TaxTMI 
TaxTMI 
2016 (10) TMI 1385
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....(though such registration may not be compulsory) not secure for plaintiffs more than what an injunction could secure since transferees, who purchase property, pendente lite in spite of such registration would be deemed to have notice of pendency of the lis and could not claim to be transferees without notice ? And, would such registration not be preferable to clamping an injunction on adversary ? (III) Since a plaintiff seeking a temporary injunction is required to show that he would suffer irreparably if temporary injunction is not issued, would it be inappropriate to expect such plaintiff to show that the provisions of Section 52 of the Transfer of Property Act do not afford adequate protection before an injunction to restrain transfer pendente lite is issued ? (IV) Would it be appropriate, in cases of claims for temporary injunction to restrain transfers pendente lite, to consider imposition of conditions short of granting injunction, which should protect the plaintiff's interest, like, seeking an undertaking that no equities would be claimed on account of sale or development of properties; effecting sales only after putting transferees to notice that their rights would ....
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....ame up for hearing before the learned Single Judge, he referred to his earlier Judgment in Kachhi Properties v. Ganpatrao Shankarrao Kadam & Ors. 2010 (5) Bom.C.R. 43 and remarked that since the appellant had not made out a case that protection under Section 52 of the Transfer of Property Act, 1882, (for short, "TP Act"), was not adequate, the appeal was liable to be dismissed. Thereupon, learned counsel for the appellant pointed out that in the case of Pralhad Jaganath Jawale & Ors. v. Sitabai Chander Nikam & Ors. 2011 (6) Bom.C.R. 619, another learned Single Judge of this Court [Coram : A.S. Oka, J.], after carefully considering the Judgment in Kachhi Properties (supra), had concluded that in view of binding precedents of the Apex Court, the observation in Kachhi Properties, that provisions of Order 39 Rule 1 of Code of Civil Procedure, 1908, (for short, "CPC"), could be invoked only if protection provided by Section 52 of the TP Act is shown to be inadequate, could not bind the Court and the finding of the Court in the case of Kachhi Properties (supra) that Section 52 of the TP Act provides adequate protection, did not create a binding precedent. 5. The learned Single Judge, be....
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....upreme Court and this Court, which touch substantially or peripherally the controversy involved herein. Learned senior counsel for the appellant has further referred to the relevant provisions of Transfer of Property Act, 1882, Code of Civil Procedure, 1908, Civil Manual and, most importantly, the 157th Report of Law Commission of India, on Section 52 of the TP Act and its amendment. 9. It is in this backdrop that we have been called upon to decide the questions of law, which essentially pertain to the protection given under Section 52 of the TP Act against transfer pendente lite vis-à-vis protection granted by order of temporary injunction and whether in view of such protection, the party can be entitled to get the relief of interim injunction against such transfer pendente lite. 10. To understand the exact nature of controversy and the circumstances in which these conflicting decisions in the cases of Kachhi Properties and Pralhad Jawale (supra) came to be delivered, it would be necessary to make brief reference to the facts of these two decisions and the legal position, as enunciated therein. Legal position set out in Kachhi Properties (supra) 11. The first case which....
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....ed Single Judge then referred to the provisions of Section 52 of the TP Act, as amended by Bombay Act XIV of 1939, in reference to an amendment in Section 18 of the Registration Act introducing sub-section (ee). Learned Single Judge then also referred to the various decisions as follows:-- "1. Sharad Jamnadharji Mor v. Arjun Yeshwant Dhanwatey, 2009 (4) Bom.C.R. 523 (N.B.) 2. Nathaji Anandrav Patil v. Nana Sarjerao Patil, 1907(9) Bom.L.R. 1173 3. Bellamy v. Sabine, 1857 (1) De G.&J. 585. 4. The Bishop of Winchester v. Paine, 1805 (11) Ves. 197. 5. Metcalfe v. Pulvertoft, 1813 (2) Ves.& B. 204. 6. Landon v. Morris, 1832(5) Sim. 263. 7. Pramatha Nath Roy v. Jagannath Kishore Lal Singh Deo, 16 I.C. 359 : 1913(17) Cal.L.J. 427. 8. Smt. Muktakesi Dawn v. Haripada Mazumdar, AIR 1988 Cal 25. 9. Nagubai Ammal v. B. Shama Rao, 1956 DGLS (soft) 38 : AIR 1956 SC 593. 10. Jayaram Mudaliar v. Ayyaswami, 1972 DGLS (soft) 220 : 1972 (2) SCC 200. 11. Rajendra Singh v. Santa Singh, 1973 DGLS (soft) 240 : 1973(2) S.C.C. 705. 12. Hadley v. London Bank of Scotland, 1865 (3) De GJ & S 63. 13. Kishorsinh Ratansinh Jadeja v. Maruti Corporation, 2009 DGLS (soft) 449 : (2009) 11 S....
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....was, one of a Division Bench of the Calcutta High Court in Smt. Muktakesi Dawn (supra). Learned Single Judge reproduced para No. 4 of the said Judgment, which deals with the said question. "4. Mr. Roy Chowdhury has secondly urged that an injunction restraining the defendant from transferring the suit property was absolutely unnecessary as no post-suit transfer by the defendant can adversely affect the result of the suit because of the provisions of section 52 of the T.P. Act whereunder all such transfers cannot but abide by the result of the suit. It is true that the doctrine of lis pendens as enunciated in section 52 of the T.P. Act takes care of all pendente lite transfers; but it may not always be good enough to take fullest care of the plaintiff's interest vis-à-vis such a transfer. The suit giving rise to the impugned order is one for specific performance of sale in respect of the suit property and if the defendant is not restrained from selling the property to a third party and accordingly a third party purchases the same bona fide for value without any notice of the pending litigation and spends a huge sum for the improvement thereof or for construction thereon,....
