Legal Blog: Doctrine of Lis Pendens and Effective Date : The Law

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Wednesday, August 10, 2011

Doctrine of Lis Pendens and Effective Date : The Law

Justice P. Sathasivam
Supreme Court of India
The Bench comprising Justice P. Sathasivam and Justice B.S. Chauhan, in Har Narain (D) By LRs v. Mam Chand (D) By LRs, has explained the concept of Lis Pendens, embodied in Section 52 of the Transfer of Property Act, 1882, which provides that during the pendency of a lis, in which any right to immovable property in is question, the property cannot be transferred by any party to the suit so as to affect the rights of other parties. Lis pendens literary 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 thereunder.

Lis pendens is based on the doctrine of expediency but for this it would be impossible for an action to be brought to a successful termination if crafty defendants alienate the suit property before judgment and the plaintiff is driven to commence de novo proceedings, public policy requires sanctity qua judicial proceedings to be maintained. It is immaterial whether the alienee pendente lite had or had no notice of the pending proceedings (Rappal v. Gopal AIR 1970 Kerala 180).

In the decision reported as 1972 (2) SCC 200 Jaya Ram Mudaliar vs. Ayya Swami and Ors. the scope of lis pendens was explained as under:- “Expositions of the doctrine indicate that the need for it arises from the very nature of the jurisdiction of Courts and their control over the subject matter of litigation so that parties litigating before it may not remove any part of the subject matter outside the power of the Court to deal with it and thus make the proceedings infructuous.”

In decision reported as AIR 1973 SC 2537 : Rajender Singh and Ors. vs. Santa Singh and Ors., referring to the doctrine of lis pendens it was observed as under:- 
“15. The doctrine of lis pendens was intended to strike at attempts by parties to a litigation to circumvent the jurisdiction of a Court, in which a dispute on rights or interests in immovable property is pending, by private dealings which may remove the subject matter of litigation from the ambit of the court's power to decide a pending dispute or frustrate its decree. Alienees acquiring any immovable property during a litigation over it are held to be bound by an application of the doctrine, by the decree passed in the suit even though they may not have been impleaded in it. The whole object of the doctrine of lis pendens is to subject parties to the litigation as well as others, who seek to acquire rights in immovable property, which are the subject matter of a litigation, to the power and jurisdiction of the Court so as to prevent the object of a pending action from being defeated. (Emphasis supplied)”
The question that arose for the Court's consideration, in the present case, was the 'effective date' from which the Doctrine of Lis Pendens was to apply; whether it was the date of execution of the sale deed or was it the date of registration of the document? The Supreme Court while reversing the Judgment of the Trial court held that;

"The basic questions arise as to whether in the fact- situation of this case, the sale deed executed by the respondent No.1 in favour of respondent nos.2 to 6 could be subject to the doctrine of lis pendens and in case the appellant had been in possession of the suit land being mortgagee since 1970, the respondent nos.2 to 6 can be held to be vendees without notice of an agreement to sell in favour of the appellant by the respondent no.1.

8. All the courts below have proceeded on the presumption that as the registration of a document relates back to the date of execution and in the instant case though the registration was subsequent to institution of the suit, it would relate back to the execution of the deed and the doctrine of lis pendens would not apply. Further, without considering the fact that the appellant had been in possession of the suit land since 1970, though, this fact had been mentioned in the sale deed in favour of respondent nos.2 to 6 by the respondent No.1 whether it could be held that they were not put to notice of the fact that the appellant had some interest in the property and whether in such fact- situation the respondent nos.2 to 6 may be entitled for benefit of the provisions of Section 19 of the Act, 1963.

