Holding

The agreements were agreements for sale, the plaintiffs were ready and willing to perform, lis pendens does not invalidate the subsequent transfers, and compensation in lieu of specific performance is the proper relief.

Summary

The plaintiffs entered into agreements dated 20‑09‑1965 and 28‑04‑1966 for the sale of 50 acres of agricultural land, paying part of the consideration and taking partial possession. The defendants contended that the documents were merely collateral security for a loan. The Supreme Court held that the agreements were unequivocally agreements for sale, that the plaintiffs had shown readiness and willingness to perform their part, and that the doctrine of lis pendens under s.52 of the Transfer of Property Act only makes subsequent transfers sub‑servient to the suit’s outcome, not illegal. Consequently, the High Court’s decree granting specific performance was set aside and the plaintiffs were awarded compensation of Rs.15,00,000 in lieu of specific performance. The appeal was partly allowed.

Issues considered

The nature of the agreements – whether they were agreements for sale or security for a loan.
Whether the plaintiffs were ready and willing to perform their part of the contract for specific performance.
Whether the subsequent purchasers' transactions are barred or rendered illegal by the doctrine of lis pendens under s.52 T.P. Act.
Whether specific performance is the appropriate relief or compensation should be awarded under the Specific Relief Act.

Legislation cited

Subjects

specific performanceagreement for salesecurity agreementreadiness and willingnessdoctrine of lis pendenstransfer of property actspecific relief actcompensationagricultural landsale deedlimitation period

Judgment

[2019] 10 S.C.R. 31 31

MADHUKAR NIVRUTTI JAGTAP & ORS. A
v.
SMT. PRAMILABAI CHANDULAL PARANDEKAR & ORS.
(Civil Appeal No. 5382 of 2007)
AUGUST 13, 2019 B
[ABHAY MANOHAR SAPRE AND
DINESH MAHESHWARI, JJ.]
Specific Relief Act, 1963: Nature of transaction between the
plaintiffs and defendant nos.1 to 3 – Suit for specific performance C
of agreements for sale of agricultural land and in the alternative
for recovery of earnest money with interest – Case of plaintiffs was
that defendant 1 to 3 had executed agreement dated 20.9.1965 for
sale of suit land for a consideration of Rs.22,951 and that Rs.3,500
was paid as earnest money; that plaintiffs further paid Rs.2,000 on
D
24.9.1965 and took possession of 25 acres of land – Plaintiff further
averred that defendants executed a supplementary agreement for
sale and accepted an additional sum of Rs.500 from plaintiffs and
handed over the remaining portion of land to plaintiffs and the
remaining sale consideration was settled at Rs.11,951 after deducting
Rs.5,000 towards encumbrances and on payment of this amount E
defendants 1 to 3 were liable to execute the sale deed in their favour
– Case of defendants 1 to 3 (vendors) was that the said agreements
were executed only as collateral security for a loan advanced by
plaintiff no.1 and not for sale of property – Held: There was not
even a remote suggestion in the agreements that there was any loan
F
or borrowing transaction between the parties and the said
agreements were being executing towards security – On the contrary,
the recitals and stipulations in the agreements were only in
affirmation of the agreement for sale and of the receipt of part
payment from time to time against the sale consideration – As to
whether the possession of the land in question was delivered to the G
plaintiffs or not, could not have been taken as a factor decisive as
regards nature of transaction – Moreover, execution of the
supplementary agreement after notice and after receiving further
an amount of Rs. 500/- by defendant Nos. 1 to 3 could only show
H
31
32 SUPREME COURT REPORTS [2019] 10 S.C.R.

A re-affirmation of the intention of the parties towards the sale
transaction – In the supplementary agreement, the defendants not
only acknowledged the receipt of part consideration to the tune of
Rs. 6,000/- but further agreed for adjustment of Rs. 5,000/- towards
encumbrances and, therefore, agreed to receive remaining Rs.
11,921/- at the time of execution of the sale deed – In view of the
B
dealings of the parties, this circumstance about execution of the
supplementary agreement only strengthened the case of the plaintiffs.
Specific Relief Act, 1963: Specific performance – Readiness
and willingness of plaintiff to perform his part of the contract –
The plaintiffs pleaded in the plaint that they were ready to get the
C sale deed executed as per the conditions in the agreement for sale
and also stated that they served the notice, then supplementary
agreement was executed; and then, on many occasions, they asked
the defendant to execute the sale deed – Defendant No.1 in his
written statement merely stated a bald denial that such averments
D were false and were ‘not agreeable to the defendants’ – The entire
emphasis of the written statement was on the assertion that the
agreement in question was not for sale and was obtained by the
plaintiffs towards security against the amount borrowed by defendant
No.1 – Held: The plea of the plaintiffs as regards their readiness to
perform the contract as per its conditions did not meet with
E categorical denial from the defendants – This apart, even at the
time of entering into the agreement, the plaintiffs paid Rs. 3,500/-
against the sale consideration of Rs. 22,951/- – Moreover, and much
before the stipulated date of execution of sale deed, they made
another payment of Rs. 2,000/- against the sale consideration –
F When the sale deed was not executed within stipulated time, the
plaintiffs served notice – Defendants thereafter executed the
supplementary agreement and the plaintiffs made payment of yet
another sum of Rs. 500/- while it was also agreed by the vendors
that the property carried encumbrance to the tune of Rs. 5,000/-,
which was to be adjusted against the sale consideration – Therefore,
G the plaintiffs were left to make payment of about half of the sale
consideration – The plaintiffs showed their readiness and willingness
to perform their part of the contract and there did not operate any
personal bar against their claim for specific performance.

H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 33
CHANDULAL PARANDEKAR

Transfer of Property Act, 1882: s.52 – Doctrine of lis A
pendens – Both the sale transactions in favour of the appellants,
purporting to transfer the suit property in part, having been effected
after filing of the suit, were directly hit by the doctrine of lis pendens,
as embodied in s.52 of the Act, 1882 – Specific Relief Act, 1963.
Transfer of Property Act, 1882: s.52 – Effect of doctrine of B
lis pendens – Held: Is not to annul all the transfers effected by the
parties to a suit but only to render them subservient to the rights of
the parties under the decree or order which may be made in that
suit – Its effect is only to make the decree passed in the suit binding
on the transferee, i.e., the subsequent purchaser – Nevertheless,
the transfer remains valid subject, of course, to the result of the C
suit – Hence, the effect of s.52, for the purpose of the instant case
would only be that the said sale transactions in favour of the
subsequent purchasers shall have no adverse effect on the rights
of the plaintiffs and shall remain subject to the final outcome of the
suit in question – However, the High Court, while holding that the D
said transactions were hit by lis pendens, proceeded to observe
further that the sale deeds so made in favour of the subsequent
purchasers were illegal – These observations by the High Court not
approved.
Specific Relief Act, 1963: Requirement to prove readiness and E
willingness of plaintiff to perform his part of the contract is not that
the plaintiff should continuously approach the defendant with
payment or make incessant requests for performance – For the relief
of specific performance, which is essentially a species of equity but
has got statutory recognition in terms of the Specific Relief Act, the
plaintiff must be found standing with the contract and the plaintiff ’s F
conduct should not be carrying any such blameworthiness so as to
be considered inequitable.
Specific Relief Act, 1963: Limitation – When the plaintiffs
had the limitation of three years for filing the suit for specific
performance, it cannot be said that during the said period, the G
plaintiffs are required to show overt act by them in furtherance of
the agreement in question – In the instant case, when the plaintiffs
had the limitation of three years for filing the suit and have indeed
filed the suit well within limitation, no aspect of delay operates
against them –Limitation – Delay/Latches. H
34 SUPREME COURT REPORTS [2019] 10 S.C.R.

A Specific Relief Act, 1963: ss.21 and 22 – Grant of relief –
Agreements in question were executed way back on 20.09.1965 and
28.04.1966 – The evidence on record showed that vendors and
thereafter, the subsequent purchasers remained in effective
possession thereof – High Court took note of the fact that as on the
date of its decision, the subsequent purchasers were in possession
B
of the land in question for about 40 years – High Court found that
land in question carried much higher valuation at the time of passing
of the judgment in second appeal and hence, enhanced the sale
consideration to Rs. 10,000/- per acre – Plaintiffs, even while seeking
specific performance, prayed for the alternative reliefs of recovery
C of amount paid by them with interest and compensation to the tune
of Rs 15,000/- – Plaintiff No. 1 expired during the pendency of suit
and plaintiff No. 2 expired during the pendency of this appeal;
though legal representative of plaintiff Nos. 1 and 2 was on record
as plaintiff No.4 (respondent No. 2) – Plaintiff No.2, while deposing
as PW2 had stated that in case specific performance was not
D
granted, she ‘may be granted alternative relief and compensation
with interest’ – In view of this, instead of specific performance,
awarding of monetary compensation to respondent No. 2 would
meet the ends of justice – Subsequent purchasers themselves filed
valuation report suggesting that the market value of unirrigated
E land was Rs. 70,000/- per hectare whereas that of the irrigated
land was Rs. 1,40,000/- per hectare – The fact also remained that
the appellants have been enjoying the land in question for a long
length of time – Further, the predecessors of respondent No. 2 made
payment of the sum of Rs. 6,000/- to the vendors in the years 1965-
1966; and the plaintiffs had claimed alternative relief of recovery
F
of the said amount together with interest as also of compensation –
Taking all the relevant factors into account, a lump sum of Rs.
15,00,000/- is awarded to respondent No. 2 as compensation in
lieu of specific performance – Equity.
Partly allowing the appeal, the Court
G
HELD: 1. Nature of transaction between the plaintiffs and
defendant Nos. 1 to 3
1.1 There had not been even a remote suggestion in the
documents in question that there was any loan or borrowing
H transaction between the parties and the said documents were
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 35
CHANDULAL PARANDEKAR

being executing towards security. On the contrary, the recitals A
and stipulations in the said agreements had only been in affirmation
of the agreement for sale and of the receipt of part payment from
time to time against the sale consideration. The subordinate
Courts proceeded to doubt if the transaction was at all intended
to be of sale while questioning as to why the parties fixed the
B
consideration in odd figures i.e., Rs. 22,951/-; and while observing
that when as per the documents, the land was being sold @ Rs.
450/- per acre, the total consideration for the land in question
would come to Rs. 22,938.75 and not Rs. 22,951/-. The Trial
Court also raised doubts on the suggestion of the plaintiffs that
possession of the land in question was handed over to them. The C
First Appellate Court even observed that as against the sale
consideration, only a paltry amount was paid in advance and
questioned as to why the supplementary agreement was executed
after serving of notice. On the other hand, the High Court
minutely examined the evidence on record and observed that
D
there was not even a whisper about the loan transaction; and that
as per the endorsement made on 24.11.1965, another amount of
Rs. 2,000/- was received by defendant Nos. 1 to 3. As regards
the supplementary agreement dated 28.04.1966, the High Court
again found that there was no whisper about any loan transaction
or any security for such a transaction and the document was clearly E
executed as being the supplementary agreement for sale while
even referring to the encumbrances of Rs. 5,000/-, which were
to be discharged. The High Court observed that by no stretch of
imagination these two agreements could be termed as and by
way of security for a loan. Trial Court and First Appellate Court
F
proceeded on entirely irrelevant and rather baseless
considerations while failing to consider that such findings on the
nature of transaction evidenced by the agreements in question
could not have been rendered on surmises and conjectures. [Paras
12.2, 12.3, 12.4][59-C-D; F-H; 60-A-C, D]
1.2 As to whether the possession of the land in question G
was delivered to the plaintiffs or not, could not have been taken
as a factor decisive as regards nature of transaction. Moreover,
execution of the supplementary agreement after notice dated
05.04.1966 and after receiving further an amount of Rs. 500/- by
H
36 SUPREME COURT REPORTS [2019] 10 S.C.R.

