TaxTMI 
TaxTMI 
2016 (10) TMI 1385
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....ir suits under Section 18 of the Indian Registration Act (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 ....
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....y interests in the suit property during the pendency of the Appeal. 4. When the Appeal came 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 provide....
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.... Counsel for the Appellant has also taken us through the plethora of Judgments of the Hon'ble Supreme 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....
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....lso the correctness of the logic of his own Judgment, in the case of Sharad Jamnadharji Mor (Supra). 14. Learned 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 DGL....
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....mporary injunction, but they pertain to only the doctrine of lis pendens, as contained in Section 52 of the TP Act. 16. Learned Single Judge found that the only Judgment which directly deals with the question of grant of temporary injunction in cases where plaintiff could have protection of Section 52 of the TP Act 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....
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....nting injunction the Court must see that plaintiff makes out a case of irreparable loss and it is not for the defendant to prove that he would suffer if an injunction is issued. After plaintiff proves irreparable loss, comes the question of balance of convenience or rather balance of inconvenience, when the Court would enquire as to who 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 t....
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....d if for a century, it has not been felt necessary to refuse injunctions to alienate on the ground that such claim is redundant in view of Section 52, there must be a good reason and so such a restraint may not now be imposed. Learned Single Judge felt that, "it was, undoubtedly, a point to ponder" and was pleased to observe that, "in the face of judgments, 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, i....
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.... Legal position set out in Pralhad Jawale (supra) 24. In the case of Pralhad Jawale, another learned Single Judge of this Court had an occasion to deal with the same controversy, which was raised in the above said decision of Kachhi Properties. In this case, there were two appeals against the orders of the Trial Judge passed in two different suits rejecting the applications of the appellants/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 sev....
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....dens. The learned Single Judge, therefore, found that the protection offered by Section 52 of TP Act is not adequate to restrain transfers pendent lite. 28. Thereafter, referring to the legal effect of Section 52 of the Act, as illustrated in the decision of Sanjay Verma, which was considered in the case of Kachhi Properties also, the learned Single Judge held, in para No. 14, of his Judgment, that Section 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....
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....it or other proceedings, where his predecessor-in-interest has been made a party to the litigation." The learned Single Judge hence held that, "in view of what is held by the Apex Court in the decision of Amit Kumar Shaw (supra), the last part of the observation in clause (a) of paragraph No. 30 of Kachhi Properties Judgment, that such transferee pendent lite cannot claim impleadment, cannot be read as a binding 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 ....
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....properties are in dispute, status quo cannot be allowed to be altered which includes creation of third party interests. In fact, the Apex Court in the case of Maharwal Khewaji Trust (supra) has observed that a defendant is required to make out a case that irreparable loss or damage will be caused to him during the pendency of the suit, if he is not allowed to alter the status quo. It is a well settled requirement of law that while 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....
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....es 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." 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 (....
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....illusory remedy. It is for those in the profession on either side of the 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". 39. The learned Single Judge felt that, "this question assumes importance in the light of the fact, which, in fact, should not require any expert opinion that the Courts are over-burdened 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 Sectio....
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....least three Hon'ble Judges, who seem to have accepted that Section 52 of the TP Act affords adequate protection, which view has not found favour with the Hon'ble Judge deciding Pralhad, it may be appropriate to have the matter referred to a larger Bench rather than committing judicial indiscipline of taking a different view." 42. The learned Single Judge also felt that this is necessary since a Division Bench of this Court in Vasant Tatoba Hargude & Ors. v. Dikkaya Muttaya 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 Dis....
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....ase of English Court, namely, Bellamy v. Sabine, wherein Turner, L.J. has explained the principle on which the Doctrine of Lis Pendens rests. It was observed by the Privy Council that, "the Doctrine of Lis Pendens, with which section 52 of the Act of 1882 is concerned, is not as Turner L.J. observed in Bellamy v. Sabine "founded upon any of the peculiar tenets of a Court of Equity as to implied or constructive notice. It is ........ a doctrine common to the Courts both of law and of equity, and rests ....... 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....
