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        Case ID :

        1976 (11) TMI 212 - HC - Indian Laws

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        Good-faith transferee protection under specific performance law prevails where the purchaser had no notice of the prior contract. A subsequent purchaser was protected as a transferee for value in good faith and without notice, so the claim for specific performance could not be ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Good-faith transferee protection under specific performance law prevails where the purchaser had no notice of the prior contract.

                              A subsequent purchaser was protected as a transferee for value in good faith and without notice, so the claim for specific performance could not be enforced against him. The Court held that the governing provision was Section 19(b) of the Specific Relief Act, not Section 41 of the Transfer of Property Act. Under Section 19(b), the relevant test is whether the transferee paid value in good faith and without notice of the original contract; it does not require proof of reasonable enquiries into the transferor's power to transfer. On the evidence, those ingredients were satisfied, and protection was available.




                              Issues: Whether the subsequent purchaser was protected as a transferee for value in good faith and without notice so as to defeat the claim for specific performance.

                              Analysis: The Court held that the controversy was governed by Section 19(b) of the Specific Relief Act and not by Section 41 of the Transfer of Property Act. Under Section 19(b), the relevant requirements are that the transferee must have paid money in good faith and without notice of the original contract. The provision does not impose the further obligation of making reasonable enquiries about the transferor's power to transfer, as is found in Section 41 of the Transfer of Property Act. On the evidence, the subsequent purchaser satisfied the ingredients of good faith and absence of notice.

                              Conclusion: The subsequent purchaser was entitled to protection under Section 19(b), and the claim for specific performance could not be enforced against him.


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                              ActsIncome Tax
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