Introduction:

In Raju Naidu v. Chenmouga Sundra & Ors., the Supreme Court reaffirmed that a person possessing property under part performance of a contract cannot claim protection under Section 53A of the Transfer of Property Act, 1882, if they knowingly agreed with being aware of pending litigation. The bench comprising Justice Sudhanshu Dhulia and Justice Prasanna B. Varale emphasized that a transferee pendent lite, who lacks a valid claim, cannot invoke Section 53A to override the rights of decree holders who have legally secured ownership. The case revolved around a property dispute where the appellant, Raju Naidu, sought to assert rights over the suit property based on a sale agreement executed during ongoing litigation. The respondent’s father had executed a Will in favour of respondent No. 9 for a portion of the disputed property, which the respondent challenged in a civil suit. The Trial Court ruled in favour of the respondents, a decision upheld by the Appellate Court. During execution, the Executing Court allowed the respondents three months to deposit the appellant’s advance payment of ₹40,000, after which the Execution Petition was granted, directing the appellant to vacate the premises. The appellant approached the High Court, contesting the jurisdiction of the Executing Court to extend the deposit deadline and seeking protection under Section 53A. The High Court ruled against him, a decision now upheld by the Supreme Court.

Arguments of the Appellant:

The appellant, Raju Naidu, contended that the Executing Court lacked the authority to extend the time for depositing the ₹40,000 advance payment. He argued that this extension, granted beyond the prescribed period, was illegal and rendered the Execution Petition defective. He further relied on Section 53A of the Transfer of Property Act, asserting that he had the property under part performance of a contract and therefore entitled to protection against eviction. The appellant maintained that his agreement with the respondent’s father, executed before the conclusion of the civil suit, granted him rights over the property. He claimed that the respondents, who sought possession based on a decree obtained in their favour, could not dispossess him since he had made substantial payments and taken possession in good faith. He also contended that the principle of lis pendens did not completely extinguish the rights of a transferee pendent lite and that his possession should be recognized as legitimate under Section 53A. Further, the appellant argued that the doctrine of merger did not apply to the present case as the extension of time granted by the Executing Court was an independent exercise of jurisdiction, separate from the Appellate Court’s order. Thus, he claimed that his possession was legally justified and sought protection from eviction.

Arguments of the Respondents:

The respondents, represented by Senior Advocate K. Radhakrishnan, countered that the appellant was fully aware of the ongoing litigation regarding the suit property at the time he entered into the sale agreement with their father. They argued that the doctrine of lis pendens, codified under Section 52 of the Transfer of Property Act, barred any transferee from acquiring valid rights over the property during litigation. Since the appellant had prior knowledge of the pending civil suit, his agreement was legally unenforceable against the decree holders. The respondents contended that Section 53A of the TPA was inapplicable because it requires the transferee to have entered into possession in good faith, without knowledge of conflicting claims. Here, the appellant’s possession was based on an agreement executed despite his awareness of the pending dispute. They further asserted that a transferee pendent lite cannot frustrate the claims of decree holders who have lawfully secured ownership through judicial determination. The respondents supported the Executing Court’s order granting them time to deposit ₹40,000, arguing that it was a reasonable exercise of discretion to facilitate the proper execution of the decree. Citing Chandi Prasad & Others v. Jagdish Prasad & Others (2004) 8 SCC 724, they emphasized that courts have consistently discouraged obstructionist tactics employed by transferees pendent lite to resist valid execution proceedings. The respondents maintained that allowing the appellant to invoke Section 53A would undermine the sanctity of the decree obtained in their favour, setting a dangerous precedent where third parties could interfere with judicially determined rights.

Court’s Judgment:

The Supreme Court dismissed the appellant’s claims, holding that he could not invoke Section 53A of the TPA to resist eviction when he knowingly agreed during the pendency of a civil suit. The bench reiterated that Section 53A protects only those transferees who take possession in good faith without awareness of conflicting legal proceedings. Since the appellant had explicit knowledge of the ongoing litigation, he could not claim superior rights over the decree holders. The Court upheld the view of the High Court, which had rightly observed that the appellant’s agreement, executed during the civil suit, conferred no enforceable rights against the respondents. It rejected the argument that the Executing Court lacked jurisdiction to extend the time for depositing ₹40,000, emphasizing that the Appellate Court’s order superseded the Trial Court’s decision under the doctrine of merger. The judgment, authored by Justice Prasanna B. Varale, relied on Chandi Prasad & Others v. Jagdish Prasad & Others, wherein the Supreme Court had previously held that transferees pendent lite acquire only limited rights and cannot obstruct the legitimate claims of decree holders. The Court noted that allowing such transferees to claim possession under Section 53A would encourage speculative litigation and create unnecessary hurdles in the execution of valid decrees. It observed:

“The Courts have uniformly held that the limited rights of the transferee pendent lite cannot be stretched to obstruct and resist the full claim of the decree holders. Such obstructionist attempts have been consistently discouraged by judicial precedent.”

The Court further stated that Section 53A could not be interpreted in a manner that allows a transferee to override legally determined ownership rights. Since the appellant agreed in pending litigation, he was bound by the principle of lis pendens and could not claim protection under Section 53A. The Supreme Court thus dismissed the appeal, holding it devoid of merit. It affirmed the High Court’s ruling and directed the appellant to vacate the property in compliance with the Execution Petition. This judgment reinforces the legal principle that transferees pendent lite cannot claim superior rights over decree holders and that Section 53A of the TPA does not apply to those who knowingly enter into agreements despite being aware of pending litigation.