Doctrine Of Lis Pendens Can’t Be Degenerated Into Weapon Of Harassment; Courts Can Exempt Properties From Rigours of Section 52 TP Act: Delhi High Court

The appeal before the High Court was filed under Order XLIII Rule 1 and Section 151 of the Code of Civil Procedure, 1908, read with Section 10 of the Delhi High Court Act, 1966, challenging the Order passed by the Single Judge in a civil suit directing the issuance of summons to the Defendants/Respondents.

The Division Bench of Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar stated, “The foregoing observations of the Hon‘ble Supreme Court make it abundantly clear that while the doctrine of lis pendens is rooted in equity and justice, it cannot be allowed to degenerate into a weapon of harassment or a tool for speculative adventurism.”

“The law recognizes that the Courts are vested with the power, in appropriate cases, to exempt properties from the rigours of Section 52 of the TP Act. The rationale behind such an exemption is to insulate genuine property owners from being trapped in vexatious, frivolous, or mala fide litigations, and to deter land-grabbers, speculators, and false claimants from misusing judicial processes to create artificial obstacles in the real estate market. In our considered opinion, the present case falls squarely within the four corners of these observations”, it added.

Factual Background

The Appellant’s case was that the negotiations for the sale and purchase of the suit property commenced with the Respondents in April 2021. A binding oral agreement was concluded in the year 2021, wherein the essential terms were settled, including a sale consideration of Rs 26 crore and a three-month timeline for completion of the transaction. Subsequently, the parties executed a Memorandum of Understanding. The Appellant alleged that by late August 2021, it came to light that the Respondents were seeking to renege on the agreement and instead negotiate with third parties for a higher price. In response, the Appellant issued a legal notice, but the Respondents denied the existence of any concluded agreement and also refuted receipt of the alleged advance payment.

The appellant instituted a suit before the Single Judge, seeking specific performance of the oral agreement to sell and the MoU in respect of the suit property, seeking the following substantive reliefs. The Appellant filed an application under Order XXXIX, Rules 1 and 2 of the CPC, seeking interim and temporary injunctions. By the Impugned Order, at the stage of issuance of summons, the Single Judge dismissed the Appellant’s interim application, holding that the electronic communications indicated only ongoing negotiations and not a concluded contract. Aggrieved by the dismissal of the interim application, the Appellant/Plaintiff approached the High Court.

Senior Advocate Manish Singhvi represented the Appellant while Senior Advocate Rajashekhar Rao represented the Respondent.

Reasoning

On a perusal of the facts and circumstances of the case, the Bench noted that the suit was resting on an inherently fragile foundation, being premised upon an alleged oral agreement which stood contradicted by the Plaintiff‘s own pleadings. The Bench was of the view that the Plaint itself admitted that the MoU superseded all prior communications and arrangements, thus making it clear that any relief could only have been founded upon the MoU and not upon any purported oral understanding.

“We are also constrained to observe that the reliance placed on various electronic communications is wholly misplaced. The WhatsApp messages and Zoom transcripts relied upon by the Appellant do not evince any concluded or binding contract; instead, they only reflect ongoing negotiations. The materials produced are not only inconclusive but appear to have been selectively extracted in order to mislead the Court”, it stated.

The Bench affirmed, “It is trite law that for a valid and enforceable contract to come into existence, there must be a lawful offer, its unqualified acceptance, and valid consideration. Section 10 of the Indian Contract Act, 1872, encapsulates this principle, requiring that every enforceable agreement be supported by free consent of competent parties, lawful consideration, and lawful object.Without these essential elements, no agreement can mature into a contract enforceable at law.”

As per the Bench, even on a prima facie evaluation, the indispensable element of valid consideration was wholly absent. The Appellant had failed to demonstrate that any payment was in fact made, much less accepted by the Respondents. It was thus held that the foundation of the suit appeared to be tenuous.

The Bench found that, ex facie, it was manifest that the Appellant‘s suit was built on a foundation that was both fragile and untenable. Neither the pleadings nor the documents relied upon disclosed a prima facie case that could justify invoking the doctrine of lis pendens. “On the contrary, the selective reliance on electronic communications, the internal contradictions within the pleadings, and the absence of credible evidence of consideration reveal that the suit has been instituted not to enforce any legitimate contractual right but to create a cloud over the title of the property and thereby impede its marketability. Such speculative litigation undermines judicial integrity and burdens the docket with frivolous claims”, it added.

The Bench was thus in agreement with the Single Judge in exempting the suit property from the operation of Section 52 of the TP Act. The Bench dismissed the Appeal with costs of Rs 5 lakh payable to the Respondents. “It is clarified that all issues shall remain open, and the suit shall proceed uninfluenced by any observations made herein”, it concluded.

Cause Title: Earthz Urban Spaces Pvt. Ltd. v. Ravinder Munshi (Neutral Citation: 2025:DHC:8899-DB)

Appearance

Appellant: Senior Advocate Manish Singhvi, Advocates Himaani Prabhakar, Saroj Rai

Respondent: Senior Advocates Rajashekhar Rao,Ashish Dholakia,Jeevesh Nagrath, Advocates Sanam Tripathi, Meherunisa Anand Jetley, Subhoday Banerjee,Anjali Kaushik, Dheeresh Kumar Dwivedi, Nitya Maheshwari, Anjali Kaushik

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