Property Law

Madhukar Nivrutti Jagtap v. Pramilabai

(2020) 15 SCC 731

Facts

An agreement dated 20 September 1965 concerned the sale of approximately 50 acres of land.
A supplementary agreement was executed in April 1966.
The proposed purchasers claimed that:
substantial money had been paid;
they had been placed in possession; and
they remained ready to complete the sale.
They filed a suit for specific performance on 26 August 1968.
After the suit was instituted, the owners executed sale deeds in favour of other purchasers:
one in September 1968;
another in July 1978.
The later purchasers claimed title and resisted the claim for specific performance.
The High Court described the subsequent transactions as illegal because they were made during the suit.

Whether a pendente lite transfer is illegal or void.
What rights subsequent purchasers obtain under such transfers.
Whether the transfers could defeat the pending specific-performance proceedings.

Section 52 does not prohibit the physical execution of a transfer during litigation.
A pendente lite transfer is:
not void ab initio;
not automatically illegal;
but subordinate to the decree ultimately passed.
The transferee steps into the transferor’s position and is bound by the result.
Knowledge of the litigation is not essential for application of the doctrine.

The specific-performance suit had already been filed before both subsequent sale deeds.
It directly concerned rights in the same land.
The owners therefore could not give the later purchasers a title superior to the rights being examined by the court.
The Supreme Court corrected the High Court’s terminology:
the transfers should not have been called “illegal”;
they remained valid transactions between the parties;
but their operation was subject to the suit and decree.
Thus, the later purchasers could retain only whatever interest the vendors were ultimately found entitled to transfer.
Their alleged absence of knowledge did not change the statutory result.
On the broader equitable facts—including the extraordinary passage of time, changes in value and the circumstances of possession—the Supreme Court declined to grant final specific performance.
It instead awarded monetary compensation.
That discretionary relief did not alter the legal rule that the subsequent transfers were pendente lite and subordinate to the proceedings.

The subsequent sale deeds were not void or illegal merely because they were pendente lite.
They were, however, subject to the outcome of the specific-performance suit.
The Court ultimately substituted monetary compensation of ₹15 lakh for specific performance.
The appeal was partly allowed on those terms.