Facts: The first respondent, Cotton Corporation of India Limited, obtained an arbitral award dated 11.06.2001 against the second respondent for recovery of money. The second respondent's challenge under Section 34 of the Arbitration and Conciliation Act was dismissed in 2013. Meanwhile, the second respondent, a borrower of ICICI Bank, entered into a tripartite agreement with the bank and the appellant (the mother of the second respondent's Managing Director), leading to a registered sale deed dated 23.04.2015 in favor of the appellant. When the first respondent sought to execute the award in 2019, the executing court ordered the attachment of the property. The appellant filed a claim petition under Order XXI Rule 58 of the Code of Civil Procedure, 1908, asserting she was a bona fide purchaser for value without notice and that the property was not liable for attachment as she was the absolute owner prior to the attachment order.
Procedural Posture: The executing court dismissed the appellant's claim petition, and the High Court subsequently dismissed the revision petition filed by the appellant. The matter reached the Supreme Court via a Special Leave Petition.
Issue: Whether a purchaser of property after the passing of an arbitral award (deemed decree) can resist execution by claiming to be a third-party bona fide purchaser, and whether the doctrine of lis pendens applies to money decrees?
Holding: No. The Supreme Court held that the appellant, having purchased the property after the institution of proceedings and the passing of the award, is a transferee pendente lite and is barred by Order XXI Rule 102 of the CPC from resisting execution.
Reasoning: The Court reasoned that under Section 36 of the Arbitration and Conciliation Act, an arbitral award is a deemed decree enforceable as a decree of the court. Order XXI Rule 102 of the CPC explicitly denies protection to transferees pendente lite, which includes those to whom property is transferred after the institution of a suit or passing of a decree. Following the ratio in "Danesh Singh v. Har Pyari", the Court affirmed that the principle of lis pendens recognized in Section 52 of the Transfer of Property Act applies to money decrees to prevent judgment-debtors from alienating assets to defeat the fruits of the decree. Furthermore, the appellant failed to prove the sale was "without notice" as she was closely related to the management of the respondent company and failed to produce the tripartite agreement which was the genesis of her title.