The Doctrine of Lis Pendens

Overview:

Whatever rights are acquired during the course of litigation have always been treated subject to the final outcome of such litigation, due to the well-entrenched doctrine of pendente lite. The doctrine of pendente lite i.e. Lis pendens had been available in equity as well as in common law. The doctrine is based on the maxim "pendente lite nihil innovetur" meaning that nothing should be changed or introduced during pending litigation.

In our jurisdiction, said doctrine of lis pendens stood well entrenched by way of express provision of Section 52 of the Transfer of Property Act, 1882. The doctrine of lis pendens provides that, neither party to the litigation, in which any right to immovable property is in question, can alienate or otherwise deal with such property so as to affect his opponent. The effect of the maxim and of the section is not to annul the conveyance, but only to render it subservient to the rights of the parties to the litigation.

Relevant Provisions:

Section 52 of the Transfer of Property Act, 1882 enacts the doctrine of Lis pendens. However, Order 39 Rules 1 and 2 of the Code of Civil Procedure provide a remedy in the form of temporary injunction against the alienation of property which is subject matter of litigation.

Text of Section 52 of Transfer of Property Act:

During the pendency in any Court having authority in Pakistan or established beyond the limits of Pakistan by the Federal Government, of any suit of proceeding which is not collusive and in which any right of 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 purpose 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.

Explanation of section 52 of Transfer of property Act:

The aforesaid section manifestly embodies the rule of lis pendens, which is available both in equity and at the common law. The section is founded upon the maxim "pendente lite nihil innovetur", which means that pending litigation, nothing should be changed or introduced. The virtual and true object of Lis pendens is to protect and safeguard the parties to the suit and their rights and interest in the immovable suit property against any alienation made by either of the parties, of that property, during the pendency of the suit in favor of a third person. The rule unambiguously prescribes that the rights of the party to the snit, who ultimately succeed in the matter are not affected in any manner whatsoever on account of the alienation, and the transferee of the property shall acquire the title to the property subject to the final outcome of the Lis. Thus, the transferee of the suit property, even the purchaser for value, without notice of the pendency of suit, who in the ordinary judicial parlance is known as a bona fide purchasers in view of the rule/doctrine of Lis pendens shall be bound by the result of the suit stricto sensu in all respects, as his transferor would be bound. The transferee therefore does not acquire any legal title free from the clog of his unsuccessful transferor, in whose shoes he steps in for all intents and purposes and has to swim and sink with his predecessor in interest. The rule of lis pendens is founded upon the principle that it would be impossible that any action or suit could be brought to a successful termination if the alienations pendente lite are permitted to prevail, and the subsequent transferee is allowed to set out his own independent case, even of being the bona fide transferee against the succeeding party of the matter and ask for the commencement of de novo proceedings so as to defeat the claim which has been settled by a final judicial verdict. The foundation of the doctrine is not rested upon notice, actual or constructive, it only rest on necessity and expediency, that is, the necessity of final adjudication (Emphasis supplied) that neither party to the litigation should alienate the property so as to effect the rights of his opponent.

Object of Doctrine of Lis Pendens:

Main purpose of the doctrine of lis pendens has been to obviate the chances of any intermeddling with a property under litigation and if any one so intermeddles, he does it at his own risk. The purpose has been to provide protection to interest of the parties under litigation and therefore any rights accrued during the course of litigation have been made subject to the final outcome of such litigation under the doctrine of lis pendens, as held by the Hon'ble Supreme Court of Pakistan in its judgment given in the case of Muhammad Ashraf Butt and others v. Muhammad Asif Bhatti and others reported as PLD 2011 Supreme Court 905, which case had also arisen out of facts similar to those of the present case.

Doctrine of Lis Pendens Means:

The word lis and pendens, lite and pendente, means precisely what their Latin significance are:

(a) Lis means an action, a cause, a controversy
(b) Pendens is the present participle of pendo meaning continuing or pending.
(c) Pendente lite is the ablative absolute of lis pendens meaning during the pendency of a suit.

Doctrine of Lis Pendens Definitions:

(1) According To Corpus Juris Scundum:

“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 a property involved in a suit pending the continuance of an action and until final judgment therein.”

