Doctrine Of Lis Pendens :: A Critical Evaluation

INTRODUCTION

The broad principle underlying S. 52 of the Transfer of Property Act is to maintain the status
quo unaffected by the act of any party to the litigation pending its determination-even after the
dismissal of a suit, a purchaser is subject to lis pendens, if an appeal is afterwards filed-if after
the dismissal of a suit and before an appeal is presented, the lis continues so as to prevent the
defendant from transferring the property to the prejudice of the plaintiff-no reason to hold that
between the date of dismissal of the suit plainly be impossible that any action or suit could be
brought to a successful termination if alienations pendent lite were permitted to prevail-The
doctrine of lis-pendens is founded in public policy and equity and if it has to be read
meaningfully such a sale until the period of limitation for second appeal is over will have to be
held as covered under S. 52 of the TP Act.[1]

The principle of the maxim pendente lite nihil innovetur is incorporated in this section. The
section provides that during the pendency of any suit in which right to immovable property is
in question, neither party to the litigation can transfer or otherwise deal with such property so
as to affect the rights of the opponent. The Explanation makes it clear that lis shall be deemed
to commence from the date of the presentation of the plaint and to continue until the suit or
proceeding has been disposed of by a final decree or order, and complete satisfaction or
discharge of such decree or order has been obtained.[2]

In Jayaram Mudaliar v. Ayyaswami[3] Supreme court held that the purpose of Section 52 of
the Act is not to defeat any just and equitable claim, but only to subject them to the authority of
the court which is dealing with the property to which claims are put forward. This court in
Hardev Singh v. Gurmail Singh[4] Section 52 of the Act does not declare a pendente lite
transfer by a party to the suit as void or illegal, but only makes the pendente lite purchaser
bound by the decision in the pending litigation. The principle underlying Section 52 is clear. If
during the pendency of any suit in a court of competent jurisdiction which is not collusive, in
which any right of an immovable property is directly and specifically in question, such
property cannot be transferred by any party to the suit so as to affect the rights of any other
party to the suit under any decree that may be made in such suit. If ultimately the title of the
pendente lite transferor is upheld in regard to the transferred property, the transferees title will
not be affected. On the other hand, if the title of the pendente lite transferor is recognized or
accepted only in regard to a part of the transferred property, then the transferees title will be
saved only in regard to that extent and the transfer in regard to the remaining portion of the
transferred property to which the transferor is found not entitled, will be invalid and the
transferee will not get any right, title or interest in that portion. If the property transferred
pendente lite, is allotted in entirely to some other party or parties or if the transferor is held to
have no right or title in that property, the transferee will not have any title to the property.

Object of the Doctrine

The object of S. 52 is to subordinate all derivative interests or all interests derived from parties
to a suit by way of transfer of pendente lite to the rights declared by the decree in the suit and
to declare that they shall not be capable of being enforced against the rights acquired by the
decree-holder. A transferee in such circumstances therefore takes the consequence of the
decree which party who made the transfer to him would take as the party to the suit. The
principle of lis pendens embodied in Section 52 being a principle of Public Policy, no question
of good faith or bona fide arises. Such being the position, the transferee from one of the parties
to the suit cannot assert or claim any title or interest adverse to any of the rights and set
interests acquired by another party under the decree in suit, the principle of lis pendens
prevents anything done by the transferee from operating adversely to the interest declared by
the decree.[5]

Lis Pendens

Lis means an action or a suit. Pendens is the present principle of Pendo, meaning
continuing or pending, and the doctrine of lis pendens may be defined as the jurisdiction,
power, or control that courts have, during the pendency of an action over the property involved
therein.[6]
Basis of the Doctrine

The section incorporates the well-known doctrine of lis pendens which, to quote Turner,
L.J.,[7] rests on the foundation. That it would plainly be impossible that any action or suit
could be brought to a successful termination, if alienations, pendente lite were permitted to
prevail.The doctrine of restitution which the section incorporates is based on the principle that
the acts of the courts should not be allowed to work injury on the suitors.[8] The principle
contained in this section is based on the English common law maxim ut lite pendente nihil
innovator i.e. during litigation no new rights should be introduced.[9] It prohibits alienation of
property when a dispute relating to the same is pending in a court of law awaiting disposal by
the same.[10]

The rule contained in S. 52 is also called the rule of lis pendens and makes transfers pendente
lite, subject to the decision of the Court. As a principle of equity, justice and good conscience,
this rule applies even where the Act does not apply.

