Case Title: H. Anjanappa & Ors. Vs. A. Prabhakar & Ors. & Beena Anthony & Ors.
Date of Order: 29 January 2025
Case No.: Civil Appeal Nos. 1180-1181 of 2025
Neutral Citation: 2025 INSC 121
Court: Supreme Court of India
Judge: Justice J.B. Pardiwala & Justice R. Mahadevan
Facts:
The dispute arose from a suit for specific performance filed by the plaintiffs (appellants) based on an Agreement of Sale executed in 1995 for a property in Bangalore. The original owner, acting through her Power of Attorney holder, agreed to sell the property for ₹20,00,000, of which ₹15,00,000 was paid. However, during the subsistence of this agreement, the property was sold to a third party (Defendant No. 3). The plaintiffs initiated legal proceedings, obtained an injunction against alienation, and eventually secured a decree for specific performance in 2016.
During the pendency of the suit, a portion of the property was transferred to Respondent Nos. 1-2, who later sought to be impleaded in the suit. Their impleadment application was rejected in 2014, and this decision attained finality. However, after the original defendant's appeal was dismissed, the subsequent purchasers (Respondent Nos. 1-2) filed a belated appeal, seeking condonation of a 586-day delay and leave to appeal. The Karnataka High Court allowed both, leading to the present appeals before the Supreme Court.
Issues:
1. Whether the High Court erred in condoning an inordinate delay of 586 days in filing the appeal.
2. Whether the High Court was justified in granting leave to appeal to Respondent Nos. 1-2 despite their impleadment application being rejected.
3. Whether the subsequent purchasers had a legal right to challenge the decree of specific performance.
Reasoning and Analysis of the Judgment:
The Supreme Court found that the High Court had erred in condoning the delay and granting leave to appeal.
1. Delay in Filing Appeal: The Court held that the 586-day delay was unexplained and unjustified. The respondents claimed ignorance of the suit, but their earlier attempt to be impleaded showed otherwise. The Court noted that such delays should not be condoned merely based on age and residence abroad.
2. Leave to Appeal: The Supreme Court analyzed the legal principles governing appeals by non-parties. It held that while a lis pendens transferee (subsequent purchaser during the pendency of litigation) may seek to be impleaded, their failure to challenge the rejection of their impleadment application precluded them from later seeking leave to appeal. The doctrine of res judicata applied, preventing them from relitigating the matter.
3. Application of Section 52 of the Transfer of Property Act: The Court reaffirmed that transfers made during the pendency of litigation do not confer any independent rights on the transferee. Such transferees take the property subject to the final outcome of the case.
4. Misuse of Legal Process: The Court noted that the respondents had purchased the property despite knowing about the litigation and injunction. Granting them leave to appeal would encourage collusive transfers to derail litigation.
Decision:
The Supreme Court allowed the appeals and set aside the High Court’s order. It ruled that Respondent Nos. 1-2 had no right to appeal and that their remedy lay in separate proceedings against their vendor (Defendant No. 3) for any claims related to the purchase. The Court emphasized the importance of finality in litigation and the need to prevent undue delays caused by subsequent purchasers challenging decrees long after their rights had been foreclosed.
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