Case Analysis of Shingara Singh v. Daljit Singh & Anr.; 2024 INSC 770, Civil Appeal No. 5919 of 2023
Date of Judgment: October 14, 2024
Coram: Justices Hrishikesh Roy and Prashant Kumar Mishra
Parties Involved:
Appellant: Shingara Singh (Defendant No. 2 in the original suit)
Respondents: Daljit Singh (Plaintiff) & Defendant No. 1 (Janraj Singh)
Facts of the Case:
Case of the Plaintiff: Daljit Singh, the plaintiff, filed the subject suit on December 24, 1992, seeking specific performance of an agreement to sell dated August 17, 1990, for a plot of land measuring 79 Kanals 09 Marlas. The sale consideration was Rs. 8,00,000/- (Rs. 80,000 per acre). The plaintiff had paid earnest money of Rs. 40,000/-, and the balance of Rs. 7,54,000/- was due to be paid at the time of execution of the sale deed on or before November 30, 1992. The plaintiff was ready to perform his part of the agreement but the defendant (Janraj Singh) failed to show up on the scheduled date (November 30, 1992) to execute the sale deed at the Registrar’s Office.
Defence of the Defendants: Defendant No. 1 (Janraj Singh) initially denied the execution of the agreement and the receipt of earnest money, claiming that the land was part of a Joint Hindu Family property. During the suit, Defendant No. 2 (Shingara Singh) was impleaded as a party after he claimed he had purchased the subject land, through a sale deed executed by Defendant No. 1 on January 8, 1993, during the pendency of the suit.
Trial Court’s Decision (2007): The Trial Court acknowledged that the agreement to sell was valid and the earnest money of Rs. 40,000/- had been paid. However, it denied specific performance due to the sale deed executed by Defendant No. 1 in favor of Defendant No. 2. The Court held that Defendant No. 2 was a bona fide purchaser who was unaware of the agreement between Daljit Singh and Defendant No. 1.
The First Appellate Court: The First Appellate Court upheld the Trial Court’s decision, ruling that the agreement between Daljit Singh and Defendant No. 1 was a result of fraud and collusion.
High Court’s Ruling: The High Court, however, reversed the lower courts’ decisions, applying the doctrine of lis pendens. The Court held that the sale deed executed by Defendant No. 1 in favor of Defendant No. 2 was void because it occurred during the pendency of the suit. The High Court ruled that Defendant No. 2 had knowledge of the ongoing dispute (since both parties were from the same village) and was not a bona fide purchaser. The High Court ordered specific performance of the agreement.
Issues before the Supreme Court:
· Whether the agreement dated August 17, 1990, was fraudulent or collusive.
· Whether Defendant No. 2 (Shingara Singh) is a bona fide purchaser?
· Applicability of the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882, to the sale executed during the pendency of the suit.
Submissions of the parties:
For the Appellant:
· The sale deed executed by Defendant No. 1 in his favor was valid and he is a bona fide purchaser who was not aware of the pending litigation.
· The High Court erred in disturbing the concurrent findings of the Trial Court and the First Appellate Court.
For the Respondent:
· The sale deed executed in favor of Defendant No. 2 was during the pendency of the suit and should be governed by the doctrine of lis pendens.
· Defendant No. 2 had knowledge of the agreement between Daljit Singh and Defendant No. 1 as both were from the same village. Hence, he cannot claim to be a bona fide purchaser.
· The High Court rightly applied the doctrine of lis pendens to set aside the earlier judgments and decree specific performance.
Supreme Court’s Decision:
· The Supreme Court affirmed the High Court’s judgment, dismissing the appeal filed by Shingara Singh.
· The Court emphasized that the doctrine of lis pendens applies to a property during the pendency of a suit, and any transaction during this period is subject to the outcome of the litigation. The sale deed executed by Defendant No. 1 in favor of Defendant No. 2 was executed after the suit was filed (on January 8, 1993), thus making it void and unenforceable.
· The Court noted that Defendant No. 2, who was a resident of the same village as the plaintiff and defendant, was deemed to have knowledge of the suit and could not claim bona fide purchaser status. The Court also held, opined that irrespective of the fact whether a purchaser is bona fide or not, doctrine of lis pendens applies, if the transaction has been done during the pendency of the suit.
· Since the agreement was valid and not fraudulent, and the sale deed was executed during the pendency of the suit, the High Court’s decree for specific performance was upheld.
Ratio Decidendi:
· Doctrine of Lis Pendens: The Supreme Court reaffirmed that lis pendens (pending litigation) applies to all alienations of property during the pendency of the suit, even if the subsequent purchaser is unaware of the litigation. Under Section 52 of the Transfer of Property Act, 188*, any transaction concerning the property that is subject to a suit is subject to the outcome of that suit.
· Bona Fide Purchaser: The Court clarified that bona fide purchasers who are unaware of the pending suit may have certain protections, but in this case, the defendant’s knowledge of the litigation (due to their proximity and relationship) meant that they could not claim bona fide purchaser status.
Conclusion and Implications:
· The judgment underscores the importance of the lis pendens doctrine in protecting the rights of parties involved in litigation. It ensures that property transactions that take place during the pendency of a suit do not undermine the legal rights of the plaintiff.
· The Court also highlighted the need for parties to act with due diligence and awareness of pending suits when engaging in property transactions. It prevents parties from circumventing legal disputes by transferring ownership during the course of litigation.