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....ho would suffer greater inconvenience and decide whether injunction ought to be granted." 18. Then the learned Single Judge dealt with the Judgments in the cases of Kishorsinh Ratansinh Jadeja v. Maruti Corporation and Ors. 2009(11) SCC 229 and that of Sanjay Verma v. Manik Roy and Ors. 2006(13) SCC 608 and found that while dealing with the issue involved therein, as to whether the alienees pendent lite would be necessary or proper parties to the suit, the Supreme Court has held in the later Judgment of Sanjay Verma that if the alienation is without the permission or leave of the Court, the transferees have no right of impleadment. Hence, plaintiff would be under no obligation to chase the alienees or file proceedings against them. Alienees would not even be able to raise an obstruction in execution proceedings. Thus, the learned Single Judge held that protection afforded by Section 52 of TP Act is sufficient and there is no need of granting temporary injunction on the specious plea of avoiding multiplicity of proceedings. 19. The learned Single Judge then referred to the decisions of Supreme Court in Silverline Forum (P) Ltd. (supra), Sarvinder Singh (supra), and Anand Niwas Pri....
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....dgments, which clearly hold that such transferees pendente lite have no right to be impleaded or to even obstruct the execution proceedings, wastage of judicial time in trial and appellate Courts on an utter redundancy, which may only give some mental solace to a plaintiff may have been tolerable in the past, but cannot be allowed to continue now with tremendous pressure on judicial time at all levels. Available time must be utilised judiciously by prioritizing cases where there are real disputes demanding Judge's time. The magnitude of the problem would become apparent from the fact that almost 25 such appeals, claiming injunctions in disregard of section 52 of the TP Act, have been lined up for adjudication today. Therefore, this argument of letting things be as they are cannot be accepted." 22. Learned Single Judge has, then, in para No. 30 of its Judgment, proceeded to sum up the legal position as follows:-- "(a) Section 52 of the TP Act provides adequate protection to the parties from transfers pendente lite and such transferees are neither required to be impleaded nor can claim impleadment. They cannot even resist execution proceedings. (b) In Mumbai (as also elsewhe....
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....plaintiffs for temporary injunction, for restraining the respondent/defendant from creating third party interests in the suit property during pendency of the suit. The learned counsel for the respondents, while supporting the said orders, brought to the notice of the learned Single Judge that the impugned orders were in tune with the decision of this Court in Kachhi Properties. Thereupon, learned counsel for the appellants made detailed submission as to how the decision in the case of Kachhi Properties, apart from the fact that it does not lay down any proposition of law, it has also no binding effect, as the same has been delivered by ignoring the binding precedents and specific provisions of law. While advancing these submissions, learned counsel for the appellant placed reliance on several decisions of the Apex Court and this Court. 25. Considering that there are large number of matters in which this issue is involved, learned Single Judge heard the submissions advanced by learned counsel for the parties, especially, having regard to the fact that the Special Leave Petition preferred against the Judgment in the case of Kachhi Properties has been summarily dismissed on 1st Octob....
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....ion 52 of the TP Act does not put any restraint on a party to the suit from alienating the suit property, but only provides that the alienation will in no manner affect the rights of any party under any decree, which may be passed in the suit. Thus, such pendent lite transfer, even if effected without permission of the Court, is neither illegal nor void. 29. The reference was then made by learned Single Judge to the decision of the Supreme Court in the case of T.G. Ashok Kumar v. Govindammal and Anr. 2011(1) All.M.R. 462, wherein the Apex Court has noted certain deficiencies in Section 52 and made several suggestions, including a suggestion that registration of notice of lis pendens should be made compulsory. By placing reliance on the observations of the Apex Court, in para No. 10 of the said Judgment, learned Single Judge held that this decision of the Apex Court also does not hold that a transfer pendent lite is either illegal or void. 30. The learned Single Judge then made reference to another decision of the Division Bench of this Court in the case of Keshrimal Jivji Shah & Anr. v. Bank of Maharashtra & Ors. 2004 (4) Bom.C.R. 842, in which, in paragraph No. 26, the Division ....
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.... precedent." 32. The learned Single Judge then proceeded to decide whether Section 52 of the TP Act provides adequate protection to the parties from transfer pendent lite and was pleased to hold that the first part of clause (a) of paragraph No. 30 in Kachhi Properties decision, does not lay down an absolute proposition of law that in every case, a plaintiff will be adequately protected by Section 52 of the TP Act. The power to grant relief of temporary injunction under Rules 1 and 2 of Order XXXIX of the said Code is always discretionary. Therefore, in a given case, considering the facts of the case, the Court can always come to the conclusion that the plaintiff may get adequate protection by virtue of Section 52 of the TP Act. 33. While dealing with the last part of clause (c) of paragraph No. 30 in the decision of Kachhi Properties, that Rule 1 of Order XXXIX of the Code can be invoked only if protection provided by Section 52 of TP Act is shown to be inadequate, the learned Single Judge found that the attention of the Court in Kachhi Properties was not invited to the decision of the Apex Court in the case of Maharwal Khewaji Trust (Regd.), Faridkot v. Baldev Dass AIR 2005 SC ....
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....hile exercising the powers under Rules 1 and 2 of Order XXXIX of the said Code, the Court has to consider the issues of prima facie case, irreparable loss and balance of convenience. In the circumstances, in view of the aforesaid binding precedents of the Apex Court, the observation in Clause (c) of paragraph No. 30 that the provision of Rule 1 of Order XXXIX could be invoked only if protection provided by section 52 is shown to be inadequate cannot bind this Court. Therefore, even the observation in first part of Clause (a) that section 52 provides adequate protection to the parties from transfers pendent lite cannot be read as a binding precedent. In any event, in view of the law laid down by the Apex Court, it cannot be said that provisions of section 52 of the said Act of 1882 in any manner put fetters on the powers of Civil Court conferred by Rules 1 and 2 of Order XXXIX of the said Code. As stated earlier, in a given case, while exercising discretionary powers, the Court can always come to the conclusion in peculiar facts of the given case, that in view of provisions of section 52 of the said Act of 1882, equitable relief of temporary injunction need not be granted. 25. Whe....
