The Punjab and Haryana High Court has reaffirmed that specific performance of a land sale agreement must be granted when the parties mutually extended the execution date by contract, and subsequent sales during pendency of litigation violate the doctrine of lis pendens. The judgment clarifies that judicial relief cannot be denied on speculative assumptions about a party’s knowledge of unrelated litigation when the contract places the duty of communication squarely on the other party.
Background & Facts
The Dispute
Milkh Singh, owner of 73 kanals and 2 marlas of land in Village Ghallu, Tehsil Fazilka, entered into an agreement to sell the property to Sukhwinder Pal Singh on 16.11.1987 at ₹28,500 per acre. An earnest money of ₹20,000 was paid. The sale deed was to be executed on or before 28.02.1988 upon payment of the balance consideration.
Key Facts
- On 22.02.1988, prior to the original deadline, the parties mutually agreed to extend the execution date to within one and a half months of the decision in a civil suit filed by Milkh Singh’s sisters over the same land.
- This extension was formally endorsed on the reverse of the original agreement.
- Milkh Singh was expressly obligated under the supplementary agreement to inform Sukhwinder Pal Singh of the outcome of the sisters’ suit.
- On 12.12.1988, Sukhwinder Pal Singh paid an additional ₹1,40,418.75 as earnest money and was given partial possession of the land.
- The civil suit filed by Milkh Singh’s sisters was dismissed on 31.01.1991.
- Milkh Singh did not inform Sukhwinder Pal Singh of the dismissal.
- On 26.05.1995, Milkh Singh executed a sale deed for 5 kanals and 4 marlas in favour of Balwinder Singh for ₹92,000.
- Sukhwinder Pal Singh obtained a certified copy of this sale deed on 26.06.1995 and filed a suit for specific performance on 27.06.1995.
- The trial court dismissed the suit. The First Appellate Court reversed the finding on readiness and willingness but still dismissed the suit on the same ground.
- During the pendency of the Regular Second Appeal (filed in 1999), Milkh Singh executed two further sale deeds on 06.08.2017: one transferring 32 kanals to Kuljinder Singh and another transferring 25 kanals 18 marlas to Raman Kumar, Ravinder Kumar, and Rakesh Jindal.
- This Court had issued an injunction on 26.11.1999 restraining alienation of the suit property.
Procedural History
- 16.11.1987: Agreement to sell executed
- 22.02.1988: Supplementary agreement extending sale deadline
- 12.12.1988: Additional earnest money paid; partial possession delivered
- 31.01.1991: Civil suit by Milkh Singh’s sisters dismissed
- 26.05.1995: Sale deed executed in favour of Balwinder Singh
- 27.06.1995: Suit for specific performance filed
- 1998: Trial Court dismissed suit
- 1998: First Appellate Court partly reversed trial court but dismissed suit
- 26.11.1999: High Court issued injunction restraining alienation
- 29.08.2001: Regular Second Appeal admitted
- 06.08.2017: Two further sale deeds executed during pendency of appeal
- 21.08.2007: Two suits filed by Sukhwinder Pal Singh challenging the 2017 sale deeds
- 10.03.2026: Judgment reserved
- 19.03.2026: Judgment pronounced
The Parties' Positions
Appellant (Sukhwinder Pal Singh): Argued that the parties had lawfully extended the deadline by mutual agreement; he remained ready and willing; Milkh Singh breached the contract by failing to inform him of the suit’s outcome; the subsequent sales were void under lis pendens and in violation of the injunction.
Respondents (Milkh Singh and subsequent purchasers): Contended that the appellant was not genuinely ready and willing; he had knowledge of the dismissal of the sisters’ suit by virtue of being in the same village; the subsequent purchasers were bona fide and unaware of the injunction.
Relief Sought
The appellant sought: (1) decree for specific performance of the 1987 agreement; (2) declaration that all subsequent sale deeds (26.05.1995 and 06.08.2017) are null and void; (3) dismissal of the counter-claim; (4) costs.
The Legal Issue
The central question was whether a party’s readiness and willingness to perform a contract can be negated on speculative grounds when the contract itself conditions performance on the other party’s communication of a prior event, and whether sale deeds executed during the pendency of litigation and in violation of a court injunction can confer valid title under the doctrine of lis pendens.