A the defendant Nos. 1 to 3 could only show re-affirmation of the
intention of the parties towards the sale transaction. In the
supplementary agreement, the defendants not only acknowledged
the receipt of part consideration to the tune of Rs. 6,000/- but
further agreed for adjustment of Rs. 5,000/- towards
encumbrances and, therefore, agreed to receive remaining Rs.
B
11,921/- at the time of execution of the sale deed. In view of the
dealings of the parties, this circumstance about execution of the
supplementary agreement only strengthened the case of the
plaintiffs rather than operating against them. [Para 12.4.1]
[60-E-G]
C 1.3 The other observations of the subordinate Courts as
regards quantum of consideration is also not convincing. Such
hair-splitting exercise by the Trial Court, that on the agreed rate,
sale consideration ought to have been Rs. 22,938.75 and as to
why the parties agreed for Rs. 22,951/-, had been entirely
D baseless, rather unwarranted. The observation of the Trial Court
as to why the sale consideration was in odd figures is itself of
such oddity that any finding on that basis could only meet with
disapproval. Rounding up of the amount of consideration and
addition of one rupee in the last is not unknown to such
transactions. In fact, quite contrary to what was observed by the
E Trial Court, the figure of sale consideration rather fortifies the
deduction that the intention of the parties had only been towards
the transaction of sale. [Para 12.4.2] [60-G-H; 61-A]
2. Readiness and willingness of the plaintiffs to perform
their part of contract
F
2.1 The requirement to prove readiness and willingness of
plaintiff to perform his part of the contract is not that the plaintiff
should continuously approach the defendant with payment or
make incessant requests for performance. For the relief of specific
performance, which is essentially a species of equity but has got
G statutory recognition in terms of the Specific Relief Act, 1963,
the plaintiff must be found standing with the contract and the
plaintiff ’s conduct should not be carrying any such blame
worthiness so as to be considered inequitable. [Para 13.2]
[62-D-F]
H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 37
CHANDULAL PARANDEKAR

2.2 The plaintiffs pleaded in the plaint that they were ready A
to get the sale deed executed as per the conditions in the
agreement for sale and also stated that they served the notice,
then supplementary agreement was executed; and then, on many
occasions, they asked the defendant to execute the sale deed.
The defendant No. 1 in his written statement merely stated a
B
bald denial that such averments were false and were ‘not agreeable
to the defendants’. In fact, the entire emphasis of the written
statement had been on the assertion that the agreement in
question was not for sale and was obtained by the plaintiffs towards
security against the amount borrowed by defendant No. 1. The
plea of the plaintiffs as regards their readiness to perform the C
contract as per its conditions did not meet with categorical denial
from the defendants. This apart, even at the time of entering into
the agreement, the plaintiffs made payment of a sum of Rs. 3,500/
- against the sale consideration of Rs. 22,951/-. Moreover, and
much before the stipulated date of execution of sale deed, they
D
made another payment of Rs. 2,000/- against the sale
consideration. When the sale deed was not executed by
23.03.1966, the plaintiffs served notice on 05.04.1966. The
vendors thereafter executed the supplementary agreement and
the plaintiffs made payment of yet another sum of Rs. 500/- while
it was also agreed by the vendors that the property carried E
encumbrance to the tune of Rs. 5,000/-, which was to be adjusted
against the sale consideration. Therefore, the plaintiffs were left
to make payment of about half of the sale consideration. The
recitals in the supplementary agreement even suggested about
the vendors having delivered possession of the property in
F
question. [Para 13.3] [62-G-H; 63-A-E]
2.3 The admission of plaintiff No. 3 that she was not
possessed of sufficient funds cannot be read in isolation and it
cannot be concluded that she was not possessed of sufficient
means to pay the remaining sale consideration. Her statement is
required to be visualised in the backdrop of the fact that her G
husband, plaintiff No. 1, had expired and she had succeeded to
his estate. Her statement, with reference to her understanding
of the matter, could only be interpreted to mean that at the given
moment, she was not off-hand in possession of the money to make
H
38 SUPREME COURT REPORTS [2019] 10 S.C.R.

A payment but such an expression in her statement cannot lead to
the conclusion that making payment of the remaining sale
consideration was beyond her capacity or that she was not willing
to perform her part of the contract. The question of readiness
and willingness on the part of the plaintiffs was approached by
the First Appellate Court from an altogether wrong angle and
B
was decided against the plaintiffs on irrelevant considerations.
[Para 13.4] [63-F-H; 64-A]
2.4 So far the period between 1966 to 1968 is concerned,
when the plaintiffs had the limitation of three years for filing the
suit for specific performance, it cannot be said that during the
C aforesaid period, the plaintiffs were required to show overt act
by them in furtherance of the agreement in question. In this case
too, when the plaintiffs had the limitation of three years for filing
the suit and have indeed filed the suit well within limitation; and
looking to the overall circumstances of the case, no aspect of
D delay operates against them. The plaintiffs have shown their
readiness and willingness to perform their part of the contract
and there does not operate any personal bar against their claim
for specific performance. [Paras 13.5-13.7] [64-B; 65-D-E]
R Lakshmikantham v. Devaraji (2019) 8 SCC 62
E – relied on.
Azhar Sultana v. B. Rajamani and Ors. (2009) 17 SCC
27 : [2009] 2 SCR 537 – distinguished.
3. Operation of the doctrine of lis pendens : Section 52
T.P. Act
F
3.1 The suit in question was filed on 26.08.1968. So far the
sale transaction in favour of the defendant Nos. 4 & 5 (appellant
Nos. 1 & 2), in relation to 25 acres of land out of the suit property,
is concerned, the same was effected by way a sale deed registered
only on 10.07.1978 i.e., nearly 10 years after filing of the suit. So
G far the sale transaction in favour of the defendant No. 6 (appellant
No. 3), in relation to other 25 acres of land out of the suit property,
is concerned, though it is suggested that there had been an
agreement (dated 08.05.1968) in his favour before filing of the

H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 39
CHANDULAL PARANDEKAR

suit but then, admittedly, the sale transaction was effected by A
way of a sale deed registered only on 18.09.1968, that had also
been after filing of the suit. The suggestion about want of
knowledge of the subsequent purchasers about the transaction
of the vendors with the plaintiffs and about the pendency of the
suit has been considered and rejected by the High Court and
B
even by the subordinate Court after due appreciation of evidence
on record; and there is no nfirmity in these findings. Both the
sale transactions in favour of the appellants, purporting to transfer
the suit property in part, having been effected after filing of the
suit, are directly hit by the doctrine of lis pendens, as embodied
in Section 52 of the Transfer of Property Act, 1882. [Para 14.1] C
[65-G-H; 66-A-CE]
3.2 The effect of doctrine of lis pendens is not to annul all
the transfers effected by the parties to a suit but only to render
them subservient to the rights of the parties under the decree or
order which may be made in that suit. Hence, the effect of Section D
52 for the purpose of the present case would only be that the said
sale transactions in favour of the appellants shall have no adverse
effect on the rights of the plaintiffs and shall remain subject to
the final outcome of the suit in question. However, the High
Court, while holding that the said transactions were hit by lis
pendens, has proceeded to observe further that the sale deeds E
so made in favour of the appellants were illegal. These further
observations by the High Court cannot be approved. [Paras 14.3,
14.4] [67-H; 68-A-B]
4. What should be the relief?
F
4.1 The High Court though proceeded to mould the relief
in the manner that specific performance was granted on enhanced
sale consideration and it was also directed that if the plaintiffs fail
to make payment within two months, the appellants (subsequent
purchasers) would make payment of same amount to the plaintiffs
so as to ‘confirm their ownership over the suit land’. However, G
after it was found that granting the decree for specific performance
in the very terms of the agreement/s in question may not be
appropriate because of myriad factors, the matter ought to have
been examined with reference to the stand of the parties and the
H
40 SUPREME COURT REPORTS [2019] 10 S.C.R.

A provisions of Sections 21 and 22 of the Act of 1963. [Paras 16,
16.1, 16.2] [68-G-H; 69-A-B]
4.2 Some of the relevant factors having bearing on the
question of appropriate relief in this matter. First, the agreements
in question were executed way back in 1965 and 1966. Secondly,
B the plaintiffs had paid Rs. 6,000/- as on 28.04.1966 against the
sale consideration of Rs. 22,951/- when the supplementary
agreement was executed. Thirdly, though the plaintiffs alleged
delivery of possession of the land in question to them, the
evidence shows that vendors and thereafter, the subsequent
purchasers remained in effective possession thereof. Fourthly,
C the High Court took note of the fact that as on the date of its
decision, the subsequent purchasers were in possession of the
land in question for about 40 years. Fifthly, the High Court found
that the land in question carried much higher valuation at the
time of passing of the judgment in second appeal and hence,
D enhanced the sale consideration to Rs. 10,000/- per acre. Sixthly,
the plaintiffs, even while seeking specific performance,
consciously prayed for the alternative reliefs of recovery of amount
paid by them with interest and compensation to the tune of Rs
15,000/-. Seventhly, plaintiff No. 3 had categorically deposed
before the Court as PW1 that he was not entitled to the land in
E question for being not an agriculturist and he had relinquished
his rights in favour of the plaintiff Nos. 1 & 2. Eighthly, the plaintiff
No. 1 had expired during the pendency of suit and the plaintiff
No. 2 had expired during the pendency of this appeal; though the
heir and legal representative of the said plaintiff Nos. 1 & 2 is on
F record as plaintiff No. 4 (respondent No. 2). Ninthly, the plaintiff
No. 2, while deposing as PW2 had stated that in case specific
performance was not granted, she ‘may be granted alternative
relief and compensation with interest’. In view of this, instead of
specific performance, awarding of monetary compensation to
respondent No.2 shall meet the ends of justice. Taking all the
G relevant factors into account, a lump sum of Rs. 15,00,000/- is
awarded to respondent No. 2 as compensation in lieu of specific
performance. [Paras 16.3, 17] [70-F-H; 71-A-G]

