Butch Carter's 21-foot jumper from the top of the key lifted Indiana to a 53-52 upset victory over Big 10 trichampion Purdue in the title game of the 42nd National Invitation Touranament tonight in Madison Square Garden.

Purdue's Jerry Sichting, a senior guard who grew up just a few miles from Indiana's campus and who has always bedeviled the Hoosiers, took the last shot in the game. He fired from the corner with a second left and the ball bounced off the far rim.

In the opening game for third place, Alabama's Reggie King set an NIT record for most points in the tournament, scoring 21 tonight to lead the Crimson Tide to a 96-86 win over Ohio State.

King, playing his final collegiate game, totaled 132 points in five playoff games, three more than Bob Loyd of Rutgers in four games in 1967.

Carter's basket made for a dazzling finish of a season that been rocky for the Hoosiers, fifth-place finishers in the Big Ten.

The Shot also served to offest a critical mistake Carter had made a minute earlier, when Indiana was holding the ball and trailing by a point.

Purdue did not score in the last 8:47, missing four shots from the floor, losing the ball once and, coming up empty twice on Carroll free throws.

Trailing 52-51 with 4:24 left, Indiana chose to hold the ball for three minutes and then began looking for an outside jumper.

At 1:02, Carter fired a pass intended for Mike Woodson, but Woodson was nowhere near. Mike Scearce intercepted under the basket and Purdue went into a stall.

With 21 seconds left, Carter fouled Purdue star center Joe Barry Carroll. Carroll missed the one-and-one free throw and Ray Tolbert rebounded for Indiana'

With 16 seconds left, Indiana called three consecutive time outs. The play Coach Bobby Knight put in called for Mike Woodson to take the shot, but Woodson was covered on the wing so he passed back to Carter, who swished from the top of the key with five seconds left.

It was a bitter defeat for Purdue, the only major conference champion in the country that was not invited to the NCAA tournament. Purdue shared the Big Ten title at 13-5 with Michigan State and Iowa, but was not one of the allowed two teams to attend because its record against the other champions was 1-3.

After Sichting missed his shot, Coash Lee Rose waked over to him and said, "You're a great kid and I love you. That was a bad break."

There was unbridled joy for 22-12 Indiana, winner in two of the three games between the state and conference rivals this season.

"This is one helluvan accomplishment for these kids," said Knight. "I've never been more pleased for a group of kids, including the team that won the national championship in 1976.

"Ive never held the ball like that when I was behind, but I just made up my mind to say the hell with it. There are too many bad things that can happen.Let's make it a 20-second game."

Carter's errant pass nearly foiled the plan, but then he was able to come back with the winning basket.

"Everyone told me, just forget about it (the pass)," said Carter. "I really wasn't looking to redeem myself. I was just looking for us to win.

"It's hard for me to explain how I really feel. Only people close to the program would understand. I feel good. That's the best I can say."

Indiana had led in the first half by as mahy as six but Purdue battled back to lead by as many as vive at 52-47 with 8:48 left.

Carroll has scorded a boggling 72 points in his last two games but Indiana sagged on him throughout the game, and the imposing 7-foot-1 center was held to six of 10 shots from the floor and hit two of eight free throws.

Indiana placed four players in double figures, led by forward London Turner's 13 points. Carter shared the tournament MVP award with Tolbert, who scorded 12 points and had 10 rebounds.

Purdue winds up its season at 27-8, the most wins ever by a Purdue team.