Section 52 Of TPA Does Not Bar The Applicability Of Principles Of Pending Suit (Lis-Pendens)

In common usage, lis pendens refers to a pending legal action. Section 52 of the TPA establishes the lis pendens doctrine, which states that if any immovable property is transferred while litigation is continuing, the parties' rights to the immovable property are unaffected. The conclusion of the litigation, as determined by a court of competent jurisdiction, in the matter in which the transfer occurred, would be binding on any purchaser who purchased the property during the pending litigation.

Legal Provisions:

Under Section 52 of the Transfer of Property Act, 1929, the doctrine of lis pendens was incorporated. This means that property cannot be transferred or otherwise dealt with by any party to the suit or proceeding to affect the rights of any other party thereto under any decree or order which may be made therein, unless under the authority of the court. This applies to non-collusive proceedings in which any right to immovable property is directly and specifically in question.

The term lis pendens means "pending suit," and the doctrine of lis pendens has been described as the jurisdiction, power, or control that a court gains over property involved in a suit during the continuation of the action and until final judgment.

Supreme Court Judgment

The present case arose in the state of Punjab, where the appellant and respondent No. 3 entered into a sale agreement. When it became clear to the appellant that respondent no.3 intended to transfer the subject matter property in favor of others, the appellant sought a permanent injunction from the trial court preventing respondent no.3 from doing so.

Despite the implementation of the injunction against respondent No. 3, he alienated the property.

Respondent no.3 maintained that the lis-pendens principles contained in Section 52 of the TPA would not apply because, under Section 1 of the TPA, the provisions of the said Act are not applicable in the States of Punjab, Delhi, or Bombay, subject to specific exceptions.

Section 52 of the TPA contains the notion of lis pendens, which is used to maintain a status quo that cannot be altered by the actions of any party involved in an ongoing dispute. The goal is also to discourage parties from engaging in duplicate proceedings in several forums. The principle is founded on fairness and good conscience.

The court explained that for the lis-pendens concept, the pendency of a suit is presumed to have begun on the date on which the plaintiff presents the claim. Furthermore, the pendency would last until a final decree is passed and carried out. In short, even if Section 52 of the T.P Act is not strictly relevant in the current case (State of Punjab), the principles of lis-pendens, which are founded on justice, equity, and good conscience, would undoubtedly apply.

Given that the appellant filed the complaint for a permanent injunction on July 21, 2003, and the property was alienated by respondent no.3 on July 28, 2003, the pendency of the suit, i.e., lis, would be regarded to have begun on July 21, 2003. As a result, because the claim was filed before the alienation occurred, the court determined that the alienation could not be used against the appellant because the injunction order against respondent no.3 had been enforced.

As a result, respondent no. 3's Release Deed dated 28.07.2003 on behalf of respondent no. 4, as well as respondent no. 4's Sale Deed dated 16.06.2004 in favour of respondents 1-2, are declared invalid. At the time these transactions were completed, there was a temporary injunction in effect, and the respondents' alienation could not have harmed the appellant. Because the parties to these actions are bound by the law of lis pendens, respondents 1-2 cannot seek the protection of bona fide purchasers for valuable consideration," the court stated.

Based on the foregoing, the court granted the appeal and reversed the High Court's decision, directing respondent no. 3 to accept the appellant's remaining sale consideration of Rs.5,50,000 and execute the agreement to sell dated 10.11.2002 in favour of the appellant within three months of the date of judgement.

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