DOCTRINE OF LIS PENDES: UPHOLDING EQUITY, JUSTICE AND GOOD CONSCIENCE

Prachurya Sahu | Symbiosis Law School, Pune | 26th June,2020

Introduction

Etymologically, the word “lis pendes” refers to litigation pending. It has been derived from the common law principle of “utlite pendente nihil innovetur”[1] which lays down that nothing new should be introduced during pending litigation. In Property Law, the principle is used to prevent the creation of new interest in a property during the pendency of any dispute regarding the title of the property.

This doctrine is of prominence, particularly in Property Law because it attempts to avoid endless litigation, protect either parties to the litigation against each other and finally avoid abuse of a legal process. This objective is clarified in the case of Bellamy v. Sabine[2], where it was laid down that if parties to a dispute are not prevented from transferring any of the property, then it would be impossible for any action or suit to be successfully terminated. This is because alienations pendente lite will continue to prevail. The plaintiff would consistently be defeated by the defendants, who would keep alienating or transferring the property prior to the judgement forcing such plaintif/s to begin proceedings afresh.

The doctrine is founded on necessity. For just and fair adjudication, it is important that a pending suit in relation to the title of a property, the litigants should not simply be allowed to take a unilateral decision regarding that property and alienate it because it will interfere with court proceedings. The Supreme Court, in Rajender Singh v. Santa Singh[3] has laid down that the intention behind the doctrine of lis pendens is to strike at the attempts made by parties to a litigation to circumvent the jurisdiction of a Court, in a dispute regarding rights of interests in an immovable property. This doctrine upholds the common law principle of equity, justice and good conscience as it seeks to uphold equitable and just treatment to all- the plaintiff as well as defendant to a dispute.[4] Allowing transfer of interest by the defendant in order to quash the plaintiff’s case would defeat the ends of justices and the principles of equity.

Section 52 of The Transfer Of Property Act, 1882

Section 52 of The Transfer of Property Act, 1882 encapsulates the doctrine of lis pendes in the following words: –

Transfer of property pending suit relating thereto.— “During the pendency of any court having authority within the limits of India excluding the state of Jammu and Kashmir or established beyond such limits by the Central Government of any suit or proceeding which is not collusive and in which any right to immovable directly or substantially 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 as may be prescribed.”

While this doctrine attempts to prevent transfer of property during the pendency of a dispute, it does not annul any alienation made by the party to the suit, but only makes it subject to the right of the parties to the litigation.[5] Such transfers are therefore, not void but only voidable at the option of the affected party to such proceedings.[6] The Supreme Court has held that the effect of this Section is not to absolve the transfer entirely but to simply subject it to the rights based on the judgement of the suit.[7]

The Essential Conditions of the Doctrine of Lis Pendens

Following must be satisfied to attract the application of this doctrine:

• Litigation or a suit must be pending before a competent court with requisite jurisdiction
• The suit must not be collusive in nature
• The suit must be directly or substantially in connection with any right to a immovable property
• Property is transferred or otherwise dealt with by any party to the suit
• This conduct must affect the rights of the other party to the dispute
• Such doctrine will apply till the final disposal of the case

Pending Litigation before a Court with jurisdiction before final disposal.   

This Section can only apply to property that is transferred during the pendency of a suit of proceeding before a court of requisite jurisdiction. Further, as explained in the statute, the pendency is considered to begin from the date when such a case is filed or when the plaint is presented before a court of adequate jurisdiction. This pendency is considered to continue till the expiration period of limitation prescribed for filing appeal.[8]  In fact, the suit would be considered to be ongoing till the final disposal of the case, not simply after the disposal of the first appeal.[9] The doctrine is even applicable to any transfers made during the pendency of execution proceedings.[10] Therefore, any transfers to be made of the disputed property will not attract the application of this doctrine until all appeals as well as execution of the proceedings are completed.

With regards to jurisdiction, if there is an inherent lack of it, any judgement or order produced by it would be null[11] and transfer made pending such proceedings will not be hit by Section 52. However, failure to follow the hierarchy of courts by bypassing lower courts competent to try a matter is simply an irregularity and will not insulate the defendants from the Doctrine of Lis pendes.[12]

Non-collusive suit

The doctrine of lis pendes is not applicable in case the suit is collusive nature. A suit is considered to be collusive if it is filed with a mala fide intent, with a secret agreement between the parties; the only purpose of such a suit is to defeat the rights of the transferee.

