The Madhya Pradesh High Court has clarified that a subsequent purchaser under an agreement to sale cannot be impleaded in a suit for declaration of title based on adverse possession, as such a purchaser holds no proprietary interest and lacks locus standi. The judgment reinforces the distinction between personal contractual rights and real property rights under the Transfer of Property Act.
Background & Facts
The Dispute
The plaintiff, Laljiram, filed a suit in 2022 seeking declaration of title and permanent injunction over a piece of land, claiming ownership through adverse possession and an agreement to sale executed on 17.09.2008 by Defendant No.1. The agreement allegedly delivered possession to the plaintiff, but no sale deed was ever executed. Subsequently, a family partition occurred between Defendant No.1 and Defendant No.2 (his son), resulting in the suit property falling in Defendant No.2’s share.
Key Facts
- Agreement to sale dated 17.09.2008 between plaintiff and Defendant No.1
- Plaintiff alleges physical possession since 2008 and continuous, hostile, open, and exclusive use of the property
- No sale deed executed despite passage of over 14 years
- Family partition occurred, transferring the property to Defendant No.2
- On 12.01.2026, during pendency of the suit, Defendant No.1 and Defendant No.2 sold the suit property to a third party (proposed party, Respondent No.3)
- Plaintiff filed an application under Order 1 Rule 10 CPC seeking impleadment of the third-party purchaser
- Trial Court rejected the impleadment application on 16.04.2026
Procedural History
- 17.09.2008: Agreement to sale executed between plaintiff and Defendant No.1
- 2022: Suit filed by plaintiff for declaration of title and permanent injunction based on adverse possession and agreement to sale
- 12.01.2026: Defendants sold the suit property to a third party during pendency of the suit
- 16.04.2026: Trial Court dismissed plaintiff’s application for impleadment of the third-party purchaser
- 11.05.2026: Present misc. petition filed before the High Court of Madhya Pradesh at Jabalpur challenging the trial court’s order
The Parties' Positions
Plaintiff (Petitioner): Argued that the subsequent purchaser is a necessary or proper party because their title claim may conflict with the plaintiff’s adverse possession claim, and their absence may lead to future litigation or inconsistent decrees.
Defendants & State (Respondents): Contended that the subsequent purchaser has no legal or equitable interest in the suit property at the time of filing the suit, as the agreement to sale confers only personal rights, not proprietary rights, and cannot be enforced against third parties.
Relief Sought
The petitioner sought setting aside of the trial court’s order dated 16.04.2026 and direction to implead the subsequent purchaser as a party to the suit under Order 1 Rule 10 CPC.
The Legal Issue
Can a subsequent purchaser under an agreement to sale, who is not a party to the original contract, be impleaded as a necessary or proper party in a suit for declaration of title based on adverse possession?
Arguments Presented
For the Appellant/Petitioner
The petitioner’s counsel argued that the subsequent purchaser’s interest in the property is directly affected by the outcome of the suit. If the plaintiff succeeds in proving adverse possession, the purchaser’s title would be rendered void. Therefore, the purchaser’s presence is essential to ensure a complete and effective adjudication. Reliance was placed on the principle that a court must decide all matters in controversy between the parties to avoid multiplicity of proceedings.
For the Respondent/State
The respondent contended that an agreement to sale does not create any interest in the property under the Transfer of Property Act. The rights arising from such an agreement are purely contractual and personal, enforceable only against the vendor. The subsequent purchaser, having no privity of contract with the plaintiff, cannot be treated as a necessary or proper party. The trial court correctly applied settled law that impleadment under Order 1 Rule 10 CPC requires a direct legal interest in the subject matter.
The Court's Analysis
The Court examined the nature of rights conferred by an agreement to sale and its interaction with claims of adverse possession. It emphasized that an agreement to sale does not transfer ownership or create any interest in the property. The Supreme Court in Correspondence, RBANMS Educational Institution v. B. Gunashekar & Another (2025 LiveLaw (SC) 429) held that such an agreement does not confer locus standi to claim injunction against third parties claiming independent title.
"The rights under an agreement to sale are personal and enforceable only against the vendor of the property or in limited cases as per Section 53A of the Transfer of Property Act against a subsequent transferee with notice, but not against third parties who are not privity to the contract."
The Court further noted that the present suit is not for specific performance of the agreement, but for declaration of title based on adverse possession. The plaintiff’s claim is against the original defendants, not the subsequent purchaser. The purchaser’s interest, if any, arises only after the sale deed is executed, which has not occurred.
The Court rejected the argument that the purchaser’s absence would prevent an effective decree. It held that if the plaintiff succeeds in proving adverse possession, Section 52 of the Transfer of Property Act will protect the plaintiff’s rights against any subsequent transferee, regardless of whether the purchaser is impleaded. Section 52 operates as a statutory doctrine of lis pendens, binding all subsequent purchasers with notice of the pending litigation.
The Court also clarified that its order does not preclude the subsequent purchaser from filing an independent application for impleadment, which must be decided under H. Anjanappa v. A. Prabhakar (2025 INSC 121), which permits impleadment where the party has a direct interest in the subject matter.
The Verdict
The petition was dismissed. The High Court upheld the trial court’s order dated 16.04.2026 rejecting impleadment of the subsequent purchaser. The Court held that the purchaser is neither a necessary nor a proper party under Order 1 Rule 10 CPC. The plaintiff’s rights, if established through adverse possession, will be protected against the subsequent purchaser under Section 52 of the Transfer of Property Act.
What This Means For Similar Cases
Agreement to Sale Does Not Create Proprietary Standing
- Practitioners must not seek impleadment of third-party purchasers under agreements to sale in suits for adverse possession or title declaration
- The absence of a sale deed means no transfer of interest; thus, no legal standing to intervene
- Applications for impleadment based solely on an agreement to sale will be dismissed unless the party has an independent title claim
Section 52 TPA Provides Automatic Protection
- A successful plaintiff in an adverse possession suit automatically binds all subsequent purchasers, even if not impleaded
- No need to join every subsequent transferee; Section 52 operates as a statutory injunction
- Practitioners should plead Section 52 TPA explicitly to safeguard against future claims
Impleadment Requires Direct Legal Interest
- Order 1 Rule 10 CPC requires the proposed party to have a direct legal interest in the subject matter
- Mere financial or practical interest is insufficient
- Courts will not allow impleadment to avoid future litigation unless the party’s rights are directly in conflict with the decree sought
