Authored By – Devdeep Ahirwal, Integrated Law Course, Faculty of Law, University of Delhi

A) INTRODUCTION

In the domain of property law, rights related to property are essential in preserving the interests of the parties involved. They define the the theoretical & legal ownership of property. Property rights give the owner or right holder the discretion to make use of the property as per their wishes. This may range from holding on to the property, to selling or renting out the property. Hence, it is imperative that these rights be preserved for the sake of securing the interests of all stakeholders involved, establishing and maintaining order in the property law regime, as well as ensuring expediency and efficiency in the system. In India, the Transfer of Property Act, 1882, which embodies the principles of English Common Law, is the overarching document which regulated the transfer of property regime in the country.

Where there are rights, there must be remedies and these remedies must be meted out by the courts. To ensure that these remedies manifest as intended, it is imperative to maintain the status quo with regard to the rights in the property. This is where the concept of lis pendens becomes pertinent. A property owner’s basic right is the ability to alienate their property as per their discretion. However, certain situations, such as a legal disputes where the legal interest in the specific property is in question, can limit or prevent the owner from alienating or dealing with the property in other manners for a set time. The doctrine of lis pendens helps ossify the status quo for the duration of the suit when the rights in an immoveable property are in question, hence ensuring that the relevant stakeholders do not suffer before the legal question is settled.

Keywords (Minimum 5): Doctrine of Lis Pendens, Section 52, Transfer of Property Act, Ongoing Litigation, Pending Litigation, Property Rights, Interest in Property, Immoveable Property

B)    MEANING, DEFINITION & EXPLANATION

Lis Pendens is a vital principle of civil procedure law. There is no uniform definition of the term ‘lis pendens’. The Doctrine of Lis Pendens, originating from Latin and meaning “pending litigation,” is a legal concept related to immovable property and is addressed under Section 52 of the Transfer of Property Act, 1882, in India. The word “lis” connotes to a legal suit, while “pendens” is the participle of “pendo” referring to something which is pending. Essentially, the courts have a jurisdiction or power over the property involved in a legal action during the pendency thereof. This power extends to the banning of alienation and the doctrine of lis pendens is a manifestation of this power.

This doctrine aims to safeguard the rights and interests of parties involved in an ongoing lawsuit concerning a particular property. It grants the court authority and jurisdiction over the property in question throughout the entire lawsuit, until a final decision is made. The doctrine includes the legal rules and principles that limit changes to the property involved in a lawsuit while it remains unresolved.

The courts have defined it as :— “lis pendens literally means a pending suit, and the doctrine of lis pendens has been defined as the jurisdiction, power, or control which a court acquires over property involved in a suit pending the continuance of the action, and until final judgment therein.”

C)   LEGAL PROVISION

Section 52 of the Transfer of Property Act, 1908 statutorily recognises the Doctrine of Lis Pendens in India.

“During the pendency in 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 proceedings which is not collusive and in which any right to immoveable 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 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.”

D)   HISTORICAL BACKGROUND AND USAGE

The principles undergirding lis pendens are espoused in the leading case of Bellamy v. Sabine. It is historically significant because it firmly established the legal doctrine of lis pendens in English law. In the dispute involved in this case, an individual Mr. A sold an immovable property to Mr. B. Subsequently, Mr. A’s son, Mr. P took legal action to nullify the sale that had been completed among the father & Mr. B. Now, during the pendency of the suit brought against him by Mr. P, Mr. B sold the property to Mr. C, who was unaware about the ongoing lawsuit. The Court, in that suit, ruled in favour of Mr. P, declaring him to be the rightful owner & invalidating the sale by Mr. A to Mr. B. Consequently, it was declared that Mr. C did not possess any legal claim as to the property in question & therefore could not obtain a valid title. The central question involved in this case was whether the transfer of immovable property in the duration of an ongoing lawsuit, which directly involves a question regarding rights in the title of that property, creates any right for the purchaser who had acquired such property during the duration of the suit.