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....usion in peculiar facts of the given case, that in view of provisions of section 52 of the said Act of 1882, equitable relief of temporary injunction need not be granted." Legal position discussed in present appeal by learned Single Judge while making Reference 37. It may be recalled that in this Appeal, when the matter was argued before the learned Single Judge [Coram : R.C. Chavan, J.] and learned Single Judge remarked that in view of his Judgment in Kachhi Properties (supra), the appellant/plaintiff had not made out a case that protection under Section 52 of the TP Act was not adequate and the Appeal was liable to be dismissed, learned counsel for the appellant brought to his notice the Judgment in Pralhad Jawale (supra). Thereupon, the learned Single Judge took "a fresh look, or, rather, a second fresh look", as stated by him, to his decision in Kachhi Properties and the earlier decision in Sharad Jamnadharji Mor (supra) and, in his elaborate and detailed order, endeavoured to justify how the legal position, as laid down by him in Kachhi Properties in paragraph No. 30, was just and correct. The learned Single Judge again referred to various decisions earlier considered by him....
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....ened with work and, therefore, cannot pay adequate attention to the genuine problems, which litigants place before the Courts." After quoting extensively from the research paper of Dr. Arun Mohan, a senior advocate from the Supreme Court, learned Single Judge posed a question as to why Courts cannot think of avoiding mindless litigation, which serves no purpose, and, in his view, applications for injunction to restrain creation of third party interest is one such specie of this type of litigation. He further added, as was done in Kachhi Properties, that there could always be cases, where litigant may satisfy the Court of the necessity of seeking such injunction, by pointing out that the protection provided by Section 52 of the TP Act is not adequate. 40. The learned Single Judge then also referred to 157th Report of the Law Commission, wherein the Law Commission had considered various provisions of Order XXI of the CPC, which recognize the principle of lis pendens. Thus, after trying to, carefully and objectively, re-examine the premises on which the Judgment in Kachhi Properties rested and not finding any reason to alter the view taken therein, the learned Single Judge was please....
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.... Pujari AIR 1980 Bombay 341, holds that Judgment later in point of time would be binding in case there is a conflict in the Judgments of Courts of equal strength. According to learned Judge, "this leads to a piquant situation, as after the Judgment in Pralhad, another learned Judge of this Court, deciding Rafique Barkatulla Khan v. Shahenshah 2011 (3) Mah. L.R. 732, which is later in point of time, has followed the decision in Kachhi Properties". 43. In the light of all these facts, circumstances and legal position, the learned Single Judge formulated the questions, reproduced in paragraph No. 1 above, for decision to a Division Bench and that is how the matter came to be placed before us. Our Discussion on Legal Position 44. Thus, after carefully considering the legal position, as spelt out in these two decisions, we now deem it appropriate to resolve the conflicting legal issues involved in this Reference, so as to answer the questions referred for our decision. Discussion on Question Nos. (I) to (IV) 45. As these questions are interlinked and deal with the efficacy of Doctrine of Lis Pendens vis-à-vis the temporary injunction, they are discussed together. As far as q....
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....s ....... 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 correct mode of stating the doctrine, as Cranworth L.C. observed in the same case, is that "pendent lite neither party to the litigation can alienate the property in dispute so as to affect his opponent." 49. In the cases of Jayaram Mudaliar and Rajendar Singh (supra), the Hon'ble Supreme Court has quoted the definition of "Lis Pendens", as given in the "Corpus Juris Secundum", as the expression of the principle of the maxim "ut lite pendente nihil innovetur" (pending litigation nothing new should be introduced). On that basis, the Hon'ble Supreme Court defined "Lis Pendens" as follows:-- "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." 50. As observed by the Hon'ble Supreme Court in Jayaram's case, "exposition of the doctrine indicate that the n....
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....o (supra) by observing that, "the effect of Section 52 of the TP Act is not to wipe out the sale made pendent lite but to subordinate it to the rights based on the decree in the suit". [Emphasis Supplied] 54. While explaining the rationale behind Section 52 of the TP Act, the Law Commission Report, in paragraph No. 3.11, observed that; "The rationale underlying section 52 is simple enough and easily intelligible. If a party against whom relief is claimed were to be allowed to transfer his right pendente lite, then the plaintiff would be indirectly compelled to make the transferee a party to the litigation. If the first transferee is himself free to transfer his own right, then (on such a transfer), the plaintiff would be indirectly compelled to make the second transferee a party. The process could thus turn out to be endless, and so would be the hardship that might be experienced by the plaintiff, unless some restriction on the right of transfer is imposed by law. It is precisely this object which section 52 has in view, when it enacts that the transfer or other dealing shall not affect the rights of any other party thereto under any decree or order to be passed in the sui....
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....hereof, the Rule of Lis Pendens now applies only when a notice of pendency of the suit, in which any right to involve property is directly and specifically in question, is registered under Section 18(ee) of the Registration Act. The Law Commission, accordingly, suggested corresponding amendment in Section 52 of the TP Act, on the lines of Bombay Amendment Act XIV of 1939. 57. As far as State of Maharashtra is concerned, as observed by the Law Commission in its Report, the provisions of Section 52 of the TP Act already stand amended by Bombay Act XIV of 1939. They read as follows: 52. Transfer of property pending suit relating thereto.-- (1) During the pendency in any Court having authority within the limits of India excluding the State of Jammu and Kashmir established beyond such limits by the Central Government, of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question, if a notice of the pendency of such suit or proceeding is registered under section 18 of the Indian Registration Act, 1908, the property after the notice is so registered cannot be transferred or otherwise dealt with by any party to t....
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....a value less than one hundred rupees, to or in immovable property; (b) Instruments acknowledging the receipt or payment of any consideration of account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; (c) Leases of immovable property for any term not exceeding one year, and leases exempted under Section 17; (cc) Instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future any right title or interest, whether vested or contingent, or a value less than one hundred rupees, to or in immovable property; (d) Instruments (other than wills) which purport or operate to create, declare, assign, limit or extinguish any right, title or interest to or in movable property; (e) Wills; (ee) notices of pending suits or proceedings referred to in Section 52 of the Transfer of Property Act, 1882; and (f) All other documents not required by Section 17 to be registered. 60. As the questions posed for our consideration deal essentially with the inter-play between the Doctrine of....
