This article has been written by Krishna Rao P V, pursuing the Certificate Course in Real Estate Laws from LawSikho.
Table of Contents
Introduction
The Transfer of Property Act, 1882, was promulgated embodying the principles of English Common Law, namely equity, good conscience, and justice underscored by the provisions of the Indian Contract Act, 1872, and came into force from July 1, 1882.
Property or ownership are synonymous with each other, and ownership interest is automatically created when a right is vested.
Ownership has to be:
- Indefinite in point of the user – The owner may use the property subject to some restrictions without injuring the rights of other persons, but at no point in time will it negate the ownership in the property even if the rights may be curtailed.
- Unrestricted in the point of disposition – The owner has an unfettered right to dispose of the property. However, there are exceptions to this as minors (those below the age of 18) can be owners but cannot alienate the property. Also, the Government may acquire the property for specific purposes irrespective of the property owner’s consent.
- Unlimited in the point of duration – As long as the property in question exists, the property rights are heritable. Again, the Government can, at any point, acquire the property and terminate the owner’s rights.
The Transfer of Property Act covers transfers inter vivos, i.e., between two living persons. A transfer is defined as an act by which living persons convey the property to one or more living persons.
The transferee can get the transferor’s rights and nothing more, where the owner is the transferor, and the transferee is the person or persons to whom the rights are conveyed.
The first amendment to the Transfer of Property Act, 1882, was in 1929, whereby the definition of living persons was amended to include companies, associations, and bodies of individuals, whether incorporated or not.
Origin of the doctrine of Lis Pendens
The doctrine of Lis Pendens has its origin by Lord Justice Turner in Bellamy Vs. Sabine, 1857 Where the Court observed the following:
“This is a doctrine common to law and equity courts, which I apprehend, on the grounds that, if alienation pendente lite was allowed to prevail, it would simply not be possible for any action or suit to be resolved successfully. In any case, the Plaintiff will be responsible for the Defendant who alienated the property before the judgment or the decree and must be obliged, according to the same course of action, to initiate these proceedings de novo.”
The facts of the above case were the following:
A person, Mr X, sold an immovable property to Mr A.
Mr X’s son, Mr Z, who was the heir of Mr. X, sued Mr A in a competent court to declare the sale as void.
However, while this litigation was pending, Mr. A sold the property to Mr. B, who did not take notice of the suit.
The Court held that the son Mr. Z was entitled to the property and the sale was set aside.
Mr. B who purchased the property from Mr. A does not get any title as he purchased the property from someone who did not have the title and therefore cannot convey it.
Therefore, evolving the principles of common law and Section 52 of The Transfer of Property Act, 1882, was born and is as follows:
When there is an ongoing lawsuit in any Court having authority within the limits of India, a suit or proceeding in which any right to immovable property is precisely in question, the property cannot be conveyed by any party to the lawsuit which can influence the rights of any other party thereto under any order which may be rendered therein, unless under the jurisdiction of the Court and on such conditions as it may enforce.
Lis Pendens literally means ‘litigation pending’ or ‘pending suit’ and is drawn from the concept based on the maxim “Pendente lite nihil innovature” which means that nothing new must be introduced while a litigation or suit is pending.
This Doctrine states that the Transfer of property shall be restricted when there is a litigation pending on the title or any rights that arise directly thereof involving an immovable property.
The suit commences the moment a complaint is presented or the day of commencement of proceedings in the appropriate Court and shall be terminated by Order of the Court.
The Court may, however, permit any party to the suit to transfer the property on such terms which it may think fit and proper to impose.
The sale of immovable property can take place through private negotiations, but the said Transfer will be subservient to the verdict of the competent Court.
Now that the doctrine is clear, an inevitable question that may arise is – what is the objective or purpose of this doctrine? Let us read on to find out.
The purpose of the doctrine of Lis Pendens
This Doctrine 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.
Let us understand the various conditions that need to be met for the doctrine to apply:
Conditions for Applicability of the Doctrine as provided in Section 52
- A suit or proceeding is pending.
- The above suit is brought to a competent court within the jurisdiction.
- The right to the title of an immovable property is directly in question.
- There cannot be any collusion.
- The suit should directly affect the rights of the other party.
- The property in question is being transferred by either party.
Some examples for Non-Applicability:
- This does not apply to a private sale by a creditor who holds the right to dispose of the property that is mortgaged to it even when the borrower has a redemption suit pending.
- The Doctrine also does not apply when the property is not described correctly, making it unidentifiable.
- In a maintenance suit, where the property is mentioned only so that maintenance payments can be determined transparently; the Doctrine does not apply when a right to the said immovable property is not directly in question and alienations are thereby permitted.
- The Doctrine fails to apply when a Court orders restoration of immovable property under the Civil Procedure Code, Order 21, Rule 63.
