LIS PENDENS
Doctrine of lis pendens.—
The law incorporated in Section 52 is based on the doctrine of lis pendens. ‘Lis’ means ‘litigation’ and ‘pendens’ means ‘pending. So, ‘lis pendens’ would mean ‘pending litigation’.
The doctrine of lis pendens is expressed in the well-known maxim: pendente lite nihil innovature, which means ‘during pendency of litigation, nothing new should be introduced’.
Under this doctrine, it is provided that during pendency of any suit regarding title of a property, any new interest in respect of that property should not be created. Creation of new title or interest is known as a transfer of property.
Therefore, in essence, the doctrine of lis pendens prohibits the transfer of property pending litigation.
It is a very old doctrine and has been operating in the English Common Law. Later on, this doctrine was adopted also by equity for a better and more regular administration of justice.
Basis of Lis pendens.—
Turner, L.J in Bellamy v. Sabine has explained that the basis of lis pendens is ‘necessity’ rather than actual or constructive notice.
The Indian Courts have also taken the view that basis of Section 52 is not the doctrine of notice but expediency i.e. the necessity for final adjudication and public policy.
For administration of justice it is necessary that while any suit is still pending in a Court of law regarding title of a property, the litigants should not be allowed to take decision themselves and transfer the disputed property.
Lis pendens is, ‘therefore, based on ‘necessity’ and as a matter of public policy it prevents the parties from disposing of a disputed property in such manner as to interfere with Court’s proceedings.
Without any rule prohibiting transfer pending litigation, all suits regarding specific property would be rendered meaningless by successive alienations making it almost impracticable for any person to settle his rights in property through the process of law.
In Rajendar Singh v. Santa Singh (A.I.R. (1973) S.C. 2537.) the Supreme Court has said that the doctrine of lis pendens is intended to strike at attempts by parties to a suit to curtail the jurisdiction of the Court by private dealings which may remove the subject matter of litigation from the power of the Court to decide a pending dispute and frustrate its decree.
Since the Courts in India regard ‘necessary’ as the basis of the doctrine of lis pendens, it is immaterial whether the transferee had any notice of pendency of suit or not. The transferee is bound by the decision of the Court even if he had no actual or constructive notice of the pending suit.
Provisions of Section 52.—The doctrine of lis pendens as laid down in Section 52 is given below:
a. During the pendency of a suit or proceeding.
b. property cannot be transferred or otherwise dealt with, and
c. if so transferred, the transferee is bound by the decision of the Court whether or not he had notice of the suit or proceeding.
Essential conditions for application of Section 52.—
Following conditions are necessary for the application of the doctrine of lis pendens as given in Section 52:
1. There is a pendency of a suit or proceeding.
2. The suit or proceeding must be pending in a Court of competent jurisdiction.
3. A right to immovable property is directly and specifically involved in the suit.
4. The suit or proceeding must not be collusive.
5. The property in dispute must be transferred or otherwise dealt with by any party to suit.
6. The transfer must affect the rights of the other party to litigation.
When the above-mentioned conditions are fulfilled, the transferee is bound by the decision of the Court. If the decision of the Court is in favour of the transferor, the transferee has rights in the property transferred to him. If the decision goes against the transferor, the transferee cannot get any interest in the property.
Pendency of suit or proceedings—
The section applies only where a property is transferred during pendency of litigation. Pendency of a suit is that period during which the case remains before a Court of Law for its final disposal.
If a case is instituted in Court, the first step is presentation of the plaint, and the last step is passing of a decree. When the Court gives its decision by passing a decree, the case is terminated. So, the pendency of a suit begins from the date on which the plaint is presented and terminates on the date when final decree is passed.
The Explanation to this section provides that pendency of suit or proceeding is deemed to begin from the date of presentation of the plaint or institution of the proceeding in a Court and continues until the suit has been disposed of by a final decree or order.
