Holding

A division bench must render findings on every issue framed by the trial court before disposing of an appeal.

Summary

The case arose from two suits filed in the Delhi High Court seeking specific performance of a 1983 agreement for the sale of flats and a refund of a loan allegedly advanced by the plaintiffs to the developers. The trial judge framed ten issues in each suit, found in favour of the plaintiffs, and held that a conveyance to a sixth defendant was collusive, denying him the status of a bona‑fide purchaser. On appeal, the division bench of the High Court dismissed the suits on the ground that the agreement was merely provisional and inconclusive, but it failed to address most of the issues framed by the trial court. The Supreme Court held that a division bench must give its findings on all issues framed by the lower court, especially when the issues are inter‑connected, and rejected the argument that the doctrine of lis pendens bound the subsequent purchaser. Citing Jayaram Mudaliar v. Ayyaswamy and K.A. Khader v. Rajamma, the Court emphasized the need for a complete adjudication of every issue. Consequently, the Supreme Court set aside the impugned judgment and directed the Delhi High Court to return with findings on all the pending issues and listed the appeals for further hearing.

Issues considered

Whether the division bench of the High Court was obligated to give findings on all issues framed by the trial court in the appeal
Whether the doctrine of lis pendens binds a subsequent purchaser who acquired the property during pendency of the suit
Whether the conveyance dated 9‑June‑1987 to the sixth defendant was vitiated by collusion and therefore not binding
Whether a bona‑fide purchaser for value without notice can defeat specific performance of the original agreement

Legislation cited

Transfer of Property Act, 1882s. 52

Subjects

specific performanceprovisional agreementcollusionbona fide purchaserlis pendenscivil appealfindings on issuesTransfer of Property Act

Judgment

. ,
A MRS. VIJA YA SHRIVASTAVA
v.
MIS. MIRAHUL ENTERPRISES AND ORS.

JULY 19, 2006

B [ARIJIT PASAYAT ANDS.H. KAPADIA, JJ.]

Appeal-Judgment not indicating findings on all the issues-Regular
First Appeals-Arising out of suits for specific performance of contracts-In
C the suits the trial court, i.e. Single Judge of High Court framed 9110 issues
and decreeing the suits partly gave findings on all the issues-Jn appeal, the
Division Bench of the High Court dismissed the suits but without answering
most of the issues-Held, Division Bench ought to have given its findings not
only on the conclusiveness of the suit agreement but also on the remaining
issues including the issues of collusion between the defendants and subsequent
D purchaser-Registry to list the civil appeals for further hearing on the specified
date-In the meantime Division Bench of the High Court would return to this
Court its findings on all the issues.

Jayaram Mudaliar v. A;,yaswamy, AIR (1973) SC 569 and K.A. Khader
v. Rajamma, AIR (1994) Kerala 122, referred to.
E
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1209-I2 IO of
2003.

From the Judgment dated 10.5.2002 of the High Court of Delhi at New
Delhi, in RFA (OS) Nos. 29 and 42/1996.
F
WITH

C.A. Nos. 1211-1212 of2003.

A.K. Ganguli and Rajiv Talwar for the Appellant.
G
K.K. Mohan, A.T.M. Sampath, V. Balaji, T.S. Shanthi, R. Meena Kumari
and S.L. Lesi for the Respondents.

The following Order of the Court was delivered :

H 698
VIJA YA SHRIVASTAVA v. MIRAHULENTERPRISES 699
ORDER A
Two suits bearing no.450/86 and 451 /86 were filed in the Delhi High
Court for specific performance of the agreement dated 2.11.1983 in which it
was alleged that defendant nos. I to 5 (developers) had agreed to sell to the
plaintiffs two flats in Mirahul Apartments, Green Park Extension, New Delhi.
The above two suits claimed from the developers execution of the sale deed B
and refund of the alleged loan amount extended by the vendees to the
developers. The defendant-developers submittP.d that there was no conclusive
agreement between the parties and that the agreement dated 2.11.1983 was a
provisional agreement which the plaintiff required to avail of the loan from
HDFC Bank. During the pendency of the suits, the defendant-developers C
conveyed a portion of the suit flat to the 6th defendant, viz., S.S. Mohd.
Arshad, a resident of Madras. Therefore, the plaintiffs (appellants herein)
amended the plaint and alleged that the conveyance in favour of Mohd.
Arshad dated 9.6.1987 was a sham transaction and that the vendees were not
bound by such transaction.
D
In the said suits, the learned single judge framed the following issues:

