Applicability of Doctrine of Lis Pendens – An Analysis of the Recent Supreme Court Judgment in Chander Bhan (D) Through LR Sher Singh v Mukhtiar Singh

The recent Supreme Court decision in Chander Bhan (D) Through LR Sher Singh v Mukhtiar Singh, 2024 INSC 377 has brought renewed attention to the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882. The case primarily revolved around the sale of immovable property during the pendency of a suit, which led the court to delve into the doctrine’s applicability in protecting the interests of parties involved in pending litigation.

The doctrine of lis pendens stems from Section 52 of the Transfer of Property Act, 1882. It states that any transfer of immovable property during the pendency of a suit affecting the property shall not affect the rights of the other party, unless the court has granted permission for such a transfer. The essence of this doctrine lies in its equitable foundation, preventing a party from alienating property that is under dispute, thus ensuring that the final judgment of the court remains enforceable without being circumvented by third-party transfers.

The core objective of lis pendens is to maintain the status quo of the property in dispute. If parties are allowed to transfer property during litigation, it could potentially result in inconsistent court decisions and create multiple legal battles over the same property. The doctrine is based on equity, justice, and good conscience, ensuring that no party can frustrate the legal process by transferring disputed property to an outsider during the pendency of litigation.

In this case, the Supreme Court extensively analyzed the applicability of lis pendens and its relevance to the alienation of immovable property during ongoing litigation. The Court reaffirmed the position that the doctrine applies from the moment a suit is instituted and remains in force until a final decree or order is passed and executed.

The Court held that the alienation of the suit property by the respondents, even after obtaining a temporary injunction order in favor of the appellant, was covered by the doctrine of lis pendens. The temporary injunction order dated 28.07.2003 prevented the transfer of the property, yet the respondents executed a release deed and sale deed subsequent to this order. The Supreme Court reiterated that the transactions made during the operation of the injunction order, or pendency of the suit, are legally invalid under the doctrine of lis pendens.

One of the significant legal observations made by the Court was the doctrine’s basis in justice, equity, and good conscience. Even though the Transfer of Property Act, 1882, may not strictly apply in certain jurisdictions (e.g., Punjab), the principles of lis pendens are universally applicable due to their equitable nature. The Court referenced the decision in Shivshankara and Another v. H.P. Vedavyasa Char (2023 SCC OnLine SC 358) to emphasize that where the Transfer of Property Act is not applicable, the equitable principles of lis pendens are still enforceable to prevent unfair alienation of disputed property.

The Court further cited previous judgments, including Rajendra Singh v. Santa Singh (AIR 1973 SC 2537) and Dev Raj Dogra v. Gyan Chand Jain (1981) 2 SCC 675, to underline that the doctrine of lis pendens is grounded in preventing multiplicity of suits and maintaining the integrity of court orders. The explanation to Section 52, inserted by Act No. XX of 1929, clarified that the pendency of a suit begins from the date of the plaint’s presentation and continues until the final decree is satisfied.

The respondents in this case sought protection under Section 41 of the Transfer of Property Act, which protects bonafide purchasers who acquire property from an ostensible owner for valuable consideration without knowledge of a dispute. However, the Supreme Court firmly rejected this defense. The Court held that even though respondents 1 and 2 claimed to be bonafide purchasers, the fact that the transfer was made during the pendency of the suit nullified this claim under lis pendens. Since the respondents were involved in the transaction while the temporary injunction was in place, they were bound by the principle of lis pendens regardless of their claim to being unaware of the ongoing litigation.

The judgment in Chander Bhan (D) Through Lr Sher Singh v Mukhtiar Singh serves as a clear reminder that the doctrine of lis pendens serves as a safeguard to ensure that litigation is not rendered futile by alienation of property under dispute. This ruling also reinforces the fact that courts will not entertain claims of bonafide purchaser status under Section 41 if the transfer occurs during the pendency of a suit. Further, it affirms that equitable principles such as lis pendens have a universal application even in regions where the Transfer of Property Act may not be strictly applicable.