AdvocateKhoj
Login : Advocate | Client
Home Post Your Case My Account Law College Law Library
    

Report No. 157

3.3. Scope of section 52 analysed.-

Analysing section 52, one can note its important ingredients, as under:

(a) The suit or proceeding should be one in which "any right to immoveable property is directly and specifically in question". (The section does not extend to suits concerning moveable property).

(b) The suit or proceeding should be pending in

(i) any court within India having authority; or

(ii) any court outside India established by the Central Government (This would be a court established under a statutory order issued by the

Central Government under legislation enacted in pursuance of Parliament's power to legislate on foreign jurisdiction).

(c) the suit or proceeding must not be collusive. Collusion in judicial proceeding is a secret arrangement between two persons that the one should institute a suit against the other in order to obtain the decision of a judicial tribunal for some sinister purpose. (Wharton's Law Lexicon, 14th Edn., p. 212). In such a proceeding, the claim put forward is fictitious, the contest over it is unreal, and the decree passed therein is a mere mask having the similitude of a judicial determination and worn by the parties with the object of confounding third parties.1

If these conditions are satisfied, then the effect would be, that a party to the suit or proceeding cannot transfer or otherwise deal with the property, so as to affect the rights of any other party thereto, except with the authority of the court and on terms imposed by the Court. Theoretically, every party to the suit is subject to the restrictive effect of section 52. In practice, however, it is the party against whom relief is claimed in the suit that would be the transferor.

1. Nagubai v. B. Shama Rao, AIR 1956 SC 593

3.4. Section 52 applies to transfers during the entire "pendency" of the suit or proceedings. The question then arises is for what period can a suit or proceeding be said to be pending for the purpose of this section. The question is to a great extent answered by the Explanation now added by the Amendment Act 20 of 1929, and the principle laid down in the Explanation has been applied as a rule of justice, equity and good conscious.

The Explanation under section 52 provides that for the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of presentation of the plaint or the institution of a proceeding in a court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a 'final decree or order and complete satisfaction or discharge of such decree or order has been obtained or has become unobtainable by reason of the expiration of any period of any limitation prescribed for the execution thereof by any law for the time being in force. This abundantly makes it clear that even appeals and execution proceedings are continuation of the pendency of the suit or proceeding within the meaning of the section and accordingly lis pendens continues to have force even during the appeal or execution also.

3.5. While considering the true import and scope of section 52 of the Act the Supreme Court in Jaynram Mudaliar v. Ayyaswami, AIR 1973 SC 569 (581), observed:

"It is evident that the doctrine as stated in section 52, applies not merely to actual transfers of right which are subject-matter of litigation but to other dealings with it "by any party to the suit or proceeding, so as to affect the right of any other party thereto". Hence, it could be urged that where it is not a party to the litigation but an outside agency, such as the tax collecting authorities of the Government, which proceeds against the subject-matter of 157.22 One Hundred and Fifty.seventh Report litigation, without anything done by a litigating party, the resulting transaction will not be hit by section 52.

Again, where all the parties which could be affected by a pending litigation are themselves parties to a transfer or dealings with property in such a way that they cannot resile from or disown the transaction impugned before the court dealing with the litigation, the court may bind them to their own acts. All these are matters which the court could have properly considered. The purpose of section 52 of the Transfer of Property Act is not to defeat any just and equitable claim but only to subject them to the authority of the court which is dealing with the property to which claims are put forward."

3.6. If one acquires property by way of transfer or otherwise pendente lite, he will be bound by the decree which may be ultimately obtained in the proceedings pending at the time of acquisition. This result is not avoided by reason of the earlier attachment. This was made clear by the Supreme Court in Kedarnath v. Sheonarain, AIR 1970 SC 1717 (1721), observing as follows:-

"Attachment of property is only effective in preventing alienation but it is not intended to create any title to the property. On the other hand, section 52 places a complete embargo on the transfer of immovable property right to which is directly and specifically in question in a pending litigation. Therefore, the attachment was ineffective against the doctrine. Authority for this clear position is hardly necessary but if one is desired it will be found in Moti Lai v. Karrab-ul-Din, (1897) 24 Ind App 170 (PC)."

3.7. Apart from doctrine of lis pendens under section 52 of the Transfer of Property Act, the subsequent purchaser does not get any right to lead any evidence as he steps into the shoes of the defendant who has given up the right to lead evidence (Dhanna Singh v. Baljinder Kaur, (1997) 3 SCALE 747 at 748). Defendants or any party is prohibited by operation of section 52 to deal with the property or transfer or otherwise to deal with it in any way affecting the rights of the other party except with the order or authority of the court. Alienation made during the pendency of the suit or proceeding would obviously be hit by the doctrine of its pendens by operation of section 52 (Sarvinder Singh v. Dalip Singh, 1996 (6) SCALE 59, para. 6).

