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1987 Supreme(Kar) 229
Karnataka High Court
Judges : Kulkarni
STATE OF KARNATAKA - Appellant
Versus
REGISTERED FIRM OF IEO METAL CORPORATION - Respondent
M. F. A. 1233 Of 1983
Decided On : 08/11/1987
Advocates Appeared :
M.N.SATHYARAJ, M.PRABHUDEV, N.S.SATYANARAYANA GUPTA, N.Suryaprakash
The effect of attachment on property does not apply to involuntary sales like Court sales or sales held by the authorities under the various Acts.
Headnote:
attachment - Recovery of Dues - Employees Provident Fund and Miscellaneous Provisions Act 1952, Payment of Gratuity Act 1972 - The court discussed the effect of attachment on property and its implications in the context of recovery of dues under the mentioned acts. It highlighted that attachment does not apply to involuntary sales like Court sales or sales held by the authorities under the various Acts, and that the attachment got effected by the State of Karnataka in Execution No. 77 of 1980 has no effect at all.
Fact of the Case:
The State of Karnataka sued out execution to recover the amount due from respondent-2 under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act 1952, Payment of Gratuity Act 1972, and the Employee's State Insurance Act 1948. The property in question had been already sold by the authorities concerned, and separate bits of sale property have been purchased by the concerned respondent-1 in both the cases. The Court below allowed both the Miscellaneous Cases and raised the attachment.
Finding of the Court:
The Court found that the attachment got effected by the State of Karnataka in Execution No. 77 of 1980 has no effect at all, as the property had been already sold by the authorities concerned and the Judgment debtor had no subsisting interest in the property capable of being sold in a court auction.
Issues: The issues involved the effect of attachment on property in the context of recovery of dues under the mentioned acts, and the justification of raising the attachment by the Court below.
Ratio Decidendi: The Court held that the attachment does not apply to involuntary sales like Court sales or sales held by the authorities under the various Acts, and that the attachment got effected by the State of Karnataka in Execution No. 77 of 1980 has no effect at all.
Final Decision: Both the appeals were dismissed as the Court found 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 Steel Construction Company (P) Ltd. , respondent-2 in M. F. A. 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 property Of respondent-2 on 7-10-1 976. 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 employee's 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 recovery 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. THIRD VENKITA REDDIAR v. S. NOORDEEN AND another, AIR1978 Ker 11 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 o. XXI R. 54 and Appendix E Form No. 24 of Civil P. C.) and Section 64 of the Civil P. C. 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 prevent aliena
