DOCTRINE OF LIS PENDENS
Ishita Gupta, B.B.A.,LL.B.(Hons.) from JIMS School of Law, Greater Noida, GGSIP University.
INTRODUCTION- ABOUT THE TRANSFER OF PROPERTY ACT 1882
Before the enactment of the Transfer of Property Act, 1882, the immovable properties were transferred in India according to the principles of English Law and equity. Due to the lack of legislation governing property laws, the judiciary was open to its analysis which majorly turned biased and non-acceptable by the parties to suit. These judicial interpretations resulted in confused and conflicting case laws.
To provide the remedies for these confusions and conflicts a Law Commission was appointed in England to prepare a code of substantive law of transfer of properties in India. A bill was drafted and prepared by the Law Commission. The Bill was further presented by the secretary of state for India. The bill was introduced before the legislative council in 1877.[i] Incorporating the recommendations of the third law commission the transfer of property bill was reintroduced in the legislative council.
The transfer of property bill having been passed by the legislative council received its assent on 17th February 1882. It came on the statute book as the Transfer of Property Act 1882 and came into force on 1st July 1882.
DOCTRINE OF LIS PENDENS
The law incorporated in section 52 is based on the doctrine of lis pendens which means the litigation is pending. The doctrine of legal action is expressed within the documented maxim that's pendente lite nihil innovator which suggests during the pendency of litigation, nothing new should be introduced. Under this doctrine, the principle is that in pendency of any suit regarding the title of the property any new interest in respect of that property shouldn't be created. Therefore, in essence, the doctrine of lis pendens prohibits the transfer of property during the litigation.
The basis of Lis Pendens is important instead of actual or constructive notice. It may be said that this doctrine is predicated on notice because a pending suit is considered constructive notice of the very fact of the disputed title of the property under litigation. Therefore, any person dealing with that disputed property shall be bound by the decision of the court.
The law incorporated in section 52 is based on the doctrine of lis pendens which means the litigation is pending. The doctrine of legal action is expressed within the documented maxim that's “Pendente Lite Nihil Innovator” which suggests during the pendency of litigation, nothing new should be introduced. Under this doctrine, the principle is that in pendency of any suit regarding the title of the property any new interest in respect of that property shouldn't be created. Therefore, in essence, the doctrine of lis pendens prohibits the transfer of property during the litigation.
The basis of legal action is important instead of actual or constructive notice. It may be said that this doctrine is predicated on notice because a pending suit is considered constructive notice of the very fact of the disputed title of the property under litigation. Therefore, any person dealing with that disputed property shall be bound by the decision of the court. The Indian Courts have considered that the structure of section 52 isn't the doctrine of notice but expediency i.e. the inevitability for final adjudication and public policy. In Rajendra Singh V. Santa Singh[ii] the Supreme Court highlighted 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 can remove the topic matter of litigation from the facility of the court to make a decision a pending dispute and frustrate its decree.”
ESSENTIAL CONDITIONS FOR APPLICATION OF LIS PENDENS
Various essential conditions are supposed to be fulfilled for the application of the doctrine of lis pendens. As and when these 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 the rights in the property transferred to him. On the other hand, when the decision is delivered against the transferor, the transferee cannot claim towards any interest in the property.
1. Pendency of suit/ proceeding
Provision is applied only when a property is transferred during pending litigation. Pendency of suit is that period during which the case remains before a court of law for its final disposal.[iii] The explanation to this section provides that pendency of suit or proceedings is deemed to begin from the date of presentation of the plaint or institution of the proceedings in a court and continues until the suit has been disposed of by a final decree or order.
Similarly, where a plaint is presented with insufficient court fee and is therefore returned by the court by the plaintiff, he presents it again by affixing proper court fee, the pendency would begin from the date when it had been presented second time with the proper court fee.
This section must be interpreted strictly. Any transfer made outside the amount of litigation won't be suffering from legal action. Where a society had already allotted the land in question to some persons before the institution of the suit by the respondent society, the court said that the doctrine of lis pendens was not attracted.
2. The suit/ proceeding must be mandatorily pending in a court of competent jurisdiction
The suit or proceeding during which the property is transferred must be pending before the court of competent jurisdiction. Where a suit is pending before the court which has no proper jurisdiction to entertain it, the lis pendens cannot be applied. The jurisdiction of the court is, therefore, territorial or pecuniary or otherwise as given in the code. Thus, a suit respecting any immovable property should be filed only in the court within that jurisdiction where the property is situated.
However, as regards to the pecuniary jurisdiction, if a suit is filed in a higher court which should have been filed in the lowest court, is has been held that there is no lack no jurisdiction, it is merely an irregularity and section 52 applies.[iv]
3. A direct and specific right to immovable property is involved in the suit
Another essential condition for the applicability of this section is that in the pending suit, right to immovable property must directly and specifically be in question. The subject matter of litigation should be about the title/ interest in an immovable property. Where the question involved within the suit or proceeding doesn't relate to any interest in immovable property, the doctrine of legal action has no application.
For instance, where a suit is pending between landlord and tenant regarding payment of rents and through litigation the owner transfers the property, the transfer isn't suffering from lis pendens because the litigation isn't regarding any interest within the property but involves payment of rents.
4. The suit/ proceeding should not be collusive
The doctrine of lis pendens is not applicable if the suit is collusive. A suit which is collusive and if it gets instituted with a mala fide intention then it may turn out to be void. Mala fide intention behind instituting a suit is inferred from the very fact that parties to the suit know their respective rights within the property and there's no actual dispute. Such a suit is, therefore, the fictitious and very purpose of filing the suit is to get judicial decision evil design.
Explaining the nature of a collusive suit, in Nagubai v. B. Sham Rao[v], the supreme court held that “in a collusive proceeding the claim put forward is fictitious, the contest over it is unreal, and the decree passed therein is a mere mask having the similitude of a judicial determination and worn by the parties with the thing of confounding third parties.”
5. The property in dispute must be transferred
During the pendency of the suit, the property must be transferred or otherwise addressed by any of the parties to suit. The transfer includes the sale, exchange, lease and mortgage. Thus, during the pendency of suit if the disputed property is sold or given in exchange, is leased or is mortgaged either by the plaintiff or by the defendant, the doctrine of lis pendens shall apply on it and the transfer would be subject to the decision of the court.
6. The transfer must adversely affect the rights of the aggrieved party in the litigation
The last condition for the applicability of section 52 is that the transfer during pendency must affect the rights of any other party to suit. The principle of legal action is meant to safeguard the parties to litigation against transfers by their opponents, therefore the words “any other party” here doesn't mean stranger to the suit. It means any other party between whom and the party who transfers, there is an issue for the decision which might be prejudice by alienation.
“Any other party” here means the other party whose interest could also be suffering from transfer during pendente lite. Where the rights only of the transferor and not of the other party to a suit is affected, the principle of lis pendens does not apply. Thus, section 52 cannot be made applicable between the parties who are at one side be the plaintiff or as a defendant because there is no dispute between B and C. But A can take the benefit of this section because of the transfer of pendente lite.
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 the litigation.
The words to affect the rights of any other party thereto under any decree or order which may be made herein suggest that the transfer pendente lite is valid and good to the extent that it might conflict with rights established under the decree. Purchase of property during the continuance of a prohibiting order of the court has been held to confer no right or title on the purchaser.
[ii] A.I.R. 1973 S.C. 2537
[iv] Govind Pillai v. Aiyappan, AIR 1957 Ker 10
[v] (1956) S.C.R. 451