Danesh Singh v. Har Pyari (D) 2025 INSC 1434 - Order XI CPC - Transfer Of Property Act

Transfer of Property Act -Section 52- Section 52 embodying the doctrine of lis pendens would apply to suits where any right to the property in question is directly and specifically in issue. Whether any right in the property was directly and specifically in question in the suit would depend on the facts and circumstances of each case. The doctrine cannot blindly be made inapplicable to suits in which the plaint contains a specific averment that the mortgaged property be attached and sold in lieu of the decree or a charge be created on the property. If interpreted so, any judgment-debtor can render the decree incapable of execution by transferring his interest in the property during the pendency of such a suit. (Para 256)

Transfer of Property Act -Section 52- Pendente lite transferee would be bound by the result of the proceedings irrespective of whether they had notice of the pending suit or not- The lack of knowledge of the proceedings would not be a valid defence against the application of the doctrine of lis pendens.  (Para 52) even where the suit is not solely one relating to the same right in the immovable property, if any right, title or interest as regards such immovable property is directly and specifically forming part of the subject-matter of the suit, Section 52 and the doctrine of lis pendens would stand attracted. (Para 58) Section 52 casts an embargo on the parties to the suit from transferring the property in question, in order to preserve the subject matter of the lis and to prevent the rights of the parties from being defeated by alienations pendente lite. If the doctrine were made inapplicable to ex-parte proceedings, a party would deliberately abstain from appearing before the court, transfer the property during the pendency of the suit, and thus, render the adjudication of rights in the said suit, infructuous. (Para 56)

Code of Civil Procedure 1908 -Order XXI Rule 89 - Rule 89 of Order XXI CPC provides an opportunity to any person claiming an interest in the property sold or a person acting for or on behalf of the persons having such interest, another opportunity to save the property from the clutches of the sale. A sine qua non for setting aside the sale under this rule would be the payment of the deposit as prescribed therein within a period of sixty days from the date of the sale. For the purposes of this rule, a pendente lite transferee of the judgment-debtor would also fall under the ambit of the phrase “person claiming an interest in the property sold”. (Para 256)

Code of Civil Procedure 1908 -Order XXI Rule 90 - Rule 90 of Order XXI CPC provides that the sale shall be setaside if there exists any material irregularity or fraud in publishing or conducting the sale. Furthermore, such material irregularity or fraud must cause a substantial injury to the applicant under Rule 90. In other words, there must be a direct nexus between the material irregularity or fraud and the substantial injury caused to the applicant.- The words “material irregularity in publishing or conducting it” in Rule 90 would include any material irregularity or fraud occurring at a stage prior to the proclamation of sale as well, provided that the applicant did not have an opportunity to raise or could not have raised such a grievance at the appropriate time. Furthermore, the mere absence of or any defect in the attachment, by itself, cannot be a ground for setting aside the sale under Rule 90, unless substantial injury is proved. The applicant must make specific averments as regards the alleged irregularities or fraud, and convince the executing court that a substantial injury has been caused to him as a consequence. (Para 256)

Code of Civil Procedure 1908 -Order XXI Rule 90,58 - The absence of a saleable interest on the part of the judgment-debtor to the suit property cannot be brought in as a ground under Rule 90 of Order XXI CPC. Such a ground would squarely fall within the ambit of Rule 58 of Order XXI CPC, if the sale is yet to be confirmed. (Para 256)

Code of Civil Procedure 1908 -Order XXI Rule 92 - Rule 92(3) of Order XXI CPC states that no person against whom an order under Rule 92 is made (either confirming the sale under Rule 92(1) or setting it aside under Rule 92(2)) can institute a separate suit in that regard. However, there is a very narrow scope for a person to file a separate suit despite the bar under Rule 92(3). The reason for such a separate suit must be that the execution proceedings and the sale was without jurisdiction and therefore, a nullity and not binding on the plaintiff who has instituted a separate suit. - Before holding such a separate suit instituted by a plaintiff alleging that the entire execution proceedings was without jurisdiction and therefore, the sale was a nullity, maintainable, courts must be vigilant in ensuring that the plaintiff was not a party to the original decree or a representative of a party to the original decree, as stated in Section 47 CPC. If so, instead of filing a separate suit, such persons must prefer an application under Section 47 CPC. Upon any failure to do so, their separate suit would be hit by the bar contained in Section 47 CPC which specifically uses the words “and not by a separate suit”. The term “third party” under Rule 92(4) would mean a party other than the judgment-debtor, decree-holder or the auction-purchaser and would refer to a party who has not had his right, title or interest vis-à-vis the property in question adjudicated under Rule 58, Rule 97 or Rule 99 of Order XXI CPC respectively. To put it very simply, the term “third party” under Rule 92(4) would refer to a party who is extraneous to the original suit proceedings and the proceedings under Order XXI CPC, and who either has not had his right, title or interest adjudicated or having the opportunity to have his right, title or interest adjudicated, has not availed such a remedy within the required time. Such a “third party” would also be someone who falls outside the scope of Section 47 CPC-Rule 92(4) is not a provision which confers any right to the third party to institute a suit for challenging the title of the judgment-debtor to the property which is subject to the execution proceedings. It is merely a procedural provision which states that such a suit must be instituted against the auction-purchaser, where the decree-holder and judgmentdebtor would be necessary parties. (Para 256)

