Doctrine of lis pendens

Pendente lite nihil innovature” – Nothing new should be introduced into a pending litigation. This maxim is basis for the Doctrine of lis pendens.

The term lis pendens means ‘Pending Suit’ or ‘Pending litigation’. This concept is enshrined under Section 52 of the Transfer of Property Act, 1882. It says that during the pendency of a suit or proceeding in any Court having jurisdiction within India or outside the limits of the central Government, involving the rights to a specifically mention immovable property, neither of the involved parties can either transfer nor deal with it in any other way which may affect the rights of the other party. Also, as per the explanation provided by the Section, it is mentioned that the applicability of this principle is from the day the suit has been brought on to the Court till the day of the judgment.

The doctrine of lis pendens is based on the ground that it is necessary for the administration of justice that the decision of a Court in a suit should be pending not only on the litigating parties but on those who drive title pendelite.

Essentials of the doctrine:

There are certain essentials laid down by the Supreme Court in the case of Dev Raj Dogra and others v. Gyan Chand Jain and others. are as follows:

There shall be pendency of a suit or proceedings

The pendency of suit should be in a Court of proper jurisdiction.

The subjected proceeding should not be a collusive kind but a bona fide one.

The suit must include issues of rights to an immovable property, either directly or indirectly.

The transfer of property in question, must be affecting the rights of the other party involved.

The period of pendency remains from the day the case is filed in the Court till the day of execution of decree.

Non-Applicability of the doctrine:

This doctrine cannot be applied during the private sale by a creditor who holds the right to dispose of the property that is mortgaged to it even when the borrower has a redemption suit pending.

This Doctrine does not apply when the property is not described correctly, making it unidentifiable.

It is also not applied when a right to the said immovable property is not directly in question and alienations are thereby permitted.

This does not apply where only the rights of the transferor is affected.

Relationship between lis pendens and Intellectual Property Rights

The doctrine of lis pendens does not only apply to real state but also to Intellectual Property Rights. In IP cases lis pendens can be used see to good effect in certain circumstances against an infringer or wrongdoer even before an IP case is prosecuted through a final judgment. A party bringing an infringement or other IP case against a wrongdoer can utilize the power of a fraudulent transfer action and a lis pendens where there is evidence that the wrongdoer has sought to shelter real property assets from possible collection in an IP lawsuit.

Judicial Interpretation of the doctrine:

In Thomas Press (India) Ltd. Vs. Nanak Builders and Investers Pvt. Ltd., AIR 1994 that the provision of the section 52 does not indeed annul the conveyance or the transfer otherwise, but to render it subservient to the rights of the parties to a litigation.

In Gouri Dutt Maharaj v. Sheikh Sukur Mohammed and Ors., Hon’ble Court discarded the defendant’s argument based on Section 52 of the act and favored the appellant on the principle ground that, the main purpose of the Section is to maintain the status quo, unaffected by the parties. The applicability of this Section cannot depend on subject of proof.

In A. Nawab John vs. V.N. Subramaniyam, (2012) SCC 738; it was held that the section 52 of the Transfer of Property Act is not to render transfers affected during the pendency of a suit by a party to the suit void; but only to render such transfers subservient to the rights of the parties to such suit, as may be, eventually, determined in the suit. Transfer remains valid subject, of course to the result of the suit. Pendete lite purchaser would be entitled to or suffer the same legal rights of the suit.  

In T.G. Ashok Kumar v. Govindammal & Anr., the Supreme Court observed that section 52 of the Act does not declare a pendete lite transfer by party to the suit void or illegal, but only makes pendent lite purchaser bound by the decision in the present litigation. If the title of the pendent lite transfer is recognized or accepted only in regard to a part of the transferred property, then the transferees title will be saved only in regard to that extent.

References:

The Transfer of Property Act, 1882

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