Written by- Afwan Sayyed
Introduction
Property Litigation can be extremely tangled and it can get more complicated if the parties during the trial of the court make other dealings with a third party in respect to the subject property. For justice to be delivered with integrity and without any ambiguity is important to impose restrictions relating to the interest of the title of such property during the pendency of the litigation.
The maxim ‘Lis pendens’ is a Latin phrase that translates to ‘litigation pending’ or ‘pending suit’. It arises from the infamous Latin maxim “ut lite pendent nihil innovetur”which translates that ‘during a pending litigation nothing new should be introduced’. The basic doctrine underlying this doctrine is that no property that is actively being contested in a court of law should be allowed to transfer the ownership title during its pendency.
This doctrine attempts to achieve these goals- Preserving the status quo of the disputed property; for justice to be given swiftly and timely, it is necessary that the litigants to the suit should be restricted from taking decisions themselves and transfer the impugnedproperty and secondly to allow the courts to allow temporary equitable relief to the parties involved as it will help avoid unwanted hurdles for a suit to acquire a successful termination.
Origin of Lis Pendens
The origin of lis pendens can be traced from the famous case law of Bellamy Vs Sabine in the year 1857.
The Court held H to be the rightful owner of the immovable property and was entitled to ownership. By this, the transferee, B had no right over the immovable property by virtue of nemo dat quad non habet (no one can transfer a better title than he himself has)
This doctrine was introduced in the Indian Judicial systems in the case of Fayaz Hussain v. Prag Narain.
The facts of the case were that:
Constitutional Provisions for lis pendens (Section 52 of Transfer of Property Act, 1882)–
Section 52 of Transfer of Property Act lays down the doctrine of lis pendens as follows:
Essential Conditions for the application of Section 52:
A proceeding is said to be in the process, from the date when the plaint first presents his case until the final judgement is passed from the competent court. This section is applicable only during this period of pendency of the lawsuit. The case is said to have been terminated or the pendency is said to have closed when the final decision or order or decree has been passed by the competent court.
The commencement of the active proceeding is deemed to be from when the plaint is first heard in a competent court of law and is said to be terminated when the final ruling or mandate has either
Similarly, any case lawsuit presented with an incorrect amount or insufficient Court fee is also retuned back by the Court until the plaintiff presents it again by affixing the proper Court fee. In such a case, the pendency of the trial will commence from the date when it was presented the second time with the rightful and proper Court fee.
In cases wherein the plaint is contested before the Court seeking permission to sue in forma pauperis i.e. without paying any court costs (as a poor person), the pendency would start from the date on which the competent court accepts the application. If such an application is rejected, the pendency of the lawsuit is deemed to not have yet commenced from the date of application.
Where the lawsuit is presented in the court having no jurisdiction, the case is returned back. The case can again be filed in an appropriate court having the rightful jurisdiction. However, any transfer that is made during this interval of a lawsuit that is returned back and then is again filed will have no effect on the exchange made by virtue of this section or lis pendens.
It is a must for lis pendens to have effect that the proceeding is pending with a competent Court. A court lacking the appropriate jurisdiction to adjudicate the contested case will not invoke the provisions of this doctrine or section 52.
The court will be deemed to be incompetent if it has no rightful jurisdiction to try the case of the disputed immovable property if the impugned area is stationed outside the territorial limits of the court. Accordingly, an order of a Court with no jurisdiction will have no effect on any transfer that is made during that period.
There are stipulated provisions in the Code of Civil Procedure for when the courts can apply their jurisdiction to disputed matters on the basis of the location of the disputed property or on the value of the disputed property. Hence, only the decree or order obtained by a competent court which has the capacity to render judgement on the dispute of the said property will prevail and hence the contended matter should only be filed in a court having the rightful jurisdiction to avoid any delay of the pendency period.
Another pre requisite of this section is that the substantive question of dispute should be specifically related to the title or interest of a disputed immovable property. A brief allusion to the respective immovable property in a plaint will not attract the applicability of this section and for this reason the doctrine of lis pendens will be of no use in the litigation.
This provision will not be applicable to a dispute wherein the substantive issue raised in not about the ownership of the disputed property.
A lawsuit within the agreement of a property holder and a rentee regarding the compensation for occupancy, and while this litigation is ongoing, the landlord conveys the contested property, this type of transfer will have no application given the lis pendens status because the substantive dispute did not pertain to ownership rights, but rather concerns rental payments.
The proceeding must not be collusive:-
Another requirement for the applicability of this provision is that the matter filed must not be fraudulent to deceive other party. Collusion is when the litigant parties purposefully file a suit against each other with a common motive, generally to deceive other party or to prolong the proceeding to obtain some unethical goals.
A lawsuit is considered collusive when it is initiated with a dishonest or malicious intent. Such lawsuits are mostly fictitious and are filed purely to defraud a third party by getting a judicial decision for some evil design.
In such cases, no question of it being a litigation matter arises since such lawsuits are purely initiated with mala fide intentions to cause injury to an innocent third party. The transferee where the transfer takes place during the pendency of such a collusive lawsuit will not be bound by the result of litigation.
It is a prerequisite that the transfer of property must have already happened by any of the parties to the suit for this lawsuit to attract the applicability of this provision. Sale, lease, mortgage or exchange may come under the ambit of ‘Transfer’.
