NATIONAL LAW INSTITUTE UNIVERSITY, BHOPAL

In partial fulfilment of the requirement of the project on the subject of Property Law-I
of B.A., L.L.B (Hons.), Sixth Trimester

TRANSFER OF PROPERTY DURING PENDENCY OF LITIGATION

Submitted to: Submitted by:

Dr. Sanjay Yadav Shivam Patel

Associate Profesor 2018BALLB86

 ACKNOWLEDGEMENT

On completion of this Project it is my present privilege to acknowledge my profound

gratitude and indebtedness towards my teachers for their valuable suggestions and
constructive criticism. Their precious guidance and unrelenting support kept me on the
right track throughout the project. I gratefully acknowledge my deepest sense of
gratitude to:

Prof. (Dr.) V. Vijaykumar, Director, National Law Institute University, Bhopal for
providing us with the infrastructure and the means to make this project;

Our Property Law teacher, Dr. Sanjay Yadav, who provided me this wonderful
opportunity and guided me throughout the project work;

I’m also thankful to the library and computer staffs of the University for helping me
find and select books from the University library.

Finally, I’m thankful to my family members and friends for the affection and
encouragement with which doing this project became a pleasure.
 Table of Contents

“LIS PENDENS....................................................................................................................................4

Doctrine of Lis Pendens....................................................................................................................4

Basis of Lis Pendens..........................................................................................................................4

State Amendments in Gujarat and Maharashtra.................................................................................5

PROVISIONS OF SECTION 52...........................................................................................................5

ESSENTIAL CONDITIONS FOR APPLICATION OF SECTION 52.................................................5

PENDENCY OF SUIT OR PROCEEDING......................................................................................6

Proceedings...................................................................................................................................7

Compromise Suit...........................................................................................................................7

PENDENCY IN COURT OF COMPETENT JURISDICTION........................................................7

RIGHT TO IMMOVABLE PROPERTY MUST BE INVOLVED...................................................7

Rights in movables........................................................................................................................8

SUIT MUST NOT BE COLLUSIVE................................................................................................8

PROPERTY IS TRANSFERRED OR OTHERWISE DEALT WITH..............................................9

Involuntary transfers......................................................................................................................9

Transfers with permission of Court.............................................................................................10

Transfer by any party to suit........................................................................................................10

TRANSFER AFFECTS RIGHTS OF ANY OTHER PARTY........................................................10

EFFECT OF THE PRINCLPLE OF LIS PENDENS..........................................................................11

BIBLIOGRAPHY..............................................................................................................................12"
 LIS PENDENS

Doctrine of Lis Pendens

“The law incorporated in Section 521 is based on the doctrine of lis pendens. ‘Lis’ means
‘litigation’ and ‘Pendens’ means ‘pending’. So Lis Pendens would mean ‘pending litigation’.
The doctrine of Lis Pendens is expressed in the well-known maxim: pendente lite nihil
innovature, which means during pendency of litigation, nothing new should be introduced.
Under this doctrine, the principle is that during pendency of any suit regarding title of a
property, any new interest in respect of that property should not be created. Creation of new
title or interest is known as transfer of property. Therefore, in essence, the doctrine of lis
pendens prohibits the transfer of property pending litigation. It is a very old doctrine and has
been operating in the English Common Law. Under this doctrine the judgements in the
immovable properties were regarded as overriding any alienation made by the parties during
pendency of litigation.””

Basis of Lis Pendens

“The basis of lis pendens is ‘necessary’ rather than actual or constructive notice. It may be
said that this doctrine is based on notice because a pending suit is regarded as constructive
notice of the fact of disputed title of the property under litigation. Therefore, any person
dealing with that property, pending litigation, must be bound by the decision of the Court. For
administration of justice it is necessary that while any suit is still pending in a Court of law
regarding title of a property, the litigants should not be allowed to take decision themselves
and transfer the disputed property. When a litigation is already pending the necessities of
1
Transfer of property pending suit relating thereto.—During the 1[pendency] in any Court having authority
2[3[within the limits of India excluding the State of Jammu and Kashmir] or established beyond such limits] by
4[the Central Government] 5[* * *] of 6[any] suit or proceedings which is not collusive and in which any right
to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise
dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any
decree or order which may be made therein, except under the authority of the Court and on such terms as it may
impose. 7[Explanation.—For the purposes of this section, the pendency of a suit or proceeding shall be deemed
to commence from the date of the presentation of the plaint or the institution of the proceeding in a Court of
competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree or
order and complete satisfaction or discharge of such decree or order has been obtained, or has become
unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any
law for the time being in force.]
judicial functioning would require that the decision of the Court should be honoured and be
made binding not only on the parties but also on all such persons who derive title under them
by alienation made by any one of them pending litigation. Without any rule prohibiting
transfer pending litigation, all suits regarding specific property should be rendered
meaningless by successive alienations making it almost impracticable for any person to settle
his rights in property through the process of law.”