In the decision to resolve the above dispute, the English Court of Chancery, presided over by Justice Turner observed that allowing property transfers during ongoing litigation could be a severe hindrance the path to justice. Further, the court noted the difficulty in allowing alienations of such properties to stand as valid, which could prevent the final resolution of disputes in an efficient manner. Plaintiffs, it was observed, would be at a disproportionate disadvantage if such transfers were deemed valid, as the defendants might dispose of the property before a judgement is made. This could lead to a vicious cycle of litigation proceedings being instituted each time, hence the doctrine of lis pendens was conceived which establishes that any purchaser of property involved in ongoing litigation takes subject to the outcome of that litigation.

Justice Turner emphasised the principle that anyone purchasing property involved in litigation does so at their own risk. He explained that the doctrine prevents third parties from intervening in a legal dispute regarding a property by purchasing it, which in turn deters the disruption of judicial process & contradictory outcomes. He noted that lis pendens serves public policy by ensuring that property involved in a dispute remains available to satisfy the outcome of that dispute, which preserves the authority of the court. According to Justice Turner, even purchasers who buy the property in good faith without notice of the litigation cannot claim exemption from the doctrine.

He opined, “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.”

E) ESSENTIALS ELEMENTS OF LIS PENDENS

It is pertinent to note that the mere mention of an immoveable property being involved in a lawsuit is an insufficient condition for the triggering of Section 52 of the Transfer of Property Act, 1882. Rather, it is the direct involvement of the property rights in the court dispute, as the Section explicitly mandates that the right in an immoveable property must be directly and specifically in question. Hence, the rights in the immoveable property must be directly & substantially contested.

Moreover, the suit which has temporarily placed an injunction on the transfer of rights must be initiated, and not terminated. This means that the suit must be ongoing, thus incentivising the temporary suspension of the transfer of property to prevent harm to ignorant parties. Such a suit must be ongoing in a court of competent jurisdiction. It must be ensured that the court is of a competent jurisdiction in both financial, as well as territorial respects.

In addition to the above conditions it must also be verified that the suit is bona fide in nature. The suit must be pursued in good faith. It must be devoid of malicious intent. Moreover, it must not be the result of a collusion between parties to prevent the transfer of property, amounting to a misuse of the due process of law. The applicability of this doctrine is invalidated if the suit is found to be tainted by collusion, malice or ill-intent.

The particular requisites required to be satisfied for lis pendens to operate were observed in the case of Dev Raj Dogra v. Gyan Chand Jain, entailing of the following fundamental conditions:

• “A suit or a proceeding in which any right to immovable property must directly and specifically in question must be pending;
• The suit or the proceeding shall not be a collusive one;
• Such property during the pendency of such a suit or proceeding cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the right of any other party thereto under any decree or order which may be passed therein except under the authority of Court. In other words, any transfer of such property or any dealing with such property during the pendency of the suit is prohibited except under the authority of the 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.”

It was observed in Balwant Singh v. Buta Ram that the doctrine comes into effect upon the fulfilment of the requirements laid down in the above case. Therefore, as per the Court’s observation, the pendency of a bona fide suit, directly and substantially calling into question the interest and rights over an immoveable property in a court of competent jurisdiction, restricts the alienation of such property without the leave of the court.

F)    RELATION WITH CONCEPT OF NOTICE

Lis Pendens has an interesting interface with the concept of Notice in Property Law. A person is construed to have notice of a fact when that individual possesses knowledge about that fact or under the circumstances prevailing, the individual’s knowledge of such fact can be legitimately proven or construed. The question regarding its interface is whether the Doctrine of Lis Pendens and subsequent bar on alienation emanates from the notice of a pending suit or some other principles.

In Bellamy v. Sabine, Lord Cranworth denied any contention of the doctrine based on grounds of notice. His Lordship noted, “It is scarcely correct to speak of lis pendens as affecting purchaser through the doctrine of notice, though undoubtedly the language of the Courts often so describes its operation. It affects him not because it amounts to notice but because the 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.” Hence, parties are barred from transferring property during an ongoing litigation on grounds of justice, equity and good conscience so that the rights of the other parties involved in the suit are not affected, as also to prevent endless litigations arising out of contentious alienations during pending suits.

