Supreme Court Weekly Digest With Subject /Statute Wise Index [July 10 to 17]

Citations 2024 LiveLaw (SC) 451 to 2024 LiveLaw (SC) 477

Code of Civil Procedure, 1908

Order 2 Rule 2 – Bar to subsequent suit on same cause of action – Observing that the suit for recovery of possession is different from the suit for arrears of rent and damages, the Supreme Court held that there's no bar to file a separate suit for arrears of rent and damages after a suit for possession. Held, a plea of a bar under 0. 2. R. 2, Civil Procedure Code can be established only if the defendant files in evidence the pleadings in the previous suit and thereby proves to the Court the identity of the cause of action in the two suits. Hence, both the causes of action being separate, the second suit was clearly maintainable. (Para 17) Uniworld Logistics Pvt. Ltd. V. Indev Logistics Pvt. Ltd; 2024 LiveLaw (SC) 469

Order 21 Rule 90 - A person aggrieved by an auction sale conducted by the public functionary in gross violations of the mandatory provisions of law cannot be called upon to establish the dual conditions stipulated in Order XXI Rule 90 CPC for setting aside the auction sale. Al-Can Export Pvt. Ltd. v. Prestige H.M. Polycontainers Ltd., 2024 LiveLaw (SC) 453

Code of Criminal Procedure, 1973

Conviction in question – Held, the Court had appropriately appreciated the evidence on record and convicted accused Nos.1 and 2 upon satisfying itself that the ingredients to attract the offence punishable under Section 494 I.P.C., have been made out by the appellant. Hence, no more narrative on the correctness of the reversal of the by the High Court is required as it is indisputable that its reversal was accepted by accused Nos.1 and 2 and they had undergone the sentence imposed by the High Court consequent to the reversal judgment. (Para 10) Baba Natarajan Prasad v. M. Revathi, 2024 LiveLaw (SC) 474

Framing of charge – Requirements – The standard of test and judgment which is finally applied before recording a finding of conviction against an accused is not to be applied at the stage of framing the charge and just a very strong suspicion, based on the material on record, would be sufficient to frame a charge. The strong suspicion should be the one emerging from the materials on record brought by the prosecution. It is within the jurisdiction of the Court concerned to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused concerned has been made out. Held, the question of framing the charge would arise only in a case where the court upon such exercise satisfies itself about the prima facie case revealing from “the record of the case and the documents submitted therewith” against the accused concerned. Hence, the intention embedded is to ensure that an accused will be made to stand the ordeal of trial only if 'the record of the case and the documents submitted therewith' discloses ground for proceeding against him. Further held, there is no ground for a prima facie case revealed from the materials produced by the prosecution. (Para 14, 15, 19 & 32) Ram Prakash Chadha v. State of Uttar Pradesh, 2024 LiveLaw (SC) 475

Section 125 – A divorced Muslim woman is entitled to file a petition for maintenance against her ex-husband under Section 125 of the Code of Criminal Procedure. This right of a Muslim woman is in addition to the right under the Muslim Women (Protection of Rights on Divorce) Act 1986. Mohd Abdul Samad v. State of Telangana, 2024 LiveLaw (SC) 452

Section 227 – Discharge of accused in criminal cases – When an application for discharge is filed under Section 227, Cr.PC, the Court concerned is bound to disclose the reason(s), though, not in detail, for finding sufficient ground for rejecting the application or in other words, for finding prima facie case, as it will enable the superior Court to examine the challenge against the order of rejection. (Para 22) Ram Prakash Chadha v. State of Uttar Pradesh, 2024 LiveLaw (SC) 475

Section 311 - A conjoint reading of Section 311 CrPC and Section 165 of the Evidence Act makes it clear that the trial Court is under an obligation not to act as a mere spectator and should proactively participate in the trial proceedings, so as to ensure that neither any extraneous material is permitted to be brought on record nor any relevant fact is left out. It is the duty of the trial Court to ensure that all such evidence which is essential for the just decision of the case is brought on record irrespective of the fact that the party concerned omits to do so. (Para 48) Gaurav Maini v. State of Haryana, 2024 LiveLaw (SC) 471