“The Indian Courts have also taken the view that basis of Section 52 is not the doctrine of
notice but expediency i.e. the necessity for final adjudication and public policy. It has been
held that “foundation for the doctrine of lis pendens does not rest upon notice, actual or
constructive; it rests solely upon necessity—the necessity that either party to the litigation
should alienate the property in dispute so as to affect his opponents. In Rejendar Singh v.
Santa Singh2 the Supreme Court has said that the doctrine of Lis Pendens is intended to
strike at attempts by parties to a suit to curtail the jurisdiction of the Court by private dealings
which may remove the subject matter of litigation from the power of the Court to decide a
pending dispute and frustrate its decree.””

“Since the Courts in India regard ‘necessary’ as the basis of the doctrine of lis pendens, it is
immaterial whether the transferee had any notice of pendency of suit or not. The transferee is
bound by the decision of the Court even if he had no actual or constructive notice of the
pending suit.”

State Amendments in Gujarat and Maharashtra

“Section 52 of the Transfer of Property Act 1882 was amended by the Bombay Act, 1939.
This amendment was subsequently declared to be in force in whole of the present States of
Gujarat and Maharashtra in the year 1959. The amended version of Section 52 provides that
this section is applicable only to those transactions pending litigation which are duly
registered. However, Section 52 of the Bombay Act, 1939 provides that the amendment in
Section 52 is applicable only to immovable properties situated wholly or partly in Greater
Bombay but the State Government is empowered to extend its application to other areas by
notification.””

2
AIR 1973 SC 2537
 PROVISIONS OF SECTION 52

The doctrine of lis pendens as laid down in Section 52 is as follows:

 During the pendency of a suit or proceeding.

 Property cannot be transferred or otherwise dealt with, and
 If so transferred, the transferee is bound by the decision of the Court whether or not
he had notice of the suit or proceeding.

ESSENTIAL CONDITIONS FOR APPLICATION OF SECTION 52

“Following conditions are necessary for the application of the doctrine of lis pendens as
provided in Section 52:

 There is a pendency of a suit or proceeding.

 The suit or proceeding must be pending in a Court of competent jurisdiction.
 A right to immovable property is directly and specifically involved in the suit.
 The suit or proceeding must not be collusive.
 The property in dispute must be transferred or otherwise dealt with by any party to
suit.
 The transfer must affect the rights of the other party to litigation.”

“When the above mentioned conditions are fulfilled, the transferee is bound by the decision
of the Court. If the decision of the Court is in favour of the transferor, the transferee has
rights in the property transferred to him. If the decision goes against the transferor, the
transferee cannot get any interest in the property.””
PENDENCY OF SUIT OR PROCEEDING
“Pendency if a suit is that period during which the case remains before a Court of Law for its
final disposal. If a case is instituted in Court, the first step is presentation of the plaint, and
the last step is passing of a decree. When the Court gives its decision by passing a decree, the
case is terminated.”

“So, the pendency of a suit begins from the date on which the plaint is presented and
terminates on the date when final decree is passed. “The Explanation to this section provides
that pendency of suit or proceeding is deemed to begin from the date of presentation of the
plaint or institution of the proceeding in a Court and continues until the suit has been
disposed of by a final decree or order. However, mere presentation of plaint is not sufficient;
the plaint must also be accepted by the Court. Where a plaint is presented in a Court having
no jurisdiction and the plaint is returned to be filed in the Court having proper jurisdiction,
the pendency would commence from the date on which the plaint is presented to another
Court having proper jurisdiction. Where an application is presented before a Court asking
permission to sue in forma pauperis, the pendency starts from the date on which the
application has been presented provided it is accepted by the Court.””

