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This article is written by Jalaj Joshi who is pursuing a Certificate Course in Advanced Civil Litigation: Practice Procedure and Drafting from LawSikho.

Introduction

The concept of Pendente Lite is imbibed under the Doctrine of Lis Pendens wherein ‘Lis; is referred to ‘litigation’ and ‘Pendens’ is referred to ‘continuing or pending’. Hence, the Doctrine of Lis Pendens in its literal sense means pending litigation. The doctrine of Lis Pendens has been expressed or been derived from the Latin maxim “Ut pendent nihil innovetur and that means “during the pendency of suit or litigation, nothing new should be introduced or nothing should be changed.” Thus the principle embodied in the Doctrine states that, during the pendency of any suit related to the title of the property, no new interest can be created or added on the particular property which is subject matter to the suit. In other words the Doctrine prohibits the transfer of disputed property. 

The Doctrine seems to be based on the concept of notice because a pending suit is considered as a constructive notice for the disputed property pendente lite. Any person related to the title of the property or subject matter of the suit, will be bound by the decision of the court. Therefore, it can be said that the Doctrine gives power, jurisdiction or control to the court over the disputed property. Therefore, the party to the suit of title dispute is not allowed to transfer the property or to take any such decisions, which can interfere with the court’s proceedings. Hence the doctrine prevents the litigants from transferring or disposing the disputed property, for the administration of justice. 

Application of Section 52 of the Transfer of Property Act

The Doctrine of Lis Pendens and the principle of the maxim Ut pendent nihil innovetur” are imbibed under Section 52 of the Transfer of Property Act, 1882. The section applies to the suits related to title dispute over any immovable property and the section prohibits or restricts any transfer, alienation or disposition of that immovable property in question till the litigation is pending or unless the judgement comes from the court of competent jurisdiction so as to affect the rights of the opponent. The Explanation to Section 52 makes it clear that lis shall be deemed to commence from the date of the presentation of the plaint and to continue until the suit or proceeding has been disposed of by a final decree or order, and complete satisfaction or discharge of such decree or order has been obtained.

This principle was introduced in the case of Bellamy v. Sabine under which Lord Turner mentioned “It is, as I think, a doctrine common to the Courts both of Law and Equity, and rests, as I apprehend, upon this foundation – that it would plainly be impossible that any action or suit could be brought to a successful termination, if alienations pendente lite were permitted to prevail. The plaintiff would be liable in every case to be defeated by the defendant’s alienating before the judgment or decree, and would be driven to commence his proceedings de novo, subject again to be defeated by the same course of proceeding”

This principle does not get eliminated even after the dismissal of the suit. After the dismissal of the suit and before filling of the appeal, the dispute is considered to exist and thus the parties can be prevented from transferring the property.

In case if transfer has been made of any immovable property during pendency of suit which will decide the right to title on that immovable property. Section 52 does not hold such transfer void, but the transferee of the property will be bound by the decision of the pendente lite. It is based on the principle that the person purchasing an immovable property from the judgment debtor during the pendency of the suit has no independent right to property to resist, obstruct or object execution of a decree. Thus, if the immovable property is being purchased from the decree holder then only the transferee will get the title of the property.

Conditions to be satisfied

Hon’ble Supreme Court in Dev Raj Dogra & Ors. v. Gyan Chand Jain & Ors. construed the meaning of Section 52 of the Transfer of Property Act and laid down following conditions to be fulfilled to fall under Section 52:

  1. A suit or a proceeding in which any right to immovable property is directly and specifically in question must be pending;
  2. The suit or proceeding should be pending in a Court of competent jurisdiction;
  3. The suit or the proceeding should not be a collusive one;
  4. Litigation must be one in which right to immovable property is directly and specifically in question;
  5. Any transfer of such immovable property or any dealing with such property during the pendency of the suit is prohibited except under the authority of Court, if such transfer or otherwise dealing with the property by any party to the suit or proceeding affects the right of any other party to the suit or proceeding under any order or decree which may be passed in the said suit or proceeding.

