Ors. (Civil Appeal No. 13066/2024)

Issue:
Whether the subsequent purchasers (Manjit Singh and Anr.) of the suit property were bona fide purchasers under Section 19(b) of the Specific Relief Act, 1963,
and thus protected from the decree of specific performance in favor of the plaintiff (Darshana Devi).

Rule:

1. Section 19(b) of Specific Relief Act, 1963
   Specific performance of a contract can be enforced against any subsequent purchaser claiming under the original party, except where the transferee:
   ● has paid valuable consideration
   ● acted in good faith
   ● had no notice of the original contract.
2. Section 3(2) of the General Clauses Act says ‘good faith’ requires honesty, even if there is negligence.
3. Section 2(11) of the Bhartiya Nyaya Sanhita, 2023 says ‘good faith’ demands due care and attention, excluding negligence and dishonesty.
4. Section 3, Transfer of Property Act (Constructive Notice)

A purchaser is deemed to have notice of facts that they could have known with reasonable inquiry, including the nature of possession.

Application:

1. The subsequent purchasers (defendants) were close relatives of the original owner and should have been aware of the plaintiff’s possession of the
   property, No inquiry was made regarding the plaintiff’s interest, despite the plaintiff’s husband being in possession as a mortgagee.
2. Payment details for the sale were suspicious and unsubstantiated as ₹10,000 was allegedly paid at home and ₹5,000 in cash at the Sub-Registrar’s office
   and the remaining ₹10,000 was retained as a mortgage amount without proper documentation. No evidence was provided to prove these payments
   or a prior agreement to sell to the defendants.
3. The High Court observed collusion between the defendants and the original owner, negating their claim of good faith.
4. Constructive notice was evident as the defendants failed to investigate the nature of the plaintiff’s possession.

Precedents Considered

In the case of, R.K. Mohammed Ubaidullah v. Hajee C. Abdul Wahab, it was held that good faith and absence of notice are exceptions, with the burden of proof on the purchaser.

In the case of Ram Niwas v. Bano, court held that failure to inquire about possession constitutes constructive notice.

In the case of, Daniels v. Davison, it was held that a purchaser must inquire about terms of possession, especially when the party in possession has an agreement to purchase.

Conclusion:

The Supreme Court held that the subsequent purchasers failed to establish their bona fide status under Section 19(b) of the Specific Relief Act. The High Court’s
judgment was affirmed, decreeing specific performance of the original agreement in favor of the plaintiff.

• Appeal dismissed.
• Plaintiff entitled to execute the decree for specific performance.

The Court affirmed the High Court’s judgment that the defendants were not bona fide purchasers, as they acted negligently and failed to make reasonable inquiries and the plaintiff, Darshana Devi, was entitled to specific performance of the original agreement.