Doctrine of Lis Pendens

Section 52 of the Transfer of Property Act, 1882, is based on the doctrine of lis pendens.

Meaning of the Doctrine of Lis Pendens

• 'Lis' refers to 'litigation,' and 'pendent' means 'pending.'
• Therefore, 'lis pendens' signifies 'pending litigation.'
• The doctrine of lis pendens is encapsulated in the maxim: 'pendent lite nullum innovator,' meaning 'nothing new should be introduced during the pendency of litigation.'
• According to this doctrine, during the pendency of a suit concerning the title of a property, no new interest in that property should be created.
• Essentially, the doctrine of lis pendens prohibits the transfer of property while litigation is ongoing.
• This doctrine is ancient and has been a part of English Common Law.
• In the context of immovable properties, judgments were considered to override any alienation made by the parties during the litigation period.

Basis of Lis Pendens

• The basis of lis pendens is 'necessity' rather than actual or constructive notice.
• While it may seem that this doctrine is based on notice because a pending suit is seen as constructive notice of the disputed title of the property, the correct view is that lis pendens is founded on 'necessity.'
• For the effective administration of justice, it is essential that during the pendency of a suit regarding the title of a property, the litigants should not be allowed to make decisions or transfer the disputed property.
• Lis pendens is, therefore, based on 'necessity' and serves as a matter of public policy to prevent parties from disposing of a disputed property in a manner that interferes with the Court's proceedings.
• The rationale behind this doctrine is explained in the case of Bellamy v. Sabine Turner, LJ, where it is stated that allowing alienations pendant lite would hinder the successful conclusion of any action or suit.

Principle of Lis Pendens

• Section 52 embodies the doctrine of lis pendens (pending litigation) as expressed in the maxim Ut lite pendent nullum innovetur, meaning nothing new should be introduced in pending litigation.
• As a principle of equity, justice, and good conscience, this rule applies even where the Act does not apply.

Applicability of Lis Pendens

• Section 52 of the Transfer of Property Act reflects the principle that during pending litigation, nothing new should be introduced.
• It states that pendant lite, neither party in a litigation concerning any right to immovable property can alienate or deal with such property in a way that affects their rights.
• In a scenario where the land in dispute was initially recorded in the name of the petitioner's husband, and after his death, his brother 'G' filed a suit seeking declaration of Khatedari rights without including his brother's wife, the sole legal heir, the litigation ensued.
• Despite the prohibition on alienation or transfer of the suit property during the pendency of the suit, the respondent brother proceeded to transfer the land, and subsequent purchasers continued to transfer the land as well.
• Such transfers would be subject to the doctrine of lis pendens.
• Section 52 would apply in cases where sales are made through private negotiations during the pendency of a suit.

Ingredients of Lis Pendens

The essential ingredients for the application of the doctrine of lis pendens as outlined in Section 52 are as follows:

1. Pendency of a suit or proceeding.
2. The suit or proceeding must be pending in a court of competent jurisdiction.
3. A right to immovable property is directly and specifically involved in the suit.
4. The suit or proceeding must not be collusive.
5. The property in dispute must be transferred or otherwise dealt with by any party to the suit.
6. The transfer must affect the rights of the other party to the litigation.

Effect of the Doctrine

• A transfer or dealing by a party to a suit during the pendency of the suit or proceeding is not automatically void.
• It only cannot affect the rights of any other party to the suit under any decree or order that may be made in the suit or proceedings.
• Section 52 creates only a right to be enforced to avoid a transfer made pendant lite because such transfers are not void but voidable, and that too at the option of the affected party to the proceeding, pending which the transfer is effected.
• Thus, the effect of the rule of lis pendens is not to invalidate or avoid the transfer but to make it subject to the result of the litigation.

Lis Pendens and Doctrine of Notice

• The rule in Section 52 of the Transfer of Property Act is not based on the doctrine of notice but on expediency.
• The lis pendens rule does not annul the transfer but makes it subordinate to the rights of the parties in the litigation.
• According to this rule, anyone who purchases a property during the pendency of a suit is bound by the judgment that may be rendered against the person from whom they derived title, even if such a purchaser was not a party to the action or had no notice of the pending litigation.

Illustrations of Lis Pendens

• A, B, and C are brothers; C lives in a distant town while A and B reside together. A files a suit for partition and does not include C or their father X. Although X and C are not parties to the suit, the subject matter of the suit is the same, and neither X nor C can legally and validly transfer or alienate his share to a third party. In such cases, the ultimate decree is likely to affect the shares of X and C too. Thus, there may be cases where a party may not be locked in a civil suit or proceeding, yet such a party may be affected by the judgment or decree in such a suit.
• A sues B regarding a house in B's possession. During the pendency of the suit, B sells the house to C. If A's suit is dismissed, the transfer to C holds good. In this case, the purchaser (C) is bound by the result of the litigation.
• A sues B concerning a house in B's possession. During the pendency of the suit, B sells it to C. If A's suit is decreed, the transfer to C is voidable, and A's right to take the house is not affected.

Fraudulent Transfer

Fraudulent transfer aims to protect the creditor and subsequent transferee. It is voidable at the option of the creditor and transferee. Section 53 consists of two parts: the first part deals with the transfer of immovable property made with intent to defeat or delay the creditors of the transferor, while the second part concerns transfer made with intent to defraud a subsequent transferee.

• Every transfer of immovable property made with intent to defeat or delay creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.
• Every transfer of immovable property made without consideration, with intent to defraud a subsequent transferee, is voidable at the option of such transferee.

Fraudulent Transfer under Section 53

• When consideration for the transfer and good faith on the part of the transferee are present, the intention of the transferor to defeat or delay his creditor becomes irrelevant.
• Section 53 has a limited scope, restricted to immovable property and not applicable to movable property.
• The benefit of this section is not limited to existing creditors; it extends to subsequent creditors as well.
• Section 53 does not make the transaction void ab initio but only voidable at the option of the person defeated, delayed, or defrauded.

Under the Transfer of Property Act

• A transfer of immovable property by a debtor may be set aside by his creditor if the transferee is not a transferee in good faith for the transferor's creditor and if the transferee is not a transferee in good faith for consideration.
• A transferee from such debtor will be protected if he acquires property for value in good faith without knowledge of the transferor's intention or if he himself is a creditor and the transfer is made in satisfaction of his pre-existing debt.
• If the creditor establishes that the transfer was made with the object of defeating him, the burden shifts to the transferee to prove that he had paid a fair price and that he was not a party to the fraud.