Vendor Is Necessary Party In Specific Performance Suits Even If He Has Transferred Property To Third Party: Supreme Court

Introduction

The Supreme Court of India has recently reaffirmed a fundamental principle of property law through its judgment in Kishorilal (D) Through LRS & Ors. vs. Gopal & Ors., delivered in January 2026 [1]. This ruling emphasizes that in suits for specific performance of agreements to sell immovable property, the original vendor remains an indispensable party to the proceedings, notwithstanding any subsequent transfer of the disputed property to third parties during the litigation. The judgment, authored by Justice Manoj Misra alongside Justice Ujjal Bhuyan, clarifies the procedural requirements and substantive rights of parties involved in specific performance disputes when property ownership has changed hands during the pendency of litigation.

Background and Facts of the Case

The dispute originated from an agreement for sale executed between Kishorilal, the vendor, and Gopal, the purchaser. During the pendency of the suit for specific performance, Kishorilal transferred the suit property to two third parties, Brajmohan and Manoj, through a sale deed executed in 1992. Despite this intervening transfer, the trial court decreed the suit in favor of Gopal in 2000, directing specific performance of the original contract. The transferees pendente lite were impleaded in the proceedings as purchasers during the ongoing litigation and were consequently held bound by the outcome of the case [1].

When the appeal against the trial court’s decree was pending before the Madhya Pradesh High Court, Kishorilal passed away in 2005. Of his four legal heirs, three were substituted on record as parties to the appeal. Subsequently, one of the substituted legal heirs, Murarilal, died in 2007, and his legal representatives were not brought on record within the prescribed time. This procedural lapse gave rise to a contentious objection that since all legal representatives of the deceased vendor had not been properly substituted, the appeal had abated, rendering the decree unenforceable. The High Court initially dismissed this objection but later reversed its position, dismissing the appeal as abated. This contradiction prompted the appellants to approach the Supreme Court.

The Legal Framework Governing Specific Performance

The Specific Relief Act, 1963, provides the statutory framework for enforcing specific performance of contracts in India. The remedy of specific performance is an equitable relief that compels a party to fulfill their contractual obligations in kind, rather than simply paying monetary damages. This remedy is particularly significant in matters involving immovable property, where courts have traditionally recognized that monetary compensation may not adequately remedy the breach of contract.

Under the Specific Relief Act, several provisions govern when and how specific performance may be granted. While these provisions have undergone amendments over time, the fundamental principles remain rooted in equity and fairness. The Act recognizes that certain contracts, particularly those involving unique or immovable property, cannot be adequately remedied through damages alone. When a vendor enters into an agreement to sell immovable property and subsequently refuses to execute the sale deed or transfers the property to another party, the disappointed purchaser may seek specific performance to compel the vendor to honor the original contract.

The Doctrine of Lis Pendens and Transfers Pendente Lite

Central to understanding the Supreme Court’s reasoning in this case is the doctrine of lis pendens, codified in Section 52 of the Transfer of Property Act, 1882. This provision states that during the pendency of any suit or proceeding in which any right to immovable property is directly and specifically in question, the property cannot be transferred by any party to the suit in a manner that would affect the rights of any other party under any decree or order that may be passed, except under the authority of the court [2].

The doctrine of lis pendens, derived from the Latin maxim “pendente lite nihil innovetur” (nothing new should be introduced during the pendency of litigation), serves to protect the integrity of judicial proceedings by preventing parties from frustrating potential court orders through strategic property transfers. When a suit concerning immovable property is pending, any transfer made by a party to that suit is not void but remains subject to the outcome of the litigation. The transferee pendente lite steps into the shoes of the transferor and is bound by whatever decree the court ultimately passes, regardless of whether they had notice of the pending litigation [3].

This principle recognizes that if parties were permitted to transfer disputed property freely during litigation, it would become virtually impossible to bring any property dispute to a successful resolution. Successive transfers could continuously defeat the purpose of judicial adjudication, rendering court decrees meaningless. The doctrine thus rests not on the concept of notice to subsequent purchasers, but on the necessity of maintaining the court’s jurisdiction over the subject matter of the dispute.

The Vendor as a Necessary Party In Specific Performance Suits: Supreme Court’s Reasoning

The Supreme Court in Kishorilal vs. Gopal emphatically reaffirmed that the vendor is a necessary party in a suit for specific performance, even when the vendor has transferred his interest in the property to a third party during the pendency of the suit [1]. This principle finds its foundation in earlier landmark judgments that have consistently held this position for decades.

The Court cited the seminal decision in Lala Durga Prasad vs. Lala Deep Chand, decided in 1953, where the Supreme Court had established that the proper form of decree in a specific performance suit involving a subsequent transferee is to direct both the vendor and the subsequent transferee to execute the conveyance in favor of the plaintiff-purchaser [4]. This formulation recognizes distinct but complementary roles: the subsequent transferee conveys the title that has vested in them, while the vendor fulfills the contractual obligations and special covenants arising from the original agreement to sell.

