Karnataka High Court
State of Karnataka - Appellant
Versus
Metal Corporation - Respondent
Decided On : 08-11-87
M.F.A. : 1232 of 1983
Attachment - Recovery of Damages - Employees' State Insurance Act, 1948, Employees Provident Fund and Miscellaneous Provisions Act 1952, Payment of Gratuity Act, 1972 - S. 64 of the Civil PC - Effect of Attachment - Prohibition on Alienation - Involuntary Sales - Court Sales - Judgment Debtor's Interest - Court's Justification in Raising Attachment
Fact of the Case:
Appellant filed a suit for recovery of damages against respondent-2. The State of Karnataka initiated proceedings to recover amounts due from respondent-2 under the Employees' State Insurance Act, 1948, Employees Provident Fund and Miscellaneous Provisions Act 1952, and Payment of Gratuity Act, 1972. The property was attached and sold by the authorities. Respondent-1 filed applications to raise the attachment, which were allowed by the court below.
Finding of the Court:
The court found that the attachment by the State of Karnataka had no effect as the property had already been sold by the authorities, and the judgment debtor had no subsisting interest in the property capable of being sold in a court auction.
Issues: Effect of attachment on property already sold by the authorities, judgment debtor's interest in the property, justification for raising the attachment.
Ratio Decidendi: The court held that the effect of the attachment is to prohibit the judgment debtor from alienating the property, but it does not apply to involuntary sales like court sales. As the property had already been sold by the authorities and the judgment debtor had no subsisting interest in the property, the attachment had no effect.
Final Decision: The court dismissed both appeals, finding no merit in them.
( 1 ) THESE two appeals by respondent-1 are directed against the common order dated 1-1-1983 passed by the 9th Additional city Civil Judge, City Civil Court, bangalore, in Miscellaneous Nos. 27/82 and 87/82 raising the attachment and allowing both the petitions.
( 2 ) APPELLANT filed a suit in O. S. No. 44/73 against M/s. Steel Construction company (P) Ltd. , respondent-2 in MFA no. 1232/83 and respondent-4 in M. F. A. . No. 1233/83 for recovery of damages on account of non-supply of electrical goods. The said suit was decreed for Rs. 2,84,329/- and odd. The State of Karnataka sued out execution in old Execution No. 17/76 and new Execution Case No. 77/80 pending on the file of the City Civil Court and got attached the immovable propeny of respondent-2 on 7-10-1976. The court ordered sale of the said property on spot on 6-1-1983 and the sale in court on 10-1-1983. Respondent-2 which is a Private limited Company is running an Industry. The provisions of the Employees' State insurance Act, 1948 and the Employees provident Fund and Miscellaneous Provisions act 1952 and the Payment of gratuity Act, 1972 are applicable to the industry run by respondent-2. It appears that respondent-2 did not contribute its shares of Provident Fund and Insurance and did not pay gratuity as required under the provisions of the said three acts. Under the provisions of the said three Acts, proceedings were initiated against respondent-2 to recover the amount due from it. A certificate was issued to the Deputy Commissioner by the authorities concerned to recover the amount due from respondent-2 under the provisions of the said three Acts. That certificate was forwarded by the Deputy commissioner to the Special Tahsildar for p. U. C. and Misc. Recoveries, Bangalore, to effect recover of amount due from respondent-2. Under the provisions of the said three Acts, the amount due from respondent-2 was to be recovered as if it was arrears of land revenue. The special Tahsildar, P U. C. and Misc. Recoveries, bangalore Taluka proceeded to recover the amount due from respondent-2 by attachment and sale of immovable properties. In accordance with the procedure laid down under the Land revenue Code, he attached the very same property bearing No, 10/1 Pampa Mahakavi road, Bangalore 4, and that is the property in Execution No. 77/80 also and sold that property in two bits He sold one bit on 15-3-1980 to K. V. Venkataramaiah shetty, respondent-1 in M. F. A. . No. 1233/83 and has sold another bit on 16-4-1980 to respondent 1 in M. F. A. . No. 1232/83. The sale certificates were also issued in favour of these two auction purchasers. Subsequently in Execution Case No. 77/80 sale proclamation was issued. At that point of time, respondent-1 in both the appeals filed these two Miscellaneous applications under Order 21 Rule 58 c P. C. to raise the attachment effected in the said Execution Case.
( 3 ) BOTH the petitions were resisted by the appellant State of Karnataka.
( 4 ) THE court below allowed both the miscellaneous Cases and raised the attachment. Hence these two appeals by the State.
( 5 ) SIMILAR question arose in V. S. Thiru Venkita Reddiar v. S. Noordeen ind Another (A. I. R. 1978 Kerala 11 ). Para 3 of the said judgment reads as : in this connection two questions arise for consideration. Firstly what is the effect of a prior attachment against an earlier sale in pursuance of a subsequent attachment and secondly whether the decree-holder in O. S. No. 95/ 53 had obtained an enforceable charge by the compromise decree. An attachment is the order prohibiting and restraining the defendant from transferring or charging the attached property by sale, gift or otherwise and all persons from so receiving it (See 0. XXI R. 54 and Appendix E Form No. 24 of Civil p. C.) and S 64 of the Civil PC. provides that private transfer or delivery of property attached shall be void against all claims enforceable under the attachment. Its effect therefore is only to
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