The Allahabad High Court has held that the principle of lis pendens applies even to a court auction sale, an involuntary alienation, and the auction purchaser takes the property subject to the outcome of a suit already pending over it.

The Court clarified that notice of the prior claim or agreement is not the basis for applying the doctrine; it operates because of the pendency of the litigation itself.

Section 52 of the Transfer of Property Act contains the rule of lis pendens. The Court explained that the rule exists to stop parties to a suit from parting with the disputed property and thereby defeating rights which the court may finally declare.

Justice Arun Kumar held,

“The appellant's contention that he was a purchaser without notice also cannot defeat the operation of lis pendens. Notice is not the foundation of the doctrine. The doctrine operates by reason of the pendency of the litigation itself.”

The bench added,

“Where a suit for specific performance relating to immovable property is pending before a court auction of the property, the purchaser at such auction takes the property subject to the result of the pending litigation. The principle of lis pendens applies notwithstanding that the auction is an involuntary alienation. This, however, does not dispense with the requirement that the plaintiff establish his independent entitlement to specific performance.”

Nawab Singh was the recorded bhumidhar and owner of agricultural land in Village Kalakuri, District Bulandshahr. Babu Singh claimed that Nawab Singh had agreed on 22^nd April 1972 to sell him the land for Rs. 7,500, that Rs. 3,500 was paid as earnest money and that possession was handed over at once. When no sale deed followed, even after a legal notice, he sued for specific performance on 24^th October 1973.

Chhajju Ram had meanwhile sued Nawab Singh in July 1973 for Rs. 10,000 on an alleged bond and obtained attachment of the same land before judgment. The money suit was decreed and he bought the land himself at a court auction on 17^th April 1974 for Rs. 12,250. Babu Singh's objection to the auction sale under Section 47 CPC read with Order XXI Rule 58 was dismissed on 14^th December 1974. He impleaded Chhajju Ram in the pending suit, alleging that the bond was fictitious and the decree and auction collusive.

Both Trial Courts found the agreement genuine and the plaintiff ready and willing to perform, applied lis pendens because the auction followed the institution of the suit, and decreed specific performance.

The second appeal before the High Court was admitted on whether specific performance could be enforced against a purchaser in execution of a decree against the owner, and whether the finding in the execution proceedings that the agreement was not genuine operated as res judicata.

Rejecting the contention that the doctrine is confined to voluntary transfers, the Court held that although Section 52 does not strictly apply to court sales, the principle of lis pendens does, as held by the Supreme Court in Samarendra Nath Sinha vs. Krishna Kumar Nag and reiterated in Kedarnath Lal (dead) by Lrs. and another Vs. Sheonarain and others, where it was also held that an earlier attachment does not take the acquisition outside the doctrine, attachment being effective only to prevent alienation and not to create title.

“The auction sale cannot be treated as void merely because it took place pendente lite. The legal consequence is that the auction purchaser acquires the property subject to the result of the pending litigation.”

On res judicata, the Court noted that the execution proceedings of 1973-74 were governed by Order XXI Rules 58 and 63 CPC as they stood before the 1976 amendment, under which a claim against attachment was investigated summarily and the claimant left to a suit under Rule 63.

Relying on Supreme Court's decision in Mangru Mahto v. Thakur Taraknathji Tarakeshwar Math, it held that such a claim proceeding was not a suit or analogous to one, and where no Rule 63 suit was filed the order became conclusive only on whether the property was liable to attachment and sale in execution of that decree.

“The statutory conclusiveness under Rule 63 extended only to the question whether the property was liable to attachment and sale in execution of the particular decree and not to the independent question whether the plaintiff was entitled to obtain specific performance of his antecedent contract against the person who subsequently acquired the property pendente lite.”

The Court observed that the suit for specific performance was already pending when the objection in execution was decided so the plaintiff was not seeking a second adjudication of an execution claim.

“An order passed upon a claim or objection under the unamended Order XXI Rule 58, where no suit was instituted under Rule 63 within the prescribed period, acquires the limited statutory conclusiveness contemplated by Rule 63 only in respect of the question whether the property was or was not liable to attachment and sale in execution of the particular decree out of which the claim proceeding arose. Such an order is not, merely by reason of its having become conclusive under Rule 63, a judgment operating as res judicata upon an independent cause of action or upon the entirety of the rights and obligations arising under an antecedent contract between the parties, including a pending claim for specific performance.”

Answering the first question in the affirmative, subject to the plaintiff independently establishing his entitlement to specific performance, and the second in the negative, the Court affirmed both decrees and dismissed the second appeal.

Case Title: Chhajju Ram v. Babu Singh

Counsel for Appellant :- Ashutosh Pandey, Jitendra Singh

Counsel for Respondent :- Bramhapal Malick, Sunil Kumar Upadhyay

Click Here To Read/Download Order