The Supreme Court has clarified that the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882 applies even to money recovery suits where the debt is secured by a mortgage over immovable property, and that the bar on transfer operates regardless of whether the proceedings are contested or ex parte.

A Bench of Justice J.B. Pardiwala and Justice R. Mahadevan held that once a bank files a suit for recovery of dues backed by a mortgage, the mortgaged property becomes “directly and specifically in question” under Section 52. Any transfer of such property during the pendency of the suit, or until complete satisfaction of the decree, would therefore be hit by the doctrine of lis pendens.

Rejecting the argument that Section 52 would not apply because the decree passed was only a simple money decree, the Court observed that the nature of the decree is irrelevant. What matters is whether the plaint discloses that the immovable property is meant to answer the debt. Where recovery of money is sought along with a prayer to proceed against the mortgaged property in case of default, the property is clearly part of the subject matter of the suit.

The Court further explained that even if a suit is not exclusively for enforcement of rights in immovable property, Section 52 would still apply if any right, title, or interest in such property is directly involved. Since the decree recorded the existence of the mortgage and recognised that the property could be proceeded against for recovery, subsequent purchasers were held to be pendente lite transferees bound by the outcome of the litigation.

Emphasising the wide language of Section 52, which uses the expressions “any suit” and “any right”, the Bench noted that after the 1929 amendment, the doctrine is no longer confined to contentious proceedings. Even ex parte proceedings attract the bar, as excluding them would enable a party to evade the court process, alienate property during pendency, and frustrate the adjudication.

The Court reiterated that the pendency of a suit begins from the date of presentation of the plaint and continues until the decree is fully satisfied or becomes inexecutable. Consequently, the doctrine applies not only during trial but also at the execution stage.

It was also reaffirmed that a transferee pendente lite is bound by the result of the litigation irrespective of notice. Lack of knowledge of the pending suit or reliance on a no-encumbrance certificate does not confer protection. A purchaser during pendency acquires no better title than what the transferor possessed.

Relying on earlier decisions including Celir LLP v. Sumati Prasad Bafna, Nagubai Ammal v. B. Shama Rao, Sanjay Verma v. Manik Roy, and Usha Sinha v. Dina Ram, the Court held that absence of notice is immaterial in cases of lis pendens.

In the present case, the dispute arose from a 1970 mortgage created in favour of New Bank of India. After default, an ex parte decree was passed in 1984. During pendency and after the decree, portions of the mortgaged land were sold to third parties. Subsequently, the entire property was auctioned in execution, and the appellants were declared successful bidders.

Allowing the appeal and setting aside the concurrent findings of the courts below, the Supreme Court held that the purchasers were bound by the auction sale as pendente lite transferees. Their claim of being bona fide purchasers was rejected.

The Court also reiterated that a separate civil suit challenging a confirmed auction sale is barred under Order XXI Rule 92(3) CPC, and any grievance must be raised under Section 47 CPC.