The Danesh Singh Case: Untangling the Web of Auction Sales, Lis Pendens, and Third-Party Rights

The Supreme Court of India's recent judgment in Danesh Singh & Ors. v. Har Pyari (Dead) Thr. Lrs. & Ors. (Civil Appeal No. 14761 of 2025) serves as a masterclass on the intricate interplay between property transfers during litigation, the finality of court auction sales, and the remedies available to affected parties. This landmark ruling clarifies several procedural labyrinths within the Code of Civil Procedure, 1908 (CPC) and the Transfer of Property Act, 1882 (TPA). For lawyers, it's a critical precedent on Order XXI CPC and Section 52 TPA. For laypersons, it's a stark reminder of the perils of buying property embroiled in legal disputes.

The Core Dispute: A Property Sold Twice Over

At its heart, the case involved a property sold twice: first by a judgment-debtor to private buyers, and then by a bank via a court auction.

The Timeline:

1. 1970: Duli Chand mortgaged 116 Kanals 13 Marlas of land to New Bank of India for a loan.

2. 1982: The bank sued for loan recovery and prayed for the sale of the mortgaged property if the debt remained unpaid.

3. 12.11.1984: An ex-parte money decree was passed against Duli Chand's legal heirs (Judgment-Debtors).

4. 13.05.1985 & 24.06.1985: Respondent Nos. 1 & 2 (Har Pyari and her husband) purchased a portion (24 Kanals 11 Marlas) of this very mortgaged property from one of the judgment-debtors.

5. 25.05.1985: The bank initiated execution proceedings.

6. 08.10.1985: The Executing Court attached the entire mortgaged property.

7. 20.06.1988: The attached property was auctioned. The appellants, sons of a judgment-debtor, were the highest bidders, purchasing the entire 116+ Kanals for a mere Rs. 35,000.

8. 30.08.1988 & 24.06.1989: The auction sale was confirmed, and possession was delivered to the auction-purchasers (appellants).

9. 05.07.1989: Respondent Nos. 1 & 2 claimed they were denied access to their purchased portion, discovering the auction for the first time.

10. 1989: They filed a separate civil suit, declaring the auction sale void as to their portion and seeking declaration of ownership and possession.

The Trial Court and the High Court ruled in favour of the private purchasers (Respondent Nos. 1 & 2), holding the auction sale void due to irregularities and fraud. The auction-purchasers (Appellants) appealed to the Supreme Court.

The Supreme Court's Analysis: Five Pivotal Issues

Justice I.B. Pardiwala, writing for the Bench, systematically dismantled the findings of the courts below by analyzing five core legal issues.

1. The Unyielding Doctrine of Lis Pendens (Section 52, TPA 1882)

The Court firmly held that the purchase by Respondent Nos. 1 & 2 was squarely hit by the doctrine of lis pendens under Section 52 of the TPA.

a. What is Lis Pendens? It is a principle of public policy meaning "pending litigation." It prohibits the transfer of any property that is "directly and specifically in question" in a pending suit, to protect the rights of the parties to the litigation.

b. Why it Applied Here: The bank's original suit (filed in 1982) explicitly described the mortgaged property and prayed for its sale in case of default. Thus, a "right to immovable property" was "directly and specifically in question" from the date the plaint was filed.

c. Critical Dates: Respondent Nos. 1 & 2 bought the property after the bank's suit was filed (1982) and after the decree was passed (1984). They were, therefore, pendente lite (during litigation) transferees.

d. Key Legal Point: The Court emphasized that lis pendens applies irrespective of the transferee's knowledge or good faith. The fact that Respondent Nos. 1 & 2 obtained a "No Encumbrance Certificate" was immaterial. As pendente lite transferees, they step into the shoes of their vendor (the judgment-debtor) and are bound by the outcome of the pending proceedings. The Trial Court's error in noting the purchase date as before the decree was corrected.

Verdict on Issue 1: The transfer was hit by Section 52, TPA. Respondent Nos. 1 & 2 derived a derivative title, subject to the bank's mortgage and the pending execution.

2. The Missed Remedies: Order XXI, Rules 89 & 90 CPC

The Court meticulously examined whether the private purchasers could have sought relief within the execution proceedings itself, instead of filing a separate suit.

A. Rule 89 (Deposit to Set Aside Sale):

This rule allows a person with an interest in the auctioned property to set aside the sale by depositing the decretal amount and 5% of the purchase money within 60 days of the sale.

a. Court's Finding: The Court held that even pendente lite transferees could apply under Rule 89, as the 1976 amendment widened the scope to "any person claiming an interest." However, this remedy was time-barred for Respondent Nos. 1 & 2, as the 60-day period from the sale date (20.06.1988) had long lapsed by the time they gained knowledge.

B. Rule 90 (Setting Aside Sale for Irregularity/Fraud):

This rule allows an affected person to challenge a sale on grounds of "material irregularity or fraud in publishing or conducting" it, provided they suffer "substantial injury."

a. Court's Finding: The alleged irregularities (sale in camera, low price, relatives bidding) pertained to the manner of sale. However, the Court found the core grievance of Respondent Nos. 1 & 2 was different: they believed the property should not have been attached and sold at all because they owned it. This is a question of title and saleable interest, not merely procedural irregularity.

b. Critical Distinction: Rule 90 deals with how the sale is conducted. A challenge based on the judgment-debtor's lack of title ("this isn't his property to sell") falls outside the scope of Rule 90 and should be raised under Rule 58 (objection to attachment) or a separate suit under specific conditions.

