The Supreme Court, in a significant ruling on Section 19(b) of the Specific Relief Act, 1963, has reinforced a critical legal principle: a subsequent purchaser must prove they acted in good faith and without notice of a prior claim.
The Bench, comprising Justices JB Pardiwala and R Mahadevan, held that a purchaser who relies blindly on a vendor's claims, without conducting their own reasonable inquiries, cannot be protected as a "bona fide purchaser."
In this case, the subsequent purchasers knew of a prior agreement to sell, which the vendor had "unilaterally cancelled." The Court deemed this unilateral cancellation illegal, upholding the original buyer's right to seek specific performance of the contract.
This judgment serves as a stark reminder for all parties in property transactions. Due diligence is not a mere formality. A buyer must actively investigate the title and any known encumbrances; simply trusting the seller is not a valid legal defense against a prior, valid claim.
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