SC on Section 53A Transfer of Property Act: Possession under a sale agreement does not confer better rights than the original transferor, Read Judgment

The dispute concerns two properties: ‘A’ Schedule property, acquired by the parents of respondent Nos. 1 to 8 in 1959, and ‘B’ Schedule property, purchased by their father in 1977. The father executed a Will in 1978, bequeathing ‘B’ Schedule property to respondent No. 9. Respondent No. 2 later filed a suit (O.S. No. 262 of 1980) to prevent alienation of the properties.

Despite this, the father sold ‘B’ Schedule property to the appellant in 1981. After his death in 1982, respondent Nos. 1 to 8 challenged the Wills in O.S. No. 4 of 1983. The trial court ruled in their favor, declaring them owners of the properties. The appellate court modified the decision, partially upholding the Wills.

Following unsuccessful review petitions, the respondents filed an execution petition. The Executing Court allowed it and ordered possession of ‘B’ Schedule property to be delivered to them. The appellant’s challenge before the High Court was dismissed, citing the merger of the appellate decree with the trial court’s order.

The appellant argued that the Executing Court exceeded its jurisdiction by extending the time for deposit of earnest money, which altered the decree. Such an extension, they contended, could only have been granted by the trial court.

Relying on Pradeep Mehra vs. Harijivan J Jethwa (2023), the appellant asserted that an executing court cannot modify a decree. It was further submitted that possession was given under a sale agreement, invoking Section 53A of the Transfer of Property Act. The appellant also contended that the execution petition was time-barred, as it was filed beyond 12 years from the decree.

Contentions of the Respondent:

The respondents argued that Section 53A of the Transfer of Property Act did not apply, as the appellant originally occupied the property under a lease, not a sale agreement. They contended that the appellate decree superseded the trial court’s order, making the execution petition timely.

Applying the doctrine of lis pendens, they asserted that the appellant’s claim was invalid as the sale agreement was made during litigation. They also cited French personal law, which restricted their father’s right to alienate property without co-sharer consent.

They argued that the revision petition was not maintainable since the order extending the deposit time had attained finality.

The Supreme Court carefully examined the submissions of both parties and reviewed the materials on record.

The appellant’s primary arguments were:

1. The executing court exceeded its jurisdiction by extending the time for deposit, thereby modifying the decree.
2. The execution petition was barred by limitation due to an inordinate delay.

The High Court had already addressed these grounds and dismissed the revision petition.

The High Court further clarified that once an appellate decree is passed, the doctrine of merger applies. It held: “Once the decree is modified by the Appellate Court, the doctrine of 'merger' comes into effect and therefore, the question of executing the decree immediately would not arise. Even otherwise, as held by the Courts as stated supra, irrespective of the fact whether there was modification or not, once the decree and judgment passed by the Appellate Court, the decree and judgment of the Trial Court merges with the same.”

The Supreme Court found no error in these observations and upheld the High Court’s conclusion.

On the issue of delay, the appellant contended that the execution petition was filed beyond the 12-year limitation period from the original decree dated 01.08.1996. However, the High Court rejected this argument. It pointed out that the appellate decree was passed in 1993, and the revision petitions filed thereafter remained pending until 13.12.2001. The High Court ruled: “The objection raised by the counsel appearing for the appellant that the execution petition was beyond the period of 12 years from the date of original decree dated 1.8.1996, cannot be countenanced both on law and on facts for the simple reason that the Appellate Court has passed decree and judgment in 1993.”

Addressing Section 53A of the Transfer of Property Act, the Court noted that the appellant entered into an agreement with the father of respondent Nos. 1 to 8 despite knowing about the pending litigation. The High Court observed that such an agreement could not confer a better right than that of the original transferor.

On the doctrine of lis pendens, the High Court rightly held that: “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 Supreme Court referred to its decision in Chandi Prasad & Others v. Jagdish Prasad & Others (2004), reaffirming the principle of merger: “The doctrine of merger does not make a distinction between an order of reversal, modification or an order of confirmation passed by the appellate authority. The said doctrine postulates that there cannot be more than one operative decree governing the same subject matter at a given point of time.”

The Supreme Court concluded that the appellate decree had superseded the trial court decree, and the executing court was bound to enforce it accordingly.

The appeal was found to be devoid of merit and was accordingly dismissed. Any pending application(s) were disposed of accordingly. No order was passed as to costs.

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