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4.3. He contended further that the facts and circumstances of the case are as such that there is no scope for exercising discretion by the Court, since the defendant No. 1 himself had failed and neglected to perform his part of the contract and had sold the property during the pendency of the suit. Therefore, the defendant No. 1 cannot claim to invoke the discretionary power of the Court, particularly, when he has parted with possession and sold the property to someone else. Similarly, the defendant No. 2, a post-suit purchaser, is hit by the doctrine of lis pendence.

Defendant. No. 2 transferee for value without notice: Lis pendence:

11. The ground that the defendant No. 2 was a bona fide transferee for value without notice cannot be available in the facts and circumstances of this case. This principle would have been applicable to him as provided in Section 19(b) SR Act if the transfer was a pre-suit transfer. Admittedly, the transfer was effected on 19th June 1995. Whereas the present suit was filed on 28th of April 1995. Therefore, this transfer is hit by the principles of (is pendence provided in Section 52 of the Transfer of Property Act, 1882. The principle of lis pendence is excluded in a suit or proceeding which is collusive and where the right to immovable property is not directly and specifically in question. This case does not come under any of the two exceptions. Therefore, the benefit of Section 19(b) of the SR Act is not available to the defendant No. 2 in this case.

13.1. In this background, we may now analyse what were the essential terms of the contract having regard to the agreement, which is at page 1 part II of this Paper Book. Admittedly, the property was mortgaged to LIC. The suit filed by LIC was decreed. The property was put to sale. It was purchased by the auction purchaser. Application for setting aside the sale was rejected. At the same time, the confirmation of sale was also refused. Against this order of refusal of confirmation of sale, an appeal preferred by LIC being F.M.A. No. 17 of 1988 was pending. The Title Execution Case No. 9 of 1972 for enforcement of the final decree passed in Title Suit No. 53 of 1963 was also pending. The property was sought to be sold free from all encumbrances but subject to the said proceedings and mortgage of LIC and that such representation was relied upon and admitted as true by the purchaser. He agreed to purchase the 1/7th share of the defendant No. 1 in the suit property free from all encumbrances, attachment, trust, charge and/or lis pendence whatsoever but subject to as aforesaid, viz. the mortgage and the pendency of the suit etc. mentioned in the agreement. Thus, one of the essential terms of the contract, according to the true construction of the agreement, is that the plaintiff had agreed to purchase the property free from all encumbrances other than the encumbrance mentioned in the agreement, viz. the mortgage and the resulting suit and decree and the pendency of the appeal of LIC. Therefore, the plaintiff must show that he was ready to perform this essential part of the contract.

13.4. The next essential part of the contract was to furnish to the defendant No. 1 the draft conveyance in order to obtain clearance from the Income Tax Department under Section 230A(1) of the Income Tax Act.

13.5. These essential terms of the contract can be found from Clause (xi), (xii) and (xxi) of the recital of the agreement and Clause (1), (2), (3), (4), (5), (6) and (8) of the terms and conditions of the agreement. A true construction of the said agreement, as we have understood, requires the fulfillment of the essential terms of the contract as discussed above. The sum total of the discussion is that it was the plaintiff's liability to redeem the property from the mortgage with LIC so far as the 1/7th part intended to be purchased by him. In case it cannot be redeemed, he was liable to purchase together with these encumbrances and his liability was limited to Rs. 70,000/- and as well as subject to the appeal. Inasmuch as, even if the LIC has agreed to part redemption and redeemed the 1/7th share intended to be purchased by the plaintiff still then the question of confirmation of sale was pending in appeal and such transfer being hit by the principle of lis pendence, was subject to the result of the appeal and the execution. If the sale was confirmed and the appeal succeeded the part redemption would have made the transfer subject to the sale so confirmed and being hit by lis pendence, the plaintiff could not have acquired any title. Therefore, there was no question of making the property free from all encumbrances, until the appeal was decided. The plaintiff had agreed to the terms of the contract having notice and knowledge of the said proceedings involved in the mortgage suit of the LIC.