Thus, executing a contract of sale, while the dispute is actively being contested in a competent Court of law will have to comply with the rules of this provision. Partition executed when the lawsuit is being decided in a competent court of law will also attract the provisions of this section.
The sixth and last re perquisite for the tenets of lis pendens to take effect is that what constitutes the transfer of property must cause an effect on the second party to the dispute. Other party in this context, refer to any party between whom and the party transferring, where there exists a dispute for the title which might be affected by alienation.
The fundamental aim of the doctrine of lis pendens is to protect the interests of other parties involved in a legal dispute from any dishonest transfers carried out by their adversaries. In a case wherein only the rights of the transferor are effected and not of the other party, the principle of lis pendens does not apply.
As an example, consider a legal case where the plaintiff is ‘G,’ and the co-defendants are ‘H’ and ‘I.’ While the trial is ongoing, ‘H’ undertakes a property transfer. In this scenario, ‘I’ is ineligible to avail advantages from this provision due to the absence of a significant conflict between ‘H’ and ‘I.’ However, ‘G’ has the opportunity to utilize this legal provision, as it pertains to the potential subordination of ‘G’s interests or rights based on a court-issued order.
Exception to this section:-
This section exempts any transfer that was made during the pendency of the trial if it was made under the authority of a competent Court. The Court may prescribe some terms so as to permit the transfer and the transfer will only be valid when such prescribed terms are fulfilled.
The transfer of the disputed immovable property that is pendente lite may be allowed, if the court gives permission to do so. Therefore, in this circumstance, despite the transfer occurring during the pendency of the litigation (pendente lite), both section 52’s provisions and the doctrine of lis pendens will remain ineffectual.
Implication of lis pendens during the period of appeal until execution:-
The application of lis pendens will continue to have an impact until the final execution of a decree has been obtained. Section 52 while concluding in explanation states that:
“…to continue until the suit or proceeding
Dismissal of the suit does not negate the application of lis pendens if an appeal is filed later. The suit continues to be active till the order is executed.
For example, a lawsuit regarding the title interest or ownership of a disputed property is filed in a District Court. After the judgement of the District Court, an appeal is filed to the High Court. Following the pronouncement of the matter by the High Court, a subsequent appeal is lodged in the Apex Court. The suit does not come to an end even after the pronouncement of the Supreme Court. A suit will be active from the point of decree’s issuance until execution.
While implementing the tenets of lis pendens, the duration for which the status of the lawsuit is required to be active and will continue until the period for filling the appeal has become time barred. The pendency of the suit proceeding will continue after the appeal until its disposal and the transfer made after the first appeal would attract the provision as the suit will be active till the court order is executed.
As an illustration, consider a situation where the objective is to regain control of a contested property from an individual in unauthorized possession. Seeking relief in this manner aids the litigant in obtaining possession. In response, the court issues a judgment directing the intruder to vacate the property within a reasonable timeframe. If, during this reasonable period, the intruder proceeds to sell the property, the transfer would fall within the scope of the doctrine of lis pendens.
However, when trespasser doesn’t vacate the impugned property within the reasonable period of time, despite the decree not being in his favour, the Court’s order will be carried out following the legal requirements and with help of execution procedures. This approach facilitates the actual delivery of physical possession to the lawful owner. The litigation will reach its ultimate conclusion only after the rightful owner has regained possession of the immovable property.
Notice to the transferee during pendency:-
When aim immovable property is transferred pendente lite, it is of no regard whether the transferee had the notice or not of the ongoing litigation. The sale of the immovable property is illegal during a pending litigation and hence the transferee cannot argue that he had no notice of the ongoing litigation dispute.
Consequently, in most cases, it holds little significance whether the recipient of the property transfer was aware of the ongoing litigation or not. Nonetheless, specific regulations in Maharashtra and Gujarat dictate that the litigating parties must adhere to a mandatory requirement of registering a notice in the prescribed manner before the rule can take effect.
Status quo of the transfer:-
The dialect used in provided provision is restrictive in nature. It uses the clause ‘the property cannot be transferred or otherwise dealt with”.
Any transfer made during an active litigation dispute is not completely void, but is voidable at the hands of the affected party. Hence, the status quo of the transfer of the disputed immovable property is not invalid, but is only bound by the final order of the Court.
The transferee will also suffer the benefits that the plaintiff will suffer even though the transferee was unaware of the pending litigation unless the transfer was sanctioned by a competent court.
Summary:-
The doctrine of les pendens is to safeguard the interest of the innocent parties and to secure that the status quo of the contested immovable asset is maintained. Section 52 of the Transfer of Property Act will be applicable only if the transfer of the disputed immovable property is made when the proceeding is actively being contested in a court of the competent court of law unless the transfer is conducted under the jurisdiction of a capable court or with the approval of the esteemed court.
The transfers made during the pendency of the proceeding refers to when the plaint is first presented in the court until the court order is executed or when the period of appeal has become time barred. This doctrine can be applied to lawsuits only wherein the substantive question of law is raised about the title interest or ownership of the disputed immovable property. The very need of this rule is to protect the innocent parties aren’t a victim to such complex litigation of such disputed properties and to safeguard them from fraud and collusive transfers.