"Suit No. 451/86:

I. Whether the plaint has been signed and verified by _a person
competent to do so and suit instituted by a duly authorized
E
person? OPP
2. Whether the agreement dated 2.11.1983 executed between the
plaintiff and the defendants 1-5 and set up by the plaintiff, is
binding in all respects on the parties? OPP
3. If issue No.2 is held in favour of the plaintiff, whether defendants F
1-5 are not liable to execute the sale deed and transfer possession
of the flat measuring 1156 sq. ft. to the plaintiff? OPDs 1-5
4. Whether the plaintiff is liable to pay to defendants 1-5 any sum
over and above the admitted sum of Rs.2,64,261/- in execution of
agreement to sell? OPDs 1-5 G
... 5. Whether the plaintiff was ready and willing to perform his part
of the agreement at all material points of time? OPP
6. Whether the plaintiff/her husband made any additional to writings
as part of the agreement to sell dated 2.11. I 983, as alleged by
H
700 SUPREME COURT REPORTS [2006) SUPP. 3 S.C.R.

A defendants 1-5? If so, to what effect? OPDs 1-5
7. Whether any sum by way of loan was advanced to defendants
1-5 by the plaintiff? If so, what amount and during what period
and on what terms and whether plaintiff can seek relief in respect
to said loan in the present suit? OPP
B 8. In case defendants are held entitled to recover from the plaintiff
in the event of specific performance being granted, any amount
of Rs.2,64,261/- then whether the plaintiff is entitled to claim
adjustment for the excess claim against the alleged loan amount?
9. Whether the sale or parting with possession by defendants 1-5
' -
c of one bed room of that flat in question in favour of defendant
no.6 is fraudulent, illegal and not binding on the plaintiff for the
reasons stated in paras 24(a) to 23(i) of the plaint? OPP
10. Relief. OPP

D Suit No.450/86:

I. Whether the plaint has been signed and verified by a person
competent to do so and suit instituted by a duly authorized
person? OPP
2. Whether the agreement dated 2.11.1983 executed betwe~n the
E plaintiff and the defendants 1-5 and set up by the plaintiff, is
binding in all respects on the parties? OPP
3. If issue no.2 is held in favour of the plaintiff, whether defendants
1-5 are not liable to execute the sale deed and transfer possession
of the flat measuring 955 ft. to the plaintiff? OPDs 1-5
F
4. Whether the plaintiff is liable to pay to defendants 1-5 any sum
over and above the admitted sum ofRs.2,68,000/- in execution of
agreement to sell? OPDs 1-5
5. Whether the plaintiff was ready and willing to perform his part
of the agreement at all material points of time? OPP
G
6. Whether the plaintiff/her husband made any additional to writings
as part of the agreement to sell dated 2.11.1983, as alleged by
defendants 1-5? If so, to what effect? OPDs 1-5
-
H
7. Whether any sum by way of loan was advanced to defendants
1-5 by the plaintiff? If so, what amount and during what period .
VIJA YA SHRIVAST AVA v. MIRAHUL ENTERPRISES 70 I

and on what tenns and whether plaintiff can seek relief in respect A
to said loan in the present suit? OPP
8. In case defendants are held entitled to recover from the plaintiff
in the event of specific performance being granted, any amount
of Rs.2,68,000/-, then whether the plaintiff is entitled to claim
adjustment for the excess claim against the alleged loan amount? B
9. Relief. OPP"

By judgment and order dated 5th July 1996, the learned single judge
decided all the issues in favour of the plaintiffs and granted specific
performance of the agreement for immovable property. However, the learned C
single judge found that the conveyance dated 9.6.1987 executed by the
defendant-developers in favour of defendant no.6 was collusive and
accordingly the claim of defendant no.6 of being a bona fide purchaser for
value without notice was rejected. By the said judgment, the learned single
judge granted decree in respect of flat no. S-2 and flat no.S-1 respectively in
favour of the original plaintiff. However, the learned single judge refused to D
grant decree for refund of the loan and, therefore, four appeals were filed
before the division bench of the Delhi High Court bearing RFA (OS) Nos.29,
30, 41 and 42 of 1996. Even defendant no.6 joined the developers in their
appeal and reiterated that he was a bona fide purchaser of a portion of the
suit land for consideration without notice.
E
By the impugned judgment dated ·10th May 2002, the divisio:i bench
allowed the appeals filed by the developers by holding that the suit agreements
dated 2.11.1983 were provisional agreements; that they were inconclusive and
accordingly the plaintiff-appellants herein were not entitled to claim specific
performance of the agreement for immovable property. Surprisingly, none of F
the other issues were answered by the division bench.

