Lis Pendens Applies to Money Suits Involving Mortgaged Property: Supreme Court Expands Doctrine Under Section 52 of Transfer of Property Act

Introduction to the Landmark Ruling

The Supreme Court of India delivered a significant judgment on December 15, 2025, in the case of Danesh Singh & Ors. v. Har Pyari (Dead) through LRs & Ors. [1], which has fundamentally reshaped the understanding of lis pendens in the context of mortgage-backed money recovery suits. The two-judge bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan clarified that the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882 applies not only to suits directly concerning immovable property but also extends to money recovery suits where the debt is secured by mortgage over immovable property. This judgment addresses long-standing ambiguities regarding the applicability of lis pendens to money suits and establishes that ex parte proceedings are equally covered under the doctrine.

Understanding the Doctrine of Lis Pendens

The doctrine of lis pendens, derived from the Latin maxim “pendente lite nihil innovetur” meaning “nothing new should be introduced during the pendency of litigation,” forms a cornerstone of property law in India. This principle is codified under Section 52 of the Transfer of Property Act, 1882, which provides that during the pendency of any suit or proceeding in a competent court where any right to immovable property is directly and specifically in question, the property cannot be transferred so as to affect the rights of any other party under any decree that may be passed.

The statutory provision reads: “During the pendency in any Court having authority within the limits of India or established beyond such limits by the Central Government of any suit or proceedings which is not collusive and in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose.” [2]

The Explanation to Section 52 further clarifies that pendency shall be deemed to commence from the date of presentation of the plaint and continue until complete satisfaction or discharge of the decree has been obtained. This temporal scope is crucial as it extends the protection beyond mere judgment to actual satisfaction of the decree, including execution proceedings.

Factual Background of the Danesh Singh Case

The dispute traces its origin to a mortgage transaction executed in 1970. Duli Chand had mortgaged agricultural land measuring 116 Kanals 13 marlas to New Bank of India to secure a loan of Rs. 20,000 for purchasing a tractor. When Duli Chand failed to repay the loan, the bank instituted a money recovery suit in 1982 before the Sub-Judge. The suit specifically mentioned the mortgage deed and prayed that in case of non-payment, the mortgaged property be attached and sold to satisfy the decree.

The suit was decreed ex parte for Rs. 22,753 as Duli Chand had passed away during pendency and his legal heirs failed to appear. During the pendency of this suit and subsequent execution proceedings, portions of the mortgaged property were sold by the judgment-debtors to third parties, including the respondents. The first purchase occurred before the execution petition was filed, while the second purchase happened after its institution. When the bank proceeded with execution, the entire mortgaged property was attached and put to auction. The appellants emerged as the highest bidders and obtained possession.

The pendente lite purchasers then filed a separate civil suit claiming ownership and challenging the auction sale, asserting they were bona fide purchasers without notice of the pending litigation. The trial court, first appellate court, and High Court all upheld their claims, leading the auction purchasers to approach the Supreme Court.

Critical Legal Issues Examined by the Supreme Court

Application of Section 52 to Money Recovery Suits

The primary contention raised by the pendente lite 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 within the meaning of Section 52. The Supreme Court firmly rejected this narrow interpretation. The Court held that where a money suit is backed by a mortgage and the plaint specifically refers to the mortgaged property with a prayer for its attachment and sale in case of default, the right and interest in immovable property are directly in issue even if the decree is framed as a money decree.

The Court relied on the precedent established in Siddagangaiah v. N.K. Giriraja Shetty [3], observing that Section 52 does not exclude money suits from its ambit. The judgment emphasized that to hold otherwise would permit judgment-debtors to alienate secured property with impunity, rendering decrees illusory and defeating creditor rights. The Court clarified that the test is whether the immovable property forms the substratum of the relief sought, not the nomenclature of the suit or the form of the decree.

Doctrine Applies to Ex Parte Proceedings

Another significant issue addressed was whether the doctrine of lis pendens applies to ex parte proceedings. The pendente lite transferees argued that since the decree was passed ex parte without their participation, the doctrine should not bind them. The Supreme Court decisively rejected this argument by tracing the legislative history of Section 52.

