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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