H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 41
CHANDULAL PARANDEKAR

Umabai and another v. Nilkanth Dhondiba Chavan A
(Dead) by LRS. and another (2005) 6 SCC 243 : [2005]
3 SCR 521 ; Sarvinder Singh v. Dalip Singh and Ors.
(1996) 5 SCC 539 : [1996] 4 Suppl. SCR 271 ; Veerayee
Ammal v. Seeni Ammal (2002) 1 SCC 134 : [2012] 6
SCR 369 ; Pushparani S. Sundaram and Ors. v. Pauline
B
Manomani James (deceased) and Ors. (2002) 9 SCC
582 ; A. Nawab John and Ors. v. V. N. Subramaniyam
(2012) 7 SCC 738 : [2012] 6 SCR 369 ; V. Muthusami
(Dead) by LRs. v. Angammal and Ors. (2002) 3 SCC
316 : [2002] 2 SCR 37 ; Guruswamy Nadar v. P. Lakshi
Ammal (Dead) through LRs and Ors. (2008) 5 SCC C
796 : [2008] 7 SCR 435 – referred to.
Case Law Reference
[2005] 3 SCR 521 referred to Para 7.1
[1996] 4 Suppl. SCR 271 referred to Para 7.3 D
[2009] 2 SCR 537 distinguished Para 8.1
[2012] 6 SCR 369 referred to Para 8.1
(2002) 9 SCC 582 referred to Para 8.1
[2012] 6 SCR 369 referred to Para 8.2 E
[2002] 2 SCR 37 referred to Para 8.2
[2008] 7 SCR 435 referred to Para 10
(2019) 8 SCC 62 relied on Para 13
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5382 F
of 2007.
From the final Judgment and Order dated 01.08.2007 of the High
Court of Judicature at Bombay in Second Appeal No.176 of 1988.
K. Parameshwar, Shivaji M. Jadhav, M. V. Mukunda, Ms. Ashtha
G
Deep, Advs. for the Appellants.
Subrat Birla, S.C. Birla, Advs. for the Respondents.

H
42 SUPREME COURT REPORTS [2019] 10 S.C.R.

A The Judgment of the Court was delivered by
DINESH MAHESHWARI, J.
1. This appeal by special leave arises out of a civil suit (No. 83 of
1968) for specific performance of agreement for sale of agricultural
land in Survey No. 64 admeasuring 50 acres and 39 gunthas, situated at
B village Gulvanchi, Taluka - North Solapur1. In its judgment and decree
dated 13.04.1984, the Trial Court declined the relief of specific
performance but decreed the suit for the alternative relief of money
recovery. On 30.11.1987, the First Appellate Court, while dismissing the
contesting plaintiffs’ appeal (Civil Appeal No. 546 of 1984), affirmed the
C decree of the Trial Court. However, the High Court of Judicature at
Bombay allowed the second appeal preferred by the contesting plaintiffs
(Second Appeal No. 176 of 1988) by its impugned judgment and decree
dated 01.08.2007 and decreed the suit for the principal relief of specific
performance, albeit on enhanced sale consideration with reference to
the market value of the land in question.
D
2. In order to appreciate the relevant features of this case,
essentially pertaining to the reliefs claimed under the Specific Relief
Act, 19632, the status and capacity of parties to this litigation may be
taken note of at the outset and as follows: -

E 2.1. In the suit for specific performance leading to this appeal, the
respondent No. 1 and the respondent No. 6 had been the plaintiff Nos. 2
and 3 respectively. The suit was filed by them jointly with the plaintiff
No. 1- late Shri Chandulal Balaprasad Parandekar, who was the husband
of plaintiff No. 2 (respondent No. 1 herein) and who expired during the
pendency of suit. After the demise of plaintiff No. 1, the daughter of
F plaintiff Nos. 1 and 2 was taken on record as plaintiff No. 4. She is
respondent No. 2 in this appeal. Therefore, respondent Nos. 1, 2 and 6
of this appeal were standing in the capacity of plaintiffs (vendees).
2.2. On the other hand, the respondent Nos. 3 to 5 of this appeal
had been the original defendant Nos. 1 to 3 in the suit in question. The
G defendant No. 1 (respondent No. 3) having expired, his legal
representatives are joined as respondent Nos. 3a to 3d in this appeal.
The agreements forming the subject-matter of this litigation were

1
Hereinafter referred to as ‘the suit property’ or ‘the land in question’.
2
H Hereinafter also referred to as ‘the Act of 1963’.
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 43
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

executed by the defendant Nos. 1 to 3 (vendors) in favour of the plaintiff A
Nos. 1 to 3 (vendees).
2.3 The appellants of this appeal were subsequently joined as
defendant Nos. 4 to 6 in the suit in question, as being the purchasers of
the suit property after filing of the suit.3
2.4. It may also be noticed that an application (IA No. 3 of 2010) B
was moved in this appeal pointing out demise of respondent No. 1 (plaintiff
No. 2), respondent No. 4 (defendant No. 2), and respondent No. 6
(plaintiff No. 3) with the submissions that the legal representative of the
respondent No. 1 was already on record as respondent No. 2; and the
legal representatives of deceased respondent Nos. 4 and 6 may be C
substituted on record. However, this application was rejected on
24.02.2012. On the other hand, other applications (IA Nos. 5 & 6 of
2013) for substitution of legal representatives of deceased respondent
No. 5 (defendant No. 3) and for condonation of delay were granted on
05.08.2013. Be that as it may, the estate of the original contesting plaintiffs
(plaintiffs Nos. 1 & 2) is duly represented by their daughter (plaintiff D
No. 4 - respondent No. 2 herein); and the contest in this litigation is
essentially between her and the appellants (subsequent purchasers).
3. Briefly put, the relevant background aspects of the matter and
respective stands of the parties had been as follows: -
E
3.1. The plaintiffs filed the suit aforesaid with the averments that
the defendant Nos. 1 to 3 had executed an agreement dated 20.09.1965
for sale of the suit property for a consideration of Rs. 22,951/-; and that
a sum of Rs. 3,500/- was paid as earnest money. It was further averred
that crops were standing on the suit property and hence, possession to
the extent of half portion thereof was to be handed over by the end of F
the year of 1965; and that in part performance of agreement, the plaintiffs
made payment of a further sum of Rs. 2,000/- to the defendant Nos. 1 to
3 on 24.09.1965 and the said defendants handed over possession of 25
acres of the land in question to the plaintiffs on 14.11.1965. The plaintiffs
further averred that they served a notice on the defendant Nos. 1 to 3 on G
05.04.1966 for performance of the agreement in question and, on receipt
of this notice, the said defendants executed a supplementary agreement
for sale; they accepted an additional amount of Rs. 500/- from the
3
As far as feasible, the parties have been referred in this judgment as per their status in
the suit. H
44 SUPREME COURT REPORTS [2019] 10 S.C.R.

A plaintiffs; and they handed over possession of the remaining part of the
land in question to the plaintiffs. The plaintiffs also averred that in this
manner, a sum of Rs. 6,000/- was paid to the defendant Nos. 1 to 3 as
part payment of the total sale consideration and the remaining sale
consideration was settled at Rs. 11,951/-, after deducting Rs. 5,000/-
towards encumbrances; and on payment of this amount, the defendant
B
Nos. 1 to 3 were liable to execute the sale deed in their favour within a
time span of 15 days. The plaintiffs averred that they were ready to
perform their part of the contract but the defendant Nos. 1 to 3 failed to
execute the sale deed for the land in question. With these averments, the
plaintiffs sought the relief of specific performance of the agreement for
C sale and in the alternative, also prayed for recovery of earnest money
with interest and for damages. The reliefs claimed in the plaint, being
relevant for present purposes, may be take note of as follows: -
“10) The Plaintiffs pray that,
A) The Defendants may be ordered to execute the sale-deed
D in respect of the land described in plaint paragraph 1, by
accepting Rs.16,951/- from the plaintiffs and to mention in
the sale-deed that, in case, the Defendants can not ward off
the charges on the land, being the sum of Rs. 5,000/-, before
the execution of the sale-deed then the said amount may be
E deducted from the sale price and the plaintiffs shall obtain
assurance for the same and the defendant Nos. 1 to 6 may be
ordered to join the defendant No.1 to 3, in execution of the
sale-deed.
B) If it is proved that, perhaps the possession of the land
F received by the Plaintiffs by way of part performance, is taken
by the Defendants and the possession is of the Defendants
only, then the Defendants may be ordered to hand over the
land.
C) In case, if it happens that, for any reason sale-deed
G pertaining to the suit land can not be executed in favour of
the plaintiffs, then the defendants may be ordered to pay to
the plaintiffs the sum accepted by the defendants towards the
earnest money Rupees 6,000/- and damages thereon at the
rate of Rs. 2% p.a. And the sum of Rupees 15,000/- towards
the losses on account of breach of Agreement by the
H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 45
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

Defendants and it may also be ordered that the encumbrances A
in respect of the said amount has been placed on the suit
land.
D) The Defendants may be ordered to pay to the plaintiffs the
entire cost, including advocates fee, of the present suit.
E) Other just and proper orders may be passed.” B

3.2. In their written statement, the defendant Nos. 1 to 3 (vendors)
though admitted the execution of agreement dated 20.09.1965 as also
supplementary agreement dated 28.04.1966 but then, claimed that the
said agreements were executed only as collateral security for a loan
advanced by the plaintiff No. 1 and not for the sale of property. These C
defendants asserted that the plaintiff No. 3 had introduced them to the
plaintiff Nos. 1 and 2, who in turn, had advanced the loan to them. They
further asserted that though the agreement was originally executed only
in favour of plaintiff No. 1, the names of other plaintiffs were incorporated
at the behest of plaintiff No.3; and that they had never parted with D
possession of the land in question.
3.3. The defendant Nos. 4 and 5 were subsequently impleaded in
the said suit as they had purchased 25 acres of the land in question by
way of a sale deed dated 10.07.1978, which was executed by the
defendant No. 1. The defendant No. 6 was also impleaded as a subsequent E
purchaser of the remaining portion of the land in question, by way of
another sale deed dated 18.09.1968. These defendants contended that
they were bona fide purchasers having no knowledge of the
aforementioned transaction between the plaintiffs and defendant Nos. 1
to 3.
F
4. On completion of pleadings of parties, the Trial Court framed
as many as 20 issues for determination of the questions involved in the
matter. After taking the evidence and having heard the parties, the Trial
Court proceeded to dismiss the suit for specific performance while
recording the basic finding to the effect that the documents in question
(the alleged agreement for sale as also the supplementary agreement) G
were, in fact, executed as security for loan and not for sale of the suit
property to the plaintiffs. The Trial Court, inter alia, observed that the
sale consideration of Rs. 22,951/- was a peculiar one, because in the
normal course, the parties do not fix the consideration amount in such an
H
46 SUPREME COURT REPORTS [2019] 10 S.C.R.

