Doctrine of Lis Pendens and Section 52 of Transfer of Property Act

“Lis Pendens,” when translated, means “pending suit or cause.” In this context, “Lis” signifies an action or lawsuit, while “Pendens” indicates that the matter is still awaiting resolution.

This concept finds its roots in the Latin proverb “Ut pendent nihil innovetur,” which emphasizes that nothing should undergo changes or alterations while a legal case is ongoing.

Section 52 of the Transfer of Property Act deals with doctrine of lis pendens.

What is Doctrine of Lis Pendens?

The Doctrine of Lis Pendens, derived from Latin, translates to “pending litigation.” It is a legal principle that pertains to immovable property and is dealt with in Section 52 of the Transfer of Property Act, 1882, in India. This doctrine serves to protect the rights and interests of parties involved in a pending lawsuit concerning a specific property.

The doctrine of lis pendens can be defined as the legal authority, control, or jurisdiction that a court holds over the property in question during the entire duration of a lawsuit, extending until a final judgment is reached. It encompasses the set of laws, norms, and principles that govern and restrict the application of the common law maxim, which stipulates that no modifications regarding the subject of a lawsuit can be made while it remains unresolved.

The underlying rationale behind doctrine of lis pendens is to prevent the subject matter of a lawsuit from being transferred to a third party while the case is still pending. In situations involving immovable property, any transfer of ownership must comply with the court’s decision, and the transferee is bound by the court’s judgment.

Section 52 of Transfer of Property Act

One of the most fundamental rights of a property owner is the freedom to transfer or dispose of their property as they see fit. However, certain circumstances, such as when a legal dispute or action involving the property is ongoing, may restrict or prohibit the owner from selling or otherwise disposing of the property for a specified period.

The legal framework governing such situations is encapsulated in Section 52 of the Transfer of Property Act of 1882.

Section 52 of Transfer of Property Act, 1882 reads as:

“52. Transfer of property pending suit relating thereto.—During the 1[pendency] in any Court having authority 2[3[within the limits of India excluding the State of Jammu and Kashmir] or established beyond such limits] by 4[the Central Government 5***] of 6[any] suit or proceeding 7[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 the Court and on such terms as it may impose.”

Section 52 of Transfer of Property Act of 1882 delineates conditions under which property transfers are permissible. These conditions may include instances where the court grants explicit permission or when the lawsuit itself has an element of collusion. Exceptions to the doctrine encompass lawsuits primarily seeking monetary compensation for debts or damages, as well as those aimed at the recovery of personal property.

The Transfer of Property Act, 1882 is a crucial piece of legislation in India that governs the transfer of immovable property. It provides a comprehensive set of rules and regulations for various aspects related to the transfer of property, such as sale, lease, mortgage, exchange, and gift. The Act also deals with the rights and obligations of parties involved in property transactions.

Over time, courts have established specific scenarios in which doctrine of lis pendens does not apply, such as when only the transferor is affected, when the litigation is of a collusive or amicable nature, or when a transfer is executed by an individual who is not a party to the lawsuit, among others. Furthermore, it has been clarified by the courts that the doctrine is applicable in cases involving disputes over immovable property rights, including partition proceedings, mortgage cases, easements, and similar matters.

The Purpose of the Doctrine of Lis Pendens

The doctrine of lis pendens is essential as it prevents Transfer of the title of any disputed property without the Court’s consent, there can be endless litigation, and it will become impossible to bring a lawsuit to a successful termination if alienations are permitted to prevail, and covenants are not imposed.

The ‘Transferee pendente lite’ is bound by the verdict just as if he were a party to the suit and the transfer shall be subservient to the result of the pending lawsuit.

Essential Conditions for Doctrine of Lis Pendens under Section 52 of Transfer of Property Act, 1882

Section 52 serves the purpose of preventing the parties involved in a lawsuit from being deprived of their interests by the opposing party while the case is still unresolved, and it is rooted in principles of equity and fairness. However, it’s important to note that merely mentioning an immovable property in the lawsuit is insufficient to trigger the application of this section. What activates Section 52 is the explicit and immediate involvement of property rights in the dispute. As a result, the transfer of an immovable property is restricted only when the rights related to the property are directly and substantially contested during the ongoing lawsuit.

Furthermore, for the doctrine of Lis Pendens to apply, the lawsuit must be pursued in good faith, devoid of collusion or malicious intent. If the lawsuit is found to be tainted by collusion or ill-intent, the doctrine will not be applicable. Additionally, the lawsuit must be filed in a court with the requisite jurisdiction, whether it pertains to pecuniary or territorial jurisdiction. If the lawsuit is initiated in a court lacking the necessary jurisdiction, the principles of Lis Pendens would not come into play.

The application of the doctrine of Lis Pendens is not automatic when a lawsuit involving immovable property is initiated. Certain specific requirements must be met for this doctrine to take effect. These conditions were elucidated by the Hon’ble Justice A.N. Sen in the case of Dev Raj Dogra v. Gyan Chand Jain, and they consist of the following key elements:

A lawsuit or legal proceeding concerning a right to immovable property must be actively pending.

The lawsuit or proceeding should not be the result of collusion between the involved parties.

During the pendency of such a suit or proceeding, no party to the case can transfer or deal with the property in question in a way that would affect the rights of any other party involved, except with the authorization of the court. In essence, any transfer or action related to the property during the lawsuit’s pendency requires court approval if it has the potential to impact the rights established by any decree or order that may be issued as part of the lawsuit.

