Inclusion of Lis Pendens Doctrine

Source: Supreme Court 

Why in News? 

The bench of Justice J.B. Pardiwala and Justice R Mahadevan in the case of Danesh Singh & Ors. v. Har Pyari (Dead) Thr. LRs. & Ors. (2025) held that the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882 applies even to money recovery suits involving mortgaged property, and that the bar on transfer operates irrespective of whether proceedings are contested or ex parte. 

What was the Background of Danesh Singh & Ors. v. Har Pyari (Dead) Thr. LRs. & Ors. (2025) Case? 

• In 1970, Duli Chand mortgaged property in favour of New Bank of India for a tractor loan. 
• Upon default, the bank filed a suit seeking recovery of dues backed by the mortgage. 
• The bank obtained an ex parte decree in 1984 for money recovery. 
• During the pendency of the suit and after the decree, two purchasers (Respondents 1 & 2) bought parcels of the mortgaged land from one of the judgment debtors in 1985. 
• In execution proceedings, the entire mortgaged property was auctioned in 1988. 
• The appellants, sons of a judgment debtor, were declared the highest bidders for ₹35,000, and the sale was confirmed in August 1988. 
• Possession was delivered to the appellants in June 1989. 
• In July 1989, the respondents filed a separate civil suit seeking declaration that the auction sale was void, alleging irregularities and fraud. 
• The Trial Court, Appellate Court, and Punjab & Haryana High Court ruled in favour of the respondents, declaring them owners and granting joint possession. 
• The defendants-appellants then approached the Supreme Court challenging these concurrent findings. 

What were the Court's Observations? 

• The Court ruled that mortgaged property becomes "directly and specifically in question" once a suit is instituted by a bank seeking recovery of dues backed by mortgage. 
• Any transfer of such property during pendency of the suit, or till complete satisfaction of the decree, would be hit by the doctrine of lis pendens. 
• The Court rejected the contention that Section 52 would not apply since the original decree was only a simple money decree, clarifying that the nature of the decree is not determinative. 
• The Court emphasized that Section 52 uses expressions "any suit" and "any right", reflecting the legislature's intention to widen the scope of the doctrine. 
• The Court stated that excluding ex parte proceedings would enable a party to deliberately stay away from court, alienate the property during pendency, and frustrate the adjudication. 
• The Court reiterated that "pendency" of a suit commences from the date of presentation of the plaint and continues until the decree is fully satisfied or becomes inexecutable due to limitation. 
• The doctrine therefore applies not only during trial but also during execution proceedings. 
• The Court held that a transferee pendente lite is bound by the outcome of litigation irrespective of notice. 
• A purchaser of mortgaged property during pendency of a recovery suit acquires no higher right than what the mortgagor possessed at the time of transfer. 
• Since the auction sale in favour of the appellants was confirmed, the respondents were bound by the auction sale as per Section 52 TPA. 
• The Court set aside the concurrent findings of the courts below and allowed the appeal. 

What is the Doctrine of Lis Pendens? 

About: 

• Lis pendens is a Latin word that means “pending litigation”. 
  • It is based on a legal maxim “pendente lite nihil innoveture” which means nothing new should be introduced during pendency of a litigation.  
• The doctrine of lis pendens is enshrined under Section 52 of the Transfer of Property Act, 1882 (TOPA), in India.  
  • This section deals with the effect of transfer of property pending a suit or proceeding. 
• It is based on equity and public policy. 

Legal Framework of Section 52 of TOPA: 

Transfer of property pending suit relating thereto —  

• During the pendency in any Court having authority within the limits of India or established beyond such limits by the Central Government, any suit or proceedings which is not collusive and in which any right to immovable 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.  
• 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. 

Essentials of Lis Pendens: 

• The suit or proceeding must be pending. 
• Suit must not be collusive. 
• Right related to immovable property must be contended. 
• The right to immovable property is directly and specifically in question.  

Purpose of Lis Pendens: 

• The underlying principle behind the doctrine of lis pendens is to protect the rights of parties involved in a legal action and prevent parties from transferring the subject matter of a dispute during the pendency of a suit in a way that might frustrate the final outcome of the litigation.  
• The doctrine is based on the idea that a third party acquiring an interest in the property during the pendency of a suit should be bound by the outcome of that suit. 

Concept Void Transfer under Lis Pendens: 

• When a suit or proceeding is pending in any court and an immovable property is the subject matter of that suit or proceeding, any transfer of that property by any party to the suit or proceeding is void against any person acquiring an interest in the property under the decree or order resulting from that suit or proceeding. 
• The transfer referred to in the section is void as against a subsequent transferee from the date of the institution of the suit or proceeding.  
• This means that if a person transfers an immovable property while a suit is pending, and another person acquires an interest in the property as a result of the court's decision in that suit, the transfer made during the pendency of the suit will be considered void. 

Exceptions of Lis Pendens: 

• The section does not affect the enforcement of a judgment or decree or order in a suit or proceeding in which such transfer is not contested. 
• The doctrine does not apply to suit where property is unidentifiable.  
• The doctrine does not apply to collusive suits.