(2) According To Black’s Law Dictionary

It is a common law doctrine, now codified in many states so as to condition its effect on the filing of a notice that binds a purchaser or encumbrances of property to the results of any pending lawful suit of the property. (6th Edition)

(3) Case Law Definition

Lis pendens literally means a pending suit or cause, ‘and the doctrine of lis pendens has been defined as jurisdiction, power or control, which a Court acquires over property involved in a suit, pending the continuance of an action, and until final judgment therein. It denotes those principles of rules and laws which define and limit the operation of Common Law maxim to the effect that nothing relating to the subject-matter of a suit can be changed while it is pending. (PLD 1988 Kar. 58)

(4) In Story's Equity Jurisprudence Vol, I, 5.406.

The Doctrine of Lis Pendens has been expounded in the terms following:
"Ordinarily, it is true, that the decree of a court binds only the parties and their privies in representation of estate. But he, who purchases during the pendency of a suit, is held bound by the decree that may be made against the person from whom he derives title. Where there is a real and fair purchase, without any notice, the rule may operate very hardly. But it is a rule founded upon a great public policy; for otherwise alienations made during a suit might defeat its whole purpose, and there would be no end to litigation. And hence arises the maxim, pendente lite, nihil innovetur; the effect of which is not to annul the conveyance, but only to render it subservient to the rights of the parties in the litigation. As to the rights of these parties, the conveyance is treated as if it never had any existence; and it does not vary them."

Essentials of Doctrine of Lis Pendens:

The following conditions are precedent for the applicability of the doctrine of lis Pendens as contained in Section 52, Transfer of property Act.

(1) A suit or proceeding must be pending.
(2) Pendency must be in a Court.
(3) Court must be competent.
(4) Suit must not be collusive.
(5) Right to immovable property must be directly and specifically in question.
(6) There must be a transfer of property without Court’s permission.
(7) The property, if not transferred, must be otherwise dealt with.
(8) Transfer may be made with Court’s permission (i.e., order or decree).
(9) Transfer must be made by any party to the suit.
(10) Transfer must affect the rights of any other party.

The Doctrine of lis pendens is Applicable when:

(1) A Suit or Proceeding Must Be Pending:

The expression “during the pendency” obviously means during the pendency for determination of the suit which has been instituted. The suit must be regarded as pending from the time of institution up to its final settlement in execution. Appeals and execution proceedings are a continuation of a suit. So also transfers pending review application would be hit by the principle of lis pendens.

(a) Pendency when commences

The explanation to the section makes it clear that a suit commences from the date of ‘the presentation of the plaint in a Court of competent jurisdiction. It is necessary that the plaint should be presented to the competent Court, i. e., competent to try the suit. Where the Court is not competent to try the suit and consequently returns the plaint presented to it for presentation to the proper Court and the plaint is subsequently represented to the competent Court, the suit will be deemed to commence only from the date of such subsequent representation.

(b) Pendency, how long continues?

According to the explanation, the pendency of the suit continues until it is disposed of by a final decree and until complete satisfaction of such a decree is obtained, or it becomes barred by limitation. The suit or proceeding remains pending till the conclusion of the litigation, including its appellate stages and the execution proceedings. AIR 1941 Pat. 577

Illustrations:

A transfer made:

(i) During the period between the date of the death of a party and the expiry of the time prescribed for bringing his legal representatives on record; or
(ii) During the period between the date of the decree and the date of the filing of the appeal; or
(iii) During the pendency of the appeal; or
(iv) Between the date of the decree and the date of the execution application; or
(v) During the pendency of execution proceedings, would, because of the explanation, be affected by the rule contained in this section. AIR 1949 Pat. 304

(2) Proceedings Must Be Pending Before A Court:

The doctrine applies only where the Lis is pending before a Court having authority in

Pakistan or established beyond the limits of Pakistan by Central Government.

Illustrations:

(a) A Registrar acting under the Co-operative Societies Act is a Court and a proceeding before him will operate as lis pendens.
(b) A Revenue Court dealing with partition proceedings is a Court and the proceedings will operate as lis pendens.

(3) Court Must Have Jurisdiction:

The section applies only where the lis is pending before a Court, that is, a Court competent to try it. Where the Court has no jurisdiction to try the Lis, a transfer, during its pendency, cannot be hit by the doctrine and cannot be affected by any decree or order passed in such suit. So, where proceedings are taken in a Court not competent to entertain the suit, and consequently the plaint is returned for presentation to the proper Court and represented thereafter to competent Court, the suit can be deemed to commence only from the date of such representation.

