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Sec. 52. Transfer of Property Pending Suit relating Thereto
“During the pendency in any court having authority within the limits of India, of any suit or proceeding which is not collusive and in which any right to immovable 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.”
Explanation — For the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree/order and complete satisfaction or discharge of such decree/order has been obtained or has become obtainable by reason of the expiration of any period of limitation prescribed.
Principle - Doctrine of Lis Pendens
The doctrine of lis pendens, found in Section 52 of the Transfer of Property Act, is a legal principle that aims to maintain stability and fairness in property transactions during pending litigation.
Its essence lies in the maxim "ut lite pendente nihil innovetur," meaning that during the pendency of a suit, nothing new should be introduced concerning the subject matter of the litigation.
Originating from the civil law tradition, lis pendens has become a cornerstone of common law systems worldwide, including in India.
It ensures that the outcome of a lawsuit involving immovable property will bind not only the parties directly involved but also any third parties who acquire an interest in the property during the litigation process.
Lis pendens operates on the premise that a purchaser or transferee during litigation is deemed to have notice of the pending lawsuit and is therefore bound by its outcome. This principle serves several important functions:
Preservation of Rights: Lis pendens safeguards the rights of parties involved in litigation by preventing one party from disposing of the property in dispute to the detriment of the other party's interests.
Prevention of Multiplicity of Suits: By binding third-party transferees to the outcome of the ongoing litigation, lis pendens prevents the proliferation of multiple lawsuits over the same property, thereby promoting judicial efficiency.
Fairness and Equity: The doctrine ensures fairness and equity by preventing parties from manipulating property rights during litigation to gain an unfair advantage over their opponents.
Legal Certainty: Lis pendens provides legal certainty by establishing clear rules governing property transactions during pending litigation, thereby reducing uncertainty and potential disputes.
Under lis pendens, the transferee or purchaser during litigation is considered to have acquired their interest subject to the outcome of the lawsuit.
This means that if the litigation concludes in favor of one party, the transferee's rights to the property will be determined accordingly, regardless of any prior agreement or transaction.
Overall, the doctrine of lis pendens plays a crucial role in maintaining the integrity of legal proceedings involving immovable property and upholding the principles of justice, fairness, and legal certainty.
Effect of the Doctrine
A transfer or dealing by a party to a suit during the pendency of the suit/ proceeding is not ipso facto void. It only cannot affect the rights of any other party to the suit under any decree or order that may be made in the suit or proceedings (Prabhakar v Antonio AIR 1971 Goa 42).
Sec. 52 creates only a right to be enforced to avoid a transfer made pendente lite, because such transfers are not void but voidable and that too at the option of the affected party to the proceeding, pending which the transfer is effected.
Thus, the effect of the rule of lis pendens is not to invalidate or void the transfer, but to make it subject to the result of the litigation. The following illustrations may clear the point :
A sues B in respect of a house in B’s possession. During die pendency of the suit B sells the house to C. A’s suit is dismissed. The transfer to C holds good. Thus, here, the purchaser (C) is bound by the result of the litigation.
A sues B in respect of a house in B’s possession. During the pendency of the suit B sells it to C. A’s suit is decreed. The transfer to C is voidable and A’s tight to take the house is not affected.
Essentials of the Doctrine
There must be pendency of a suit or proceeding: According to explanation to Sec. 52, the pendency of a suit or proceeding begins from the date of the presentation of the plaintiff or institution of the proceedings in a court of competent jurisdiction. A suit instituted in a higher court where it should have been instituted in a lower court is a court having no jurisdiction to try the case (Govinda Pillai Gopala Pillai v Aiyyappan Krishnan AIR 1957 Ker. 10). If the plaintiff is presented in a wrong court, and a transfer takes place during such pendency; the doctrine of lis pendens would not be applicable.
The suit or proceeding must not be collusive - The suit or proceeding must not be collusive; it must be a genuine proceeding. A collusive suit is not a real suit but a suit filed with conspiracy; a sham or pretentious suit but is one in which there is a fraudulent secret understanding between the plaintiff and the defendant that the suit would not be contested with a view’ to defeat the rights of transferee of either parties.
A right to immovable property must be directly and specifically in question in that suit or proceeding: The right to an immovable property’ must be directly’ and specifically in issue in the suit or proceeding. For instance, a suit for specific performance of a contract to transfer immovable property; a suit on mortgage, a suit for partition, a suit for pre-emption (a preferential right to a person to have a transfer effected in his favour on a priority basis) where shares are not ascertained, a suit for injunction, etc.
The property in dispute must be transferred or otherwise dealt with by any party to the litigation: The property must be transferred or otherwise dealt with by any of the parties to the suit or proceeding. ‘Parties to the suit’ include the plaintiff and the defendant and/or their representatives on their demise. Where a legal representative of a defendant in a pending suit effects a transfer and is subsequently substituted in place of the defendant after his death, ds pendens will apply Nallakumara v Pappayi AIR 1945 Mad 219).
Therefore, a transfer by a person whose tide is paramount to that of the parties to the suit, or whose tide is not in any way connected with them (e.g. third party/stranger), is not affected by the doctrine.
The suit or proceeding must be pending in a competent court
The alienation must affect the rights of the other party: The doctrine is not applicable where the rights of the transferor alone are affected and not of the other party to the suit [Sripal Singh v Naresh (1925) Pat 239].
Decision binding on the Alienee
A person who purchases property during the pendency of an action is bound by the judgment that may be made against the person from whom he derives the tide as if he was a party to the suit.
