In a significant ruling, the Supreme Court has clarified that individuals who acquire property while litigation is ongoing—known as pendente lite transferees—do not have an automatic right to be added as parties to a suit. Such requests, the Court held, can only be granted in exceptional cases where the transferee’s rights are directly impacted.
A bench comprising Justice JB Pardiwala and Justice R Mahadevan laid out key principles governing the impleadment of pendente lite transferees:
- Courts must assess the circumstances before allowing a transferee to join a case.
- There is no inherent right for such transferees to be impleaded.
- The decision depends on the nature of the case and available evidence.
- If a transferee does not seek to be impleaded, they risk the suit proceeding without their involvement.
- Even without formal inclusion, a transferee remains bound by the case’s outcome.
- Transactions made during litigation fall under Section 52 of the Transfer of Property Act and are subject to the final judgment.
- A transferee can seek the Court’s permission to be impleaded but is not automatically entitled to do so.
The ruling stemmed from a case where two individuals purchased property while a suit for specific performance was still pending. Their request to be impleaded was denied by the trial court, and they did not appeal that decision. However, after the trial court ruled against them, they approached the Karnataka High Court, which granted them leave to appeal despite their exclusion from the original suit.
The Supreme Court overturned the High Court’s decision, emphasizing that unless a person is formally impleaded in a case, they cannot appeal a judgment unless they prove that their rights were directly jeopardized. The Court also rejected the argument that the transferees should be included because they had been misled by the seller, stating that any claims of fraud should be pursued separately through appropriate legal channels.
Ultimately, the appeal against the High Court’s order was upheld, reinforcing the principle that property buyers during litigation must abide by the suit’s outcome without assuming an automatic right to intervene.