Section 321 – Permission for withdrawal of the prosecution against an accused is challenged – Held, the Trial Court's has taken a casual approach towards the accusations against the then sitting Member of Legislative Assembly in allowing withdrawal of his prosecution and merely because an accused person is elected to the Legislative Assembly cannot be a testament to their image among the general public. Matters of a gruesome crime akin to the double murder in the present case do not warrant withdrawal of prosecution merely on the ground of good public image of an accused named in the charge sheet after thorough investigation. Contrary to the Trial Court's view, such withdrawal cannot be said to be allowed in public interest in cases of involvement of influential people. Hence, it is of paramount importance to ensure progression of the trial without further delay. (Para 12) Shailendra Kumar Srivastava v. State of Uttar Pradesh, 2024 LiveLaw (SC) 476

Section 418 (1) – Proportionality of sentence with respect to the offence committed – To claim enhancement of punishment for conviction for the offence – Held, it is the solemn duty of the Court to strike a proper balance awarding sentence proportionate to the gravity of the offence committed by the accused concerned upon his conviction for serious offence(s). The offence under Section 494 I.P.C., has to be treated as a serious offence, hence, the imposition of 'imprisonment till the rising of the court' is not a proper sentence falling in tune with the rule of proportionality. Further held, imposition of sentence of 'imprisonment till the rising of the court' upon conviction for an offence under Section 494 I.P.C., on them was unconscionably lenient or a flea-bite sentence. Hence, it appropriate to use our judicial discretion to modify the sentence imposed under the impugned judgment to six months each, making the nature of the sentence as simple imprisonment for the said period. (Para 14, 15, 17 & 19) Baba Natarajan Prasad v. M. Revathi, 2024 LiveLaw (SC) 474

Section 439 – To set aside Bail order – Grant of bail in serious offences like murder – The power to grant bail under Section 439 CrPC although is discretionary power of the court, it has to be exercised in a judicious manner and not as a matter of course. Where a court considering an application for bail fails to consider relevant factors, an appellate court may justifiably set aside the order granting bail. An appellate court is thus required to consider whether the order granting bail suffers from a non-application of mind or is not borne out from a prima facie view of the evidence on record. Held, it is evident that the High Court failed to assign any reasons for the exercise of its discretion in favour of the accused, knowing fully well that he is involved in a serious offence like murder and was absconding for a couple of years. Further held, here an order refusing or granting bail does not furnish the reasons that inform the decision, there is a presumption of the non-application of mind which may require the intervention of this Court. Hence, bail order is set aside. (Para 14 & 16) State of Jharkhand v. Anil Ganjhu, 2024 LiveLaw (SC) 459

Constitution of India

Article 12 and 13 - The Army Welfare Education Society cannot be considered as "State" under Article 13 of the Constitution. The High Court committed an egregious error in entertaining the writ petition filed by the respondents herein holding that the appellant society is a “State” within Article 12 of the Constitution. Undoubtedly, the school run by the Appellant Society imparts education. Imparting education involves public duty and therefore a public law element could also be said to be involved. However, the relationship between the respondents herein and the appellant society is that of an employee and a private employer arising out of a private contract. If there is a breach of a covenant of a private contract, the same does not touch any public law element. The school cannot be said to be discharging any public duty in connection with the employment of the respondents. (Para 42) Army Welfare Education Society v. Sunil Kumar Sharma, 2024 LiveLaw (SC) 464

Article 131 - Scope of - Explained - CBI under administrative control and superintendence of Union Govt. - The State's suit against the Union over the registration of cases by the CBI despite revocation of its general consent is maintainable. State of West Bengal v. Union of India, 2024 LiveLaw (SC) 451

