CHANDER BHAN (D) THROUGH LR SHER SINGH VERSUS MUKHTIAR SINGH & ORS, 2024 (SC) 347

Facts: On November 10, 2002, the appellant and respondent No. 3 entered into an agreement to sell 16 kanals of land for Rs. 8 lakhs, with Rs. 2.5 lakhs paid upfront and the remaining Rs. 5.5 lakhs to be paid upon execution of the sale deed by November 10, 2004. Before the sale deed could be executed, the appellant filed a suit for permanent injunction on July 21, 2003, upon learning that respondent No. 3 intended to alienate the property. Despite this, on July 28, 2003, respondent No. 3 executed a release deed in favor of his son, Harvinder Singh (respondent No. 4), who later sold the land to Mukhtiar Singh and Baljeet Singh (respondents Nos. 1-2) on June 16, 2004. The appellant filed a suit for specific performance when respondent No. 3 failed to execute the sale deed by the deadline. Respondent No. 3 claimed the agreement was signed under "misconception" and that it was fraudulently obtained. Respondents Nos. 1-2 claimed to be bona fide purchasers and sought protection under Section 41 of the Transfer of Property Act, 1882. The trial court ruled in favor of the appellant, and the appellate court dismissed the appeal. However, the High Court reversed the
lower courts’ decisions, awarding the appellant a refund of the earnest money with interest.
Issue:Whether the doctrine of lis pendens can apply even if Section 52 of the Transfer of Property Act is not strictly applicable in a state?
Observation: The Supreme Court held that the non-applicability of Section 52 of the Transfer of Property Act, 1881, does not prevent the application of the lis pendens doctrine, which is based on justice and equity. The Court clarified that lis pendens applies to maintain the status quo during pending litigation, preventing any party from transferring property involved in the suit. The pendency is considered from the date the suit is filed until a final decree is passed and executed. The Court allowed the appeal, set aside the High Court’s JUDGMENT, and directed respondent No. 3 to accept the remaining Rs. 5.5 lakhs from the appellant and execute the sale deed within three months from the JUDGMENT.