The Court further relied on Dwarka Prasad Singh vs. Harikant Prasad Singh, where it was emphasized that without the vendor joining in the execution of the sale deed, special covenants and contractual assurances between the vendor and the original purchaser cannot be incorporated into the conveyance [5]. The transferee pendente lite, being a stranger to the original contract, cannot be expected to undertake obligations or provide warranties that were specifically negotiated between the contracting parties.

Justice Misra, writing for the bench, observed that the reason for this requirement is straightforward: the transferee or third party cannot be subjected to special covenants, if any, between the vendor and the plaintiff-purchaser. The object of a decree of specific performance is to place the person who agreed to purchase the property in the same position they would have occupied if the contracting parties had, pursuant to the agreement, executed a deed of sale and completed it in every manner [1].

Distinguishing Between Necessary and Proper Parties

The Supreme Court’s jurisprudence has carefully distinguished between necessary parties and proper parties in specific performance litigation. A necessary party is one without whom no effective decree can be passed by the court. Their absence would make it impossible for the court to grant complete relief or determine all questions in controversy. A proper party, on the other hand, is one whose presence facilitates comprehensive adjudication but whose absence does not prevent the court from passing an effective decree [6].

In the context of specific performance suits, the vendor is invariably a necessary party because they are the original contracting party who undertook specific obligations under the agreement to sell. The contractual relationship exists between the vendor and the purchaser, and any decree of specific performance must address the performance of that contract. The subsequent transferee pendente lite, while bound by the outcome of the litigation under the doctrine of lis pendens, is not always a necessary party in the strict sense, though their joinder as a proper party is often prudent to ensure that title can be effectively conveyed upon the passing of the decree.

Recent Supreme Court decisions have clarified that while it is not mandatory to join the subsequent purchaser as a necessary party, their joinder as a proper party is advisable to bind their rights and forestall conflicting claims. The suit for specific performance focuses on enforcing the original contract against the vendor, not on canceling subsequent sales to bona fide purchasers. Even without the subsequent purchaser’s formal presence as a party, the decree can be effectuated against the vendor and executed against those claiming under the vendor, subject to the protections afforded to bona fide purchasers without notice under the Specific Relief Act [7].

The Consequences of Non-Substitution and Abatement

A critical aspect of the Kishorilal judgment concerned the consequences of failing to substitute legal representatives of a deceased party in a timely manner. Under Order 22 of the Code of Civil Procedure, 1908, when a party to a suit dies during the pendency of proceedings, their legal representatives must be brought on record within the prescribed time period. If this is not done, the suit or appeal may abate in respect of that deceased party.

However, the Supreme Court clarified that abatement does not automatically follow in every case of non-substitution. When the estate of the deceased party is sufficiently represented by other parties already on record, the proceedings do not abate merely because one or more legal heirs have not been substituted. In the present case, although one of Kishorilal’s legal heirs, Murarilal, died and his representatives were not brought on record, three other legal heirs of Kishorilal remained as parties to the appeal. Moreover, the subsequent purchasers Brajmohan and Manoj, in whom the title to the property had vested through the sale deed executed pendente lite, were also parties to the appeal [1].

The Court held that in such circumstances, Kishorilal’s estate was sufficiently represented, and therefore the appeal did not abate. This principle prevents the technical rule of abatement from being used to defeat substantial justice when the interests of the deceased party are adequately protected and represented by other parties to the litigation.

The Court also invoked the doctrine of res judicata between different stages of the same proceeding. Once the High Court had determined in an earlier order that the appeal had not abated despite the non-substitution of Murarilal’s heirs, it was not open to the court to revisit this issue at a later stage in the same proceedings. The principle of res judicata applies with equal force to different stages within the same litigation as it does to entirely separate proceedings, preventing parties from relitigating issues that have already been decided [1].

Practical Implications for Property Transactions and Litigation

The Supreme Court’s reaffirmation of these principles carries significant practical implications for property transactions and litigation in India. For vendors who have entered into agreements to sell, the judgment makes clear that they cannot escape their contractual obligations by simply transferring the property to a third party during the pendency of a specific performance suit. The vendor, as a necessary party in specific performance, remains involved throughout the litigation, and their legal heirs must be properly substituted in the event of their death to ensure that the decree, if granted, can be effectively executed.

For purchasers who have entered into agreements to buy immovable property, the judgment provides reassurance that subsequent transfers by the vendor during litigation will not defeat their rights under the original contract. The doctrine of lis pendens ensures that such transfers remain subject to the outcome of the specific performance suit, and the subsequent purchaser will be bound by the decree even if they were not initially parties to the proceedings.

