'Lis Pendens' Doctrine Can Be Applied Even If S.52 Transfer Of Property Act Is Not Strictly Applicable In A State : Supreme Court

The Supreme Court held that the non-applicability of the provisions of Section 52 of the Transfer of Property Act, 1881 (“TPA”) wouldn't bar the applicability of  principles of lis-pendens, which are based on justice, equity, and good conscience.

“In short, there can be no doubt that even if Section 52 of the T.P Act is not applicable in its strict sense in the present case (State of Punjab) then too the principles of lis-pendens, which are based on justice, equity, and good conscience, would certainly be applicable.”, the bench comprising Justices Sudhanshu Dhulia and PB Varale said.

Reference was made to the judgment in Shivshankara and Another v. H.P. Vedavyasa Char 2023 LiveLaw (SC) 261 in which the Court stated :

"It is a well- nigh settled position that wherever TP 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.....”

The present matter originated from the State of Punjab, where, an agreement to sell was entered between the appellant and respondent no.3. When it appeared to the appellant that respondent no.3 was going to alienate the subject matter property in favor of some other persons, the appellant sought permanent injunction from the trial court restraining the respondent no.3 to alienate the property.

However, despite the enforcement of the injunction against respondent no.3, to not alienate the property, respondent no.3 alienated the property.

Respondent no.3 claimed that the principles of lis-pendens contained under Section 52 of TPA wouldn't be applicable, as under Section 1 of TPA, the provisions of the said Act are not applicable in the States of Punjab, Delhi, or Bombay subject, to certain exceptions.

The doctrine of lis pendens contained under Section 52 of TPA is for maintaining a status quo that cannot be affected by an act of any party in a pending litigation. The objective is also to prevent multiple proceedings by parties in different forums. The principle is based on equity and good conscience.

The court clarified that for the applicability of the doctrine of lis-pendens, the pendency of a suit shall be deemed to have commenced from the date on which the plaintiff presents the suit. Moreover, the pendency would extend till a final decree is passed and such a decree is realized.

Noting that the appellant had presented the suit for a permanent injunction on 21.07.2003, whereas the property was alienated by respondent no.3 on 28.07.2003, therefore the pendency of the suit i.e., lis would be deemed to have commenced from 21.07.2003. Hence, because the suit was presented on an earlier date before the alienation took place, the court held that the alienation could not operate against the appellant due to the enforcement of the injunction order against respondent no.3.

“the appellant filed a suit for permanent injunction on 21.07.2003 and obtained an order of temporary injunction on 28.07.2003. As of 21.07.2003 the doctrine of lis pendens would take its effect. The release deed executed by respondent no. 3 in favour of respondent no. 4 was of 28.07.2003, which is subsequent to the filing of the suit. Respondent no. 4 executed the registered sale deed in favour of respondents 1-2 on 16.06.2004 which is during the operation of the temporary injunction order. Thus, the alienation made by respondents, cannot operate against the interests of the appellant considering he had obtained an order of temporary injunction in his favour.”, the Judgment authored by Justice Sudhanshu Dhulia said.

“Consequently, the Release Deed dated 28.07.2003 executed by respondent no. 3 in favour of respondent no. 4 and the Sale Deed dated 16.06.2004 executed by respondent no. 4 in favour of respondents 1-2 is held to be without any legal sanctity. There was an order of temporary injunction operating at the time when these transactions were made and the alienation made by the respondents cannot operate to the disadvantage of the appellant. Since the parties to these proceedings are bound by the doctrine of lis pendens the respondents 1-2 cannot take the protection of bonafide purchasers for valuable consideration.”, the court added.

Based on the above premise, the court allowed the appeal and set aside the impugned decision of the High Court with a direction to respondent no. 3 to accept the balance sale consideration of Rs.5,50,000 from the appellant and execute the agreement to sell dated 10.11.2002 in favor of the appellant, within 3 months from the date of judgment.

Counsels For Petitioner(s) Mr. Rameshwar Singh Malik, Sr. Adv. Mr. Jitesh Malik, Adv. Mr. Abhay Singh, Adv. Mrs. Leelawati Suman, Adv. Mr. B C Bhatt, Adv. Mr. Satish Kumar, AOR

Counsels For Respondent(s) Mr. Narender Hooda, Sr. Adv. Mr. Rahul Rathore, Adv. Mr. Shaurya Lamba, Adv. Ms. Sukhmani Bajwa, Adv. Dr. Surender Singh Hooda, AOR

Case Title: CHANDER BHAN (D) THROUGH LR SHER SINGH VERSUS MUKHTIAR SINGH & ORS

Citation : 2024 LiveLaw (SC) 347

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