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....each of any of the terms on which the injunction was granted or the order made, the Court granting the injunction or making the order, or any Court to which the suit or proceeding is transferred, may order the property of the person guilty of such disobedience or breach to be attached, and may also order such person to be detained in the civil prison for a term not exceeding three months, unless in the meantime the Court directs his relea se. (2) No attachment made under this rule shall remain in force for more than one year, at the end of which time, if the disobedience or breach continues, the property attached may be sold and out of the proceeds, the Court may award such compensation as it thinks fit to the injured party and shall pay the balance, if any, to the party entitled thereto." Order XXXIX Rule 11 of Code of Civil Procedure, 1908 11. Procedure on parties defying orders of Court and committing breach of undertaking to the Court-- (1) Where the Court orders any party to a suit or proceeding to do or not to do a thing during the pendency of the suit or proceeding, or where any party to a suit or proceeding gives any undertaking to the Court to do or to refrain from....
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....ed in the civil prison for a term, which may extend to thirty days. The Court may also order the person or persons whom it holds responsible for such resistance or obstruction to pay jointly or severally in addition to costs, reasonable compensation to the decree-holder or the purchaser, as the case may be, for the delay and expenses caused to him in obtaining possession. Any order made under this rule shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree. (As substituted by the Bombay Amendment of 1983). Rule 100 in Order XXI of CPC - Order to be passed upon application complaining of dispossession-- Upon the determination of the questions referred to in Rule 101, the Court shall, in accordance with such determination-- (a) make an order allowing the application and directing that the applicant be put into possession of the property or dismissing the application; or (b) pass such other order, as in the circumstances of the case, it may deem fit. Proviso:-- Where it is determined that the application is made by a person to whom the judgment-debtor has transferred the property after the institution of the suit in....
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....ights of any party to the suit and is made, except under the authority of the Court and on such terms, as it may impose, then, that alone is impermissible. 65. Order XXXIX of CPC provides for grant of temporary injunctions and interlocutory orders. Order XXXIX Rule 1 provides for cases in which temporary injunction may be granted and Order XXXIX Rule 2 provides for injunction to restrain repetition or continuance of breach. The injunction under Order XXXIX Rule 2 can be granted for restraining the defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not, the plaintiff, in such a suit, at any time after the commencement of the suit, and either before or after judgment, apply to the Court for a temporary injunction to restrain the defendant from committing the breach of contract or injury complained of, or any breach of contract or injury of a like kind arising out of the same contract or relating to the same property or right. Order XXXIX Rule 2(2) empowers the Court to impose terms. 66. The sweep of this injunction order and the power to grant it must be seen in the back-drop of the cases in which Order XXXIX R....
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.... sold in execution of a decree. Therefore, it is not restricted to only a right in immovable property. Secondly, it takes care of a situation where defendant to the suit threatens or intends to remove or dispose of his property with a view to defrauding his creditors. Lastly and importantly, it takes care of a threat of the defendant to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit. Therefore, it is not a situation only of transfer of immovable property, which is dealt with in Rule 1 of Order XXXIX CPC. It is also not controlled by the nature of the suit or proceeding. The same also is not restricted to transfer or otherwise dealing with the immovable property, if that is in dispute in the suit, but prevents its wastage, damage or alienation, as above. 68. Further, we have found from the language of Order XXXIX Rule 1 CPC itself that the Court may, by order, grant temporary injunction to restrain such act or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property or otherwise causing injury to the plaintiff in relation to ....
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....e made in that behalf. How such orders have to be made is provided by Rule 8. By Order XXXIX Rule 9, party may be put in immediate possession of land, the subject-matter of the suit. Therefore, where land of the nature and categories specified in Order XXXIX Rule 9 is the subject-matter of a suit, then, in the eventuality set out and specified in Order XXXIX Rule 9, such property can be immediately put in possession of any other party to the suit claiming to have an interest therein. By Order XXXIX Rule 10, an interlocutory order in a suit for money or some other thing capable of delivery can be granted on an admission. The details with regard to such admission are also set out in Order XXXIX Rule 10, coupled with a discretion in the Court to make an interlocutory order or deposit of the money in Court or delivery of the thing capable of delivery, if that thing capable of delivery is admitted to be held in trust or that it belongs or is due to another party. 72. The power to grant temporary injunction in a mandatory form also flows from the same provision, namely, Order XXXIX Rule 1 CPC. A temporary injunction in a mandatory form is distinct and separate from a mandatory injunctio....
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....Section 94. However, exercise of that power can only be done if the circumstances of the case fall under the rules. Therefore, when a matter comes before the court, the Court has to examine the facts of each case and ascertain whether the ingredients of Section 94 read with the rules in an order are satisfied and accordingly grant an appropriate relief. It is only in cases where circumstances do not fall under any of the rules prescribed that the Court can invoke its inherent power under Section 151 CPC. Accordingly, the courts have to grant relief of attachment before judgment, if the circumstances fall under O. 38 CPC. Similarly, Courts will grant temporary injunction if the case satisfies Order 39. So depending on the circumstances falling in the prescribed rules, the power of the Court to grant specified reliefs would vary. Therefore, each set of rules prescribed are distinct and different from the other and therefore, one cannot equate rules of temporary injunction with rules of attachment before judgment although all are broadly termed as interlocutory orders." 76. Thus, having considered all these legal provisions, now we may turn once again to the questions of law referred....