There is no need to implead alienee pendente lite as a party to the principle suit. A lis pendens transferee (with consideration and without notice of the pending litigation) is bound by the decree of the court as the broad purpose is to maintain the status quo unaffected by any act of the parties
4. Or otherwise dealt with : The property that is the subject matter of the litigation cannot be transferred or otherwise dealt with (e.g. sale, partition, release, surrender, etc). But it does not include any forcible taking of possession (Dhansingh v Sushilabai AIR 1968 Mad 229).
A partition suit involves rights in specific immovable property; and a transfer of property when a suit for a partition is pending in a court of law would be hit by the rule of lis pendens.
5. Involuntary transfer: A transfer under Sec. 52 need not be by act of parties, it could be an involuntary transfer also e.g. court-sales.
Therefore, a purchaser of a property at an execution sale during the pendency of a suit in respect of the same property is affected by the doctrine.
Leading Case Laws
In the case of Govinda Pillai Gopala Pillai v Aiyyappan Krishnan (AIR 1957 Ker. 10), the court addressed the application of the doctrine of lis pendens.
Facts and Issue: A property dispute was brought before the court, but the plaint was returned due to lack of pecuniary jurisdiction.
Before the case could be filed in the proper court, the possessor of the property gifted it to his wife and son. The issue was whether the gift deed would be affected by the doctrine of lis pendens.
Observations: Section 52 of the Transfer of Property Act, 1882, pertains to lis pendens. The court examined the amended section and its explanation, which clarified the commencement of the suit's pendency from the date of the plaint's presentation in a competent court.
It was noted that the doctrine of lis pendens is rooted in the necessity to prevent litigants from disposing of disputed property in a manner that interferes with court decrees.
Decision: The court concluded that, based on the amended Section 52, the doctrine of lis pendens did not apply to the gift deed, as there was no suit pending in a court of competent jurisdiction at the time of its execution.
In the case of Dalip Kaur v Jeewan Ram (AIR 1996 P & H 158), the Supreme Court affirmed that proceedings before it, pursuant to the grant of special leave under Article 136 of the Constitution of India, are indeed a continuation of those in the original suit.
Facts and Issue: A had filed a suit for pre-emption of land sold to B, which was eventually decided in A's favour. However, during the pendency of subsequent appeals to the Supreme Court, A sold the property to X. The question arose whether the principle of lis pendens and restitution applied to proceedings before the Supreme Court.
Observations and Decision: The Supreme Court emphasised its pivotal role in the judicial system and its jurisdiction to grant special leave under Article 136. It ruled that the proceedings before it are indeed a continuation of the original suit, and the principle of lis pendens and restitution applies. Therefore, X, as the transferee during the pendency of the proceedings, was bound by the result, and restitution of possession was deemed necessary. Thus, the Supreme Court held that the doctrine of lis pendens and restitution are applicable to proceedings before it.
In the case of Supreme General Films Exchange v H.H. Maharaja Brij Nath Singh Deo (AIR 1975 SC 1810), the Supreme Court held that a lease of immovable property executed during the pendency of litigation is affected by the doctrine of lis pendens, as it creates new rights during the course of the litigation.
Facts and Issue: The plaintiff-mortgagee had brought a civil suit against the former owners of a theatre for recovery of dues. During the pendency of the suit, the owners executed a lease deed in favour of the appellant company. The issue was whether the lease was affected by the doctrine of lis pendens.
Observations and Decision: The Supreme Court rejected the tenant's argument that they had an antecedent right on the property, stating that the lease created new rights during the litigation. The Court held that the lease was subject to the outcome of the court's decision, and the tenant was required to vacate the premises accordingly. Since the lease was executed during the pendency of the suit, the tenant's rights were subject to the court's decision.
In the case of Sri Jagannath Mahaprabhu v Pravat Chandra Chatterjee (AIR 1992 ORI. 47 (F.B.)), the court held that when a motion is made by a lis pendens transferee to be impleaded as a party, the court may exercise its discretion judicially to add them as a proper party to prevent multiplicity of suits and protect their interests.
However, the parties affected by the transfer pendente lite are not obligated to implead the lis pendens transferee as a party to the litigation.
Facts and Issue: The petitioner filed a suit for eviction and recovery of possession, and the defendant sold a portion of the property to other parties during the pendency of the suit.
The purchasers applied to be impleaded as parties, which was allowed by the court despite objections from the petitioner.
Observations and Decision: The court observed that a transferee from a party to a suit acquires interest in the suit property and has the right to be substituted in place of the transferor in the suit.
The court rejected the argument that a transfer pendente lite should be rendered void, citing the Supreme Court's decision in Nagubai Ammal v B. Shama Rao (AIR 1956 SC 593). The court emphasised that the lis pendens transferee is bound by the court's decree, regardless of how it was granted.
In the case of Jayaram Mudaliar v Ayyaswami (AIR 1973 SC 569), the Supreme Court held that a private sale of family property by a Karta, pending a suit for partition instituted by a member, is affected by Sec. 52 of the Transfer of Property Act and does not bind the family.
The purpose of Sec. 52 is not to defeat just and equitable claims but to subject them to the authority of the court dealing with the property.
Facts and Issue: The appellant purchased property from Muniswami Mudaliar in a public auction held in execution of a money decree, while a partition suit was pending.
The respondent challenged the validity of the sales, claiming they were struck by the doctrine of lis pendens.
Observations and Decision: The court held that Sec. 52 applies to both private and public auctions, modifying its effect based on the law governing the auction.
The doctrine of lis pendens aims to maintain the status quo during litigation and does not invalidate just or equitable claims.
The court directed safeguards to protect the appellant's rights without infringing on the respondent's rights in the joint property. Revenue sales would bind only the share of the debtor, not other family members.
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