By applying Doctrine of Lis Pendens Supreme Court overturned the Punjab and Haryana High Court Judgement in a case concerning a contentious land sale dispute.

The case involved a dispute over the sale of land. The appellant and respondent no. 3 had entered into an agreement to sell 16 "Kanals" of land in 2002. However, before the sale could be completed, the appellant obtained a temporary injunction against the sale or alienation of the property due to concerns that respondent no. 3 was attempting to sell it to a third party.

Despite the injunction, respondent no. 3 executed a "release deed" in favor of his son, who then sold the property to respondents 1-2. The appellant filed a suit for specific performance, arguing that the subsequent transactions were illegal due to the Doctrine of Lis Pendens.
The Punjab and Haryana High Court dismissed the appellant's suit, holding that the respondents were bona fide purchasers for valuable consideration. However, the Supreme Court reversed the High Court's decision. The Supreme Court found that the transactions violated the principle of Lis Pendens and that the respondents had not taken sufficient steps to ascertain the existence of the injunction and the Apex court held that “The alienation made by the respondents, cannot operate against the interests of the appellant considering he had obtained an order of temporary injunction in his favour.”

Question of Law:
• Whether the transactions by the respondents were illegal due to the principle of lis pendens.
• Whether respondents 1-2 could claim protection as bona fide purchasers for valuable consideration.

Key Points:
• Lis Pendens: When a suit is filed relating to immovable property, any subsequent transfer of the property is void as against the rights of the parties to the suit.
• Bona Fide Purchasers: To qualify as a bona fide purchaser for valuable consideration, a person must have taken reasonable steps to ascertain the existence of any legal encumbrances on the property. Judgment:
• The Supreme Court held that the transactions by the respondents violated the principle of lis pendens and were therefore illegal.
• The Court rejected the respondents' claim that they were bona fide purchasers for valuable consideration, as they had not taken sufficient steps to ascertain the existence of the injunction.
• The Court restored the decree in favor of the appellant and ordered specific performance of the original agreement to sell.
Significance:
• This case reinforces the importance of the doctrine of lis pendens in protecting the rights of parties to pending lawsuits.
• It also clarifies that bona fide purchasers cannot claim protection if they have not made reasonable inquiries to determine whether there are any legal encumbrances on the property they are purchasing.

Supreme Court of India Case Summary
Between Chander Bhan Vs Mukhtiar Singh and others
Date of Judgment: May 3, 2024
Court: Supreme Court of India
Coram: Justices Sudhanshu Dhulia and Prasanna B. Varale
Find Judgement Copy Here