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....to the extent that it might conflict with rights decreed under the decree or order (vide T. Bhup Narain Singh v. Nawab Singh, AIR 1957 Patna 729 at 731). A transfer or a dealing by a party to a suit during the pendency of the suit or proceeding is not, ipso facto void. It only cannot affect the rights of any other party to the suit under any decree or order that may be made in the suit or proceeding." [Emphasis Supplied] 53. This position is affirmed by the Supreme Court in the case of Nagubai v. B. Sharma Rao (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 transfer....
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....sons, who buy the property in dispute in good faith and acting bona fide; especially, when the Doctrine of Lis Pendens applies not merely to actual transfers of rights, which are subject matter of litigation, but to other dealings with it by any party to the suit or proceedings, so as to affect the right of any other party thereto. 56. The Law Commission, therefore, in its report, after referring to the laws operating in the U.K. and other countries, recommended amendment in Section 18 of the Indian Registration Act, 1908, on the lines of the Bombay Amendment Act. In view thereof, 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 pr....
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....to properties in Mumbai and the unamended section applies to rest of the State. 59. Simultaneously, Section 18 of the Registration Act, 1908 is also amended by adding Clause (ee) to provide for registration of notices of pending suits as follows:-- "Section 18 of the Registration Act, 1908 S. 18 Document of which registration is optional Any of the following documents may be registered under this Act, namely: (a) Instruments (other than instrument of gift and wills) which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of 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 purpor....
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.... 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. (2) The Court may by order grant such injunction, on such terms as to the duration of the injunction, keeping an account, giving security, or otherwise as the Court thinks fit." 61. In this context, it is also necessary to reproduce Rule 2A and 11 of Order XXXIX CPC, which deals with the consequences of non-obedience of Court's order of interim injunction. "2A. Consequence of disobedience or breach of injunction- (1) In the case of disobedience of any injunction granted or other order made under rule 1 or rule 2 or breach 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 ....
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.... (a) make an order allowing the application and directing that the applicant be put into the 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. (2) Where, upon such determination, the Court is satisfied that the resistance or obstruction was occasioned without any just cause by the judgment-debtor or by some other person at his instigation or on his behalf, or by any transferee where such transfer was made during the pendency of the suit or execution proceedings, it shall direct that the applicant be put into possession of the property, and where the applicant is still resisted or obstructed in obtaining possession, the Court may also, at the instance of the applicant, order the judgment-debtor, or any person acting at his instigation or on his behalf, to be detained 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,....
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....n the limits of India, excluding the State of Jammu and Kashmir, of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question. The section states that during the pendency of such suit, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto. However, the crucial words are "under any decree or order, which may be made therein". Such transfer cannot be except under the authority of the Court and on such terms, as it may impose. An Explanation has been added so as to explain what is meant by pendency of the suit or proceeding. We have already explained the ambit and scope of this provision. However, it must be understood that it operates to cover transfer of property pending suit. It deals with both, transfer or otherwise dealing with, and if that affects the rights 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 XXXI....
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....sessing the plaintiff or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit. The words "any property" are of wide amplitude. The injunction can also be granted when the defendant threatens or intends to remove or dispose of his property with a view to defrauding his creditors. In comparison to Section 52 of the TP Act, which deals with any suit or proceeding in which any right to immovable property is directly and specifically in question, the immovable property in regard to which the right is directly and specifically in question cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the right of any other party thereto; Order XXXIX Rule 1 speaks of "any suit" and by sub-clauses (a) to (c), takes care of a situation where any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit or wrongfully 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 hi....
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....one after giving an opportunity of being heard to the party applying for its vacation, discharge or setting aside, the same has caused undue hardship to that party. 70. We have, therefore, very wide sweep of the powers of granting injunction, while granting it and after granting it. Importantly, Order XXXIX Rule 5 clarifies that injunction to Corporation binds its officers, whose personal action it seeks to restrain. 71. By Order XXXIX Rule 6, the Court is empowered to make interlocutory orders and which are not of injunction, but permitting sale of any movable property, being the subject-matter of such suit or attached before Judgment in such suit; if that is subject to speedy and natural decay, or if that is required for any other just and sufficient cause, which makes it desirable to have it sold at once. Order XXXIX Rule 7 permits, detention, preservation, inspection etc. of subject-matter of the suit and interlocutory order can be 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....
