Doctrine of Lis Pendens

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Doctrine of Lis Pendens

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Doctrine of Lis Pendens | Overview

I. Meaning of Lis Pendens

‘Lis’ means an action or a suit and ‘Pendens’ means pending. Hence, Lis Pendens means during the pendency of a suit. And the doctrine of Lis Pendens may be defined as the jurisdiction or the control that courts have during the pendency of action over the property involved therein. The doctrine is based upon the ground that the decision of the court is not only pending upon the parties to the suit but also on those who derive the title during the pendency of the suit.

The term ‘suit’ indicates a legal action or proceedings initiated by a person invoking the judicial mechanism set up by the state for a peaceful relief of his grievance.

This doctrine is based upon the English common law maxim “ut lite pendente nihil innovator”, it means that during the litigation no new rights should be introduced.

This maxim is a rule which is based upon the necessity for final adjudication and also on the just ground that it will be impossible to bring a suit to a successful culmination if the alienation is allowed/permitted during the pendency of the suit.

II. This doctrine is embodied in Section 52 of the Transfer of Property Act, 1882.

Section 52 provides that : “During the pendency in any court having authority within the limits of India excluding the state of Jammu & Kashmir or established beyond such limits by the Central Government of any suit or proceeding which is not collusive and in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of court and on such terms as it may impose.[1]

Explanation: For the purpose of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding  in a court of competent jurisdiction, 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, or has become unobtainable by the reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force.”

The principle of Section 52 prohibits the transfer or otherwise dealing with property which is in question, during the pendency of the suit.

Judicial Explanations

  • The principle is explained in Bellamy v. Sabine[2], where Turner, L.S  said, it that doctrine rests upon this foundation that, it would plainly be impossible that any action or suit could be brought to a successful termination if alienations pendente lite were to allowed 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 proceeding de novo  subject again to the same course of the proceeding.”

  • The doctrine is based upon expediency and it is immaterial whether the transferee pendente lite had or had not notice of the suit. This doctrine had been fully expounded by the Privy Council in Faiyaz Hussain Khan v. Prag Narain[3], where their lordship quote with approval the observations of Lord Justice Turner is Bellamy’s case.

III. The basic ingredients of the doctrine of Lis Pendens

  1. Litigation should be pending in a court of competent jurisdiction.
  2. The suit must be relating to the right in a specific immovable property.
  3. The suit should not be collusive.
  4. Property should not be transferred or otherwise dealt with.
  5. By any party to the suit.
  6. So as to affect the right of any party thereto.
  7. Till the final disposal of the case.

 Explanation

  1. Litigation should be pending in a court of competent jurisdiction.

The suit commences on the date of filing of the plaint and it is deemed to continue until a final decree or order has been passed determining that matter. That means the suit is considered to be pending even if there is a chance of appeal against the decree determining that suit or the execution of the decree is pending.

Example: A dispute regarding the title of the property X arose between A and B. A was then in the possession of X. The matter was brought before the District court. The District Court passed the decree in favour of A. While the decree was appealable, A sold the property X. The transfer would be considered via Section 52 or the Doctrine of Lis Pendens.

Now in the above-mentioned case the HC passed the decree in favour of A but the Apex court passed the decree in favour of B. When the Apex Court passes a judgement, even then the suit does not come to an end. If the Apex Court passed the decree ordering A to transfer the possession of X to B within 30 days, then during this period of 30 days, the suit would be deemed to be pending.

Court of competent jurisdiction:

The courts in India have been segregated on the basis of territorial, pecuniary jurisdiction or subject matter, etc. Hence, the suit must be pending in the court having the jurisdiction to try the suit. If the suit is presented before a court not having the competent jurisdiction to try it, a transfer during the pendency of such a suit would not be hit by the rule of Lis Pendens.

Illustration: A dispute over property was presented before the court. However, the plaint was returned on the ground that the court before which the plaint was presented did not have the competent jurisdiction to try it. Before it could be filed before the court which had the competent Jurisdiction to try the suit, A who had the possession of the property, executed a gift deed of the same in favour of his wife and son. It was held that on the date when the gift deed was executed, there was no suit pending before the court of competent jurisdiction, and therefore the doctrine of Lis Pendens will not apply to this gift.

  1. The suit must be relating to the right in a specific immovable property.

 The doctrine applies in the case of immovable properties only and not where the subject matter is movable property. The litigation must involve a specific right in immovable property, such as a dispute with respect to title, possession or a right of alienation, etc.

The doctrine applies to the sale, specific performance of a contract, mortgage suit, easements, pre-emption, the charge created by Hindu widow on the Hindu Joint Family Property etc. and is not applicable to the suits related to debts, rents, accounts (house tax), etc.

  1. The suit should not be collusive.

The term collusive suit depicts ‘the suit filed with conspiracy’. It is a sham suit. Here, the parties to the suit enter into an agreement with the intention to defeat the rights of the transferee. The suit presented or pending must be genuine and not a collusive one.

Example: A was familiar with the fact that the property belonged to Mr B. They entered into an agreement and decided together to go for litigation where A would question the title of B over the property. During the pendency of the suit, A professed to transfer the property to C for money. In this case, the property would go to C and the doctrine of Lis Pendens will not be attracted.