“As regards termination of the suit or proceeding, the Explanation provides that pendency
continues until the final decree or order in the suit or proceeding is completely satisfied or
discharged unless execution of the decree has become time-barred. Execution proceedings are
in fact part of the proceedings in a suit. In N.C. Bhartia v. Gandevi Peoples Co-operative
Bank Ltd.3, an order of attachment of judgement-debtor’s property was passed during
execution proceedings. Subsequently, the relatives of the judgement-debtor objected the
attachment and claimed a share in that property. They also sold that property and this sale-
deed was executed during pendency of the execution proceedings. Gujarat High Court held
that the sale-deed was hit by the doctrine of lis pendens. Litigation in a mortgage suit
continues after the decree and does not terminate till the security is realised for the
satisfaction of the decree. After a final decree, the defendant has a right to appeal within the
period of limitation. Where an appeal is preferred within limitation period, the appeal would
be a continuation of the suit and the lis shall be deemed to continue during appeal. Transfer of
property made during appeal shall be a transfer during pendency of suit and the provisions of
Section 52 shall apply on it.”

3
AIR 2002 Guj 209
“Any transfer made outside the period of litigation will not be affected by lis pendens. Where
a society had already allotted the land in question to some persons before institution of the
suit by the respondent society, the Court said that the doctrine of lis pendens was not
attracted. A sale-deed executed before but registered after presentation of the plaint is not
affected by this section because deed operates from the date of its execution. But where the
sale-deed is already registered the sale-deed would be affected by the doctrine of lis
pendens.” In Suresh Singh v. State of Bihar 4, a registered sale-deed was executed in favour
of the petitioner.

“The other party filed an application for pre-exemption in terms of earlier sale-deed in respect
of the same property on the same date. The Court held that ‘Lis’ about the claim for pre-
exemption would be deemed to be pending before Collector on date of the execution of sale-
deed. Therefore, this sale-deed was hit by the doctrine of lis pendens. Accordingly, the Court
allowed the application for pre-exemption by the other party.”

Proceedings
“The doctrine of lis pendens applies to transfer during pendency of suit or proceeding.
‘Proceeding’ means a judicial activity whether civil or criminal. For purposes of this section,
there is no difference between a suit and a proceeding.”

“This section has been applied to transfers made during revenue proceedings. A claim made
under O. XXI, R. 58 of the Civil Procedure Code is a proceeding under this section.
Similarly, proceedings for ejectment before Revenue Officer are affected by lis pendens.
Since Registrar of Co-operative Societies is regarded as a Court, therefore, proceeding under
Rule 14 of the Co-operative Societies Act, 1912 operates as lis pendens. But, proceeding
before Settlement Officer is not a proceeding under this section and such proceeding cannot
operate as lis pendens.”

Compromise Suit
“The doctrine of lis pendens is applicable in cases where the pending litigation is ultimately
compromised and a compromise or consent decree is passed. The word ‘decree’ or ‘order’ in
this section contemplates compromise or consent decrees. However, the compromise must be
during the pendency of suit and not a compromise entered into after withdrawal of the suit.””

4
AIR 1994 Pat 34
PENDENCY IN COURT OF COMPETENT JURISDICTION
“The suit or proceeding during which the property is transferred, must be pending before a
Court of Competent Jurisdiction. Where a suit is pending before a Court which has no proper
jurisdiction to entertain it, the lis pendens cannot apply. For filing a suit, the Civil Procedure
Code has prescribed jurisdictions of the Courts on the ground of territory or on the basis of
valuation of the subject-matter or dispute. The jurisdiction of the Court is, therefore,
territorial or pecuniary or, otherwise as given in the Code. Thus, a suit respecting any
immovable property should be filed only in the Court within whose jurisdiction the property
situates. Accordingly, the Court cannot pass valid decree so as to affect a transfer made
pendente lite. Lis pendens is not applicable where the suit is pending in any Court is outside
the scope of this section.”

“However, as regards pecuniary jurisdiction, if a suit is filed in a Higher Court which should
have been filed in the Lowest Court, it has been held that there is no lack of jurisdiction; it is
merely an irregularity and Section 52 applies.””

RIGHT TO IMMOVABLE PROPERTY MUST BE INVOLVED

“The litigation should be regarded title or interest in any immovable property. Where the
question involved in the suit or proceeding does not relate directly to any interest in an
immovable property, the doctrine of lis pendens has no application.”

“For example, where a suit is pending between landlord and tenant regarding payment of
rents and during litigation the landlord transfers the property, the transfer is not affected by
lis pendens because the litigation is not with regard to any interest in the property but
involves payment of rents. Similarly, where a Hindu widow filed a suit against her stepson
for maintenance and specifies certain immovable properties in possession of such stepson, it
was held that right to immovable property is not directly in issue and this section cannot
apply. Mere mention of an immovable in the plaint is not enough; rights in respect of that
immovable property must directly and substantially be in question. In a suit for specific
performance of a contract to transfer an immovable property, the right to such immovable
property is directly and substantially in question. Therefore, transfer of that property is within
the scope of this section.””