The Court noted that the 1929 amendment to Section 52 replaced the phrase “contentious suit” with “any suit or proceeding which is not collusive.” This deliberate expansion was intended to prevent litigants from circumventing the doctrine through non-participation. The Court held that ex parte proceedings are fully covered by Section 52 provided the suit is not collusive. The doctrine operates as a matter of public policy, irrespective of whether parties actively participate in the proceedings. The only exception is for collusive suits, which are expressly excluded by the statute itself.

Continuation of Lis Pendens During Execution Proceedings

A crucial clarification provided by the Supreme Court relates to the temporal scope of lis pendens. Relying on the Explanation to Section 52, the Court held that pendency continues until complete satisfaction or discharge of the decree has been obtained or has become unobtainable due to expiration of limitation period. Consequently, execution proceedings form an integral part of lis pendens, and transfers made during execution before satisfaction remain subject to the decree.

This interpretation has far-reaching consequences, particularly in cases where judgment-debtors attempt last-minute alienations during execution to obstruct recovery. The judgment makes it clear that the protection afforded by Section 52 extends throughout the entire litigation lifecycle, from institution of the suit until final satisfaction of the decree.

Rejection of Bona Fide Purchaser Defense

The pendente lite transferees in Danesh Singh argued they were bona fide purchasers for value without notice, having obtained no-encumbrance certificates from revenue authorities. The Supreme Court reiterated settled law that notice is irrelevant under Section 52. The doctrine of lis pendens is founded on public policy considerations, not on equitable principles governing relations between private parties.

The Court emphasized that lis pendens operates in rem against the property itself, not merely in personam against individual parties. Once a suit is pending and the conditions of Section 52 are satisfied, any transfer made during pendency is automatically subordinated to the eventual decree, regardless of whether the transferee had actual or constructive notice of the pending litigation. Even genuine purchasers who conduct due diligence and obtain clearance certificates cannot claim immunity against the decree.

This position aligns with earlier Supreme Court pronouncements in cases such as Hardev Singh v. Gurmail Singh [4], where it was held that Section 52 does not declare pendente lite transfers void or illegal, but makes the transferee bound by the decision of the pending litigation. The transferee steps into the shoes of the transferor and acquires whatever rights the transferor possessed, subject to the outcome of the suit.

Relationship Between Lis Pendens and Mortgage Law

The Danesh Singh judgment clarifies the intersection between the doctrine of lis pendens and mortgage law principles. When a mortgagor creates a mortgage over immovable property to secure a debt, the mortgaged property becomes answerable for the debt. If the mortgagor subsequently transfers the mortgaged property to a third party during the pendency of a suit for recovery of the mortgage debt, that transfer cannot defeat the mortgagee’s right to proceed against the property.

The Court explained that in mortgage transactions, the secured property is intrinsically linked to the relief sought, even in a money suit. The mortgagee’s right to proceed against the property is not merely incidental but forms the very basis of the security. Therefore, any right to the mortgaged property is directly and specifically in question within the meaning of Section 52, satisfying the essential requirement for applicability of lis pendens.

Remedies Available to Pendente Lite Transferees

The Supreme Court addressed the question of what remedies, if any, are available to persons who purchase property during the pendency of execution proceedings. The Court held that pendente lite transferees or persons deriving title from judgment-debtors cannot claim independent rights superior to the decree-holder. Their only remedies lie within the framework of Order XXI of the Code of Civil Procedure, 1908.

Rule 89 of Order XXI provides an opportunity to set aside sale on deposit of the decretal amount along with compensation. Rule 90 permits challenges on specific grounds including material irregularity or fraud in publishing or conducting the sale. However, these remedies are subject to strict limitation periods prescribed under the Limitation Act, 1963. In the present case, the respondents failed to invoke these remedies within the prescribed time, rendering their subsequent separate suit non-maintainable.

The Court emphasized that once the limitation period under Article 127 of the Limitation Act expires, a person cannot file a separate suit to bypass the prescribed procedural framework. This principle prevents parties from undermining the finality of execution proceedings and ensures that challenges to auction sales are raised promptly within the statutory scheme.

Bar Under Section 47 CPC and Order XXI Rule 92

The Supreme Court held that the respondents, being transferees pendente lite of the judgment-debtor, were representatives within the meaning of Section 47 of the Code of Civil Procedure. Section 47 provides that all questions arising between the parties to the suit in which the decree was passed, or their representatives, relating to execution, discharge or satisfaction of the decree, shall be determined by the executing court and not by a separate suit.

