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Report No. 157

2.8. The principle is, therefore, based not on the doctrine of notice, but on expediency, that is, the necessity for final adjudication. It is quite reasonable that when the jurisdiction of the Court once attached, it should not be ousted by the transfer of the defendant's interest. If that were not so, there would be no end to litigation and justice would be defeated.1 In the following case, however, it has been said that the principles contained in this section are in accordance with the principle of equity, good conscience or justice because they rest upon an equitable and just foundation. There-le.2

1. Jahar Lal Butra v. Bhupendra Nath, (1992) 49 Cal 495 : 67 IC 108: 1922 AC 412.

2. Govind Pillsi v. Aiyyapan Krishnan, AIR 1957 Ker 10 (11).

2.9. While considering the true import of lis pendens in relation to the principle of res judicata, Bhagwati, J. in Digambararao v. Rangarao, AIR 1949 Born 367, observed as follows:-

"Res judicata means a matter adjudicated upon or a matter on which judgment has been pronounced. The rule of res judicata has been put on two grounds, the one the hardship to the individual that he should be vexed twice for the same cause, and the other, public policy, that it is in the interest of the State that there should be an end of litigation; (See Lockyer v. Ferryman, 1877-2 AC 519). The rule is based on this principle that the cause of action which would sustain the second suit does not any more survive, it being merged in the judgment of the first.

It is well-established that every suit has got to be sustained by a cause of action, and if by the decision reached in the first suit, meaning thereby a previously decided suit, the cause of action no more survives, being merged in the judgment, where could be the cause of action left which would sustain the second suit after the decision was reached in the first suit? Up to the time the decision was reached in the first suit it would be possible to say that there is a cause of action which could sustain both the suits. The suits are pending and the cause of action can be litigated between the contending parties.

Once, however, the cause of action ceases to exist being merged in a judgment duly pronounced by a Court, the decision reached in that suit becomes res judicata. The cause of action which till then sustained the second suit does not survive any more and no court after such decision has been reached by a competent court in the previously decided suit would under the provisions of section 11, C.P.C. or otherwise on general principles try any suit in which the same cause of action is contested between the same parties or parties under whom they or any of them claim litigating under the same title lis pendens is an action pending and the doctrine of lis pendens is that an alienee pendente liteis bound by the result of the litigation. As Turner, L.J. said in the leading case of Bellamy v. Sabine, (1857) 1 De G&J 566 (578) (584): 26 LJC 797:.

'It is, as I think a doctrine common to the courts both of Law and Equity, and rests, as I apprehend, upon this foundation, that it would plainly be impossible that any action or suit could be brought to a successful termination, if alienations pendente litewere permitted to prevail. The plaintiff would be liable in every case to be defeated by the defendant's alienating before the judgment or decree, and would be driven to commence his proceedings, de novo subject again to be defeated by the same course of proceeding.'"

The Privy Council also has adopted the same principle in Faiyaz Husain Khan v. Prag Narain, 29 All 339: 34 IA 102 PC, where they lay stress on the necessity for final adjudication and observe that otherwise there would be no end to litigation and justice would be defeated. The doctrine of lis pendens is expounded in Story's Equity Jurisprudence Vol. 1, section 406 in the following terms:

"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, pendente 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 if it never had any existence; and it does not vary them."

It is also settled law that in the absence of fraud or collusion the doctrine of lis pendens applies to a suit which is decided ex parte or by compromise. If the compromise has not been fairly and honestly obtained, the suit which ended in compromise will not operate as lis pendens. This is the doctrine of lis pendens. These principles are quite clear, and we have got to determine whether in the event of a conflict arising between the rule of res judicata and the doctrine of lis pendens either the one or the other should prevail. As has been observed before, the rule of res judicata rests on the necessity of having a finality in litigation, and so does the doctrine of lis pendens.

Both have the same end in view, the former that as between the same parties, or their representatives-in-interest litigating under the same title, once the decision is reached in a suit, the same question shall not be canvassed in any other suit, and the latter that whatever the party may choose to do by way of transfers pendente lite, the transferee pendente liteshall be bound by the result of the litigation. There is, however, this difference between the two that the rule of res judicata is concerned with more actions than one, whereas the doctrine of lis pendens is concerned with the very same suit during the benoency of which there is an alienation of the right title and interest of one of the parties thereto.