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....terated that; "15. The doctrine of lis pendens was intended to strike at attempts by parties to a litigation to circumvent the jurisdiction of a court, in which a dispute on rights or interests in immovable property is pending, by private dealings which may remove the subject-matter of litigation from the ambit of the court's power to decide a pending dispute or frustrate its decree. Alienees acquiring any immovable property during a litigation over it are held to be bound, by an application of the doctrine, by the decree passed in the suit even though they may not have been impleaded in it. The whole object of the doctrine of lis pendens is to subject parties to the litigation as well as others, who seek to acquire rights in immovable property, which are the subject-matter of a litigation, to the power and jurisdiction of the court so as to prevent the object of a pending action from being defeated." 81. In his separate supplementing Judgment, the Hon'ble Justice T.S. Thakur (as His Lordship was then) dealt with the effect of the sale pendent lite in view of the principles of lis pendens and was pleased to refer to earlier Judgment of Supreme Court in Nagubai Ammal (sup....
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.... passed in the suit unless the property was alienated with the permission of the court." [Emphasis Supplied] 85. The Hon'ble Supreme Court then was pleased to finally refer to its decision in Jayaram Mudaliar (supra), in which the observations made on the Doctrine of Lis Pendens in Commentaries on the Laws of Scotland, by Bell, are extracted with approval, in paragraph No. 43, as follows:-- "43. ..... Bell, in his Commentaries on the Laws of Scotland said, that it was grounded on the maxim : Pendente lite nibil innovandum. He observed: 'It is a general rule which seems to have been recognized in all regular systems of jurisprudence, that during the pendence of an action, of which the object is to vest the property or obtain the possession of real estate, a purchaser shall be held to take that estate as it stands in the person of the seller, and to be bound by the claims which shall ultimately be pronounced'." 86. Thus, after taking recourse to all its earlier decisions, in paragraph No. 53, the Hon'ble Supreme Court has summed up its conclusion as follows:-- "53. There is, therefore, little room for any doubt that the transfer of the suit property pendent ....
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....ch of order of the Court. Thus, the effect of the Doctrine of Lis Pendens is not to annul the conveyance, but only to render it subservient to the rights of the parties to the litigation. As held by the Apex Court in the case of Sanjay Verma (supra), "the principle underlying Section 52 of TP Act is that a litigating party is exempted from taking notice of a title acquired during the pendency of the litigation. The mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject matter of the suit. The section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree, which may be passed in a suit." 90. Thus, as far as Section 52 of TP Act is concerned, it is apparent that it does not put any restraint on a party to the suit from alienating suit property, nor does it render the alienation illegal or void. 91. In this respect, we can also make reference to the decision of the Apex Court in the case of T.G. Ashok Kumar v. Govindammal and Anr., 2011 (1) ALL M.R. 462, wherein Apex Court has again reiterated that Section 52 of TP Act does not declare a pendent lite transfer....
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....of such order are different, as it may entail into punishment, which consequences are not at all contemplated under Section 52 of TP Act. 96. Moreover, as against the transfer made pendent lite, the transfer made in violation of injunction order is held to be no transfer in the eyes of the law. The legal position in this respect is well settled that, if any property is alienated in the face of order of interim injunction passed by the Court, such alienation becomes ipso facto illegal and not at all binding on the parties thereto. It confers no right, title or interest on the transferee. This legal position is very well illustrated in the Division Bench Judgment of this Court in the case of Keshrimal Jivji Shah (supra), to which one of us [Coram : S.C. Dharmadhikari, J.] was a Member. 97. The question raised before the Division Bench in this case was exactly 'as to whether the transfer of an immovable property in contravention of a prohibitory or injunction order of a Court is illegal or void?' It was argued by learned counsel for the petitioner that there is no provision either in CPC or elsewhere which makes transfer of immovable property done in violation of an injuncti....
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....signees, respondents herein, cannot claim to be impleaded as parties on the basis of assignment. Therefore, the assignees-respondents could not have been impleaded by the trial Court as parties to the suit, in disobedience of its orders. The principles of lis pendens are altogether on a different footing. We do not propose to examine their involvement presently. All that is emphasized is that the assignees in the present facts and circumstances had no cause to be impleaded as parties to the suit. ................" 100. The Division Bench in this case also referred to the decision in Ramchandra Ganpat Shinde v. State of Maharashtra, 1994 (1) Bom.C.R. 460, wherein the Hon'ble Supreme Court, in paragraph Nos. 12 and 13, has observed as under:-- "12. Mr. Justice Arthur J. Venderbilt in his "The Change of Law Reforms 1955" at pages 4 and 5, stated that: ............ It is the courts and not in the legislature that our citizens primarily feel the keen, the cutting edge of the law. If they have respect for the work of their courts, their respect for law will survive the short comings of every other branch of the Government; but if they lost their respect for the work of the court....
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....order be circumvented by parties with impunity and expect the Court to confer its blessings. It does not matter that to the contempt proceedings Somani Builders was not a party. It cannot gain an advantage in derogation of the rights of the parties, who were litigating originally. If the right of sub-tenancy is recognized, how is status qua as of 15-9-1988 maintained? Hence, the grant of sub-lease contrary to the order of status-quo is clearly illegal. All actions including the grant of sub-lease are clearly illegal." 102. The Division Bench then expressed its inability to accept the contention of petitioners' counsel that, the decision of the Supreme Court in Sujit Singh's case (supra) should be read as restricted to proceedings under Order XXII Rule 10 CPC and the same cannot be extended to defiance of injunction order issued under Order XXXIX Rule 1 CPC. It was held in paragraph No. 26 that; "26. ................. Once the issue is placed on the pedestal of public policy and the very faith of litigants in Rule of law and administration of justice, then it is not possible to make the distinction or bifurcation suggested by Shri. Naphade. It would mean that consequences....
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....therefore, preservation of status-quo prevailing as on the date of issuance of the order. Any alteration in the status qua as prevailing and directed to be maintained by the Court of law is not permissible except with leave or sanction of Court. It is well settled that if courts are not to honour and implement their own orders and encourage party litigants, be they public authorities, to invent methods of their own to short circuit and give a go by to the obligations and liabilities incurred by them under orders of courts, the Rule of law will become casualty in the process - a consequence to be jealously avoided? by all and at any rate by the highest courts in the State." 105. The Court in this case was also pleased to hold that, "the Court cannot allow a party to get away with violation of its prohibitory orders and uphold the transactions contrary to and in violation of its directions on the spacious plea that only way in which the Court can regulate such acts is to visit the guilty party with penalties. It is time that the Courts reach the transaction itself and put an end to purported rights created thereby. Failing which, it will become possible for the parties to retain fru....
