The Supreme Court has settled a recurring dispute in property litigation: once a suit is filed, later purchasers cannot shelter behind Section 19(b) of the Specific Relief Act. From that point onward, the transaction is governed squarely by the doctrine of lis pendens under Section 52 of the Transfer of Property Act.
In unmistakable terms, the Court held that Section 19(b) operates only in the period before a suit is instituted. Any transfer made after litigation begins is automatically subject to the outcome of that case, regardless of the purchaser’s claims of good faith.
The protection under Section 19(b) is narrow and conditional. It shields only those buyers who purchase property for value, in good faith, and without notice of an earlier agreement. That shield drops the moment a suit for specific performance is filed. From then on, the law treats the property as being under judicial watch, binding every later transferee to the eventual decree.
A bench comprising Justices Manoj Misra and Ujjal Bhuyan underlined that Section 19(b) must “give way” to Section 52 once proceedings commence. Allowing otherwise, the Court noted, would defeat the very purpose of lis pendens, which exists to prevent parties from frustrating court proceedings through strategic transfers.
How the dispute unfolded
The controversy stemmed from an agreement for sale executed in 1973. When the seller failed to perform, a suit for specific performance was filed in a Pune court in 1986, followed by the registration of a lis pendens notice. Despite this, the seller proceeded to transfer portions of the same property to third parties during the pendency of the suit. One such transferee even raised a bungalow on the land.
In 1990, the trial court decreed specific performance, directing execution of the sale deed and delivery of possession. When the seller did not comply, a court-appointed official completed the sale in favour of the decree holder. Multiple challenges to the decree failed, and it eventually attained finality.
Problems resurfaced at the execution stage. Subsequent purchasers obstructed delivery of possession, asserting independent rights over the property. The executing court rejected these objections, holding that they were transferees pendente lite and therefore bound by the decree. The High Court agreed, noting that the purchasers had constructive knowledge of both the earlier agreement and the pending suit.
The Supreme Court’s reasoning
Upholding the High Court’s view, the Supreme Court drew a sharp distinction between two situations: transfers made before a suit is filed and those made after. Section 19(b), the Court explained, belongs entirely to the first category. Once litigation is underway, Section 52 steps in, and every subsequent transfer becomes subordinate to the court’s final decision.
In effect, the ruling reinforces a simple but powerful principle: litigation locks the property in place. Buyers who step in during a pending suit do so at their own risk, no matter how bona fide they claim to be.
The appeal by the subsequent purchaser was dismissed, firmly reaffirming that lis pendens is not a technical footnote but a substantive rule designed to protect the authority of courts and the integrity of their decrees.
