S.53A Transfer Of Property Act Protection Not Available If Person Entered Into Agreement Knowing About Pending Litigation
The Supreme Court recently reaffirmed that protection under Section 53A of the Transfer of Property Act, 1882 (“TPA”), for a person possessing a property under part performance of a contract, is not available to a party who knowingly entered into the agreement despite being aware of pending litigation.
The Court approved the view of the High Court that Section 53A of the Transfer of Property Act will not be applicable to the facts and circumstances of this case as the appellant had knowledge about the pendency of the suit when he had entered into an agreement with the father of the respondent Nos. 1 to 8.
The Court held that Section 53A TPA cannot be invoked by a transferee to obstruct or resist the claims of decree holders who have legally acquired rights over the suit property. It emphasized that a transferee who enters into a sale agreement during pending litigation, despite lacking a valid claim, cannot use this provision to override the decree holders' rights.
“the Courts have uniformly held that the limited rights of the transferee pendent lite on the principle of lis pendens. Such limited rights cannot be stretched to obstruct and resist the full claim of the decree holders to execute the decree in their favour. In fact, the Courts have deprecated such obstruction.”, the court observed.