Article 142 – Action of forfeiture of security deposit is challenged to be punitive – Claiming re-commencement of the e-auction process on grounds of bona fide mistake – Held, the system pop-up gives only one option to the bidder to submit the bid with the digital signature with no scope of rectification or retraction. There was no opportunity available on the platform for the appellant to rectify the error in the bid, having once entered it. Even if the bidder had realized that the bid amount requires to be rectified, it could not have done so because of the system not permitting such a course. Further held, it can be inferred from the circumstances that the mistake in entering the bid was committed inadvertently and the appellant on discovery of the error or mistake acted promptly in informing the authority concerned for rectification of the bid. Held, applying the balancing test to the factual matrix of the present case, it is clear that the forfeiture of entire security deposit of the appellant as against evident human error is punitive. (Para 10, 14, 21) Omsairam Steels & Alloys Pvt. Ltd. v. Director of Mines and Geology, 2024 LiveLaw (SC) 477

Article 142 – Negligence in competitive bidding process – E-auction in process was a competitive bidding process which demanded a high degree of caution and care on the part of the appellants. The human error envinces a degree of remiss and carelessness the result of which is bound to cost the public exchequer heavily in terms of time, effort and expense. Held, on account of the appellant's failure to act with the required degree of care, the liberty granted to conduct fresh e-auction is confirmed. Hence, the appellant id directed to pay to the first respondent Rs 3,00,00,000/- (Rupees three crore only) within a month from date. (Para 25) Omsairam Steels & Alloys Pvt. Ltd. v. Director of Mines and Geology, 2024 LiveLaw (SC) 477

Article 341 – Power to amend list of schedule caste – The list of scheduled caste can be amended, altered only by law made by Parliament. The Resolution extending benefit of Scheduled Castes to the members of the “Tanti-Tantwa” community by merging it with 'Pan, Sawasi, Panr' community under Entry 20 of the list of Scheduled Castes, was patently illegal, erroneous as the State Government had no competence/ authority/power to tinker with the lists of Scheduled Castes published under Article 341 of the Constitution. “TantiTantwa” Caste, which does not appear in the list of Scheduled Castes of Bihar cannot be issued Scheduled Castes Certificates treating them to be 'Pan, Sawasi, Panr'. Hence, whether synonymous or not, any inclusion or exclusion of any caste, race or tribe or part of or group within the castes, races or tribes has to be, by law made by the Parliament, and not by any other mode or manner. Further held, that that such posts of the Scheduled Castes Quota which had been filled up by members of “Tanti-Tantwa” community availing benefit on the basis of Resolution may be returned to the Scheduled Castes category and such candidates of “Tanti-Tantwa” community be accommodated by the State in their original category of Extremely Backward Classes by taking appropriate measures. (Para 2, 3, 36 & 42) Dr. Bhim Rao Ambedkar Vichar Manch v. State of Bihar, 2024 LiveLaw (SC) 472

Contract

The sanctity of contracts is a fundamental principle that underpins the stability and predictability of legal and commercial relationships. When public authorities enter into contracts, they create legitimate expectations that the State will honour its obligations. Arbitrary or unreasonable terminations undermine these expectations and erode the trust of private players from the public procurement processes and tenders. Once a contract is entered, there is a legitimate expectation that the obligations arising from the contract will be honoured and that the rights arising from it will not be arbitrarily divested except for a breach or non-compliance of the terms agreed thereunder. (Para 127) Subodh Kumar Singh Rathour v. Chief Executive Officer, 2024 LiveLaw (SC) 455

Doctrine of Legitimate Expectation

Features of - a. First, legitimate expectation must be based on a right as opposed to a mere hope, wish or anticipation; b. Secondly, legitimate expectation must arise either from an express or implied promise; or a consistent past practice or custom followed by an authority in its dealings; c. Thirdly, expectation which is based on sporadic or casual or random acts, or which is unreasonable, illogical or invalid cannot be treated as a legitimate expectation; d. Fourthly, legitimate expectation operates in relation to both substantive and procedural matters; e. Fifthly, legitimate expectation operates in the realm of public law, that is, a plea of legitimate action can be taken only when a public authority breaches a promise or deviates from a consistent past practice, without any reasonable basis. f. Sixthly, a plea of legitimate expectation based on past practice can only be taken by someone who has dealings, or negotiations with a public authority. It cannot be invoked by a total stranger to the authority merely on the ground that the authority has a duty to act fairly generally. (Para 48) Army Welfare Education Society v. Sunil Kumar Sharma, 2024 LiveLaw (SC) 464

