Varadharajan @ Pandian Vs Thayar — Specific Performance | Madras HC (2026)

Varadharajan @ Pandian Vs Thayar — Specific Performance | Madras HC (2026)

What the court decided

AI extract

Outcome

Second Appeal allowed with no costs; connected Civil Miscellaneous Petition closed; the decree and judgment dated 25.10.2021 in A.S. No.5 of 2020 (confirming the O.S. No.89 of 2013 decree) set aside and modified — the appellant/2nd defendant directed to pay Rs.1,50,000/- to the respondent/plaintiff in full quit of all claims within three months, failing which interest at 12% per annum till payment; plaintiff permitted to withdraw the Rs.81,000/- deposited by her before the trial court.

Issue for consideration

Whether the courts below erred in concluding that the appellant (2nd defendant) is not an innocent bona fide purchaser without properly appreciating the evidence, and in denying him protection under Section 19(b) of the Specific Relief Act.

Court's answer

Neither the trial court nor the first appellate court framed any issue or points for consideration on whether the 2nd defendant was a bona fide purchaser, although he contested the suit on that footing and deposed to having no knowledge of the plaintiff–1st defendant agreement; that aspect therefore required appropriate consideration in this Second Appeal.

Ratio / Principle

Per the proviso to Section 49 of the Registration Act, 1908, an unregistered document affecting immovable property may be received as evidence of the contract in a suit for specific performance; hence there is no infirmity in the courts below relying upon the unregistered sale agreement.

Key takeaways

The circumstance that the 2nd defendant had enquired whether any sale agreement existed does not establish his knowledge of the suit sale agreement between the plaintiff and the 1st defendant; the conclusion attributing such knowledge is a mere assumption unsupported by any evidence.ratio¶61
The 1st defendant's non-appearance and non-examination cannot be presumed to show connivance amongst the defendants to defeat the plaintiff's rights; a purchaser who bought for consideration under a registered document and a vendor who lost interest may simply choose not to appear, and connivance cannot be presumed in the absence of evidence.ratio¶63

Detailed headnote1 paragraphs

Madras High Court (K.Govindarajan Thilakavadi, J.) — S.A.No.531 of 2023 with C.M.P. No.16591 of 2023, pronounced 02.02.2026. Admitted on a single substantial question: whether the courts below wrongly concluded that the appellant/subsequent purchaser was not an innocent bona fide purchaser and so denied him protection under Section 19(b) of the Specific Relief Act. The Court held that reliance on the unregistered sale agreement was proper under the proviso to Section 49 of the Registration Act, 1908; that the purchaser's mere enquiry about the existence of any sale agreement could not establish knowledge of the plaintiff's agreement, the contrary conclusion resting on assumption without evidence; that the vendor's non-appearance evidenced no connivance; and that neither court below had framed an issue on the purchaser's bona fides. Finding that the 2nd defendant amply proved good-faith purchase for valuable consideration without notice, the Court allowed the appeal, set aside the concurrent judgments, refused specific performance, and equitably directed the appellant to pay the plaintiff Rs.1,50,000/- (inclusive of the Rs.20,000/- advance) in full quit of all claims within three months, failing which interest at 12% per annum would run, while permitting withdrawal of the plaintiff's Rs.81,000/- deposit before the trial court.

S.A.No.531 of 2023

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Reserved on	04.11.2025
Pronounced on	02.02.2026

CORAM

THE HONOURABLE MRS.JUSTICE K.GOVINDARAJAN THILAKAVADI

S.A.No.531 of 2023 and C.M.P. No.16591 of 2023

Varadharajan @ Pandian ...Appellant Vs. Thayar ...Respondent

Prayer : Second Appeal is filed under Section 100 CPC, 1908 against the decree and judgment dated 25.10.2021 passed in A.S. No.5 of 2020, on the file of the II Additional District and Sessions Court, Chidambaram, confirming the Judgment and decree dated 05.09.2019 passed in O.S. No.89 of 2013, on the file of the Subordinate Court, Chidambaram.