It is a doctrine common to the courts both at law and Equity, and restsupon this foundation
that it would plainly be impossible that any action or suit could be brought to a successful
termination, if alienation pendente lite were permitted to prevail. The plaintiff would be liable
in every case to be defeated by the defendants alienating before the judgment or decree, and
would be driven to commence his proceedings de novo subject again to be defeated by the
same course of proceedings. If any decree or order is passed in such proceedings, any transfer
of rights during inter regnum shall be determined as non est in the eyes of law.[11]It is based
on the principle that the person purchasing property from the judgment debtor during the
pendency of the suit has no independent right to property to resist, obstruct or object execution
of a decree.[12]

Doctrine Of Lis Pendens:A Critical Evaluation

The basic ingredients of the doctrine of lis pendens are:[13]

(i) A litigation should be pending in a court of competent jurisdiction;

(ii) The suit must be relating to a specific immovable property;

(iii) The suit should not be collusive;

(iv) The suit should relate to a right in this specific property;

(v) Property should not be transferred or otherwise dealt with;

(vi) By any party to the suit;

(vii) So as to affect the rights of any party thereto;

(viii) Till the final disposal of the case.

APPLICATION OF SECTION 52

For the application of the Section 52 the following conditions have to be satisfied:

A suit or a proceeding in which any right to immovable property is directly and specifically
in question, must be pending;
The suit or the proceeding shall not be a collusive one;
Such property during the pendency of such a suit or proceeding cannot be transferred or
otherwise dealt with by any party to the suit or proceeding so as to affect the right of any other
party thereto under any decree or order which may be passed therein except under the authority
of Court.[14]

For invoking the doctrine of lis pendens under S. 52 T.P. Act, the question whether the
subsequent transferee was a party to the suit or not is not material.[15] Where the entire plots
were in dispute, the transferee of even one third share in the plots was held bound by the result
of the litigation in respect of all the plots then in dispute.[16] Section 52 imposes a prohibition
on transfer or otherwise dealing with any property during the pendency of a suit provided the
conditions laid down in the Section are satisfied.[17]

Any transfer of suit property or any dealing with such property during the pendency of the suit
is prohibited except under the authority of the court, if such transfer or otherwise dealing with
the property by any party to the suit or proceedings under any order or decree which may be
passed in the said suit or proceeding.[18]There is statutory bar on alienation by the parties to
the proceedings in respect of the suit property. If anybody wants to alienate, he can do so only
with the permission of the Court. The intention of the legislature is that no party to the
litigation can defeat the claim of other in case he succeeds in the litigation.[19]

The doctrine of lis pendens embodied in Section 52 is intended to prevent a party to a suit from
making an assignment inconsistent with the rights which may be established in the suit and
which might require a further party to be impleaded to make effectual the Courts decree. The
effect of Section 52 is not to wipe out a sale pendente lite altogether but to subordinate it to the
rights based on the decree in the suit.[20]

NON-APPLICABILITY OF DOCTRINE

It is not the law that the doctrine of lis pendens would be applicable in every case. Rather there
are many instances where this doctrine does not apply. Following are the instances:

(a) A private sale by a mortgagee in exercise of power conferred by mortgage deed is not
affected by the doctrine of lis pendens embodied in the section and the sale is valid, though
made during the pendency of a redemption suit filed by the mortgagor.[21]

(b) To cases of review.

(c) When the transferor alone is affected.[22]

(d) To an order passed against an intervenor in execution proceedings as the proper remedy in
such cases is a suit under O. 21, r. 63 of the Code of Civil Procedure, 1908.

(e) To a friendly suit.[23]

(f) Where the proceedings are collusive.[24]

(g) To yearly leases and such other acts as are either the necessary or the ordinary reasonable
incidents of an interim beneficial enjoyment.[25]

(h) To a transfer pending suit by a person who is not a party to such suit.[26]

(i) To personal property other than the chattel interests in land.[27]

(j) To the interval that lapses between dismissal of a suit and a fresh suit on the same cause
of action.

(k) Where the parties to the transfer are ranged on the same side.[28]

(l) To transfer affected by order of the court in which suit or proceedings is pending.[29]

(m) Where there is misdescription of the property in the plaint.[30]

(n) Where alienations are not inconsistent with the rights which may be established by the
decree in the suit.[31]

(o) The doctrine of lis pendens does not apply to the case of a person who, during the
pendency of a mortgage suit obtains a mortgage of the property, in consideration for money
paid by him and used by the mortgagor to pay off the suit mortgage.[32]
CRITICAL EVALUATION

