1. Partition suit — Alienation of joint family properties during pendency via voluntary sale and revenue sale for loan recovery — Challenge under Section 52, Transfer of Property Act. (Para 2 , 4 , 27 , 28 )
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1972 Supreme(SC) 226
SUPREME COURT OF INDIA
S.M. SIKRI, C.J.I., A.N. RAY AND M.H. BEG, JJ.
Jayaram Mudaliar, Appellant
Versus
Ayyaswami and others, Respondents.
Civil Appeal No. 2151 of 1968, D/- 12-4-1972.
Advocates appeared
Mr. M. C. Chagla, Sr. Advocate, (M/s. R. Gopalakrishnan and T. L. Garg, Advocates, with him), for Appellant; Mr. M. K. Ramamurthi, Sr. Advocate, (M/s. J. Ramamurthy and Vineet Kumar, Advocates, with him), for Respondents Nos. 1 and 6 to 9.
Advocates:
J.RAMAMURTHY, M.C.CHAGLA, M.K.RAMAMURTHY, R.GOPAL KRISHNAN, T.L.GAY, VINIT KUMAR
J.RAMAMURTHY, M.C.CHAGLA, M.K.RAMAMURTHY, R.GOPAL KRISHNAN, T.L.GAY, VINIT KUMAR
The doctrine of lis pendens applies to both voluntary and involuntary alienations, including revenue sales. However, it does not affect pre-existing statutory charges on property, such as those created under land improvement loan legislation, which remain enforceable despite the pendency of a partition suit.
Headnote:(A) Transfer of Property Act, 1882 - Section 52 - Doctrine of lis pendens - Voluntary and involuntary alienations - Revenue sales - Pre-existing charges - The principle of lis pendens applies to both voluntary alienations and involuntary alienations, such as court and revenue sales. However, the doctrine does not affect pre-existing rights or charges. Where a valid statutory charge subsists on land by virtue of loans granted for its improvement, such a charge is a pre-existing liability that is not extinguished by the institution of a partition suit. Consequently, a purchaser in a revenue sale for the recovery of such loans is not prejudiced by the principle of lis pendens in respect of the properties for which the loans were taken. (Paras 15, 16, 18, 40)
(B) High Court Rules - Procedure for seeking certificate for leave to appeal - A rule prescribing that an application for a certificate of fitness for further appeal must be made orally and immediately after the judgment is delivered is not ultra vires. Such a rule does not take away the right to appeal but merely regulates the manner and time in which the right is exercised. (Paras 13, 24)
Facts of the case:
A suit for partition of joint family properties was filed. During the pendency of the litigation, some of the properties were transferred to a third party through a voluntary sale deed, and other properties were sold via a public auction (revenue sale) to recover arrears of loans taken under a land improvement statute. The plaintiff challenged these transfers, alleging they were hit by the doctrine of lis pendens under Section 52 of the Transfer of Property Act. The High Court held that the voluntary sale was hit by lis pendens, but the revenue sale was not hit to the extent that the properties were those for whose improvement the loans were taken.
Findings of Court:
The court found that the voluntary sale deed was a voluntary alienation and thus fell within the prohibitions of Section 52 of the Transfer of Property Act. Regarding the revenue sale, the court found that the liability was a pre-existing charge created by the land improvement loan, which the State could enforce notwithstanding the pendency of the partition suit.
Issues: 1. Whether the procedural rule requiring an immediate oral application for a certificate of fitness for appeal is ultra vires. 2. Whether voluntary and revenue sales conducted during the pendency of a partition suit are hit by the doctrine of lis pendens.
Ratio Decidendi: The court ruled that procedural rules regulating the timing and manner of applying for a certificate of appeal are valid and not ultra vires. On the merits, it held that while the doctrine of lis pendens generally applies to all transfers during litigation to prevent the subject matter from being removed from the court's control, it cannot override pre-existing statutory charges. A revenue sale to recover loans specifically granted for land improvement is the enforcement of a pre-existing charge that survives the institution of a partition suit.
Result: Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Validity of High Court rule on certification for appeal — Whether voluntary and revenue sales of properties during pendency are hit by the doctrine of lis pendens. (Para 12 , 21 , 23 , 29 , 34 , 39 , 43 )
3. Rule 28 regulates procedure without infringing substantive rights — Lis pendens applies to involuntary sales but does not extinguish pre-existing statutory charges for land improvement. (Para 13 , 24 , 31 , 33 , 37 , 38 , 40 , 42 , 44 , 48 , 50 )
4. Doctrine of lis pendens applies to voluntary and involuntary alienations but does not affect pre-existing statutory charges or interests existing before the loan. (Para 15 , 16 , 18 , 49 , 51 )
5. Appeal dismissed; High Court direction to separate properties improved by loans from other properties upheld. (Para 19 , 52 )
6. Is a rule requiring oral application for a certificate of fitness immediately after judgment ultra vires the Letters Patent?
