Inherent powers cannot impose damages undertakings, but lis pendens may be relaxed on security for dealings with suit property.

Inherent powers under the Code of Civil Procedure cannot be used to impose a substantive damages liability on a plaintiff at the threshold of a pending suit; a court has no authority to require an undertaking to pay damages if the suit fails merely because the claim appears weak or vexatious. By contrast, the doctrine of lis pendens may be regulated in an appropriate case under the Transfer of Property Act, and the court may permit dealings with the suit property during the suit on terms of security to protect the opposite party. The impugned damages undertaking was set aside, while the security-based exemption from lis pendens was upheld.

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Issues: (i) Whether a civil court can, in exercise of inherent powers, direct a plaintiff to file an undertaking to pay damages to the defendant if the suit fails; (ii) whether the suit property could be protected from the operation of lis pendens by imposing security on the defendants so that they may deal with the property during pendency of the suit.

Issue (i): Whether a civil court can, in exercise of inherent powers, direct a plaintiff to file an undertaking to pay damages to the defendant if the suit fails.

Analysis: The statutory scheme of the Code of Civil Procedure provides specific mechanisms for costs, compensatory costs, rejection of plaint, preliminary determination of jurisdictional bars, security for costs, and compensation in limited situations. Section 151 preserves procedural inherent power, but it cannot be used to create substantive liabilities or obligations not contemplated by the Code or other substantive law. No provision authorizes the court to assess and impose, at the threshold of a pending suit and without adjudication of breach or damages, a liability requiring the plaintiff to indemnify the defendant merely because the claim appears weak or the litigation may be vexatious.

Conclusion: The court has no power to direct the plaintiff to file an undertaking to pay a specified sum as damages upon failure in the suit.

Issue (ii): Whether the suit property could be protected from the operation of lis pendens by imposing security on the defendants so that they may deal with the property during pendency of the suit.

Analysis: Section 52 of the Transfer of Property Act embodies the doctrine of lis pendens, which restricts dealings with the suit property during pendency of litigation. At the same time, the section recognizes the court's power to exempt the property from that operation on appropriate terms. On the facts, the court found it fit to permit the defendants to deal with the property during the suit, while safeguarding the plaintiff's position by requiring reasonable security. The condition was treated as a lawful term attached to exemption from lis pendens, not as an unlawful damages order against the plaintiff.

Conclusion: The property could be exempted from the operation of lis pendens subject to the defendants furnishing security.

Final Conclusion: The impugned order directing the plaintiff to furnish an undertaking to pay damages was set aside, and the defendants were instead allowed to deal with the property during pendency of the suit on furnishing security.

Ratio Decidendi: Inherent powers under Section 151 of the Code of Civil Procedure cannot be used to impose a substantive damages liability on a plaintiff in a pending civil suit, but the court may, in appropriate cases, regulate the operation of lis pendens by imposing security as a condition for permitting dealings with the suit property.

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