9. Section 54 of the Act, 1882, mandatorily requires that the sale of any immovable property of the value of hundred rupees and upward can be made only by a registered instrument. Section 47 of the Act, 1908, provides that registration of the document shall relate back to the date of the execution of the document. Thus, the aforesaid two provisions make it crystal clear that sale deed in question requires registration. Even if registration had been done subsequent to the filing of Suit, it related back to the date of execution of the sale deed, which was prior to institution of the Suit. A similar issue though in a case of right of pre-emption was considered by the Constitution Bench of this Court in Ram Saran Lall & Ors. v. Mst. Domini Kuer & Ors., AIR 1961 SC 1747, by the majority of 3:2, the Court came to the conclusion that as the mere execution of the sale deed could not make the same effective and registration thereof was necessary, it was of no consequence unless the registration was made. Thus, in spite of the fact that the Act, 1908, could relate back to the date of execution in view of provisions of Section 47 of the Act, 1908, the sale could not be given effect to prior to registration. However, as the sale was not complete until the registration of instrument of sale is complete, it was not completed prior to the date of its registration. The court held:
"Section 47 of the Registration Act does not, however, say when sale would be deemed to be complete. It only permits a document when registered, to operate from a certain date which may be earlier than the date when it was registered. The object of this section is to decide which of two or more registered instruments in respect of the same property is to have effect. The section applies to a document only after it has been registered. It has nothing to do with the completion of the registration and therefore, nothing to do with the completion of a sale when the instrument is one of sale. A sale which is admittedly not completed until the registration of the instrument of sale is completed, cannot be said to have been completed earlier because by virtue of Section 47 the instrument by which it is effected, after it has been registered, commences to operate from an earlier date. Therefore, we do not think that the sale in this case can be said, in view of Section 47 to have been completed on January 31, 1946." (Emphasis added).
10. This view has subsequently been followed and approved by this Court as is evident from the judgments in Hiralal Agrawal Etc. v. Rampadarath Singh & Ors. Etc., AIR 1969 SC 244; S.K. Mohammad Rafiq (Dead) by LRs. V. Khalilul Rehmad & Anr. Etc., AIR 1972 SC 2162; Thakur Kishan Singh (Dead) v. Arvind Kumar, 11 AIR 1995 SC 73; and Chandrika Singh (Dead) by LRs. V. Arvind Kumar Singh (Dead) by LRs. & Ors., AIR 2006 SCC 2199.

11. However, all these cases are related to right to pre- emption though the legal issue involved therein remained the same. In view of the above, we are of the considered opinion that in spite of the fact that the registration of the sale deed would relate back to the date of execution, the sale can not be termed as complete until its registration and it becomes effective only once it stands registered. Thus, the fiction created by Section 47 of the Act, 1908, does not come into play before the actual registration of the document takes place.

12. In Guruswamy Nadar v. P. Lakshmi Ammal (Dead) Through LRs. & Ors., (2008) 5 SCC 796, this Court dealt with a similar issue and considered the effect of doctrine of lis pendens and the provisions of Section 19(b) of the Act, 1963. Facts of the said case had been that an agreement to sell stood executed between the first purchaser and owner of the land on 4th July, 1974 for a sum of Rs.30,000/- and a sum of Rs.5,000/- was given as advance. The remaining amount was to be paid before 31st July, 1974. As the said amount was not paid, the owner again sold the suit property to another party (appellant) on 5th May, 1975 for a sum of Rs.45,000/- and possession of the suit property was handed over to the appellant therein. Thus, the first purchaser filed the suit for enforcement of the specific performance of the contract. The trial court dismissed the Suit holding that the agreement was genuine and appellant was a bona fide purchaser for value paid in good faith, without notice of the earlier agreement, therefore, no decree for specific performance could be passed in favour of the plaintiff therein. The First Appellate Court reversed the said judgment and decree. The Second Appeal was dismissed by the High Court. This Court considered the provisions of Section 52 of the Act, 1882, and Section 19 (b) of the Act, 1963, and held that as the subsequent sale was subsequent to the filing of the Suit, Section 19(b) of the Act 1963 read with Section 52 of the Act, 1882, could not grant any benefit to the subsequent purchaser and the subsequent sale was subject to the doctrine of lis pendens. Second sale could not have the overriding effect on the first sale. The Court held as under: "So far as the present case is concerned, it is apparent that the appellant who is a subsequent purchaser of the same property, has purchased in good faith but the principle of lis pendens will certainly be applicable to the present case notwithstanding the fact that under Section 19(b) of the Specific Relief Act his right could be protected."

13. In view of the above, it is evident that doctrine of lis pendens would apply in the present case as the registration of the sale deed was subsequent to filing of the Suit and subsequent purchasers i.e. respondent Nos. 2 to 6 cannot claim benefit of the provisions of Section 19(b) of the Act, 1963.

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