Lis Pendens Essay

CHAPTER 1 INTRODUCTION The doctrine of lis pendens1contained in Section 52 of the Transfer of Property Act, 1882 (hereinafter â€Å"TPA†) and expressed by the maxim ut lite pendente nihil innoveturem bodies the principle of law that â€Å"†¦pending a litigation nothing new should be introduced, and provides that pendente lite2, neither party to the litigation, in which any right to immovable property is in question, can alienate or otherwise deal with such property so as to affect his opponent.†3 The basis of this doctrine rests on the idea that â€Å"†¦the very purpose of seeking relief against any grievance [through a judicial proceeding] would be meaningless and ineffective†4 â€Å"†¦if alienations pendente lite were permitted to prevail†5 as despite having a decree of the Court in his favor, the plaintiff would have to commence proceedings de novo in order to reclaim his rights from the person to whom the property right was transferred by the defendant. The do ctrine can be said to be an aspect of the principle of res judicata6and has its basis in â€Å"expediency and necessity of fine adjudication†7 and the need of having â€Å"finality in litigation†.8The doctrine is based on the notions of justice, equity and good conscience9 and has emerged out of public policy considerations.10 This paper deals with the doctrine of lis pendens as it is contained in the Transfer of Property Act 1882 and analyses the doctrine under the following heads: (A) Theoretical Basis (B) Essential Conditions and (C) Effect of a transfer pendente lite. STATEMENT OF PROBLEM Why this project? This is a project in the subject of Property Law for the completion of assessment and evaluation as it is part of the curriculum. The above project titled ‘Doctrine of Lis Pendens (Section 52): A Critical Analysis’ is part and parcel of course of Property Law subject in eighth semester. The project lies for the complete analysis of the theme through which we will be able to find out and highlight the basis and their relevance in the subject. SCOPE The project deals with some of the questions arising out of Section 52 of the Transfer of Property Act, 1882 which deals with the transfer of immovable property pendente lite. The research will be restricted to the given topic and secondary sources are used for the purpose of this research. OBJECTIVE The objective of the research is to study in depth Section 52 and critically analyze it referring to various books and Law Commission Report. Also, to find out the limitations and loopholes which are there in the Section in light of different case laws and judicial pronouncements. HYPOTHESIS Pendency of a suit or a proceeding shall be deemed to continue until the suit or a proceeding is disposed of by final decree or order, and complete satisfaction or discharge of such decree or order has been obtained or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force RESEARCH METHODOLOGY Doctrinal Research This project is mainly the outcome of the library based research. The research is of the systematic exposition, analysis and critical evaluation of legal rules and their inter-relationships. Articles, books, case study and secondary data are referred for the literature review and reference and based on it analysis and conclusion are drawn. CHAPTER 2 THEORETICAL BASIS This part will enquire into the theoretical basis of the doctrine of lis pendens. The broader question that is sought to be answered here arises in a situation when a person unknowingly acquires title to a property which is involved in a civil dispute which is yet to be decided upon. In this situation, the question that is often raised is that on what basis the rights of the ignorant transferee can be subverted under the doctrine of lis pendens in order to recognize the rights of the victorious party in the  dispute over the disputed property. Two theories have been out forth in this regard. The first theory states that a pending suit is a constructive notice to the entire world and thus an ignorant transferee is consequently deemed in law to be aware of the disputed condition of the property and is barred from making the claim that s/he was a bonafide purchaser.11 However this theory is being increasingly displaced by another which relies on public policy considerations to justify the doctrine of lis pendens. Accordingly â€Å"†¦the doctrine is not founded on any theory of notice at all, but is based upon the necessity†¦ [for] preventing litigants from disposing of the property in†¦such manner as to interfere with execution of the court’s decree. Without such a principle†¦ all suits for specific property might be rendered abortive by successive alienations of the property in suit, so that at the end of the suit another would have to be commenced, and after that, another, making it almost impracticable for a man ever to make his rights available by a resort to the courts of justice.†12 This theory does away with need of inferring a constructive notice from fact of existence of the dispute. The transferee’s rights are not affected because the suit amounts to a constructive notice but because â€Å"†¦law does not allow litigant parties to give to others, pending the litigation, rights to the property in dispute, so as to prejudice the opposite party.†13 â€Å"The intention of the doctrine is to invest the Court with complete control over alienations in the res which is pendente lite, and thus to render its judgment binding upon the alienees, as if they were parties, notwithstanding the hardship in individual cases.†14 It has been argued that such a stringent version of this doctrine imposes an undue burden on innocent purchasers who buy disputed property. This is particularly so in cases where the lis is not duly registered under Section 18 of the Indian Registration Act, 1908. The states of Maharashtra and Gujarat have enacted state amendme nts which restrict the application of this doctrine to the cases where the parties to the dispute have registered the lis under the Indian Registrations Act 1908. This affords protection purchasers who may not have any means of determining the existence of a dispute in relation to the property they intend to deal with.15 CHAPTER 3 ESSENTIAL CONDITIONS The following conditions have to be satisfied for the application of Section 52 of TPA: (I) A suit or proceeding â€Å"in which any right to immovable property is directly and specifically in question†16 must be pending in an appropriate Court (II) The suit should not be a collusive one. In such a case, the property â€Å"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.