Doctrine of lis pendens

The underlying principle governing the doctrine of lis pendens can be found in the judgment
of Lord Justice Turner in the leading case of Bellamy V Sabine which says – “It is, as I think,
a doctrine common to the courts of law and equity, and rests, as I apprehend, upon this
foundation – that it would plainly be impossible that any action should or could be brought to
a successful termination, if alienation pendente lite were permitted to prevail. The plaintiff
would be liable in every case to be defeated by the defendant’s alienating before the
judgement or decree, and would be driven to commence his proceedings de novo, subject
again to be defeated by the same course of proceedings”. The doctrine prohibits transfer of
title to an immovable property, unto a third party, during the pendency of a lis in which the
property in question is the subject matter of the lis. Any action in violation of this principle,
so as to affect the rights of a Plaintiff over a property in question in the lis, although not
makes it invalid, but it nevertheless makes it subservient to the rights of the Plaintiff,
provided he succeeds in the lis. If the Plaintiff fails in the lis, then only the pendente lite
transferee’s rights over the immovable property prevails.

An Arbitration proceeding in India, however, is not held in the Courts of Law, but before an
Arbitral Tribunal which is mutually constituted by the parties to the lis. More often than not,
an Arbitral Tribunal is constituted by the competent Court of Law, under the relevant
provisions of The Arbitration and Conciliation Act, 1996, when the parties are unable to
constitute a mutually agreeable Arbitral Tribunal. The word ‘Court’, as is used in Section 52
of the Transfer of Property Act, or in general, has not been defined in the Act. So are also the
words ‘Suit’ and ‘Proceeding’ found in Section 52, which makes it ambiguous whether or not
the benefit of the doctrine of lis pendens is available to a party to an Arbitration proceeding,
during the pendency of which the Respondent has transferred the property under lis to a third
party purchaser. 

Doctrine of lis pendens and arbitral proceedings in India

The broad purpose of the doctrine of lis pendens is to maintain the title over an immovable
property under dispute unaffected during the pendency of the lis, so that the party in whose
favor the title accrues at the end of the lis may enjoy the benefit of the judgment and decree,
which if not done, then the very purpose of adjudication of the lis becomes useless. The
principle enumerated in the case of Bellamy v. Sabine has been adopted by the Privy Council
in the case of Faiyaz Hussain v. Munshi Prag Narrain – (1907) 34 Ind App 102, quoted in
AIR 1978 All 318, where they lay stress on the necessity for final adjudication and
observation that otherwise there would be no end to litigation and justice would be defeated.

The issue was discussed at length by the Hon’ble High Court of Punjab and Haryana, in the
case of Sardar Singh v. Mohan Lal Major and Others and it was held, referring to a judgment
of the Hon’ble Supreme Court of India, in the case of Satish Kumar and Others v. Surinder
Kumar and Others – AIR 1970 SC 833, that an Arbitration Award is not a mere waste paper
but has some legal effect and is binding on the parties, and further held that Award is a final
adjudication of a Court of the parties’ own choice. The Court further held that, in the
background of the facts involved in the said case, that Krishan Lal by his own act and
conduct rather tried to nullify the effect of the Award by transferring portion of the suit land
in favor Sajjan Singh, and that since Krishan Lal had no right, title or interest in the Schedule
property after the award, he could not transfer the same in favor of Sajjan Singh.

The Hon’ble High Court of Delhi, in the case of Iqbal Singh v. Mahender Singh and
Another held that once the Arbitration proceedings commences, the suit property becomes
sub-judice and any transfer during the pendency of the Arbitration proceeding would be hit
by section 52 of the Transfer of Property Act. The Hon’ble High Court of Punjab and
Haryana, in the case of Swaran Singh v. Arjun Singh and Others held that principles of lis
pendens will apply to arbitral proceedings if the award has the stature of the decree
enforceable in a Court of Law.

Conclusion

Interestingly, we may note that challenging the validity of an Arbitral Award is made by
approaching the jurisdictional District Court, under Section 34 of the Arbitration and
Conciliation Act, 1996, and thereafter, to the jurisdictional High Court, under Section 37 of
the Act. Both being Courts of Law, and the proceedings being before them, by a natural
corollary it can be understood that the doctrine of lis pendens is applicable if a property is
alienated or otherwise dealt with, so as to affect the rights of the parties, during the pendency
of these proceedings. It, therefore, can be argued, based on the precedents on the point, that
doctrine of lis pendens is applicable to Arbitral proceedings and the word ‘Court’ as used in
Section 52 of the Act also refers to an Arbitral Tribunal. Even if it is assumed that the said
provision is not applicable to Arbitral proceedings, the principles governing the same would
be applicable. Section 52 of the Act is such a provision which is based on justice, equity and
good conscience.