3.8. The effect of the doctrine of lis pendens is not to annul the transfer, but only to render it subservient to the rights of the parties to the litigation. In other words, the section 52 in fact, does not have the effect of wiping out a transfer pendente lite altogether, but only subordinates it to the parties based on the decree to the suit. As between the parties to the transfer, that is, the transferor and the transferee, transfer of the title is perfectly valid, and operates to vest the title of the transferor in the transferee.

The words "so as to affect the rights of any other party thereto under any decree or order which may be made therein" make it quite clear that the transfer is good except to the extent that it might conflict with rights decreed under the decree or order [vide T. Bhup Narain Singh v. Nazvab Singh, AIR 1957 Pat 729 (731)]. A transfer or a dealing by a party to a suit during the pendency of the suit or proceeding is not, ipso facto void. It only cannot affect the rights of any other party to the suit under any decree or order that may be made in the suit or proceeding1.

1. Prabhakar v. Antonia, AIR 1971 Goa 42 (43). and Agarwal & Co. v. State of Rajasthan, 1985 RLW 676.

3.9. Thus, the effect of section 52 is not to wipe out a sale pendente lite altogether, but to subordinate the rights based on the decree in the suit. As between the parties to the transaction, however, it is perfectly valid and operates to vest the title of the transferor in the transferee. While considering and analysing the true effect of section 52 of the Transfer of Property Act on a sale pendente lite, the Supreme Court in Nagubai v. B. Sharma Rao, AIR 1956 SC 593 (602), concluded as follows:-

"(24) It was finally contended that the purchase by Devamma in execution of the decree in 0. S. No. 100 of 1919-20 was void and conferred no title on her, because the Official Receiver in whom the estate of Keshavanada, the mortgagor, had vested on his adjudication as insolvent on 19-2-1926 had not been made a party to those proceedings, and that, in consequence, the title of Dr. Nanjunda Rao and his successors under the sale deed dated 30-1-1920 continued to subsist, notwithstanding the court auction sale on 2-8-1928.

The obvious answer to the contention is that the properties which were sold on 2-8-1928 did not vest in the Official Receiver on the making of the order of adjudication on 19-2-1926, as they had been transferred by the mortgagor, long prior to the presentation of Insolvency Case No. 4 of 1925-26 under the very sale deed dated 30-1-1920 which forms the root of the appellants' title. That sale was no doubt pendente lite, but the effect of section 52 is not to wipe it out altogether but to subordinate it to the rights based on the decree in the suit.

As between the parties to the transaction, however, it was perfectly valid, and operated to vest the title of the transferor in the transferee. Under section 28(2) of the Insolvency Act, what vests in the Official Receiver is only the property of the insolvent, and as the suit properties had ceased to be his properties by reason of the sale deed dated 30-1-1920, they did not vest in the Official Receiver, and the sale held on 2-8-1928 is not liable to be attacked on the ground that he had not been impleaded as a party thereto.

(25) But it is argued for the appellants that having regard to the words in section 52 that pendente lite "the property cannot be transferred", such a transfer must, when it falls within the mischief of that section, be deemed to be non est, that in consequence Keshavananda must, for purposes of lis pendens, be regarded as the owner of the properties, notwithstanding that he had transferred them, and that the Official Receiver who succeeded to his rights had a right to be impleaded in the action.

This contention gives no effect to the words "so as to affect the rights of any other party thereto under any decree or order which may be made therein", which make it clear that the transfer is good except to the extent that it might conflict with rights decreed under the decree or order. It is in this view that transfers pendente lite have been held to be valid and operative as between the parties thereto.

It will be inconsistent to hold that the sale deed dated 30-1-1920 is effective to convey the title to the properties to Dr. Nanjunda Rao, and that at the same time, it was Keshavanada who must be deemed to possess that title. We are, therefore, unable to accede to the contention of the appellants that a transfer pendente litemust, for purposes of section 52 be treated as still retaining title to the properties."

3.10. It may be stated that the rule/principle enacted in this section is in a sense an extension of the rule of res judicata, and makes the adjudication in the suit binding on alienees from parties during the pendency of the suit, just as much as the doctrine of res judicata makes the adjudicating binding, not only on the parties themselves but also on alienees from them after the decree. It affects a purchaser pendente lite, not because it amounts to notice, but because the law does not allow a litigant party to give to others, pending the litigation rights,4o the property in dispute, so as to prejudice the opposite party.

If this were not so, there would be no certainty that the litigation would ever come to an end. Ordinarily, a decree binds only the parties to the suit, but he who purchases during the pendency of the suit, is bound by the decree, that may be made against the person from whom he derives the title. The litigating parties are exempted from the necessity of taking any notice of a title so acquired. As to them it is as if no such title existed. Otherwise, suits would be indeterminable, or which would be the same, in effect, it would be in the pleasure of one party at what period the suit should be determined.



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




Client Area | Advocate Area | Blogs | About Us | User Agreement | Privacy Policy | Advertise | Media Coverage | Contact Us | Site Map
powered and driven by neosys