(4) Suit Must Not Be Collusive:

(a) Meaning of “Collusive Suit”

A collusive suit is a civil action not founded upon an actual controversy between the parties to it, but brought for the purpose of securing a determination of a point of law for the gratification of curiosity or to settle rights of third persons not parties. City and county of San Francisco v. Boyd, 22 Cal. 2d. 685.

A collusive suit is one in which there is no contest, no judicial determination of a cause agitated between real parties. There is no real interest, no real argument, no real prosecution of the suit, no real defense and no real decision. And there is no Judge; but a person invested with the ensigns of a judicial office is mis-employed in listening to a fictitious cause proposed to him; there is no party litigating, there is no party defendant, and no real interest brought into question. Bondon v. Beecher, 3 Cl & F 479.

(b) Legal Effect

Whether a suit is collusive or not depends upon the facts of each case. A collusive suit is not a real suit at all, not a battle, but a sham fight. When the parties to a suit collude with each other, for the express purpose of defeating the right of transferee and obtain a decree, the rule of Lis pendens does not apply.

(5) Right to Immovable Property Must Be Directly and Specifically In Question:

The words “directly and specifically in question” indicate that the sub-matter must be clearly and pointedly in question. The doctrine of lis pendens will apply only
(a) if the property involved in the suit is described either by such definite and technically legal description, that its identity can be made out by the description alone, or
(b) if there is such a general description of its character, or status, and by such reference that upon enquiry the identity of the property involved in litigation can be ascertained.

Illustrations

(a) Suit for maintenance

The doctrine of lis pendens was held applicable to a suit for maintenance, where the plaintiff claimed to have maintenance specifically charged on specific items of immovable property, mentioned in the plaint, and a decree was passed creating a charge on such property, as it was held that the right to immovable property was directly and substantially in question in the case. AIR 1930 M 824

(b) Suit for specific performance

The section is applicable to a suit for specific performance of a contract to transfer immovable property. Such a suit operates as lis pendens, and the vendor’s transfer of the legal title, after the suit is brought, does not suspend the proceeding or defeat the title under the decree of the Court. ILR 49 C 495

(c) Suit for pre-emption

A suit for pre-emption involves a right to specific immovable property. Therefore, the doctrine of Lis pendens applies also to such suits. It follows that during the pendency of such a suit, the property cannot be transferred or otherwise dealt with by any party to the suit so as to affect the rights of any other party thereto under any decree which may be made therein, and transfer or dealing can affect the rights of the plaintiffs. AIR 1946 Lah. 322

(6) Transfer May Be Made with Court’s Permission:

The doctrine of lis pendens will not apply to a transfer made pending a suit, after obtaining the sanction of the Court in which the suit is pending, for such transfer. The sanction by another Court for a transfer cannot exempt the transfer from the operation of lis pendens, Otherwise every sale in execution of a decree pending a suit will be valid and this is not the law.

Illustration

A sale by the Official Receiver on a Hindu father’s insolvency pending a suit for partition by the son is not affected by lis pendens where the sale is held after an application by the son for an injunction against the Receiver to stay the sale has been refused, In such a case, the sale must be deemed to be one which is held with the leave of the Court.

(7) The Property, If Not Transferred, Must Be Otherwise Dealt With:

The section affects not only transfers of immovable property, where any right is directly or specifically in question in a suit, but it also prevents dealing with the property otherwise. The words “transferred or otherwise dealt with” widen the scope of prohibited transfers. They are sufficiently wide to include not only voluntary and involuntary transfers but also those indirectly obtained by a decree. And the section equally affects transfers made through the intervention of the Court.

Illustrations

(a) The word “transferred” refers to transfers by way of sales, mortgages, leases,” exchanges and gifts. The words “otherwise dealt with" include releases, surrenders, and involuntary transfers made through the intervention of the Court.
(b) The entering into a contract for sale of the land in suit, which is capable of specific performance. AIR 1917 Oudh 193
(c) Partition of the property in suit, though a mere filing of a suit for partition is not a “dealing” with the property such as is contemplated by the section. AIR 1928 Mad. 735
(d) The obtaining of a collusive decree or order relating to the property.
(e) The entering into a compromise with a third party regarding the subject-matter of the suit.

(8) Transfer Must Be Made By “Any Party to The Suit:

The section is confined in its application to suits or proceedings in which any right to immovable property is directly and specifically in question. In such cases, the property cannot be transferred by any party to the suit or proceeding so as to affect rights under any decree or order made therein. The section has no application to transfers by the persons not a party to the suit or proceeding.