However, mere presentation of plaint is not sufficient the plaint must also be accepted by the Court. Where a plaint is presented in a Court having no jurisdiction and the plaint is returned to be filed in the Court having proper jurisdiction, the pendency would commence from the date on which the plaint is presented to another Court having proper jurisdiction.
Transfer made during the interval between the first presentation of plaint (which was returned back) and the date of presentation thereof in a proper Court, is not affected by the doctrine of lis pendens.
Similarly, where a plaint is presented with insufficient Court fee and is therefore returned by the Court and the plaintiff presents it again by affixing proper Court fee, the pendency would begin from the date when it was presented second time with proper Court fee.
Where an application is presented before a Court asking permission to sue in forma pauperis, the pendency starts from the date on which the application has been presented provided it is accepted by the Court. But, where such application is rejected, the pendency shall not commence from the date of application.
As regards termination of the suit or proceeding, the Explanation provides that pendency continues until the final decree or order in the suit or proceeding is completely satisfied or discharged unless execution of the decree has become time-barred.
Execution proceedings are in fact part of the proceedings in a suit. Therefore, the pendency continues till the decree is completely executed.
In N. C. Bhartia v. Gandevi Peoples Co-operative Bank Ltd., an order of attachment of judgment-debtor’s property was passed during execution proceedings. Subsequently, the relatives of the judgement-debtor objected the attachment and claimed a share in that property. They also sold that property and this sale-deed was executed during pendency of the execution proceedings. Gujarat High Court held that the sale-deed was hit by the doctrine of lis pendens as given in Section 52.
Lis (litigation) in a mortgage suit continues after the decree and does not terminate till the security is realised for the satisfaction of the decree. After a final decree, the defendant has a right to appeal within the period of limitation. Where an appeal is preferred within limitation period, the appeal would be a continuation of the suit and thus shall be deemed to continue during appeal.
Transfer of property made during appeal shall be a transfer during pendency of suit and the provisions of Section 52 shall apply on it.
It may be concluded that for purposes of this section pendency of a suit begins from the date of presentation of a plaint and continues up to the termination of litigation including appellate stage and execution proceedings.
In Supreme General Films Exchange Ltd. v. Sri Nath Singhji Deo, a theatre (Plaza Talkies) was attached in execution of a decree against its owner. During attachment, the owner leased the theatre to M/s. Supreme General Films Exchange Ltd. It was held by the Supreme Court that the lease was hit by the doctrine of lis pendens.
This section must be interpreted strictly. Any transfer made outside the period of litigation will not be affected by lis pendens.
A sale-deed executed before but registered after presentation of the plaint is not affected by this section because deed operates from the date of its execution.
Proceedings.—
The doctrine of lis pendens applies to transfers during pendency of suit or proceeding. ‘Proceeding’ means a judicial activity whether civil or criminal.
Here it-means a judicial activity in respect of determining the rights in an immovable property.
Accordingly, for purposes of this section, there is no difference between a suit and a proceeding.
This section has been applied to transfers made during revenue proceedings.
Compromise Suit.—
The doctrine of lis pendens is applicable in cases where the pending litigation is ultimately compromised and a compromise or consent decree ‘is passed.
The word ‘decree or order’ in this section contemplates compromise or consent decrees. However, the compromise must be during the pendency of suit and not a compromise entered into after withdrawal of the suit.
Pendency in Court of Competent Jurisdiction.—
The suit or proceeding during which the property is transferred, must be pending before a Court of competent jurisdiction.
Where a suit is pending before a Court which has no proper jurisdiction to entertain it, the lis pendens cannot apply.
Right to immovable property must be involved.—
Another condition for applicability of this section is that in the pending suit, right to immovable property must directly and specifically be in question. The litigation should be regarding title or interest in an immovable property.
Where the question involved in the suit or proceeding does not relate directly to any interest in an immovable property, the doctrine of lis pendens has no application.