Education

Even if the function being performed by a private educational institution in imparting education may be considered as a public function, the relationship between the administration of such an institution and its employees remains a contractual one, falling within the ambit of private law. (Para 50) Army Welfare Education Society v. Sunil Kumar Sharma, 2024 LiveLaw (SC) 464

Evidence Act, 1872

Confessional statements recorded by the Police Officers which are part of the charge-sheet cannot remain a part thereof and the same must be ignored. Sanju Bansal v. State of Uttar Pradesh, 2024 LiveLaw (SC) 467

Dock Identification – It is an identification made by witness in Court during trial. (Para 12) P. Sasikumar v. State rep. by the Inspector of Police, 2024 LiveLaw (SC) 460

Section 9 – Conviction challenged – On grounds that identification of accused is not correct as the test identification parade (TIP) is not conducted – Where accused is a stranger to a witness and there has been no Test Identification Parade (TIP), the trial court should be very cautious while accepting the dock identification by such a witness. Held, not conducting a TIP was a fatal flaw in the police investigation and in the absence of TIP, the dock identification of the present appellant remains doubtful. The prosecution has not been able to prove the identity of the appellant beyond a reasonable doubt. Hence, the appellant could not have been convicted on the basis of a doubtful evidence as to the appellant's identity. Conviction is set aside. (Para 12, 13, 16) P. Sasikumar v. State rep. by the Inspector of Police, 2024 LiveLaw (SC) 460

Foreigners Act, 1946

Authorities cannot randomly ask people to prove Indian citizenship on mere suspicion without sharing any material. Md. Rahim Ali @ Abdur Rahim v. State of Assam, 2024 LiveLaw (SC) 462

Indian citizenship should not be doubted due to minor variations in name spellings in electoral rolls or govt records. Md. Rahim Ali @ Abdur Rahim v. State of Assam, 2024 LiveLaw (SC) 462

Hindu Marriage Act, 1955

Section 13(1)(ib) and 13(1A)(ii) – Divorce petition – A divorce petition can be presented on the ground that there has been no restitution of conjugal rights between the parties to the marriage for a period of one year and more after passing the decree for restitution of conjugal rights – Held, the desertion of the appellant at least from 2008 till the date of filing the divorce petition in 2013 continued without any reasonable cause. Therefore, a decree for divorce on the ground of desertion under Section 13(1)(ib) ought to have been passed. It is a case of a complete breakdown of marriage for the last 16 years and more. (Para 14) X v. Y, 2024 LiveLaw (SC) 458

Section 25 – Alimony – Held, the appellant has offered to pay the respondent a lump sum alimony of Rs. 30 lakhs which can be accepted as a one time lump sum alimony. (Para 15) X v. Y, 2024 LiveLaw (SC) 458

Land Acquisition

Land Acquisition Act, 1894; Section 23(1) – Land acquisition – Quantum of compensation granted to the landowners is challenged to be inadequate – Held, there exists no direct piece of evidence to determine fair and just compensation in the instant cases hence, courts must resort to the settled principle of guesstimation. While the Court can use the principle of guesstimation in reasonably estimating the value of land in the absence of direct evidence, the Court must embrace a holistic view and consider all 'relevant factors' and existing evidence, even if not directly comparable, to arrive at a fair determination of compensation. Such relevant factors can be divided into three categories: (i). Characteristics of the land, (ii). Future potentiality of the land, (iii). Factors denoting market sentiment. Further held, compensation could be determined applying the principle of guesstimation, based on the circle rate after granting a marginal increase over the same. It would be appropriate to apply a 15% escalation for one year to the price fixed at INR 350 per sq. yd., bringing the total guesstimate to INR 403 per sq. yd.. It stands conclusively surmised that the landowners are entitled to an enhancement in the compensation awarded. (Para 32, 33, 34, 42 & 43) New Okhla Industrial Development Authority v. Harnand Singh, 2024 LiveLaw (SC) 456