In our view, the division bench ought to have answered all the issues
which were framed by the trial court. All the issues are inter-connected. For
example, in the suit, the plaintiff-appellant has alleged that there were two
separate transactions - one for sale of the flat and another for specific G
performance of the agreement under which interest-free loan was extended to
the developers. Whether the loan amount was adjustable towards the price
payable to the developers was an important issue which has a linkage with
the agreement for sale of flats. We do not wish to express any opinion on
any of the said issues.
H
702 SUPREME COURT REPORTS [2006] SUPP. 3 S.C.R.

A In the circumstances, we are of the view that the division bench ought
to have given findings on all the issues referred to hereinabove.

It was vehemently urged on behalf of the original plaintiffs who are the
appellants before us that the findings on other issues need not be called for
particularly in view of the fact that defendant no.6 had not filed the written
B statement in the suit. We do not find any merit in this argument. In the said
suit, a specific issue was framed by the single judge - as to whether the sale
deed dated 9.6.1987 in favour of defendant no.6 stood vitiated on account of
collusion between the developer and the subsequent purchaser. This issue
was answered in favour of the plaintiff. The suit was decreed inter alia on
C that basis. Defendant no.6 was also asked to join in execution of conveyance
with defendant nos. I to 5 in favour of the plaintiffs. Aggrieved by the
decision of the learned single judge, all the six defendants preferred RFAs.
They have challenged all the findings of the learned single judge. In the
appeals, defendant no.6 has categorically submitted that he was a bona fide
purchaser for value without notice. Therefore, we are of the view that the
D division bench ought to have given its findings not only on the conclusiveness
of the suit agreement but also on the remaining issues including the finding
on the issue of coll:ision between the developer and defendant no.6, as
alleged by the plaintiffs.

The doctrine of /is pendens was invoked by the learned coumel
E appearing on behalf of the plaintiffs-appellants. He submitted that the alienation
in favour of defendant no.6 had taken place during the pendency of the suit
and, therefore, the decree passed by the single judge was binding on defendant
-
no.6. We do not find any merit in this argument.

F In the case of Jayaram Mudaliar v. Ayyaswamy, reported in AIR ( 1973)
SC 569, it has been held as follows:

" .... The purpose of section 52 of the Transfer of Property Act is not
to defeat any just and equitable claim but only to subject them to the
authority of the Court which is dealing with the property to which
G claims are put forward."

To the same effect is the judgment of the Kerala High Court in K.A. Khader
v. Rajamma reported in AIR (1994) Kerala 122.

In the present case, it may also be noted that the plaintiffs have alleged
-
H that the sale deed dated 9.6.1987 is vitiated by collusion and, therefore, not
VIJAYA SHRIVASTAV Av. MIRAHUL ENTERPRISES 703
binding on the piaintiffs. As stated above, this issue is decided against A
defendant no.6 by the single judge. Decree has been passed against defendant
no.6. He has preferred RFA to the division bench, in which he has categorically
stated that he was a resident of Madras; that, he had given power of attorney
to the managing partner of Mis. Mirahul Enterprises; and that, he was a bona
fide purchaser for consideration and without notice. This issue is very relevant B
because even if in a given case, the contract is found to be concluded, still
the Court can refuse specific performance if the subsequent purchaser is
found to be a bona fide purchaser for value without notice. On this point,
we do not wish to express any opinion. We have only given reasons in
respect of our conclusion that the division bench of the High Court should
have decided all the above quoted issues which the single judge has decided C
while passing the decree in favour of the plaintiffs. In the circumstances, the
following order is passed:

The Registry is directed to place the above Civil Appeals for further
hearing on 4.12.2006. In the meantirr•e, we are directing the division bench of
Delhi High Court to return to us the findings on all the above-quoted issues D
in RFA (OS) Nos.29, 30, 41and42of1996.

RP. Appeals to be listed on futher hearing on 4. I 2.2006.