Alienation Of Suit Property Not Illegal Merely Because It Was Done During Pendency Of Suit SC

Alienation Of Suit Property Not Illegal Or Void Merely Because It Was Done During Pendency Of Suit: SC [Read Judgment]

Judiciary

The Supreme Court on August 13, 2019, in the case of Madhukar Nivrutti Jagtap v. Pramilabai Chandulal Parandekar has observed that the effect of doctrine of Lis Pendens is not to annul all the transfers effected by the parties to a suit but only to render them subservient to the rights of the parties under the decree or order which may be made in that suit.

Its effect is only to make the decree passed in the suit binding on the transferee, i.e., the subsequent purchaser. Nevertheless, the transfer remains valid subject, of course, to the result of the suit, the Bench comprising Justice Abhay Manohar Sapre and Justice Dinesh Maheshwari said while it set aside a Bombay High Court finding in a second appeal that the transfer made during the pendency of suit to third parties is illegal.

In this case, the Bombay High Court held that during the pendency of a suit for specific performance, the defendants were estopped from transferring the suit land in view of the embargo of Section 52 of the Transfer of Property Act, 1882 and, therefore, the sale deeds in favour of other defendants are required to be held as illegal.

The contention raised was that the Bombay High Court has erroneously held that the sale made by the vendors to the subsequent purchasers is ‘illegal’ though the law remains settled that the sale to the subsequent purchaser is not illegal or void ab initio.

Referring to Section 52 of the Transfer of Property Act, the Bench said: “The aforesaid observations in no way lead to the proposition that any transaction on being hit by Section 52 ibid., is illegal or void ab initio, as assumed by the High Court. In Sarvinder Singh (supra), as relied upon by the High Court, the subsequent purchasers sought to come on record as defendants and in that context, this Court referred to Section 52 of the T.P. Act and pointed out that alienation in their favour would be hit by the doctrine of lis pendens. The said decision is not an authority on the point that every alienation during the pendency of the suit is to be declared illegal or void. The effect of doctrine of lis pendens is not to annul all the transfers effected by the parties to a suit but only to render them subservient to the rights of the parties under the decree or order which may be made in that suit. In other words, its effect is only to make the decree passed in the suit binding on the transferee, i.e., the subsequent purchaser. Nevertheless, the transfer remains valid subject, of course, to the result of the suit.”

[Read Judgment]

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