Following suits have been held to involve question of rights in immovable property and are
within the scope of this section:
  A suit for partition.
 A suit on mortgage.
 A suit for pre-exemption.
 Easement suit.
 Suit for maintenance by a Hindu widow in which she claims to have her maintenance
made a charge on specific immovable property and a decree is passed creating a
charge on such property.

Where the suit or proceeding does not involve any question of right in immovable property,
Lis Pendens does not apply. Thus,

 A suit for debt or damages where the claim is limited to money,

 A suit for the recovery of movables, or
 A suit for an account.

Are outside the scope of this section. Similarly, a suit for recovery of rents of an agricultural
holding is also outside the scope of this section.

Rights in movables
“The doctrine of lis pendens does not apply where the suit involves rights in movable
properties. Standing timber is a movable property; therefore, this section cannot apply where
the issue before the Court is rights in respect of standing timber. Similarly, where certain
ornaments were pledged pending a suit for their recovery, it was held that lis pendens is not
applicable and the pledge shall not be subject to decision of the Court.”

SUIT MUST NOT BE COLLUSIVE

“Lis pendens is inapplicable if the suit is collusive in nature. A suit is collusive if it is
instituted with a mala fide intention.”

“Mala fide intention behind instituting a suit is inferred from the fact that parties to the suit
know their respective rights in the property and there is no actual dispute. Such suit is,
therefore, fictitious and the very purpose of filing the suit is to get judicial decision for some
evil design.”

“Since such suits are instituted with a mala fide intention of causing injury to a third person,
there is no question of its being a litigation involving rights in an immovable property. Where
property is transferred during pendency of a collusive suit, the transferee is not bound by the
result of the litigation. However, it is impossible that a suit in the beginning is bona fide but
during pendency there is a secret agreement between the parties in the form of a compromise.
In such cases too lis pendens is inapplicable. A Hindu wife filed a maintenance suit against
her husband with a secret agreement that during litigation the husband would transfer the
property. During the pendency of the suit, the husband sold the property. Later on, a charge
was created in favour of the wife over the property. It was held by the Privy Council that the
suit was collusive in nature and was, therefore, outside the scope of lis pendens. Accordingly,
the Court held that the purchaser was not bound by the Charge on the property.””

PROPERTY IS TRANSFERRED OR OTHERWISE DEALT WITH

“During pendency of suit, the property must be transferred or otherwise dealt with by any of
the parties to suit. ‘Transfer’ includes sale, exchange, lease and mortgage. Thus, during
pendency of suit is the disputed property is sold or given in exchange, is leased or is
mortgaged either by plaintiff or by defendant, the doctrine of lis pendens shall apply on it and
the transfer would be subject to decision of the Court.”

“The expression “otherwise dealt with” has been interpreted to mean those transactions in
which although there is transfer of some interest in the property but they do not come strictly
within the meaning of ‘transfer of property’ as defined in Section 5 of this Act. Accordingly,
surrender, release or partition would be regarded as transfer for purposes of this section. A
contract of sale has been regarded as a transfer within the meaning of ‘otherwise dealt with’.
Therefore, entering into contract of sale of the disputed property during litigation shall attract
the provisions of this section. Partition affected during pendency of the suit shall also come
on within the ambit of this section. Handing over of the disputed property during litigation
would mean ‘otherwise dealt with’ and Section 52 applies.””

“To construct building on the disputed land so as to compel the plaintiff to file another suit
for its removal is dealing the property otherwise and comes within the purview of Section 52.
Entering into a compromise respecting disputed property with a third person during litigation
is also dealing the property otherwise.”

Involuntary transfers
Transfer of property may either be by act of parties or by operation of law. Transfers by
operation of law are known as involuntary transfers e.g. Court sale or transfer made by order
of Court. Section 52 is applicable to both the kinds of transfers’ pendente lite.
“Formerly there was some doubt whether this section applies to transfers made by operation
of law because this Act does not apply to such transfers. But the Privy Council had settled the
law that the principle of lis pendens is applicable also to transfers by operation of law. In
Samarendra Nath Sinha v. Krishna Kumar Nag5, the Supreme Court has also held that it
is true that Section 52 strictly speaking does not apply to involuntary alienations such as
Court but, it is well established that the principle of lis pendens applies to such transfers.
Therefore, the doctrine of lis pendens applies where the sale is made by order of the Court.
Though an attachment is not a transfer, but a sale in pursuance of an attachment comes within
the scope of this section.””

