Can make a Lease Agreement prior to institute Partition Action?

The relevant law regarding the issue states as follows:

Section 66 of Partition Law No. 21 of 1977

(1) After a partition action is duly registered as a lis pendens under the Registration of Documents Ordinance no voluntary alienation, lease or hypothecation of any undivided share or interest of or in the land to which the action relates shall be made or effected until the final determination of the action by dismissal thereof, or by the enter of a Decree of Partition under section 36 or by the entry of a certificate of sale.

(2) Any voluntary alienation, lease or hypothecation made or effected in contravention of the provisions of subsection (1) of this section shall be void.

(3) Any assignment, after the institution of a partition action, of a lease or hypothecation effected prior to the registration of such partition action as a lis pendens shall not be affected by the provisions of subsections (1) and (2) of this section.

With reference to the Section 66 (1) and (2), it is clear that any alienation, lease or hypothecation after the partition action is duly registered as a lis pendens under the Registration of Documents Ordinance becomes void.
And provided that any such voluntary alienation, lease or hypothecation made in the event of final determination of the partition action by dismissal or interlocutory decree deemed to be valid.
In the meantime, in accordance with Section 66 Sub Section 3, if any alienation, lease or hypothecation which made prior to the registration of such partition action as a lis pendens shall not be affected by the provisions of Sub-Sections (1) and (2) of this section. Therefore any alienation, lease or hypothecation which made prior to the registration of such partition action is valid and can be given priority effect.

Decided Case Laws

Abusali Sithi Fareeda V Mohamed Noor and Mohamed Farook (SC. Appeal 134/2013)
In this case Eva Wanasundera PC. J. is of the view that “it is settled law for many decades that in spite of the provisions included in the Partition Ordinance firstly by Section 17 and thereafter in the Partition Law by Section 66, any party to a lawsuit of partitioning a co-owned Land is able to gift, sell, or hypothecate his entitlement to the share of the land which would be allocated to him at the end of the case.”

B. Sillie Fernando Vs. W. Siliman Fernando and Others 64 NLR 404
It was held that “where, prior to the entering of the interlocutory decree in a partition action, a party transfers by sale or donation whatever will be allotted to him by the final decree, the lot in severalty finally allotted to the transferor or those representing him (if he has died before the entering of the final decree) will automatically pass and vest in the transferee, without any further conveyance by the transferor or his representatives.”

 Khan Bhai Vs. Perera 26 NLR 204
A Full Bench of the Supreme Court then, decided on this same point of law, unanimously ruling that persons desiring to charge or dispose of their interests in a property subject to a partition action could do so “by expressly charging or disposing of the interest to be ultimately allotted to them in the action.”

Sirinatha Vs. Sirisena and Others (1998) 3 SLR 19
Ismail, J. (P/CA) at that time, stated that “It is clear that the object of Section 66 of the Partition Law is to prevent the passage of a partition action being prolonged by permitting new parties to be added on every occasion that the interests presently vested in the parties to the action are alienated or hypothecated.”

With considering all the above facts we can come to an analysis that, in the given situation where the lease agreement was made prior to the registration of the partition action and only after the lease agreement was made the co -owners are inclined to go for a partition action, therefore, the rights of the lessee under the lease agreement will not be affected and the lessee can claim priority effect to the lease agreement under Section 66 Sub Section 3 of the Partition Law No. 21 of 1977.

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