Specific Relief Act (SRA)
The Subsequent Purchaser and Lis Pendens
A seller who has agreed to sell his land to one buyer sometimes sells it again to another. Whose claim prevails? The answer lies in Section 19(b) of the Specific Relief Act and Section 52 of the Transfer of Property Act. The earlier buyer's contract binds the later purchaser, unless that purchaser bought for value, in good faith and without notice; and a purchase made after the suit is filed is caught by lis pendens whatever his good faith. This note explains the good-faith defence, the meaning of notice, the doctrine of lis pendens, and the procedure for bringing the subsequent purchaser into the suit.
Figure: The bona fide purchaser defence and its three requirements, the meaning of notice, lis pendens under Section 52 TPA, and the procedure
1. The Only Escape: The Bona Fide Purchaser for Value Without Notice
Section 19(b) ▪ The rule. A person claiming under a party by a title arising after the contract is bound by it, except a transferee for value who has paid in good faith and without notice of the original contract. ▪ Three requirements, all necessary. The later purchaser must prove that he paid value, acted in good faith, and had no notice, actual or constructive, of the prior contract. ▪ The burden is on him. The burden of establishing all three lies on the subsequent transferee who sets up the defence. |
2. The Meaning of Notice
What fixes a purchaser with notice ▪ Actual notice. He in fact knew of the earlier agreement. ▪ Constructive notice. He would have known had he made the enquiries a prudent buyer makes. ▪ Possession as notice. Possession of the property by the prior buyer is itself notice of his rights, so the purchaser must enquire into who is in possession. ▪ Due diligence. A buyer who fails to inspect the property or examine the title cannot plead ignorance; the failure fixes him with constructive notice. |
3. Lis Pendens: Section 52 of the Transfer of Property Act
A purchase during the suit ▪ The doctrine. A transfer of the suit property during the pendency of the suit is subject to the result of the suit. ▪ The effect. A purchase made after the suit is filed is bound by the decree, quite apart from Section 19(b); the pendente lite transferee cannot claim to be free of it. ▪ The division of labour. Section 19(b) governs a purchase before suit, where good faith and want of notice can be pleaded; lis pendens governs a purchase during the suit, where that defence is not open. |
4. Procedure: Bringing the Subsequent Purchaser In
- Impleadment. A subsequent purchaser against whom relief is sought should be joined as a party; a pendente lite transferee may be added so that he is bound by, and can contest, the decree.
- Necessary or proper party. He is a necessary party where no effective decree can be passed without him, and at least a proper party whose presence helps a complete adjudication.
- The decree. The decree directs conveyance by the vendor and the subsequent purchaser as the case requires, so that the buyer obtains a good title.
5. Frequently Asked Questions
Q. Is a later buyer bound by an earlier agreement to sell?
A. Yes, unless he is a bona fide transferee for value without notice under Section 19(b), or, where he bought during the suit, unless lis pendens does not apply, which it almost always will.
Q. What must a subsequent purchaser prove to take free of the earlier contract?
A. All three of value, good faith, and want of notice, actual or constructive; the burden of proving them lies on him.
Q. Is possession by the earlier buyer notice to a later purchaser?
A. Yes. Possession by the prior buyer is itself notice of his rights, so a later purchaser is expected to enquire into who is in possession.
Q. What is the effect of buying property during a pending suit?
A. Under Section 52 of the Transfer of Property Act, the purchase is subject to the result of the suit; the pendente lite transferee is bound by the decree regardless of Section 19(b).
SEO METADATA URL slug: subsequent-purchaser-lis-pendens-specific-relief-act SEO title: The Subsequent Purchaser and Lis Pendens Meta description: The subsequent purchaser in a specific-performance suit: the bona fide purchaser for value without notice under Section 19(b), the meaning of actual and constructive notice, possession as notice, and lis pendens under Section 52 of the Transfer of Property Act. Keywords: subsequent purchaser specific performance, bona fide purchaser without notice, constructive notice possession, lis pendens Section 52 TPA, pendente lite transferee, Section 19(b) |