Source: Supreme Court 

Why in News? 

A bench of Justice JB Pardiwala and Justice R Mahadevan laid down principles to be followed for impleading a transferee pendente lite.              

• The Supreme Court held this in the case of H. Anjanappa v. A. Prabhakar & Ors. (2025). 

What was the Background of H. Anjanappa v. A. Prabhakar & Ors. Case?  

• Ownership & Agreement of Sale (1995): 
  • Late Smt. Daisy Shanthappa (Defendant No.1) owned two adjacent lands in Bagalur Village. 
  • She agreed to sell the land to the plaintiffs (appellants) for ₹20,00,000 through her Power of Attorney holder (Defendant No.2). 
  • ₹5,00,000 was paid as earnest money, and Defendants 1 & 2 agreed to evict unauthorized occupants. 
• Supplementary Agreement (1997): 
  • Since unauthorized occupants were not evicted, a supplementary agreement was executed, extending the sale deed execution timeline. 
  • Plaintiffs paid an additional ₹10,00,000, totaling ₹15,00,000 of the agreed amount. 
• Sale of Property to a Third Party (Defendant No.3): 
  • Despite the subsisting agreement with the plaintiffs, Defendant No.1 allegedly sold 40 out of 42 acres to Defendant No.3 for ₹40,00,000. 
  • Plaintiffs became aware when Defendant No.3 attempted to change revenue records. 
• Plaintiffs’ Legal Action (2003): 
  • Plaintiffs filed O.S. No. 1093/2003 (later O.S. No. 458/2006) in Bangalore Rural District Court, seeking Specific Performance of the Sale Agreement. 
  • Temporary Injunction granted (17th December 2003), restraining Defendants 1-3 from alienating or creating third-party rights. 
• Violation of Injunction & Further Sale: 
  • Defendant No.3, violating the court order, sold 10 acres (4+6 acres) to Respondents Nos.1 & 2. 
• Confirmation Deed by Defendant No.1: 
  • Defendant No.1 later executed a Confirmation Deed acknowledging the validity of the sale agreement with plaintiffs and admitting she was misled into selling to Defendant No.3. 
• Impleadment Application (2007): 
  • Respondents Nos.1 & 2 filed an application, seeking to be added as defendants. 
  • Trial Court rejected it (06^th August 2014), ruling that they purchased the property in violation of the injunction and Section 52 of the Transfer of Property Act, 1882.  
  • No appeal was filed against this order, making it final. 
• Trial Court’s Final Judgment (2016): 
  • The suit was decreed in favor of the plaintiffs, directing execution of the Sale Deed within 2 months. 
  • Defendant No.3’s appeal was dismissed. 
• Delayed Appeal by Respondents Nos.1 & 2 (2018): 
  • Despite their impleadment being rejected and their vendor’s appeal being dismissed, they challenged the decree after 2 years. 
  • Application was filed seeking condonation of 586 days’ delay and leave to appeal. 
• High Court’s Decision: 
  • The High Court allowed both applications, condoning the inordinate delay and granting leave to appeal. 
  • This decision was opposed by plaintiffs. 

 What were the Court’s Observations?  

• The Court observed that the rejection of an application filed under Order I Rule 10 of CPC is per se not a ground to reject the application for leave to file appeal. 
• The appellate court has to see whether the transferee pendente lite is aggrieved by a decree or is otherwise prejudicially affected by it.  
• The Court in this case observed the following two legal provisions: 
  • Order I Rule 10 of Civil Procedure Code, 1908 (CPC) 
  • Order XXII Rule 10 of CPC 
• The Court held that both the provisions of CPC are similar and therefore the principles applicable to Order XXII Rule 10 CPC, in order to bring a purchaser pendente lite on record, are applicable to Order I Rule 10 CPC. 
• Under Order I Rule 10(2) CPC, the Court is required to record a finding that person sought to be impleaded as party in the suit is either necessary or proper party. 
• While Section 146 and Order XXII Rule 10 CPC confers right upon the legal representative of a party to the suit to be impleaded with the leave of the Court and continue the litigation. 
• While deciding an application under Section 146 and Order XXII Rule 10 CPC, the Court is not required to go in the controversy as to whether person sought to be impleaded as party in the suit is either necessary or proper party. If the person sought to be impleaded as party is legal representative of a party to the suit, it is sufficient for the Court to order impleadment/substitution of such person. 
• Thus, a lis pendens transferee though not brought on record under Order XXII Rule 10 CPC, is entitled to seek leave to appeal against the final decree passed against this transferor, the defendant in the suit. 
• However, whether to grant such leave or not is within the discretion of the court and such discretion should be exercised judiciously in the facts and circumstances of each case. 
• The Court in the facts of the present case set aside the order passed by the High Court. 

 What is Transfer Pendente Lite? 

• It is provided for under Section 52 of Transfer of Property Act, 1882 (TOPA). 
• It provides that when a suit or proceeding is pending in any court and an immovable property is the subject matter of that suit or proceeding, any transfer of that property by any party to the suit or proceeding is void against any person acquiring an interest in the property under the decree or order resulting from that suit or proceeding. 
• The transfer referred to in the section is void as against a subsequent transferee from the date of the institution of the suit or proceeding. 
• This means that if a person transfers an immovable property while a suit is pending, and another person acquires an interest in the property as a result of the court's decision in that suit, the transfer made during the pendency of the suit will be considered void. 

 What are the Landmark Cases on Transfer Pendente Lite? 

• Vinod Seth v. Devinder Bajaj, (2010): 
  • The Court held that Section 52 does not render transfers affected during the pendency of the suit void but only render such transfers subservient to the rights as may be eventually determined by the Court. 
• Thomson Press (India) Ltd. vs. Nanak Builders & Investors P. Ltd. (2013): 
  • The Court held in this case that the transfer of the suit property pendete lite is not void ab initio and that the purchaser of any such property takes the bargain subject to the rights of the plaintiff in the pending suit. 

What are the Principles Laid down by the Court in this Case for Impleadment of Tranferee Pendente Lite?

• The guidelines laid down by the Court are as follows: 
  • For the purpose of impleading transferee pendente lite the Court should consider the facts and circumstances, and Court can permit such a party to come on record either under Order I Rule 10 or under Order XXII Rule 10 of CPC. 
  • Secondly, a transferee pendente lite is not entitled to come on record as a matter of right. 
  • Thirdly, there is no absolute rule that such a transferee pendente lite, with the leave of the Court should, in all cases, be allowed to come on record as a party. 
  • Fourthly, the impleadment of a transferee pendente lite would depend upon the nature of the suit and appreciation of material available on record. 
  • Fifthly, where a transferee pendente lite does not ask for leave to come on record, that would obviously be at his peril, and the suit may be improperly conducted by the plaintiff on record. 
  • Sixthly, merely because such transferee pendente lite does not come on record, the concept of him (transferee pendente lite) not being bound by the judgment does not arise and consequently he would be bound by the result of the litigation, though he remains unrepresented 
  • Seventhly, the sale transaction pendente lite is hit by the provisions of Section 52 of the Transfer of Property Act. 
  • Eighthly, a transferee pendente lite, being an assignee of interest in the property, as envisaged under Order XXII Rule 10 CPC, can seek leave of the Court to come record on his own or at the instance of either party to the suit.