Non-applicability of the doctrine of Lis Pendens

However, there are certain cases where in spite of fulfilling all the conditions mentioned above, remain out from the purview of Section 52 i.e. the Doctrine of Lis Pendens will not applicable in certain situations, that are:

  • Cases of review,
  • When transfer alone is affected,
  • A friendly suit,
  • Collusive proceedings,
  • In cases of private sale made by a mortgagee in an exercise of power discussed in mortgage. Deed is nor affected by the doctrine of Lis Pendens and since it is made during the pendency of a redemption suit filed by the mortgagor the sale remains valid,
  • To transfer pending suit by a person who is not a part to such suit,
  • Personal property other than the chattel interests in land,
  • Cases where the parties to the transfer are ranged on the same side,
  • Cases in which the transfer affected by the order of the court in which suit or proceeding is pending,
  • Cases in which there is no proper description of the property in the plaint.

Judicial precedents

Hardev Singh v. Gurmail Singh

The facts of the case are such that A transferred some of his properties in the name of his wife, B in lieu of maintenance. B on the other hand has filed a suit for declaration that she is the owner of the properties transferred to her. When the suit was pending, A sold the property to C under a sale deed but the judgement came against A. However, when C was challenging the title of the property, during second appeal, he added a ground of death of B. Thus, C contended that the disputed property that will come to A after B’s death shall come to C as per the sale deed.

While dealing with the case, the Supreme Court in paragraph no. 18 and 25 of the judgement held that;

Section 52 merely prohibits a transfer. It does not state that the same would result in an illegality. Only the purchaser during the pendency of a suit would be bound by the result of the litigation. The transaction, therefore, was not rendered void and/or of no effect.”

It means that the section does prohibit transfer but does not hold it void. It suggests that the transferee will be bound by the decision of the court. The right of the transferee on the disputed property will be limited to the extent of the right of the transferor in the disputed property as per the judgement.

T.G. Ashok Kumar v. Govindammal

In this case of Lis Pendens, there is a transfer of property by A through sale deed to B, which was afterwards challenged by C on the grounds that the suit property originally belongs to D, her father for which there is already a pending suit of partition. Accordingly at a later stage C was able to get part of the disputed property. B, the transferee had previous knowledge of such partition suit and in spite of that purchased the suit property Pendente Lite from A, was not allowed to claim any independent right over the suit property.

While dealing with the case, the Supreme Court in paragraph no. 13 & 14 of the judgement held that;

“A bare perusal of the said section would clearly demonstrate that a third party purchaser of a suit property pending litigation, without the permission of the Court cannot have any independent right over and above the right of the seller who happened to be the party to the lis.”

Thus, Hon’ble court in the instant case held that any sale deed executed related to any property in dispute does not give any independent right over and above the right of the seller who happened to be the party to the lis. The transferee will be bound by the decision of the court and will be considered as the person who stepped into the shoes of the transferor, and thus be owner of the property the transferor gets through the judgement.

Current COVID-19 Scenario

COVID-19 crisis and its impact on Indian real estate is such that it is being considered as the third ‘Black Swan’ event for the realty sector in the last five years, the first two being Demonetization and the implementation of the Real Estate (Regulation and Development) Act, 2016. Due to the pandemic, the construction activities are at a halt and have eroded the market of potential buyer-base. The courts are only dealing with urgent matters and therefore have laid down a huge impact on the cycle of prolonged litigation of the Lis pendens cases. The actual owners of the property in these distressed times are caught in the middle. 

Conclusion

The maxim “Ut pendent nihil innovetur” and the principle underlying Section 52 is clear. During the pendente lite for title, no transfer can be made. However, in case a sale deed has been executed, Section 52 does not declare it as illegal but the rights of the transferee will not be affected only in case the transferor is upheld in regard to the transferred property. Also, in case the transferor of the pendente lite related to title is recognized for a part of the property then the transferee will also be served with the same part of the property. Transferee is held to have no right on the disputed property, over and above what is served to transferor in the judgement


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