1. Introduction

The case of Chander Bhan (D) Through L.R. Sher Singh v. Mukhtiar Singh et al. (2024 INSC 377) represents a pivotal decision by the Supreme Court of India, reinforcing the precedence of the doctrine of lis pendens over the protections offered to bona fide purchasers under Section 41 of the Transfer of Property Act, 1882. This case revolves around a land dispute involving an agreement to sell, subsequent unauthorized transactions, and the application of legal principles governing property transfer during pending litigation.

2. Summary of the Judgment

The appellant, Chander Bhan, entered into an agreement to sell 16 Kanals of land to respondent no. 3 for Rs. 8 lakhs. After receiving knowledge that respondent no. 3 intended to alienate the property, the appellant filed a suit for a permanent injunction. Despite obtaining a temporary injunction, respondent no. 3 executed a release deed in favor of his son, who subsequently sold the property to respondents 1 and 2. The trial court initially ruled in favor of the appellant, directing respondent no. 3 to complete the sale. However, the Punjab and Haryana High Court overturned this decision, recognizing respondents 1 and 2 as bona fide purchasers. The appellant appealed to the Supreme Court, which ultimately reversed the High Court’s decision, emphasizing the applicability of the doctrine of lis pendens.

3. Analysis

3.1 Precedents Cited

The Supreme Court referred to several key precedents to substantiate its ruling:

• Rajendra Singh v. Santa Singh, AIR 1973 SC 2537
• Dev Raj Dogra v. Gyan Chand Jain, (1981) 2 SCC 675
• Sunita Jugalkishore Gilda v. Ramanlal Udhoji Tanna, (2013) 10 SCC 258
• Kanshi Ram v. Kesho Ram, AIR 1961 P&H 299
• Shivshankara and Another v. H.P. Vedavyasa Char, 2023 SCC OnLine SC 358
• Sardar Kar Bachan Singh v. Major S Kar Bhajan Singh, AIR 1975 P&H 205

These cases collectively reinforced the principles of lis pendens and the limitations on the protection of bona fide purchasers when property transactions occur during pending litigation.

3.2 Legal Reasoning

The Court’s legal reasoning centered on two primary doctrines:

• Lis Pendens: Under Section 52 of the Transfer of Property Act, 1882, any transfer of property during pending litigation is subject to the outcome of the suit. The Supreme Court emphasized that lis pendens serves to maintain the status quo and prevent multiple litigations over the same property.
• Bona Fide Purchaser (BFP): Section 41 protects purchasers who buy property in good faith without notice of existing disputes. However, the Court clarified that this protection is not absolute when the transfer occurs during the pendency of relevant litigation.

In this case, the appellant had secured a temporary injunction preventing the sale of the property. Despite this, respondents 1 and 2 proceeded to purchase the property. The Supreme Court held that since the sale occurred while the injunction was active, the doctrine of lis pendens took precedence, rendering the protection under Section 41 inapplicable. The Court further noted that the mere renovation or improvement of the property by the purchasers does not entitle them to override the existing legal injunction.

3.3 Impact

This judgment significantly impacts property law by:

• Reaffirming Lis Pendens: Strengthens the application of lis pendens, ensuring that property transactions are not used to circumvent pending litigation.
• Limitations on BFP Protection: Clarifies that the protection for bona fide purchasers is limited when property transactions occur amidst ongoing legal disputes.
• Preventing Collusion: Discourages parties from engaging in collusive transactions to undermine litigation outcomes.
• Guidance for Future Cases: Provides a clear precedent for courts to determine the validity of property transactions during litigation, promoting fairness and legal consistency.

4. Complex Concepts Simplified

4.1 Lis Pendens

Definition: Lis pendens is a legal doctrine that dictates that once a lawsuit is filed concerning a property, any subsequent sale or transfer of that property cannot override the pending litigation.

Purpose: To prevent conflicting judgments and protect the interests of parties involved in the lawsuit by maintaining the status quo until the case is resolved.

4.2 Bona Fide Purchaser (BFP)

Definition: A bona fide purchaser is someone who buys property in good faith and without notice of any existing disputes or claims against the property.

Protection: Under Section 41 of the Transfer of Property Act, a BFP is typically protected from challenges to their ownership, provided they have acted with due diligence and reasonable care.

5. Conclusion

The Supreme Court's decision in Chander Bhan (D) Through L.R. Sher Singh v. Mukhtiar Singh et al. reinforces the supremacy of the doctrine of lis pendens over the protections afforded to bona fide purchasers under Section 41 of the Transfer of Property Act, 1882. By doing so, the Court underscored the importance of safeguarding the integrity of pending litigation and preventing unscrupulous attempts to undermine judicial processes through property transactions. This judgment serves as a crucial precedent, ensuring that the legal system upholds equitable principles and maintains the sanctity of judicial orders in property disputes.