Bona Fide Purchaser versus Pendente Lite Purchaser

Two later buyers of the same property may fare very differently, and the difference turns on a single date: when they bought. A bona fide purchaser, who bought before the suit, may escape the earlier contract if he proves value, good faith and want of notice. A pendente lite purchaser, who bought during the suit, cannot escape at all, because lis pendens binds him to the result whatever his good faith. This note explains each in its own right, compares them, and works through an example.

Figure: Bona fide purchaser and pendente lite purchaser compared, and why the line is drawn at the filing of the suit

1. The Bona Fide Purchaser in Its Own Right

A bona fide purchaser is one who bought the property before the suit was filed. Under Section 19(b) of the Specific Relief Act he may take free of the earlier contract, but only if he proves all three of the requirements: that he paid value, acted in good faith, and had no notice, actual or constructive, of the prior contract. The burden of establishing all three lies on him. Notice of any kind defeats the defence, and possession by the earlier buyer is itself notice that puts him on enquiry.

2. The Pendente Lite Purchaser in Its Own Right

A pendente lite purchaser is one who bought the property during the pendency of the suit. Under Section 52 of the Transfer of Property Act, the doctrine of lis pendens makes his transfer subject to the result of the suit; he is deemed to have bought subject to the litigation, and he is bound by the decree whatever he knew and however honestly he paid. Good faith is no answer, because the defence of the bona fide purchaser is simply not open once the suit is on foot. Nothing he can prove helps him.

3. The Two Compared

4. The Line Is Drawn at the Filing of the Suit

5. A Worked Example

Suppose A agrees to sell his house to B. Before B sues, A sells it to C, who pays full value, checks the record, finds nothing, and knows nothing of B; C is a bona fide purchaser and, if he proves value, good faith and want of notice, takes free of B's contract. Now suppose that, after B has filed his suit for specific performance, A sells the house to D. Even if D pays full value and genuinely knows nothing of the dispute, D is a pendente lite purchaser: by Section 52 his purchase is subject to the result of the suit, and if B wins, D is bound by the decree. The only difference between C and D is the date of purchase, one before the suit and one after, and it makes all the difference.

6. Frequently Asked Questions

Q. What is the difference between a bona fide purchaser and a pendente lite purchaser?
A. A bona fide purchaser bought before the suit and may escape the earlier contract under Section 19(b) on proving value, good faith and want of notice; a pendente lite purchaser bought during the suit and is bound by lis pendens whatever his good faith.

Q. Can a pendente lite purchaser plead good faith?
A. No. Under Section 52 of the Transfer of Property Act, his purchase is subject to the result of the suit, and the good-faith defence is not open to him.

Q. What must a bona fide purchaser prove?
A. All three of value, good faith and want of notice, actual or constructive; the burden lies on him, and any notice defeats the defence.

Q. Why does the date of purchase matter so much?
A. Because it decides which rule applies: Section 19(b) for a purchase before the suit, which allows the good-faith defence, and lis pendens for a purchase during the suit, which does not.