It is important to distinguish between collusive and fraudulent suits. While collusion between parties will override the application of Section 52, fraud will not. This has been succinctly explained in the case of Nagubai v B. Sham Rao[13]: “ In such (collusive) proceeding a claim put forward is fictitious, the contest over it is unreal, and the decree passed therein is a mere mask having the similitude of a judicial determination and worn by the parties with the object of confounding third parties. But when a proceeding is alleged to be fraudulent, what is meant that the claim made therein is untrue, but the claimant has managed to obtain the verdict of the court in his favor and against his opponent by practicing fraud on the court…. While in a collusive proceeding the contest is a mere sham, in a fraudulent suit it is real and earnest.”

In cases of collusion, the suit will not be binding on the transferee[14] and the transfer will be deemed valid. Further in a case of a suit which was bona fide to begin with and then subsequently there is a secret negotiation between the parties, then too the doctrine of lis pendes and the Section 52 will apply.

Right to Immovable property must be disputed.

It is quintessential for Section 52 to be applicable, that the subject matter of the suit must be related directly or substantially to a question concerning a right to an immovable property.[15] Such a property, so transferred or dealt with, must be actually in litigation. ^[16] It is not sufficient to simply refer to a property, if the right to it is not directly in issue.

Transfer or otherwise dealing of such disputed property

During the pendency of the suit, the property must be transferred or otherwise dealt with to attract the application of Section 52. Such transfer may include sales, mortgages, leases and exchanges.[17]  The words “otherwise dealt with” imply a host of transactions such as a surrender[18], release[19] or partition,[20] a contract of sale,[21] handing over of possession[22] as well as creation of tenancy.[23] Any conduct involving the above transactions during the pendency of a suit will be hit by Section 52 and the transferee shall be made subject to the ruling of the Court.

Affecting the rights of the other party to the suit

Such a transfer or other dealing must be affecting the rights of the party to the suit for seeking any relief under Section 52 of the Transfer of Property Act. The objective is to protect the parties of the litigation against any transfers effected by their opponents. This clause also allows to set the parameters of responsibility. In cases where the transfer by a party to the dispute does not affect the other, Section 52 is not attracted, as in the case of  Dhanse D Kalal v. Vasudeo [24]

Exceptions to the Section 52

Sometimes, this section can be used as a sword whereby innocent parties to a legal case are not allowed to transfer properties freely due to false cases being instituted against him. Such a situation will defeat the aim of lis pendes of equity, justice and good conscience. Therefore, an exception has been introduced to deal with such instances. This exception manifests by making this section subject to the power of the Court to exempt any suit property from the purview of the operation of this Section subject to such conditions as it may impose. Many instances illuminate cases where this doctrine in inapplicable such as private sale by a mortgagee, collusive suits, friendly suits and more. Therefore, the Court can, in appropriate cases, permit a party to transfer the rights of a disputed property.[25]

[1] Amit Kumar Shah v Farida Khatoon, AIR 2005 SC 2209

[2] Bellamy v. Sabine, (1857) 1 De G & J 566

[3] Rajender Singh v. Santa Singh, AIR 1973 SC 2537

[4] Lov Raj Kumar v. Dr. Major Daya Shanker, AIR 1986 Del. 364

[5] Commentaries on Equity Jurisprudence, 3rd English Edn, section 406, p 106

[6] Shib Chandra v Lachmi Narain, (1929) ILR 51 All 686

[7] K A Khader v Rajamma John Madathil, AIR 1994 Ker. 122 

[8] Jagan Singh v Dhanwanti, (2012) 2 SCC 628

[9] S Malleshwarrao v Bokka Venkateshwarrao, AIR 2013 Kant. 88 

[10] Thakur Prasad v Gaya Prasad, (1898) ILR 20 All 349

[11] Mulla, Code of Civil Procedure, 13th Edn, pp 124-129.

[12] Nathusingh v Anandrao, (1941) ILR Nag 652; Govinda Pillai v Aiyappan Krishnan, (1957) ILR Ker 5 

[13] Nagubai Ammal v B Shama Rao, [1956] 1 SCR 451

[14] Awadesh Prasad v Belarani, ILR 33 Pat. 389.

[15] Shanmugharsundaram v Parvathi Ammal, AIR 1945 Mad. 454

[16] Thakardas v Jaikishna, AIR 1938 Lah 448

[17] Mulla, Transfer of Property Act, 1882, 13th Edn

[19] Prataprao Narayan Pawar v Ramchandra Dalichand Sancheti, AIR 2008 9NOC 1412 Bom.

[20] Sumitra Devi v Sita Sharan Bulna, AIR 2009 Pat. 83 

[21] Kubra Bibi v Khudaija, (1917) 20 OC 13 : 38 IC 582.

[22] Dhansingh v Sushilabai, AIR 1968 MP 229 

[23] Mahfooz Ahmed v Neelmani, AIR 2010 MP 165

[24] Dhanse D Kalal v Vasudeo, (1971) ILR Bom 530 

[25] Vinod Seth v Devinder Bajaj, (2010) 8 SCC 1.