Status of the transfer

The language of the section is prohibitive in nature. Section 52 uses the phrase the property
cannot be transferred or otherwise dealt with. At the same time, the transfer pendente lite is
not void,[33] but is only subject to the outcome of the litigation.[34]The transfer is thus
voidable at the instance of the affected party,[35] except to the extent that it may conflict with
rights decreed under the decree held to be valid and operative as between the parties.[36] The
transferee only takes the title of the transferor subject to the result of pending legislation.[37]
The rule does not annul the conveyance but only renders it subservient to the rights of the
parties to the action, as determined by the decree.[38] The doctrine does not defeat any just and
equitable claim, but only subjects them to the authority of the court dealing with the property
to which claims are put forward.[39] The Apex Court has held[40]

The effect of Section 52 is not to wipe it(transfer) out altogether but to subordinate it to the
rights based on the decree in the suit. As between the parties to the transaction, however, it was
perfectly valid and operated to vest the title of the transferor in the transferee.

Right of alienee pendente lite to be pleaded as a party to the lis

The predominant view is that a transferee pendent lite cannot seek impleadment when transfer
was affected during the pendency of appeal without the permission of the court[41] and with
full knowledge that the status quo order was in existence.[42] The petitioner in the suit would
be dominus litus, and if he wants to take a calculated risk, the court may not exercise its
discretion to implead him,[43] and he cannot contend that he has any independent right over
the suit property over and above the right of the seller who is a party to the lis.[44] The reason
being that a person who violates the law can never be treated as holding a legal enforceable
right[45] and thus a resistance at the instance of a transferee of judgment debtor during the
pendency of the proceedings cannot be said to be resistance or obstruction by a person in his
own right and he is therefore not entitled to get his claim adjudicated.[46] The Apex Court has
explained the position in the following words:[47]

Where a party does not ask for leave, he takes the obvious risk that the suit may not be
properly conducted by the plaintiff on record; yet he will be bound by the result of the
litigation even though he is not represented at the hearing unless it is shown that the litigation
was not properly conducted by the original party or he colluded with the adversary.

On the other hand, some High Courts[48] have expressed the opinion that after affecting a
transfer of the property, the transferor would invariably not pursue the litigation as vigorously
as he might have been doing previously. Since he obtains consideration, his interest in the
litigation and also the property would diminish. He may even collude with the other party and
the interest of the alienee would be adversely affected. Since due to the application of doctrine
of lis pendens, the interests of the party to the lis are already protected, no harm would be done
to him if the alienee is impleaded as a party. Rather in the interests of justice, both the parties
should be given a fair chance at the trial. Thus the Orissa High Court held that a transferee
pendent lite can be impleaded as a party to litigation.[49]

Right of any other party under the decree

The doctrine does not apply merely to actual transfers or rights which are the subject matter of
litigation but to other dealings with it by any party to the suit or proceedings, so as to affect
the right of any other party thereto.[50] Any other party means a person between whom and
the party alienating there is an issue for decision, which might be prejudiced by the alienation.

The rule of lis pendens is enacted for the benefit of the third party, and not for the party
making the transfer.[51] This statutory right is given to the party to the suit other than the
alienating party, to have an alienation set aside so far as it is necessary for the protection of his
own rights.[52]

Recommendation by Supreme Court

The Supreme Court also gave its recommendations to the Law Commission of India and

the Parliament recommending change in law in the following terms[53]:

It is necessary to refer to the hardship, loss, anxiety and unnecessary litigation caused on
account of absence of a mechanism for prospective purchasers to verify whether a property is
subject to any pending suit or a decree or attachment. At present, a prospective purchaser can
easily find out about any existing encumbrance over a property either by inspection of the
Registration Registers or by securing a certificate relating to encumbrances (that is copies of
entries in the Registration Registers) from the jurisdictional Sub-Registrar under Section 57 of
the Registration Act, 1908. But a prospective purchaser has no way of ascertaining whether
there is any suit or proceeding pending in respect of the property, if the person offering the
property for sale does not disclose it or deliberately suppresses the information. As a result,
after parting with the consideration (which is many a time the life time savings), the purchaser
gets a shock of his life when he comes to know that the property purchased by him is subject to
litigation, and that it may drag on for decades and ultimately deny him title to the property.
The pendente lite purchaser will have to wait for the litigation to come to an end or he may
have to take over the responsibility of conducting the litigation if the transferor loses interest
after the sale. The purchaser may also face objections to his being impleaded as a party to the
pending litigation on the ground that being a lis pendens purchaser, he is not a necessary party.
All these inconveniences, risks, hardships and misery could be avoided and the property
litigations could be reduced to a considerable extent, if there is some satisfactory and reliable
method by which a prospective purchaser can ascertain whether any suit is pending (or whether
the property is subject to any decree or attachment) before he decides to purchase the property.

