Introduction
Reaffirming the settled legal position under the Doctrine of Lis Pendens, the Supreme Court of India has once again clarified that a transferee pendente lite—a person who purchases property during the pendency of litigation—has no independent right to obstruct or resist the execution of a decree. The Court held that such transfers remain strictly subservient to the outcome of the pending proceedings, and the transferee is bound by the decree passed therein.
The ruling, delivered by a Bench comprising Justice Manoj Misra and Justice Ujjal Bhuyan, upheld the Bombay High Court’s dismissal of objections raised by a purchaser who had acquired the disputed property while litigation was ongoing.
This judgment provides crucial clarity on the scope and application of Order XXI Rule 102 of the Code of Civil Procedure, 1908 (CPC), read with Section 52 of the Transfer of Property Act, 1882 (TPA), and reinforces judicial intolerance towards attempts to frustrate execution proceedings through pendente lite transfers.
Background of the Case
The dispute arose when a purchaser bought immovable property during the pendency of a civil suit concerning the same property. After the decree-holder initiated execution proceedings, the transferee sought to resist and obstruct the execution, claiming independent rights over the property.
The executing court rejected these objections, relying on Order XXI Rule 102 CPC, which bars transferees pendente lite from invoking the protections available to bona fide purchasers or persons in possession. The Bombay High Court upheld this view, prompting the transferee to approach the Supreme Court.
Key Legal Issue
The primary issue before the Supreme Court was:
Whether a transferee pendente lite has any right to resist or obstruct the execution of a decree under Order XXI CPC?
Supreme Court’s Ruling
The Supreme Court dismissed the appeal and categorically held that:
- A transferee pendente lite is bound by the decree, irrespective of whether they were a party to the original suit.
- Such a transferee cannot obstruct execution proceedings or claim protection under Order XXI Rules 97 to 101 CPC.
- Any transfer made during the pendency of litigation is subservient to the rights determined by the final decree.
The Bench emphasised that Order XXI Rule 102 CPC expressly excludes transferees pendente lite from raising objections to execution, thereby preventing abuse of the judicial process.
Interpretation of Order XXI Rule 102 CPC
Order XXI Rule 102 CPC states that nothing in Rules 98 and 100 shall apply to resistance or obstruction by a person to whom the judgment-debtor has transferred the property after the institution of the suit.
The Supreme Court clarified that:
- Rules 98 and 100 are intended to protect bona fide third parties who are dispossessed during execution.
- A transferee pendente lite does not qualify as a bona fide third party, since the transfer itself is subject to the outcome of the litigation.
- Allowing such transferees to obstruct execution would defeat the finality of decrees and encourage strategic alienations during litigation.
Doctrine of Lis Pendens under Section 52 TPA
The judgment strongly relied on Section 52 of the Transfer of Property Act, which embodies the Doctrine of Lis Pendens. The doctrine is founded on public policy and aims to prevent:
- Multiplicity of proceedings
- Defeat of judicial outcomes through private transfers
- Dilution of court authority
The Court reiterated that:
- The doctrine does not invalidate the transfer, but renders it ineffective against the rights of parties to the suit.
- The transferee steps into the shoes of the transferor and takes the property with all its legal risks.
- Knowledge or lack of knowledge of pending litigation is irrelevant for the application of Section 52.
No Equity in Favour of Transferee Pendente Lite
Rejecting arguments based on equity and hardship, the Supreme Court held that:
- Equity cannot override statutory provisions like Order XXI Rule 102 CPC.
- A purchaser who buys property during litigation does so at their own peril.
- Courts cannot permit execution proceedings to be stalled by parties who knowingly or negligently enter into pendente lite transactions.
The Bench observed that allowing objections by such transferees would result in endless obstruction to decree execution, undermining the efficiency of the civil justice system.
Consistency with Previous Supreme Court Judgments
The Court’s ruling aligns with earlier landmark decisions such as:
- Jayaram Mudaliar v. Ayyaswami (1972)
- Silverline Forum Pvt. Ltd. v. Rajiv Trust (1998)
- Usha Sinha v. Dina Ram (2008)
In all these cases, the Supreme Court consistently held that transferees pendente lite cannot claim independent rights and are bound by decrees passed against their vendors.
Practical Implications of the Judgment
1. For Property Buyers
- Mandatory due diligence is crucial before purchasing property.
- Buyers must verify whether any litigation is pending, as pendente lite purchases carry significant legal risks.
2. For Decree Holders
- The judgment strengthens the hands of decree holders by preventing execution delays caused by strategic transfers.
3. For Trial and Executing Courts
- The ruling offers clear guidance to summarily reject objections raised by transferees pendente lite.
Conclusion
The Supreme Court’s reaffirmation that a transferee pendente lite has no right to obstruct execution of a decree reinforces the sanctity of judicial proceedings and the finality of decrees. By strictly enforcing Order XXI Rule 102 CPC and the Doctrine of Lis Pendens, the Court has sent a strong message against attempts to derail justice through pendente lite alienations.
This judgment not only upholds established legal principles but also promotes certainty, efficiency, and integrity in civil litigation—ensuring that decrees are not rendered meaningless by post-suit transfers.
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