For example, where a suit is pending between landlord and tenant regarding payment of rents and during litigation the landlord transfers the property, the transfer is not affected by lis pendens because the litigation is not with regard to any interest in the property but involves payment of rents.
Similarly, where a Hindu widow filed a suit against her stepson for maintenance and specifies certain immovable properties in possession of such stepson, it was held that right to immovable property is not directly in issue and this section cannot apply.
Mere mention of an immovable property in the plaint is not enough, rights in respect of that immovable property must directly and substantially be in question.
However, following suits have been held to involve question of rights in immovable property and are within the scope of this section
i. A suit for partition.
ii. A suit on mortgage.
iii. A suit for pre-emption.
iv. Easement Suit.
v. Suit for maintenance by a Hindu widow in which she claims to have her maintenance made a charge on specific immovable property and a decree is passed creating a charge on such property.
Where the suit or proceeding does not involve any question of right in immovable property, lis pendens does not apply. Thus,
i. suit for debt or damages where the claim is limited to money,
ii. a suit for the recovery of movables, or
iii. a suit for an account are outside the scope of this section.
iv. Similarly, a suit for recovery of rents of an agricultural holding is also outside the scope of this section.
Rights in movables.—
The doctrine of lis pendens does not apply where the suit involves rights in movable properties.
Standing timber is a movable property, therefore, this section cannot apply where the issue before the Court is rights in respect of standing timber.
Similarly, where certain ornaments were pledged pending a suit for their recovery, it was held that lis pendens is not applicable and the pledge shall not be subject to decision of the Court.
Suit must not be collusive.—
Lis pendens is inapplicable if the suit is collusive in nature.
A suit is collusive if it is instituted with a mala fide intention.
Mala fide intention behind instituting a suit is inferred from the fact that parties to the suit know their respective rights in the property and there is no actual dispute. Such suit is, therefore, fictitious and the very purpose of filing the suit is to get judicial decision for some evil design e.g. defrauding a third party.
Property is transferred or otherwise dealt with.—
During pendency of suit, the property must be transferred or otherwise dealt with by any of the parties to suit.
Transfer includes sale, exchange, lease and mortgage. Thus, during pendency of suit if the disputed property is sold or given in exchange, is leased or is mortgaged either by plaintiff or by defendant, the doctrine of lis pendens shall apply on it and the transfer would be subject to decision of the Court.
The expression “otherwise dealt with” has been interpreted to mean those transactions in which although there is transfer of some interest in the property but they do not come strictly within the meaning of transfer of property’ as defined in Section 5 of this Act.
Accordingly, surrender, release or partition would be regarded as transfer for purposes of this section.
A contract of sale has been regarded as a transfer within the meaning of ‘otherwise dealt with’. Therefore, entering into contract of sale of the disputed property during litigation shall attract the provisions of this section.
Partition effected during pendency of the suit shall also within the ambit of this section.
Handing over of the disputed property during litigation would mean ‘otherwise dealt with’ and Section 52 applies.
However, in Rajendra Singh v. Santa Singh, the Supreme Court has held that taking illegal possession or continuance of wrongful possession of the disputed property does not amount to ‘otherwise dealt with’ and, therefore, it shall not attract the provisions of Section 52 even though the wrong doer is party to suit.
To construct building on the disputed land so as to compel the plaintiff to file another suit for its removal is dealing the property otherwise and comes within the purview of Section 52.
Entering into a compromise respecting disputed property with a third person during litigation is also dealing the property otherwise.
Involuntary transfers.— Transfer of property may either be by act of parties or by operation of law.
Transfers by operation of law are known as involuntary transfers e.g. Court sale or transfer made by order of Court. Section 52 is applicable to both the kinds of transfers pendente lite.