For third parties considering the purchase of property that is subject to pending litigation, the judgment serves as a warning that their title will be subordinate to any decree passed in favor of the original agreement holder. Purchasers pendente lite take the property subject to the risk that they may ultimately be required to convey it to the plaintiff if the specific performance suit succeeds. This underscores the critical importance of conducting thorough due diligence, including searches for pending litigation, before entering into property transactions.

For legal practitioners, the judgment emphasizes the importance of carefully identifying and joining all necessary parties in specific performance suits from the outset, and of ensuring proper substitution of legal representatives when parties die during the pendency of proceedings. The distinction between necessary and proper parties must be clearly understood, and applications for joinder must be made promptly to avoid procedural complications that could jeopardize the enforceability of decrees.

The Interplay with Other Provisions of the Specific Relief Act

The Supreme Court’s decision must be understood within the broader context of the Specific Relief Act, particularly Section 19(b), which addresses the persons against whom specific performance may be enforced. This provision states that specific performance of a contract may be enforced against any person claiming under the contracting party by a title arising subsequently to the contract, except a transferee for value who has paid money in good faith and without notice of the original contract [8].

This exception for bona fide purchasers without notice creates an important qualification to the general rule that subsequent transferees are bound by the outcome of specific performance litigation. If a subsequent purchaser can establish that they purchased the property for valuable consideration, in good faith, without any knowledge or notice of the prior agreement to sell, they may be protected from having to convey the property to the original agreement holder. However, the burden of proving these elements rests on the subsequent purchaser, and courts scrutinize such claims carefully, particularly where there are circumstances that should have put a reasonable purchaser on inquiry.

The interplay between the doctrine of lis pendens and the bona fide purchaser exception has been the subject of considerable judicial interpretation. Generally, when a transfer occurs after the filing of a suit for specific performance, it becomes difficult for the subsequent purchaser to claim lack of notice, as the pendency of the suit itself constitutes constructive notice. The doctrine of lis pendens operates to bind the transferee regardless of actual knowledge, though the specific performance decree can only be enforced against subsequent purchasers subject to the qualifications in Section 19(b) of the Specific Relief Act.

Conclusion

The Supreme Court’s judgment in Kishorilal vs. Gopal represents a significant reaffirmation of well-established principles governing specific performance litigation in India. By holding that the vendor remains a necessary party even after transferring the disputed property to third parties, the Court has reinforced the contractual nature of specific performance remedies and the importance of ensuring that decrees can effectively implement all aspects of the original agreement to sell, including special covenants and warranties.

The decision provides clarity on several important procedural and substantive issues, including the application of the doctrine of lis pendens to transfers during litigation, the circumstances under which appeals do not abate despite incomplete substitution of legal representatives, and the proper form of decrees when both the original vendor and subsequent transferees must join in executing the conveyance. These principles serve to protect the rights of original agreement holders while recognizing the position of subsequent transferees who take property pendente lite.

For all stakeholders in property transactions, the judgment underscores the critical importance of fulfilling contractual obligations, conducting thorough due diligence before purchasing property, and ensuring proper party representation throughout the litigation process. The vendor’s status as a necessary party is not merely a procedural technicality but a substantive requirement that ensures specific performance decrees can be fully and effectively implemented, placing the agreement holder in the position they would have occupied had the contract been performed according to its terms.

References

[1] Kishorilal (D) Through LRS & Ors. vs. Gopal & Ors., 2026 INSC 48. Available at: https://www.livelaw.in/supreme-court/vendor-is-necessary-party-in-specific-performance-suits-even-if-he-has-transferred-property-to-third-party-supreme-court-518588 

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

[3] Doctrine of Lis Pendens and Section 52 of Transfer of Property Act. Available at: https://lawbhoomi.com/doctrine-of-lis-pendens-and-section-52-of-transfer-of-property-act/ 

[4] Lala Durga Prasad and Another vs. Lala Deep Chand and Others, AIR 1954 SC 75. Available at: https://indiankanoon.org/doc/752687/ 

[5] Dwarka Prasad Singh and Others vs. Harikant Prasad Singh and Others, (1973) 1 SCC 179. Available at: https://www.barandbench.com/law-firms/view-point/suit-for-specific-performance-proper-form-of-decree 

[6] M/S J N Real Estate vs. Shailendra Pradhan & Ors., 2025 LiveLaw (SC) 519. Available at: https://www.lawweb.in/2025/11/not-necessary-party-but-proper-party.html 

[7] Supreme Court: Subsequent Purchaser Not a ‘Necessary Party’ but Can Be Added as ‘Proper Party’ in Specific Performance Suit. Available at: https://courtbook.in/posts/supreme-court-subsequent-purchaser-not-a-necessary-party-but-can-be-added-as-proper-party-in-specific-performance-suit 

[8] Specific Relief Act, 1963, Section 19(b). Available at: https://www.indiacode.nic.in/bitstream/123456789/1583/7/A1963-47.pdf