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.... grant such relief merely because it is lawful to do so. The exercise of discretion must be sound and reasonable and not arbitrary. The equitable principles have a defined place in this exercise of discretion. Therefore, it is further futile and unnecessary to discuss whether pendency of application seeking temporary injunction and interlocutory orders slows down the speed and pace in delivery of justice. Once the power to grant injunction is discretionary and sound and not uncontrolled, unrestricted or unbridled, then, there is no reason to be unnecessarily apprehensive. There are inbuilt checks and safeguards in the system and in the law itself to prevent any abuse of these discretionary powers by the parties and an arbitrary, erroneous and illegal exercise of the discretion by the Court. 75. As held in the case of Vareed Jacob v. Sosamma Geevarghese and Ors. AIR 2004 SC 3992, "the source of power of the court to grant interim relief is under 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....
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....ile discussing the principle of lis pendens, it was observed that, "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." 79. The Apex Court also considered in this decision the observations made by it in the case of Kedar Nath Lal v. Ganesh Ram, AIR 1970 SC 1717, which referred the earlier decision in Samarendra Nath Sinha v. Krishna Kumar Nag, AIR 1967 SC 1440, that the purchaser pendent lite under this doctrine is bound by the result of the litigation on the principle that since the result must bind the party to it so must it bind the person deriving his right, title and interest from or through him. 80. In para No. 29 of its Judgment, the Apex Court also reaffirmed the legal position relating to Section 52 of the TP Act, as considered by it in Rajender Singh (supra), in which the Supreme Court, with approval of the principles laid down in Jayaram Mudaliar (supra), reiterated 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 prope....
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.... will not therefore render a transaction relating to the suit property during the pendency of the suit void but render the transfer inoperative insofar as the other parties to the suit. Transfer of any right title or interest in the suit property or the consequential acquisition of any right, title or interest, during the pendency of the suit will be subject to the decision in the suit." [Emphasis Supplied] 84. Then Hon'ble Supreme Court observed that, the decision in the case of A. Nawab John v. V.N. Subramaniyam, (2012) 7 SCC 738, is a recent reminder of the principle of law enunciated in the earlier decisions, as in that case the Court summed up the legal position thus:-- "18. ...... '12. ....... 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 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 fin....
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....ehension of the plaintiff ? 88. Thus, from the above-said emphatic pronouncement of the Apex Court, it is crystal clear that the principle of lis pendens contained in Section 52 of the TP Act, neither restrains the party from alienating the property, nor it has the effect of rendering such transaction pendent lite ipso facto or ipso jure illegal or void. It also does not make such transaction void ab-initio, nor the transfer ineffective. It only makes the alienation subservient to the decision of the Court. As it does not contemplate the Court passing any order of restraining the party to the suit from alienating the said property, the party, thus, alienating the property during pendency of the litigation does not incur any consequences for breach of any order of the Court. 89. Thus, the object of Section 52 of the TP Act is merely to make the alienation subservient to the decision of the Court and not to restrain the parties from entering into it or making it void, ab-initio or illegal or making the party subject to consequences for breach 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 ....
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....isobedience or breach of injunction order entails attachment and sale of the property of the concerned person or even detention of such person in civil prison. Rule 11 of Order XXXIX of Bombay Amendment also lays down that in case of breach of any order passed by the Court, suit of the party committing the breach is liable to be dismissed or if the party committing such breach is defendant, then his defence is liable to be struck off. 94. The provisions of the Contempt of Courts Act, 1971 also lay down the consequences for committing the breach of any order passed by the Court, including the order of interim injunction, and such consequences again provide for punishment for contempt of Court. 95. Thus, it is not only the purport, import and object of Order XXXIX Rule 1 and 2 of CPC of granting the relief of interim injunction restraining the other party from creating third party interest in the property pending the suit, is different than that of the Principle of Lis Pendens contained in Section 52 of TP Act, but even the consequences for the breach of such order are different, as it may entail into punishment, which consequences are not at all contemplated under Section 52 o....
