TRANSFER OF PROPERTY

FINAL PROJECT SUBMISSION

ANALYSIS OF 157TH LAW COMMISSION REPORT

SUBMITTED BY

SHREYA GHOSH DASTIDAR (16010323154)

DIVISION- B

SEMESTER V

BATCH- 2016-21

IN

SEPTEMBER, 2018

Under the guidance of

PROF. SHRISHTI KHARE

Symbiosis Law School, Hyderabad

Symbiosis International Deemed University, PUNE

 CERTIFICATE

This research project titled “ANALYSIS OF THE 157TH LAW COMMISSION REPORT” is
submitted to Symbiosis Law School, Hyderabad as a part of our “The Transfer of Property”
Project assessment carried out under the guidance of Prof. Shrishti Khare (Professor Transfer
of Property), Symbiosis Law School, Hyderabad from July to November, 2018.

The material from other sources and incorporated in these has been duly acknowledged. I
understand that I myself can be held responsible and accountable for plagiarism, if any detected
later on.

SIGNATURE OF THE CANDIDATE:

DATE: 15/09/2018
 ACKNOWLEDGEMENT

In performing my assignment, I had to take the help and guideline of some respected persons,
who deserve my greatest gratitude. The completion of this assignment gives me much Pleasure. I
would like to show my gratitude towards SYMBIOSIS LAW SCHOOL HYDERABAD for
giving us a good guideline for assignment throughout numerous consultations. I would also like
to expand my deepest gratitude to all those who have directly and indirectly guided me in writing
this assignment.

In addition, a thank you to Professor Shrishti Khare who introduced me to the Methodology
of work, and whose passion for the “underlying structures” had lasting effect.

Many people, especially our classmates and everyone who has directly or indirectly, have made
valuable comment suggestions on this proposal which gave me an inspiration to improve my
assignment. I thank all the people for their help to complete my assignment.
Aims and Objectives:
The aim of the project is to present a brief analysis on the 157 th Law Commission Report which
introduced the concept of the “DOCTRINE OF LIS PENDENS”, through decisions, statutes,
amendments, suggestions and different writings and articles.

Scope and Limitations:

Though this is an immense project and pages can be written over the topic but because of certain
restrictions and limitations I was not able to deal with the topic in great detail.

Sources of Data:
The following secondary sources of data have been used in the project-
1. Articles
2. Books
3. Websites

Method of Writing:
The method of writing followed in the course of this research paper is primarily
analytical.
 INTRODUCTION

Law Commission of India is an executive body. It is established through an order of the

Government of India. Its core function is to reform laws, comprises of legal experts assigned by
the government to take good care of the laws, and create maximum peace, security and justice in
the society. It also acts as an advisory body to the Ministry of Law and Justice. The tenure of
each Law Commission is five years. The 157 th law commission report discussed about section
52 of the transfer of property act and its amendments. Section 52 briefly states the concept of the
doctrine of Lis Pendens. Although, in this report, also some important matters regarding the act
were also discussed like recognising the need to recognise a man’s right to property, recognition
of subsequent dispositions. In this report, the importance of the right to property was discussed in
regard to the Constitution following the discussion on the procedure and jurisdiction of
machinery for resolution of dispute and then, the concept of Lis pendens was introduced. In
current practice, a lis pendens is a written notice that a lawsuit has been filed concerning real
estate, involving either the title to the property or a claimed ownership interest in it. The notice is
usually filed in the county land records office. Recording a lis pendens against a piece of
property alerts a potential purchaser or lender that the property’s title is in question, which makes
the property less attractive to a buyer or lender. After the notice is filed, anyone who nevertheless
purchases the land or property described in the notice takes subject to the ultimate decision of the
lawsuit.

SECTION-52 OF THE TRANSFER OF PROPERTY ACT: THE

DOCTRINE OF LIS PENDENS

Provisions of section 52: The doctrine of lis pendens as laid down in Section 52 is as follows:

 During the pendency of a suit or proceeding.

 Property cannot be transferred or otherwise dealt with, and
 If so transferred, the transferee is bound by the decision of the Court whether or not he
had notice of the suit or proceeding.
The law incorporated in Section 52 of the transfer of property act is based on the doctrine of Lis
pendens. The word ‘Lis’ means ‘litigation’ and ‘Pendens’ means ‘pending’. So, the literal
meaning of the word Lis Pendens is ‘pending litigation’. The doctrine of Lis Pendens is
expressed in the well-known maxim: Pendente Lite Nihil Innovature, which means during
pendency of litigation, nothing new should be introduced. According to this doctrine, the
principle is that during pendency of any suit regarding title of a property, no new interest in
respect of that property should be created. Creation of new title or interest is known as transfer of
property. Therefore, for the essence, the doctrine of lis pendens restricts and prohibits the
transfer of property related to pending litigation. It is a very old doctrine and has been operating
in the English Common Law. According to this doctrine, the judgements in the immovable
properties were regarded as overriding any alienation made by the parties during pendency of
litigation.

