Introduction

The Transfer of Property Act, 1882, was promulgated embodying the principles of English Common Law, namely equity, good conscience, and justice underscored by the provisions of the Indian Contract Act, 1872, and came into force from July 1, 1882.

Property or ownership are synonymous with each other, and ownership interest is automatically created when a right is vested.

Ownership has to be:

1. Indefinite in terms of the user – The owner may use the property with certain restrictions without violating the rights of others, but at no time will it be deemed to be a negation of the owner’s ownership in the property, even if the rights may be restricted.
2. Unrestricted in the point of disposition – The owner is free to sell the property at any time. Minors (those under the age of 18) can own property but cannot alienate it, hence there are certain exceptions to this rule. Furthermore, the government may purchase the land without the owner’s permission in order to fulfil certain objectives.
3. Unlimited in the point of duration – As long as the property in question exists, the property rights are heritable. Again, the Government can, at any point, acquire the property and terminate the owner’s rights.

Transfers inter vivos, or between two living individuals, are covered by the Transfer of Property Act. A transfer is defined as an action in which one or more living people acquire property from another living person.

When the owner is the transferor and the transferee is the person or persons to whom the rights are transferred, the transferee can only get the rights of the transferor and nothing more.

The Transfer of Property Act, 1882, saw its first change in 1929, expanding the definition of “living persons” to encompass organisations made up of individuals, whether or not they are corporations.

Origin of the doctrine of Lis Pendens

The doctrine of Lis Pendens has its origin by Lord Justice Turner in Bellamy Vs. Sabine, 1857 Where the Court observed the following:

“This is a doctrine common to law and equity courts, which I apprehend, on the grounds that, if alienation pendente lite was allowed to prevail, it would simply not be possible for any action or suit to be resolved successfully. In any case, the Plaintiff will be responsible for the Defendant who alienated the property before the judgment or the decree and must be obliged, according to the same course of action, to initiate these proceedings de novo.”

The facts of the above case were the following:

A person, Mr X, sold an immovable property to Mr A.

Mr X’s son, Mr Z, who was the heir of Mr. X, sued Mr A in a competent court to declare the sale as void.

However, while this litigation was pending, Mr. A sold the property to Mr. B, who did not take notice of the suit.

The Court held that the son Mr. Z was entitled to the property and the sale was set aside.

Mr. B who purchased the property from Mr. A does not get any title as he purchased theproperty from someone who did not have the title and therefore cannot convey it.

Therefore, evolving the principles of common law and Section 52 of The Transfer of Property Act, 1882, was born and is as follows:

“When there is an ongoing lawsuit in any Court having authority within the limits of India, a suit or proceeding in which any right to immovable property is precisely in question, the property cannot be conveyed by any party to the lawsuit which can influence the rights of any other party thereto under any order which may be rendered therein, unless under the jurisdiction of the Court and on such conditions as it may enforce.“

Lis Pendens literally means ‘litigation pending’ or ‘pending suit’ and is drawn from the concept based on the maxim “Pendente lite nihil innovature” which means that nothing new must be introduced while a litigation or suit is pending.

This Doctrine states that the Transfer of property shall be restricted when there is a litigation pending on the title or any rights that arise directly thereof involving an immovable property.

The suit commences the moment a complaint is presented or the day of commencement of proceedings in the appropriate Court and shall be terminated by Order of the Court.

The Court may, however, permit any party to the suit to transfer the property on such terms which it may think fit and proper to impose.

The sale of immovable property can take place through private negotiations, but the said Transfer will be subservient to the verdict of the competent Court.

The purpose of the doctrine of Lis Pendens

This doctrine is important because it bans the transfer of any contested property’s title without the court’s permission. Without it, disputes can drag on indefinitely and it will be impossible to bring a lawsuit to a successful conclusion.

The “Transferee pendente lite” is subject to the judgement in the same way as if he were a party to the action, and the transfer will be based on the outcome of the ongoing litigation.

Conditions for Applicability of the Doctrine as provided in Section 52

• A suit or proceeding is pending.
• The above suit is brought to a competent court within the jurisdiction.
• The right to the title of an immovable property is directly in question.
• There cannot be any collusion.
• The suit should directly affect the rights of the other party.
• The property in question is being transferred by either party.

Some examples for Non-Applicability:

This does not apply to a private sale by a creditor who has the authority to sell the property that is subject to a mortgage even if the borrower is the subject of an ongoing redemption action.