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....and administration of justice is gone, if, despite prohibitory orders, immovable properties are alienated or disposed of with impunity. Such an approach is contrary to public policy. 99. While dealing with these rival contentions, this Court felt it necessary to refer to the decision of the Hon'ble Supreme Court in the case of Sujit Singh & Ors. v. Harbans Singh & Ors., 1995 (6) SCC 50, wherein the Hon'ble Supreme Court was pleased to observe as follows:-- "23. .................. In defiance of the restraint order, the alienation/assignment was made. If we were to let it go as such, it would defeat the ends of justice and the prevalent public policy. When the Court intends a particular state of affairs to exist while it is in seisin of a lis, that state of affairs is not only required to be maintained, but it is presumed to exist till the Court orders otherwise. The Court, in these circumstances has the duty, as also the right to treat the alienation/assignment as having not taken place at all for its purposes. Once that is so, Pritam Singh and his assignees, respondents herein, cannot claim to be impleaded as parties on the basis of assignment. Therefore, the a....
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....utlining the importance of rule of law, administration of justice and the role of courts, the Supreme Court has observed: "29. Apart from the fact whether A.K. Ghosh had a legal authority to sub-lease or not, it was not open to him to grant a sub-lease in violation of the order. It is no use contending as Mr. Chidambaram, learned counsel for the respondents, does, that there was a bar to such a sub-lease under the terms of the status qua order. It has the effect of violating the preservation of status of the property. This will all the more be so when this was done without the leave of the Court to disturb the state of things as they then stood. It would amount to violation of the order. The principle contained in the maxim : Aactus Curiae Neminem Gravatt" has no application at all to the facts of this case when in violation of status qua order a sub-tenancy has been created. Equally, the contention that even a trespasser cannot be evicted without recourse to law is without merit, because the state of affairs in relation to property as on 15-9-1988 is what the Court is concerned with. Such an order be circumvented by parties with impunity and expect the Court to confer its....
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.... completely if the Court does not curb and prevent this tendency. The note of caution of the Supreme Court must be consistently at the back of everybody's mind. Therefore, Shri. Naphade is not right in the distinction which he is trying to make." [Emphasis Supplied] 103. The Division Bench was also pleased to reject the contention of the learned counsel for the petitioners therein that, the order of injunction will bind only the transferor and not the world at large, as ownership rights are neither taken away nor restricted in any manner by order of injunction or other preventing directions. It was held that, "the order of injunction reaches and touches a party to the lis. Hence, when during pendency of an order of injunction, immovable property, which is subject-matter of restraint or injunction, is transferred, there is no choice but to declare the transaction as illegal." [Emphasis Supplied]. 104. It was further held that, "an order issuing interlocutory injunction is issued with a view to preserve and protect the status-quo during the pendency of litigation. The true effect of such an order is, therefore, preservation of status-quo prevailin....
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....o confer its blessings. It does not matter that to the contempt proceedings, sub-lessee was not a party. It cannot gain an advantage in derogation to the rights of the parties, who were litigating originally. [Emphasis Supplied] 108. Thus, it is apparent that, both, "the Principle of Lis Pendens" and "the order of temporary injunction", have not only different objects but the breaches thereof have also different consequences. The transaction made in breach of injunction order is apparently and patently illegal and binds no party, even the purchaser. Whereas, transaction effected during lis pendens does not attract the taint of illegality. It remains legal, valid and binding on the parties, subject to the outcome of the litigation. It also does not entail the consequences of penalty or contempt, as there is no order passed by the Court in Doctrine of Lis Pendens. 109. As a result, from the perspective of litigating parties also, the "Doctrine of Lis Pendens" and "Order of Temporary Injunction" have different effects. The apprehension of action under Section 2A Rule 11 of CPC of attachment of property and the punishment of contempt of courts act as deterrent to the par....
