RAM NIWAS V. BANO, AIR 2000 SC 2921
FACTS
- A person A, took a shop on rent from B, and subsequently entered into a contract for the purchase of this shop for a consideration. He paid part of the consideration on the date of the agreement, and undertook to pay the remaining amount on the date of the execution of the sale deed.
- Six months later, however, B sold the shops to C, for a sum of Rs. 20,000. A filed a suit for specific performance of the contract, and C resisted it on the ground that they were bona fide purchasers for value and without any notice of the claim of A.
- Therefore, the registered sale deed in their favour cannot be cancelled and relief of specific performance could not be granted in favour of the tenant.
ISSUE
Whether C had notice or not?
HELD
- The court observed that a person may not have actual knowledge of a fact but he may have notice of it.
- If the purchasers (C) have relied upon the assertion of the vendor (B) or on their own knowledge and abstained from making inquiry into the real nature of the possession of the tenant, they cannot escape from the consequences of the deemed notice under Explanation II of s. 3 of TP Act.
- C’s right over the property thus was subordinate to A’s rights.