When Lis Pendens Ends: Bombay High Court Brings Clarity to Section 52 of the Transfer of Property Act.

When Lis Pendens Ends: Bombay High Court 

Litigation over property can often stretch across decades—dragging on like a shadow over the rights of buyers, owners, and investors. But what happens when the very nature of that litigation changes over time? Can the law continue to hold up property transactions even when the dispute is no longer really about the property?

In a pivotal judgment, the Bombay High Court, through Justice Sharmila U. Deshmukh, has shed light on this grey area, providing much-needed clarity on when the doctrine of lis pendens ceases to apply under Section 52 of the Transfer of Property Act.

What is Lis Pendens All About?

To understand the judgment, let’s first unpack the doctrine of lis pendens.

The term literally means “litigation pending.” Under Section 52 of the Transfer of Property Act, 1882, if a property is the subject of a legal dispute, neither party can transfer or deal with it in a way that could affect the rights of the other until the case is resolved. This ensures that the court’s final decision isn’t undermined by secretive sales or transfers made mid-litigation.

In short, lis pendens is meant to protect the status quo while the court decides who really owns the property.

But here’s where this case gets interesting.

A Dispute that Began in 1981—And Evolved Over Time

The case involved a family business split between two groups—Plaintiffs and Defendants—who had once jointly owned and managed four partnership firms. Back in 1975, an Interim Arbitral Award divided assets and allotted properties, including one in Mumbai and another in Delhi, to the Defendants.

However, the Plaintiffs disputed this division, arguing that the interim award was meaningless without a Final Award based on full accounting and valuation of the firms' assets. In 1981, they filed a suit seeking division of properties in equal shares, proper accounting, and valuation.

Crucially, during the entire 38 years the case remained pending (first in the High Court, later transferred to the City Civil Court due to jurisdictional changes), no interim reliefs were granted to the Plaintiffs. The case ended in 2019, when the court dismissed the suit outright.

The 1995 Twist: Lis Pendens Notice Registered

In the meantime, in 1995, the Plaintiffs registered a lis pendens notice with the Sub-Registrar of Assurances. This flagged the two properties (Mumbai and Delhi) as being under litigation, effectively preventing the Defendants from dealing with or selling them.

After the suit was dismissed, the Defendants applied to lift the notice, arguing: “The suit is over. The claim is now only for money. Why should our property still be frozen?”

Plaintiffs’ Argument: "But the Appeal is Pending!"

The Plaintiffs pushed back, saying the appeal process is a continuation of the suit and so the lis pendens should continue. Even if the properties are gone, they argued, the money equivalent still needs to be calculated, and therefore, the case lives on.

What the Court Held: Focus Shifted From Property to Money

Justice Deshmukh offered a clear, reasoned answer:

“Post alienation by way of sale or surrender, the immovable properties are no longer available for distribution and what remains is a money claim based on accounts and valuation. Post alienation, the complexion of the suit changed into a suit for accounts or at the best a money claim to which the doctrine of lis pendens has no applicability.”

In other words, once the properties had already been acted upon and alienated (transferred/surrendered), the suit's nature changed. It was no longer a battle for ownership—it became a financial dispute. And since the law on lis pendens only applies to disputes over the actual property, it had no place in a purely monetary claim.

This Matters: A Win for Legal Certainty

This ruling carries real-world impact for thousands of litigants and stakeholders:

• Buyers now have more confidence that they won’t unknowingly walk into a long-dormant property dispute.
• Defendants in dismissed suits are no longer shackled by outdated lis pendens notices.
• Courts have a clear precedent for distinguishing between property and financial claims.

Above all, this judgment discourages the misuse of lis pendens as a strategy to freeze property rights indefinitely, even when a case is no longer really about the property.

 Thoughts

The Bombay High Court’s ruling brings a welcome sense of closure—for the parties involved and for the doctrine of lis pendens itself. It reminds us that the law is not just a shield—it must also be a fair compass, guiding justice without paralyzing progress.