Wednesday, 2 February 2022

lis pendens in TPA

 Doctrine of Lis pendens in Transfer of Property Act

By Shreya Verma

The word ‘lis pendens’ is formed of two words 'lis' which means litigation and 'pendens' which means pending. It is principle of English common law and is based on the principle of equity in law. The doctrine of lis pendens is based on the well-known legal maxim 'pendente lite nihil innovature' which means nothing new shall be introduced while a litigation is pending. 

The purpose of Lis pendens is based on the rule of necessity because it prohibits parties from disposing of the disputed property which could interfere with judicial proceeding. 

It was held in Bellamy vs. Sabine (1857) by Turner L.J., That if, Lis pendens is allowed then it will directly or indirectly affect the justice and thus is a rule of necessity

If allowed, then it may cause a gross inconvenience as the parties will enter into transfer, while the pendency of litigation, in order to get the disputed property out of the jurisdiction of the court. This was the opinion of the apex court and Rajinder Singh vs. Santa Singh (1973). 

Section 52 of the Transfer of Property Act, 1889 incorporates the principle of Lis pendens by prohibiting any transfer during the pendency of suit. 

Section 52: 

  • A suit regarding rights over and immovable property is pending in court of competent jurisdiction. 

  • Any of the party to suit transfer that property with or without consideration to some other person by the suit was still pending. Such suit shall not be conclusive in nature. 

  • Transferee is thereby bound by the judgement of the court. 

Section 52 does not invalidate transfer to bonafide transferee rather it binds the transferee with the decision of the court. It was held in- Thomson press India vs. Nanak Builders and investors (2013) that section 52 does not render conveyance invalid but it makes a transfer subservient to the judgement. 

It is essential for the principle of Lis pendens to apply that the suit must not be collusive. That is, it must not be brought into between the parties with collusion to defraud third person. eg. ‘A’ the owner of a house colluded with ‘B’, the tenant by virtue of which, ‘B’ declared himself as the owner. ‘A’ brought a Suit against him. Meanwhile, ‘B’ sold the property to ‘C’. They divided the transfer money among them and when the judgement came the court declared ‘C’ as the owner. Here, since the suit was collusive so that transfer in favour of ‘C’ is not invalid and will not be hit by S.52. 

Also, for Section 52 to apply, it is necessity that transfer must be made during the pendency of suit. eg. ‘A’ filed Suit against ‘B’ u/S. 6 of specific Relief Act, claiming right to possession over the property. But Court rejected the plea on the want of jurisdiction. Meanwhile, ‘B’ gives the property to ‘C’ on lease. Later, ‘A’ filed suit in court with proper jurisdiction. Here the transfer is does not attract the provision of section 52 the because transfer was not made during the pendency of suit. 

Suit is pending in court from the date of filing of plaint till the final disposition of the decree. Thus, suit filed even during appeal or execution proceeding is hit by the provision of section 52. 

Transfer under Sec. 52 must affect the rights of the other party i.e., if a suit is A vs. B & C, then in case transfer by ‘B’, ‘C’ cannot ask for pendente lite, however, ‘A’ can. Other party here means a party to suit and not the third party. 

Also transfer can be involuntary (i.e., by courts order) or by the act of  the parties in form of sale, lease, gift, etc. And person can make such transfer with permission of the court and it is not hit by section 52. 

Effect of section 52 is that transfer during pendency of suit remains valid but it is subservient to the outcome of judgement. Which means that, the transfer to be affected only if it is in favour of the transferor.

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