Supreme Court explains the Doctrine of Lis Pendens and clarifies applicability of Order 21 CPC Rules and Section 47 CPC

Supreme Court Rules Suit by Pendente Lite Transferees Against Auction Sale as Non-Maintainable Apex Court directs Rs. 75 lakh compensation to buyers in 40-year-old mortgaged property dispute, clarifies applicability of Order XXI CPC Rules and Section 47 CPC on auction sale challenges

In a significant judgment delivered on December 15, 2025, the Supreme Court of India, comprising Justices J.B. Pardiwala and R. Mahadevan, has clarified the contours of the doctrine of lis pendens and procedural bars under the Code of Civil Procedure, 1908 (CPC), in the context of auction sales conducted during execution of decrees. The case arose from a long-standing dispute involving mortgaged agricultural land in Faridabad, where the respondent bank secured a decree for recovery of dues against the judgment-debtors who had mortgaged their property.

The respondents 1 and 2 had purchased a portion of the mortgaged property during the pendency of the bank’s suit and execution proceedings but were not parties to the original money suit or the execution proceedings. Subsequently, the entire mortgaged property was auctioned by the executing court, and the appellants, sons of one of the judgment-debtors, were declared highest bidders and confirmed purchasers.

Respondent nos. 1 and 2 instituted a separate suit challenging the validity of the auction sale insofar as their purchased portion was concerned, alleging fraud, irregularities in the auction process, and asserting their title and possession. Trial and appellate courts upheld their suit, declaring the auction sale void and confirming their ownership. The High Court also dismissed the appellants’ appeal, holding the suit maintainable due to alleged fraud vitiating the execution sale.

The Supreme Court, however, reversed the High Court’s decision, ruling that the suit filed by respondents 1 and 2 was not maintainable. The Court extensively analyzed the applicability of Section 52 of the Transfer of Property Act, 1882, embodying the doctrine of lis pendens, and the procedural framework under Order XXI CPC, especially Rules 58, 89 to 92, 99 to 104, along with Section 47 CPC.

Key legal findings include:

• 1. Doctrine of Lis Pendens (Section 52, TPA): The Court held that since the suit property was directly and specifically in question in the bank’s money recovery suit, any transfer of the property by the judgment-debtor during the pendency of that suit (from the date of plaint till satisfaction of decree) is subject to the doctrine of lis pendens, irrespective of notice or bonafides of the transferees. Respondents 1 and 2, having purchased during pendency, are pendente lite transferees and bound by the outcome.

• 2. Bar on Separate Suit (Section 47 CPC and Order XXI Rule 92(3)): The Court observed that questions relating to execution, discharge or satisfaction of a decree between parties to the original suit or their representatives must be determined by the executing court and not by a separate suit. Respondents 1 and 2, being pendente lite transferees of the judgment-debtor, are “representatives” for this purpose and barred from filing a separate suit.

• 3. Remedies under Order XXI CPC:  
•   - Rule 89 allows persons claiming interest in the auctioned property to apply for setting aside sale on depositing prescribed sums within 60 days of sale; pendente lite transferees fall within “persons claiming interest.”  
•   - Rule 90 permits setting aside sale on grounds of material irregularity or fraud in publishing or conducting sale, but only if substantial injury is proved and application is made timely.  
•   - Rule 99 empowers persons dispossessed during execution to apply for restoration of possession; however, pendente lite transferees are barred from relief under Rule 100 by Rule 102 CPC.  
•   - Filing a separate suit as an alternative to these remedies is disallowed once limitation expires or if relief could have been obtained under these rules.

• 4. Third Party Exception (Order XXI Rule 92(4)): The Court clarified that only “third parties” who are neither parties nor representatives to the original suit and who have not had their rights adjudicated under Rule 58 or execution proceedings can file a separate suit challenging the title post confirmation of sale. Respondents 1 and 2 do not qualify as third parties.

• 5. Fraud and Irregularities: While fraud can vitiate a sale, the Court emphasized that procedural safeguards under Rule 90 exist to address fraud and irregularities. Allowing a separate suit on fraud allegations outside these rules would undermine the statutory scheme and limitation periods.

Given the facts, the Court held that respondents 1 and 2’s suit was barred by Section 47 CPC and Order XXI CPC and dismissed it. However, recognizing the hardship due to the passage of over 40 years and the familial relationship between parties, the Court directed the appellants (auction purchasers) to pay Rs. 75,00,000 to respondents 1 and 2 within six months, failing which interest at 12% per annum would accrue.

This landmark ruling reinforces the sanctity of execution proceedings and auction sales, upholds the doctrine of lis pendens, and underscores the necessity of availing statutory remedies within prescribed timelines rather than resorting to collateral suits.

Statutory provision(s): Transfer of Property Act, 1882 Section 52, Code of Civil Procedure, 1908 Order XXI Rules 58, 66, 89, 90, 92, 99, 100, 101, 102, 104, Section 47 CPC, Limitation Act Articles 127 and 128

Danesh Singh v. Har Pyari, (SC) : Law Finder Doc Id # 2822031