Case Name: Danesh Singh & Ors. v. Har Pyari (Dead) Thr. LRs & Ors.
Case Number: Civil Appeal arising from SLP (C) — 2025
Citation: 2025 INSC 1434
Date of Judgment: December 2025
Bench: Justice J.B. Pardiwala & Justice R. Mahadevan
Bought a Property While a Bank’s Recovery Suit Was Going On? You Could Lose Everything.
This judgment is critical for anyone who buys property without checking court records first. The Supreme Court in December 2025 significantly widened the reach of the doctrine of lis pendens (pending suit), making clear that it is not limited to title disputes — it extends even to money recovery suits where the loan was secured by a mortgage on the property.
What Is Lis Pendens?
Under Section 52 of the Transfer of Property Act, 1882, when a property is directly involved in a court case, no one can buy or transfer that property in a way that defeats the rights of the parties in the litigation. If someone does buy it, they buy subject to the final outcome of the court case. This is called the doctrine of lis pendens — the pending suit binds the world.
What Happened in This Case?
A bank had filed a suit to recover a loan that was secured by a mortgage over immovable property. During the pendency of that recovery suit, the borrower (judgment debtor) sold the mortgaged property to third parties — the respondents. These buyers later filed a separate suit claiming ownership and challenging the bank’s auction of the property to recover the debt. Lower courts upheld the buyers’ claim. The Supreme Court reversed this entirely.
What Did the Supreme Court Say?
Supreme Court’s Ruling
The doctrine of lis pendens under Section 52 TPA applies even to money recovery suits where repayment is secured by a mortgage. When a bank files a recovery suit involving mortgaged immovable property, that property is “directly and substantially in question” in the litigation. Any person who buys that property during the pendency of the suit is a transferee pendente lite — and their purchase is subordinate to the court’s final decree. Such a buyer cannot even file a separate suit to challenge the auction.
The Court also held that lis pendens operates even in ex parte proceedings (i.e., even if the borrower did not participate in the case). The doctrine is based on public policy and cannot be avoided by claiming ignorance of the lawsuit.
What This Means for Property Buyers
Before buying any property — especially distressed assets, builder properties, or resale flats — you must now check not just for title disputes but also for any bank recovery cases, mortgage enforcement suits, or DRT (Debt Recovery Tribunal) proceedings involving that property. Buying without this check can result in you losing the property to a bank decree, with no recourse.
Advocate’s Tip –
Insist on a full litigation search certificate (both civil and revenue courts, and DRT) before finalising any property purchase. Also check CERSAI (Central Registry of Securitisation) for mortgage registrations. If a property has any active mortgage or recovery proceeding, do not purchase it without first getting a clear NOC from the lender and court.
