SC Judgment on Transferee Pendente Lite: Key Observations and Legal Implications [January 29, 2025]

About the Judgment

In a significant ruling dated January 29, 2025, the Supreme Court has held that a transferee pendente lite does not have an automatic right to be impleaded in an ongoing suit either under Order 1 Rule 10 CPC or under Section 146 read with Order 22 Rule 10 CPC. The Court emphasized that such an impleadment is subject to judicial discretion and depends on the nature of the case and material on record.

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Key Observations from the Judgment

The Supreme Court, in paragraph 55, clarified the similarity in scope between Order 1 Rule 10 CPC and Order 22 Rule 10 CPC regarding the impleadment of a transferee pendente lite.** The Court observed that:

• Under Order 1 Rule 10(2) CPC, a party can be impleaded if deemed a necessary or proper party to the suit.
• Under Order 22 Rule 10 CPC, the legal representative of a party may be impleaded with the leave of the Court to continue the litigation, without needing to establish necessity or propriety.

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Important Principles Laid Down (Paragraph 58)

The ruling provides the following key takeaways:

1. Judicial Discretion: A transferee pendente lite may be allowed to be impleaded only after considering the facts and circumstances of the case.
2. No Automatic Right: Such a transferee cannot claim impleadment as a matter of right.
3. No Absolute Rule: The Court has no obligation to implead the transferee in every case.
4. Case-Specific Approach: The decision depends on the nature of the suit and available evidence.
5. Risk of Non-Impleadment: If the transferee does not seek impleadment, they bear the risk of the suit being improperly conducted.
6. Binding Effect: Even if not impleaded, the transferee pendente lite remains bound by the outcome of the litigation.
7. Doctrine of Lis Pendens: Any sale during litigation is subject to Section 52 of the Transfer of Property Act, making the transaction void against the final decision.
8. Assignee’s Right: A transferee pendente lite may seek impleadment with leave of the Court either independently or at the request of an existing party.

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Legal Significance

This ruling clarifies the limited rights of transferees pendente lite and reinforces the importance of judicial discretion in allowing their impleadment. The judgment also underscores the risks involved in purchasing property under litigation and reiterates the doctrine of lis pendens as a safeguard against such transactions.

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