Private Compromise Cannot Defeat Pendente Lite Transferees; Punjab and Haryana High Court Upholds Registered GPA and Punishes Alienation in Breach of Status Quo Order

Case Name: Suraj Pal v. Karishma Floricultures Limited and Others

Date of Judgment: 2 September 2026

Citation: 2026:PHHC:124476

Bench: Hon’ble Mr. Justice Deepak Gupta

Held: The Punjab and Haryana High Court held that an allegation of fraud or forgery in civil proceedings must be determined on the standard of preponderance of probabilities and not proof beyond reasonable doubt. Upon a cumulative assessment of the registered General Power of Attorney, the admitted financial dealings, the signatures appearing on the document, the evidence relating to its registration and attestation, and the custody of the original title documents, the Court upheld the finding that Dev Bhushan Gupta had executed the GPA dated 5 July 1990. Consequently, the five sale deeds dated 28 July 1990 executed by the attorney were held valid. The Court further held that although an appellant ordinarily has a right to withdraw an appeal, such withdrawal cannot be permitted through a subsequent private compromise where substantial rights have devolved upon impleaded transferees and the withdrawal would prejudice their interests or frustrate an effective adjudication. Transfers pendente lite are not void, but remain subject to the result of the litigation under Section 52 of the Transfer of Property Act, 1882. The Court also held Sat Narayan Bansal and Karishma Floricultures guilty of civil contempt for deliberately alienating interests in the disputed property despite a subsisting status quo order.

Summary: The litigation originated from a civil suit instituted in 1990 by Dev Bhushan Gupta, who claimed ownership of the disputed property and alleged that a General Power of Attorney purportedly executed by him in favour of Devender Kumar Vashisht was forged and fabricated. Five sale deeds dated 28 July 1990 had been executed on the strength of that GPA. The Trial Court accepted the challenge and decreed the suit, but the First Appellate Court reversed the decree, upheld the GPA and dismissed the suit. Four Regular Second Appeals were thereafter filed before the High Court.

The High Court observed that the First Appellate Court had incorrectly approached the allegation of fraud and forgery as though it required proof beyond reasonable doubt. It clarified that even serious allegations of fraud or forgery in civil litigation continue to be governed by the civil standard of preponderance of probabilities, though they require careful scrutiny and cogent evidence. Applying the correct standard independently, the Court found that the admitted payment of ₹3.50 lakh, the presence of several genuine signatures of Dev Bhushan Gupta on the GPA, the contemporaneous registration and attestation evidence, and the unexplained custody of the original title deed collectively outweighed the circumstances relied upon to allege complete fabrication. The GPA and the five sale deeds executed pursuant to it were accordingly upheld.

The Court ruled that the title flowing from the authorised sale deeds of 28 July 1990 constituted the legally sustainable chain of title. Therefore, the subsequent sale deed dated 13 May 2004 executed by Dev Bhushan Gupta in favour of Kaptan Singh could not convey title over property that had already been validly transferred. Persons claiming through Dev Bhushan Gupta or Kaptan Singh could not acquire a better title than their transferors, whereas persons claiming through Sat Narayan Bansal or Karishma Floricultures could derive rights through the valid 1990 chain, subject to the extent and independent validity of their respective conveyances.

During the pendency of the appeals, several third parties acquired interests through the competing chains of title and sought impleadment. Dev Bhushan Gupta and Suraj Pal subsequently sought withdrawal of their appeals on the basis of private compromises. The Court declined to allow the original appellants to terminate the proceedings in a manner prejudicial to the impleaded transferees. It reasoned that once substantial interests had devolved upon third parties and those parties had been brought before the Court, a private settlement between the original litigants could not be used to extinguish or undermine their asserted rights. The compromises could operate only between their parties and could neither alter the Court’s adjudication of title nor prejudice the impleaded applicants.

The Court reiterated that Section 52 of the Transfer of Property Act does not render a pendente lite transfer void. Such a transferee acquires only the right, title and interest possessed by the transferor and remains bound by the final result of the litigation, irrespective of actual notice. Impleadment of a subsequent transferee also does not, by itself, amount to recognition or declaration of title in that transferee’s favour.

The Court separately examined alienations made while its status quo order dated 4 December 2019 remained operative. Sat Narayan Bansal had executed two registered sale deeds dated 30 August 2024 in favour of Sunil Saini, while Karishma Floricultures surrendered its leasehold interest in favour of the same transferee. Their conduct was held to constitute conscious, wilful and deliberate disobedience. However, no contempt was established against Sunil Saini or the Sub-Registrar, Sohna, as no completed act of further alienation by Sunil Saini or violation of any specific direction addressed to the Sub-Registrar was proved.

Decision: All four Regular Second Appeals were dismissed and the common judgment and decrees of the First Appellate Court were affirmed, subject to the declarations and directions contained in the judgment. The applications for impleadment filed by the subsequent transferees were allowed, but their impleadment was expressly held not to constitute an independent declaration of title. The applications seeking withdrawal of the appeals on the basis of subsequent compromises were not permitted to terminate the adjudicatory process. The sale deeds executed by Sat Narayan Bansal in favour of Sunil Saini were declared incapable of defeating or prejudicing the rights enforceable by Bimla Jain and Anil Jain under the decree dated 14 September 2019. Sat Narayan Bansal and Karishma Floricultures were held guilty of civil contempt, while Sunil Saini and the Sub-Registrar were exonerated. The contempt petitions were directed to be listed separately for hearing on the quantum of sentence.