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Sale Agreement Executed During Pendency Of Suit Hit By 'Lis Pendens'

In RFA.No. 657 of 2015, V.T.VIJAYAN vs U.KUTTAPPAN NAIR, the question before the Full Bench of the Kerala High Court was whether an agreement for sale executed by a party to the lis, during the pendency of the suit is hit by the doctrine of lis pendens or not?

The Bench observed that Section 52 of the Transfer of Property Act states that during the pendency of any suit or proceedings, which is not collusive; an immovable property cannot be transferred or otherwise dealt with by any of the parties to the suit or proceedings, so as to affect any other party thereto, except under the authority of the court. Further Lis pendens literally means a pending suit and the doctrine of lis pendens has been defined as the jurisdiction, power, or control which a court acquires over property involved in a suit, pending the continuance of the action, and until final judgment therein. The Bench also observed that as per the Privy Council, the broad purpose of Section 52 is to maintain the status quo unaffected by the act of any party to the litigation pending
its determination.

Though an agreement of sale does not by itself create any right, title or interest in the property, it creates an obligation which is capable of being enforced by a court of law. Therefore, it has the potential to adversely affect the interests of a party to the suit.  On a combined reading of section 5A of the Transfer of Property Act, Section 19 of the Specific Relief Act, section 37 of the Contract Act,, we find that a contract such as agreement for sale of the subject-matter of the suit during the pendency of the suit, would adversely affect the parties to the suit, and others claiming right under them.



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