This article has been written by Parijat Banchhor, final year law student. Pursuing B.A,LL.B(H) from Amity University Raipur Chhattisgarh.
SHINGARA SINGH (PETITIONER)
Versus
DILJITH SINGH & ANR (DEFENDANT)
COURT – IN THE HON’BLE SUPREME COURT OF INDIA
CITATION- 2024 Live Law (SC) 795
DATE OF JUDGEMENT – OCTOBER 14, 2024
HON’BLE BENCH – JUSTICE PRASHANT KUMAR MISHRA and JUSTICE HRISHIKESH ROY
INTRODUCTION
“You can’t escape the responsibility of tomorrow by evading it today.” –Abraham Lincoln
As it is recognized, the foundation for ensuring the integrity and clarity of real estate transactions is “THE TRANSFER OF PROPERTY, 1882.” A contract for sale and the actual transfer of property are distinguished by Section 54 of the Transfer of Property Act, which has particular conditions for each. The law recognizes both registered and unregistered sale agreements, their implications and enforceability may vary. Section 52 of this Act, which outlines the “Lis Pendens” doctrine, is one of its most important clauses. The “pending lawsuit” idea is crucial for defending the interests of those involved in ongoing real estate disputes. It guarantees their enforceability and validity. Public policy and the need to give decisions from courts finality serve as the basis of this thought. The Supreme Court’s decision in “Shingara Singh v. Diljith Singh” reinforces this principle, emphasizing that once a transaction is determined to be affected by the doctrine of lis Pendens, defence’s such as bona fide purchaser status and lack of notice regarding the sale agreement are rendered ineffective.
FACT OF THE CASE
This is a land dispute case where Mr. Daljit Singh agreed to buy land from Mr. Janraj Singh in 1990. They made a deal for 79 Kanals 09 marlas of land at Rs. 80,000 per acre, with a total price of Rs. 7,94,000. The buyer paid Rs. 40,000 as advance and was supposed to pay the remaining Rs. 7,54,000 when completing the paperwork by November 30, 1992. On the final day, the buyer showed up at the registration office with all the money and papers, but the seller didn’t come. The buyer wisely filed an official statement about being present there. When the seller failed to show up, the buyer went to court on December 24, 1992, and the court ordered that the land shouldn’t be sold to anyone else while the case was ongoing. However, despite this court order, the seller went ahead and sold the same land to another person, Mr. Shingrara Singh, on January 8, 1993, for a lower price of Rs. 6,45,937.50. The original seller tried to defend himself by claiming he never made the first deal, never received any advance payment, and saying the land belonged to his joint family. The court found several suspicious elements: both the seller and second buyer lived in the same village (suggesting the second buyer knew about the first deal), the land was sold for less money than the original deal, and the second sale happened very quickly after the court case started. The court ultimately ruled in favor of the first buyer, saying he had done everything right and was always ready to complete the deal. The court declared the second sale invalid because it happened after the court case began, and determined that the second buyer wasn’t an innocent purchaser. This case shows how the court protected the rights of someone who followed all the rules against those who tried to bypass the law.
ISSUES
- Does a person need to challenge the parts of a court order they lost, while defending the parts they won?
- Can a Higher Court change what two lower courts jointly decided about enforcing a contract?
- Can someone get monetary compensation if their request to enforce the same contract was rejected?
ARGUMENTS OF THE PETITIONER
This is a property dispute where Defendant No. 2 says he legally bought a piece of property on January 8, 1993, with all the proper paperwork done. He got a registered sale deed, took possession of the property, and even had the official records updated to show he was the new owner. Now, here’s where things get interesting – someone else came forward with an agreement claiming they had the right to buy this same property. But Defendant No. 2 says that agreement is fake and was backdated. His main argument is that when he bought the property, the seller (Defendant No. 1) never mentioned anything about promising to sell it to someone else first. Because of this, Defendant No. 2 considers himself an innocent buyer who had no idea about any previous deals. The case went through several courts, and both the Trial Court and Appellate Court agreed with Defendant No. 2’s side. However, when it reached the High Court, things changed. Through his lawyer, Mr. Raval, Defendant No. 2 is arguing that the High Court shouldn’t have overturned these earlier decisions since two courts had already ruled in his favor.
ARGUMENTS OF THE RESPONDENT
Based on the doctrine of lis Pendens, the respondents’ senior counsel contended that the High Court properly reversed the lower courts’ rulings because of their incorrect reason, awarding the plaintiff’s specific performance. Instead of needing cross-objections to defend their favorable conclusion, obtaining respondents can now challenge specific harmful findings through cross-objections under the amended CPC. This is a significant change from the previous rules, which prohibited winners from filing cross-objections and eliminated all opportunities to challenge unfavourable .
COURT’S REASONING
The theory of “lis pendens” binds prospective buyers to any judgments rendered in an ongoing legal proceeding, the court concludes. A transferee is not allowed to hinder legal procedures while the suit is pending, as per Rule 102 of, and doing so will prevent them from receiving certain safeguards. Parties may deal with the property throughout the course of a litigation, but unless the court permits it, such dealings have no bearing on the opposing party’s rights under any subsequent court orders. This sale deed, which was executed by while the lawsuit was pending, is governed by the lis pendens doctrine. The decision of the Trial Court to uphold the agreement and to grant the plaintiff a refund was not challenged. The High Court thus appropriately overturned.
