoda, Tehsil Dr. Ambedkar Nagar, District Indore. The total sale consideration was Rs. 3,71,46,900/- for 4.95 acres at Rs. 75,00,000/- per acre, with Rs. 5,00,000/- paid as advance via cheque no. 808110 dated 15.02.2021 drawn on IndusInd Bank.
Key Facts
- The agreement stipulated part payment of Rs. 45,00,000/- within two months, followed by NOC from Bank of India and diversion order, with balance payable in six quarterly installments starting after nine months (total 24 months period)
- Plaintiff paid total Rs. 1,58,11,469/- to defendant No. 1 (Atmaram Patel) till 16.09.2022 through bank transfers
- Plaintiff issued a notice to sellers on 13.12.2022 demanding execution of sale deed upon payment of balance consideration
- Defendants Nos. 1-3 executed a sale deed in favor of Shree Sai Samarth Buildcon (defendants Nos. 5-6, subsequent purchasers) on 13.04.2023 for Rs. 3,18,00,000/- during the pendency of the suit
- Plaintiff filed the suit for specific performance on 16.03.2023 before the Trial Court
- Subsequent purchasers remained ex parte after service of notice by substituted mode
Procedural History
- 16.03.2023: Original suit (O.S. No. 9 of 2004) filed by plaintiff before IV District Judge, Dr. Ambedkar Nagar, Indore
- 11.03.2025: Trial Court decreed specific performance in favor of plaintiff, directing original sellers to execute sale deed upon payment of balance Rs. 2,17,06,900/- and declared sale deed to subsequent purchasers void and ineffective
- 21.03.2025: First Appeal No. 513/2025 filed by original sellers (defendants Nos. 1-3)
- 21.03.2025: First Appeal No. 736/2025 filed by subsequent purchasers (defendants Nos. 5-6)
- 12.08.2026: Appeals reserved for judgment
- 17.09.2026: Judgment delivered by Hon'ble Shri Justice Vinay Saraf
The Parties' Positions
- Original Sellers (Appellants in FA 513/2025): Challenged plaintiff's authorization to sue (Rahul Sharma lacked authority letter), alleged forged agreement, and asserted they were still in possession of suit lands
- Subsequent Purchasers (Appellants in FA 736/2025): Contended improper service of notice, lack of plaintiff's readiness and willingness, and claimed bona fide purchase without notice of suit
- Plaintiff (Respondent): Asserted Rahul Sharma was authorized representative, proved readiness and willingness through part payment and notice, and argued subsequent purchasers had knowledge of suit and thus bound by lis pendens
Relief Sought
Original sellers sought dismissal of suit and setting aside of trial court decree. Subsequent purchasers sought similar relief, claiming they were bona fide purchasers for value without notice. Plaintiff sought affirmation of trial court decree with specific performance against both original sellers and subsequent purchasers.
The Legal Issue
The central questions were: (1) Whether Rahul Sharma was authorized to file the suit on behalf of plaintiff company; (2) Whether plaintiff proved readiness and willingness to perform the contract after the 2018 amendment to Section 16(c) of the Specific Relief Act, 1963; and (3) Whether the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882 applies to bind subsequent purchasers who acquired suit property during litigation pendency, overriding the bona fide purchaser exception under Section 19(b) of the Specific Relief Act, 1963.
Arguments Presented
For the Appellants (Original Sellers and Subsequent Purchasers)
Original sellers argued Rahul Sharma lacked authorization as he was neither a director nor shareholder, citing Uttamram Vithaldas Vs. Thakur Das Parshottamdas (AIR 1922 Bombay 113) and Janki Vashdeo Bhojwani Vs. Indusind Bank Ltd. (AIR 2005 SC 439) to contend a power of attorney holder cannot act as witness. They further asserted the agreement was forged and fabricated, and that they remained in possession of suit lands. Subsequent purchasers contended defective service of notice, lack of plaintiff's readiness and willingness (citing J. Samuel Vs. Gattu Mahesh [(2012) 2 SCC 300] and Shubh Laxmi Grih Nirman Sahakari Sanstha Maryadit Vs. Suresh@ Gopal [2018 (2) JLJ 159]), and claimed bona fide purchase without notice under Section 19(b) of SRA.