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....rrent to the party against whom order of injunction is running. This deterrent has the further effect of avoiding multiplicity of transactions and proceedings. The Doctrine of Lis Pendens does/cannot create such deterrent effect as it does not entail drastic consequence of attachment of property, detention in civil prison, suit being dismissed or defence being struck off, as the case may be, or punishment for contempt of court. 110. Alienation of property lis pendens is merely in the nature of a gamble, which party may willingly enter into without any apprehension of above-said consequences as such party has always the chance of winning the case and thereby retaining the property. The only consequence the party may face, is of loosing that property and nothing more. In that respect also, the transaction will always remain binding between transferor and purchaser. Therefore, alienee can very much receive purchase-price from transferor as such transaction does not suffer from any taint of illegality. As against it, the order of temporary injunction can and does avoid multiplicity and complications by deterring the party at the threshold itself from entering into transactions, which ....
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....said Amendment Act XIV of 1939, in Section 18 of the Registration Act, clause (ee) has been added, it provides that registration of notices of pending suits or proceedings referred to in Section 52 of the TP Act is only optional. 113. Thus, the Legislature, has not made registration of notice of lis pendens compulsory under the Registration Act. Non-registration of a document governed by Section 18 of the Registration Act does not visit a person with any adverse consequences, as registration of the document is itself optional. Therefore, conjoint reading of the provisions of Section 52 of the TP Act and Section 18 of the Registration Act, makes it clear that even in respect of the property situated in the city of Mumbai, if the notice of lis pendens is not registered, as it is optional, no other consequence follows, except the fact that Section 52 of the TP Act will have no application to the transaction effected during the pendency of the suit and the proceedings in respect of the properties concerned. Thus, even the amendments made in Section 52 of the TP Act and in Section 18 of the Registration Act also do not make the transaction illegal as such, whereas, the transaction made....
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....ransferee pendent lite can be added as a proper party if his interest in the subject-matter of the suit is substantial and not just peripheral. A transferee pendent lite to the extent he has acquired interest from the defendant is vitally interested in the litigation, where the transfer is of the entire interest of the defendant; the latter having no more interest in the property may not properly defend the suit. He may collude with the plaintiff. Hence, though the plaintiff is under no obligation to make a lis pendens transferee a party under Order 22 Rule 10 an alienee pendent lite may be joined as party. As already noticed, the court has discretion in the matter which must be judicially exercised and an alienee would ordinarily be joined as a party to enable him to protect his interests. [Emphasis Supplied] The court further held that, "a transferee pendent lite of an interest in immovable property is a representative-in-interest of the party from whom he has acquired that interest. He is entitled to be impleaded in the suit or other proceedings where his predecessor-in-interest is made a party to the litigation; he is entitled to be heard in the matter on the merits of the ....
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....mber of earlier decisions in the cases of Anil Kumar Singh v. Shivnath Mishra, (1995) 3 SCC 147; Surjit Singh v. Harbans Singh, (1995) 6 SCC 15; Savitri Devi v. District Judge, Gorakhpur, (1999) 2 SCC 577; Vijay Pratap v. Sambhu Saran Sinha, (1996) 10 SCC 53; Kasturi v. Iyyamperumal, (2005) 6 SCC 733; and Vidur Impex and Traders (P) Ltd. v. Tosh Apartments (P) Ltd., (2012) 8 SCC 384, and allowed appellant's application for impleadment as party-defendant. 122. In his separate Supplementing Judgment, Hon'ble Justice T.S. Thakur (as His Lordship then was), after referring to the effect of Lis Pendens on the transfers, was pleased to conclude that, "though a transferee pendent lite cannot seek as of right addition as a party-defendant to the suit under Order I Rule 10 CPC, he can be added as a party under Order XXII Rule 10 CPC, so that he should not suffer prejudice on account of the transferor loosing interest in the litigation post transfer." Relying upon above-said observations in the Judgments of Amit Kumar Shaw and Khemchand Shankar Chowdhary, His Lordship was pleased to hold that even though appellant in the case was not a bonafide purchaser and is, therefore, not prote....
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.... be straightway dismissed. Therefore, further proposition of law laid down by learned Single Judge in formulating question No. 1 that Rule 100 leaves no discretion to the executing Court and provides that application by transferee pendent lite shall be rejected; cannot be treated as laying down correct legal position. It would always be a question of fact situation in such cases; to be determined not only by having a mere look at the documents by which the property is transferred and by looking at the date of filing of the suit, as observed by learned Single Judge, but also at the other aspects as to whether such transferee has got substantial interest in the property or not. 126. Thus, it has to be held that the two legal propositions on the basis of which the learned Single Judge has formulated question No. (I) as to whether Section 52 of TP Act provides adequate protection to the parties from transfers pendent lite, are not laying down correct legal position. Hence, it has to be held that question No. (I) is not based on correct legal premises. 127. Hence, in that way, not formulated correctly. 128. Now, without referring to those two legal premises, if we once again come to ....
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....show that the protection granted under Section 52 of the TP Act is not adequate and thereafter only to pass the order of injunction, will be totally against the settled principles under which the order of interim injunction is passed. It is a well settled requirement of law that while exercising the powers under Rules 1 and 2 of Order XXXIX CPC, the Court has to consider the issues of prima facie case; of irreparable loss and balance of convenience, where there is an apprehension shown that the defendant may transfer or alienate the suit property. Normally, if all these three ingredients are satisfied, the applicability of Section 52 of the TP Act cannot take away power of the Court to grant temporary injunction. 130. The provisions of Section 52 of the TP Act cannot act as a further hurdle in the plaintiffs seeking the relief of injunction. While exercising discretionary powers, the Court can always come to a conclusion, in the particular facts of the given case, that in view of the provisions of Section 52 of the TP Act, equitable relief of temporary injunction need not be granted. However, calling upon the plaintiff in each and every case to further satisfy the Court in additio....