ANALYSIS BY THE PRECEDENT
In this case, the plaintiff testified along with several witnesses, while the defendants presented their own witnesses. The Trial Court determined that the plaintiff had successfully proven the sale agreement but ultimately denied a decree for specific performance. The court explained that the defendant was the rightful owner and in possession of the property due to a sale deed executed during the ongoing lawsuit. Although the plaintiff was found to be ready and willing to fulfill the contract, the court classified the defendant as a bona fide purchaser who was unaware of the earlier agreement. As a result, the plaintiff was awarded a refund of Rs. 40,000 along with interest.
The First Appellate Court agreed with this decision but also stated that the agreement was fraudulent and collusive, despite the defendant not appealing the related finding. This was seen as inappropriate since the defendants accepted the refund and did not contest the specific fraud finding. The court emphasized that the doctrine of “lis pendens” applies to any transfers made while a lawsuit is pending, meaning these transfers cannot affect the rights of the parties involved. It referenced prior rulings that clarify purchasers cannot oppose a decree arising from a pending lawsuit, regardless of their knowledge of it.
Ultimately, the court concluded that the sale occurred during the lawsuit, making it subject to the doctrine of lis pendens. Therefore, the subsequent sale could not undermine the plaintiff’s rights established in the original agreement, and considerations of good faith were irrelevant in this situation. The court reaffirmed that the transactions executed by the defendants were invalid due to the ongoing litigation.
JUDGMENT
The court upheld the doctrine of lis pendens, asserting that the sale deed executed by Petitioner Janraj Singh in favor of defendant Shingrara Singh during the ongoing litigation was invalid. This doctrine protects the rights of parties involved in a lawsuit by prohibiting the transfer of property that is the subject of litigation, ensuring that subsequent purchasers are bound by the court’s final decision. The court determined that Shingrara Singh could not be classified as a bona fide purchaser. Given that both he and Janraj resided in the same village and considering the timing and terms of the sale, it was deemed unlikely that Shingrara was unaware of Daljit Singh’s existing agreement with Janraj. The sale price of Shingrara’s transaction was also notably lower than the original agreement amount, suggesting prior knowledge of the litigation.
The High Court reversed the decisions of both the Trial Court and the First Appellate Court, which had denied Daljit’s request for specific performance. The ruling emphasized that Daljit had demonstrated his readiness and willingness to fulfill his contractual obligations, thereby entitling him to enforce the agreement for the property. The High Court upheld the Trial Court’s conclusions about the agreement’s legality, noting that neither fraud nor conspiracy was responsible. This confirmation supported Daljit’s rightful ownership of the plot of land.
The court highlighted the role of the judiciary in maintaining contractual obligations and defending the parties’ rights by issuing a judgment that permits Daljit Singh to complete the property sale as originally negotiated. Dismissal of Appeal: In the end, Shingrara Singh’s appeal was denied, maintaining Daljit Singh’s right to particular performance and the conclusions of the High Court.
ANALYSIS
This case serves as a pivotal reminder of the complexities involved in property transactions and the legal principles that govern them. The decision of the High Court to uphold Daljit Singh’s right to specific performance highlights the importance of the doctrine of lis pendens, which protects the interests of parties engaged in ongoing litigation. Article 300 of the Constitution of India provides for the rights of the government and the legal principles governing property transactions. The Constitution upholds the Rule of Law, which necessitates that parties cannot claim ignorance of pending litigation when it involves real property.
It emphasizes that individuals must be diligent and aware of any existing agreements before entering into property transactions. Shingrara Singh’s claim as a bona fide purchaser was rightly dismissed because he should have been aware of the pending lawsuit, given the circumstances. “Usha Sinha vs Dina Ram (2007)” claims that the rights of the parties to the lawsuit are unaffected by any transactions made while the case is pending. “N. Srinivasa Murthy v. S. Suryanarayana” and “A. R. Srikrishna v. S. L. K. K. Krishnappa” emphasize that in order to prove specific performance, one must show that one is prepared and willing to carry out the terms of a contract.
Overall, the outcome reaffirms the judiciary’s role in safeguarding contractual obligations and ensuring fairness in property dealings. This case not only reinforces the necessity of legal protections for those involved in contracts but also sets a precedent for future disputes regarding property rights and agreements. It underscores the message that the integrity of contractual relationships must be upheld to maintain trust in the legal system and in real estate transactions. By requiring that the rights of all parties be similarly protected within contractual frameworks, Article 14 of the Constitution of India guarantees equality before the law. Public policy and equity considerations also play important roles, highlighting the need to prevent private transactions during litigation from undermining the legal system.
CONCLUSION
The Supreme Court’s judgment in Shingara Singh vs Diljith Singh represents a significant reinforcement of fundamental principles in property law, particularly regarding the doctrine of Lis Pendens under Section 52 of the Transfer of Property Act, 1882. The judgment underscored the importance of upholding contractual obligations, the necessity of due diligence in property transactions, and the protective nature of legal doctrines like lis pendens. This case serves as a crucial precedent for future disputes involving real estate and contractual law.
It provides clear guidance for future cases involving property disputes and emphasizes the importance of transparent and legally compliant property transactions. The decision supports the broader public policy goal of maintaining stability and fairness in real estate dealings while deterring attempts to circumvent legal processes through subsequent transaction.
REFERENCE
- Usha Sinha vs Dina Ram (2007)
- (N.d.). Indiankanoon.org. Retrieved November 4, 2024, from https://indiankanoon.org/doc/486/
- Shingara Singh v. Diljith Singh
- SHINGARA SINGH v. DALJIT SINGH. (n.d.). Https://www.casemine.com. Retrieved November 4, 2024, from https://www.casemine.com/judgement/in/670efdde8e274d7b5b6a0c6d
- Transfer of Property Act, 1882
- (N.d.-b). Nic .In. Retrieved November 4, 2024, from https://www.indiacode.nic.in/handle/123456789/2338
