Vendor Is Necessary Party In Specific Performance Suits Even If He Has Transferred Property To Third Party: Supreme Court

The Supreme Court reaffirmed the settled legal position that the vendor is a necessary party in a suit for specific performance of an agreement to sell immovable property, even if he has transferred his interest in the property to a third party.

“The law is thus settled that the vendor is a necessary party in a suit for specific performance of an agreement for sale, notwithstanding that vendor has transferred his interest in the subject matter of the agreement to a third party.”, observed a bench of Justices Manoj Misra and Ujjal Bhuyan.

"In a suit for specific performance of an agreement for sale of an immovable property, vendor is a necessary party notwithstanding he has transferred his interest in the property to a third party. As a sequitur, a suit or an appeal emanating from such a suit would abate if, upon death of the vendor, his legal heirs/ representatives are not substituted," the Court added.

The case arose out of an agreement for sale executed by one Kishorilal in favour of Gopal. During the pendency of the suit for specific performance, Kishorilal transferred the suit property to two third parties, Brajmohan and Manoj. Despite this transfer, the trial court decreed the suit in favour of Gopal, directing specific performance of the contract. The transferees were impleaded in the proceedings as purchasers pendente lite, and were held bound by the outcome of the litigation.

While the appeal against the decree was pending, Kishorilal died. Out of his four legal heirs, three were substituted on record. An objection was raised that since all the legal representatives of the deceased vendor had not been brought on record, the appeal had abated, and therefore the decree could not be sustained.

Rejcting the objection, the judgment authored by Justice Misra relied on the case of Lala Durga Prasad v. Lala Deep Chand, (1953) 2 SCC 509, where it was held that the proper form of a decree in a specific performance suit is to direct both the vendor and the subsequent transferee to execute the conveyance in favour of the purchaser. The transferee conveys title, while the vendor fulfils the contractual obligations arising out of the agreement.

It also referred to Dwarka Prasad Singh v. Harikant Prasad Singh, (1973) 1 SCC 179, which emphasised that without the vendor joining in the execution of the sale deed, special covenants and contractual assurances between the vendor and the purchaser cannot be incorporated in the conveyance. Therefore, the vendor's presence is indispensable for the decree to be complete and effective.

“Reason being that the transferee/ third party cannot be subjected to special covenants, if any, between the vendor and the plaintiff-purchaser. Besides that, the object of the decree of specific performance is to put the person who has agreed to purchase the property in the same position which he would have obtained in case the contracting parties i.e., vendor and the purchaser had, pursuant to the agreement, executed a deed of sale and completed it in every way.”, the court observed.

Also From Judgment: Appeal Won't Abate For Not Adding Legal Heirs If Interest Of Deceased Is Sufficiently Represented By Others : Supreme Court

Cause Title: KISHORILAL (D) THR. LRS & ORS. VERSUS GOPAL & ORS.

Citation : 2026 LiveLaw (SC) 39

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