Order XXI Rule 92(3) CPC further provides that where property has been sold in execution of a decree, no suit shall lie to set aside the sale on the ground of any irregularity or illegality in the proceedings relating to the sale. The only exception is where the sale has become void for want of jurisdiction in the executing court or through fraud. In the present case, though allegations of fraud were raised, the Court found that the respondents had failed to avail the remedy under Rule 90 within the limitation period, thereby foreclosing their right to challenge the sale through a separate suit.

Public Policy Rationale Behind Lis Pendens

The Supreme Court reiterated that the doctrine of lis pendens embodies a fundamental principle of public policy designed to maintain the subject matter of litigation in status quo until the rights of parties are finally determined. Without this protective mechanism, it would become impossible to bring any suit to a successful conclusion, as parties could continuously alienate property to frustrate judicial proceedings.

The judgment in K.N. Aswathanarayana Setty v. State of Karnataka [5] explained that the doctrine is grounded in justice, equity, and good conscience. Allowing property transfers to prevail during litigation would enable litigants to defeat legitimate claims through strategic alienations. The doctrine ensures that persons involved in litigation are not expected to take notice of titles acquired during pendency of the lawsuit, as such titles remain subservient to the court’s eventual determination.

This public policy foundation distinguishes lis pendens from purely contractual or equitable doctrines. It operates as a rule of law that binds third parties regardless of their knowledge, conduct, or equitable claims. The doctrine reflects the court’s inherent power to protect its jurisdiction and ensure effectiveness of its decrees.

Essential Conditions for Applicability of Lis Pendens

The Supreme Court in Dev Raj Dogra v. Gyan Chand Jain [6] and subsequent cases has established that certain essential conditions must be satisfied for the doctrine of lis pendens to apply. First, there must be a suit or proceeding pending in a court of competent jurisdiction. The suit must be instituted in a court having proper territorial and pecuniary jurisdiction over the subject matter. Second, the suit or proceeding must not be collusive between the parties. Third, the right to immovable property must be directly and specifically in question, not merely incidentally involved. Fourth, the transfer must be made by a party to the suit during its pendency. Fifth, the transfer must be such as would affect the rights of another party under any decree that may be made.

In the Danesh Singh case, all these conditions were satisfied. The suit was pending before a competent court, it was not collusive, the mortgaged property was directly in question as it formed the security for the debt, the transfers were made by parties to the suit during pendency, and the transfers would have affected the bank’s right to realize its dues from the mortgaged property.

Regulatory Framework Governing Property Transfers

The Transfer of Property Act, 1882 provides the statutory framework regulating transfer of immovable property in India. Section 5 of the Act defines “transfer of property” as an act by which a living person conveys property to one or more living persons. The Act recognizes various modes of transfer including sale, mortgage, lease, exchange, and gift. However, these transfer rights are subject to restrictions imposed by law, including the doctrine of lis pendens under Section 52.

The Registration Act, 1908 mandates registration of certain documents affecting immovable property. Section 17 of the Registration Act requires registration of documents creating, declaring, assigning, limiting or extinguishing any right, title or interest in immovable property of value exceeding one hundred rupees. While registration ensures public notice of transactions, it does not override the operation of Section 52 of the Transfer of Property Act. Even a duly registered transfer made during pendency of a suit remains subject to the doctrine of lis pendens.

Interplay with Code of Civil Procedure

The Code of Civil Procedure, 1908 provides the procedural framework for civil litigation in India. Order XXI of the CPC deals with execution of decrees and orders. The Supreme Court’s judgment emphasizes the need to harmonize substantive law under the Transfer of Property Act with procedural law under the CPC. The doctrine of lis pendens under Section 52 of the Transfer of Property Act operates in conjunction with provisions of Order XXI to ensure that execution proceedings are not frustrated by pendente lite transfers.

Section 47 CPC provides that questions arising in execution shall be determined by the executing court itself, not by separate suits. This provision prevents multiplicity of proceedings and ensures expeditious execution of decrees. The Supreme Court held that pendente lite transferees, being representatives of judgment-debtors, are bound by Section 47 and cannot circumvent it by filing separate suits challenging execution sales.