Principle of guesstimation – It is a heuristic device that enables the court, in the absence of direct evidence and relevant sale exemplars, to make a reasonable and informed guess or estimation of the market value of the land under acquisition, and concomitantly the compensation payable by the appropriate Government. This principle accentuates the fundamental understanding that determining compensation for land is not a matter of exact science but involves a significant element of estimation. Indeed, this holds true for valuation of land in general, which is affected by a multitude of factors such as its location, surrounding market conditions, feasible uses etc. Accordingly, while evidence and calculations can aid in estimating the land value, they ultimately serve as tools for approximation rather than precision. (Para 31 & 32) New Okhla Industrial Development Authority v. Harnand Singh, 2024 LiveLaw (SC) 456

Seeking parity with Bir Singh v. State of Uttar Pradesh where compensation was enhanced to INR 449 per sq. yd – Held, enhanced compensation was awarded relying on the sale deed which noted the value of land as INR 400 per sq. yd which was founded on a bona fide factual error. The figure of 400 actually denoted the area and size of the plot and not its sale value. Further held, the decision was not revisited by this Court likely on account of the practical difficulties in recovering the excess compensation amount already paid to the expropriated land owners and given the larger interest of justice. Hence, the judgement would not be binding and market value of land in question is to be determined independently. (Para 21) New Okhla Industrial Development Authority v. Harnand Singh, 2024 LiveLaw (SC) 456

Penal Code, 1860

Criminal Conspiracy – To constitute even an accusation of criminal conspiracy, first and foremost, there must at least be an accusation of meeting of minds of two or more persons for doing an illegal act or an act, which is not illegal in itself, by illegal means. (Para 27) Ram Prakash Chadha v. State of Uttar Pradesh, 2024 LiveLaw (SC) 475

Sections 418 and 420 - The complainant purchased a BMW 7 Series vehicle and reported a defect. A complaint was lodged for alleged offences under Sections 418 and 420 of the IPC, naming the manufacturer, Managing Director, and other directors as accused. The High Court concluded that the ingredients of the offence of cheating were not established based on the contents of the FIR. Having come to this conclusion, there was no justification for the High Court thereafter to direct the manufacturer to replace the vehicle with a new BMW 7 Series. Held, the High Court correctly quashed the criminal proceedings, as the ingredients of cheating were not established based on the FIR. The Court deemed it unnecessary to continue prosecution, given the nature of the dispute and the elapsed time. Exercising jurisdiction under Article 142 of the Constitution, the Court directed BMW India Private Limited to pay Rs 50 lakhs to the complainant in full settlement. (Para 10 - 15) State of Andhra Pradesh v. BMW India P.Ltd., 2024 LiveLaw (SC) 466

Prevention of Corruption Act, 1988

It is the settled convention in such cases that the Trap Laying Officer makes efforts to verify the factum of demand of bribe by the public servant before initiating the trap proceedings. The factum of demand of bribe can also be verified by recording the telephonic conversation between the decoy and the suspect public servant. Often, a recording device is secretly placed on the person of the decoy to record the conversation which would transpire during the course of acceptance of bribe by the public servant. (Para 31) Mir Mustafa Ali Hasmi v. State of A.P., 2024 LiveLaw (SC) 468

Section 19 and Criminal Procedure Code, 1973; Section 319 – Summon order challenged – Sanction under Section 19 of PC Act is Necessary to Summon Public Servant as Additional Accused – Held, courts cannot take cognizance against any public servant for offences committed under the PC Act on an application under section 319 of the CrPC, without first following the requirements of Section 19 of the P.C Act. The correct procedure should have been for the prosecution to obtain sanction under Section 19 of the P.C Act from the appropriate Government, before formally moving an application before the Court under Section 319 of CrPC. Hence, on absence of the sanction the entire procedure remains flawed. High Court's order of setting aside the order of Summon is upheld. (Para 11) State of Punjab v. Partap Singh Verka, 2024 LiveLaw (SC) 461