Arguments Presented
For the Appellant
The appellant relied on the express terms of the supplementary agreement dated 22.02.1988, which made Milkh Singh’s obligation to communicate the outcome of the sisters’ suit a condition precedent to performance. He argued that the First Appellate Court’s finding that he was not ready and willing was internally contradictory, as the same court had earlier held he had discharged the burden of proving readiness. He cited Chander Bhan v. Mukhtiar Singh (2024 INSC 377) and Usha Sinha v. Dina Ram (2008) 7 SCC 144 to establish that transactions during pendency of litigation are void under lis pendens, regardless of notice. He further argued that Balwinder Singh, having appeared ex parte and adduced no evidence, could not be deemed a bona fide purchaser.
For the Respondent
The respondents contended that the appellant’s delay in filing suit - four years after the dismissal of the sisters’ suit - demonstrated lack of genuine intent. They argued that as both parties belonged to the same village, the appellant must have known of the suit’s outcome. They also claimed the subsequent purchasers were unaware of the injunction and had paid valuable consideration, thus qualifying as bona fide purchasers under Section 41 of the Transfer of Property Act.
The Court's Analysis
The Court conducted a meticulous review of the contractual terms and the factual matrix. It found that the First Appellate Court’s judgment was internally inconsistent: while it held in paragraph 10 that the appellant had remained ready and willing, it later concluded the opposite without justification. The Court emphasized that the burden of proving readiness and willingness lies on the plaintiff, and once unchallenged testimony is given, it stands unless rebutted by evidence - which was absent here.
"The learned First Appellate Court has acted erroneously and committed a serious legal fallacy in its reasoning. The Court, in effect, ‘took away with the left hand what it had given with the right.’"
The Court rejected the notion that the appellant should have independently inquired about the sisters’ suit, noting that the supplementary agreement placed the duty of communication squarely on Milkh Singh. The absence of any evidence - no registered notice, no witness testimony, no postal receipt - meant Milkh Singh had breached the contract.
Regarding the subsequent purchasers, the Court held that the sale deeds dated 06.08.2017 were executed during the pendency of the Regular Second Appeal, which had been stayed by an injunction since 26.11.1999. Citing Chander Bhan and Usha Sinha, the Court affirmed that lis pendens operates as constructive notice and renders such transfers void ab initio, irrespective of the purchaser’s knowledge.
"Once it has been held that transactions executed by the respondents are illegal due to the doctrine of lis pendens, the defence of the respondents 1-2 that they are bona fide purchasers for valuable consideration and thus entitled to protection under Section 41 of the Act of 1882 is liable to be rejected."
The Court further held that Balwinder Singh, having failed to contest the suit and adduce any evidence, could not be granted the status of a bona fide purchaser. The burden of proof lies entirely on the purchaser, and silence cannot be construed as proof of good faith.
The Verdict
The appellant succeeded. The High Court set aside all lower court judgments and decrees. The suit for specific performance was decreed. Milkh Singh is directed to execute a sale deed in favour of Sukhwinder Pal Singh within two months of this judgment upon deposit of the balance sale consideration. If he fails to do so within a further one month, the appellant may apply to the Court for execution of the deed. The sale deed dated 26.05.1995 in favour of Balwinder Singh is declared null and void to the extent it relates to the suit property. The sale deeds dated 06.08.2017 in favour of Kuljinder Singh and Raman Kumar et al. are declared illegal, null, and void. The counter-claim is dismissed in its entirety.
What This Means For Similar Cases
Contractual Conditions Override Assumed Knowledge
- Practitioners must argue that where a contract imposes a duty of communication on one party, the other party cannot be presumed to have knowledge of external events.
- Courts cannot substitute their own assumptions about village gossip for express contractual obligations.
- Failure to prove communication under a contractual term constitutes breach, not default by the other party.
Lis Pendens Is Absolute and Non-Negotiable
- Any transfer of property during pendency of litigation affecting the title is void, regardless of the transferee’s knowledge or good faith.
- Injunctions are not mere procedural formalities - they create substantive legal bars to alienation.
- Bona fide purchaser defence is unavailable where the transfer violates a court order or lis pendens.
Burden of Proof for Bona Fide Purchaser Is On the Purchaser
- A defendant who appears ex parte and files no written statement cannot claim bona fide purchaser status.
- Mere payment of consideration without proof of inquiry, due diligence, or title verification is insufficient.
- Courts must strictly apply the principle that the burden lies on the person claiming the status, not on the plaintiff to disprove it.
