LIS PENDENS

Transfer of Property Act,1882

OCTOBER 20, 2017

SHARJEEL AHMAD
B.A.LLB S/F
(20165282)
1
PROPERTY LAW PROJECT, 2017-18

Contents
INTRODUCTION ............................................................................................................................................ 2
Lis Pendens ............................................................................................................................................... 3
Doctrine Of Lis Pendens ................................................................................................................................ 4
Basis of the Doctrine ................................................................................................................................... 7
Doctrine Of Lis Pendens: A Critical Evaluation .......................................................................................... 8
APPLICATION OF SECTION 52 ...................................................................................................................... 9
Court ........................................................................................................................................................... 11
NON-APPLICABILITY OF DOCTRINE ........................................................................................................... 13
Recommendation by Supreme Court ............................................................................................................... 15
CONCLUSION............................................................................................................................................... 17
2
PROPERTY LAW PROJECT, 2017-18

INTRODUCTION
The Transfer of Property Act [hereinafter ‘TOPA’] is a legislation that filled the lacuna in the set
up of Indian Laws. This lacuna was a combined result of the fact that earlier, with a predominant
panchayati system, custom was the main tool of effectuating transfers. However, a little before
Independence, this trend had changed to English Law which governed the field of transfer of
property. While it was a welcome change as it brought a standard rule across the country, it was a
flawed concept as the English idea of justice could not be applied strictly to the socio-economic
potpourri of Indian conditions. What followed was a slightly adapted form of the same rules by
modifying it using judicially-created notions of equity justice and good conscience. There were
certain instances when this discretion would go contrary to the precedent set by the application of
English Law and thus, create further confusion.

It would be acceptable to state thus, that there would have been a fundamental requirement of a
domestic legislation which could create a compendium of the applicable English Law on the matter
in India along with these judicially created notions of equity justice. With the advent of TOPA,
one such principle of lis pendens was introduced which acted as a regulator on the transfers
effectuated. The concept of lis pendens is a common law concept which pertains to the parties to
a litigation, the subject matter of which is property. It aims to prevent the alienation of the said
property when the litigation concerning the same is pending before the court.

This project will delineate the meaning, purpose and implementation of the concept of lis pendens
and its application in the TOPA and other legislations like the Code of Civil Procedure. The
researcher will analyze the scope of Section 52 of the TOPA and its application in Property Law.
Finally, the project will look into the pertinent judgments on the said doctrine and attempt to
formulate a model of how the application of lis pendens has changed over the years and the
ultimate end it has served.
3
PROPERTY LAW PROJECT, 2017-18

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.
4
PROPERTY LAW PROJECT, 2017-18

Doctrine Of Lis Pendens

Meaning- From a plain reading of Section 521, it is clear that the underlying aim of the same is to
protect the sanctity of court proceedings, the subject matter of which is immovable property. To
elaborate, there will be instances when two parties will go to court with a dispute at the centre of
which lies immovable property. Once, they approach the court, the property in question is assigned
a special status. This is so as the determination of the court ultimately decides the rights of the
parties over the property. With this material determination at stake, it would be extremely
prejudicial to the rights of any party, if the other transferred the property in question, before the
court arrives at an outcome in the pending litigation. Such an act would defeat the entire purpose
of the litigation process and would render the determination of the court null and void. The
ramification of such an act even amounts to subverting the jurisdiction of the court as the party’s
action of transferring the property before his right to do so, has been confirmed by the court
amounts to contempt of the court proceedings.
Principle
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. 2

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

1 The Transfer of Property Act,1882

2 TPA, SUPRA note 1
5
PROPERTY LAW PROJECT, 2017-18

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.
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 Singh4 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 transferee’s 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 transferee’s 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.

3 AIR 1973 SC 569

4 (2007) 2 SCC 404
6
PROPERTY LAW PROJECT, 2017-18

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.
7
PROPERTY LAW PROJECT, 2017-18

Basis of the Doctrine

The section incorporates the well-known doctrine of lis pendens which, to quote Turner, L.J.,
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. 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. It prohibits alienation of property when a
dispute relating to the same is pending in a court of law awaiting disposal by the same.

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 rests…upon 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 defendant’s 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.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.
8
PROPERTY LAW PROJECT, 2017-18

Doctrine Of Lis Pendens: A Critical

Evaluation

The basic ingredients of the doctrine of lis pendens are:

(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.

9
PROPERTY LAW PROJECT, 2017-18

APPLICATION OF SECTION 52
For the application of the Section 52 the following conditions have to be satisfied:
1. 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.

2. 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. 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.
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.

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. 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.

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
10
PROPERTY LAW PROJECT, 2017-18

established in the suit and which might require a further party to be impleaded to
make effectual the Court’s 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.
11
PROPERTY LAW PROJECT, 2017-18

Court
The provision places a special emphasis on the fact that the litigation in question must be
pending in “a court having authority." There are various implications of this phrase.

Firstly, it precludes any jurisdiction that could be afforded to a tribunal. Tribunals that look into
the disputes concerning immovable disputes do not have the same power as courts. This is due to
their inherent functional disabilities. It is established that a Tribunal is merely a body with all the
trappings of a court, but is not a court itself.

Secondly, the emphasis on court is a sign of intent by the legislature that the implementation of
the word ‘court’ is for achieving the ends of the provision. If the purpose of the provision is to
prevent a party from alienating a property which is the subject matter of the dispute, pending
litigation in a court, it is necessary that the court in question must be the appropriate forum to
adjudicate upon the dispute. In other words, it should have sufficient authority to deal with the
issue and make a final determination of the rights of the parties over the property.

Finally, the requirement of having a court which can deal with the matter conclusively is that it
will help affix the rights of the parties pertaining to the property in question.

This is essential as the court’s determination of who hold the rights over the property will
ultimately affect the right of the transferee who might have received the property pending the
disposal of the dispute.

The provisions of TOPA mandate that in order to effectuate the utilisation of Section 52, it is
necessary that the matter pending before the court pertains substantially and directly to
immovable property. This means that if one party to a suit transacts with a third party regarding
property X, for the application of Section 52 and to bar this transaction, it is necessary that the
subject matter of the original suit is property X.

This statement implies two things: firstly, the property which is the subject matter of the suit
must be similar to the one which is transacted upon by a party to the suit with a third party.
Secondly, it is mandatory that the subject matter of the dispute in court must be property. In
other words, this property must form the crux of the dispute in court.
12
PROPERTY LAW PROJECT, 2017-18
13
PROPERTY LAW PROJECT, 2017-18

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.

(b) To cases of review.

(c) When the transferor alone is affected.

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

(e) To a friendly suit.

(f) Where the proceedings are collusive.

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

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

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

(j) To the interval that lapses between dismissal of a suit and a fresh suit on the same cause
of action.
14
PROPERTY LAW PROJECT, 2017-18

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

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

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

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

(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.
15
PROPERTY LAW PROJECT, 2017-18

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:

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
16
PROPERTY LAW PROJECT, 2017-18

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.
17
PROPERTY LAW PROJECT, 2017-18

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.