Formerly there was some doubt whether this section applies to transfers made by operation of law because this Act does not apply to such transfers. But the Privy Council had settled the law that the principle of lis pendens is applicable also to transfers by operation of law . ( Nilkant v. Suresh Chander, (1885) 12 Cal. 414, 12 I.A. 171 ; Motilal v. Karrabulam, (1897) 25 Cal. 179, 24 I.A. 170. )
In Samarendra Nath Sinha v. Krishna Kumar Nag (A.I.R. (1967) S.C. 1440. ) the Supreme Court has also held that it is true that Section 52 strictly speaking does not apply to involuntary alienations such as Court sales but, it is well established that the principle of lis pendens applies to such transfers. Therefore, the doctrine of lis pendens applies where the sale is made by order of the Court.
Though an attachment is not a transfer, but a sale in pursuance of an attachment comes within the scope of this section.
The principle of lis pendens applies to execution sales as well as sales for non payment of Government revenue.
The auction-purchaser is bound by the decision of the pending litigation though auction is made by Court’s order Purchaser at a sale for arrears of income-tax is affected by the rule of lis pendens and would be bound by the decision of Court if he had purchased the property pending litigation.
Lease effected by Government in Khas mahal is regarded as lease by the landlord and if made pendente lite, Section 52 is applicable on such a lease.
Transfers with permission of the Court.— When a transfer is made during pendency of suit with the permission of Court, the principle of lis pendens is not applicable. The concluding part of this section exempts transfers pendente lite if such transfer is made ‘under the authority of the Court’ and on such terms as it may impose’.
Transfer by any party to suit.— Transfer made during pendency of suit is not enough to attract the provisions of this section. It is necessary that transfer of disputed property is made by any party to suit. Transfer of property by a person whose title is not in any way connected with disputed property is not affected by lis pendens.
A party to suit whose name is struck off as a contesting party by consent is not bound by the decree because lis pendens shall not apply to him.
It is to be noted that the words ‘any party’ are not merely descriptive but refer to the time when the transaction takes place. The doctrine of lis pendens was, therefore, not applied where the transfer was made pending the suit by a person who was not party at the time of transfer but, was subsequently made a party as a representative of the original defendant.
Transfer affects the rights of any other party. — The last condition for applicability of Section 52 is that the transfer during pendency must affect the rights of any other party to suit.
The principle of lis pendens is intended to safeguard the parties to litigation against transfers by their opponents. So, the words ‘any other party’ here does not mean stranger to suit. It means any other party between whom and the party who transfers, there is an issue for decision which might be prejudiced by alienation.
‘Any other party’ here means the opposite party whose interest may be affected by transfer pendente lite. Where the rights only of the transferor and not of the other party to suit are affected, the principle of lis pendens does not apply.
Thus, Section 52 cannot be made applicable between parties who are at one side either as plaintiff or as defendant because there is no question of any dispute between them.
For example in a suit A is plaintiff and B, and C are co-defendants. During pendency of the suit B transfers the property. C cannot take the benefit of Section 52 because there is no dispute between B and C. But A can take the benefit of this section because he is party to suit other than the transferor and his rights may be affected by the transfer pendente lite.
Effect of the principles of lis pendens.— When the condition necessary for the applicability of this section are fulfilled the result is that transferee is bound by the decision of the Court.
For example, in a suit between A and B respecting title of a house if B transfers the house to C during pendency and the judgment is subsequently in favour of B., then C would be entitled to the house. But if the decree is passed against B; then it is binding not only on B but also on C with the result that C cannot get the house. Under this section C cannot take the plea that he had no notice of pending litigation.
It may be noted that normally decree of a Court binds only the parties to the suit. But, under the principle of lis pendens, a person who purchases during pendency of the suit is also bound by the decree made against that party from whom he had purchased.
The effect of lis pendens is, therefore, that it does not prevent the vesting of title in the transferee but only makes it subject to the rights of the parties as decided in the suit. Section 52, therefore, does not invalidate the transfer but renders if subservient or subject to the rights of the parties to litigation.
The words “so as to affect the rights of any other party thereto under any decree or order which may be made therein” suggest that the transfer pendente lite is valid and good to the- extent that it might conflict with rights established under the decree.