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....e, therefore, find the conclusions drawn by the learned Single Judge in Prakash Jawale's case to be based on sound reasoning and in tune with Apex Court's decisions. 112. The learned Single Judge in Prakash Jawale's case has then also rightly considered the effect of the registration of lis pendens on the transaction. Admittedly, at present the provisions of the Amendment Act XIV of 1939 apply only to the properties situate wholly or partly in the city of Mumbai. The substituted Section 52 of the TP Act, which deals with the registration of the notice of pendency of the suit, can apply to the other areas only when the notification to that effect is issued under Section (2) of the said Act. It is, admittedly, not in dispute even till date that there is no such notification issued making applicable the substituted Section 52 of the TP Act to other parts of the State of Maharashtra. Furthermore, even the substituted Section 52 of the TP Act, would apply even in respect of immovable properties in the city of Mumbai, only in a case where the notice of pendency of suit or proceedings is registered under the Indian Registration Act. Though by the provision of the said Amend....
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....s brings us to consider the proposition of law laid down by the learned Single Judge in question No. 1 while making reference that, "the transferees pendent lite are not required to be or entitled as of right to be impleaded as party to the suit and cannot resist execution proceedings in view of the provisions of Order XXIX Rule 100 of CPC, as amended by this Court." 117. In our view, with greatest respect, this proposition of law, as laid down by the learned Single Judge, while framing question No. 1 for reference, itself is not based on correct legal position, in view of the various decision of the Apex Court. 118. The decision directly on this point is of Amit Kumar Shaw v. Farida Khatoon, (2005) 11 SCC 403, wherein the Apex Court had an occasion to consider the effect of Section 52 of TP Act in the context of the provisions of Rule 10 of Order I; Rule 10 of Order XXII; and Section 146 of the Code and it was held as under:-- "16. The doctrine of lis pendens applies only where the lis is pending before a court. Further pending the suit, the transferee is not entitled as of right to be made a party to the suit, though the court has a discretion to make him a party. ....
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....the appellate court where he is not already brought on record." [Emphasis Supplied] 120. In the latest decision of the Apex Court in the case of Thomson Press (India) Ltd. (supra), once again the Apex Court had an occasion to deal with legal position. In this case, despite having notice and knowledge of injunction order passed by the Court prohibiting transaction or alienation of suit property pending suit, the suit property was purchased by the appellant. Appellant then filed an application for impleadment under Order I Rule 10 CPC in a suit for specific performance of contract. The Division Bench of Delhi High Court rejected the said application, affirming the order of the learned Single Judge. Hence, the appellant approached the Supreme Court. The exact question, which fell for consideration in this decision, therefore, before the Apex Court was, as to whether the appellant, who is the transferor pendent lite, having notice and knowledge about pendency of the suit for specific performance and order of injunction, can be impleaded as party under Order I Rule 10 CPC on the basis of Sale Deed executed in his favour by the defendant? 121. While answering this question....
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....subject matter of the disputed property, then he becomes vitally interested in the litigation. The transferor of the property, having no more interest in the property, in that situation, may not properly defend the suit and may collude with the plaintiff. Therefore, such transferee can apply to become a party to the suit and as held by the Hon'ble Supreme Court in above-said decision of Thomson Press (India) Ltd. (supra), he is entitled to be joined as a party to the suit to enable him to protect his interest. 125. In view of this legal position, there cannot be any blanket proposition that transferees pendent lite are not required to be or entitled to be, as of right, impleaded as parties to the suit. Everything depends on the interest in the property, which such transferee has acquired during pendency of the litigation. If the interest is substantial, then, as held by the Apex Court, he becomes entitled to be impleaded as party to the suit. In that situation, he may also become entitled to resist the execution proceedings. His claim cannot be thrown out merely because Order XXI Rule 100 CPC, as amended by this Court, states that the obstruction raised by transferee pendent....
