Supreme Court: The civil appeal challenged the direction issued in order dated 3 August 2023 passed by the Calcutta High Court, which allowed the appellant to continue construction on disputed property but restrained the appellant from creating third-party interests in flats constructed on disputed property, a Division Bench of B.V. Nagarathna and R. Mahadevan, JJ., set aside the restriction imposed by the High Court and permitted the appellant to create third-party rights in the constructed flats, clarifying that any such sale or transfer would remain subject to the outcome of the pending suits. The Court also directed the appellant to disclose the pendency of the litigation in the sale documents and requested the trial court to dispose of the suits expeditiously.
Background
In the instant matter, the appellant approached the Supreme Court challenging the direction contained in para 14 of the impugned order dated 3 August 2023 passed by the Calcutta High Court. The High Court had permitted the appellant to continue construction in accordance with the previously sanctioned plan. However, it restrained him, his agents, partners and persons acting under him from using the property, creating any third-party interest or transferring the property without leave of the competent civil court.
The appellant contended that the construction had already been completed and the flats were ready for sale. He argued that Section 52, Transfer of Property Act, 1882, permitted transfer of the disputed property subject to the outcome of the pending suit.
It was further submitted that the suits filed by the appellant and Respondents 5 and 6 were pending and had been clubbed together. The appellant alleged that the proceedings were moving at a snail’s pace and that Respondents 5 and 6 were seeking adjournments.
The respondents opposed the appeal, contending that in view of the dispute concerning title, the appellant could not be permitted to create third-party interests in the property.
Issue for Determination
Whether a property developer can be restrained from creating third-party interests in flats constructed on disputed property merely because competing title suits are pending?
Analysis and Decision
The Court noted that the appellant had already completed the construction and that third parties were ready and willing to purchase the flats, subject to the result of the pending suit and the risks involved therein.
Considering these circumstances, the Court set aside para 14 of the impugned order, which had restrained the appellant from creating third-party interests or transferring the property without obtaining leave of the competent civil court.
While removing the restriction, the Court made it clear that any sale or creation of third-party rights by the appellant would remain subject to the outcome of the suits filed by the appellant as well as Respondents 5 and 6. The Court further directed the appellant to indicate the pendency of the suits between the parties in the sale agreement or sale deed executed in favour of third parties.
Taking note of the fact that the suits had been pending since 2022, the Court requested the trial court concerned to dispose of them as expeditiously as possible, obviously with the cooperation of the parties.
[Bhola Paik v. State of W.B., Civil Appeal arising out of SLP (C) No. 27629 of 2023, decided on 26-10-2026]
Advocates who appeared in this case:
For the Appellant: Mr. Swarnendu Chatterjee- 2905, AOR Ms. Malvika Trivedi, Sr. Adv. Ms. Amrita Sarkar, Adv. Ms. Sujal Gupta, Adv. Mr. Ashish Kumar Singh, Adv. Ms. Swastika Ganguly, Adv. Mr. Shailendra Slaria, Adv.
For the Respondents: Mr. Kunal Mimani, AOR Mr. Partha Sil, AOR Mr. Utkarsh Dwivedi, Adv. Mr. Srijit Datta, Adv. Mr. Subhasish Bhowmick, AOR Mr. Suraj Kumar Singh, Adv. Mr. Reegan S Bel, Adv. Mr. Rakesh Kumar Tiwari, Adv. Mr. Uddyam Mukherjee, AOR Mr. Swapnil Pattanayak, Adv. Ms. Kratika Kushwaha, Adv. Ms. Meghna Nag, Adv.
