All NotesCivil LawTransfer of Property Act (TPA)

Transfer of Property Act (TPA)

The Bona Fide Purchaser During the Pendency of a Suit: What He Loses, and What He Can Still Do

A purchaser who pays full value, searches the register, finds nothing and buys in perfect good faith is protected by the Act in a whole series of situations — against a maintenance claim, against a restrictive covenant, against the real owner behind an ostensible one, against defrauded creditors. Against section 52 he is protected by none of it. His purchase is valid, and it is subject to the decree. That is not a punishment: it is the price of buying property that the court has not yet finished with.

Figure 1: The purchaser's four pleas, the provision that answers them all, and the courses still open to him

1. The Pleas That Do Not Work

The plea

Why it fails

'I paid full value'

Consideration is not a defence to section 52; the section says nothing about value

'I had no notice of the suit'

Notice is irrelevant — the doctrine rests on necessity, not on the purchaser's knowledge

'My deed is registered'

Registration gives his deed effect and gives others notice of it; it does not lift the subordination to the decree

'I took possession'

Possession does not answer the decree either; the decree binds the property in whosoever's hands it is

'I have improved the property'

Improvements do not defeat the decree, though a claim may be made in the execution proceedings on equitable grounds, and section 51 may assist where its conditions are met

2. What His Position Actually Is

  1. His transfer is valid. It is good between him and his vendor, and it is not void or illegal.
  2. He takes subject to the decree. If the plaintiff succeeds, the property in his hands answers the decree; if the plaintiff fails, he keeps what he bought.
  3. He is treated as claiming under his vendor. That is why the decision binds him although he was never a party, and why he cannot ordinarily reopen the decided questions in a fresh suit.
  4. He is not a wrongdoer. Nothing in the section suggests any impropriety in buying during a suit; it simply refuses to let the purchase defeat the decree.

3. What He Can Still Do

The course

Content

Apply to be brought on record

Under Order 22 Rule 10 of the Code, where an interest devolves during the pendency of a suit, the suit may be continued by or against the person on whom it has devolved, with the leave of the court. He can then defend his own purchase rather than rely on his vendor

Seek the court's authority for the transfer

Section 52 expressly excepts a transfer made under the authority of the court and on such terms as it may impose. Where the purchase is in contemplation, this is the safe course

Sue the vendor

On the covenants for title implied by section 55(2), and on the contract generally — for the price, for damages, or for an indemnity if one was taken

Rely on an exception to the section

That the suit was collusive, that no right to immoveable property was directly and specifically in question, that the transferor was not a party, or that the court lacked jurisdiction

Check the local amendment

In States where section 52 applies only if a notice of pendency has been registered, the absence of such a notice may be a complete answer

4. Where Section 52 Does Not Reach Him

  1. A collusive suit. The section applies only to a suit or proceeding that is not collusive.
  2. Property not directly and specifically in question. A money suit against the vendor does not prevent him selling his land.
  3. A transferor who was not a party to the suit or proceeding.
  4. A court without jurisdiction, the Explanation requiring a court of competent jurisdiction.
  5. A transfer made with the court's leave, on the terms it imposed.

5. Practical Guidance Before Buying

The searches that actually matter

Search the register, as always — but understand that it will not usually disclose a pending suit.

Search the courts having jurisdiction over the property for suits and execution proceedings involving the vendor or the property.

Ask the vendor in writing, and record the answer, so that a false reply supports a claim against him.

Enquire of anyone in possession, whose account will often reveal a dispute.

And where a suit is on foot, apply for the court's authority under the exception in section 52, or walk away.

6. Why the Law Places the Loss on Him

  1. Because somebody must bear it, and as between a stranger who chose to buy and a litigant who has been fighting for the property, the purchaser is the person who could have enquired.
  2. Because he has a remedy against his vendor, while the successful litigant would have none against the purchaser.
  3. Because the alternative would defeat every decree. If good faith and value sufficed, a defendant could sell to an innocent stranger the day after the plaint and leave the plaintiff with nothing.

Retention aid

Value, good faith, registration and possession — four cards, all trumped. His remedies are against his vendor, or in an application to the court; never in his own innocence.

7. Landmark Cases

📖 Rajender Singh v. Santa Singh, (1973) 2 SCC 705

Held: The transfer made during the pendency of the suit is not void; the transferee acquires a valid title as against his transferor, but he takes it subject to the decree that may be passed. His position is that of a person who has purchased property about which litigation is pending.

Ratio: A purchaser pendente lite is bound by the result, however honest his purchase.

8. Related Topics and Provisions

  • Doctrine of Lis Pendens, Section 52 — the essentials and the effect
  • Lis Pendens vs Notice — why good faith is no answer
  • Lis Pendens and Execution Proceedings — the period during which he is at risk
  • Section 55, TPA — the covenants for title on which he may sue his vendor
  • Order 22 Rule 10, Code of Civil Procedure, 1908 — leave to be brought on record
  • Section 51, TPA — improvements made in good faith, where its conditions are satisfied