The effect of Section 52 is not to wipe out a sale pendente lite altogether.
It only operates as a bar to the extent of the right, title, and interest that
may be determined in favor of the other party. In other words, the essence of
Section 52 is that a transaction made during the pendency of a suit by a party
to the suit cannot prejudice the interest of the other party. Therefore, the
sale in the instant case in favor of the review applicant will be valid to the
extent that it does not affect the rights of the opposite party, if any, as
determined or to be determined (Usha Rani v. Hardas Das, AIR 2005 Gau 1).
A transferee pendente lite is bound by the decree. He cannot take the plea that
he is a bona fide purchaser for value without notice of litigation (Indrajeet v.
Jagjit, AIR 2005 P&H 218):
"The rule of lis pendens contained in Section 52 is based not on the doctrine of
notice, but on expediency. The effect of this rule is not to annul the transfer
but only to render it subservient to the rights of the parties to the
litigation. According to this rule of lis pendens, whosoever purchases property
during the pendency of a suit is bound by the judgment that may be rendered
against the person from whom he derived his title, even though such a purchaser
was not a party to the action or had no notice of the pending litigation" (Sardar
Hari Bachha v. Major S. Harbhaja, AIR 1975 P&H 205).
Order 22, Rule 10 of the C.P.C. confers discretion on the court hearing the suit
to grant leave for the joinder of a transferee pendente lite. However, bringing
a lis pendens transferee on record is not a right but a matter of judicial
discretion. Even if not brought on record, the lis pendens transferee remains
bound by the decree as, in the eyes of the law, he is a representative in
interest of the transferor (Raj Kumar v. Sardari Lal, (2004) 2 SCC 601).
The effect of the purchase of property under attachment has been considered in
Vidyawati v. Lala Ram 8(70) ALR 7. In explaining the legal position, Tarun
Agarwala J. observes as follows:
A transfer of property during the pendency of the judgment is only void as
against all claims enforceable under that attachment, and not otherwise. That is
to say, the transaction is only void in relation to claims enforceable under the
attachment. Once the attachment is lifted, the embargo of a void document is
also automatically lifted. To elucidate further, for example, a property under
attachment may not be auctioned or transferred, and the debt could be discharged
in some other manner.
Once the decretal amount is paid, or the decree is
satisfied, the attachment may be withdrawn, and the holder of the property
regains all his rights and may deal with it in any manner he likes.
Consequently, there is no absolute embargo on a transferee purchasing property
from the judgment debtor during the attachment proceedings. The only limitation
is that the transferee’s title remains under a cloud until the attachment is
lifted.
A person can purchase property under attachment in the hope that if the
attachment is eventually withdrawn, he could become the complete owner thereof.
Once the attachment is withdrawn, the transfer, though made during the pendency
of the attachment, becomes perfectly valid, conferring full rights on the
transferee.
Written By: S Kundu & Associates
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