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....hey are bonafide purchasers for value and without notice, his interests in the suit property and the equities created in his favour, may defeat the plaintiff's equitable right to get the specific performance of the suit property and thereby frustrate the very object of the suit itself. It is, therefore, always desirable to take fullest care of the plaintiff's interest and right in the suit property vis-à-vis such transfer by granting relief of temporary injunction, as Section 52 conspicuously lags behind in granting such protection or making improvement therein by spending huge amount. 129. In our considered opinion, the learned Single Judge in the case of Prakash Jawale (supra) has considered in its proper perspective all these aspects and after referring to the provisions of Order XXXIX Rule 1 and 2 of the CPC, the learned Single Judge has rightly held in Prakash Jawale's case that, the power to grant relief of temporary injunction under these provisions is always discretionary and, 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 ....
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....udge, 'whether it would be appropriate, in cases of claims for temporary injunction to restrain transfers pendent lite, to consider imposition of conditions short of granting injunction, which should protect the plaintiffs' 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 be subject to the pending suit, or requiring the party to inform the Court promptly of creation of every such interest', in our considered opinion, the Court can always, in appropriate cases, impose such conditions. Those conditions, at times, may be in addition to or as part of the order of temporary injunction. However, mere imposition of such conditions cannot dispense with the effective relief of temporary injunction. As a matter of fact, the imposition of condition, like, seeking an undertaking that no equities would be claimed on account of sale or development of properties, is merely in the nature of the principle of lis pendens. Similarly, directing conditions of effecting a sale only after putting transferees to notice or requiring the party ....
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....indless 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, which could conveniently be avoided." 133. With greatest respect, though there cannot be and need not be any dispute about the proposition that the Courts should avoid mindless litigation, which serves no purpose, considering the constraints on the time and resources of the Courts, in our view, the Court cannot call the litigation as 'mindless', merely because there may be some other provisions also in which some relief can be granted. Once it is held that the very object, scope and effect of the provisions of Section 52 of the TP Act and Rules 1 and 2 of Order XXXIX of CPC is different and they operate in two different fields and in such situation, Section 52 of TP Act does not afford adequate and effective protection, as is afforded by Order XXXIX Rule 1 and 2 CPC, then the litigation in the nature of applications for temporary injunction, cannot be called as 'mindless litigation'. It is not simplicitor a case that, "the order of injunction only gives an advantage to the legal prof....
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....ations simplicitor or put additional fetters on plaintiff's right, which are not contemplated by law. The Courts are meant to uphold the rule of law by implementing the statutory provisions of law; by exercising the discretion vested in it by law. Refusal to do so cannot be an answer to get rid from over-burdening of work. The solution for the overburdening of Court may be found somewhere else, but definitely and certainly not in refusing to exercise the discretion vested in the Court by law or putting additional fetters on that discretion, which the Legislature in its wisdom not deemed it fit to impose, even when both these provisions of "lis pendens" and "temporary injunction" co-exist together for years and even when in its 157th Report devoted specifically to the "Doctrine of Lis Pendens", the Law Commission has made certain suggestions for amendment to Section 52 of TP Act, but not on this score. It is pertinent to note that in its Report, the Law Commission has also considered the provisions of temporary injunction in the light of the Doctrine of Lis Pendens, but did not find it necessary to consider the provisions of temporary injunction as redundant in view of Doctrine ....
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....d any reason to alter the view taken by him in Kachhi Properties (supra), ordinarily, the appeal could have been dismissed as untenable and as resulting in heaping upon the judicial system an unwarranted burden. However, in his opinion, "since conflicting judgments of the Courts of record tend to create confusion in the trial Courts and result in uncertainty in law, and, since on this question, there are at least three Hon'ble Judges, who seem to have accepted that Section 52 of the TP Act affords adequate protection, which view has not found favour with the Hon'ble Judge deciding Pralhad, it may be appropriate to have the matter referred to a larger Bench rather than committing judicial indiscipline of taking a different view". 139. Learned Single Judge also felt it necessary since a Division Bench of this Court in Vasant Tatoba Hargude and Others v. Dikkaya Muttaya 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. 140. As the question No. 5 is formulated in the context of the observations made in paragraph No. 13 of Vasant Hargude's Judgment (supra) ....
