Lis Pendens Doctrine Kicks In When Petition Is Filed & Not When Court Issues Notice; It Applies Even If Petition Was In Defect : Supreme Court

The Supreme Court has held that the doctrine of lis pendens under Section 52 of the Transfer of Property Act,1882 will kick in from the moment a petition is filed in the Court and not at the stage when notice is issued by the Court.

The Court also rejected the argument that the lis pendens doctrine wouldn't apply when the petition was lying in the Registry in a defective state.

A bench comprising Chief Justice of India DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra made this observation while reviewing and recalling a 2022 judgment which refused to allow the specific performance of an agreement to sell.

The issue of lis pendens arose when the property was sold after the 2022 judgment. The respondents argued that the property was sold before the review petition was registered.

On 23 September 2022, the petitioner filed a review petition against the judgment of this Court dated 25 August 2022 within the period of limitation. On 14 October 2022, the Registry sent a letter to the petitioner asking him to cure defects. On 11 November 2022, the petitioner cured the defects. On 13 December 2022, the review petition was registered. Notice on the review petition was issued on 26 September 2024.

The Court noted that as per Section 52 of the Transfer of Property Act, the pendency of a suit or proceedings shall be deemed to commence from the date of the presentation of the plaint or institution of the proceeding in a Court, and shall continue until the suit or proceeding is disposed by a “final decree or order” and complete satisfaction of the order is obtained, unless it has become unobtainable by reason of the expiry of any period of limitation.

The Court explained that the following conditions ought to be fulfilled for the doctrine of lis pendens to apply:

a. There must be a pending suit or proceeding;

b. The suit or proceeding must be pending in a competent court;

c. The suit or proceeding must not be collusive;

d. The right to immovable property must be directly and specifically in question in the suit or proceeding;

e. The property must be transferred by a party to the litigation; and

f. The alienation must affect the rights of any other party to the dispute.

Based on an analysis of the precedents, the judgment authored by CJI DY Chandrachud stated :

"The purpose of lis pendens is to ensure that the process of the court is not subverted and rendered infructuous. In the absence of the doctrine of lis pendens, a defendant could defeat the purpose of the suit by alienating the suit property. This purpose of the provision is clearly elucidated in the explanation clause to Section 52 which defines “pendency”. Amending Act 20 of 1929 substituted the word “pendency” in place of “active prosecution”. The Amending Act also included the Explanation defining the expression “pendency of suit or proceeding”. “Pendency” is defined to commence from the “date of institution” until the “disposal”. The argument of the respondents that the doctrine of lis pendens does not apply because the petition for review was lying in the registry in a defective state cannot be accepted. The review proceedings were “instituted” within the period of limitation of thirty days. The doctrine of lis pendens kicks in at the stage of “institution” and not at the stage when notice is issued by this Court. Thus, Section 52 of the Transfer of Property Act would apply to the third-party purchaser once the sale was executed after the review petition was instituted before this Court. Any transfer that is made during the pendency is subject to the final result of the litigation."