  1. Property should not be transferred or otherwise dealt with

The term transfer includes absolute transfer as well as the partial transfer. The doctrine applies to the sale, a grant under the lease, mortgage etc. the transfer here means the transfer covered by Transfer of Property Act, 1882. ‘otherwise dealt with’ includes the cases which are not covered by the Transfer of Property Act, 1882. It includes the cases of partition.

Partition of the Joint Hindu Family property does not amount to a transfer, but is covered under the expression ‘otherwise dealt with’. Hence, a partition of the property which is a subject matter of the suit, affected during the pendency of the suit would be subject to the rule of Lis Pendens.

Any transfer made with the permission of the court and in accordance with the term imposed by it, will not be subject to the rule of Lis Pendens.

  1. By any party to the suit

The parties to the suit include the ones who file the plaint or petition i.e. the plaintiffs and the ones against whom the relief is prayed for i.e. the defendants, or their representatives on their demise. The transfer made by a person before he is made a party to the suit is not affected by the doctrine of Lis Pendens.

Example: A is the owner of the property X, which is managed by B with the permission of A. B sells the property to C. A files a suit against B reclaiming the possession of the property X and C is not made the party to the suit.  Meanwhile, C sells the property to Y. As C is not the party to the suit, the transfer made by him will not be affected by the doctrine of  Lis Pendens.

  1. So as to affect the right of any party thereto

Example: A, the landlord filed a plaint against B (tenant), that he hasn’t paid the rent for two months. Meanwhile, A transfers the property which is the subject matter of the suit, to C.  It does not fall under Section 52 as it does not affect the rights of another party.

The test to determine the applicability of Section 52 is the nature of the claim in the suit and not the property in dispute.

  1. Till the final disposal of the case.

It implies that there is no chance of any appeal against the decree of the court in that particular case nor is the execution of the decree pending. Once the case is finally disposed of, the transfer will not attract Section 52 as the main ingredient of the doctrine is the pendency of the suit and the pendency of suit ends as soon as the case is finally disposed of.

IV. Status of the transfer

Section 52 is prohibitive in nature. It uses the phrase ‘the property cannot be transferred or otherwise dealt with’. At the same time, the transfer during the pendency of the suit is not void. It is only subject to the outcome of the litigation. Hence, the transfer is voidable at the instance of the affected party, except to the extent that it may conflict with the rights conferred under the decree held to be valid.

The transferee only takes the title of the transferor subject to the result of the pending litigation. Hence, mere pendency of the suit does not prevent one of the parties from dealing with the property that is the subject matter of the suit.

Law simply postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the court. The transferee cannot deprive the successful plaintiff of the fruits of the decree if he purchased the property during the pendency of the suit and he is bound by the decree as much as the parties to the suit.

V. NOTICE/ Can the transferee seek the protection under Section 43 of Transfer of Property Act, 1882

Section 52 is based on the rule of expediency and public policy. Hence, no question of good faith or bona fide arises.

Section 43 talks about feeding grants by estoppel. One of the main essentials of Section 43 is the good faith of transferee i.e. the transferee at the time of the transfer had no knowledge about the non-competency of the transferor to transfer. But when a suit is pending in which the subject matter is the property transferred, the transferee cannot contend good faith as a pending suit is a notice in itself.

Example: There is a matter pending before the court of competent jurisdiction between A and B. Property X is the subject matter of the suit. A professes to transfer X to C during the pendency of the suit. The transfer is hit by Lis pendens. Later on, the decree is passed in favour of A.

Now C cannot ask A to transfer the property under Section 43 of TPA, 1882. It is immaterial whether C had the knowledge of the pendency of the suit or not, or whether A notified C or not because the doctrine is based on the concept of necessity and not notice.

VI. Exception

The section provides that it is open to the court to permit any party to the suit to transfer the property to on terms which it may think fit to impose.

In Amarnath v. Deputy Director of Consolidation[4], it was held that party is said to be a party to the suit if the decision or judgement is likely to affect the share of such a party and the decision would be binding on him too. Thus A,B,C, are brother; C is residing in a distant town while A and B are residing together.  A files a suit for partition and does not implead C or his father X.

Though X and C are not parties to the suit, yet the subject matter of the suit is the same, and neither X nor C legally and validly transfers or alienate his share to a third party. In such case the ultimate decree is likely to affect the shares of X and C too. Thus, there may be a case where a party may not be locked in a civil suit or proceeding; yet such a party may be affected by the judgment/decree is such a suit.

In Fayaz Husain Khan v. Prag Narain[5], a mortgage sued to enforce his mortgage, but before the summons was served, the mortgagor affected a subsequent mortgage. The prior mortgagee continued his suit and obtained a sale order from the court, without making the subsequent mortgagee, a party to the suit. It was held that the sale extinguished the subsequent mortgagee’s right to redeem the prior mortgagee.

[1] Section 52 of the Transfer of Property Act, 1882

[2] (1857) 1 Dec. & 566

[3] (1907) 29 All 339 PC

[4] AIR 1985 All 169

[5] (1907) 29 All 339

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