Supreme Court Clarifies Leave to Appeal and Condonation of Delay for Transferees Pendente Lite

Introduction

The Supreme Court of India, in H. Anjanappa v. A. Prabhakar (2025 INSC 121), addressed critical questions regarding the rights of purchasers who acquire property while litigation is pending (“transferees pendente lite”). The Appeals under consideration arose from a decree for specific performance of a land sale agreement and a subsequent High Court order condoning a significant delay and granting leave to transferee purchasers to appeal against that decree. Ultimately, the Supreme Court set aside the High Court’s order. This commentary examines the background and the core legal issues resolved in this judgment, highlighting its significance in clarifying the standards for leave to appeal and condonation of delay for those who purchase property subject to pending litigation.

Summary of the Judgment

The dispute originated from a suit for specific performance of a contract to sell certain lands in Bagalur Village, Bangalore North Taluk. The original owners (Defendant Nos. 1 & 2) had executed Agreements of Sale in favor of the Plaintiffs (Appellants). Subsequently, Defendant No. 3 purchased the same property, and thwarting a subsisting injunction order restraining alienation, portions of the land were further sold to Respondent Nos. 1 and 2 (the alleged transferees pendente lite).

The trial court decreed the suit in favor of the Plaintiffs, directing specific performance. Respondent Nos. 1 and 2—being transferees pendente lite—were not parties to the suit; their application to be impleaded as defendants was previously rejected. When the transferor’s (Defendant No. 3’s) separate appeal failed, the transferees ultimately filed their own appeal, seeking condonation of a 586-day delay and requesting leave to appeal. The High Court condoned the delay and granted leave. On further challenge, the Supreme Court held that the High Court had erred in condoning the long delay and granting leave on grounds that were unsubstantiated and insufficient. As a result, the Supreme Court reversed the High Court’s decision, confirming that the final decree in favor of the Plaintiffs should stand.

Analysis

Precedents Cited

Adi Pherozshah Gandhi v. H.M.Seervai (AIR 1971 SC 385): A Constitution Bench ruling clarifying that a non-party may be allowed to appeal if the judgment prejudicially affects that person’s interest.
Smt. Sukhrani (Dead) by L.Rs & Ors. v. Hari Shanker & Ors. (AIR 1979 SC 1436): Recognized that an interlocutory finding can be re-evaluated during final appeal, if it has attained finality and directly affects the ultimate decree.
Smt. Jatan Kumar Golcha v. Golcha Properties Pvt. Ltd. (1970) 3 SCC 573: Affirmed that persons not on record but who may be prejudiced by a judgment may seek leave to appeal.
Province of Bombay v. W.I. Automobile Association (AIR 1949 Bombay 141): Elaborated that someone not formally a party to the suit but affected by an order may approach the appellate court for permission to appeal.
Smt. Saila Bala Dassi v. Sm. Nirmala Sundari Dassi (1958 SCR 1287): Held that transferees pendente lite (during appeal or suit) may apply for leave to come on record or to file an appeal, provided they are “persons claiming under” the original party.
Amit Kumar Shaw v. Farida Khatoon (AIR 2005 SC 2209): Recognized that a transferee pendente lite is vitally interested in defending the property interest acquired but is subject to the court’s discretion.

Legal Reasoning

Central to the Supreme Court’s reasoning was the principle codified in Section 52 of the Transfer of Property Act, 1882, known as the doctrine of lis pendens. A purchaser who acquires property during the pendency of a suit does so subject to the ultimate rights determined in that suit. This “transferee pendente lite” bears the risk that the decree may render the transfer inoperative against the successful plaintiff.

The Supreme Court pointed out that although such transferees are not automatically barred from seeking appellate remedies, any attempt to appeal requires:

A sufficient explanation for any delay in appealing (under Section 5 of the Limitation Act);
A demonstration that they are “persons aggrieved” by, or “bound by,” the decree;
Satisfaction of the leave criteria under Sections 96/100 of the Code of Civil Procedure (CPC) and relevant provisions (Order XXII Rule 10 and Section 146).

In the case at hand, the Court ruled that Respondent Nos. 1 and 2 had purchased the property in direct violation of a subsisting injunction and were not diligent in challenging the trial court decree. They sought condonation of 586 days of unexplained delay. Consequently, mere claims of age and residence abroad did not persuade the Supreme Court, which found that the High Court had erred in condoning the delay “on the mere asking.” Additionally, having lost an application under Order I Rule 10 CPC (for being impleaded) that was never appealed by them, they could not now demand unconditional leave to appeal without a justifiable basis.

Impact

This decision clarifies the boundaries of appellate rights for transferees who purchase property during litigation. While reiterating that nothing in law outright nullifies sales pendente lite, the Supreme Court made it equally clear that such transferees must proceed diligently if they choose to protect their property interest. Concretely, future transferees pendente lite:

Will not be granted condonation of delay as a matter of course;
Must meet a stricter standard in demonstrating they are bona fide purchasers and have acted vigilantly to protect their interests;
Face potential denial of leave to appeal if they knowingly flout injunctions and fail to justify prolonged inaction.

Thus, this judgment reaffirms that courts will exercise greater caution before condoning extensive delays by subsequent purchasers who acquire property in violation of existing judicial restraints.

Complex Concepts Simplified

Transferee Pendente Lite: A person who buys immovable property when a suit relating to that property is still ongoing. Such a buyer’s rights are subject to the outcome of the litigation.
Doctrine of Lis Pendens (Section 52 TPA): Renders any sale or transmission of rights in a property during litigation (provided it is not collusive) subservient to the final decree. The purchaser is bound by the litigation result, though the transfer is not automatically void.
Leave to Appeal: A formal permission to file an appeal by someone who was not originally a party but whose legal rights are directly impacted by the trial court decree.
Condonation of Delay: Discretionary power of a court to excuse a party’s failure to file a case or appeal within the statutorily prescribed time limit, usually under Section 5 of the Limitation Act, 1963.
Order I Rule 10, Order XXII Rule 10, and Section 146 of CPC: Procedural provisions allowing courts to bring in parties who claim under a original litigant or to continue the suit/appeal upon an assignment or devolution of interest. However, they are not automatic; discretion lies with the court, often granted if it avoids injustice.

Conclusion

In H. Anjanappa v. A. Prabhakar (2025 INSC 121), the Supreme Court decisively set aside the High Court’s decision to condone a protracted, unexplained delay and grant leave to appeal on behalf of transferees pendente lite who purchased property during a subsisting injunction. This ruling underscores the principle that courts will not blindly allow subsequent purchasers to intervene at the appellate stage unless they demonstrate due diligence and convincingly justify their grievance as parties significantly affected by the decree.

Transferees pendente lite retain the possibility of seeking appellate or procedural relief, but only under strict scrutiny of their conduct, timeliness, and valid grievance. The judgment serves as a cautionary reminder that those who purchase property in breach of judicial orders, or without verifying pending litigation, cannot take for granted that courts will condone delays in pursuit of any belated legal remedies.

Overall, this verdict strengthens the integrity of litigation by deterring frivolous or delayed challenges from purchasers who knowingly assume the risk of taking property sub judice and then seek relief without prompt, bona fide grounds.