Introduction :

The doctrine of lis pendence is a legal principle that states that a title to property cannot be transferred until the debtor has received the funds they are owed. This principle is important in property law because it helps to prevent creditors from seizing property until they have been paid. This principle is essential because it prevents the transfer of title to disputed property without court approval, where litigation can be endless, and where divestitures are permitted and covenants are not imposed, it is impossible to successfully conclude litigation.

It is based on the doctrine of necessity rather than the doctrine of notification. During the period when a dispute over property ownership is pending, the parties shall not be allowed to dispose of or transfer the disputed property at their own discretion, which is crucial to judicial work. Therefore, Section 52 of the Transfer of Property Act 1882 plays a vital role in ensuring that justice is done to those who deserve it and that no one restricts the rights of others for their own satisfaction and will.

Section 52  of Transfer of property act :

Section 52  of Transfer of property act read as ; Transfer of property pending suit relating thereto.—During the pendency in any Court having authority within the limits of India excluding the State of Jammu and Kashmir or established beyond such limits by the Central Government of 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. 

Understanding the Doctrine :

The most effective protection against claims of other creditors is to create a first encumbrance on the property on behalf of the lender. This encumbrance created on the property usually takes precedence over all other rights and can also be enforced without the consent of subsequent creditors. The same is stated in the provisions of the SARFAESI Law.

The doctrine of lis pendens is expressed in maxim ut lite pendent nihil innovateur, which means that nothing new should be introduced when an action is pending.

“A necessary condition for the application of the pending principle is that the transfer or other disposition of property must be made by the litigant. However, the litigious case principle applies only to the transfer or other disposition of property, pending final decision. The person/party who ultimately prevails in the lawsuit The court may be asked to disregard an assignment or other disposition of property by either party. Proceedings conditional on assignment or other disposition while the lis is pending”.

Conditions for Applicability of the Doctrine as provided in Section 52 :

• A lawsuit or proceeding is in progress.

• The aforementioned suit is filed in a competent court within the jurisdiction.

• The right to an immovable property’s title is immediately in dispute.

• There must be no cooperation.

• The suit should have a direct impact on the other party’s rights.

• Either party is transferring the property in question.

Cases where doctrine does not apply :

• This does not apply to a private sale by a creditor who has the right to sell the mortgaged property even if the borrower has a redemption suit pending.

• The Doctrine also does not apply when the property is incorrectly specified, rendering it unidentified.

• In a maintenance litigation, when the property is referenced simply to assess maintenance payments openly; the Doctrine does not apply where a right to the said immovable property is not directly in question, allowing alienations.

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

Relevant case laws :

The Kerala High Court had an occasion to consider the scope of Sec.52 of the Transfer of Property Act and the doctrine behind the same, in the decision reported in K.A. Khader v. Rajamma John Madathil A.I.R. 1994 Ker. 122 wherein it was held by the Kerala High Court that the effect of the doctrine lis pendens as embodied in Sec.52 of the Transfer of Property Act is not to annul all voluntary transfers effected by the parties to a suit but only to render it subservient to the rights of the parties thereto under the decree or order which may be made in that suit. Its effect is only to make the decree passed in the suit binding on the transferee if he happens to be a third person even if he is not a party to it. The transfers will remain valid subject, however, to the result of the suit. That this is the true legal effect of the provision will be clear from the latter part of the rule which states that 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.

In KN Aswathnarayana Setty v. State of Karnataka & Ors[17], Dr. B.S. Chauhan, J. expressed the meaning of lis pendens by saying that: The principle of lis pendens is in accordance with the equity, good conscience and justice because they rest upon an equitable and just foundation that it will be impossible to bring an action or suit to a successful termination if alienations are permitted to prevail. A transferee pendente lite is bound by the decree just as much as he was a party to the suit. A litigating party is exempted from taking notice of a title acquired during the pendency of the litigation.

However, it must be clear that mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject matter of the suit. The law simply postulates a condition that the alienation will, in no manner, affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the Court. The transferee cannot deprive the successful plaintiff of the fruits of the decree if he purchased the property pendente lite.

Conclusion :

The essence of this Section is that a transaction made during the pendency of a suit by a party to the suit cannot prejudice the interest of the other party. As a result, the sale in this matter in favour of the review applicant will be lawful to the extent that it does not impact the opposite party’s claim, if any, as determined or to be determined in title action. The principles set forth in Section 52 of the Transfer of Property Act are consistent with the principles of equity, good conscience, and justice because they are founded on an equitable and just foundation, and it will be impossible to bring an action or suit to a successful conclusion if alienations are permitted to prevail.

References :

https://indiankanoon.org/doc/1634925/

https://www.legalserviceindia.com/legal/article-5254-doctrine-of-lis-pendens-a-right-against-unauthorized-alienation.html

https://www.livelaw.in/top-stories/supreme-court-transfer-of-property-lis-pendens-not-void-section-52-tp-act-189805#:~:text=Doctrine%20of%20Lis%20Pendens%20is,on%20equity%20and%20public%20policy.

https://www.casemine.com/judgement/in/56ea7baf607dba36cc7474d7#p_54

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