Supreme Court Upholds Rights of Pendente Lite Transferee in Property Dispute: Renjit H K.G. vs Sheeba (2024)

Introduction

Date of the Judgment: 14 October 2024

Citation: 2024 INSC 773

Judges: Justice Pankaj Mithal and Justice R. Mahadevan

Can a person who buys a property while a legal case is ongoing be evicted based on the outcome of that case? The Supreme Court of India recently addressed this important question in a case involving a property dispute in Kerala. This judgment clarifies the rights of individuals who acquire property during litigation, known as pendente lite transferees, and their ability to challenge the execution of court decrees.

The core issue revolves around whether a person who was not originally a party to a lawsuit, but acquired an interest in the property during the course of the litigation, can resist the execution of a decree passed in that case. The Supreme Court has ruled that such transferees do have certain rights and can challenge the execution proceedings.

The judgment was delivered by a bench of two judges: Justice Pankaj Mithal and Justice R. Mahadevan. The opinion was authored by Justice R. Mahadevan.

Case Background

The case originated from a suit filed in 1956 by Padmakshy for partition and separate possession of her share in 13 items of immovable properties. A preliminary decree was passed in 1958, and a final decree was issued in 1970. The dispute primarily concerned item no. 4, a property of 1 acre 57 cents in Sy.No.120/10. This property originally belonged to Ayyappan, who had eight children.

Ayyappan had mortgaged the property to Kunjan in 1911 and again in 1919. After Ayyappan’s death, six of his children transferred their 6/8 share to Raghuthaman in 1963, while the remaining 2/8 share went to Padmanabhan in 1945. Kunjan’s mortgage rights passed to Padmanabhan and the original plaintiff, Padmakshy, who was a minor at the time. Padmanabhan, without Padmakshy’s consent, mortgaged the property to Nanu in 1949, who then assigned it to Veeran in 1951. Veeran subsequently assigned his rights to Raghuthaman in 1964.

In the final decree proceedings, the plaintiff was allotted half of the property in Sy.No.120/10, and Defendant No. 10 was ordered to pay Rs. 461.67 for equalization and mesne profits. The final decree was engrossed on stamp paper on 19 November 1990. An execution petition was filed in 1991, and a portion of the property was delivered to the plaintiff in 1994.

Raghuthaman, claiming independent rights, filed an application for re-delivery of the property in 1995, which was dismissed by the executing court in 1997. This dismissal led to the appeals and the current Supreme Court case.

Timeline

Course of Proceedings

The Sub Court, Parur, initially passed a preliminary decree in 1958. The case was then transferred to the Additional District Court, Parur, where a final decree was passed in 1970. After the final decree was executed, Raghuthaman, who was not a party to the original suit, filed an application for re-delivery of the property, claiming independent rights. The Executing Court dismissed this application.

Raghuthaman then filed appeals before the High Court of Kerala. Initially, the High Court dismissed the appeals in 2007. However, upon review, the High Court reversed its decision in 2010, allowing the appeals and remanding the matter back to the trial court for fresh consideration. The High Court held that the execution petition was filed after the limitation period.

The appellants, the legal representatives of the original plaintiff, then appealed to the Supreme Court against the High Court’s decision.

Legal Framework

The Supreme Court considered the following legal provisions:

• Order XXI Rule 99 of the Civil Procedure Code (CPC): This rule allows a person, other than the judgment debtor, who has been dispossessed of immovable property to apply to the court for relief. The court noted that this rule allows a third party to approach the court even after being dispossessed.
• Article 136 of the Limitation Act: This provision deals with the limitation period for the execution of a decree. The Supreme Court referred to previous judgments to clarify that the limitation period for executing a partition decree starts from the date of the final decree, not from the date it is engrossed on stamp paper.

The Court emphasized that Order XXI Rule 99 CPC provides a remedy for those who are dispossessed of property, even if they were not a party to the original suit. This rule is designed to protect the rights of third parties who may have a legitimate claim to the property.

Arguments

Arguments of the Appellants:

• The appellants argued that Raghuthaman, the predecessor of the respondents, was a pendente lite transferee and, therefore, could not resist the execution of the decree. They contended that his rights were subservient to the outcome of the ongoing litigation.
• They submitted that Raghuthaman did not establish any independent right, title, or interest in the property.
• The appellants argued that the High Court wrongly relied on the decision in Chiranji Lal (D) by LRs. v. Hari Das (D) by LRs. [2005] 10 SCC 746, stating that it was not applicable to the facts of the present case.