A odd figure and even the rate of Rs. 450/- per acre did not match with the
consideration amount stated in the agreement. The Trial Court also held
that the plaintiffs had failed to prove that they were handed over possession
of the suit property in pursuance of the agreements in question. In view
of its finding on the nature of transaction, the Trial Court observed that
the issue regarding readiness and willingness of the plaintiffs did not
B
survive for consideration. The Trial Court, of course, held that the
transactions effected in favour of defendant Nos. 4 to 6 were hit by the
doctrine of lis pendens as per Section 52 of the Transfer of Property
Act, 18824; and that the defendant Nos. 4 to 6 were not bona fide
purchasers of suit property. However, in view of its findings on material
C issues, the Trial Court held that the plaintiffs were not entitled for specific
performance and recovery of possession but then, directed that the
amount paid by the plaintiffs i.e., the sum of Rs. 6,000/-, be returned to
them, together with interest at the rate of 6% per annum from the date
of decree until payment.
D 5. Aggrieved by the judgment and decree of the Trial Court, the
plaintiff Nos. 1, 2 & 4 preferred the first appeal that was considered and
dismissed by III Addl. District Judge, Solapur by way of the judgment
and decree dated 30.11.1987. The First Appellate Court, on re-appreciation
of evidence, affirmed the principal findings of the Trial Court on the
nature of transaction, while observing that the plaintiffs had failed to
E prove that the amount in question was not that of a loan advanced, as
contended by the defendant Nos. 1 to 3. In regard to this question relating
to the nature of transaction, the First appellate Court specified the
circumstances being relied upon by it in paragraph 17 of its judgment as
follows:-
F “ 17. Following are the circumstances which reveal that the
documents on which the Plaintiffs have relied upon that the
Defendants Nos. 1 to 3 had agreed to sell the suit land, were
for the purpose of collateral security to the loan advanced
and the intention of the parties to them was not to sell the
G land as mentioned in those documents.
(i) As compared to the total price for the land agreed to be
sold, a partly sum was paid towards the advance payment of
the price.

4
H Hereinafter also referred to as ‘the T.P. Act’.
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 47
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

(ii) The possession of the land was never delivered to the A
Plaintiffs in pursuance of the agreement of sale.
(iii) The Plaintiff Nos. 1 and 2 must not be interested in
purchasing the land.
(iv) The notice dated 5.4.1966 was issued by the Plaintiffs
asking the Defendants Nos. 1 to 3 to execute the sale-deed B
and, therefore, after this notice the Plaintiffs ought to have
got the sale deed executed if at all the Defendants Nos. 1 to 3
had no objection to do so, instead of getting an agreement of
sale executed.”
5.1. The First Appellate Court also held that the plaintiffs had C
failed to prove their continuous willingness and readiness to perform
their part of the contract, particularly for the reason that despite stating
the availability of sufficient consideration with them, the plaintiffs got
executed supplementary agreement rather than the sale deed. The First
Appellate Court decided this question against the plaintiffs while observing D
as under:-
“(24) As discussed above, according to the terms of the
agreement of sale, the sale-deed was to be executed on or
about Chaitra Shubha 1, Shake 1888 means on 23rd March,
1966 according to the Gregorian Calender. The Plaintiffs E
issued the notice asking the Defendant Nos. 1 to 3 to execute
the sale-deed on 5.4.1966 means after the date on which the
sale deed was got to be executed according to the terms laid
down in the agreement of sale. The Notice (Exb. 87) issued
by the plaintiffs being after the period before which the sale
deed was to be executed cannot be used for proving that the F
Plaintiffs were ready and willing to perform their part of the
contract. It was necessary for the Plaintiffs to prove that before
Chaitra Shudha 1, Shake 1888 means 23rd March, 1966 they
were ready and willing to get the sale-deed executed in terms
of the agreement of sale but there is no evidence to prove that G
before Chaitra Shudha 1, Shake 1888 the Plaintiffs were ready
and willing to perform their part of contract. When the
Plaintiffs had sufficient consideration in their hand to make
payment of the entire price of the land and when there was
not difficulty for the Defendants Nos. 1 to 3 to dispose of the,
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48 SUPREME COURT REPORTS [2019] 10 S.C.R.

A it is not explained why the supplementary agreement was got
executed instead of getting the sale-deed executed. The
postponement of the sale-deed to which the Plaintiffs gave
consent clearly suggests that the parties were in fact not
intending to execute the sale-deed. The Plaintiffs have, thus
failed to prove that they were ready and willing to perform
B
their part of contract of getting the sale-deed executed within
the time limit proving in the earlier agreement of sale.”
5.2. The First Appellate Court affirmed the finding that the
defendant Nos. 4 to 6 were not bona fide purchasers while observing
that even if they had alleged want of knowledge about the agreement in
C question, given the size of the village and the population thereof, they
were aware of the pending litigation. However, the First Appellate Court
observed that even though the transactions with defendant Nos. 4 to 6
were hit by the doctrine of lis pendens, but the same would not affect
the validity of sale deeds executed in their favour, as the alleged
D agreements were executed only for the purpose of collateral security
for the loan advanced.
5.3. In view of its findings, the First Appellate Court affirmed the
decree of the Trial Court and dismissed the appeal. Aggrieved by the
decree so passed by the Trial Court and affirmed by the First Appellate
E Court, the plaintiff Nos. 1, 2 & 4 preferred second appeal before the
High Court.
6. The second appeal so filed by the contesting plaintiffs was
admitted by the High Court while formulating the following substantial
questions of law for consideration:-
F “(a) Whether, in a suit for specific performance of agreement,
in order to establish the readiness and willingness, the plaintiff
has to give notice to the defendant before the last date,
specified in the agreement or after the last date specified in
the agreement but within reasonable time thereafter?
G (b) What is the true nature of suit transaction, viz. Whether it
is an agreement of sale or whether it is security agreement?”
6.1. During the course of hearing, the High Court found yet another
substantial question of law arising for consideration and formulated the
same as follows:-
H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 49
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

“(c) If the sale transactions executed in favour of defendant A
nos.4 to 6 during the pendency of the suit were hit by the
doctrine of lis pendente lite, could the transfer of the suit
land to defendant nos.4 to 6 be held to be illegal and void ab
initio?”
7. The High Court, in its impugned judgment dated 01.08.2007, B
examined the contentions of the parties and upturned the findings of the
subordinate Courts on the question of nature of transaction as also the
finding of First Appellate Court on the question of readiness and
willingness on the part of the plaintiffs to perform their part of the contract.
7.1. The High Court observed that both the agreements were C
silent about any loan transaction between the plaintiffs and the defendant
Nos 1 to 3 and came to the conclusion that the agreements in question
were not executed as security against any loan advanced to the
defendants. The High Court referred to the decision of this Court in the
case of Umabai and another v. Nilkanth Dhondiba Chavan (Dead)
by LRS. and another.: (2005) 6 SCC 243 and held as under:- D

“The agreement at Exh.85 was signed on 20/9/1965 and in
its preamble it is stated that the suit property had become the
personal property of the vendors i.e. the present defendant
nos.1 to 3 by way of the order dated 16/8/1963 passed by the
Mamlatdar of North Solapur. It proceeded to state that the E
said property was being offered to the plaintiffs by way of
sale at the rate of Rs.450/- per acre. By way of advance, an
amount of Rs.3,500/- was received and the remaining amount
of Rs.19,451/- would be paid at the time of signing the sale
deed. The defendants had agreed that the sale deed will be F
signed by Chaitra Shudha 1 Shake 1888 or around that time.
The agreement for sale would be binding on the successor of
the vendors. Out of the total land of 50 acres 39 gunthas, 25
acres of land was having the crops of groundnuts and toor
and those crops would be harvested and possession would
be given by the end of November, 1965. The possession of G
the remaining land would be handed over to the plaintiffs on
execution of the sale deed. In this document there is no mention
of any security for any loan transaction. The document did
not even whisper about the loan being given by the plaintiffs
H
50 SUPREME COURT REPORTS [2019] 10 S.C.R.

A at the request of the defendant nos.1 to 3. At the end of this
document there is an endorsement made on 24/11/1965 to the
effect that an additional amount of Rs.2000/- was received
by the defendant nos.1 to 3 on that day as the amount was
required to be paid for the acquisition of house plot and
purchase of buffaloes. It was further stated that the said
B
amount of Rs.2000/- would be adjusted against the balance
of Rs.19,451/- and the remaining amount of Rs.17,451/- would
be given while executing the sale deed and the sale deed would
be executed within the time originally specified. Coming to
the supplementary agreement at Exh.86 and signed on 28/4/
C 1966, there is no whisper about any loan transaction or a
security for such a transaction. The document is clearly titled
as a supplementary agreement for sale. It further states that
the suit land had an encumbrances of additional Rs.5000/-
which was to be discharged by the plaintiffs and balance
amount of Rs.11,951/- was to be paid by the plaintiffs at the
D
time of execution of the sale deed. By no stretch of imagination
these two agreements at Exhs.85 and 86 could be termed as
and by way of security for a loan transaction. This defence
was taken by way of an after thought when the suit was filed
and beyond the oral statement made in the depositions of
E defendant no.1, there is not even an iota of evidence to hold
that these agreements were by way of security for a loan
transaction. As observed by their Lordships in the case of
Umabai (Supra) and as is the well established position in law
that the agreements have to be read as it is and if so read it is
clear that the agreements at Exhs.85 and 86 were the
F
agreements for sale and the concurrent findings recorded by
both the courts below that they were by way of security against
loan transaction are unsustainable. It is a perverse finding
by both the courts below.”
7.2. On the question of readiness and willingness of the plaintiffs,
G the High Court analysed the chronology of events, being that, as per the
terms mentioned in the first agreement, the sale deed was to be executed
by or on 23.03.1966; and on the vendors’ failure to execute the sale
deed, legal notice dated 05.04.1966 was issued, which led to the execution
of supplementary agreement dated 28.04.1966. With reference to these
H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 51
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

facts and events, the High Court was of opinion that the plaintiffs were A
always ready and willing to perform their part of the contract. The High
Court observed and held as under:-
“…..Admittedly, as per the agreement for sale at Exh.85, the
sale deed was to be executed by 23/3/1966 and obviously if it
was not so done on account of any reason attributable to any B
of the parties, the question of one party calling upon the other
unwilling party by a legal notice would arise and there would
not be any occasion to issue the legal notice by any of the
parties before 23/3/1966 and in the instant case the
supplementary agreement for sale at Exh.86 was signed on
28/4/1966. As the agreement was not singed by 23/3/1966 C
the plaintiffs have issued legal notice dated 5/4/1966 to the
defendant nos.1 to 3 calling upon them to execute the sale
deed which indicated that the notice was issued at the earliest
after the dead-line for signing the sale deed was over. In
response to the said notice the defendant nos.1 to 3 held fresh D
negotiations with the plaintiffs and the supplementary
agreement for sale at Exh.86 was signed on 28/4/1966 and,
therefore, the findings recorded by the Lower Appellate Court
are manifestly erroneous. In the instant case, the plaintiffs
were required to give notice after 23/3/2006 and not before
that and such a notice was given on 5/4/1966. The notice E
was not required to give before the last date fixed for signing
the sale deed i.e. 23/3/1966. The cause of action to issue the
notice will arise only when either of the parties failed to
execute the sale deed by the date mentioned in the agreement
for sale. The substantial question framed at (a) in para 1 F
above is answered accordingly. It is, therefore, held that the
plaintiffs have proved that they were always ready and willing
to perform their part of the contract with the defendant nos.1
to 3 for signing the sale deed consequent to the agreements
for sale at Exh.85 and 86.”
G
7.3. As regards the defendant Nos. 4 to 6 (appellants herein), the
High Court upheld the findings of the subordinate Courts that they were
not bona fide purchasers; and also observed that the sale transactions
in their favour were made only in order to defeat the claim of the plaintiffs
and hence, the said sale deeds were required to be held illegal. The High
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52 SUPREME COURT REPORTS [2019] 10 S.C.R.