It is of some interest that a solution has been found to this problem in the States of Maharashtra
by an appropriate local amendment to section 52 of the Act, by Bombay Act 4 of 1939. Section
52, as applicable in the Maharashtra and Gujarat, It is wished that the Law Commission and
the Parliament considers such amendment or other suitable amendment to cover the existing
void in
title verification or due diligence procedures. Provision can also be made for compulsory
registration of such notices in respect of decrees and in regard to attachments of immoveable
properties.[5]

CONCLUSION

The right contemplated under Section 52 no doubt can be used both as a sword and a shield,
depending on such facts as to (i) what rights or interest is transferred, (ii) who the affected
party is, (iii)how and in what manner, the transfer is likely to affect any party to the pending
proceedings. It can be used as a shield in a subsequent or the same proceeding between the
same parties. Any person who would like to use it as sword, must however, first establish his
right to do so when, in any subsequent proceeding an objection is taken to his claim to do so.
Indeed if the transfer was not avoided by any of the parties to the earlier proceeding likely to
be affected by such transfer, the transferee is not prevented from claiming that the right to
avoid the transfer was lost and that nothing survived to be enforced.

In order that a transfer may be void as hit by the provisions of Section 52, it has to be
established that it has affected the rights of any other party to the suit. If a party challenges a
transfer on the basis of doctrine of lis pendens, it has to establish that the transfer was made
with a view to affecting and defeating the rights of the plaintiff under a decree or order which
may be passed in the case and that it has been defeated. By this doctrine, it is intended to strike
at attempts by the parties to a suit to curtail the jurisdiction of the Court by private dealings
which my remove the subject-matter of litigation from the power of the court to decide a
pending dispute and frustrate its decree.
Source 2

The meaning of lis pendens is - a pending legal action, wherein Lis means the suit and
Pendens means continuing or pending. The doctrine has been derived from a latin maxim
Ut pendent nihil innovetur which means that during litigation nothing should be changed.

The principle embodying the said doctrine is that the subject matter of a suit should not be
transferred to a third party during the pendency of the suit. In case of transfer of such immovable
property, the transferee becomes bound by the result of the suit.

The doctrine of Lis Pendens esstentially aims at (i) avoiding endless litigation, (ii) protecting
either party to the litigation against the act of the other, (iii) avoiding abuse of legal process.

Lis Pendens is captured under Section 52 of the Transfer of Property Act, 1882 (the Act). The
Section essentially prohibits alienation of immovable property when a dispute relating to the
same is pending in a competent court of law. It is based on the principle that the person
purchasing an immovable property from the judgment debtor during the pendency of the suit has
no independent right to property to resist, obstruct or object execution of a decree.[1]

APPLICATION OF SECTION 52 OF TRANSFER OF PROPERTY ACT

CONDITIONS TO BE SATISFIED

The Supreme Court in a three Judge Bench in Dev Raj Dogra and others v. Gyan Chand Jain
and others[2] construed the meaning of Section 52 of the Transfer of Property Act and laid down
following conditions:

1. A suit or a proceeding in which any right to immovable property is directly and

specifically in question must be pending;
2. The suit or proceeding should be pending in a Court of competent jurisdiction;
3. The suit or the proceeding should not be a collusive one;
4. Litigation must be one in which right to immovable property is directly and
specifically in question;
 5. Any transfer of such immovable property or any dealing with such property during the
pendency of the suit is prohibited except under the authority of Court, if such transfer
or otherwise dealing with the property by any party to the suit or proceeding affects
the right of any other party to the suit or proceeding under any order or decree which
may be passed in the said suit or proceeding.

Non Applicability of Doctrine of Lis Pendens

Lis Pendens is not applicable in every case. There are certain instances wherein this doctrine
does not apply[3]:

A sale made by the mortgagee in the exercise of the power as conferred by the mortgage
deed.
In matters of review;
In cases where the transferor is the only party affected;
In cases of friendly suits;
In cases where the proceedings are collusive;
In case of suits involving pending transfers by a person who is not a party to the suit;
In cases where the property has not been properly described in the plaint;
In cases where the subject matter of rights concerned in the suit and that which are alienated
by transfer are different.