Impact on Mortgage Transactions and Lending Practices

The Danesh Singh judgment has significant implications for mortgage lending and secured transactions. Banks and financial institutions extending loans against mortgaged property can take comfort from the Court’s ruling that their security interest remains protected even if the borrower alienates the property during pendency of recovery proceedings. This protection is crucial for maintaining the integrity of secured lending and ensuring that borrowers cannot defeat legitimate claims by transferring mortgaged property to colluding third parties.

The judgment reinforces the principle that mortgaged property remains answerable for the debt throughout the litigation and execution process. This enhances legal certainty for lenders and promotes responsible lending practices. At the same time, it cautions potential purchasers to conduct thorough due diligence, including searches in court records, before acquiring property, as no-encumbrance certificates from revenue authorities may not reveal pending litigation.

Practical Guidelines for Stakeholders

For parties to mortgage-backed recovery suits, the judgment clarifies that the mortgaged property is directly in question and cannot be transferred without court permission during pendency. For potential purchasers of property, the ruling emphasizes the need for comprehensive due diligence including court record searches, as constructive or actual notice is irrelevant under Section 52. For judgment-debtors, the decision makes clear that attempting to alienate property during pendency to frustrate execution will not succeed, as such transfers remain subject to the decree.

For courts, the judgment provides guidance on interpreting the scope of Section 52 of the Transfer of Property Act and the relationship between lis pendens and execution proceedings. Courts should liberally construe the expression “any right to immovable property is directly and specifically in question” to include money suits where the relief is intrinsically connected to mortgaged property. For legal practitioners, the decision serves as an authoritative exposition on multiple aspects of lis pendens doctrine, execution law, and the interplay between substantive and procedural provisions.

Conclusion

The Supreme Court’s decision in Danesh Singh v. Har Pyari represents a landmark exposition on the doctrine of lis pendens, resolving interpretative controversies and providing much-needed clarity on the scope of Section 52 of the Transfer of Property Act. By holding that the doctrine applies to money suits involving mortgaged property and extends to ex parte proceedings and execution stages, the Court has reinforced the effectiveness of civil litigation and protected the rights of decree-holders. The judgment strikes a balance between protecting legitimate creditors and maintaining the integrity of judicial processes, while ensuring that the doctrine is not circumvented through technical arguments or strategic alienations. This decision will have far-reaching consequences for mortgage law, execution proceedings, and property transactions in India, providing clearer guidelines for courts, litigants, and stakeholders in the years to come.

References

[1] Danesh Singh & Ors. v. Har Pyari (Dead) through LRs & Ors., Civil Appeal No. 14761 of 2025, 2025 INSC 1434. Available at: https://www.livelaw.in/supreme-court/lis-pendens-applies-to-money-suits-involving-mortgaged-property-ex-parte-proceedings-also-covered-under-s-52-tp-act-supreme-court-513614

[2] The Transfer of Property Act, 1882, Section 52. Available at: https://indiankanoon.org/doc/1634925/

[3] Siddagangaiah v. N.K. Giriraja Shetty, (2018) 7 SCC 278. Available at: https://www.scconline.com/blog/post/2025/12/17/sc-separate-suit-auction-sale-transferee-pendente-lite-bar-scc-times/

[4] Hardev Singh v. Gurmail Singh. 

[5] K.N. Aswathanarayana Setty v. State of Karnataka & Ors. Available at: https://lawbhoomi.com/doctrine-of-lis-pendens-and-section-52-of-transfer-of-property-act/

[6] Dev Raj Dogra v. Gyan Chand Jain. Available at: https://lawbhoomi.com/doctrine-of-lis-pendens-and-section-52-of-transfer-of-property-act/

[7] Supreme Court of India. (2025). Doctrine of Lis Pendens – Recent Developments. Available at: https://www.drishtijudiciary.com/current-affairs/the-doctrine-of-lis-pendens

[8] Legal Bites. (2025). Lis Pendens Extends Beyond Property Suits: Money Claims, Mortgaged Property & Ex-Parte Proceedings Covered. Available at: https://www.legalbites.in/property-law/lis-pendens-extends-beyond-property-suits-money-claims-mortgaged-property-ex-parte-proceedings-covered-1229165