In Specific Performance Suits, Advisable To Seek Interim Injunction Against Sale; Doctrine Of Lis Pendens May Not Be Good Enough : Supreme Court

The Supreme Court recently explained the importance of seeking an interim injunction in a suit for specific performance over simply relying on Section 52 of the Transfer of Property Act, 1882. In a suit wherein the plaintiff prays for specific performance and if the defendant is not restrained from selling the property to a third party and accordingly a third party purchases the same bona fide for value without any notice of the pending litigation and spends a huge sum for the improvement thereof or for construction thereon, the equity in his favour may intervene to persuade the Court to decline, in the exercise of its discretion, the equitable relief of specific performance to the plaintiff at the trial and to award damages only in favour of the plaintiff.”, the court explained. The Court reasoned that if the remedy available under Section 52 TPA would have taken care of the pendente lite transfers, then the legislature would not have provided in Order 39 Rule 1 CPC for an interim injunction restraining the transfer of suit property in favour of the third party. “It must be noted that Rule 1 of Order 39 of the Code clearly provides for interim injunction restraining the alienation or sale of the suit property and if the doctrine of lis pendens as enacted in Section 52 of the T. P. Act was regarded to have provided all the panacea against pendente lite transfers, the Legislature would not have provided in Rule 1 for interim!