No. Such a rule regulates the manner and time of exercising the right to appeal without taking away the substantive right conferred by the Letters Patent. (Para 13 , 24 )
7. Does the doctrine of lis pendens apply to involuntary alienations such as court or revenue sales?
Yes. The principle of lis pendens applies to involuntary alienations, including court auctions and revenue sales, as the purchaser is bound by the litigation's result. (Para 15 , 16 )
8. Does the doctrine of lis pendens affect pre-existing charges or mortgages on a property?
No. The principle of lis pendens does not affect pre-existing rights. Valid charges or mortgages subsisting before the suit continue to be enforceable notwithstanding the pendency of a partition suit. (Para 16 , 18 )
9. How does the Land Improvement Loans Act interact with the doctrine of lis pendens in revenue sales?
Recoveries under Section 7(c) for land improvement are pre-existing charges. If the state sells land specifically improved by such loans, the purchaser is not prejudiced by lis pendens. (Para 16 , 17 , 18 , 40 , 42 )
Judgment
SIKRI, C.J.I. :- I have had the advantage of perusing the judgment prepared by my brother, Beg J., but as I arrive at the same conclusion by a slightly different route I am writing a separate judgment. I may give a few facts to make the judgment self-sufficient. The following pedigree may enable us to appreciate the facts :
2. On June 23, 1956 Ayyaswami (Plaintiff) filed a pauper petition No. 137/1958. In the plaint he claimed a partition of B Schedule properties which, according to him belonged to Joint Hindu Family consisting of himself and the defendants. While this suit was pending, defendant No. 1 - Muniswami Mudaliar - and four of his sons executed a sale deed (Ex. B-7) in respect of some lands in Ozhaiyathur village in favour of Jayaram Mudaliar on July 7, 1958. These properties comprised items 5, 15 to 19, 24 and 28 of Schedule B. On July 15, 1960 a certificate of sale (Ex. B-51) was issued stating that Jayaram Mudaliar had purchased at public auction immoveable property (described in the certificate) for Rs. 6,500/-. The property is stated to have been sold for "pump set arrears under Hire-Purchase System due by Muniswami Mudaliar." Exhibit B-51 covered items 4, 18, 20, 23 to 27 and 31. It is common ground that these properties were included in the B Schedule mentioned in the plaint.
3. It is stated in the judgment of the trial Court that Jayaram Mudaliar got himself impleaded as 12th defendant. He filed a written statement inter alia alleging that the Plaint B Schedule properties were the sole and absolute properties of the Ist defendant. Additional issues were framed in the suit.
4. It appears that by virtue of order dated September 18, 1961, the plaint was amended and paras 24 (a) and 24 (b) inserted. They read :
"24 (a). The 12th defendant is a close agnate of the son-in-law of the Ist defendant. He executed the sham and nominal sale deed dated 7-7-1958 in favour of the 12th defendant to defeat the plaintiff s rights and to secrete the properties. It was not acted upon. It is the Ist defendant that continue to be in possession even now. The alleged sale deed is not supported by consideration. The mortgage itself was brought about to defeat any rights. In any event on the date of the alleged sale deed dated 7-7-1958 the mortgage decree debt was not subsisting. The plaint was filed in forma pauperis as O. P. 137 of 1958 on the file of this Hon ble Court on 23-6-1958. Thus in any event the sale is hit by the rule of lis pendens and the sale deed dated 7-7-1958 cannot and does not confer any rights on the 12th defendant.
24 (b). The revenue sale is brought about collusively and fraudulently. There was no publication. The 12th defendant never got into possession of any property. The possession still continues to be with the 1st defendant on behalf of the joint family. The sale is also hit by the rule of lis pendens. It also does not and cannot confer any rights on the 12th defendant."
5. Following additional issues were raised out of the pleadings of the 12th defendant :
(1) Whether the plaint B Schedule properties are joint family properties ?
(2) Whether the plaintiff is entitled to question the alienation in favour of the 12th defendant ?
(3) Whether the sale deed dated 7-7-1958 by the Ist defendant in favour of the 12th defendant true, valid and binding on the plaintiff and is affected by lis pendens ?
(4) Whether the Revenue sale by the Collector dated 16-3-1960 is liable to be questioned by the plaintiff ?
(5) Is the suit without impleading the Government liable to be questioned by the plaintiff ?
(6) Is the sale of pump set by the Ist defendant to the 12th defendant true, valid and binding on the plaintiff ?
(7) Whether the plaintiff and other members became divided from the Ist defendant after 1939 ?
(8) To what equisities, if any, is the 12th defendant entitled ?
(9) Is the plaintiff estopped from questioning the alienations and claiming any right in the B Schedule properties ?
6. We are only concerned with issues 3 a