Code of Civil Procedure 1908 -Order XXI Rules 99-102 -When a party other than the judgment-debtor, including a third party, is dispossessed during the course of execution of a decree, the only remedy for such a dispossessed party would lie in filing an application under Rule 99 complaining of its dispossession. In such an application, all questions including that of the right, title and interest of the parties in the proceeding, to the property, would be examined by the executing court. The words “may” used in Rule 99 along with the words “and not by a separate suit” used in Rule 101, must not be read to mean that a party who has been dispossessed has two options i.e., to either prefer an application under Rule 99 or to file a separate suit, the moment they are dispossessed. This would defeat the underlying object of the amendment made to the scheme of Rules 99 to 104 respectively wherein the executing court has been specifically empowered to look into the questions relating to the right, title and interest of the parties, quite akin to that which would have been done by way of a separate suit. Once the period of limitation for preferring an application under Rule 99 lapses, the person who has been dispossessed in the course of the execution of the decree, including a third party, cannot file a separate suit to circumvent or by-pass the said prescribed period of limitation.- Rule 102 prevents the executing court from passing any order under Rule 100 if it is found that the applicant under Rule 99 is a transferee pendente lite of the judgment-debtor. This again, cannot be construed as giving leeway to such a person to institute a separate suit- Even in the separate suit, the law would not look favorably upon a pendente lite transferee, and no relief of declaration of title and/or possession would be granted to him. His fate would be the same as under an application under Rule 99. (Para 256)

Code of Civil Procedure 1908 -Order XXI Rules 99-102 - There exists no option of filing a separate suit for a person who may very well prefer an application under Rule 99 of Order XXI CPC- One cannot file a separate suit as an alternative to an application under Rule 99. If such a suit is preferred, it could be said to be nonmaintainable for the reason that the appropriate course of action would have been to prefer an application under Rule 99 instead. (Para 220)

Code of Civil Procedure 1908 -Order XXI Rules 99-102- The fate of a transferee pendente lite of the judgment-debtor in the separate suit would be the same as that of his fate under Rule 101. Therefore, there exists no special reason to carve out an exception and allow the filing of a separate suit for persons falling within the bar under Rule 102 when the end result would be the same.  (Para 231)

Transfer of Property Act -Section 52- Pendente lite transferee would be bound by the result of the proceedings irrespective of whether they had notice of the pending suit or not- The lack of knowledge of the proceedings would not be a valid defence against the application of the doctrine of lis pendens.  (Para 52) even where the suit is not solely one relating to the same right in the immovable property, if any right, title or interest as regards such immovable property is directly and specifically forming part of the subject-matter of the suit, Section 52 and the doctrine of lis pendens would stand attracted. (Para 58)

Mortgage - In a simple mortgage, the property is encumbered with the mortgagee’s interest in it, which means that any purchaser of the property would receive an interest in the property subject to the mortgagee’s rights, irrespective of whether the transfer is with or without notice of the mortgage, unless there is anything to the contrary to this effect in the mortgage agreement. A transferee of a mortgaged property will have only such interest which the mortgagor himself had at the time of transferring the property. (Para 64)

Code of Civil Procedure 1908 - Section 47- The recourse under Section 47 CPC could be availed in a situation where the execution proceedings were itself without jurisdiction and a nullity - In a case, where a judgment-debtor has already paid the decretal amount but his property is nevertheless sold in the auction sale and the auction sale is also confirmed – he would not be able to file a separate suit owing to him being a person against whom the order confirming the sale was passed under Rule 92(1) and thereby, he would fall under the bar specified in Rule 92(3). However, he would be able to prefer an application under Section 47 CPC on the ground that the entire sale was a nullity. In such a situation, both the bars to a suit i.e., the bar under Rule 92(3) and the bar under Section 47 CPC, would interact and prevent the filing of a separate suit while making the option of preferring a simpliciter application under Section 47 CPC available to him. In such cases, the appropriate course of action would be to prefer an application under Section 47 and not institute a separate suit. (Para 143)

Code of Civil Procedure 1908 - Section 47- When the executing court is of the opinion that the application under Section 47 CPC directly relates to a specific rule i.e., either Rules 89, 90 or 91 respectively, then the section 47 application would be treated as an application under Rules 89, 90 or 91 respectively as the case may be, and it will be decided according to the law settled under those rules. (Para 144) one cannot overcome the limitation period prescribed under Rules 89, 90 or 91 respectively by filing a simpliciter application under Section 47 and demanding that the same be allowed. Only in situations wherein a party to the original suit or their representative wants to assail the auction sale for the reason that the entire auction sale was without jurisdiction and a nullity, can a simpliciter application under Section 47 be allowed after the order of confirmation of sale has been passed under Rule 92. (Para 145)