A Court referred to a decision of this Court in the case of Sarvinder Singh
v. Dalip Singh and Ors.: (1996) 5 SCC 539 and held, inter alia, as
under:-
“8.…….It is clear that the sale transactions by defendant
nos.1 to 3 in favour of defendant nos.4 to 6 were intended to
B defeat the claim of the plaintiffs in the suit and the suit property
could not have been transferred in favour of defendant nos.4
to 6 during the pendency of the suit filed by the plaintiffs.
The finding recorded by the Lower Appellate Court that the
defendant nos.4 to 6 were not aware of the agreements between
the plaintiffs on one hand and the defendant nos.1 to 3 on
C the other hand, cannot be accepted having regards to the
oral evidence of DW 1 and DW 6. The Lower Appellate Court
was not right in turning down the findings on this issue
recorded by the trial court. Even otherwise, during the
pendency of the suit the defendant nos.1 to 3 were estopped
D from transferring the suit land in view of the embargo of
Section 52 of the Transfer of Property Act, 1882 and, therefore,
the sale deeds in favour of defendant nos.4 and 5 and
defendant no.6 executed by defendant nos.1 to 3 are required
to be held as illegal…..”
E 7.4. After the findings aforementioned, the High Court examined
the question of relief to be granted. In this regard, the High Court referred
to: (a) the alternative relief of money recovery as claimed in the plaint;
(b) the decree as passed by the Trial Court; (c) the fact that the defendant
Nos. 4 to 6 were cultivating the land in question for about 40 years; (d)
the location of the land in question at about 20 kilometres from Solapur
F Municipal Corporation area; and (e) the horticulture growth of the area
in question. With reference to these factors, the High Court
considered it appropriate to fix the market value of the land in question
at Rs. 10,000/- per acre.
7.5. On the basis of the findings and observations aforesaid, the
G High Court proceeded to decree the suit for specific performance but
with the stipulations that the plaintiffs would be entitled to receive
possession of the land in question from defendant Nos. 4 to 6 on making
payment at the rate of Rs. 10,000/- per acre, whereafter, all the
defendants shall jointly and/or severally execute the sale deeds in favour
H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 53
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

of the plaintiffs. The High Court further ordered that on failure of the A
plaintiff to make the requisite payment within a period of two months,
the defendant Nos. 4 to 6 shall pay Rs. 10,000/- per acre to the plaintiffs
‘so as to confirm their title and ownership over the suit land’. The
High Court also directed that the said land shall be used for the purpose
of self-cultivation or horticulture. The operative part of the judgment
B
impugned reads as under:-
“12. In the premises, the second appeal is hereby allowed
and the decree of the trial court as confirmed by the Lower
Appellate Court is hereby substituted as under:-
(a) The suit is decreed. The plaintiffs are entitled to get the C
decree of specific performance of the contract (Sathe Khat
dated 20/9/1965 and the Supplementary Sathe Khat dated
28/4/1966) executed in their favour.
(b) By way of specific performance of contract the plaintiffs
at the first instance shall be entitled to receive the possession D
of the suit land from defendant nos. 4 to 6 by paying them a
compensation at the rate of Rs.10,000/- per acre and the said
defendants in turn shall execute the sale deeds jointly and/or
severally in favour of the plaintiffs immediately on receipt of
the compensation amount. The plaintiffs shall pay the
compensation within two months from today. E

(c) In case the plaintiffs jointly and/or severally fail to pay
the compensation of Rs.10,000/- per acre to the defendant
nos. 4 to 6 within the stipulated period of two months, the
said defendants shall pay an amount of Rs.10,000/- per acre
to the plaintiffs within a period of two months therefrom so as F
to confirm their ownership over the suit land.
(d) The land shall be used for self cultivation or horticulture.
(e) Costs in cause.
Fresh decree be drawn in the above terms by the Registry G
and forward the same to the trial court for its execution.”
8. Assailing the judgment of the High Court, learned counsel for
the appellants-defendant Nos. 4 to 6 has strenuously argued that the
High Court could not have re-appreciated the evidence on record while
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54 SUPREME COURT REPORTS [2019] 10 S.C.R.

A exercising jurisdiction under Section 100 of the Code of Civil Procedure
and could not have upset the concurrent findings of the subordinate Courts;
and as there was no substantial question of law involved, the second
appeal ought to have been dismissed. Learned counsel would submit
that the question as to whether the agreements in question were
agreements for sale or were only executed towards security, had been
B
of fact and there was no occasion for the High Court to upturn the
concurrent findings of subordinate Courts that were returned after due
appreciation of evidence. Further, according to the learned counsel,
readiness and willingness of the plaintiffs has to be demonstrated during
the period specified in the agreement for execution; and the High Court
C has erred in assuming the readiness and willingness on part of the plaintiffs
even contrary to the evidence on record. Further, with reference to the
fact that at the time of executing supplementary agreement, an amount
of Rs. 500/- was paid by the plaintiffs whereas a sum of Rs. 5,500/- was
earlier paid as earnest money as against the total sale consideration of
Rs. 22,951/-, the learned counsel has contended that such payment being
D
wholly inadequate as against the alleged sale consideration, the plaintiffs
could not have been considered ready and willing to perform their part
of contract.
8.1. The learned counsel has elaborated on the submission that
even the notice seeking performance was sent by the plaintiffs only on
E 05.04.1966 i.e., thirteen days after 23.03.1966, which was the last date
prescribed by the agreement for execution of the sale deed; and even at
the later stage after the notice dated 05.04.1966, the vendees settled for
a supplementary agreement and did not seek specific performance, which
clearly shows want for readiness and willingness on their part to perform
F their obligations under the agreement. The learned counsel would submit
that even if time is not of the essence of agreement, the vendees ought
to have claimed performance within reasonable time whereas in the
present case, there is no evidence as to the steps taken by the vendees,
including verbal or written demands for performance, for a period of
two years after the supplementary agreement and until institution of the
G suit on 24.08.1968. This delay, according to learned counsel, ought to be
considered fatal to the case of the plaintiffs. The learned counsel has
referred to and relied upon the decisions in Azhar Sultana v. B.
Rajamani and Ors.: (2009) 17 SCC 27; Veerayee Ammal v. Seeni
Ammal: (2002) 1 SCC 134, and Pushparani S. Sundaram and
H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 55
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

Ors. v. Pauline Manomani James (deceased) and Ors.: (2002) 9 A
SCC 582.
8.2. Learned counsel for the appellants-defendant Nos. 4 to 6 has
further submitted that the High Court has erroneously held that the sale
made by the vendors to the subsequent purchasers is ‘illegal’ though the
law remains settled that the sale to the subsequent purchaser is not B
illegal or void ab initio. The learned counsel has referred to the decision
in A. Nawab John and Ors. v. V.N. Subramaniyam: (2012) 7 SCC
738. The learned counsel has contended that the appellants had been
the bona fide purchasers having no knowledge about any previous
transaction, and on the facts and in the circumstances of this case, decree
for specific performance ought not to have been granted where the C
plaintiffs failed to prove the execution of the document as also their
possession over the suit land; and where, after a lapse of 40 years since
the execution of alleged agreement, the relief of specific performance
would provide undue advantage to the plaintiffs. The learned counsel
would submit that now, the appellants are in possession of the suit D
property for the past 50 years and have made improvements thereupon;
and at this late stage, it would be inequitable to sustain a decree for
specific performance, especially when the Trial Court and the First
Appellate Court refused this relief. The learned counsel has referred to
the decision in V. Muthusami (Dead) by LRs. v. Angammal and Ors.:
(2002) 3 SCC 316. The learned counsel has also submitted that the E
market value of the suit land was wrongly calculated by the High Court
inasmuch as the value for unirrigated land in the area in question was
Rs. 70,000/- per hectare and that of irrigated one was Rs. 1,40,000/- per
hectare.
9. Per contra, learned counsel for the contesting respondent has F
strenuously argued that proper construction of the agreement dated
20.09.1965 and supplementary agreement dated 28.04.1966, after reading
them in entirety, would only lead to the conclusion that they were
agreements for sale and not for security inasmuch as therein, neither
there is any provision for payment of interest nor for re-payment; and G
there is no expression in the documents to show that there was any
security arrangement. The learned counsel has also argued that the
plaintiffs had specifically pleaded their readiness and willingness to
perform their part of the contract and such pleadings were not specifically
denied by the defendants. Further, according to the learned counsel, the
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56 SUPREME COURT REPORTS [2019] 10 S.C.R.

