No bar to implead subsequent purchaser as a party to the suit: Doctrine of Lis Pendens

Detailed Analysis and Summary of the Judgment: Yogesh Goyanka Vs. Govind & Ors. [Civil Appeal No(s). 7305 of 2024 arising out of SLP (C) No(s). 10005 of 2022]

Court: Supreme Court of India
Bench: Justice Satish Chandra Sharma, Justice Vikram Nath
Date: July 10, 2024

Background:

• The case concerns a dispute over the impleadment of a transferee pendente lite (a purchaser of property during the pendency of litigation) in a civil suit.
• The appellant, Yogesh Goyanka, along with other respondents, purchased a piece of land (the ‘Subject Land’) in Hinduan City, Rajasthan, from Respondent No. 21. The sale was completed through a registered sale deed (RSD) dated September 28, 2018, despite the knowledge that there were ongoing legal disputes regarding the land.
• The original plaintiffs (Respondent Nos. 1-17) had earlier sold the land to Respondent Nos. 18-20, who then sold it to Respondent No. 21. The plaintiffs later filed a suit challenging the validity of the sale deeds and sought a permanent injunction and a declaration that the sale deeds were null and void.
• After purchasing the land, the appellant sought to be impleaded in the ongoing suit, which was denied by both the Additional District Judge (ADJ) and the High Court.

Key Legal Issues:

1. Doctrine of Lis Pendens (Section 52 of the Transfer of Property Act, 1882):

   • The central issue was whether the appellant, as a purchaser during the pendency of litigation (lis pendens), could be impleaded in the suit. The High Court had previously dismissed the appellant’s application, stating that the sale was void under the doctrine of lis pendens.

2. Impleadment of Transferee Pendente Lite:

   • Whether a transferee pendente lite, who was aware of the ongoing litigation at the time of purchase, could still seek impleadment in the suit to protect his interests in the property.

3. Bona Fide Purchaser:

   • The question of whether the appellant was a bona fide purchaser, given that he knew about the litigation when he bought the land.

Judgment:

• Supreme Court’s Analysis:

  • The Court held that the doctrine of lis pendens does not automatically render a transfer made during litigation void but makes the transferee’s rights subject to the outcome of the litigation. The High Court’s interpretation that the RSD was null and void was incorrect.
  • The Supreme Court emphasized that while a transferee pendente lite does not have an automatic right to be impleaded, courts have discretion to allow such impleadment, especially when there is a risk of collusion between the original parties or when the transferee’s rights need protection.
  • The appellant’s claim of collusion between the original parties was considered substantial, given the relationship between the plaintiffs and defendants and the delay in filing the suit by the plaintiffs.

• Outcome:

  • The Supreme Court allowed the appeal, setting aside the orders of both the High Court and the ADJ. The appellant was granted the right to be impleaded as a party in the ongoing suit. The Court directed that whether the full consideration was paid by the appellant, a point contested by the respondents, should be determined by the trial court.

Significance:

• This judgment reinforces the principle that the doctrine of lis pendens does not nullify transactions made during the pendency of litigation but rather subjects them to the outcome of the litigation.
• It also clarifies that impleadment of a transferee pendente lite is not barred if the transferee can demonstrate potential prejudice to his rights or the possibility of collusion between the original parties.
• The decision highlights the discretionary power of courts to allow impleadment to ensure a fair trial and protection of all parties’ interests.

Conclusion:

• The judgment in Yogesh Goyanka Vs. Govind & Ors. underscores the careful balance courts must maintain between protecting the rights of existing litigants and recognizing the legitimate interests of third-party purchasers during the pendency of litigation. The Court’s decision to allow the appellant to be impleaded ensures that his rights are considered in the final adjudication of the underlying property dispute.