Turner, L.J. observed in Bellamy v. Sabine that lis pendens is not “founded upon any of the peculiar tenets of a Court of Equity as to implied or constructive notice”. He observed, “It is a doctrine common to the Courts both of law and of equity, and rests 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 (pending litigation) were permitted to prevail.” The correct mode of stating the doctrine, as Cranworth, L.C. observed in the same case, is that “pendente lite either party to the litigation can alienate the property in dispute so as to not affect his opponent.”

The next point of contention is whether constructive notice of ongoing litigation affecting interest in a property is contemplated in Indian Law. The position has been clearly laid down for India in Usha Sinha v. Dina Ram, in which the Apex Court held that the application of the doctrine of lis pendens to a transfer of property is operating, being so regardless of whether such alienees had notice of the ongoing litigation. “It is thus settled law that a purchaser of suit property during the pendency of litigation has no right to resist or obstruct execution of decree passed by a competent Court. The doctrine of ‘lis pendens’ prohibits a party from dealing with the property which is the subject matter of suit. ‘Lis pendens’ itself is treated as constructive notice to a purchaser that he is bound by a decree to be entered in the pending suit.”

G)   CONTRIBUTION OF THE COURTS

To understand the nature of this doctrine, it becomes pertinent to assess the opinion, observations & findings of the Courts during its analysis & scrutiny.

Courts have assessed the question of inclusion of arbitral proceedings within the ambit of the essential condition of ‘competency of the court’. This was done to inquire into the question of whether the competency extends to include arbitral proceedings. The Court further clarified this question in the case of Sardara Singh v. Mohan Lal Major as well as additional subsequently decided cases, where the court observed that the doctrine applies to arbitral proceedings as well, because the decisions of these arbitral tribunals have legal effects which are consonant to a competent court of law, under the Arbitration and Conciliation Act, 1996 and is binding on the parties. Subsequently, the HIgh Court of Delhi too, in the case of Iqbal Singh v. Mahendar Singh, Was of the view that once arbitration proceedings are initiated, the suit property becomes sub judice, which is tantamount to an ongoing litigation. Therefore, any alienation overlapping the time period of pendency of arbitration proceedings would be subject to Section 52 of the Transfer of Property Act, being non-transferrable due to the operation of lis pendens. The High Court of Punjab and Haryana too, in Swaran Singh v. Arjun Singh and Ors observed that lis pendens shall apply to an interest in property subject to arbitral proceedings, if the legal status of the award is tantamount to that of a decree enforceable in a court of law.

Another ambiguity that the courts have dispelled was surrounding the ‘type of transfers’ under the doctrine. The question arose regarding the applicability of lis pendens on involuntary transfers, including transfers made by the court. Although a plain reading of Section 52 of Transfer of Property Act would beget the interpretation that only ‘private transfers’ made by the parties under a suit are contemplated, this is not the case. A well-settled law has been established on the issue by decisions of Privy Councils. These have shown that the doctrine is applicable to court sales and also due to failure to pay government revenue sale.

Courts have also dealt with the effect of a judgement in a pending suit on the stakeholders in the alienation of a property undertaken during the period of an ongoing litigation. The court, in Simla Banking Industrial Co. Ltd v. Firm Luddar Mal, Tek Chand, explained that the doctrine would bind an individual gaining an interest in the property during the pendency of a suit to the judgement whose decision was adversarial to the individual from the title was derived. This binding nature operates irrespective of the absence of direct involvement in the suit or lack of notice of the ongoing litigation to such individual.

H) PURPOSE AND NEED OF DUE DILIGENCE

The basic purpose of the doctrine of lis pendens is to prevent any third party from acquiring an interest in the property involved in the pending lawsuit. While bringing out the intent behind Section 52 in the case of Gouri Datt Maharaj v. Sheikh Sukur Mohammed & Ors, the High Court of Madhya Pradesh felt that the section was meant to consolidate status quo and to prevent an ignorant person from being harmed by the marauding acts of any party whose rights within a property are claimed in a suit that is pending. In dealing with immovable property, a transfer of ownership of property must be in consonance with the court’s ruling, and the new owner is subject to the court’s final judgment. The doctrine deters alienation of any property whose interests are in dispute, without the Court’s consent. Hence, it prevents the opening of the metaphorical can of potential litigations, which can be an adversarial and damaging process for the parties involved. It can be reasonably inferred that in the pursuit of this purpose, the doctrine is rooted in the principles of equity and fairness.

