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Siddagangaiah (D) Thr. Lrs. v. N.K. Giriraja Shetty (D) Thr. Lrs.

Civil Appeal · 2018 INSC 506Decided 11 May 2018
Civil Appeal No. 5007 of 2018
Justice Arun Mishra · Justice Uday Umesh Lalit

Background

A wife (Thopamma) sued her husband in 1968 for maintenance and to create a charge over his properties. While that suit was pending, the husband sold two of those properties in 1974 to N.K. Giriraja Shetty. After the maintenance decree was passed in 1976 (creating a charge on the properties), Thopamma got those properties auctioned in execution of her decree and purchased them herself in 1977; Shetty's objection to the auction was dismissed for non-appearance and the sale was confirmed. Shetty then filed a fresh civil suit (concealing that his earlier objection had been dismissed) claiming ownership and possession, which the trial court dismissed but the first appellate court and High Court allowed in his favour, prompting the present appeal by the eventual purchasers from Thopamma.

Decision Breakdown

The Supreme Court held that once Shetty's objection to the court auction (filed under Order XXI Rule 90 CPC) had been dismissed and the sale confirmed, Order XXI Rule 92(3) CPC barred him from filing a fresh suit raising the same grounds: the auction had attained finality. The Court also held the 1974 sale deed to Shetty was void against the maintenance charge because it was executed while Thopamma's 1968 suit was still pending, squarely attracting the doctrine of lis pendens under Section 52 of the Transfer of Property Act; Shetty, a close friend of the husband, could not claim to be a bona fide purchaser without notice. It further found that the first appellate court and High Court had wrongly given findings of fraud and collusion that were never even pleaded in Shetty's suit. The Court set aside the first appellate court's and High Court's judgments, restored the trial court's dismissal of Shetty's suit, and allowed the appeal, leaving parties to bear their own costs.

Lesson Learnt

A property bought from someone while a court case affecting that very property (such as a maintenance suit seeking a charge on it) is still pending is vulnerable under the doctrine of "lis pendens": the buyer takes it subject to the outcome of that case; and if a court auction sale is not successfully challenged within the law's own procedure, a litigant cannot later relitigate the same objections through a fresh civil suit.

Official source (sci.gov.in)View Judgment (PDF)

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