For the Respondent (Plaintiff)
Plaintiff countered that Rahul Sharma was duly authorized as employee and local representative, relying on United Bank of India Vs. Naresh Kumar ((1996) 6 SCC 660) to assert substantive rights cannot be defeated on technical procedural grounds under Section 99 CPC. Regarding readiness and willingness, plaintiff argued the 2018 amendment to Section 16(c) SRA omitted the pleading requirement, and proved willingness through part payment of Rs. 1,58,11,469/- and issuance of notice on 13.12.2022. On lis pendens, plaintiff relied on Alka Shrirang Chavan Vs. Hemchandra Rajaram Bhonsale (2026 SCC OnLine SC 969) and Maharaj Singh Vs. Karan Singh [(2024) 8 SCC 83] to assert Section 52 TPA applies immediately upon suit institution, binding subsequent transferees irrespective of notice.
The Court's Analysis
The court first addressed authorization, holding that Section 99 CPC prevents reversal of decrees on technical defects not affecting merits or jurisdiction. It found Rahul Sharma entered agreement on plaintiff's behalf, conducted all transactions, and appeared as witness - defect of no authorization letter was curable and not raised at trial, thus inadmissible on appeal. On readiness and willingness, the court noted the 2018 amendment to Section 16(c) SRA removed the word 'aver', making proof (not pleading) sufficient. Plaintiff's part payment (over 90% of consideration) and prompt notice issuance established readiness and willingness from facts and circumstances, citing A. Shahul Hameed Vs. N. Malligarjuna (2026 SCC OnLine SC 969).
On lis pendens, the court held Section 52 TPA operates independently of Section 19(b) SRA. It emphasized that upon suit institution, Section 52 TPA prohibits property transfer affecting other parties' rights, with the sole exception being court-authorized transfer. Subsequent purchasers' knowledge of suit (admitted by DW-1 Nandkishore Patel) negated bona fide claim. The court affirmed Lala Durga Prasad Vs. Lala Deep Chand [(1953) 2 SCC 509] and Maharaj Singh Vs. Karan Singh [(2024) 8 SCC 83], holding the proper decree directs specific performance between original vendor and plaintiff, with subsequent transferee joining to pass on title - rejecting cancellation of subsequent sale as inequitable due to potential covenant disruption.
"The moment a suit or proceeding is instituted by a party to the contract whereafter there is transfer of the suit property, Section 19(b) of the Specific Relief Act would have to give way to Section 52 of the Transfer of Property Act, in which event the doctrine of lis pendens would come into force."
The court concluded Trial Court correctly appreciated evidence: plaintiff proved agreement execution, part payment, and defendants' failure to perform despite demands; defendants' conduct (denying agreement yet claiming non-payment) supported adverse inference; and subsequent purchasers were not bona fide due to suit knowledge.
The Verdict
The plaintiff succeeded. The court dismissed both appeals, affirmed the trial court's decree with modification: (a) Original defendants Nos. 1-3 and 5-6 shall execute and register the sale deed in plaintiff's favor after receipt of balance sale consideration of Rs. 2,17,06,900/-; (b) Defendants Nos. 1-3 and 5-6 in possession shall deliver vacant possession of suit lands to plaintiff after sale deed execution; (c) Defendants Nos. 1-3 and 5-6 shall not interfere in plaintiff's possession; (d) Sale deed executed by defendants Nos. 1-3 in favor of defendants Nos. 5-6 is ineffective and not binding on plaintiff. No costs were awarded.
What This Means For Similar Cases
Lis Pendens Overrides Bona Fide Purchase
Practitioners must verify lis pendens notices before property transactions during litigation. The judgment clarifies that Section 52 TPA applies irrespective of subsequent purchaser's notice or good faith, binding them to litigation outcomes. Lawyers should advise clients to register lis pendens notices under Section 18 of Registration Act, 1908 where applicable (e.g., Maharashtra) to prevent third-party exploitation of procedural gaps.
Readiness and Willingness: Proof Trumps Pleading
Post-2018 SRA amendment, courts assess readiness and willingness from conduct and circumstances - not mere pleadings. Part payment constituting substantial consideration (here, over 90%) coupled with timely notice issuance suffices to establish willingness. Plaintiffs need not expressly aver readiness in plaint but must prove it via evidence like payment records and communication trails.
Specific Performance Against Subsequent Transferees
The proper remedy in pendente lite transfers is not cancellation of subsequent sale but directing the transferee to join conveyance to pass title to the plaintiff. This avoids inequity from altering vendor-transferee covenants. Lawyers seeking specific performance should join subsequent purchasers as parties and seek decree for execution of sale deed in plaintiff's favor, with transferees merely passing on title without special covenants.