The Doctrine also does not apply if the item cannot be identified because of improper description.

The Doctrine does not apply when a right to the said immovable property is not directly in issue and hence alienations are authorised in a maintenance suit where the property is referenced simply to allow maintenance payments to be clearly assessed.

The Doctrine fails to apply when a Court orders restoration of immovable property under the Civil Procedure Code, Order 21, Rule 63.

Understanding the jurisprudential evolution of this Doctrine

In Ayyaswami vs Jayaram Mudaliar AIR 1973 SC 569, the Court held that the purpose of this provision is not to deprive the parties of every just or fair argument but rather to guarantee that the parties submit themselves to the jurisdiction and authority of the Court which shall determine all claims that are placed before it to the satisfaction of the parties concerned.

In the case of Hardev Singh v. Gurmail Singh, Civil Appeal No. 6222 of 2000, the Court ruled that Section 52 of the Transfer of Property Act, would not make void or unlawful any sale of the contested properties, but only puts the purchaser beyond the binding limits of the judgment on the disposition of the conflict.

The land in dispute was initially registered in the name of the Plaintiff in Koyalee v. Rajasthan District, AIR 2009 Raj.28. After his passing, his brother discovered it and, knowing full well that his brother’s wife was still alive and the only recorded legal heir, launched a lawsuit to pursue the Khatedari rights. As a result, the wife was forced to contest that she was the only recorded legal heir of the Khatedar. Although it reiterated its authority to exempt the suit property from the restrictions outlined in Section 52 of the Act, it allowed the Respondent to make a pendente lite move in Vinod Seth v. Devinder Bajaj, 2010. However, the Court has set a few restrictions on these Section 52 exemptions. In the case at hand, the Defendant wanted to transfer ownership of the land to a third party while the Plaintiff was a contractor who wished to benefit by erecting a structure on the suit-land. In order to transfer the subject property, the defendant was required to deposit a total of three lakh rupees as a security; this is the amount the claimant would have benefited from. In order to make the pendente lite transfer legal, the Court had so imposed the requirement for the payment of that amount.

The Court’s positions on this pendente lite-transfers issue are explained in Ashok Kumar v. Govindammal and Anr, 2010. The Supreme Court of India has here reaffirmed that a pendente lite cannot be transferred for a property whose title is the subject of litigation.

The rights of the person to whom the court would eventually have granted title to the property would be restricted by these transfer payments. When the court’s ruling upholds the pendente lite transferor’s entitlement to the property, the transferee’s title to the property is ignored. A transferor can only have title to a portion of the property, but, if the pendente lite transferor’s title is accepted for the entire property. The Transfer of the title of the rest of the land, for which there is no right for the pendente lite transferor, is invalid. This means that the transferee cannot claim the title or any other interest in the rest of the property. Finally, if the transferor was found to have no right in the first place to the transferred land, then the transferor would also not have gained rights on this property.

In accordance with Section 47(2) of the Registration Act of 1908, the Supreme Court considered and revised the law pertaining to the doctrine of lis pendens in the case of Har Narain v. Mam Chand. According to the lis pendens doctrine, no fixed property may be transferred while a litigation involving it is ongoing. A recorded sale deed for a fixed property is regarded as having existed upon registration under Section 47 as of the date of execution. The Court affirmed that the fiction created in accordance with Section 47 does not preclude the operation of a lis pendens. Therefore, the Court determined that land sales are nonetheless bound by the lis pendens concept even if the civil action begins later and is registered..

Suggestions

While the Doctrine is essential to guarantee the protection of the parties’ property rights, it is equally crucial to use technology to prevent the transfer of the property title under consideration while the case is still in progress. In order to ensure that the integrity and sanctity of the data are never in doubt, India has already created a Unique Identification System for all of its citizens via the Aadhaar card. This can be combined with the fact that all properties are given a property identification number to ensure that this can be done. Additionally, it will help to prevent situations in which the property cannot be located.

When an encumbrance certificate (EC) is issued, it mentions any encumbrance. This can be improved, so as to list any pending litigation(s) to alert the registering authority and the parties concerned.

Conclusion

The Lis Pendens doctrine strongly adheres to the theory of necessity rather than the theory of notice, which is guided by the three common law principles of justice, equity, and good conscience. Therefore, it is essential to making sure that justice is served without violating the rights of either party.