Purchaser During Pendency Of Suit Bound By Compromise Decree, Cannot Treat It As Void In Collateral Proceedings: Punjab & Haryana High Court

"It is well settled principle of law that even a void order is required to be set aside by a competent Court of law... An order cannot be declared to be void in collateral proceedings." Punjab and Haryana High Court, in a significant ruling dated July 17, 2026, held that a property purchaser during the pendency of a suit is bound by the outcome of the litigation, even if it results in a compromise decree.

A single-judge bench of Justice Harsh Bunger observed that a party cannot unilaterally treat a judicial order as null and void without getting it formally set aside by a competent court, especially in collateral proceedings.

The dispute arose after the plaintiffs filed a suit declaring themselves owners of a property they purchased from one Amarjit Singh via registered sale deeds in December 1984. However, at the time of this purchase, a prior civil suit filed in 1983 regarding the same property was already pending against their vendor, wherein a court injunction against alienating the land was actively in force. The 1983 suit culminated in a 1985 compromise decree declaring the vendor's original title illegal, which subsequently led the First Appellate Court to dismiss the plaintiffs' current suit on grounds of lis pendens.

The primary question before the court was whether the plaintiffs were entitled to a decree of ownership when their vendor had suffered an allegedly "collusive" compromise decree during the pendency of litigation. The court was also called upon to determine whether it is permissible for a party to treat a prior judgment as null and void in a separate suit without specifically challenging it before a competent forum.

COURT'S OBSERVATIONS AND JUDGMENT

Purchaser Steps Into Shoes Of Vendor

The High Court noted that the plaintiffs' vendor executed the sale deeds during the active pendency of the 1983 civil suit. The bench emphasized that the transaction occurred in direct violation of a 1983 court order that expressly restrained the defendants from alienating the suit land. Relying on Section 52 of the Transfer of Property Act, 1882, the Court underscored the strict application of the doctrine of lis pendens. The bench observed that any sale during the pendency of a suit is subservient to the rights of the litigating parties and the final outcome of the dispute.

Compromise Decree As Binding As Merit Decision

Addressing the appellants' argument that the 1985 decree was collusive and hence fell outside the scope of Section 52, the Court firmly rejected the proposition. It endorsed the First Appellate Court's finding that the plaintiffs acquired no right in the land through their vendor, as the 1985 decree had extinguished the vendor's title. The Court agreed with the established principle that a subsequent purchaser is equally bound by the judgment suffered by their vendor.

"a decree passed upon a compromise is just as much binding as a decree founded upon a decision on merits."

Cannot Treat Judgments As Void Without Proper Challenge

Moving to a critical procedural flaw in the plaintiffs' case, the High Court questioned whether a party could bypass a formal challenge to a judicial order they believed to be flawed. The bench answered this in the negative, noting that the plaintiffs never sought to set aside the 1985 decree despite being fully aware of its details from the written statements filed by the defendants. The Court held that the plaintiffs should have amended their plaint to include specific pleadings regarding the alleged collusion.

Collateral Attack On Decrees Impermissible

To fortify its stance, the Court referred to a catena of Supreme Court decisions, including Meghmala v. G. Narasimha Reddy and Tayabbhai M. Bagasarwalla v. Hind Rubber Industries. The Court reiterated that even if an order is perceived as void or voidable, the aggrieved party must approach the appropriate forum to get it set aside. It is legally impermissible to merely ignore a judicial order as non-est while initiating parallel collateral proceedings.

“A decision rendered by a competent Court cannot be challenged in collateral proceedings for the reason that if it is permitted to do so there would be 'confusion and chaos and the finality of proceedings would cease to have any meaning'.”

Proper Forum Must Be Approached

The bench underscored the essence of established jurisprudence, stating that if a party feels a court order or decree is void, they must resort to appropriate legal proceedings to extinguish it. The Court observed that unless a court of competent jurisdiction sets aside the disputed decree, it cannot be deemed non-est simply based on a party's estimation, and must continue to be treated as valid in the eyes of the law.

Finding no illegality or perversity in the First Appellate Court's judgment, the High Court dismissed the regular second appeal. The ruling firmly reiterates that subsequent purchasers cannot bypass the doctrine of lis pendens or collaterally attack prior court decrees without instituting a direct legal challenge before a competent forum.

Date of Decision: 17 July 2026