Specific performance barred where a site-sale agreement defeated statutory allotment conditions and alienation restrictions.

Specific performance was denied where an agreement to sell a site allotted under a statutory residential scheme conflicted with the allotment conditions, including restrictions on alienation and the obligation to construct on the site; a contract that would defeat the object of the governing law was treated as unenforceable. The Court also explained that lis pendens depends on transfer by a party during pendency of litigation and is not determined by notice or good faith alone, so the subsequent transfer could not be invalidated on that basis. Although prematurity under Article 54 was discussed, the decisive point remained the underlying unenforceability of the bargain.

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Issues: (i) whether the agreement to sell could be specifically enforced despite the statutory scheme governing allotment and alienation of the site, (ii) whether the subsequent transfer was hit by lis pendens or could be protected as a transfer to a bona fide purchaser, and (iii) whether the suit for specific performance was premature.

Issue (i): whether the agreement to sell could be specifically enforced despite the statutory scheme governing allotment and alienation of the site

Analysis: The site was allotted under a statutory scheme intended for residential use, with the allottee bound to construct a building and prohibited from alienating the site during the prescribed period. The agreement between the allottee and the plaintiff contemplated an immediate sale of the site as such, with possession being handed over to the plaintiff, and thereby ran directly against the statutory obligations attached to the allotment. The Court held that a contract is unenforceable when its enforcement would expressly or impliedly defeat the object of the governing law, and that the illegality in this case went to the root of the matter. The plaintiff could not obtain specific performance of an arrangement that was inconsistent with the statutory conditions governing the property.

Conclusion: The agreement to sell was unenforceable and specific performance could not be granted.

Issue (ii): whether the subsequent transfer was hit by lis pendens or could be protected as a transfer to a bona fide purchaser

Analysis: The doctrine of lis pendens applies only to a transfer or dealing with property by a party to the litigation during the pendency of the lis and does not turn on notice or good faith. On the facts, the transferee purchased when neither the vendor nor the transferee was on record in the suit, and the Court held that the transfer could not be invalidated on the footing adopted by the High Court. The Court also found that, even assuming absence of bona fides in the transferee's purchase, that circumstance did not revive an otherwise unenforceable agreement or entitle the plaintiff to specific performance.

Conclusion: The transfer was not liable to be upset on the basis adopted by the High Court, and the finding against the transferee did not advance the plaintiff's claim.

Issue (iii): whether the suit for specific performance was premature

Analysis: The agreement fixed the time for performance by reference to the vendor obtaining title from the authority and then completing the transaction within a further stipulated period. The Court noted the limitation principles under Article 54, but held that it was unnecessary to interfere with the finding on prematurity because the suit failed on the broader and decisive ground that the underlying agreement was itself unenforceable.

Conclusion: The suit was not allowed to succeed, though the Court did not rest its final decision solely on prematurity.

Final Conclusion: The challenge to the decree of specific performance succeeded, but the Court moulded relief by awarding a monetary amount in place of the decree to do complete justice between the parties.

Ratio Decidendi: A contract for sale will not be specifically enforced when its enforcement would directly or impliedly defeat the statutory object governing the property, and collateral findings such as lis pendens or absence of bona fides cannot validate an otherwise illegal and unenforceable bargain.

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