LIS PENDENS Flashcards
Lis Pendens
“Lis” means an action or a suit. The principle contained in this section is based on the English common law maxim ut lite pendente nihil innovator i.e., during litigation no new rights should be introduced.
The maxim is a rule based on expediency i.e., the necessity for final adjudication, and rests upon an equitable and just foundation that it will be impossible to bring an action or suit to a successful culmination if alienations are permitted to prevail.
The rule contained in section 52 is also called the rule of lis pendens and makes transfers pendente lite, subject to the decision of the court. As a principle of equity, justice and good conscience, this rule applies even where the Act does not apply.
Section 52 protects the right of suitor to any immovable property, which is subject matter of issue in the court. It forewarns the creation of third party’s interest in the said property, which has the effect of defeating the right of a person in whose favour decree or order is passed by the court of competent jurisdiction.
It in essence forbids transferring rights in third party during the pendency of litigation. If any decree or order is passed in such proceedings, any transfer of right during inter regnum shall be determined as non est in the eyes of law.
Ingredients of Doctrine of Lis Pendens
(i) A litigation should be pending in a court of competent jurisdiction;
(ii) The suit must be relating to a specific immovable property;
(iii) The suit should not be collusive;
(iv) The suit should relate to a right in this specific property;
(v) Property should not be transferred or otherwise dealt with;
(vi) By any party to the suit;
(vii) So as to affect the rights of any party thereto;
(viii) Till the final disposal of the case
PENDENCY
The first essential ingredient for the application of the doctrine of lis pendens is that a suit must be pending in a court of law. The term “pendency” means from the commencement of the case till the final disposal.
For instance, A executes a gift of his property in favour of B. Before B could take possession, A died and his son, took the possession of his property as his heir. B files a suit challenging the title of S
and prays that he be delivered the possession of the property on the strength of the gift deed.
The day the suit is filed is the day when it commences. The case goes through various courts, and finally the Apex Court passes a decree in favour of B. The suit is still pending as though B has been declared to be the owner of the property he is still to
get the possession. In execution of this decree, when possession is delivered to him, that is the time when this suit comes to an end.
Lis pendens continues during appeal with decree passed in the suit. Dismissal of a suit does not negate the application of lis pendens if an appeal is filed later, but not where it is reversed in appeal.
The suit continues even after passing of the decree till its execution.
For example, the court passes a verdict that within a period of 30 days the trespasser should vacate the premises. During this period of 30 days, the suit would be deemed to be pending. If the trespasser sells the property after the decision is given by the Apex Court and within this period of 30 days, the transfer would be hit by the rule of lis pendens. If the trespasser vacates and the litigant gets his property, the suit comes to an end, as he has obtained the relief sought by him.
However, if the trespasser does not vacate despite the verdict of the court against him, then the decree of the court would be executed. The execution of the
decree means that with the help of the execution proceedings, and in accordance with the principles of law, the possession would be delivered to the owner. Once he gets the possession after the execution of the decree, then only would the litigation come to an end.
Suit or Proceedings
The term “suit” indicates a measure taken for a legal action or proceedings initiated by a person who claims relief invoking the judicial mechanism set up by the state for a peaceful relief of his grievance.
COLLUSIVE SUITS
The suit or proceedings must be a genuine proceedings and not a collusive one. If the
suit is collusive, a transfer during its pendency would not be hit by the rule of lis pendens. The term “collusive suit” means “a suit filed with conspiracy”, a sham suit or a pretentious suit.
The original section did not contain the words collusive, rather it used the expression “a contentious suit or proceedings” in its place. The term collusive was added to the section in 1929.
For instance, A, the owner of a house, contracts to sell it to B and accepts an advance amount from him. The terms and conditions of the contract stipulate that if B does not purchase the property within 30 days, he would have to forfeit the advance amount, but if A failed to execute a transfer in his favour, he would have to pay double the amount of advance amount as damages. A, later, does not want to execute the sale deed, yet, is not willing to pay the damage amount. His wife, in collusion with him, files a suit against A claiming past arrears of maintenance and future maintenance and seeks to charge this property which was the subject matter of the contract.
Even if this property is charged in favour of the wife of A for her maintenance, the transfer affected during the pendency of this suit would be valid and will not be hit by the rule of lis pendens as
this was not a genuine suit, but a collusive suit.
When the parties to a suit enter into an agreement for the express purpose of defeating the rights of a transferee and obtain a decree in terms of the agreement, the suit is collusive and the rule of lis pendens will not apply
NOTICE
Section 52 incorporates a statutory rule that is based on the rule of expediency, and public policy, no question of good faith or bona fide arises. As section 52 forbids transfer of right in third party during pendency of litigation, therefore, the sale is illegal even if the purchaser pendente lite had no idea of
status quo.