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....the same nature which are covered under the Doctrine of Lis Pendens. Merely requiring the other party to inform the Court promptly of creation of every such interest, cannot solve the plaintiff's difficulty in getting the property, because, then, such party would have to be impleaded in the suit. Even calling upon the party to effect sale only after putting transferees to notice that their right would be subject to the pending suit, is again in the nature of the notice contemplated by registration of the lis pendens under amended Section 52 of TP Act. Once we have held that the consequences of alienation effected in breach of lis pendens and in breach of injunction order, are totally different and principle of lis pendens in Section 52 of TP Act do not offer adequate protection on that score, then, imposition of these additional conditions in place of granting relief of temporary injunction, cannot be an answer or substitute for not granting of the order of temporary injunction. Once again, it is open to the Court to mould the relief. It may not necessarily make an order of injunction but can clarify, in the event it finds that presently or right now there is no need to pass a ....
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....ose in the profession on either side of Bar, to examine and decide whether ethically they would like to be parties to an expedition of making the clients seek an illusory protection at substantial cost and expense in the trial as well as Appellate Courts", as observed by the learned Single Judge. But, it is a matter of making available the protection, which is given to a party under the statutory law, without putting any further fetters on such protection, even assuming that such provision may be for advantage of legal profession. Moreover, the protection afforded by the order of injunction can in no way be called as illusory, but it is definitely an effective protection, as the aforesaid discussion reveals. It saves the plaintiff from multiplicity of proceedings and also avoids his right to get property being defeated by purchaser creating equities in his favour with investment by making improvement in suit property or by carrying on construction thereon. The relief of interim injunction being discretionary one and such discretion is to be exercised under well settled principles of law, as enunciated and crystalized from time to time by the various decisions of the Apex Court and ....
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...., as suggested by the learned Single Judge. 135. The learned Single Judge, in this case as well, dealt with the question, as to whether the order of interim injunction would be akin to Mareva injunction, which operates in rem. Learned Single Judge then referred to the decision of the learned Single Judge in the Court of Appeal in (Z Ltd. v. A)18, (1982) 1 All England Reporter 556, and came to the conclusion that, observations of Lord Denning in respect of Mareva injunction are made in exercise of admiralty jurisdiction, which is in rem, unlike the jurisdiction in personam in suits inter-parties. According to learned Single Judge, the order of interim injunction can, at the most, bind the defendant, but cannot bind the transferee pendent lite. 136. However, in our considered opinion, once it is held that the alienations made in breach of order of injunction are illegal as they are no transactions at all in the eyes of the law and for their validity or legality, they are not depending on the fate of the suit, as happens in case of lis pendens under Section 52 of the TP Act, then the effect of such injunction is to render even those subsequent transactions and transfers also illegal....
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....e contention of Mr. Rane as to the competency of the later Bench of three Judges to overrule the ratio of the earlier Bench of equal number of Judges need not detain us. In the event of there being clear conflict, the decision of such later Bench would be binding on us. Secondly, the decision in Anand Nivas case (AIR 1965 SC 414) is based not so much on the incidence of statutory tenancy as on the interpretation of Sections 12 to 15 of the Rent Act. All the Judges were unanimous on statutory tenant having no estate or property in the tenancy. Even while expressing dissent as to the extent and nature of any statutory tenant's "interest" in the tenancy. Sarkar, J. proceeded on the hypothesis that the power of transfer of even such "interest" required authority of law. The determination of true scope and import of Section 13(1)(e) and consequently of Sections 12, 14 and 15 appear to have been assumed to be the main point in controversy in that case and the decision on the first point indicating conflict on a narrow margin appears to have been treated as mere observations. This may have prompted the later Bench to dispense with any need to refer the point to a larger Bench." [Emp....
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....recedent value. As observed by the Supreme Court in S.P. Gupta & Ors. v. President of India & Ors. AIR 1982 SC 149, "It is elementary that what is binding on the court in a subsequent case is not the conclusion arrived at in a previous decision, but the ratio of that decision, for it is the ratio which binds as a precedent and not the conclusion." 145. A case is thus only an authority for what it actually decides and not what may come to follow logically from it. Hence, it is stated that the Judgments of courts are not to be construed as Statues. 146. The following observations in The Mumbai Kamgar Sabha, Bombay v. Abdulbhai Faizullabhai & Ors. (1976) 3 SCC 832 may be useful in this respect: "It is trite, going by Anglophonic principles, that a ruling of a superior court is binding law. It is not of scriptural sanctity but is of ratio-wise luminosity within the edifice of facts where the judicial lamp plays the legal flame. Beyond those walls and de hors the milieu, we cannot impart eternal vernal value to the decision, exalting the doctrine of precedents into a prison-house of bigotry, regardless of varying circumstances and myriad developments. Realism dictates that a judgmen....
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....is no specific provision, like, Article 141 of Constitution making the law declared by the High Court binding on subordinate courts, it is implicit in the power of supervision conferred on a superior Court that the Courts subject to its supervision would confirm to the law laid down by it. It is in that view of the matter that the Supreme Court in East India Commercial Co. Ltd. v. Collector of Customs AIR 1962 SC 1893, held that, "the law declared by the highest court in the State is binding on the Courts, authorities or Tribunals under its superintendence, and they cannot ignore it...... " There is essentially also no dispute about the legal position that the decision of larger Bench, whether of Supreme Court or of High Court binds the smaller Bench of the Supreme Court or that particular High Court. 152. This position has been very aptly summed up by the Supreme Court in Mahadeolal Kanodia v. Administrator General of West Bengal AIR 1960 SC 936: "Judicial decorum no less than legal propriety forms the basis of judicial procedure. If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if judges of co-ordi....