Basis of Lis Pendens:

The basis of the doctrine Lis pendens is ‘necessary’ rather than actual or constructive notice. It
may be considered that this doctrine is based on notice for the reason that a pending suit is
regarded as constructive notice of the fact of disputed title of the property under litigation.In that
case, any person dealing with the property which is related to that pending litigation, must be
bound by the decision of the Court. For administration of justice, it is essential that while any
suit is still pending in a Court of law regarding the title of a property, the litigants should not be
allowed to take a decision by themselves regarding the transfer that disputed property. At the
time when a litigation is already pending the necessities of judicial functioning would definitely
require the fact that the decision of the Court should be honoured and be made binding not only
on the parties but also on all such persons deriving title under them by alienation made by any
one of them pending litigation. With no govern restricting or, prohibiting the transfer pending
litigation, all suits in regards to particular property ought to be rendered meaningless by
successive alienations making it relatively impracticable for any individual to settle his rights in
property through the procedure of law.

The Indian Courts have additionally taken the view that the basis of Section 52 isn't the doctrine
of notice, it actually is a doctrine of convenience i.e. the necessity for final adjudication and
public policy. It has been held that "establishment for the doctrine of lis pendens does not rest
upon notice, real or constructive; it rests exclusively upon necessity—the necessity that either
party to the case should alienate the property in dispute to influence his adversaries. In the case
of Rejendar Singh v. Santa Clause Singh, the Supreme Court has said that the principle of Lis
Pendens is proposed to strike at endeavours by parties to a suit to curtail the jurisdiction of the
Court by private dealings which may evacuate the topic of prosecution from the intensity of the
Court to choose a pending dispute and disappoint its decree.

Since the Courts in India regard ‘essential’ as the basis of the doctrine of lis pendens, it is
completely irrelevant whether the transferee had any notice of pendency of suit or not. The
transferee is bound by the decision of the Court regardless of whether he had no actual or
constructive notice of the pending suit.

ESSENTIAL CONDITIONS FOR APPLICATION OF SECTION 52

Following conditions are necessary for the application of the doctrine of lis pendens as provided
in Section 52:

 There is a pendency of a suit or proceeding.

 The suit or proceeding must be pending in a Court of competent jurisdiction.
 A right to immovable property is directly and specifically involved in the suit.
 The suit or proceeding must not be collusive.
 The property in dispute must be transferred or otherwise dealt with by any party to suit.
 The transfer must affect the rights of the other party to litigation.

When the above-mentioned conditions are fulfilled, the transferee is bound by the decision of the
Court. If the decision of the Court is in favour of the transferor, the transferee has rights in the
property transferred to him. If the decision goes against the transferor, the transferee cannot get
any interest in the property.
 RECOMMENDATIONS OF THE COMMISSION

 In regards to section 52 of The Transfer of Property Act

1. If during pendency in any court having authority within the limit of India excluding
the state of Jammu and Kashmir or established beyond such limit as per by the
direction given by the central government , of any suit or proceedings which is not
converting and in which any right to immovable property is directly and specifically
in question and the notice of pendency of such suit or proceeding containing the
particular specified in sub section 2 is registered under sec 18 of the Indian
Registration Act 1908 within a period of 90 days from the date of institution of the
suit or proceedings in the case of plaintiff or petitioner or from the date of the
knowledge of the pendency thereof in the case of any other party, as the case may be
then , after the notice is so registered the property cannot be transferred or otherwise
can be dealt by any other party who is a party to the suit or proceeding which can
affect the rights of any other party without any decree or order or any other directions
given by the court.
2. It must also be taken into notice the above mentioned period of 90 days no parties
shall have any right of transfer or otherwise deal with the property which can effect
the right of any of the party to the suit or proceedings under any decree nor order
which may be made therein
3. Nothing in sub section 1 of section 52 shall effect section 64, 74 and order XXI rule
102 of the Code of Civil Procedure 1908
4. The pendency of the suit or proceedings shall be deemed to commence on and from
the date of the presentation of plaint or institution of the proceeding in a court of
competent jurisdiction and to continue until the suit or the proceedings have been
disposed of by a final decree or order and complete satisfaction or discharge f such
decree or order has been obtained and has been expired by any period of limitation
prescribed for the execution b y any law for the time being in force
5. Every notice of the pendency of the suit or proceedings referred to in sub section 1
shall contains these followings particulars
  The name and address of the owner of the immovable property opr of other
peon whose right to the immovable property is in question
 The description of that immovable property which is in question
 The court in which the suit is in proceedings
 The nature and title of the suit or proceeding
 The date on which the suit was instituted
6. The provision of sub section shall also apply to any transfer or other dealing with the
immovable property affected by a party to the suit or proceeding in favour of other
person who has actual knowledge of the pendency of such suit or proceedings even
where no notice has been registered.

