LIS PENDENS, AUCTION SALES, AND THE LIMITS OF BONA FIDE PURCHASES: REASSERTING DISCIPLINE IN EXECUTION PROCEEDINGS

INTRODUCTION
The Supreme Court of India, in Danesh Singh & Ors. v. Har Pyari (Dead) through LRs & Ors., Civil Appeal No. 14761 of 2025 (arising out of SLP (C) No. 14461 of 2019), reported as 2025 INSC 1434, delivered a comprehensive and authoritative judgment on 15 December 2025. The decision was authored by Justice J.B. Pardiwala, speaking for the Bench.
This landmark ruling undertakes an exhaustive examination of the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882, the scheme of Order XXI of the Code of Civil Procedure, 1908 and the circumstances in which a separate civil suit challenging an execution sale is maintainable. The Judgment reconciles competing principles of finality of execution proceedings, protection of third-party rights and the imperative to nullify transactions tainted by fraud.

BRIEF FACTS
The dispute traces its origin to a mortgage created in 1970 by one Duli Chand in favour of a bank to secure a loan. Upon default, the Bank instituted a recovery suit, which culminated in an ex parte decree in 1984. During and after these proceedings, portions of the mortgaged property were sold by one of the Judgment-Debtors to the Respondents (Plaintiffs), who claimed to be bona fide purchasers for value.
Subsequently, the Bank initiated execution proceedings, resulting in the auction sale of the entire mortgaged property. The Appellants—sons of one of the Judgment-Debtors—emerged as auction purchasers in a sale conducted in circumstances later alleged to be irregular and collusive. Possession was delivered to them, following which the Respondents were dispossessed from the land they had earlier purchased.
The Respondents instituted a separate civil suit seeking a declaration that the auction sale, insofar as it affected their property, was void and not binding upon their rights. The Trial Court, the First Appellate Court and the High Court concurrently upheld the maintainability of the suit and granted relief in favour of the Respondents. Aggrieved, the auction purchasers approached the Supreme Court.

ISSUES OF LAW
The Supreme Court was called upon to decide, inter alia:
1) Whether the transfers in favour of the respondents were hit by Section 52 of the Transfer of Property Act, 1882, embodying the doctrine of lis pendens.
2) Whether the respondents were required to pursue remedies under Order XXI Rules 89, 90, or 99 CPC, instead of instituting a separate suit.
3) Whether the bar under Section 47 CPC or Order XXI Rule 92(3) CPC precluded a separate suit.
4) Whether the respondents could be treated as “third parties” entitled to challenge the auction sale on grounds of fraud.
5) Whether fraud and material irregularities in execution proceedings could vitiate even a confirmed auction sale.

ANALYSIS OF THE JUDGMENT
The Supreme Court undertook an extensive doctrinal analysis of Section 52 of the Transfer of Property Act, holding that the expression “any suit or proceeding” and “any right to immovable property” must be interpreted expansively. The Court clarified that even a suit primarily for recovery of money may attract lis pendens if rights in immovable property are directly and substantially involved, particularly where the decree contemplates satisfaction through sale of mortgaged property.
Rejecting the plea of bona fide purchase, the Court reaffirmed that lis pendens is founded on public policy and applies irrespective of notice or good faith. A pendente lite transferee necessarily takes the property subject to the outcome of the litigation and cannot claim equities superior to those of the decree-holder.
On the question of remedies under Order XXI CPC, the Court drew a nuanced distinction between procedural challenges to execution sales and substantive challenges based on fraud or absence of saleable interest. It held that while Order XXI Rules 89 and 90 provide limited statutory remedies, they do not bar a separate suit where the sale itself is alleged to be void due to fraud, collusion or violation of mandatory legal requirements.
The Supreme Court also clarified the interplay between Section 47 CPC and Order XXI Rule 92(4), holding that not all transferees can be mechanically treated as “representatives” of Judgment-Debtors. Where transferees assert independent rights and allege fraud in execution proceedings, a separate suit may still be maintainable.
Significantly, the Court condemned the manner in which the auction was conducted—highlighting the sale of the entire property for a disproportionately low price, the exclusion of legitimate purchasers from notice and the participation of close relatives of Judgment-Debtors despite express prohibitions. Such conduct, the Court held, strikes at the root of the execution process and cannot be protected by the doctrine of finality.

CONCLUSION
The Judgment in Danesh Singh v. Har Pyari stands as a definitive exposition on lis pendens, execution jurisprudence and the limits of auction finality. While reaffirming that pendente lite purchasers are ordinarily bound by the outcome of litigation, the Supreme Court has equally emphasized that fraud vitiates all judicial acts, including execution sales confirmed by courts.
By harmonizing statutory remedies under Order XXI CPC with the overarching duty of courts to prevent abuse of process, the ruling ensures that execution proceedings do not become instruments of injustice. The decision thus reinforces both procedural discipline and substantive equity, offering crucial guidance to courts, decree-holders, auction purchasers and transferees alike.

SARTHAK KALRA
Senior Legal Associate
The Indian Lawyer & Allied Services

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