Doctrine of lis pendens As applied in pakistan

DOCTRINE OF LIS PENDENS DOCTRINE OF LIS PENDENS AS APPLIED IN PAKISTAN By Sardar Amanullah Khan Niazi, Advocate It has long been the doctrine of tire Courts, both in equity, and at common law, that during the pendency of a suit respecting lands any alienation of the lands must be subject to the decision in the suit. In other words, "pendente lite neither party to the litigation can alienate the property in dispute so as to affect his opponent". The law does not allow litigant parties to give to others, pending the litigation, rights to the property in dispute so as to prejudice the opposite‑party. This is called the doctrine of lis pendens (See PLD 1987 Azad J&K 139, PLD 1988 Kar. 58, 1990 CLC 366, PLD 1995 Lah. 255 and Goodeve's Modern Law of Real Property, 3rd Edition, p.102). Section 52 of the Transfer of Property Act, 1882 incorporates the doctrine of lis pendens. The leading case on the subject is that of Bellamy v. Sabine (1857) I De G. and J.566)/(44 English Reports (Chancery) 842) and the following observations of Lord Turner are often cited as laying down the principles of doctrine of lis pendens: "The doctrine of lis pendens is not, as I conceive, founded upon any of the peculiar tenets of a Court of equity as to implied or constructive notice. Iris., as I think, a doctrine common to the Courts, both of law and of 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 lite were permitted to prevail. The plaintiff would be liable in every case by the defendant's alienating before the judgment or decree, and would be driven to commence his proceeding de novo subject again to be defeated by the same course of proceeding." This dictum was quoted with approval by Straight and Broadhurst, JJ, in Dammer v. Nazir‑ud‑Din (Weekly Notes 1889, p.92). In the same afore‑quoted leading English case Lord Cranworth observed: "Where a litigation is pending between a plaintiff and a defendant as to the right of a particular estate, the necessities of mankind require that the decision of the Court in the suit should be binding not only on the litigant parties but also on those who derive title under them by alienations made pending the suit, whether such alienees had not any notice of the pending proceedings. If this were not so there could be no certainty that the litigation would ever come to an end. A mortgage or 'sale made before final decree to a person who had no notice of the pending proceedings would 'always render a new suit necessary and so interminable litigation might be the consequence". These observations were cited by Lord Macnaghten in the Privy Council's case of Faiyaz Hussain Khan v. Prag Narain and others [(1907) 29 All. 339/34 IA 102] and by Chandavakar and Aston, JJ., in a Bombay case. (Bombey Law Reports, Vol.5, p.22) with approval. In M/s. Aman Enterprises v. M/s. Rahim Industries Ltd. and another (PLD 1993 SC 292) the respondent No. 1 entered into an agreement on 16‑10‑1978 with the appellant for the sale of their factory building for a sum of Rs. 4,75,000 and received Rs. 10,000 by way of earnest money. The parties, in the meantime, accused each other of violating the said agreement. Ultimately, the appellant filed a suit for specific performance of the agreement. During the pendency of the suit. respondent No. 1 sold the factory building to respondent No.2. Before the Hon'ble Supreme Court it was contended on behalf of respondent No.2 that it was not aware of the agreement of 16‑10‑1978 between respondent No. 1 and the appellant when it purchased the factory building. Subsequently, stated respondent No. 2, it made huge investments amounting to more than Rs.2 crores. The Hon'ble Supreme Court said; "This contention is without any merit. The rule of lis pendens is fully applicable in this case as respondent No. 2 purchased the factory building during the pendency of the suit .... ... ... ... .. There is hardly any equity in its favour" . The doctrine of lis pendens, as enunciated in section 52 of the Transfer of Property. Act, applies to alienations sometimes called voluntary alienations. Needless to point out that section 52 of the Transfer of Property Act, 1882 is not exhaustive. Knox and Aikman, JJ. after holding that the provisions of section 52 of the Transfer of Property Act did not apply to the facts of the case before them remarked as follows: "But this will not dispose of the case, for it may be governed by the doctrine of lis pendens even though section 52 has no application (A.W.N. 1900, p.200/S.C. 23 All. 60).." Now in the light of the above, another question arises: Will the result be different if the property, instead of being voluntarily transferred by B, is sold by a Court in execution of a money decree against B and purchased by C whilst A's appeal is pending? In. other words, whether the doctrine of lis pendens, as applied in Pakistan, is at all applicable to sales by Courts in execution of decrees? For an instance, a decree‑holder who held a simple money decree applied for its execution and got attached certain immovable property as belonging to the judgment‑debtor. A third person (claimant) preferred a claim to the property attached and thereupon the property was released from attachment. The decree‑holder then instituted a regular suit (against the claimant) to establish his judgment‑debtor's right to the property and for a declaration that the said property was liable to attachment and sale in the execution of his own decree. This suit was decreed. The defendant (claimant) thereupon appealed and during the pendency of the appeal applied for the temporary injunction restraining the decree‑holder from putting the property to sale. A Division Bench of the Allahabad High Court composed of Knox and Aikman, JJ:, declined to grant the temporary injunction asked for (in re: Chando Bibi, A.W.N. 1904, page 37). In coming to this decision the learned Judges overruled an earlier decision of the same High Court in re: Kirpa Dayal v. Rani Kishori (ILR 10 All. 80) and preferred to follow an unreported decision of Burkitt, J., who had taken a similar view before. As necessary result of Chando Bibi's decision, it would follow that where a decree‑holder attaches immovable property as belonging to his judgment‑debtor and a claimant, say C, agitates the matter by way of an objection with the result that his (claimant C's) claim is disallowed. If, then, C brings a regular suit in a Civil Court, this Court, on the authority of Chando Bibi's case will refuse to grant a temporary injunction to stay the sale, should C apply to have the sale stayed pending the disposal of the suit. Where such is the case, questions as to the rights of a bona fide purchaser against a successful claimant or vice versa are bound to arise and our Courts will be called upon to decide some very nice questions of law as to the effect of the sale upon the right, title and interest of the claimant on the one hand and as to the effect of a successful termination of the claimant's suit upon the rights acquired by a bona fide purchaser at the sale. It would be by no means an unprofitable study to inquire what would happen if, pending the appeal in Chando Bibi's case just quoted above, two things crop up: (i) If the property is sold by the Court in execution of the decree and is purchased by a stranger (a bona fide purchaser). (ii) If the appeal is decreed and the right of the claimant is established. Suffice it to refer and allude in this regard to two Privy Council decisions‑‑Rewa Mahton v. Ram Kishen (ILR 14 Cal. 18) and Zain‑ul‑Abdin v. Muhammad Asghar (ILR 10 All. 166). Lastly, even though section 52 of the Transfer of Property Act, 1882 was not. in force in the Province of Punjab, yet in Moot Chand arid others v. Ganga Jal and others (AIR 1930 Lahore 356) a Full Bench of the Lahore High Court held that the principles underlying the provision were applicable to the Province. In this regard, see also PLD 1957 Lah. 1054 and PLD 1973 Lah. 546. Needless to say that the principle of lis pendens is fully applicable in respect of suits for specific performance as held in Mst. Jhandi v. Syed Baqir Ali Rizvi and another 1987 CLC 459.