The Supreme Court has ruled that a party who takes possession of property during the pendency of litigation, with full knowledge of the dispute, cannot claim protection under Section 53A of the Transfer of Property Act, 1882. The judgment came in Civil Appeal No. 3616 of 2024, where appellant Raju Naidu’s claim over a property in Pondicherry was rejected on the ground that his possession was neither lawful nor protected, having been obtained amid ongoing legal proceedings.
The bench of Justice Sudhanshu Dhulia and Justice Prasanna B. Varale dismissed the appeal filed by Naidu, confirming the findings of the Madras High Court and lower courts. The case stems from a decades-long legal battle over two properties originally owned by Chenmougam Aroumugam and his wife Tiranti Tam.
Background of the Case
The dispute involved two properties: one on Mariamman Kovil Street (‘A’ Schedule) and another on Chetty Street (‘B’ Schedule) in Pondicherry. After Tiranti Tam became the sole owner of ‘A’ Schedule property, she passed away in 1976, leaving the property to her eight children (respondents 1 to 8). In 1977, Chenmougam purchased ‘B’ Schedule property and later executed a Will in 1978 in favor of one respondent (No. 9), with whom he allegedly developed an intimate relationship.
In 1981, while a suit filed by one of his sons (respondent No. 2) was pending to restrain him from alienating property, Chenmougam executed a sale agreement with appellant Raju Naidu for the ‘B’ Schedule property. Naidu took possession after paying a partial amount of Rs. 40,000 out of the Rs. 60,000 agreed sale price.
Following Chenmougam’s death in 1982, the children filed a suit to declare both wills void and sought recovery of the property. In 1986, the Principal Subordinate Judge held that Naidu was not entitled to retain possession and ordered him to vacate after repayment of the Rs. 40,000 advance by the respondents.
Appellant’s Arguments
Naidu argued that he was entitled to retain possession under Section 53A of the TP Act, citing part performance of a valid agreement. He also claimed the execution petition filed by the respondents was time-barred and that the Executing Court had no authority to extend the period granted in the 1986 decree for refunding the advance money.
Respondents’ Case
The respondents, represented by senior counsel, countered that Naidu was aware of the ongoing suit when he entered into the sale agreement and hence could not claim equitable protection. They emphasized that his possession began under a lease, not the sale agreement, making Section 53A inapplicable. They also argued that the Appellate Court’s 1993 judgment superseded the trial court’s decree, triggering the doctrine of merger and resetting the limitation clock.
Supreme Court’s Ruling
The Court dismissed the appeal, endorsing the High Court’s reasoning that Naidu’s possession was not protected under Section 53A. The bench observed:
“It is the admitted fact that the Revision Petitioner having the knowledge of the pendency of the suit, had entered into agreement with the father of the respondent Nos.1 to 8 and he could not have better and valid right over the rights of the original transferor.”
The Court reinforced the principle of lis pendens, noting that:
“Courts have uniformly held that the limited rights of the transferee pendent lite… cannot be stretched to obstruct and resist the full claim of the decree holders.”
Citing Chandi Prasad v. Jagdish Prasad [2004 (8) SCC 724], the bench also reiterated the doctrine of merger, stating that once an appellate decree is passed, it supersedes the trial court decree regardless of whether it modifies, reverses, or confirms the earlier decision.
On the issue of delay, the Court rejected the appellant’s limitation claim, holding that:
“The objection raised by the counsel appearing for the appellant that the execution petition was beyond the period of 12 years… cannot be countenanced both on law and on facts.”
The Court affirmed the High Court’s finding that the execution petition was filed within time, as the final order on the review application came only in 2001.