For Appellant : Mr.S. Subramaniya for Mr. S. Sathish Rajan For Respondent : Mr. A. Muthukumar

Page 1 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

JUDGMENT

The present Second Appeal is preferred against the decree and judgment dated 25.10.2021 passed in A.S. No.5 of 2020, on the file of the II Additional District and Sessions Court, Chidambaram, confirming the Judgment and decree dated 05.09.2019 passed in O.S. No.89 of 2013, on the file of the Subordinate Court, Chidambaram.

The appellant herein is the 2^nd defendant in the above suit. The respondent herein is the plaintiff in the suit. The parties will be referred to in the rank assigned to them in the suit for the purpose of convenience and clarity.

The plaintiff instituted the suit seeking for the relief of specific

performance of the Agreement of Sale dated 05.07.2013 executed by the

1^st defendant in favour of the plaintiff agreeing to sell the suit land.

The case of the plaintiff is that the suit property was agreed to be

Page 2 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

sold for total sale consideration of Rs.1,01,000/-. Towards the said amount, the plaintiff had paid a sum of Rs.20,000/- as advance and agreed to pay the balance amount of Rs.81,000/- within a period of one month and failing which the plaintiff is entitled to file a suit to get the sale deed executed. The plaintiff approached the 1^st defendant several times within a stipulated period of one month to tender balance amount and requested him to execute the sale deed, but the 1^st defendant evaded with an intention to defeat the rights of the plaintiff. On 16.08.2013, the plaintiff sent a legal notice calling upon the 1^st defendant to receive the balance sale consideration and to execute the sale deed. Meanwhile, the 1^st defendant sold the property to the 2^nd defendant. The 1^st and 2^nd defendants colluded together and created a sale deed knowing fully well about the agreement between the plaintiff and the 1^st defendant. Hence, the suit.

The 1^st defendant remained ex parte . The 2^nd defendant resisted

the claim of the plaintiff and submitted that he purchased the suit property from the 1^st defendant on 20.08.2013 for a proper sale consideration of Rs.65,700/-. After purchase by the 2^nd defendant, the Page 3 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

plaintiff, being the adjacent owner, created the suit sale agreement. Hence, prayed for dismissal of the suit.

The trial court, decreed the suit in favour of the plaintiff and the same was confirmed by the first appellate court.

Challenging the same, the present Second Appeal is filed by the

2^nd defendant.

This Second Appeal is admitted on the following substantial question of law:

“Whether the courts below are right in arriving at the conclusion that the appellant is not an innocent bonafide purchaser by not properly appreciating the evidence on record and thereby, not granting him the protection under Section 19(b) of the Specific Relief Act.”

Mr.S. Subramaniya, the learned counsel for the appellant / 2^nd defendant contends that the 2^nd defendant is the bonafide purchaser Page 4 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

without notice of the alleged agreement between the plaintiff and the 1^st defendant. He contends that the entire transaction was entered into in a bonafide manner and the sale deed having been registered, the courts below erroneously held that the 2^nd defendant has no locus standi to object the case of the plaintiff. He would further submit that the suit sale agreement is an unregistered and unstamped document fabricated by the plaintiff in order to defeat the right of the 2^nd defendant. Moreover, in Ex.A2 legal notice, the plaintiff has stated that the entire sale consideration was paid to the 1^st defendant. Whereas, in the plaint, it is mentioned that the plaintiff has paid a sum of Rs.20,000/- as advance and balance amount of Rs.81,000/- has to be paid. The above contradictory statements of the plaintiff would itself prove that the suit agreement is a fabricated document. Furthermore, the plaintiff failed to seek the relief of declaration to set aside the sale deed in favour of the 2^nd defendant executed by the 1^st defendant and no issue has been framed in this regard. The courts below failed to frame necessary issues or points for consideration as to whether the 2^nd defendant is bonafide purchaser. The courts below, merely based on the evidences of the attesting witness and the scribe of the suit agreement, erroneously concluded that the plaintiff Page 5 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