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.... of this Court in Panjumal Hassomal Advani v. Harpal Singh Abnashi Singh AIR 1975 BOMBAY 120, wherein Division Bench of this Court was pleased to observe that, "now, it is well-settled that normally one Division Bench of a High Court cannot take a view contrary to the decision given by another Bench of that Court. It is equally well settled that an interpretation (and equally a misinterpretation) of a binding decision of the Supreme Court will itself be binding subsequently on co-ordinate courts and must be got corrected by a higher Court and no co-ordinate Court on that ground may refuse to follow an earlier decision, opining that in its view the said earlier decision had wrongly understood or improperly applied a decision of a higher Court." 156. In V.R.G. & G.O.M.C. Co. v. State of A.P. (1972) AIR SC 51, it has been observed that, "the later Bench before whom a question arises is bound by the earlier decision." 157. In this respect, the reliance was also placed on the observations in the case of Young v. Bristol Aeroplane Co. Ltd. (1944) IKB 718, wherein the following propositions have been set out in the head-note: "The Court of Appeal is bound to follow its own decisions a....
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....e Court. The reasons being myriad, like, the decision of earlier Bench not brought to the notice of the later Bench and so on. Hence, the real difficulty arises in case of the conflicting Judgments on a particular point by co-equal Benches. This difficulty arises, especially, to the Trial and Appellate Court Judges, who are bound by the ratio of the law enunciated by the superior Courts. In the absence of Constitutional or Statutory guidance in this regard, the precedents and practice as such have not been uniform and consistent. There have been three mutually repugnant streams of Judgments/precedents on this very important and often recurring question of law. One view is that in case of conflict between two Judgments of Co-ordinate Benches, later decision should be followed; another view says that, decision earlier in point of time should be followed; the third view is that, the Court should follow the decision, which is more accurate and better in point of law; whether it be earlier or later. 160. For example, in the case of Sundeep Kumar Bafna v. State of Maharashtra and Anr. AIR 2014 SC 1745, while dealing with the conflicting decisions in the case of Niranjan Singh v. Prabhak....
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....pears to me as hardly relevant." [Emphasis Supplied] 164. In coming to the above-said conclusion, the Apex Court placed reliance on few decisions of Courts in England, like, Hampton v. Holman (1877) 5 Ch D 183, (Jessel M.R.), Miles v. Jarvis (1883) 24 Ch D 633, (Kay J) and Young v. Bristol Aeroplane Co. Ltd. (1994) KB 718 and thereafter quoted with high regard and approval the view of the great constitutional visionary Sri. H.M. Seervai, as under: "Even though it is perhaps unconventional to quote a living authority, it deserves recalling that Mr. Seervai in his latest edition of his authoritative work in the Constitutional Law of India has opined as follows:-- "*** But Judgments of the Supreme Court, which cannot stand together, present a serious problem to the High Courts and to subordinate Courts. It is submitted that in such circumstances, the correct thing is to follow that Judgment which appears to the Court to state the law accurately or more accurately than the other conflicting Judgments." 165. It was also observed that, "I am keenly aware of the great difficulty of making a choice between the decisions of a Superior Court when they are in direct conflict with ea....
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....ardas Patel v. Union of India and Ors. 1995 (2) Bom.C.R. 640, expressed unqualified concurrence with the law, as enunciated in the Special Bench decision of Bholanath (supra). 171. To some extent, this conflict was tried to be resolved by the Apex Court in the case of Commissioner of Income-Tax v. Thana Electricity Supply Ltd. (1994) 206 ITR 727 Bom., by formulating its propositions as follows:-- 172. From the foregoing discussion, the following propositions emerge: "(a) The law declared by the Supreme Court being binding on all courts in India, the decisions of the Supreme Court are binding on all courts, except, however, the Supreme Court itself which is free to review the same and depart from its earlier opinion if the situation so warrants. What is binding is, of course, the ratio of the decision and not every expression found therein. (b) The decisions of the High Court are binding on the subordinate courts and authorities or Tribunals under its superintendence throughout the territories in relation to which it exercises jurisdiction. It does not extend beyond its territorial jurisdiction. (c) The position in regard to the binding nature of the decisions of a High Cour....
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....d 11, pleased to observe as under:-- "10. Time and again this Court has emphatically restated the essentials and principles of 'Precedent' and of Stare Decisis which are a cardinal feature of the hierarchical character of all Common Law judicial systems. The doctrine of Precedent mandates that an exposition of law must be followed and applied even by coordinate or co-equal Benches and certainly by all smaller Benches and subordinate courts. That is to say that a smaller and a later Bench has no freedom other than to apply the law laid down by the earlier and larger Bench; that is the law which is said to hold the field. Apart from Article 141, it is a policy of the courts to stand by precedent and not to disturb a settled point. The purpose of precedents is to bestow predictability on judicial decisions and it is beyond cavil that certainty in law is an essential ingredient of rule of law. A departure may only be made when a coordinate or co-equal Bench finds the previous decision to be of doubtful logic or efficacy and consequentially, its judicial conscience is so perturbed and aroused that it finds it impossible to follow the existing ratio. The Bench must then comply ....
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.... be followed and applied by the Subordinate Courts to the facts and circumstances of a case before it. Considering that the view now taken by the Hon'ble Supreme Court is that, "the later Judgment by Coordinate Bench is rendered ignoring the binding precedent and hence is per incuriam." As a result, we answer the question No. 5 to the effect that, in case of conflict between the decisions of Co-ordinate Benches, it is not the later but the earlier one in point of time, which should be followed and applied by the Subordinate Courts to the facts and circumstances of a case before it, unless, of-course, earlier decision is considered and explained in the later decision. 177. In view of the above-said discussion, we answer the questions placed before us for reference as follows: "Question No. (I) : Does Section 52 of the Transfer of Property Act provide adequate protection to the parties from transfers pendente lite since such transferees are not required to be, or entitled as of right to be, impleaded as parties to the suit and cannot resist execution proceedings in view of provisions of Order XXI Rule 100 of the Code as amended by this Court ? Answer : Section 52 of TP Act d....