Thursday, 10 May 2018

Good legal article on Lis pendens( S 52 of Transfer of Property Act)

Lis pendens means that nothing new should be introduced in 

pending litigation.

      Where a suit or proceeding is pending between two persons with respect to immovable property and one of the parties thereto sells,or otherwise transfers subject matter of litigation, then transferee will be bound by result of suit or proceeding,whether or not, he had notice of suit or proceeding .This rule is known as the rule of lis pendens. This rule affects the purchaser not because the pending suit or proceeding amounts to notice but because the law does not allow litigants to give to others pending the litigation any right to property in dispute so as to prejudice the other party.
Thus the rule of lis pendens is based on the necessity for final adjudication: It aims at prevention of multiplicity of suits or proceedings.A transaction entered in to during pendency of a suit can not prejudice the interests of a party to suit who is not party to transaction. The object of the rule is to protect one of the parties to a litigation against act of the other.

     The doctrine of lis pendens can not be availed of by the transferor and it is really intended for the protection of the other party, that is the party in the suit other than the transferor.
Suits decreed exparte also falls within the scope of doctrine of lis pendens ,provided they are not collusive.
       Compromise decree also falls within the scope of doctrine of lis pendens, provided compromise is not result of fraud.
The rule of lis pendens does not apply to a transfer by a person who subsequent to transfer is added as a party to the pending suit. A transfer by a person before he is made a party is not affected by rule of lis pendens.
       It may be noted that 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. This provision operates even if the transferee pendente lite had no notice of pending suit or proceeding at the time of transfer.
     Its essentials-In order to constitute a lis pendens, the following six elements must be present:
1.There should be a suit or a proceeding.
2.The suit or proceeding must be one in which a right to immovable property is directly and specifically in question.
3.The suit or proceeding must not be a collusive one .
4.The suit or proceeding must be pending.
5. The property directly and specifically in question in the suit must be transferred during such pendency.
Pending litigation-
The pendency continues from the time the plaint is presented to the proper court till it is finally disposed of, and complete satisfaction or discharge of the decree is either obtained or has become unobtainable.
It may be noted here that pendency of suit must be in competent court in India. The reason behind this rule is that in foreign court, not only the procedure, but even the remedy may be different from that prevailing in India.
Bonafide litigation-
The suit or proceeding must not be collusive.
Right to property must be in dispute-
The right to an immovable property must be directly and specifically in issue in the suit or proceeding.This will happen in a suit for specific performance of contract to transfer immovable property.
Transfer during pendency of litigation only-
For the purpose of this doctrine, the transfer must be made only during pendency of suit or proceeding. Naturally there a transfer before the suit will not be affected by lis pendens.It does not matter that the deed is registered after suit is filed, provided it was executed prior to its institution.
The decree of first court does not always put an end to the litigation.Therefore,even after dismissal of a suit,a purchaser is subject to lis pendens if an appeal is thereafter fled. Thus the rule of lis pendens applies to a transfer made after decree of the court but before filing of an appeal.

 In greater Bombay,however it is necessary to register the notice of lis pendens under S 18 of Indian Registration Act. Otherwise a pendency does not affect any transaction.

Important judgments on Lis pendens

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