IMPACT OF THE REPORT: EFFECT OF THE PRINCIPLES OF LIS

PENDENS

The doctrine of Lis pendens has been taken as constructive notice of the pending lawsuit, and it
serves to place a cloud on the title of the property in question until the suit is resolved and the
notice released or the lis pendens is removed. Lenders who are reputed and careful, will not lend
money on the security of land subject to a Lis pendens, as the title to such land will not be
insured by the title insurance companies: title is taken subject to the result or outcome of the
lawsuit. Since such amount of real property is purchased with borrowed money, this fact will
largely keep the owner from selling the property. It may also keep the owner from borrowing
more money secured by the property (for example, to pay the expenses of defending the suit).
Similarly, it’ll make careful buyers unwilling to purchase the land, at least not at a price
amounting the full value would be without the cloud on title.

It is important to note the fact that the presence of a Lis pendens in a property does not prevent or
essentially refute or, invalidate a transfer of the property, in spite of the fact that it makes transfer
of such kind, a subject to the outcome of the litigation. All things considered, it tends to frighten
away the diligent, reputable lenders and careful buyers. In this manner, the owner is not
prevented from selling the land for (non-borrowed) cash, pledging it as security for a speculative
loan, or giving it away—subject to the outcome of a lawsuit. However, once the Lis pendens is
recorded, the beneficiary (a "purchaser" or "grantee pendente lite") would be considered to have
notice of the case, and in this way would not be a true buyer, and the title may be regained.

While it is generally considered to be in connection with real properties such as land, buildings
etc, the doctrine of Lis pendens also applies to personal property. Frequently, Lis pendens
statutes just apply to genuine property, so the common-law doctrine probably still applies to
personal property.

At the point when the condition which are necessary for the applicability of this section are
fulfilled, the outcome is that the transferee is bound by the decision of the Court. For example, in
a suit between A and B regarding the title of a house if B transfers the house to C during
pendency and the judgement is subsequently in favour of B, then C would be entitled to the
property. But if in any case, the decree is passed against B, then it is binding not only on B but
also on C with the outcome that C cannot get the house. Under this section, C is not entitled to
take the plea that he had no notice of pending suit. It might be noticed that regularly
pronouncement of a Court ties just the gatherings to the suit. Be that as it may, under the rule of
Lis pendens, a man who buys during the pendency of the suit is likewise bound by the decree
made against that gathering from whom he had obtained.

The impact of Lis pendens is, in this manner, that it doesn’t prevent the vesting of title in the
transferee yet just makes it a subject to the rights of the parties as decided in the suit. Section 52
of Transfer of Property Act, therefore, does not invalidate the transfer but renders if subservient
or subject to the rights and privileges of the parties to litigation. The words containing “so as to
affect the rights of any other party thereto under any decree or order which may be made therein”
therefore, recommend the fact that the transfer pendente lite is valid and good to the extent that it
might conflict with rights established under the decree.

CONCLUSION
The main aim of the doctrine of lis pendis enshrined under section 52 of the transfer or property
act is to prevent the multiplicity of proceedings by disallowing the transferor or otherwise
dealing with the property which in in dispute or in other terms disputed property during the
pendency of a suit or proceedings. According to the commission this principle is a noble and
salutary one which is based on public policy and convenience as its purpose is to determination
of the matter finally. Section 52 plays an important and vital role in administration of justice. The
opinion of the veterans was that this particular section is important because it will prevent
unnecessary litigation as persons knows previously before the transaction occurs that his
property is in dispute they may not purchase the property. By the help of the proposed
amendment purchaser will be able to know about he disputed property which will give him a fair
chance to make a correct decision. The proposed amendment will help in the matter of finalizing
property without hampering the interest of the purchaser. By this there will be a decline in the
no. of cases of a subject matter like this as the buyer wil be aware about the history of the
property.The 157th law commission report not only recommends to ammend section 52 of the
transfer of property act but also recommended some changes in the registration act 1908.
Overall this report helped to serve justice to the people by making them more information about
the properties which portect their interest and in other way rounds curbs an increment in the
suits.