A contesting plaintiff’s specific assertion in the deposition about readiness
and willingness has remained unshaken in the cross-examination. Learned
counsel would submit that with the repeated payments made by the
plaintiffs show their readiness and willingness to perform their part of
the contract without any doubt and continuous readiness and willingness
could well be deduced from the conduct of plaintiffs. Therefore, according
B
to the learned counsel, the perverse finding of the First Appellate Court
in this regard has rightly been set aside by the High Court. The learned
counsel has also argued that the appellants had not been bona fide
purchasers of the suit property and their sale transaction is clearly hit by
the doctrine of lis pendens as per Section 52 of the T.P. Act; and, for
C want of bona fide, the appellants are not entitled for any equitable relief.
The learned counsel has referred to and relied upon the decision in
Guruswamy Nadar v. P. Lakshi Ammal (Dead) through LRs and
Ors.: 2008 (5) SCC 796. The learned counsel has also argued that the
High Court has justifiably proceeded to balance the equities by directing
the plaintiff to pay enhanced sale consideration and hence, no interference
D
is called for in this appeal.
10. We have bestowed anxious consideration to the rival
submissions and have scanned through the material placed before us for
perusal.
E 11. On the submissions made by the learned counsel for the parties
and in the given set of fact and circumstances, the principal point for
determination in this appeal is as to whether the High Court was justified
in entertaining the second appeal; and in upsetting the judgment and
decree impugned? Three–fold basic questions need to be addressed to
for determination of this point. The first question is as to whether the
F agreement dated 20.09.1965 and supplementary agreement dated
28.04.1966 had been for sale and had not been the documents executed
towards security for a loan taken by the defendant Nos. 1 to 3? If the
answer to the first question is in favour of the plaintiffs and the agreements
in question are held to be those for sale of property, the second question
G would be as to whether the plaintiffs were always ready and willing to
perform their part of the contract and no personal bar operates against
them so as to enforce the specific performance of the agreement in
question. For effective disposal of this matter, the third question would
be as to whether the appellants had not been bona fide purchasers and
the sale transactions in their favour relating to the property in question
H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 57
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

are hit by the doctrine of lis pendens? However, as shall be noticed A
hereafter later, even if the questions foregoing are answered in favour
of the plaintiffs, another point would still arise for determination as to
whether, on the facts and in the circumstances of this case, the decree
passed by the High Court, for the relief of specific performance on
enhanced market value of the suit property, is justified or if any other
B
form of relief shall meet the ends of justice?
Nature of transaction between the plaintiffs and defendant
Nos. 1 to 3
12. As regards the question concerning the nature of transaction
under the agreements in question, as noticed, the Trial Court and the C
First Appellate Court held that such agreements had been towards
security and not for sale. The High Court has, however, disagreed and
has held that such findings by the subordinate Courts suffered from
perversity and the documents in question were not towards security for
any loan transaction; neither the documents say so nor there was any
evidence on record to hold that these agreements were executed by D
way of security for a loan transaction.
12.1. We have minutely examined the translated copies of the
said agreements dated 20.09.1965 and 28.04.1966, as placed before us
for perusal. In the initial agreement dated 20.09.1965, after mentioning
the area, survey number and boundaries of the land in question, the E
vendors had stated as under:-
“ The land accordingly within the boundaries, including
stones, earth , well, trees, shrubs, etc.
This land agreed to be sold at the rate of Rs. 450/- per F
acres, area 50 Acres, 39 Gs. for total price of Rs. 22951/- Rs.
Twenty-two thousand, Nine Hundred and fifty one. This
agreement is accordingly made. Today and earnest amount
of Rs. 3500/- Rs. three Thousand, five hundred. The remaining
amount or Rs. 19451 is to be paid at the time of sale deed.
The sale transaction would be completed on Chaitra Sud I, G
Shake 1, 1888 or thereabout.
The expense to be incurred for sale-deed are to borne by
you. The sale deed is to be executed by us and to be taken by
you. This agreement is accordingly executed, for execution
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58 SUPREME COURT REPORTS [2019] 10 S.C.R.

A of sale deed. All our heirs shall sign the sale deed. The
encumbrances shall be extinguished or Havala shall be given
and the said amounts shall be deducted at the time of execution
of sale deed and thus the land would be free from any charge.
Out of the land, there is crop of groundnut and Toor. After
same would be reaped, actual possession would be delivered
B
at the time of sale deed by the end of November of 1965. The
remaining whole land would be actually delivered to you by
completing the sale transaction. Accordingly, subject to
fulfilling the abovementioned conditions, the sale transaction
would be completed within limit prescribed. If anybody would
C commit breach of conditions he will take action and
expenditure shall be borne by him. The earnest amount of Rs.
3500 Rs. Three thousand and five hundred) is received.
This Sathekhat given in writing on 20.09.1965. Dastur
Bhagwa-n Vaman Palaskar resident of Solapur. The sa-le deed
D of the transactions.
Note: The sale deed of the dealings (property) shall be
executed in your name or in the names of other persons
suggested by you.
The sale deed would be executed –in your name or in the
E names others suggested by. The earnest amount of earnest of
Rs. 3500 received. No complaint.
This Sathekhat dt. 20.09.1965. Dastur Bhagwan Vaman
Palaskar, resident of Solapur.”

F 12.1.1. As noticed, another payment of Rs. 2,000/- was made by
the plaintiffs to the defendant No. 1 and an endorsement for adjustment
of such payment against the sale price was made on this very document
on 24.11.1965 as follows:-
“ I have purchased the house building and also purchased
she-buffalos. For that, I have received Rs. 2000 in cash from
G
you. That amount should be deducted being paid. The
remaining amount of Rs. 17451 would be received from you
and as per the conditions of the Sathekhat, the transaction
of sale would be completed. Sd/-. Date :24.11.1965”

H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 59
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

12.1.2. In the supplementary agreement dated 28.04.1966, the A
vendors acknowledged that they had received Rs. 6,000/- from the
plaintiffs under the agreement dated 20.09.1965; and also stated that
they had delivered possession of a part of the land in question on
14.11.1965 and that they had delivered the possession of entire land to
the vendees in part performance. The vendors also stated that there
B
was a charge of approximately Rs. 5,000/- on the land in question and,
therefore, after deducting in all a sum of Rs. 11,000/-, the vendees shall
pay the remaining amount of Rs. 11,961/- and the sale deed would be
executed in their favour.
12.2. There had not been even a remote suggestion in the
documents in question that there was any loan or borrowing transaction C
between the parties and the said documents were being executing
towards security. On the contrary, the recitals and stipulations in the said
agreements had only been in affirmation of the agreement for sale and
of the receipt of part payment from time to time against the sale
consideration. Of course, defendant No. 1, while deposing as DW1 D
attempted to suggest that he had approached the plaintiff No. 3 seeking
loan to the tune of Rs. 5000-5500/- through a broker; and, at the instance
of the plaintiff No. 3, executed the document in question as security
while taking loan at the interest rate of 1 per cent per month. This
defendant also admitted having obtained another sum of Rs. 2,000/- from
the plaintiff No. 1 and having put an endorsement on the document in E
question. He, however, denied having received any other amount or
having delivered possession of the suit property. The evidence on the
part of the defendants in this case remains rather vague and sketchy;
and it is difficult to accept the oral assertions of defendant No. 1 as
against the recitals in the agreements. F
12.3. It is also noticed that the subordinate Courts proceeded to
doubt if the transaction was at all intended to be of sale while questioning
as to why the parties fixed the consideration in odd figures i.e., Rs.
22,951/-; and while observing that when as per the documents, the land
was being sold @ Rs. 450/- per acre, the total consideration for the land G
in question would come to Rs. 22,938.75 and not Rs. 22,951/-. The Trial
Court also raised doubts on the suggestion of the plaintiffs that possession
of the land in question was handed over to them. The First Appellate
Court even observed that as against the sale consideration, only a paltry
amount was paid in advance and questioned as to why the supplementary
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60 SUPREME COURT REPORTS [2019] 10 S.C.R.

A agreement was executed after serving of notice. On the other hand, the
High Court minutely examined the evidence on record and observed
that there was not even a whisper about the loan transaction; and
that as per the endorsement made on 24.11.1965, another amount of Rs.
2,000/- was received by the defendant Nos. 1 to 3. As regards the
supplementary agreement dated 28.04.1966, the High Court again found
B
that there was no whisper about any loan transaction or any security for
such a transaction and the document was clearly executed as being the
supplementary agreement for sale while even referring to the
encumbrances of Rs. 5,000/-, which were to be discharged. The High
Court observed that by no stretch of imagination these two agreements
C could be termed as and by way of security for a loan.
12.4. Having examined the matter in its totality, we have no
hesitation in upholding the findings of the High Court that have been
returned after due consideration of the material on record and with
reference to the law applicable to the case. It is plain and obvious that
D the Trial Court and the First Appellate Court proceeded on entirely
irrelevant and rather baseless considerations while failing to consider
that such findings on the nature of transaction evidenced by the
agreements in question could not have been rendered on surmises and
conjectures.
E 12.4.1. As to whether the possession of the land in question was
delivered to the plaintiffs or not, could not have been taken as a factor
decisive as regards nature of transaction. Moreover, execution of the
supplementary agreement after notice dated 05.04.1966 and after
receiving further an amount of Rs. 500/- by the defendant Nos. 1 to 3
could only show re-affirmation of the intention of the parties towards
F the sale transaction. Significantly, in the supplementary agreement, the
defendants not only acknowledged the receipt of part consideration to
the tune of Rs. 6,000/- but further agreed for adjustment of Rs. 5,000/-
towards encumbrances and, therefore, agreed to receive remaining Rs.
11,921/- at the time of execution of the sale deed. In our view, looking to
G the dealings of the parties, this circumstance about execution of the
supplementary agreement only strengthens the case of the plaintiffs rather
than operating against them.
12.4.2. The other observations of the subordinate Courts as regards
quantum of consideration are difficult to be appreciated. Such hair-splitting
H exercise by the Trial Court, that on the agreed rate, sale consideration
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 61
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

ought to have been Rs. 22,938.75 and as to why the parties agreed for A
Rs. 22,951/-, had been entirely baseless, rather unwarranted. The
observation of the Trial Court as to why the sale consideration was in
odd figures is itself of such oddity that any finding on that basis could
only meet with disapproval. Rounding up of the amount of consideration
and addition of one rupee in the last is not unknown to such transactions.
B
In fact, quite contrary to what was observed by the Trial Court, the
figure of sale consideration rather fortifies the deduction that the intention
of the parties had only been towards the transaction of sale. In the ultimate
analysis, we are satisfied that the High Court has rightly disapproved the
baseless findings of the subordinate Courts and has rightly held that the
agreements in question were executed for the sale of suit property. Thus, C
the first question is answered in favour of the plaintiffs.
Readiness and willingness of the plaintiffs to perform their
part of contract
13. When the agreements in question were for the sale of suit
property, the plaintiffs were entitled to take up the action seeking specific D
performance. However, in order to succeed in their claim, the plaintiffs
were required to aver and prove that they were always ready and willing
to perform their part of the contract. As noticed, the Trial Court chose
not to answer this question in view of its finding on the nature of
transaction. The First Appellate Court though adverted to this question E
but answered the same against the plaintiffs, essentially for the reasons
that they had failed to prove if before the stipulated date of execution of
sale document, they were ready and willing to get the sale deed executed
and there was no explanation as to why supplementary agreement was
got executed. On this question, again, the High Court examined the record
with reference to the law applicable and disapproved the finding of the F
First Appellate Court while observing that when as per the first
agreement, the sale deed was to be executed by 23.03.1966, there was
no occasion for any party to call upon the other for performance before
that date. The High Court also found that the plaintiffs issued notice on
05.04.1966, calling upon defendants Nos. 1 to 3 to execute the sale deed G
and, obviously, fresh negotiations were held thereafter and hence, the
supplementary agreement was executed. The High Court found the
approach of the Appellate Court erroneous and held that the plaintiffs
had proved their readiness and willingness to perform their part of the
contract.
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62 SUPREME COURT REPORTS [2019] 10 S.C.R.

