Faiyaz Hussain Khan v Prag Narain

Facts

Property that was the subject matter of a pending suit was dealt with by a party during the pendency of the litigation. The question was whether the transferee taking pendente lite could defeat the rights of the opposite party under the decree ultimately passed in the suit, and whether notice of the lis was a precondition for the doctrine to apply.

Issues

• Whether a transfer made during the pendency of a contentious (non-collusive) suit relating to the property binds the transferee to the decree under the doctrine of lis pendens.
• Whether the doctrine of lis pendens rests on notice to the transferee or on grounds of public policy/expediency.

Arguments

The transferee contended that, having no notice of the pending litigation, he should be protected as a bona fide purchaser. The opposite party argued that lis pendens operates irrespective of notice, on the principle that parties to a suit cannot, by private dealing, defeat the jurisdiction of the court or frustrate its decree.

Held

The Privy Council, approving Bellamy v Sabine, held that the doctrine of lis pendens does not rest on the doctrine of notice but on the necessity for final and effective adjudication. A litigant cannot, pending the suit, transfer rights in the disputed property so as to prejudice the opposite party. The transferee pendente lite is bound by the decree just as if he were a party to the suit. It is immaterial that the alienee had no notice of the proceeding.

Ratio decidendi

A transfer of immovable property during the pendency of a non-collusive suit in which a right to that property is directly and specifically in question is subservient to the rights of the parties under the decree; the doctrine applies regardless of the transferee's notice or good faith.

Significance

Recognised as the leading Indian authority on lis pendens; its reasoning was codified when 'a contentious suit or proceeding' was replaced by 'any suit or proceeding which is not collusive' in the 1929 amendment to Section 52, and it has been consistently approved by the Supreme Court.

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