Holding

Section 52 of the Transfer of Property Act, 1882, bars transfer of suit property during pendency without court permission and binds the transferee pendente lite to the decree, precluding compulsory impleadment.

Summary

The appellant, Sanjay Verma, filed a suit for specific performance of a contract concerning a property in 1991. During the suit's pendency, the property was transferred to the respondents, Manik Roy and Ahilya Jha, without obtaining the court's permission. The respondents sought to be impleaded under Order I Rule 10(2) of the CPC, but the trial court rejected their application, holding that the transfers were "pendente lite" and fell within Section 52 of the Transfer of Property Act, 1882, which bars such alienations. The Jharkhand High Court reversed this decision, allowing the respondents to be added as parties. On appeal, the Supreme Court held that Section 52 is a principle of public policy that binds a transferee pendente lite to the decree as if he were a party, and that the High Court’s order was indefensible. Consequently, the appeal was allowed and the High Court’s order set aside, with no order as to costs.

Issues considered

Whether a transferee of suit property during pendency, without leave of the court, can be impleaded as a party under Order I Rule 10(2) CPC.
Whether Section 52 of the Transfer of Property Act, 1882, bars such transfer and binds the transferee to the eventual decree.
Whether the High Court erred in allowing the respondents to be added as parties to the suit.

Legislation cited

Code of Civil Procedure, 1908s. Order I Rule 10(2)
Transfer of Property Act, 1882s. 52

Subjects

Transfer of Property ActSection 52lis pendenstransferee pendente litespecific performanceimpleadmentCivil Procedure Codepublic policyequity

Judgment

SANJAY VERMA A
v.
MANIK ROY AND ORS.

DECEMBER 8, 2006 '

[DR. ARIJIT PASAYAT AND S.H. KAPADIA, JJ.] B

Transfer of Property Act, 1882-Section 52-General principles-Held:
Litigant party is exemptedfrom taking notice of title acquired during pendency
of litigation-Principle of lis pende'1s is of public policy, where good faith C
or bona fide do not arise-Transferee pendente lite is bound by decree just
as much as he was party to the suit-Mere pendency of suit does not prevent
one of the parties from dealing with the suit property-Only property alienated
with the permission of the Court could affect rights of other party under
decree passed in the suit-Thus, order of High Court that transferees pendente
lite without leave of the court could be added as parties in the suit, is set D
aside.

Appellant filed suit for specific performance with regard to the suit
property in 1991. During pendency of the suit, in year 1993 suit property
was transferred in favour of respondents. Respondents filed an application
under Order 1, Rule 10(2) CPC for impleadment to contest the suit in 2005. E
Trial court held that both the transferees had purchased the suit property
after filing of the suit, without obtaining leave of the court and thus, the
transfer is pendente lite and is hit by section 52 of the Transfer of Property
Act, 1882 and rejected the prayer for impleadment. High Court allowed their
writ petition holding that the respondents' vendors were not parties to the F
suit and there was no representation of respondent to safeguard their interest
and therefore, they are required to be added as parties in the suit. Hence the
present appeal.

Allowing the appeal, the Court
G
HELD: 1.1. The principles specified in section 52 of the Transfer of
Property Act, 1882 are in accordance with equity, good conscience of justice
because they rest upon an equitable and just foundation that it will be
impossible to bring an action or suit to a successful termination if alienations
are permitted to prevail. A transferee pendente lite is bound by the decree
469 H
470 SUPREME COURT REPORTS [2006] SUPP. IO S.C.R.

A just as much as he was a party to the suit. The principle of /is pendens embodied
in section 52 of the T.P. Act being a principle of public policy, no question of
good faith or bona.fide arises. The principle underlying Section 52 is that a
litigating party is exempted from taking notice of a title acquired during the
pend ency of the litigation. The mere pendency of a suit does not prevent one
of the parties from dealing with the property constituting the subject matter
B of the suit. Section only postulates a condition that the 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 was alienated with the permission of
the Court. Thus, the High Court's view that the respondents' vendors were
not parties to the suit and there was no representation of respondent to
C safeguard their interest and therefore, they are required to be added as parties
in the suit, is clearly indefensible and.is set aside. [474-C-FJ

1.2. It is trite law that if a person is not a party to a suit, the decree
does not affect him unless the judgment is in rem and not in personem.
(474-GJ
D
Bibi Zubaida Khatoon v. Nabi Hassan Saheb and Anr., (20041 1 SCC
191, distinguished.

Sarvinder Singh v. Dalip Singh and Ors., (19961 5 SCC 539; and
Dhurandhar Prasad Singh v. Jai Prakash University and Ors., (20011 6 SCC
E 534, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5664 of2006.