is entitled for the relief of specific performance even without any evidence as to his readiness and willingness to perform his part of contract. Hence, he would submit that if the relief of specific performance is granted in favour of the plaintiff, the 2^nd defendant will be put to great hardship. He would further contend that though the courts below have held against the 2^nd defendant, the non consideration of the relevant facts amounts to a concurrent error committed by the courts. He also pointed out that the High Court can determine issues of fact in Second Appeal under Section 100 in certain circumstances and interfere with the findings of the courts below, when such circumstances are clearly made out. The learned counsel further contended that in appreciation of evidence the courts below have overlooked material facts as to the bonafideness of the 2^nd defendant in purchasing the suit property without notice of the suit sale agreement. He would also contend that the plaintiff failed to establish his readiness and willingness to perform his part of contract. A subsequent purchaser can also challenge the readiness and willingness on part of the plaintiff who has not met the requirements of clauses A, B and C of Section 16 of the Specific Relief Act, 1963. The plea of readiness and willingness of vendee is always available to all the Page 6 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

defendants in a suit for specific performance including subsequent vendee and vendor and therefore, the observation made by the courts below that the 2^nd defendant has no locus standi to question the validity of the sale agreement and the readiness and willingness of the plaintiff to perform his part of contract is incorrect. To support his contentions he has relied upon the following judgments:

1. Sukhwinder Singh vs. Jagroop Singh & another reported in CDJ 2020 SC 099

2. K.N. Nagarajappa and others vs. H. Narasimha Reddy reported in (2021) 18 SCC 263

3. Narayan Sitaramji Badwaik (dead) through Legal representatives vs. Bisaram and others reported in (2021) 15 SCC 234.

4. Ram Awadh (dead) by Lrs. vs. Achhaibar Dubey reported in CDJ 2000 SC 057

5. Kadupugotla Varalakshmi vs. Vudagiri Venkata Rao and others reported in CDJ 2021 SC 144.

Hence, prayed for setting aside the judgment and decree passed by the courts below.

Page 7 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

Mr.A. Muthukumar, the learned counsel for the plaintiff / respondent would seek to sustain the judgments passed by the courts below. It is contended that the courts below have concurrently held against the defendants and the reversal of the same is not warranted. It is his case that the plaintiff had entered into a sale agreement with the 1^st defendant and paid a sum of Rs.20,000/-as advance and agreed to pay the balance sale consideration of Rs.81,000/- within a period of one month and execute the sale deed. Despite repeated demands and issuance of legal notice, the 1^st defendant failed to receive the balance sale consideration and execute the sale deed. The 1^st defendant executed a sale deed in favour of the 2^nd defendant in order to defeat the valuable right of the plaintiff. The learned counsel contends that the defendants have connived with each other and executed the sale deed and therefore, the same cannot be considered as a bonafide transaction. The courts below rightly rejected the defence set up by the 2^nd defendant and decreed the suit in favour of the plaintiff. He would further submit that it is settled law that even an unregistered sale agreement relating to sale of immovable property could be received in evidence in a suit for specific performance. To support his contention, he has relied upon the judgment Page 8 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

of the Hon'ble Supreme Court in R. Hemalatha vs. Kashthuri reported in (2023) 3 MLJ 178 (SC) . Hence prayed for dismissal of the Second Appeal.

Heard on both sides. Records perused.

It is settled law that, as per proviso to Section 49 of the Registration Act, 1908, unregistered document affecting immovable property and required by Registration Act or Transfer of Property Act to be registered, might be received as evidence of contract in a suit for specific performance. Therefore, there is no infirmity in relying upon the unregistered sale agreement by the courts below. However, in this Second Appeal, the only question to be decided is, whether the 2^nd defendant is a bonafide purchaser without notice. On a perusal of the impugned judgment of the first appellate court, it is seen that there is an observation that the 2^nd defendant had enquired the 1^st defendant as to whether there was any sale agreement in respect of the suit property. Now the question is, whether that alone would show that the 2^nd defendant was aware of the suit sale agreement between the plaintiff and the 1^st defendant. The Page 9 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