Similarly where during the pendency of a suit for specific performance the suit land was purchased, this transfer would be hit by rule of lis pendens and the question of good faith, essential for establishing any relief would be irrelevant.
Court of Competent Jurisdiction
The courts in India are segregated on the basis of their pecuniary, territorial, extra-ordinary jurisdiction, etc. There are special courts dealing in a specified subject matter.
For the purposes of section 52, the suit must be pending in a court having competent jurisdiction.
If it is presented to a court that does not have the competency to try it, a transfer during the pendency of such a suit would not be hit by the rule of lis pendens.
For instance, A, has a house in Lucknow. He comes to Delhi in search of a job and decides to live there. Trespassers encroach upon his house in Lucknow. With respect to immovable property, a suit with respect to this property can be filed only in the courts at the place where the property is located. It cannot be filed elsewhere. If A files a case relating to this property at a court in Delhi, transfer of the property during the pendency of such a suit will not be subject to the rule of lis pendens, as the courts in Delhi will not have the jurisdiction to try the dispute. If the property in question is partly situated in
the area where the suit is filed, and partly in another state, the court of the former area is competent to try the case.
RIGHT OF ANY OTHER PARTY UNDER THE DECREE
The doctrine does not apply merely to actual transfers or rights which are the subject matter of litigation but to other dealings with it “by any party to the suit or proceedings, so as to affect the right of any other party thereto.
Decision Binding on the Alienee
Ordinarily, the judgment binds only the parties to the suit, but he who purchases during the pendency of an action is bound by the judgment that may be made against the person from whom he derives title, irrespective of the question of the notice as if he
was a party to the suit. A transferee with consideration and without notice of the pending litigation is bound by the charge created by the decree as the broad purpose is to maintain the status quo unaffected by any act of the parties, and make the sale pendente lite subordinate to the rights based on the decree in the suit nd not to
declare the sale invalid or defeat any just or equitable claim.
The effect of section 52 is that a lis pendens transferee is bound by the decree of the
court, irrespective of whether it was granted on contest, ex-parte or on compromise.
The parties affected by this transfer pendente lite are under no obligation to implead a
lis pendens transferee as a party to the litigation
Rule of Lis Pendens
The rule of Lis Pendens states that when there is a suit or proceeding pending between two persons with respect to an immovable property and one these parties sells or otherwise transfers the subject matter of the litigation, then the
transferee will be bound by the result of the suit or proceeding whether he had the notice of the suit of proceeding or not.
Whom does this rule affect?
This rule affects the purchaser, not because the pending suit/proceeding amounts to notice, but because
the law does not allow litigants to give to others, pending the litigation, any right to the property in
dispute, so as to prejudice the other party. The doctrine is therefore based upon expediency.
Object of the Rule
Under the doctrine of lis pendens, the purchaser (transferee) pendente lite is bound by the result of the litigation on the principle that since the result must bind the party to it, so must it bind the person deriving his right, title, and interest from or
through him. (Samendra Nath Sinha v. Krishna Kumar Nag AIR 1967 SC 1440).
Therefore, the rule of lis pendens is enacted for the benefit of the third party, and not for the party making the transfer. This statutory right is given to the party to the suit other than the alienating party, to have an alienation set aside so far as it is
necessary for the protection of his own rights (Achut Sitaram v. Shivaji Rao AIR 1937 Bom 244).
Amit Kumar Shaw v Farida Khatoon
i) There must be pendency of a suit or proceeding.
ii) The suit or proceeding must be pending in a competent court.
iii) A right to immovable property must be directly and specifically in question in that suit or proceeding.
iv) The property in dispute must be transferred or otherwise dealt with by any party to the litigation. (Rule
doesn’t apply does not apply to the person who is not a party to litigation)
v) The alienation must affect the rights of the other party.
vi) It is immaterial as to whether the transferee had any notice of suit pending in the court or not.
vii) The transferee is bound by the order of the court even if he had no actual or constructive notice of the
pending suit.
viii)The pendency of the suit starts from the date on which the plaint is filed in the court and ends on the date on which the final decree is passed by the court.
ix) The suit or proceeding must not be collusive.
(Kiernandery v. Benimadhub AIR 1931
Cal 763
A suit can be filed only in the courts at the place where the property is located). If the property is situated in the area where the suit is filed and party is in another State, the court of
the former area is competent to try the case
(Sivaramakrishna v. K. Mammu AIR 1957 Mad 214)
The pendency of suit in a foreign court does not create the bar of lis pendens.
Similarly, the doctrine does not apply to property situated outside India
