Purchase of Property During Pendency of Suit Without Court's Permission is Invalid: Telangana High Court

Telangana High Court dismissed an appeal related to a property dispute, ruling that the appellant, who purchased the disputed property during the pendency of the suit and in violation of an injunction order, had no valid legal claim. The court held that transactions conducted in defiance of a court's injunction order lacked legal sanctity and could not confer ownership rights on the appellant.

The dispute involved an agreement of sale dated March 22, 2006, between the plaintiffs and defendants for the sale of a property. While the case was ongoing, the trial court issued an injunction in 2008, restraining the defendants from alienating the property. However, despite this injunction, the defendants sold the property to the appellant in 2011. The trial court decreed the suit in favor of the plaintiffs in 2015, ordering the defendants to execute the sale deed in the plaintiffs' favor. The appellant, a subsequent purchaser, appealed against this decree.

Violation of Injunction Order: The court noted that the appellant purchased the property despite a clear injunction prohibiting its sale during the litigation. The Supreme Court’s precedents held that transactions in violation of an injunction order were invalid, and the appellant could not claim any rights to the property​.

Consent Decree: The court emphasized that the trial court’s judgment was based on the consent of all parties, including the appellant. As per Section 96(3) of the Code of Civil Procedure, 1908, no appeal could be filed against a consent decree, further undermining the appellant's position​.

Pendente Lite Purchase: Citing the doctrine of lis pendens under Section 52 of the Transfer of Property Act, the court held that any transaction carried out while litigation was pending was subject to the outcome of the suit. The appellant, having purchased the property during the pendency of the suit, could not override the court's decree in favor of the original plaintiffs​.

The Telangana High Court dismissed the appeal on the grounds of maintainability, affirming that the appellant's purchase was illegal and in violation of the court's injunction. The court upheld the trial court’s decree directing the sale of the property to the plaintiffs and rejected the appellant’s attempt to challenge the consent decree​.

This ruling reinforces the principle that property transactions conducted in violation of a court’s orders are void and cannot confer legal rights. The court also upheld the legal sanctity of consent decrees, ensuring that parties cannot challenge them through appeals after consenting to them.

Date of Decision: October 1, 2024

B. Narasimha Reddy v. T. Seshikanth Reddy​.