learned counsel for the 2^nd defendant would submit that mere common enquiries as to the existence of sale agreement, cannot be construed as knowledge about the actual existence of suit sale agreement. It is also seen that, neither the trial court nor the first appellate court has framed any issue or points for consideration as to whether the 2^nd defendant is a bonafide purchaser. In a circumstance, where the 2^nd defendant had contested the suit and had put forth the contention that he was a bonafide purchaser without notice and through his evidence had deposed that he had no knowledge of agreement entered into between the plaintiff and the 1^st defendant, that aspect require appropriate consideration in this Second Appeal. Though the first appellate court observed that, since the 2^nd defendant had enquired about the existence of any sale agreement with the 1^st defendant, that alone would not be sufficient to come to a conclusion that the 2^nd defendant would have knowledge of the suit agreement between the plaintiff and the 1^st defendant. Such conclusion is only an assumption and there is no evidence with regard to the knowledge of the 2^nd defendant. Moreover, the mere fact that the 1^st defendant has not caused appearance in spite of notice having been issued and he not being examined as a witness, it could not be assumed that Page 10 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

there is connivance amongst the defendants to defeat the rights of the plaintiff. Since the 2^nd defendant has purchased the property for a consideration under a registered document and the 1^st defendant having lost interest in the property, if he had not chosen to appear and defend the suit, the same cannot be a presumption of connivance in the absence of evidence to that effect. The plaintiff failed to establish that the 2^nd defendant is not a bonafide purchaser and bought the property not in good faith. On the other hand, the 2^nd defendant amply proved that he is a bonafide purchaser and bought the property in good faith for valuable consideration and without notice of any prior agreement.

In the background of the above consideration, the plaintiff, in any event, is not entitled to a decree for specific performance against the 1^st defendant. Despite holding that the 2^nd defendant is a bonafide purchaser, the fact that the 1^st defendant had received a sum of Rs.20,000/- as advance from the plaintiff cannot be lost sight. Since the 1^st defendant having lost interest in the property has not appeared before the trial court, and considering the plight of the plaintiff that he would have been entitled to the benefit of the land if the transaction was Page 11 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

concluded and in such situation, this Court deems it appropriate to direct the 2^nd defendant to pay a sum of Rs.1,50,000/- inclusive of the advance amount of Rs.20,000/- to the plaintiff in full quit of all claims, within a period of three months, failing which, the same should carry interest at 12% per annum till payment. The plaintiff is at liberty to withdraw the amount of Rs.81,000/- deposited by her before the trial court.

In view of the above, the following order is passed.

i. The Second Appeal is allowed. No costs. Consequently connected Civil Miscellaneous Petition is closed.

ii. The decree and judgment dated 25.10.2021 passed in A.S. No.5 of 2020, on the file of the II Additional District and Sessions Court, Chidambaram, confirming the Judgment and decree dated 05.09.2019 passed in O.S. No.89 of 2013, on the file of the Subordinate Court, Chidambaram, is set aside.

iii. The decree and judgment dated 25.10.2021 in A.S. No.5 of 2020 on the file of the II Additional District and Sessions

Page 12 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

Court, Chidambaram, shall stand modified and the appellant / 2^nd defendant is directed to pay a sum of Rs.1,50,000/- to the respondent / plaintiff in full quit of all claims, within a period of three months, from the date of receipt of a copy of this order, failing which, the same should carry interest at 12% per annum till payment.

iv. The plaintiff is at liberty to withdraw the amount of Rs.81,000/- deposited by her before the trial court.

02.02.2026

Index: Yes/No Internet: Yes/No Speaking/Non-Speaking order bga

To

The II Additional District and Sessions Judge, Chidambaram

The Subordinate Court, Chidambaram.

The Section Officer, VR Section, High Court, Madras.

Page 13 of 14

https://www.mhc.tn.gov.in/judis

S.A.No.531 of 2023

K.GOVINDARAJAN THILAKAVADI,J.

bga

Pre delivery judgment in S.A.No.531 of 2023 and C.M.P. No.16591 of 2023

02.02.2026

Page 14 of 14

https://www.mhc.tn.gov.in/judis