Judicial Precedents

1. In Hardev Singh v. Gurmail Singh[4], the Supreme Court observed that Section 52 of
the Act does not declare a pendente lite transfer by a party to the suit as void or illegal,
but only makes the pendente lite purchaser bound by the decision of the pending
litigation. Thus, if during the pendency of any suit in a court of competent jurisdiction
which is not collusive, in which any right of an immovable property is directly and
specifically in question, such immovable property cannot be transferred by any party
to the suit so as to affect the rights of any other party to the suit under any decree that
may be made in such suit.
2. In T.G. Ashok Kumar v. Govindammal & Anr.[5], the Supreme Court observed that if
the title of the pendente lite transferor is upheld in regard to the transferred property,
the transferees title will not be affected. On the other hand, if the title of the pendente
lite transferor is recognized or accepted only in regard to a part of the transferred
property, then the transferees title will be saved only in regard to that extent and the
transfer in regard to the remaining portion of the transferred property will be invalid
and the transferee will not get any right, title or interest in that portion. If the property
transferred pendente lite, is entirely allotted to some other party or parties or if the
transferor is held to have no right or title in that property, the transferee will not have
any title to the property.
3. In Jayaram Mudaliar v. Ayyaswami[6], the Supreme Court held that the purpose of
Section 52 of the Act is not to defeat any just and equitable claim, but only to subject
them to the authority of the Court which is dealing with the property to which claims
are put forward. The Supreme Court went on to further explain the scope of lis
pendens as, It is evident that the doctrine, as stated in section 52, applies not merely
to actual transfers of rights which are subject-matter of litigation but to other dealings
with it by any party to the suit or proceeding, so as to affect the right of any other
party thereto. Hence it could be urged that where it is not a party to the litigation but
an outside agency such as the tax collecting authorities of the Government, which
proceeds against the subject-matter of litigation, without anything done by a litigating
party, the resulting transaction will not be hit by Section 52. Again, where all the
parties which could be affected by a pending litigation are themselves parties to a
transfer or dealings with property in such a way that they cannot resile from or
disown the transaction impugned before the Court dealing with the litigation the
Court may bind them to their own acts. All these are matters which the Court could
have properly considered. The purpose of Section 52 of the Transfer of Property Act is
not to defeat any just and equitable claim but only to subject them to the authority of
the Court which is dealing with the property to which claims are put forward.
4. In Rajender Singh and Ors. v. Santa Singh and Ors.[7], it was observed by the
Supreme Court that the doctrine of lis pendens was intended to strike at attempts by
parties to a litigation to circumvent the jurisdiction of a Court, in which a dispute on
 rights or interests in immovable property is pending, by private dealings which may
remove the subject matter of litigation from the ambit of the court's power to decide a
pending dispute or frustrate its decree. Alienees acquiring any immovable property
during pending litigation, are held to be bound by an application of the doctrine, by
the decree passed in the suit even though they may not have been impleaded in it. The
whole object of the doctrine of lis pendens is to subject parties to the litigation as well
as others, who seek to acquire rights in immovable property, which are the subject
matter of litigation, to the power and jurisdiction of the Court so as to prevent the
object of a pending action from being defeated.
5. In Gouri Dutt Maharaj v. Sheikh Sukur Mohammed and Ors.[8], it was held that broad
principle underlying Section 52 of the Transfer of Property Act,1882 is to maintain
status quo, unaffected by act of any party to the pending litigation.
6. In Ramjidas v. Laxmi Kumar and Ors.[9], the Madhya Pradesh Court observed that
the purpose of Section 52 is not to defeat any just and equitable claim but only to
subject them to the authority of Court which is dealing with the property to which the
claims are put forward.
7. In Lov Raj Kumar v. Dr. Major Daya Shanker and Ors.,[10] the Delhi High Court
observed that the principles contained in Section 52 of Transfer of Property Act are
in accordance with the principle of equity, good conscience or justice, because they
rest upon an equitable and just foundation, that it will be impossible to bring an
action or suit to a successful termination if alienations are permitted to prevail.
Allowing alienations made during pendency of a suit or an action to defeat rights of a
Plaintiff will be paying premium to cleverness of a Defendant and thus defeat the ends
of justice and throw away all principles of equity.

[1] Chaman Lal v. Nanki, High Court of Himachal Pradesh, Execution Petition No. 1 of 2014;
Usha Sinha v. Dina Ram, Appeal (Civil) 1998 of 2008.

[2] AIR 1981 SC 981

[3] See, http://artismc.com/index.php/blogs/view/52/228/ last assessed on 20thSeptember, 2016

[4] Civil Appeal No. 6222 of 2000

[5] Civil Appeal No. 10325 of 2010

[6] 1972 (2) SCC 200

[7] AIR 1973 SC 2537

[8] AIR 1948 PC 147

[9] AIR 1987 MP 78

[10] AIR 1986 Delhi 364