P L D 2011 Supreme Court 905
Transfer of Property Act (IV of 1882)---
----S. 52---Rule of lis pendens---Virtual and true object---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 purchaser, 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---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---Rule of lis pendens shall also be duly attracted and applicable during the period of limitation provided for an appeal or revision etc. to challenge a decree/order-If therefore an alienation of a suit property has been made by a party to the lis, who succeeds at one stage (such as trial), but the transfer is during the period of limitation available to the other (unsuccessful) party, to challenge that decision and ultimately the decree/order is over turned in its further challenge, such alienation made shall also be hit and shall be subject to the rule of lis pendens---Principles.
In the present case, from the contents of the pleading of the case, the plaint and the written statement it emanates that the dispute in effect is between two private parties, relating to the title of a property, which at the time of institution of the suit was a private property in nature, notwithstanding the fact that at an earlier point of time it was treated as an evacuee property and was accordingly transferred by way of auction. Therefore, in the context' of auction purchasers locus standi to file an application under section 12(2), C.P.C. the proposition, in the case is germane to the scope and application of section 52 of the Transfer of Property Act, 1882.
Section 52, Transfer of Property Act, 1882 manifestly embodies the rule of lis pendens, which is available both in equity and at the common law. The rule and 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 proper against any alienation made by either of the parties, of that property, during the pendency of the suit in favour of a third person. The rule unambiguously prescribes that the rights of the party to the suit, 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 purchaser, 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 nova 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 rests on necessity and expediency, that is, the necessity of final adjudication that neither party to the litigation should alienate the property so as to effect the rights of his opponent. If that was not so, there would be no end to litigation and the justice would be defeated.
The doctrine of "lis pendens" is that one who purchases from party pending suit a part or the whole of the subject-flatter 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.
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 intermediates 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.
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 res 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.
Ordinarily, it is true, that the decree of a court binds only the parties and their prives 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, pendents 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 it never had any existence; and it does not vary them.
However, the application of section 52, Transfer of Property Act, 1882 and the doctrine is circumscribed by certain conditions; (1) the suit must be relating to a specific immovable property in which any rights of the parties are directly and specifically in question (2) the suit should be pending at the time when the alienation in favour of the third person has been made (3) neither the suit itself nor the outcome thereof must be collusive, fraudulent and/or is meant to entrap, deceive, and defraud an innocent transferee specially a bona fide purchaser.
As per the clear wording of the Explanation to the section 52, Transfer of Property Act, 1882 when read as a whole, and especially by construing the expression "the suit or proceeding has been disposed of by a final decree or order" it undoubtedly means, that final verdict, which is given in an appeal or revision at the final level of the judicial hierarchy, which verdict has attained conclusiveness. Therefore, the rule of lis pendens shall also be duly attracted and applicable during the period of limitation provided for an appeal or revision etc. to challenge a decree/order.
If therefore an alienation of a suit property has been made by a party to the lis, who succeeds at one stage (such as trial), but the transfer isduring the period of limitation available to the other (unsuccessful) party, to challenge that decision and ultimately the decree/order is overturned in its further challenge, such alienation made shall also be hit and shall be subjectto the rule of lis pendens.
K, in the present case had sold the property to Y prior to the institution of the suit, therefore; if the latter was not impleaded as a party, and had made any transfer even during the pedency of the suit, such alienation would not have attracted lis pendens as being not a party thereto, but when the afore-named was arrayed as a defendant, from that point of time he shall for the purposes of section 52 be the party to the suit, and thus for all considerations thereof was the predecessor in interest of the appellants, notwithstanding the fact that Y who himself had purchased the property from him during the pendency of the suit was made a party to the suit or not. It is in this scenario that lis pendens shall be duly attracted and the bona fide purchasers shall have no locus standi to tile application under section 12(2), C.P.C. challenging the decree on account of any lapse in the impleadment of the defendants, and thus there was no question for the recording of the evidence on this issue. In any case, the bona fide purchasers would not acquire any independent right to challenge the said decree even on the score of being the bona tide purchaser, because the provisions of section 52 are not subservient to section 41 of the Transfer of Property Act, 1882 or section 27(b) of the Specific Relief Act, 1877 or the general - equitable concept of bona fide purchaser, rather section 52, Transfer of Property Act, 1882 and the rule of lis pendens is an exception to the above provisions/concept. And the bona tide purchasers could only sustain in their claim to challenge the decree on the basis of the three conditions of section 52 mentioned above.
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