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2010 (8) Supreme 338
SUPREME COURT OF INDIA
R V Raveendran and A K Patnaik, JJ.
T.G. Ashok Kumar — Appellant
versus
Govindammal & Anr. — Respondents
Civil Appeal No.10325 of 2010
[Arising out of SLP [C] No. 163 of 2010]
Decided on : 8-12-2010
AIR 1973 SC 569; (2007) 2 SCC 404 – Relied upon
(b) Transfer of Property Act, 1882 – Section 52 – Appellant is entitled to a declaration of title and consequential injunction in the property to the extent of the second respondent’s share – Suit should not have been dismissed in entirety even if the transaction was hit by doctrine of lis pendence. (Paras 11 and 12)
(c) Transfer of Property Act, 1882 – Section 52 – Central amendment on the lines of Maharashtra amendment suggested obviating hardships to prospective purchaser pendente lite. (Para 14)
(d) Indian Registration Act, 1908 – Section 17 – Making all agreement to sale of immovable property compulsorily registrable may be a viable solution to obviate hardships of prospective purchasers. (Para 15)
Facts of the case:
1. Second respondent sold the suit property in favour of the appellant and delivered possession thereof to him.
2. The first respondent who is step-daughter of the second respondent, had filed a partition suit against the second respondent alleging that the suit property and several other properties belonged to her father and that she and second respondent had each an half share in those properties.
3. The appellant was unaware of the pendency of the said suit for partition.
4. Subsequently the said suit for partition filed by the first respondent was decreed dividing the suit property in a manner that nearly three fourth portion of the suit property was allotted to the share of the first respondent and only about a one-fourth portion was allotted to the share of the second respondent.
5. That adversely affected appellant’s right and title to the suit property and therefore it became necessary for him to file a suit for declaration of his right and title to the suit property with a consequential permanent injunction.
6. The trial court dismissed the appellant’s suit holding that the suit property was not the self acquired property of second respondent and that there was no collusion between first and second respondents; and that the appellant having purchased the suit property during the pendency of the suit for partition filed by the first respondent against the second respondent, the sale in his favour was hit by the doctrine of lis pendens and that therefore the appellant did not get any title to the suit property and he was not entitled to the relief of declaration and injunction sought by him.
7. The appeals filed by the appellant was dismissed by the first appellate court and the High Court
Finding of the Court:
Appellant is entitled to a declaration of title and consequential injunction in the property to the extent of the second respondent’s share.
Result : Appeal allowed.
Certainly. The judgment addresses the legal principles related to the transfer of immovable property during the pendency of a suit, specifically under the doctrine of lis pendens. It clarifies that if a property is involved in a pending, non-collusive suit where a right to the property is directly and specifically in question, then the property cannot be transferred or dealt with in a way that affects the rights of the other parties involved, except with court approval (!) .
The court emphasizes that a sale made during the pendency of such a suit does not automatically void the transfer; rather, it is subject to the outcome of the litigation. If the transferor’s title is ultimately upheld, the transferee’s rights are preserved; if not, the transfer is invalid to the extent that the transferor lacked title. The transfer of property pendente lite is therefore subordinate to the court’s final decision, and the rights of the parties are determined accordingly (!) .
In the specific case discussed, the property was involved in a pending partition suit at the time the second respondent sold it to the appellant. Since the suit was not collusive, the sale did not affect the rights of the first respondent, who was a party to the suit. The court held that the sale was valid only to the extent that the property was allotted to the second respondent in the final decree of the partition. The portion of the property that was assigned to the first respondent in the final decree was not affected by the sale, and thus the sale was ineffective regarding that portion (!) (!) .
Importantly, the court pointed out that the courts below should have decreed the appellant’s claim in part, specifically for the portion of the property that was allotted to the second respondent in the partition, instead of dismissing the suit entirely. This partial decree would have recognized the appellant’s rights to that specific portion, respecting the final partition decree (!) .
Furthermore, the judgment highlights the need for better mechanisms to verify pending litigation or encumbrances on properties before purchase, suggesting amendments to existing laws to facilitate such due diligence. It advocates for registering notices of pending suits to prevent unnecessary hardships and litigation, and recommends making agreements to sell immovable property compulsory to register, thereby reducing fraudulent practices and black money circulation in real estate transactions (!) (!) (!) (!) .
Finally, the court partially allows the appeal, granting the declaration of title and injunction only for the portion of the property that was allotted to the second respondent in the final decree of the partition suit, thus recognizing the rights of the appellant only over that specific part (!) .
JUDGMENT
R.V. Raveendran, J. —
Notice to respondents was issued limited to the question whether the High Court ought to have decreed the appellant’s suit for declaration and consequential injunction at least in respect of the portion of the suit property which was allotted to the share of second respondent in the earlier partition suit filed by the first respondent. Leave is granted only in regard to that question.
2. The appellant was the plaintiff in a suit for declaration of title and permanent injunction in regard to the suit property, that is, a plot measuring East to West : 49 feet and north south 81 feet, total extent of 3969 sq.ft (forming part of Natham Survey No. 178 (New No. 137-138) of a total extent of 4 acres 25 cents situated at Kakkalur Village, Tiruvallur Taluk and District). The appellant filed the said suit in the year 2000 in the court of Subordinate Judge, Thiruvallur (OS No.68/2000) subsequently transferred and renumbered as OS No. 138 of 2004 on the file of the District Munsiff, Thiruvallur.
3. The case of appellant in brief is as under: that the suit property was purchased by the second respondent under sale deed dated 4.3.1957; that she was in possession and enjoyment of the suit property as absolute owner and had mortgaged it in favour of appellant’s sister (T.N. Latha) on 30.6.1983; that second respondent sold the suit property in favour of the appellant under sale deed dated 11.4.1990 and delivered possession thereof to him in pursuance of the sale; that though the suit property was the self acquired property of the second respondent, the first respondent who is her step- daughter, filed a collusive suit against the second respondent in OS No. 8/1985 on the file of the Sub-ordinate Judge, Thiruvallur alleging that the suit property and several other properties belonged to her father Ekambara Reddy and that she and second respondent had each an half share in those properties; that the appellant is a bona fide purchaser of the suit property from second respondent and he was unaware of the pendency of the said suit for partition in O.S. No.8/1985; that subsequently the said suit for partition filed by the first respondent was decreed vide preliminary decree dated 17.3.1994 holding that the first respondent was entitled to half share in the properties described as Items 1 to 6 in the partition suit schedule (which included the suit property (as Item No.6); that in the final decree proceedings, a Commissioner was appointed to divide the properties; that on the basis of the Commissioner’s report, a final decree was passed on 7.4.2000 dividing the properties; that on account of collusion between first and second respondents, the Commissioner’s report divided the suit property in a manner that nearly three fourth portion of the suit property was allotted to the share of the first respondent and only about a one-fourth portion was allotted to the share of the second respondent; and that adversely affected his right and title to the suit property and therefore it became necessary for him to file a suit for declaration of his right and title to the suit property with a consequential permanent injunction.
4. The first respondent resisted the suit contending that the appellant had purchased the suit property during the pendency of her suit for partition and that being a purchaser pendente lite, the sale in his favour was hit by the doctrine of lis pendens and therefore he could not claim any right in the suit property. She asserted that the suit property was not the self-acquired property of the second respondent, and that the suit property was purchased by her father in the name of the second respondent. She denied that there was any collusion between her and the second respondent. The second respondent did not contest the suit.
5. The trial court by judgment dated 6.7.2005 dismissed the appellant’s suit. It held that the suit property was not the self acquired property of second respondent and that there was n
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