Prevention of Money Laundering Act, 2002

Arvind Kejriwal is an elected leader and the Chief Minister of Delhi, a post holding importance and influence. We have also referred to the allegations. While we do not give any direction, since we are doubtful whether the court can direct an elected leader to step down or not function as the Chief Minister or as a Minister, we leave it to Arvind Kejriwal to take a call. Larger Bench, if deemed appropriate, can frame question(s) and decide the conditions that can be imposed by the court in such cases. (Para 86) Arvind Kejriwal v. Directorate of Enforcement, 2024 LiveLaw (SC) 463

Section 19 - Power to arrest under Section 19(1) is not for the purpose of investigation. Arrest can and should wait, and the power in terms of Section 19(1) of the PML Act can be exercised only when the material with the designated officer enables them to form an opinion, by recording reasons in writing that the arrestee is guilty. (Para 41) Arvind Kejriwal v. Directorate of Enforcement, 2024 LiveLaw (SC) 463

Section 19 - (a) Whether the “need and necessity to arrest” is a separate ground to challenge the order of arrest passed in terms of Section 19(1) of the PML Act? (b) Whether the “need and necessity to arrest” refers to the satisfaction of formal parameters to arrest and take a person into custody, or it relates to other personal grounds and reasons regarding necessity to arrest a person in the facts and circumstances of the said case? (c) If questions (a) and (b) are answered in the affirmative, what are the parameters and facts that are to be taken into consideration by the court while examining the question of “need and necessity to arrest”? Questions referred to the larger bench. (Para 84) Arvind Kejriwal v. Directorate of Enforcement, 2024 LiveLaw (SC) 463

Section 45 gives primacy to the opinion of the Directorate of Enforcement (DoE) when it comes to grant of bail. DoE should act uniformly, consistent in conduct, confirming one rule for all. (Para 79) Arvind Kejriwal v. Directorate of Enforcement, 2024 LiveLaw (SC) 463

Right to Information Act, 2005

Section 12(4) – Validity of Central Information Commission (Management) Regulations, 2007 framed by the Chief Information Commissioner (CIC) under Section 12(4) of the RTI Act – Powers of the CIC – Held, the use of the words “superintendence, direction and management” in Sections 12(4) of the RTI Act clearly provides the CIC an ambit of power wide enough to frame its own Regulations and to delegate its power to a committee formed by it. While the RTI Act does not explicitly grant CIC the authority to frame Regulations, a purposive interpretation of Section 12(4) reveals that the powers of "superintendence, direction and management" are intended to be comprehensive, enabling the CIC to adopt measures, including the framing of Regulations, that ensure transparency, accountability, and efficient handling of its responsibilities. The Chief Information Commissioner's powers to frame Regulations pertaining to constitution of Benches of the Commission are upheld. (Para 22 & 25) Central Information Commission v. DDA, 2024 LiveLaw (SC) 465

Section 12(4) and Central Information Commission (Management) Regulations, 2007; Regulation 22 – Powers of the CIC to constitute Benches within the Commission. Held, Sections 12(4) RTI Act, grants the CIC wide-ranging powers to manage the Commissions' affairs, including the ability to constitute benches. This interpretation aligns with the purpose and objective of the RTI Act, which aims to facilitate the efficient disposal of cases and the effective implementation of the right to information. The absence of an explicit provision for Benches does not negate the CIC's authority to constitute them, as such powers are implicitly included within the scope of the CIC's general superintendence and management responsibilities. The formation of Benches allows for the efficient allocation of work and ensures the timely disposal of cases, which is crucial for upholding the right to information. (Para 15, 16, 17, 18 & 19) Central Information Commission v. DDA, 2024 LiveLaw (SC) 465

Specific Relief Act, 1963

Section 19(b) – Specific performance of the suit agreement – Held, the defendants, who are subsequent purchasers, fail to prove that they entered into the sale deed in good faith and without notice of earlier suit agreement. Hence, in view of Section 19(b), a decree for specific performance of the sale agreement can be passed against such defendants. (Para 16) Maharaj Singh v. Karan Singh, 2024 LiveLaw (SC) 473