From the final Judgment and Order dated 19.4.2006 of the High Court
of Jharkhand at Ranchi in W.P. (C) No. 943/2006.
F S.B. Upadhyay, Shivmangai Sharma, R.R. Dubey, Santosh Mishra, Pawan
Upadhyay and Sharmila Upadhyay for the Appellant.

Reetesh Singh, Yunus Malik and Prashant Choudhary for the
Respondents.

G The Judgment of the Court was delivered by

DR. ARIJIT PASAY AT, J. Leave granted.

Challenge in this appeal is to the order passed by a learned Single
Judge of the Jharkhand High Court allowing application filed by the
H respondents in terms of Order I Rule I 0 of the Code of Civil Procedure, 1908
- SANJAYVERMAv. MANIKROY [PASAYAT,J.] 471
(in short the 'CPC'). The applicants are transferees of the property in dispute A
during the pendency of the suit.

Background facts in a nutshell are as follows:

Appellant filed a suit for specific performance of contract against one
Rajeshwari Devi, respondent No.3. The suit is numbered as Title Suit No. 88 B
of I 991. The prayer in the suit was for a decree against the defendant for
specific performance of agreements dated 25.12.1986 and 27.12.1990 by directing
to the defendant No. I to execute registered sale deeds. Further declaration
was sought for to the effect that said defendant No. I had no right to execute
four sale deeds in favour of defendants 2, 3, 4 and 5. Permanent injunction
was also sought for restraining the defendants from interfering in any manner C
in the peaceful possession of the plaintiff.

During the pendency of the suit an application in terms of Order XXXIX
Rules land 2 read with Section I5 I CPC was filed on behalf of appellant for
temporary injunction. Learned Subordinate Judge-I, Dhanbad granted
temporary injunction in favour of the appellant. After the order of injunction D
was passed, Smt. Vinaya Devi, Defendant (respondent No.4 herein) transferred
a portion of suit land in favour of one Mihir Kumar Chakraborty by Sale Deed
dated 16.3.1993. Defendant Sanjay Prasad also transferred a portion of suit
land in favour of one Shyam Kumar Datta by registered Sale Deed dated
13.7.1993. On 3.I2.1997 said Shyam Kumar Datta further transferred a portion E
of the suit land in favour of respondent No.1-Manik Roy and Mihir Kumar
Chakraborty vide registered sale deed dated 3.I2.I997. The respondents filed
an application in terms of Order I, Rule 10(2) CPC on 20.8.2005 for impleadment
. to contest the suit and ~o permit them to file written statement. Learned_
Subordinate Judge held that both Smt. Ahilya Jha and Manik Roy had
admittedly purchased the suit property after I 99 I without obtaining leave of F
the court and thus the transfer is pendente lite and is clearly hit by Section
52 of the Transfer of Property Act, I 882 (in short the 'TP Act'). It was further
observed that Manik Roy had purchased the property on 3 .12.1997. Ahilya
Jha applicant had purchased the portion of the suit property on 9.12.2000.
The trial Court, therefore, rejected the prayer for impleadment. G
Being aggrieved by the order dated I 6. I .2006 respondents Manik Roy
and Ahilya Jha filed a writ petition before the High Court which allowed the
writ petition holding that the respondents' vendors were not parties to the
suit and there was nobody to represent and safeguard their interest and
therefore they are required to be added as parties in the suit for the ends of H
472 SUPREME COURT REPORTS [2006) SUPP. 10 S.C.R.

A justice.
The High Court also noted that the trial Court had not considered the
effect of the fact that the respondents' vendors are not parties to the suit and
there was no representatiqn of the writ petitioners and their vendors in the
suit.
B
In support of the appeal, learned counsel for the appellant submitted
that the effect of Section 52 of the T.P. Act has been completely lost sight of.

Learned counsel for the respondents on the other hand submitted that
plaintiff Sanjay is none other than the son of late M.M. Sharma, who was an
C advocate who had appeared for defendant Rajeshwari Devi in · a suit for
specific performance which was decreed in favour of said Rajeshwari Devi on
23.12.1986. A few days thereafter taking advantage of the professional
relationship between late Sh. M.M. Sharma, father of the appellant and Smt.
Rajeshwari Devi, the agreements in question were executed. There has been
D a series of transactions and neither Rajeshwari Devi nor the vendors of the
respondents had shown any interest in the dispute. That being so the interest
of the respondents is likely to be prejudicially affected. Therefore, the High
Court has rightly interfered in the manner. Strong reliance is placed on
paragraph 9 of Bibi Zubaida Khatoon v. Nabi Ha.ssan Saheb and Anr., [2004]
1sec191.
E
Section 52 of the T.P. Act reads as follows:

"During the pendency in any court having authority within the limits
of India of any suit or proceedings which is not collusive and in which
ariy right to immovable property is directly and specifically in question,
F the property cannot be transferred or otherwise dealt with by any
party to the suit or proceeding so as to affect the rights of any other
party thereto under any decree or order which may be made therein,
except under the authority of the Court and on such terms as it may
impose."