From these guidelines and the language of the section 52 itself, it can be inferred that the necessary conditions for the application of the doctrine of lis pendens are as follows:

• There must be a pending suit or proceeding.
• The suit or proceeding must be within the jurisdiction of a competent court.
• The suit must directly and explicitly involve a right to immovable property.
• The suit or proceeding must not be collusive.
• Any transfer or action related to the property in dispute must involve a party to the suit.
• Such a transfer or action must impact the rights of the other party involved in the litigation.

In the case of Balwant Singh v. Buta Ram, the court held that when a situation meets all of the aforementioned requirements, the doctrine comes into effect. During a legitimate lawsuit in a court with appropriate jurisdiction, where ownership of immovable property is directly and substantially contested, the property cannot be transferred without the court’s permission. If such a transfer occurs, the buyer of the immovable property will be bound by the court’s ruling.

In summary, the rule of Lis Pendens under Section 52 of Transfer of Property Act applies to property transfers that pertain to a pending suit or proceeding. This includes transfers made after the initiation of the suit or proceeding and before its resolution by a party to the case as well as to third parties. If these essential conditions are not met, the rule of Lis Pendens does not apply.

Exceptions to Doctrine of Lis Pendens under Section 52 of Transfer of Property Act

While the specified conditions must generally be met for the doctrine of Lis Pendens to be applicable, there are exceptions, one of which is when a transfer is made with the court’s consent. Section 52 of Transfer of Property Act, 1882, explicitly states, “except under the authority of the Court and on such terms as it may impose.”

Consequently, in a lawsuit directly and explicitly involving issues related to the rights of immovable property, the court has the discretion to permit any party to dispose of the property while the case is ongoing, subject to any conditions imposed by the court. This aspect sets apart the Lis Pendens principle.

In certain situations, the court meticulously examines the facts and circumstances of each case to ensure that the rights of any parties involved are not jeopardized by such an authorized transfer. For instance, in the case of Vinod Seth v. Devinder Bajaj, the court, after a thorough examination of the case’s facts and circumstances, determined that it was appropriate to exempt the case from the Lis Pendens doctrine, provided that security was provided. In this specific instance, upon providing a security deposit of Rs. 3,000,000, the court allowed the defendants to sell the property even while the case was still pending.

Effect of Doctrine of Lis Pendens

A transfer or action taken by a party to a lawsuit during the pendency of the suit or proceeding is not automatically void. Instead, it is only considered voidable if it has the potential to impact the rights of any other party to the suit under any decree or order that may be issued as part of the lawsuit. Section 52 of Transfer of Property Act creates a right that can be enforced to set aside a transfer made during the pendency of the suit, as these transfers are not inherently void but rather voidable. Importantly, this voidability depends on the choice of the party affected by the ongoing proceeding, during which the transfer occurred.

In essence, the rule of lis pendens does not aim to invalidate or automatically void the transfer but rather places it under the purview of the litigation’s outcome. According to this rule, anyone who acquires a property during the pendency of a lawsuit is bound by the judgment that may be rendered against the person from whom they acquired the title, even if such a purchaser was not a party to the lawsuit or had no prior notice of the ongoing litigation.

Cases on Doctrine of Lis Pendens

In the case of Faiyaz Hussain v. Munshi Prag Narrain, the Privy Council followed the theory established in the case of Bellamy v. Sabine. They emphasized the importance of reaching a final adjudication in legal matters and observed that failing to do so would result in endless litigation.

In the case of Iqbal Singh v. Mahendar Singh, the High Court of Delhi held that once arbitration proceedings commence, the suit property becomes sub-judice, and any transfer made during the pendency of arbitration proceedings would be subject to Section 52 of Transfer of Property Act.

The High Court of Punjab and Haryana, in the case of Swaran Singh v. Arjun Singh and Ors., stated that the doctrine of lis pendens will apply to arbitral proceedings if the award holds the status of a decree enforceable in a court of law.

The impact of a judgment on parties involved in property transfers during a pending suit was addressed in the case of Simla Banking Industrial Co. Ltd. v. Firm Luddar Mal, Tek Chand. It was explained that the lis pendens rule binds the person who acquires property during the pendency of a suit to the judgment that might be rendered against the individual from whom they derived their title, even if such a buyer was not directly involved in the lawsuit or had no prior notice of the pending litigation. The primary aim of this doctrine is to provide the court with broad oversight over property transfers in ongoing lawsuits.

The meaning of lis pendens was further clarified in the case of Kn. Aswathnarayana Setty v. State of Karnataka & Ors., where it was noted that this principle is grounded in justice, equity, and good conscience. It is based on a fair and equitable foundation, as allowing property transfers to prevail during litigation would make it impossible to bring a legal action to a successful conclusion. Parties involved in litigation are not expected to take notice of titles acquired during the pendency of the lawsuit.

The Supreme Court, in the case of Hardev Singh v. Gurmail Singh, clarified that Section 52 does not declare a transfer made by a party to a pending suit as void or illegal but rather makes that party bound by the judgment that may be issued.

The High Court of Madhya Pradesh, in the case of Gouri Datt Maharaj v. Sheikh Sukur Mohammed & Ors., highlighted the underlying principle of Section 52 of Transfer of Property Act. This section is intended to maintain the status quo, ensuring that it remains unaffected by the actions of any party involved in the pending litigation.

Conclusion

The Doctrine of Lis Pendens is a legal safeguard to prevent parties from disposing of property in a manner that might undermine the outcome of a pending lawsuit.

It is designed to maintain the status quo of the property until the legal dispute is resolved, thereby ensuring fairness and protecting the rights of all parties involved in the litigation.