Transfers with permission of Court

“When a transfer is made during pendency of suit with the permission of Court, the principle
of lis pendens is not applicable. The concluding part if this section exempts transfers
pendente lite if such transfer is made under the authority of the Court and on such terms as it
any impose. Under this clause, the parties to suit are entitled to apply to the Court in which
the suit is pending to get permission for the transfer. If the Court deems in fit, it may give
permission for the transfer of disputed property. In such a situation, Section 52 shall not
apply on the transfer of disputed property. In such a situation, Section 52 shall not apply on
the transfer though it is made during pendency of suit.”

Transfer by any party to suit

“Transfer of property by a person whose title is not in any way connected with disputed
property is not affected by lis pendens. A party to suit whose name is struck off as a
contesting party by consent is not bound by the decree because lis pendens shall not apply to
him. It is to be noted that the words ‘any party’ are not merely descriptive but refer to the
time when transaction takes place. The doctrine of lis pendens was, therefore, not applied
where the transfer was made pending the suit by a person who was not party at the time of
transfer but, was subsequently made a party as a representative of the original defendant.”

“In Sri Pal Singh v. Naresh6, the owner of the property who was a party to the suit sold the
property to a second purchaser. This sale was affected after the first vendee had filled a suit
for specific performance of the sale to him. The Court said that the principle of lis pendens
was to apply notwithstanding the fact that the right of the subsequent purchaser could be
protected under Section 19(b) of the Specific Relief Act, 1963.”
5
1967 AIR 1440
6
TRANSFER AFFECTS RIGHTS OF ANY OTHER PARTY
The last condition for applicability of Section 52 is that the transfer during pendency must
affect the rights of any other party to suit. The principle of lis pendens is intended to
safeguard the parties to litigation against transfers by their opponents. So, the words ‘any
other party’ here does not mean stranger to suit. It means any other party between whom and
the party who transfers; there is an issue for decision which might be prejudiced by
alienation. ‘Any other party’ here means the opposite party whose interest may be affected by
transfer pendente lite. Where the rights only of the transferor and not of the other party to suit
are affected, the principle of lis pendens does not apply.

Thus, Section 52 cannot be made applicable between parties who are at one side either as
plaintiff or as defendant because there is no question of any dispute between them.

EFFECT OF THE PRINCLPLE OF LIS PENDENS

When the condition necessary for the applicability of this section are fulfilled the result is that
transferee is bound by the decision of the Court. For example, in a suit between A and B
respecting title of a house if B transfers the house to C during pendency and the judgement is
subsequently in favour of B, then C would be entitled to the house. But if the decree is passed
against B, then it is binding not only on B but also on C with the result that C cannot get the
house. Under this section C cannot take the plea that he had no notice of pending litigation. It
may be noted that normally decree of a Court binds only the parties to the suit. It may be
noted that normally decree of a Court binds only the parties to the suit. But, under the
principle of lis pendens, a person who purchases during pendency of the suit is also bound by
the decree made against that party from whom he had purchased.

The effect of lis pendens is, therefore, that it does not prevent the vesting of title in the
transferee but only makes it subject to the rights of the parties as decided in the suit.

Section 52, therefore, does not invalidate the transfer but renders if subservient or subject to
the rights of the parties to litigation. The words “so as to affect the rights of any other party
thereto under any decree or order which may be made therein” suggest that the transfer
pendente lite is valid and good to the extent that it might conflict with rights established
under the decree.
Where the assignee of a decree was neither impleaded in the first appeal, nor in the second
appeal, it was held that he was nevertheless bound by the result of the second appeal and
could reap the benefit of the decree for possession in the second appeal.

Purchase of property during continuance of a prohibitory order of the Court has been held to
confer no right or title on the purchaser.

BIBLIOGRAPHY

BOOKS
  Sinha, R.K. The Transfer of Property Act, 11th Edition. Allahabad: Central Law
Agency, 2010.

E-ARTICLES

 Hemanth. “Transfer of Property Pending Suit- Clear Principle” at

<http://law-principles.blogspot.in/2011/05/trasfer-of-property-pending-suit-
clear.html>

 M. M. Mohan. “Transfer of Property Act” at

<http://advocatemmmohan.wordpress.com/2011/11/15/transfer-of-property-act-1882-
s-52-transfer-of-property-by-a-defendant-pending-a-partition-suit-partition-suit-
found-to-be-not-collusive-decree-in-partition-suit-in-terms-of-decree-the-pend/>