The doctrine of lis pendens, as stipulated in Section 52 of the Transfer of Property Act, 1882, will commence to operate from the instant a petition is filed in the court, rather than at the stage when notice is issued by the court.
In the Judgment rendered in the review of the renowned Katta Sujatha case (2022), the Supreme Court addressed the doctrine of lis pendens.
The lis pendens issue arose when the property was sold after the 2022 judgment. The respondents contended that the property was sold prior to the registration of the review petition.
On 23 September 2022, the petitioner filed a review petition against the judgment of this Court dated 25 August 2022. The review was filed within thirty days, the prescribed period of limitation in terms of Order XLVII Rule 2 of the Supreme Court Rules 2013. On 14 October 2022, the Registry sent a letter to the petitioner asking him to cure defects. On 11 November 2022, the petitioner cured the defects. On 13 December 2022, the review petition was registered. On 27 January 2023, the counsel for the petitioner sought six weeks to bring some documents on record. On 1 March 2023, the matter was listed before a three-Judge Bench of Justice Krishna Murari, Justice Hima Kohli and one of us (Justice DY Chandrachud). The matter was not taken up. By an order dated 31 August 2023, Justice D Y Chandrachud allowed the application for listing the review petition in open court and issued notice, returnable in six weeks. Justice Hima Kohli did not agree and was of the view that the review petition be dismissed. Justice Narasimha who was the third member of the Bench recused from the matter for personal reasons. Subsequently, Justice Manoj Misra was nominated as the third member of the Bench. By an order dated 26 September 2024, notice was issued in the review petition.
The Apex Court has observed that
Section 52 of the Transfer of Property Act 1882 states that during the pendency in any court of any suit in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceedings. The explanation to the provision states that for the purposes of the Section, the pendency of a suit or proceedings shall be deemed to commence from the date of the presentation of the plaint or institution of the proceeding in a Court, and shall continue until the suit or proceeding is disposed by a “final decree or order” and complete satisfaction of the order is obtained, unless it has become unobtainable by reason of the expiry of any period of limitation.
Consequently, the Apex Court has established the following conditions that must be met for the doctrine of lis pendens to be applicable:
a. There must be a pending suit or proceeding;
b. The suit or proceeding must be pending in a competent court;
c. The suit or proceeding must not be collusive;
d. The right to immovable property must be directly and specifically in question in the suit or proceeding;
e. The property must be transferred by a party to the litigation; and
f. The alienation must affect the rights of any other party to the dispute.
Based on an analysis of the precedents “Bellamy v. Sabine,” “Jayaram Mudaliar v. Ayyaswami,” and “GT Girish v. Y Subba Raju,” the Apex Court observed that
“The purpose of lis pendens is to ensure that the process of the court is not subverted and rendered infructuous. In the absence of the doctrine of lis pendens, a defendant could defeat the purpose of the suit by alienating the suit property. This purpose of the provision is clearly elucidated in the explanation clause to Section 52 which defines “pendency”. Amending Act 20 of 1929 substituted the word “pendency” in place of “active prosecution”. The Amending Act also included the Explanation defining the expression “pendency of suit or proceeding”. “Pendency” is defined to commence from the “date of institution” until the “disposal”. The argument of the respondents that the doctrine of lis pendens does not apply because the petition for review was lying in the registry in a defective state cannot be accepted. The review proceedings were “instituted” within the period of limitation of thirty days. The doctrine of lis pendens kicks in at the stage of “institution” and not at the stage when notice is issued by this Court. Thus, Section 52 of the Transfer of Property Act would apply to the third-party purchaser once the sale was executed after the review petition was instituted before this Court. Any transfer that is made during the pendency is subject to the final result of the litigation.”
Party
M/s Siddamsetty Infra Projects Pvt Ltd v. Katta Sujatha Reddy and Others – Review Petition (C) No. 1565 of 2022 in C.A. No. 5822 of 2022 – 2024 INSC 861 – November 08, 2024 – 3 judge bench
https://api.sci.gov.in/supremecourt/2022/30567/30567_2022_1_1504_56986_Judgement_08-Nov-2024.pdf
