20 May 2020

Transfers during pendency of suit by a party to the suit is not void, such transfer is subservient to the decision in the suit.

What is the status of transaction and purchaser of property during the pendency of suit?

   It is settled legal position that the effect of Section 52 is not to render transfers effected during to pendency of a suit by a party to the suit void, but only to render such transfers subservient to the rights of the parties to such suit, as may be, eventually, determined in the suit. In other words, the transfer remains valid subject, of course, to the result of the suit. The pendente lite purchaser would be entitled to, or suffer the same legal rights and obligations of his vendor as may be eventually determined by the court. The mere pendency of the suit does not prevent one of the parties to the suit from dealing with the subject matter of the suit. The Section only postulates a condition that the lis pendens alienation will in no manner affect the rights of the other party under any decree, which may be passed in the suit unless the property alienated with the permission of the Court.
   A transferee pendente lite of an interest in immovable property is a representative-in-interest of the party from whom he has acquired that interest. He is entitled to be impleaded in the suit or other proceedings where his predecessor-in-interest is made a party to the litigation; he is entitled to be heard in the matter on the merits of the case.{Relied on Amit Kumar Shaw Vs. Farida Khatoon (2005) 11 SCC 40: (AIR 2005 SC 2209: 2005 AIR SCW 2078)} [Para No.42]


   In the case of Thomson Press (India) Limited (supra), the Supreme Court was considering an appeal arising out of a suit for specific performance of prior agreement to sell filed by the buyer against the original owner/transferor/seller pendente lite. In Paragraph 26 to 29 of the said judgment, the Supreme Court after referring to Section 52 of the Transfer of Property Act, observed that transfer during pendency of suit does not automatically render such transfer void. The provisions of the Section only render such transfers subservient to the rights of the parties to a litigation. The transferees acquiring any immovable property during litigation over it, are held to be bound, by application of the doctrine of lis pendens and by the decree passed in the suit even though they may not have been impleaded in it. "The whole object of the doctrine of lis pendens is to subject parties to the litigation, as well as others who seek to acquire rights in immovable property, which are the subject matter of litigation, to the power and jurisdiction of the Court so as to prevent the object of a pending action from being defeated." The Supreme Court further observed in Paragraphs 55 and 56 that a transferee pendente lite can be added as a party to the suit lest the transferee suffered prejudice on account of the transferor losing interest in the litigation post such transfer. Sometimes a transferor pendente lite may not even defend the title properly as he has no interest in the same or may collude with the plaintiff in which case the interest of the purchaser pendente lite will be ignored. To avoid such situations, transferee pendente lite can be added as a party defendant to the suit provided his interest is substantial and not just peripheral. This is particularly so where the transferee pendente lite acquires the interest in the entire estate that forms the subject matter of the dispute.{Relied on Thomson Press (India) Limited Vs. Nanak Builders and Investors Private Limited and others 2013 (5) SCC 397}[Para No.43]

Allahabad High Court

Ram Chander

Deputy Director Consolidation

Decided on 19/05/2020

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