Current Affairs

Source: Supreme Court

Why in News?

Recently, the Supreme Court in the matter of Chander Bhan (D) Through Lr. Sher Singh v. Mukhtiar Singh & Ors., has held that the non-applicability of the provisions of Section 52 of the Transfer of Property Act, 1882 (TPA) wouldn't bar the applicability of doctrine of lis-pendens.

What was the Background of Chander Bhan (D) Through Lr. Sher Singh v. Mukhtiar Singh & Ors. Case?

• In this case the appellant and respondent no. 3 entered an agreement to sell for a total consideration of Rs. 8 lakhs, where Rs. 2.50 lakhs were paid at the time of the agreement and the remaining was to be paid at the time of execution of sale deed.
• The appellant, having received the knowledge that respondent no. 3 was likely to alienate the suit property, files a suit for permanent injunction against the respondent no.3.
• The appellant then files a suit for specific performance before the Additional Civil Judge, Senior Division, i.e. respondent No.3 did not come forward even on the last day to execute the sale deed.
• The Trial Court, nevertheless, decreed the suit of the appellant with costs and directed respondent no. 3 to accept balance sale consideration and execute the agreement to sell.
• Thereafter, the first appellate court dismissed the appeal filed by the appellant.
• The appellant filed a second appeal before the Punjab and Haryana High Court.
• The impugned Judgement of the High Court has reversed the concurrent findings of the trial court and the first appellate court and has consequently dismissed the suit of specific performance filed by the appellant, although a partial relief was granted to the appellant by return of the earnest money to the appellant, with interest.
• Thereafter, an appeal was filed before the Supreme Court.
• Allowing the appeal, the Supreme Court set aside the decision of the High Court.

What were the Court’s Observations?

• The bench comprising of Justices Sudhanshu Dhulia and PB Varale observed that there can be no doubt that even if Section 52 of TPA is not applicable in its strict sense in the present case then too the doctrine of lis-pendens, which are based on justice, equity, and good conscience, would certainly be applicable.
• The Court even referred to the judgment given in the case of Shivshankara and Another v. H.P. Vedavyasa (2023).
• In this case, the Supreme Court held that it is a well- nigh settled position that wherever the Transfer of Property Act is not applicable, such principle in the said provision of the said Act, which is based on justice, equity and good conscience is applicable in a given similar circumstance, like Court sale etc.

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 TPA in India.
  • This section deals with the effect of transfer of property pending a suit or proceeding.
• It is based on justice, equity, good conscience and public policy.

Section 52 of TPA:

• This Section deals with the transfer of property pending suit relating thereto.
• It states that 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.

Essential Elements 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.

Objectives 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.

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.

Case Laws

• In Rajendra Singh and Ors. v. Santa Singh and Ors (1973), the Supreme Court cited that Lis pendens literally means a pending suit, and the doctrine of lis pendens has been defined as the jurisdiction, power, or control which a court acquires over property involved in a suit pending the continuance of the action, and until final judgment therein.
• In Vinod Seth v. Devinder Bajaj and Ors. (2010), the suit property was exempted by the Supreme Court from application of doctrine of lis pendens on furnishing security of Rs. 3,00,000.