Lis Pendens Extends Beyond Property Suits: Money Claims, Mortgaged Property & Ex-Parte Proceedings Covered
Supreme Court clarifies that lis pendens covers money suits, mortgaged property and execution proceedings until decree satisfaction.
The doctrine of lis pendens, codified under Section 52 of the Transfer of Property Act, 1882, has traditionally been associated with suits directly seeking declaration, partition, or possession of immovable property. However, evolving commercial realities, complex mortgage transactions, and strategic pendente lite transfers have consistently tested the doctrine’s boundaries.
In Danesh Singh & Ors. v. Har Pyari (Dead) through LRs & Ors. (2025 INSC 1434), the Supreme Court held that money suits involving mortgaged property also attract lis pendens, as the secured property is directly and substantially connected with the relief sought.
Doctrine of Lis Pendens: Conceptual Framework
The doctrine of lis pendens rests on the principle that the subject matter of litigation must remain unaffected during pendency of proceedings. Section 52 TPA provides that during the pendency of any suit or proceeding:
- which is not collusive,
- in which any right to immovable property is directly and specifically in question,
the property cannot be transferred so as to prejudice the rights of any party under a decree that may ultimately be passed.
The Explanation of Section 52 is crucial. It clarifies that pendency begins from presentation of the plaint and continues until complete satisfaction or discharge of the decree, not merely until judgment.
Thus, lis pendens is not concerned with the validity of the transfer inter se parties, but with its subordination to the outcome of litigation.
Factual Background of the Case
The dispute in Danesh Singh arose from a loan transaction secured by a mortgage. The borrower mortgaged agricultural land to a bank in 1970. Upon default, the bank instituted a money recovery suit, seeking repayment and, in default, sale of the mortgaged property.
The suit culminated in an ex-parte money decree. During pendency of the suit and execution proceedings, portions of the mortgaged land were sold by the judgment-debtor to third parties. Subsequently, the entire mortgaged property was auctioned in execution, and possession was delivered to auction purchasers.
The pendente lite purchasers filed a separate suit claiming ownership and challenging the auction sale. Lower courts upheld their claims, prompting appeal before the Supreme Court.
Issues
The Supreme Court framed, inter alia, the following critical issues:
- Whether Section 52 TPA applies to money suits involving mortgaged property.
- Whether ex-parte proceedings attract the doctrine of lis pendens.
- Whether pendente lite transferees can claim bona fide purchaser protection.
- Whether lis pendens continues during execution proceedings until satisfaction of decree.
Lis Pendens and Money Suits: The Supreme Court’s Clarification
A central argument raised by the purchasers was that the bank’s suit was merely a money recovery suit, and therefore the immovable property was not “directly and specifically in question”.
The Supreme Court rejected this narrow view. It held that where:
- a money suit is secured by mortgage, and
- the mortgaged property is described in the plaint as security for repayment,
the right and interest in immovable property are directly in issue, even if the decree is framed as a money decree.
The Court clarified that Section 52 does not exclude money suits. To hold otherwise would permit judgment-debtors to alienate secured property with impunity, rendering decrees illusory and defeating creditor rights.
Thus, money claims backed by mortgaged property squarely attract lis pendens.
Ex-Parte Proceedings and Lis Pendens
Another significant contention was that since the decree was passed ex-parte, the doctrine should not apply.
The Supreme Court decisively rejected this argument. It traced the legislative history of Section 52, noting that the 1929 amendment replaced the phrase “contentious suit” with “any suit or proceeding which is not collusive.”
This deliberate expansion was meant to prevent litigants from:
- abstaining from proceedings,
- allowing ex-parte decrees to be passed, and
- transferring property pendente lite to frustrate enforcement.
The Court held that ex-parte proceedings are fully covered by Section 52, provided the suit is not collusive. The doctrine operates irrespective of participation of parties in the proceedings.
Continuity of Lis Pendens Through Execution
One of the most important aspects of the judgment is its reaffirmation that lis pendens does not end with the decree.
Relying on the Explanation to Section 52, the Court held that pendency continues until:
- the decree is fully satisfied or discharged, or
- satisfaction becomes legally unattainable.
Consequently, execution proceedings are an integral part of lis pendens. Transfers made during execution before satisfaction remain subject to the decree.
This clarification has far-reaching consequences, particularly in cases where judgment-debtors attempt last-minute alienations during execution to obstruct recovery.
Bona Fide Purchasers: No Safe Harbour
The pendente lite transferees argued that they were bona fide purchasers for value without notice, having obtained no-encumbrance certificates.
The Supreme Court reiterated settled law that notice is irrelevant under Section 52. Lis pendens is founded on public policy, not equitable considerations between private parties.
A transferee pendente lite:
- steps into the shoes of the judgment-debtor,
- acquires no better title than the transferor, and
- is bound by the outcome of litigation regardless of knowledge or diligence.
Thus, even genuine purchasers cannot claim immunity against the decree.
Mortgage Law and Lis Pendens: Interplay Explained
The Court also explained the relationship between mortgage law and lis pendens. A mortgagor retains ownership but is subject to the mortgagee’s interest. Any transfer during the pendency of a suit to enforce that mortgage necessarily remains subordinate to the mortgagee’s rights.
When a bank sues to recover a loan secured by a mortgage, the mortgaged property is inseparably linked to the relief claimed. Transfers during such litigation undermine the security and are precisely what Section 52 seeks to prevent.
Impact on Auction Sales and Execution Proceedings
By upholding the applicability of lis pendens, the Supreme Court reinforced the sanctity of court-conducted auctions. Allowing pendente lite purchasers to defeat auction sales would destabilise execution jurisprudence and encourage speculative transfers.
The ruling ensures that:
- auction purchasers receive certainty,
- decree-holders are not frustrated, and
- judicial processes are not rendered meaningless.
Conclusion
The Supreme Court’s decision in Danesh Singh v. Har Pyari marks a decisive reaffirmation of the doctrine of lis pendens as a robust, expansive, and policy-driven rule of law. By holding that Section 52 applies to money suits involving mortgaged property, continues through execution proceedings, and covers ex-parte decrees, the Court has closed interpretative loopholes that often undermined decree enforcement.
The judgment conveys a clear message that no pendente lite transfer, even if made in good faith, can undermine the authority of the court or defeat the rights crystallised under its decree. By reaffirming this principle, the decision enhances creditor confidence, reinforces the effectiveness of judicial processes, and upholds the integrity of civil justice administration in India.