Understanding the jurisprudential evolution of this Doctrine
In Ayyaswami vs Jayaram Mudaliar AIR 1973 SC 569, the Court held that the purpose of this provision is not to deprive the parties of every just or fair argument but rather to guarantee that the parties submit themselves to the jurisdiction and authority of the Court which shall determine all claims that are placed before it to the satisfaction of the parties concerned.
In the case of Hardev Singh v. Gurmail Singh, Civil Appeal No. 6222 of 2000, the Court ruled that Section 52 of the Transfer of Property Act, would not make void or unlawful any sale of the contested properties, but only puts the purchaser beyond the binding limits of the judgment on the disposition of the conflict.
In the case of Koyalee v. Rajasthan District, AIR 2009 Raj.28, the land in question was originally registered in the name of the Plaintiff’s husband. After his death, his brother realised and knowing well that the wife of his brother was alive and was the sole legal heir, filed a lawsuit pursuing the Khatedari rights, and pursuant to this, the wife had to contest that she was the sole legal heir of the recorded Khatedar. The brother further went on to transfer the land despite the lawsuit that was pending, since this was done without seeking the Court’s permission the transfer was struck down under Section 52 of the Transfer of Property Act as per the Doctrine of lis pendens.
In Vinod Seth v. Devinder Bajaj, 2010, though reiterating its power to exclude the suit property from the limitations set out in Section 52 of the Act, it has allowed the Respondent to make a pendente lite move. These exemptions under Section 52 are, however, subject to certain conditions imposed by the Court. In the case at question, the Plaintiff was a contractor who wished to make a profit by constructing a building on the suit-land, and the Defendant wanted to move it to a third party. A total of three lakh rupees was to be deposited as a security by the Defendant to transfer the property in question, The sum the claimant would have profited by. The Court had thus levied the condition for the payment of that sum, which would make the pendente lite transfer legitimate.
The Court’s positions on this pendente lite-transfers issue are explained in Ashok Kumar v. Govindammal and Anr, 2010. The Supreme Court of India has here reaffirmed that a pendente lite cannot be transferred for a property whose title is the subject of litigation.
These transfer payments would limit the rights of the party to whom the Court would eventually have agreed that the property would be given the title. Where the right of the pendente lite transferor to the property is upheld under the decree of the Court, then the title of the transferee to the property is disregarded. However, if the title of the pendente lite transferor is acknowledged only for a smaller portion of the property, only for that portion of the property can a transferor have the title. The Transfer of the title of the rest of the land, for which there is no right for the pendente lite transferor, is invalid. This means that the transferee cannot claim the title or any other interest in the rest of the property. Finally, if the transferor was found to have no right in the first place to the transferred land, then the transferor would also not have gained rights on this property.
The Supreme Court discussed and amended the law concerning the Doctrine of lis pendens in Har Narain v Mam Chand, in compliance with Section 47(2) of The Registration Act, 1908. The lis pendens doctrine states that no fixed property may be transferred when a lawsuit relating to it is pending. Under Section 47, from the date of execution, a recorded sale deed of a fixed property is considered to exist upon registration. The Court made it clear that the fiction produced pursuant to Section 47 does not prohibit lis pendens from functioning. Thus, if the civil action starts and is registered later, the Court held that land sales are still subject to the principle of lis pendens.
Suggestions
To digitize all property records, while the Doctrine is necessary to ensure that the property rights of the parties involved are protected, it is also imperative that technology be employed so that the property title in question does not get transferred while the case is pending. This can be achieved by the complete digitalization of property records wherein all properties are accorded a property identification number, this along with the fact that India has already created a Unique Identification System for all its citizens via the Aadhaar card can be combined to ensure that the integrity and sanctity of the data are never in question. This will also help in avoiding cases where the property cannot be identified.
When an encumbrance certificate (EC) is issued, it mentions any encumbrance. This can be improved, so as to list any pending litigation(s) to alert the registering authority and the parties concerned.
Conclusion
The doctrine of Lis Pendens is strictly based on the theory of necessity rather than on the theory of notice governed by the principles enshrined in common law, namely Justice, Equity and Good Conscience. It is, therefore, pivotal in ensuring that justice is provided without injuring the rights of either party.
References
[1]. Bellamy Vs Sabine, 1857 De G & J 566. [2]. The Transfer of Property Act, 1882. [3]. The Civil Procedure Code 1908. [4].The Registration Act, 1908. [5]. The Province of Jurisprudence by John Austin, 1832. [6]. Raja Balwant Singh vs The Rev. Rockwell Clancy And Rao on February 28, 1912. [7]. Manika Gramani vs Ellappa Chetti on 17 March, 1896. [8]. Ayyaswami vs. Jayaram Mudaliar AIR 1973 SC 569. [9]. Hardev Singh v. Gurmail Singh, Civil Appeal No. 6222 of 2000. [10]. Koyalee v. Rajasthan District, AIR 2009 Raj.28 case. [11]. Vinod Seth versus Devinder Bajaj, 2010. [12]. Ashok Kumar vs. Govindammal and Anr,2010. [13]. Har Narain v Mam Chand.Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.
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