In the case of res judicata the same cause of action may sustain various actions simultaneously, but once the cause of action is merged in the judgment pronounced in a previously decided suit. There is no cause of action left to sustain the second suit. In the case of lis pendens however the cause of action continues as it was sustaining the suit which has been filed for the adjudication of the rights of the various parties thereto and the doctrine applies during the pendency of that suit sustained on that cause of action.

Whatever be the transfers pendente litethey do not affect the result of the litigation qua the parties to the suit and the transferee pendente liteis bound by the result of that litigation, irrespective of whatever was happened between his transferor and himself. Once, however, even in the case where the doctrine of lis pendens applies a judgment is pronounced and the cause of action is merged in the judgment that judgment is the final pronouncement which binds not only the parties to the suit but also the transferees pendente lite from them. The conveyance is treated as if it never had any existence.

As Story has put it in the passage above quoted the effect of it is not to annul the conveyance but only to render it subservient to the rights of the parties in the litigation. Whether this decision is reached in the same suit or in a different one and whether the cause of action which sustained the suit in which the doctrine of lis pendens applies was merged in the judgment pronounced in the very same suit or in another one, the position would be that decision would determine the rights of the parties and would be binding on them as well as the transferees pendente lite from them.

The transferee pendente lite would be legitimately treated as the representative-in-interest of the parties to the suit and the judgment which has been pronounced, whether in the same suit or in another, would be determinative of the rights of the parties. There would be then no lis or action which would survive. The lis or action can only be sustained by a cause of action. If the cause of action was merged in a judgment duly pronounced by a competent court there would be no more occasion for any lis to continue pending.

If a judgment duly pronounced on that particular cause of action was to merge the cause of action in itself, that judgment would govern the rights of the parties, whether it is pronounced in the same suit in which the doctrine of lis pendens applies or in any other. If it is in the same suit, there would be no question of the applicability of the rule of res judicata. The rule of res judicata would come into operation only if it was pronounced in another suit which came to be decided earlier than the one in which the doctrine applied.

But once that judgment was pronounced it would have the effect of finally determining the rights of the parties and the cause of action which would sustain the suit in which the doctrine of lis pendens applied would be merged in the judgment duly pronounced in what may be described as the previously decided suit. In our opinion, therefore, the rule of res judicata prevails over the doctrine of lis pendens and we have come to the conclusion that once a judgment is duly pronounced by a competent court in regard to the subject-matter of the suit in which the doctrine of lis pendens applies, that decision is res judicata and binds not only the parties thereto but also the transferees pendente lite from them."

2.10. In Simla Banking Industrial Co. Ltd. v. Firm Luddar Mal, (AIR 1959 Punj 490), Tek Chand, J., said:

"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...."

2.11. From the analysis of the aforementioned decisions of different courts on the subject, it would appear that the doctrine of lis pendens, as Turner, L.J., observed in Bellamy's case, supra, is a principle of law common to both the courts of law and equity which mandates from the point of view of expediency that suit or proceeding once instituted should be brought to a logical termination. It would be impossible to achieve this purpose if alienations pendente lite are permitted to prevail. Since the principle is based on expediency, that is, the necessity for final adjudications, it would bring about frustrating results in the administration of justice if the alienations pendente lite are allowed.

The principle, thus, is in accordance with the principle of equity, good conscience and justice. As stated by the Kerala High Court in Govinda Pillai's case, supra, since the principle rests upon an equitable and just foundation, it will apply even in the absence of law. Since there seems to be utmost relevance and need of the principle in the administration of justice, it may be difficult to entirely dispense with the same. Nevertheless, we are of the view that in the interests of justice, that is, to bring about equitable results, if certain conditions such as registration of the notice of suit or proceeding are set out as a pre-requisite for the applicability of the principle, it may not run counter to the basic spirit of the doctrine of lis pendens. We propose to discuss this aspect in the subsequent Chapter III.



Section 52 of the Transfer of Property Act, 1882 and its Amendment Back




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