 Furthermore, the application would have been barred by limitation (60 days) and by Order XXI, Rule 90(3), which prevents raising objections that could have been made before the proclamation of sale was drawn up.

Verdict on Issue 2: Respondent Nos. 1 & 2 could not have successfully availed remedies under Rules 89 or 90, both on merits and due to limitation.

 3. The Bar on Separate Suits: Order XXI, Rule 92(3) & Section 47 CPC

This is the crux of the judgment, clarifying when a separate suit is barred.

A. Rule 92(3) CPC: It states, "No suit to set aside an order made under this rule shall be brought by any person against whom such order is made."

 Court's Interpretation: Once a sale is confirmed under Rule 92(1) (as happened here on 30.08.1988), a person whose grounds for challenge fall under Rules 89, 90, or 91 cannot circumvent the limitation period by filing a fresh suit. Allowing this would render the strict timelines of execution proceedings meaningless. The suit was an attempt to overcome the limitation prescribed for a Rule 90 application.

B. Section 47 CPC: It mandates that all questions relating to the execution of a decree between parties to the suit or their representatives must be determined by the Executing Court, "and not by a separate suit."

 Court's Finding: Since Respondent Nos. 1 & 2 were pendente lite transferees, they were "representatives of the judgment-debtor" as understood under Section 47. Therefore, their challenge to the execution sale was a question "relating to the execution... of the decree" that should have been raised before the Executing Court under available mechanisms (like an application under Section 47 itself if alleging nullity), not via a separate suit. The High Court's finding that they were representatives was upheld, thus attracting the bar under Section 47.

Verdict on Issue 3: The separate suit was barred under both Order XXI, Rule 92(3) and Section 47 CPC.

4. Who is a "Third Party"? The Narrow Gate of Rule 92(4)

Respondent Nos. 1 & 2 argued they were "third parties" under Order XXI, Rule 92(4), which allows a third party to file a suit against an auction-purchaser challenging the judgment-debtor's title.

a. Court's Elaborate Interpretation: The Court conducted a deep dive into the scheme of Rule 58 (objections to attachment) and Rule 92(4). It held that a "third party" here refers to someone alien to the original suit and the execution proceedings—a person who had no opportunity to adjudicate their title claim under Rule 58 (typically because they had no knowledge until after the sale was confirmed).

b. Why Respondent Nos. 1 & 2 Didn't Qualify: As pendente lite transferees and thus "representatives" under Section 47, they could not be considered "third parties." Rule 92(4) is not a jurisdiction-conferring provision for all; it's a procedural mandate for a specific category of strangers whose only recourse after a confirmed sale is a title suit.

c. Synergy with Rule 58: The Court harmonized the provisions, stating that the suit mentioned in Rule 58(5) (when an objection is not entertained because the property is already sold) and the suit in Rule 92(4) are one and the same, available only to genuine strangers after sale confirmation.

Verdict on Issue 4: Respondent Nos. 1 & 2 were not "third parties" entitled to file a suit under Rule 92(4).

5. The Remedy of the Dispossessed: Order XXI, Rule 99 CPC

The appellants argued that since Respondent Nos. 1 & 2 were dispossessed, their exclusive remedy was an application under Rule 99 CPC.

a. Court's Analysis: Rule 99 allows "any person other than the judgment-debtor" dispossessed by an auction-purchaser to apply for relief. Rule 101 mandates the Executing Court to adjudicate all questions of right, title, and interest in such a proceeding, barring a separate suit.

b. The Final Twist – Rule 102: However, Rule 102 states that "nothing in rules 98 and 100 shall apply" to a pendente lite transferee of the judgment-debtor. The Court interpreted this to mean that while a pendente lite transferee can file an application under Rule 99, the Executing Court is barred from granting them relief (like restoration of possession under Rule 100). The adjudication would be limited to determining if they are indeed such a transferee.

c. No Separate Suit Escape Route: Crucially, the Court held that this does not open an avenue for a separate suit. The same legal principle (Section 52, TPA) that bars relief under Rule 102 would also defeat their claim in a separate suit. The 1976 amendments intended execution courts to be the sole forum for such adjudications to prevent protracted litigation.

Verdict on Issue 5: Respondent Nos. 1 & 2, as pendente lite transferees, were caught in a remedial deadlock—they could not get relief in execution (Rule 102 bar), and they were not permitted to file a separate suit either.

Conclusion and Final Judgment

The Supreme Court allowed the appeal filed by the auction-purchasers (Appellants). It set aside the judgments of the Trial Court, Appellate Court, and High Court.

The Ultimate Legal Takeaway:

1. The Peril of Pendente Lite Purchase: Buying property during litigation binds you to its outcome, regardless of your good faith or lack of knowledge.

2. Sanctity of Court Auctions: Challenges to execution sales must be made within the strict framework and timelines of Order XXI CPC (Rules 89, 90, 91). A confirmed sale attains significant finality.

3. Remedial Hierarchy: Parties must choose the correct procedural remedy. A challenge on grounds of fraud/irregularity (Rule 90) is different from a challenge based on title (Rule 58 or a suit by a true third party under Rule 92(4)).

4. The Separate Suit Bar is High: The gates for filing a separate civil suit to attack an execution sale are now very narrow, especially for those considered "representatives" of the original parties.

The Danesh Singh judgment reinforces procedural discipline, prioritizes the finality of execution proceedings, and offers a comprehensive guide to navigating the complex crossroads of property law and civil procedure.

Case Name: Danesh Singh & Ors. v. Har Pyari (Dead) Thr. Lrs. & Ors., Civil Appeal No. 14761 of 2025 (Arising out of SLP(C) No. 14461 of 2019), Supreme Court of India.