Standards of Weight & Measures (Packaged Commodity) Rules, 1977

Rule 2(x)(iii) & 29 and Central Excise Act, 1944; Section 4A –Wholesale package – Rule 29 does not require a declaration of sale price on the wholesale package. The respondent is selling HDPE bags containing 100 poly packs each to the distributors and dealers. The Commissioner held that an HDPE bag containing 100 poly packs does not contain a declaration of selling price and therefore, it would be a wholesale package. Rule 29 do not require the display of price on such HDPE bags. Held, HDPE bags would be covered by the definition of 'wholesale package' as defined in clause (iii) of Rule 2(x) of the said Rules. Hence, duty under Section 4A(1) of the Excise Act was not applicable to the goods and subject matter of the show cause notices, cannot be faulted with. (Para 17 & 18) Commissioner of Central Excise, Jaipur -II v. Miraj Products Pvt. Ltd., 2024 LiveLaw (SC) 470

Rule 2(q) – “Retail sale” – to attract the definition of retail sale, a commodity has to be sold, distributed, or delivered for consumption by an individual, a group of individuals, or any other consumer. Thus, the sale or distribution of a commodity to a dealer who, in turn, sells the commodity to retail dealers will not be a retail sale. (Para 11) Commissioner of Central Excise, Jaipur -II v. Miraj Products Pvt. Ltd., 2024 LiveLaw (SC) 470

Transfer of Property Act, 1882

Section 3 Explanation 1 and Registration Act 1908; Section 17(2) – Constructive notice of sale agreement – Under the Uttar Pradesh Civil Laws (Reforms and Amendment) Act 1976, clause (v) of Section 17(2) of the Registration Act 1908 was amended, which made an agreement for the sale of an immovable property, a compulsorily registerable document in the State. Held, in view of explanation 1 to Section 3 of the TP Act, the second to fourth defendants shall be deemed to have knowledge of the suit agreement, which was duly registered in view of the constructive notice. Hence, it cannot be said that they paid money in good faith to the first Defendant. Therefore, the second to fourth defendants can never be held to be bona-fide purchasers who have paid consideration in good faith without the notice of the suit agreement. (Para 13) Maharaj Singh v. Karan Singh, 2024 LiveLaw (SC) 473

Section 52 – Doctrine of lis pendens – Lis pendens does not render all transfers pendente lite to be void ab-initio, it merely renders rights arising from such transfers as subservient to the rights of the parties to the pending litigation and subject to any direction that the Court may pass thereunder. The mere fact that the registered sale deed was executed during the pendency of the Underlying Suit does not automatically render it null and void. Held, there exists no bar to the impleadment of transferees pendente lite with notice. Permitting the impleadment of a transferee pendente lite is, in each case, a discretionary exercise undertaken to enable a purchaser with a legally enforceable right to protect their interests especially when the transferor fails to defend the suit or where there is a possibility of collusion. Further held, the Appellant has a registered sale deed in his favour and in the interest of justice the appellant is entitled to impleadment in the Underlying Suit in order to protect his interests, if any, in the Subject Land. Hence, the Appellant is directed to be added as a party defendant in the Underlying Suit. (Para 16, 17, 21 & 22) Yogesh Goyanka v. Govind, 2024 LiveLaw (SC) 457

Section 54 – Zamindari Abolition Act; Section 154B - Prohibition of the sale or transfer of agricultural lands to a person who is not an agriculturalist – Section 154-B permits the sale of agricultural land to a non-agriculturalist with the permission of the State Government for the purposes specified in clause (i) to (v) of clause (h). Held, an 'agreement for sale' does not transfer the property subject matter of the agreement to the purchaser and does not create any interest in the property subject matter of the agreement. Therefore, the embargo created by sub-section (1) of Section 154-B will apply only to the execution of the sale deed and not to the execution of the agreement for sale. Further held, a decree enjoining the defendants to obtain permission to sell the suit property can be passed and a decree for the specific performance can be passed contingent upon the grant of the permission. (Para 17 & 18) Maharaj Singh v. Karan Singh, 2024 LiveLaw (SC) 473