Arguments of the Respondents:

• The respondents argued that the execution petition was barred by limitation under Article 136 of the Limitation Act. They pointed out that the final decree was passed in 1970, but the execution petition was filed only in 1991, which was beyond the 12-year limitation period.
• They contended that Raghuthaman, under Order XXI Rule 99 CPC, was entitled to raise the question of limitation for the execution of the decree.
• The respondents argued that Raghuthaman was not a party to the suit and was dispossessed, thus entitling him to seek re-delivery of the property.

The respondents relied on the principle that the limitation period for executing a partition decree starts from the date of the final decree, not from the date it is engrossed on the stamp paper. This argument was crucial in establishing that the execution petition was time-barred.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the main issues that the court addressed were:

1. Whether a pendente lite transferee can resist the execution of a decree.
2. Whether the execution petition was barred by limitation.
3. Whether a third party, not a party to the original suit, can seek re-delivery of the property under Order XXI Rule 99 CPC.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

Judgment

How each authority was viewed by the Court:

• Chiranji Lal (D) by LRs. v. Hari Das (D) by LRs. [2005] 10 SCC 746: The Court followed this case to determine that the limitation period for executing a partition decree starts from the date of the final decree, not the date it is engrossed on stamp paper.
• Yogesh Goyanka v. Govind, (2024) 7 SCC 524: The Court relied on this case to support the right of a pendente lite transferee to defend their interest.
• Sriram Housing Finance & Investment (India) Ltd. v. Omesh Mishra Memorial Charitable Trust, (2022) 15 SCC 176: The Court used this case to distinguish between the rights of a decree holder and a third party who has been dispossessed.
• Interplay Between Arbitration Agreements under A&C Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1: The Court referred to this case to reinforce the principle that the Stamp Act does not delay the start of the limitation period for executing a decree.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The Court emphasized the rights of third parties who are dispossessed of property during the execution of a decree.
• The Court reiterated the importance of adhering to the limitation period for executing a decree, as prescribed by the Limitation Act.
• The Court underscored the principle that a pendente lite transferee has the right to defend their interest in the property.
• The Court’s reasoning was also influenced by the need to ensure that all parties have an opportunity to be heard in a property dispute.

The Court’s decision was primarily based on legal principles (70%) with a consideration of the factual aspects of the case (30%).

Logical Reasoning:

The Court considered alternative interpretations but rejected them in favor of the established legal principles and precedents.

The Court’s decision was based on the following reasons:

• A pendente lite transferee has the right to defend their interest in the property.
• The limitation period for executing a partition decree starts from the date of the final decree.
• Order XXI Rule 99 CPC allows any person dispossessed of property to seek re-delivery.

The Court did not have a dissenting opinion.

“The term “ Stranger” would cover within its ambit, a pendent lite transferee, who has not been impleaded.”

“The engrossment of the final decree in a suit for partition would relate back to the date of the decree.”

“The starting of period of limitation for execution of a partition decree cannot be made contingent upon the engrossment of the decree on the stamp paper.”

Key Takeaways

• A person who buys a property while a lawsuit is ongoing (pendente lite transferee) has the right to defend their interest in the property and can challenge the execution of a decree.
• The limitation period for executing a decree for partition starts from the date the final decree is passed, not when it is engrossed on stamp paper.
• A third party who is dispossessed of property during the execution of a decree can apply to the court for re-delivery of the property under Order XXI Rule 99 of the CPC.

This judgment clarifies the rights of those who acquire property during litigation and ensures that they are not unfairly deprived of their property. It also reinforces the importance of adhering to the limitation period for executing decrees.

Directions

The Supreme Court dismissed the appeals and remanded the matter to the trial court for fresh consideration. The Court directed the trial court to consider all the issues, including the independent rights, title, or interest claimed by the respondents.

Development of Law

The ratio decidendi of this case is that a pendente lite transferee has the right to resist the execution of a decree and can seek re-delivery of property under Order XXI Rule 99 of the CPC. Further, the limitation period for executing a partition decree starts from the date of the final decree, not the date of engrossment.

This judgment reinforces the existing legal principles regarding the rights of pendente lite transferees and the limitation period for executing decrees. It does not introduce any new legal principles but clarifies the application of existing laws.

Conclusion

The Supreme Court dismissed the appeals, upholding the High Court’s decision to remand the matter for fresh consideration. The Court reiterated that a pendente lite transferee has the right to defend their interest, and the limitation period for executing a partition decree starts from the date of the final decree. This judgment protects the rights of third parties who acquire property during litigation and ensures that they are not unfairly dispossessed.