Can Third-Party Buyers Be Added to Ongoing Property Partition Suits?

Family property disputes can be messy, but they get even more complicated when third-party buyers enter the scene. The Patna High Court in Md. Atif Ansar v. Rehan Mohammad Tarique, C.Misc. No. 320 of 2023, dated 27.08.2024, tells us how courts approach such situations, especially when properties are sold during a pending litigation.
A partition suit was filed by a plaintiff against family members. While the case was still pending, the defendants sold parts of the disputed property to third parties. When the plaintiff tried to include these third-party buyers in the case, the trial court refused, saying it would delay the case since the matter was already at the final arguments stage. The trial court’s decision was challenged under Article 227 of the Constitution at the Patna High Court.

The law in Order 1 Rule 10(2) of the Code of Civil Procedure, 1908 empowers courts to add or remove parties to ensure effective and complete adjudication.

But when should new parties be added? The Supreme Court has provided some guidance over the years:

In the case of Mumbai International Airport (P) Ltd. v. Regency Convention Centre & Hotels (P) Ltd. [(2010) 7 SCC 417] the Hon’ble Supreme Court discussed the law relating to impleadment of the parties. It would be relevant to quote para 15 of the said judgement:

15. A “necessary party” is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the court. If a “necessary party” is not impleaded, the suit itself is liable to be dismissed. A “proper party” is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in dispute in the suit, though he need not be a person in favour of or against whom the decree is to be made.

Further, the Hon’ble Supreme Court in the case of Kasturi v. Iyyamperumal [(2005) 6 SCC 733] held that “necessary parties” are essential for passing a decree, while “proper parties” simply help the court resolve all the issues.

Further, the Hon’ble Supreme Court in the case of Sumtibai v. Paras Finance Co. [(2007) 10 SCC 82] held that a party with a semblance of interest in the suit property could be impleaded, even if no direct relief is sought against them.

Further, the Hon’ble Supreme Court in the case of Amit Kumar Shaw v. Farida Khatoon [AIR 2005 SC 2209] held that transferees pendente lite (buyers during litigation) are representatives-in-interest and may be added to protect their acquired interest.

The Patna High Court disagreed with the trial court’s decision. It pointed out that by selling the property during the case, the defendants had already complicated things. Adding the third-party buyers wouldn’t delay proceedings—it would actually make it easier to settle everything in one go!

The Court stressed that even if these buyers weren’t “necessary” parties, they were still “proper” parties and should be included to ensure a fair resolution. This way, the court could avoid future lawsuits involving the same property.

The law protects against unauthorized property transfers during litigation through the doctrine of 'lis pendens'. It’s crucial to address such transfers head-on to avoid prolonged or repeated legal battles.

Property disputes can be a hassle, so if you’re in a similar situation, consulting an experienced lawyer can make all the difference.

[Signing off… see you next year!!]