These important aspects of the doctrine were also addressed by the court in Kn. Aswathnarayana Setty v. State of Karnataka & Ors. The court observed that the principle of lis pendens is grounded in justice, equity, and good conscience. By disallowing property transfers during court proceedings, the court opined, the doctrine promotes the successful conclusion of a legal action and is hence based on a fair and equitable foundation. Though the doctrine is rooted in justice and equity to prevent passing of such rights in a property which are in dispute, parties are not absolved of their duty to exercise due diligence before buying a property. It is important for parties that gain title to a property whose rights are under dispute by virtue of a legal proceeding, to exercise reasonable care. This becomes especially imperative in light of Supreme Court’s ruling in Hardev Singh v. Gurmail Singh, wherein it clarified that the judgement is made binding to the transfer made by a party, rather than it declaring a transfer made by a party to a pending suit void or illegal.

I) CONCLUSION & COMMENTS

In conclusion, the doctrine of lis pendens plays a crucial role in safeguarding the legal interests of parties involved in property disputes by preventing unauthorised transfers during litigation. Codified under Section 52 of the Transfer of Property Act, 1882, it ensures that the subject property remains unaffected by any changes in ownership until the case reaches a final verdict. The doctrine operates on principles of justice, equity, and public policy, maintaining stability and protecting stakeholders from potential harm caused by interim transfers that could complicate the resolution process. Indian courts have consistently upheld and expanded the scope of lis pendens, emphasising that the doctrine applies to all forms of property transfers during litigation, including those made through court or arbitral proceedings. By doing so, courts reinforce the integrity of judicial outcomes, ensuring that parties cannot undermine legal proceedings by transferring disputed properties. Furthermore, the doctrine emphasises the need for due diligence, cautioning third parties against acquiring property involved in ongoing litigation without understanding the associated risks. Ultimately, lis pendens serves as a vital tool to uphold fairness and protect the rights of all parties until a dispute is fully resolved.

J) REFERENCES

1. Books / Commentaries / Journals Referred
   • HWR Wade & Forsyth, Administrative Law 579 (7th ed.).
   • William Hanley, Lis Pendens and Procedural Due Process, 1 Pepperdine Law Rev., 433, (1974).
2. Online Articles / Sources Referred
   • Pavlina Janeckova, Lis Pendens as the Solution of Jurisdictional Conflicts, & Soc. Sci. Rev., (2017), https://is.muni.cz/publication/1401158/Janeckoava_clanek.pdf.
3. Cases Referred
   • Govinda Pillai v. Aiyyapan Krishnan, AIR 1957 Ker 10.
   • Jayaram Mudaliar v. Ayyaswami, AIR 1973 SC 569.
   • Rajendar Singh v. Santa Singh, AIR 1973 SC 2537.
   • Dev Raj Dogra v. Gyan Chand Jain, 1981 AIR 981.
   • Balwant Singh v. Buta Ram, AIR 2009 (NOC) 2942.
   • Bellamy v. Sabine, (1857) 1 De G&J 566.
   • Faiyaz Husain Khan v. Munsiff Prag Narain, 34 Law Reports (Indian Appeal), 102.
   • Sardara Singh v. Mohan Lal Major, AIR 1990 PUNJAB AND HARYANA 254.
   • Simla Banking And Industrial Co. Ltd. vs Firm Luddar Mal Tek Chand, AIR 1959 PUNJAB 490.
   • Gouri Datt Maharaj v. Sheikh Sukur Mohammed & Ors, (1948) 50 BOMLR 657.
   • Aswathnarayana Setty v. State of Karnataka & Ors., AIR 2014 SUPREME COURT 279.
   • Hardev Singh v. Gurmail Singh, 2007 (2) SCC 404.
   • Usha Sinha v. Dina Ram, 2008 7 SCC 144.
4. Statutes Referred
   Transfer of Property Act, 1882, § 52, No. 4, Acts of Parliament, 1882 (India).