†17 The following parts deal with each of these elements in detail. Pending Suit â€Å"A suit is commenced by the filing of a plaint, and appeals and execution proceedings are a continuation of the suit.†18 According to of Section 52 a transfer of property involved in a suit while the pendency of the suit is hit by the rule of lis pendens enshrined therein. For a suit to be pending the Court must have the necessary jurisdiction. In the absence of such jurisdiction, â€Å"the decree pronounced by the Court will be a nullity†19 and hence would not attract the rule of lis pendens. An appeal or execution is included in the continuation of the suit and the bar of lis pendens extends over such proceedings. â€Å"The explanation to the said section indicates that the pendency of a suit would encompass the stage after the final decree till complete satisfaction and discharge of such decree or order. It is, therefore, obvious that legislature †¦ has thought it fit to extend the scope and ambit of the terminology â€Å"suit† even for covering the execution proceedings in connection with decrees passed in such suits†20 A transfer made before the pendency of the suit is not subjected to this rule.21 A suit filed in a foreign court cannot be a lis pendens under this rule.22The rule cannot apply to properties situated outside India.23 Furthermore the right to an immovable property24 must be directly and specifically be involved in the suit.25 Suit must not be collusive Section 52 of TPA becomes operative as soon as a bona-fide suit is instituted which is not in any way collusive.26 A collusive proceeding27 is different from a fraudulent proceeding. In a fraudulent proceeding, the claims made are false and are instituted to injure the plaintiff. Whereas in a collusive  proceeding, there is a secret arrangement between the parties to the suit and the object of instituting such proceedings is to utilize the judicial forum to curtail the claims of bona-fide transferees over the disputed property.28 A collusive proceeding would bind the parties but not their transferees.29 CHAPTER 4 EFFECT OF TRANSFER PENDENTE LITE â€Å"The transfer when it falls within the mischief of [Section 52 of TPA] will be deemed to be non est for the purpose of lis pendens.†30 The right to the property will continue to vest in the transferor notwithstanding he transferred it. However, there is no indication in the section that the transfer is rendered void. Rather, the transfer has been held to be â€Å"valid and operative as between the parties thereto.†31 The doctrine of lis pendens merely subordinates the rights of the transferee to the rights determined by the Court upon the completion of the proceedings. If the rights do not conflict, then the transfer would act as a valid transfer. This is can be inferred from the words, â€Å"so as to affect the rights of any other party thereto under any decree or order which may be made therein.†32 CHAPTER 5 CONCLUSION This paper reviews the doctrine of lis pendens under Section 52 of TPA. It is evident from the analysis of the doctrine that the basis of the doctrine lies in public policy considerations and the expediency to ensure finality of litigation. While the doctrine does invalidate a transfer pendente lite it renders the rights of the transferor subservient to those determined by the Court in the ongoing proceedings. The doctrine demonstrates a classic case wherein individual rights of parties are rendered dormant to satisfy a public policy objective. The broad principle underlying Section 52 of the Transfer of Property Act, 1882 is to maintain the status quo unaffected by the act of any party to the litigation pending its determination. Even after the dismissal of a suit, a purchaser is subject to lis pendens, if an appeal is afterwards filed. If such a view is not taken, it would plainly be impossible that any action or suit could be brought to a successful  termination if alienations p endente lite were permitted to prevail. The explanation to Section lays down that the pendency of a suit or a proceeding shall be deemed to continue until the suit or a proceeding is disposed of by final decree or order, and complete satisfaction or discharge of such decree or order has been obtained or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force. INDEX OF AUTHORITIES 1. Legislations: a. Transfer of Property Act 1882. 2. Cases Cited: a. Thakurai Bhup Narain Singh v. Nawab Singh And Ors. [1957] AIR Pat 759 (HC). b. Bellamy v. Sabine [1857] (1) De G & J 566. c. Digambararao v. Rangarao [1949] AIR Bom 367 (HC). d. Lov Raj Kumar v. Daya Shankar [1986] AIR Del 364 (HC). e. Chanda Sab v. Jamshed Khan [1993] AIR Kant 338 (HC). f. Minakshi Saini v. Gurucharan Singh Sharma (2002) 2 Punj LR 439, 441 (HC). g. Simla Banking Industrial Co. Ltd. v. Firm Luddar Mal [1959] AIR Pun 490 (HC). h. Ghantesher Ghosh v. Madan Mohan Ghosh and Ors.[1997] AIR 471 (SC) . i. Umesh Chunder v. Zaboor Fatima [1956] AIR 593 (SC). j. Palani Chetti v. Subramanyam Chetti (1896) ILR 19 Mad 257. k. Sivaramakrishna v. K. Mammu (1957) 1 Mad LJ 14 (HC). l. Hans Nath v. Ragho Prasad (1932) ILR 54 All 159 (HC). m. Md. Shafiqullah Khan v. Md. Samiullah Khan [1929] AIR All 943 (HC). n. Gouri Dutt v. Sheikh Sukur Md. [1948] AIR PC 147 (PC). o. Nuzbat-ud Daula v. Dilband Begam 21 IC 570. p. Nagubai Ammal v. B. Sharma Rao [1956] 1 SCR 451 (SC) 3. Books: a. Sorabjee S, Darashaw J.Vakil’s Commentaries on the Transfer of Property Act (2nd Edn., Wadhwa Nagpur 2004). b. Bharuka G, Mulla: The Transfer of Property Act 1882 (10th Edn., Lexis Nexis 2006). 4. Dictionaries: a. Black H.C., Black’s Law Dictionary (4th Edn, West Publishing Company 1968). 5. Law Commission Reports: a. Law Commission of India, Section 52: The Transfer of Property Act 1882 and It’s Amendment (Law Com No. 157, 1998).