A 13.1. It has been vehemently argued on behalf of the appellants
that the plaintiffs paid only Rs. 500/- while executing the supplementary
agreement dated 28.05.1966 which goes to show that the plaintiffs were
not having the capacity to pay the remaining sale consideration and they
were never ready and willing to perform their part of the contract. It has
also been argued that after supplementary agreement dated 28.05.1966
B
and until filing of the suit in the year 1968, there was complete silence on
the part of the plaintiffs. It has also been pointed out that the plaintiff
No. 3, while deposing as PW1, stated having relinquished his right to
purchase the land in favour of the plaintiff Nos. 1 and 2 but then, the
plaintiff No. 2, while deposing as PW2, only made a passing statement
C that she was ready and willing to perform her part of the contract but
there was no indication of her source of funds and on the contrary, her
statement had been that she was a widow and was having no other
source of income.
13.2. The question as to whether the plaintiff seeking specific
D performance has been ready and willing to perform his part of the contract
is required to be examined with reference to all the facts and the
surrounding factors of the given case. The requirement is not that the
plaintiff should continuously approach the defendant with payment or
make incessant requests for performance. For the relief of specific
performance, which is essentially a species of equity but has got statutory
E recognition in terms of the Specific Relief Act, 19635, the plaintiff must
be found standing with the contract and the plaintiff’s conduct should
not be carrying any such blameworthiness so as to be considered
inequitable. The requirement of readiness and willingness of the plaintiff
is not theoretical in nature but is essentially a question of fact, which
F needs to be determined with reference to the pleadings and evidence of
parties as also to all the material circumstances having bearing on the
conduct of parties, the plaintiff in particular. In view of the contentions
urged, we have scanned through the record to examine if the finding of
the High Court in this regard calls for any interference.
G 13.3. It is noticed that plaintiffs pleaded in paragraphs 6 and 7 of
the plaint that they were ready to get the sale deed executed as per the
conditions in the agreement for sale and also stated that they served the
notice, then supplementary agreement was executed; and then, on many
occasions, they asked the defendant to execute the sale deed. The
5
H Its forerunner being the Specific Relief Act, 1877
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 63
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

defendant No. 1 in his written statement merely stated a bald denial that A
such averments were false and were ‘not agreeable to the defendants’.
In fact, the entire emphasis of the written statement had been on the
assertion that the agreement in question was not for sale and was obtained
by the plaintiffs towards security against the amount borrowed by the
defendant No. 1.6 The plea of the plaintiffs as regards their readiness to
B
perform the contract as per its conditions did not meet with categorical
denial from the defendants. This apart, and as noticed, even at the time
of entering into the agreement, the plaintiffs made payment of a sum of
Rs. 3,500/- against the sale consideration of Rs. 22,951/-. Moreover,
and much before the stipulated date of execution of sale deed, they
made another payment of Rs. 2,000/- against the sale consideration. C
When the sale deed was not executed by 23.03.1966, the plaintiffs served
notice on 05.04.1966. The vendors thereafter executed the supplementary
agreement and the plaintiffs made payment of yet another sum of
Rs. 500/- while it was also agreed by the vendors that the property
carried encumbrance to the tune of Rs. 5,000/-, which was to be adjusted
D
against the sale consideration. Therefore, the plaintiffs were left to make
payment of about half of the sale consideration. The recitals in the
supplementary agreement even suggested about the vendors having
delivered possession of the property in question. The plaintiffs have alleged
that they lost possession later on. Though the factum of delivery of
possession is disputed by the defendants but such a dispute does not E
carry any adverse impact on the rights of the plaintiffs to seek specific
performance.
13.4. The admission of plaintiff No. 3 that she was not possessed
of sufficient funds cannot be read in isolation and it cannot be concluded
that she was not possessed of sufficient means to pay the remaining F
sale consideration. Her statement is required to be visualised in the
backdrop of the fact that her husband, plaintiff No. 1, had expired and
she had succeeded to his estate. Her statement, with reference to her
understanding of the matter, could only be interpreted to mean that at
the given moment, she was not off-hand in possession of the money to
make payment but such an expression in her statement cannot lead to G
the conclusion that making payment of the remaining sale consideration
was beyond her capacity or that she was not willing to perform her part

6
This plea of the defendants as regards nature of transaction stands rejected for what
has been discussed in paragraphs 12 and its sub-paragraphs hereinbefore. H
64 SUPREME COURT REPORTS [2019] 10 S.C.R.

A of the contract. In the ultimate analysis, we are satisfied that the question
of readiness and willingness on the part of the plaintiffs was approached
by the First Appellate Court from an altogether wrong angle and was
decided against the plaintiffs on irrelevant considerations.
13.5. So far the period between the year 1966 to the year 1968 is
B concerned, when the plaintiffs had the limitation of three years for filing
the suit for specific performance, it cannot be said that during the
aforesaid period, the plaintiffs were required to show overt act by them
in furtherance of the agreement in question. The principles stated in the
decisions in Azhar Sultana, Veerayee Ammal and Pushparani S.
Sundaram (supra), as relied upon by the learned counsel for the
C appellants, are not of any doubt or debate but each of the said cases had
proceeded on its own facts. We may also observe that in the case of
Azhar Sultana, the Court found that as against the agreement dated
04.12.1978, the suit for specific performance was filed on 07.12.1981,
after the property was sold on 31.10.1981; and that the plaintiff failed to
D show that she was not having notice of the subsequent sale. However,
in the said case, the Court directed monetary payment to the tune of
twice the amount advanced by the plaintiff. In Veerayee Ammal, this
Court pointed out that the expression ‘reasonable time’ for performance
on the part of plaintiff would depend on the circumstances of the case,
including the terms of contract. In Pushparani S. Sundaram, the basic
E requirements of Section 16 of the Act of 1963 were reiterated. In contrast
to what is suggested on behalf of the appellants, we may point out that
recently, in the case of R Lakshmikantham v. Devaraji: Civil Appeal
No. 2420 of 2018, decided on 10.07.2019, this Court has again
explained that when the suit for specific performance is filed within the
F period of limitation, delay cannot be put against the plaintiff. This Court
has said:-------
“….In the aforesaid circumstances, the High Court was also
incorrect in putting a short delay in filing the Suit against the
plaintiff to state that he was not ready and willing. In India,
G it is well settled that the rule of equity that exists in England,
does not apply, and so long as a Suit for specific performance
is filed within the period of limitation, delay cannot be put
against the plaintiff - See Mademsetty Satyanarayana v.
G.Yelloji Rao and Others AIR 1965 Supreme Court 1405
(paragraph 7) which reads as under:-
H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 65
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

“(7) Mr. Lakshamaihan cited a long catena of English A
decisions to define the scope of a Court’s discretion. Before
referring to them, it is necessary to know the fundamental
difference between the two systems- English and Indian-
qua the relief of specific performance. In England the
relief of specific performance pertains to the domain of
B
equity; in India, to that of statutory law. In England there
is no period of limitation for instituting a suit for the said
relief and, therefore, mere delay – the time lag depending
upon circumstances – may itself be sufficient to refuse the
relief; but, in India mere delay cannot be a ground for
refusing the said relief, for the statute prescribes the period C
of limitation. If the suit is in time, delay is sanctioned by
law; if it is beyond time, the suit will be dismissed as barred
by time; in either case, no question of equity arises.””
13.6. In the present case too, when the plaintiffs had the limitation
of three years for filing the suit and have indeed filed the suit well within D
limitation; and looking to the overall circumstances of the case, no aspect
of delay operates against them.
13.7. Having examined the matter in its totality and in the light of
applicable principles, we are satisfied that the given set of facts and
circumstances of this case lead only to the conclusion that the plaintiffs E
have shown their readiness and willingness to perform their part of the
contract and there does not operate any personal bar against their claim
for specific performance. Therefore, the second question is also answered
in favour of the plaintiffs.
Operation of the doctrine of lis pendens: Section 52 T.P. Act F
14. The third question as regards the sale transactions in favour
of the present appellants (the subsequent purchasers) need not detain us
longer, except to correct an error on the part of High Court where it is
observed that such sale deeds are to be treated as illegal.
14.1. The suit in question was filed on 26.08.1968. So far the sale G
transaction in favour of the defendant Nos. 4 & 5 (the appellant Nos. 1
& 2 herein), in relation to 25 acres of land out of the suit property, is
concerned, the same was effected by way a sale deed registered only
on 10.07.1978 i.e., nearly 10 years after filing of the suit. So far the sale
H
66 SUPREME COURT REPORTS [2019] 10 S.C.R.

A transaction in favour of the defendant No. 6 (the appellant No. 3 herein),
in relation to other 25 acres of land out of the suit property, is concerned,
though it is suggested that there had been an agreement (dated
08.05.1968) in his favour before filing of the suit but then, admittedly, the
sale transaction was effected by way of a sale deed registered only on
18.09.1968, that had also been after filing of the suit. The suggestion
B
about want of knowledge of the subsequent purchasers about the
transaction of the vendors with the plaintiffs and about the pendency of
the suit has been considered and rejected by the High Court and even by
the subordinate Court after due appreciation of evidence on record; and
we are unable to find any infirmity in these findings. Both the sale
C transactions in favour of the present appellants, purporting to transfer
the suit property in part, having been effected after filing of the suit, are
directly hit by the doctrine of lis pendens, as embodied in Section 52 of
the Transfer of Property Act, 1882 that reads as under: -
“52. Transfer of property pending suit relating thereto. ——
D During the pendency in any Court having authority within
the limits of India excluding the State of Jammu and Kashmir
or established beyond such limits by the Central Government
of any suit or proceedings which is not collusive and in which
any right to immoveable property is directly and specifically
in question, the property cannot be transferred or otherwise
E dealt with by any party to the suit or proceedings so as to
affect the rights of any other party thereto under any decree
or order which may be made therein, except under the
authority of the Court and on such terms as it may impose.
Explanation.—— For the purposes of this section, the
F pendency of a suit or proceeding shall be deemed to commence
from the date of the presentation of the plaint or the institution
of the proceeding in a Court of competent jurisdiction, and
to continue until the suit or proceedings has been disposed
of by a final decree or order and complete satisfaction or
G discharge of such decree or order has been obtained, or has
become unobtainable by reason of the expiration of any
period of limitation prescribed for the execution thereof by
any law for the time being in force.”
14.2. In the case of Guruswamy Nada (supra), this Court has
H held as under: -
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 67
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