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....int of time would bind successive Courts". Therefore, according to learned Single Judge, there is no question of a Judgment later in point of time having a greater binding force over a Judgment given earlier and, therefore, this stray sentence, which has also resulted in a considerable turbulence for the Courts below, would require appropriate judicial consideration. Hence, learned Single Judge formulated the question No. 5 to the effect, "whether the observation in para (13) of the Judgment in Vasant Tatoba Hargude and Others v. Dikkaya Muttaya Pujari (AIR 1980 Bombay 341), that in the event of there being conflict, the decision of later Bench would bind only lays down that judgment later in point of time as explaining the earlier judgment would bind?" 143. In our considered opinion, so far as the Law of Precedent is concerned, it is undisputable that it's very premise lies in judicial discipline and in certainty of legal position. The judicial discipline requires that the Judgment rendered by higher Courts be binding on subordinate Courts, whereas certainty of legal position requires that the Judgment rendered earlier in point of time would bind successive Courts. 144. ....
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....se, the courts must carefully try to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this court, to support their reasoning." 148. In the above decision, the Supreme Court, also quoted with approval, the following note of caution given by it earlier in Madhav Rao Jivaji Rao Scindia Bahadur v. Union of India (1971) 1 SCC 85, that, "It is not proper to regard a word, a clause or a sentence occurring in a judgment of the Supreme Court, divorced from its context, as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment." 149. It is thus clear that it is only the ratio decidendi of a case which can be binding and not the obiter dictum. Obiter, at best, may have some persuasive efficacy, though, as far as pronouncements of Supreme Court are concerned, as per settled position of law, even its obiter dicta is also binding on High Courts and subordinate Courts. 150. The question as to whose decisions are binding, Article 141 of the Constitution, provides that, "th....
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....h Court gives a decision on a question of law, it should generally be followed by a co-ordinate Bench in the subsequent case. If it wants the earlier decision to be reconsidered, it should refer the question at issue to a larger Bench. 154. As to the binding nature of the Judgment given by the Coordinate Benches, again the law is settled, as laid down by the Apex Court, in the case of State of U.P. & Ors. v. Jeet S. Bisht & Anr. (2007) 6 SCC 586. In this reported Judgment, in paragraph No. 100, while regretting to express his inability to agree with Brother Katju, J., in regard to the criticism of various orders passed in this case itself by other Benches, Justice S.B. Sinha, J. observed that; "I am of the opinion that it is wholly inappropriate to do so. One Bench of this Court, it is trite, does not sit in appeal over the other Bench particularly when it is a coordinate Bench. It is equally inappropriate for us to express total disagreement in the same matter as also in similar matters with the directions and observations made by the larger Bench. Doctrine of Judicial Restraint, in my opinion, applies even in this realm. We should not forget other doctrines which are ....
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....e can be no dispute with respect to the settled legal proposition that a judgment of this Court is binding, particularly, when the same is that of a co-ordinate Bench, or of a larger Bench. It is also correct to state that, even if a particular issue has not been agitated earlier, or a particular argument was advanced, but was not considered, the said judgment does not lose its binding effect, provided that the point with reference to which an argument is subsequently advanced, has actually been decided. The decision therefore, would not lose its authority, "merely because it was badly argued, inadequately considered or fallaciously reasoned". The case must be considered, taking note of the ratio decidendi of the same i.e., the general reasons or the general grounds upon which, the decision of the court is based, or on the test or abstract, of the specific peculiarities of the particular case, which finally gives rise to the decision." 159. This being the legal position of judicial discipline and hierarchy, there can be no dispute that a larger bench decision will prevail over a smaller bench decision and one Bench of the High Court or Supreme Court cannot and does not sit in ap....
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....ict between two decisions of the Apex Court of equal number of Judges, the later decision would be binding on the High Court". 163. As against it, since the mechanical adherence to later decision may hinder the cause of justice in many cases, the Supreme Court has in the case of Municipal Corporation of the City of Ahmedabad v. Chandulal Shamaldas Patel (1970) 1 SCWR 183, held as below:-- "Now the contention that the latest Judgment of a Coordinate Bench is to be mechanically followed and must have pre-eminence irrespective of any other consideration does not commend itself to me. When judgments of the superior court are of co-equal benches and therefore of matching authority, then their weight inevitably must be considered by the rationale and the logic thereof and not by the mere fortuitous circumstances of the time and date on which they were rendered. It is manifest that when two directly conflicting judgments of the superior Court and of equal authority are extent, then both of them cannot be binding on the courts below. Inevitably a choice though a difficult one has to be made in such a situation. On principles, it appears to me that the High Court must follow the....