G In Bibi Zubaida Khatoon 's case (supra) on which learned counsel for
respondents had placed reliance in fact goes against the stand of the
respondents. Though a casual reading of paragraph 9 supports the stand
taken by the respondents, it is to be noted that the factual position was
entirely different. In fact a cross suit has been filed in the suit in that case.
H Respondents being transferees pendente lite without leave of the court cannot
SANJAYVERMAv. MANIKROY(PASAYAT,J.] 473
as of right seek impleadment in the suit which was in the instant case pending A
for a very long time. In fact in para 10 of the judgment this Court has held
that there is absolutely no rule that the transferee pendente lite without leave
of the Court should in all cases contest the pending suit. In Sarvinder Singh
v. Dalip Singh and Ors., [1996] 5 SCC 539, it was observed in para 6 as
follows:
B
"6. Section 52 of the Transfer of Property Act envisages that:

"During the pendency in any court having authority within the
limits of India ... of any suit or proceeding which is not collusive
and in which any right to immovable property is directly and
specifically in question, the property cannot be transferred or C
otherwise dealt with by any party to the suit or proceeding so
as to affect the rights of any other party thereto under the decree
or order which may be made therein, except under the authority
of the court and on such terms as it may impose."

It would, therefore, be clear that the defendants in the suit were D
prohibited by operation of Section 52 to deal with the property and
could not transfer or otherwise deal with it in any way affecting the
rights of the appellant except with the order or authority of the court.
Admittedly, the authority or order of the court had not been obtained
for alienation oftho.se properties. Therefore, the alienation obviously E
would be hit by the doctrine of tis pendens by operation of Section
52. Under these circumstances, the respondents cannot be considered
to be either necessary or proper parties to the suit."

In Dhurandhar Prasad Singh v. Jai Prakash University and Ors.,
[200116 sec 534, it was noted as follows: F
"7. Under Rule IO Order 22 of the Code, when there has been a
devolution of interest during thr. pendency of a suit, the suit may, by
leave of the court, be continued by or against persons upon whom
such interest has devolved and this entitles the person who has
acquired an interest in the subject-matter of the litigation by an G
assignment or creation or devolution of interest pendente lite or suitor
or any other person interested, to apply to the court for leave to
I .
continue the suit. But it does not follow that it is obligatory upon
them to do so. If a party does not ask for leave, he takes the obvious
risk that the suit may not be properly conducted by the plaint~ff on
record, and yet, as pointed out by Their Lordships of the Judicial H
.....
474 SUPREME COURT 1REPORTS [2006) SUPP. 10 S.C.R.
'
A Committee in Moti Lal v. Karrabuldin (ILR (1898) 25 Cal 179) he will
be bound by the result of the litigation even though he is not
represented at the hearing unless it is shown that the litigation was
not properly conducted by the original party or he colluded with the
adversary. It is also plain that if the person who has acquired an
interest by devolution, obtains leave to carry on the suit, the suit in
B his hands is not a new suit, for, as Lord Kingsdown of the Judicial
Committee said in Prannath Roy Chowdry v. Rookea Begum, [(1857-
60) 7 MIA 323), a cause of action is not prolonged by mere transfer
of the title. It is the old suit carried on at his instance and he is hound
by all proceedings up to the stage when he obtains leave to carry on
c the proceedings."

The principles specified in Section 52 of the T.P. Act are in accordance
with equity, good conscience or justice because they rest upon an equitable
and just foundation that it will be impossible to bring an action or suit to a
successful termination if alienations are permitted to prevail. A transferee
D pendente lite is bound by the decree just as much as he was a party to the
suit. The principle of lis pendens embodied in Section 52 of the T.P. Act being
a principle of public policy, no question of good faith or bona fide arises. The
principle underlying Section 52 is that a litigating party is exempted from
taking notice of a title acquired during the pendency of the litigation. The
E mere pendency of a suit does not prevent one of the parties from dealing with
the property constituting the subject matter of the suit. The Section only
postulates a condition that the 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 was alienated with the permission of the Court.

F Above being the position, the High Court's view is clearly indefensible
and is set aside.

Learned counsel for the respondents submitted that since they are not
parties in the suit, their interest will get jeopardized. It is a trite law that if
a person is not a party to a suit, the decree does not affect him unless the
G judgment is in rem and not in personem.

Appeal deserves to be allowed which we direct, but without any order
as to costs.

N.J. Appeal allowed.
H