Illustrations

(a) Transfer by Subsequent Mortgage

Transfers by a subsequent mortgage, not a party to the suit or proceeding are not affected by this section and the fact that he is made party after the transfer has no effect. AIR 1932 Pat. 270

(b) Transfer by official receiver

After the institution of the suit three of the defendants mortgages were adjudged insolvents and their shares vested in the Official Receiver. The Official Receiver was not impleaded in the suit but a decree was passed. The Official Receiver made a sale of the property vested in him. It was held that the sale by the Official Receiver was not hit by the rule of Lis pendens. AIR 1949 M 886

(9) Transfer Must Affect the Rights Of Any Other Party

The words “any other party” refers to a party other than the transferor who is, or is deemed, to be a party. The essence of the section is that a transaction entered into during the pendency of the Lis cannot prejudice the interests of a person who is not a party to it. The transfer must be such as “to effect the rights of any other party thereto” and not the rights of the person who dealt with the property, or of those who stand in his shoes.

Illustration:

M sued X and Y for declarations that a sale-deed executed by M in favour of X and a subsequent mortgage executed by X of that property in favour of Y were not binding on him and, pending that suit, Z, in execution of a decree obtained by him against X, purchased the property, it was held in a suit by Y upon his mortgage against X and Z that Z was not precluded from questioning the validity of the mortgage by the doctrine of lis Pendens. in the suit by M against X and Y there was no contest between X and Y as to the validity of the mortgage at all, and the result of M’s suit simply upheld the title of X to the property and his right to mortgage it to Y.

Important Case Laws/Judgements on Doctrine of Lis Pendens:

(i) Messrs Aman Enterprises v. Messrs Rahim Industries Ltd. and another (PLD 1993 SC 292), Muhammad Nawaz Khan v. Muhammad Khan and 2 others (2002 SCMR 2003). Besides, in West Virginia Pulp and Paper Co. v. Cooper, 106 S.E. 55, 60, 87 W.Va. 781, it has been held "the doctrine of "lis pendens" is that one who purchases from a party pending suit a part or the whole of the subject-matter involved in the litigation takes it subject to the final disposition of the cause and is bound by the decision that may be entered against the party from whom he derived title. It had also been held that the course of litigation would also include the appeal, revision available under the law and filed therein, as well as the period of limitation provided for such appeals, revisions. During all these times, when a transaction takes place, same would be subject to the principle of lis pendens

(ii) In Tilton v. Cofield, 93 U.S. 1681 23 L.Ed. 858, the view set out is "the doctrine of Lis pendens is that real property, when it has been put in litigation by a suit in equity, in which it is specifically described, will, if the suit is prosecuted with vigilance, be bound by the final decree, notwithstanding any intermediate alienation; and one who intermeddles with property in litigation does so at his peril, and is as conclusively bound by the results of the litigation, whatever they may be, as if he had been a party from the outset."

(iii) In Simla Banking Industrial Co. Ltd. v. Firm Luddar Mal (AIR 1959 Punj. 490), it has been prescribed: "The rule of lis pendens lays down that whoever purchases a property during the pendency of an action, is held bound by the judgment that may be made against the person from whom he derived his title (to the immovable property, the right to which is directly and specifically in question in the suit or proceeding) even though such a purchaser was not a party to the action or had no notice of the pending litigation. The intention of the doctrine is to invest the Court with complete control over alienations in the Lis which is pendente lite and thus to render its judgment binding upon the alienees, as if they were parties, notwithstanding the hardship in individual cases

CONCLUSION

Section 52 of the Transfer of Property Act is an expression of the principle of the maxim pendente lite nihil innoveture (pending a litigation nothing new should be introduced) and provides that pendente lite, neither party to the litigation, in which any right to immovable property is in question, can alienate or otherwise deal with such property so as to affect his opponent, It is intended to protect the parties to a litigation against alienations by their opponents during the pendency of the suit, The law of lis pendens is an extension of the law of res judicata and makes the adjudication in the suit binding on alienees from parties pending suit, just as much as the law of res judicata makes the adjudication binding on the parties themselves and on alienees from them after the decree.

Relevant Questions:

Explain the doctrine of “Lis pendens”during a suit as understood with reference to transfer of property Act.
What do you understand by the principle of Lis pendens? Please explain in detail.
Discuss and Explain The doctrine of “Lis pendens” in the Light of Judgements of Courts.

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