“13. Normally, as a public policy once a suit has been filed A
pertaining to any subject-matter of the property, in order to
put an end to such kind of litigation, the principle of lis
pendens has been evolved so that the litigation may finally
terminate without intervention of a third party. This is because
of public policy otherwise no litigation will come to an end.
B
Therefore, in order to discourage that same subject-matter of
property being subjected to subsequent sale to a third person,
this kind of transaction is to be checked. Otherwise, litigation
will never come to an end.”
14.3. The aforesaid observations in no way lead to the proposition
that any transaction on being hit by Section 52 ibid., is illegal or void ab C
initio, as assumed by the High Court. In Sarvinder Singh (supra), as
relied upon by the High Court, the subsequent purchasers sought to come
on record as defendants and in that context, this Court referred to Section
52 of the T.P. Act and pointed out that alienation in their favour would be
hit by the doctrine of lis pendens. The said decision is not an authority D
on the point that every alienation during the pendency of the suit is to be
declared illegal or void. The effect of doctrine of lis pendens is not to
annul all the transfers effected by the parties to a suit but only to render
them subservient to the rights of the parties under the decree or order
which may be made in that suit. In other words, its effect is only to make
the decree passed in the suit binding on the transferee, i.e., the subsequent E
purchaser. Nevertheless, the transfer remains valid subject, of course,
to the result of the suit. In the case of A. Nawab John (supra), this
Court has explained the law in this regard, and we may usefully reiterate
the same with reference to the following:-
“18. It is settled legal position that the effect of Section 52 F
is not to render transfers effected during the pendency of a
suit by a party to the suit void; but only to render such
transfers subservient to the rights of the parties to such suit,
as may be, eventually, determined in the suit. In other words,
the transfer remains valid subject, of course, to the result of G
the suit. The pendent lite purchaser would be entitled to or
suffer the same legal rights and obligations of his vendor as
may be eventually determined by the court.”
14.4. Hence, the effect of Section 52 ibid., for the purpose of the
present case would only be that the said sale transactions in favour of H
68 SUPREME COURT REPORTS [2019] 10 S.C.R.

A the appellants shall have no adverse effect on the rights of the plaintiffs
and shall remain subject to the final outcome of the suit in question.
However, the High Court, while holding that the said transactions were
hit by lis pendens, has proceeded to observe further that the sale deeds
so made in favour of the present appellants were illegal. These further
observations by the High Court cannot be approved for the reasons
B
foregoing.
High Court not in error in entertaining second appeal
15. For what has been discussed hereinabove, the basic point for
determination, i.e., as to whether the High Court was justified in
C entertaining the second appeal stands answered in the affirmative
because, as noticed, the findings of the subordinate Courts on the nature
of transaction and as regards readiness and willingness of the plaintiffs,
which are of material bearing on the final determination, suffered from
perversity and were based on irrelevant considerations. The second
appeal before the High Court, obviously, involved substantial questions
D of law and the High Court cannot be faulted in entertaining the second
appeal and in deciding the questions in favour of the plaintiffs. However,
the observations of the High Court as regards operation of doctrine of
lis pendens are partly incorrect and stand modified as above.
What should be the relief?
E
16. The determination foregoing is not the end of the matter. Even
when the agreements in question are held to be for sale and the plaintiffs
are held being ready and willing to perform their part thereof; and the
transactions in favour of the present appellants are hit by lis pendens,
the point that still remains for determination is as to whether the plaintiffs
F are entitled to the relief of specific performance, or granting of alternative
relief would be just and proper disposal of this litigation?
16.1. It is noticed that the High Court though proceeded to mould
the relief in the manner that specific performance was granted on
enhanced sale consideration and it was also directed that if the plaintiffs
G fail to make payment within two months, the present appellants
(subsequent purchasers) would make payment of same amount to the
plaintiffs so as to ‘confirm their ownership over the suit land’. However,
in regard to this crucial aspect of the matter, it appears that the High
Court overlooked the other relevant provisions of the Act of 1963 and
H
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 69
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

omitted to examine if the alternative mode of relief would meet the ends A
of justice.
16.2 In our view, after it was found that granting the decree for
specific performance in the very terms of the agreement/s in question
may not be appropriate because of myriad factors, the matter ought to
have been examined with reference to the stand of the parties and the B
provisions of Sections 21 and 22 of the Act of 1963. For ready reference,
we may extract the said provisions as were existing at the time of filing
of the suit in question as under:-
“21. Power to award compensation in certain cases.—
(1) In a suit for specific performance of a contract, the plaintiff C
may also claim compensation for its breach, [either in addition
to, or in substitution of] 7, such performance.
(2) If, in any such suit, the court decides that specific
performance ought not to be granted, but that there is a
contract between the parties which has been broken by the D
defendant, and that the plaintiff is entitled to compensation
for that breach, it shall award him such compensation
accordingly.
(3) If, in any such suit, the court decides that specific
performance ought to be granted, but that it is not sufficient E
to satisfy the justice of the case, and that some compensation
for breach of the contract should also be made to the plaintiff,
it shall award him such compensation accordingly.
(4) In determining the amount of any compensation awarded
under this section, the court shall be guided by the principles F
specified in section 73 of the Indian Contract Act, 1872 (9 of
1872).
(5) No compensation shall be awarded under this section
unless the plaintiff has claimed such compensation in his
plaint: G
Provided that where the plaintiff has not claimed any such
compensation in the plaint, the court shall, at any stage of

7
The expression “either in addition to, or in substitution of” was substituted by the
expression “in addition to” by Act No.18 of 2018. H
70 SUPREME COURT REPORTS [2019] 10 S.C.R.

A the proceeding, allow him to amend the plaint on such terms
as may be just, for including a claim for such compensation.
Explanation.—The circumstance that the contract has become
incapable of specific performance does not preclude the court
from exercising the jurisdiction conferred by this section.
B 22. Power to grant relief for possession, partition, refund of
earnest money, etc.—
(1) Notwithstanding anything to the contrary contained in
the Code of Civil Procedure, 1908 (5 of 1908), any person
suing for the specific performance of a contract for the
C transfer of immovable property may, in an appropriate case,
ask for—
(a) possession, or partition and separate possession, of the
property, in addition to such performance; or
(b) any other relief to which he may be entitled, including the
D refund of any earnest money or deposit paid or made by him,
in case his claim for specific performance is refused.
(2) No relief under clause (a) or clause (b) of sub-section (1)
shall be granted by the court unless it has been specifically
claimed: Provided that where the plaintiff has not claimed
E any such relief in the plaint, the court shall, at any stage of
the proceeding, allow him to amend the plaint on such terms
as may be just for including a claim for such relief.
(3) The power of the court to grant relief under clause (b) of
sub-section (1) shall be without prejudice to its powers to
F award compensation under section 21.”
16.3. We may refer to some of the relevant factors having bearing
on the question of appropriate relief in this matter. First, the agreements
in question were executed way back on 20.09.1965 and 28.04.1966.
Secondly, the plaintiffs had paid an amount of Rs. 6,000/- as on 28.04.1966
against the sale consideration of Rs 22,951/- when the supplementary
G
agreement was executed. Thirdly, though the plaintiffs alleged delivery
of possession of the land in question to them, the evidence on record
shows that vendors and thereafter, the subsequent purchasers remained
in effective possession thereof. Fourthly, the High Court has taken note
of the fact that as on the date of its decision (01.08.2007), the subsequent
H purchasers were in possession of the land in question for about 40 years.
MADHUKAR NIVRUTTI JAGTAP v. SMT. PRAMILABAI 71
CHANDULAL PARANDEKAR [DINESH MAHESHWARI, J.]

Fifthly, the High Court has found that the land in question carried much A
higher valuation at the time of passing of the judgment in second appeal
and hence, enhanced the sale consideration to Rs. 10,000/- per acre.
Sixthly, the plaintiffs, even while seeking specific performance,
consciously prayed for the alternative reliefs of recovery of amount paid
by them with interest and compensation to the tune of Rs 15,000/-.
B
Seventhly, the plaintiff No. 3 had categorically deposed before the Court
as PW1 that he was not entitled to the land in question for being not an
agriculturist and he had relinquished his rights in favour of the plaintiff
Nos. 1 & 2. Eighthly, the plaintiff No. 1 had expired during the pendency
of suit and the plaintiff No. 2 had expired during the pendency of this
appeal; though the heir and legal representative of the said plaintiff Nos. C
1 & 2 is on record as plaintiff No. 4 (respondent No. 2 herein). Ninthly,
the plaintiff No. 2, while deposing as PW2 had stated that in case specific
performance was not granted, she ‘may be granted alternative relief
and compensation with interest’.
17. In view of the above, on the point as to whether the decree D
passed by the High Court is justified or any other form of relief shall
meet the ends of justice, we are of the view that instead of specific
performance, awarding of monetary compensation to the respondent
No. 2 shall meet the ends of justice. In this regard, we may observe that
the appellants themselves have filed a so-called valuation report suggesting
that the market value of unirrigated land was Rs. 70,000/- per hectare E
whereas that of the irrigated land was Rs. 1,40,000/- per hectare. The
fact also remains that the appellants have been enjoying the land in
question for a long length of time. Further, it gets reiterated that the
predecessors of respondent No. 2 made payment of the sum of Rs.
6,000/- to the vendors in the years 1965-1966; and the plaintiffs had F
claimed alternative relief of recovery of the said amount together with
interest as also of compensation. Taking all the relevant factors into
account, we are of the view that awarding a lump sum of Rs. 15,00,000/
- (Rupees fifteen lakh) to the respondent No. 2 as compensation in lieu
of specific performance and in lieu of any other claim qua the land in
question shall meet the ends of justice. G

CONCLUSION
18. Accordingly, this appeal is partly allowed to the extent and in
the manner that the impugned judgment and decree dated 01.08.2007
stand modified and the relief of specific performance of the agreements H
72 SUPREME COURT REPORTS [2019] 10 S.C.R.

A in question is set aside. In lieu of specific performance and in lieu of any
other claim qua the land in question, the plaintiff-respondent No. 2 is
awarded compensation in the sum of Rs.15,00,000/- (Rupees fifteen
lakh), payable within two months from today by the defendants, including
the present appellants, jointly and severally. Upon the expiry of the period
of two months, the amount shall carry interest @ 6% per annum until
B
payment or realization. The plaintiff-respondent No. 2 shall also be entitled
to withdraw the amount of Rs. 5,10,000/- (Rupees five lakh ten thousand)
deposited in terms of the decree of High Court, if not already withdrawn.
In the circumstances of the case, the parties are left to bear their own
costs throughout.
C

Devika Gujral Appeal partly allowed.

D

E

F

G

H