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....rty to follow the one or the other." 167. Even the Five-Judge Bench of the Supreme Court in the case of Atma Ram v. State of Punjab AIR 1959 SC 519 has also indicated (at page No. 527) that, "such a task may fall on and may have to be performed by the High Court. According to the Supreme Court, when confronted with two contrary decisions of equal authority, the subordinate court is not necessarily obliged to follow the later, but would have to perform the embarrassing task "of preferring one view to another". 168. In the words of Supreme Court, "we are inclined to think that no blanket proposition can be laid down either in favour of the earlier or the later decision". 169. The Special Bench of the Calcutta High Court in Bholanath v. Madanmohan AIR 1988 Cal. 1, has also, after relying on the Judgment of the Supreme Court in Atma Ram's case (supra), held that, "the subordinate court would have to prefer one to the other and not necessarily obliged, as a matter of course, to follow either the former or the later in point of time, but must follow that one, which, according to it, is better in point of law. As old may not always be the gold, the new is also not necessarily....
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.... of the same High Court, it should refer the case to a larger Bench. (iii) Where there are conflicting decisions of courts of co-ordinate jurisdiction, the later decision is to be preferred if reached after full consideration of the earlier decisions. [Emphasis Supplied] 173. This legal position is also found reflected in the Full Bench decision of Madhya Pradesh High Court in the case of Jabalpur Bus Operators Association & Ors. v. State of M.P. & Anr. AIR 2003 MP 81, wherein it was held that; "In case of conflict between two decisions of the Apex Court, Benches comprising of equal number of Judges, decision of earlier Bench is binding unless explained by the later Bench of equal strength, in which case the later decision is binding...... No decision of Apex Court has been brought to our notice which holds that in case of conflict between the two decisions by equal number of Judges, the later decision is binding in all circumstances, or the High Courts and Subordinate Courts can follow any decision which is found correct and accurate to the case under consideration." [Emphasis Supplied] 174. As a matter of fact, this issue should no more d....
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.... v. Hilli Multipurpose Cold Storage Private Ltd., the three-Judge Bench of the Hon'ble Supreme Court was once again pleased to quote with approval the law laid down by its five-Judge Bench in the case of Central Board of Dawoodi Bohra Community v. State of Maharashtra (2005) 2 SCC 673 and reiterated that the decision delivered by the Bench of larger strength is binding on any subsequent Bench of a lesser strength or co-equal strength. Thus, in this case, it was held that, when a three-Judge Bench in 2005 ignored the view taken by another three Judge Bench of 2002, as the 2005 Bench was bound by the view taken by earlier three-Judge Bench, the view expressed by 2002 Bench, being earlier in point of time, is required to be followed. 176. In view of this principle laid down by the Hon'ble Supreme Court that, Co-ordinate Bench is bound by the view taken earlier by the co-equal or Co-ordinate Bench. Unless the view held by earlier Bench is per incuriam, such a binding Judgment of earlier Bench cannot be ignored or brushed aside. It has to be followed, as judicial discipline demands that there is a certainty in the views expressed by the Courts. The principle of finality and c....
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....e? And, would such registration not be preferable to clamping an injunction on adversary? Answer : Mere registration of notices of pending suit cannot secure for plaintiffs more than or even equivalent to what an injunction could secure, as the consequences of alienation in breach of interim injunction render such alienation illegal and expose the party to the consequences provided under Order XXXIX Rule 2A and Rule 11 CPC, in addition to the punishment for contempt of Court. Hence, such registration of notices of pending suit, though desirable as an additional safeguard, cannot be preferable or substituted to clamping an order of injunction on adversary. Question No. (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? Answer : Though it may not be inappropriate for the Court to expect the plaintiff to show that the provisions of Section ....