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Bombay High Court
MADON
Pradyut Natwarlal Shah - Appellant
Versus
Suryakant N.Sangani - Respondent
Decided On : 04/25/1978
AUCTION SALE - ATTACHMENT - PRIVATE TRANSFER - VOID - CONFIRMATION OF SALE - RELATES BACK TO DATE OF SALE - BONA FIDE PURCHASER - NOT AFFECTED.
Fact of the Case:
The Appellant purchased a flat in an auction sale held in execution of a decree against the Third Respondent. The First Respondent purchased the same flat and shares in the co-operative housing society from the Third Respondent's brother and wife, who were benamidars for the Third Respondent. The First Respondent filed a suit to set aside the auction sale and obtained a temporary injunction restraining the Appellant from taking possession of the flat. The Appellant appealed against the grant of the injunction.
Finding of the Court:
The Court held that the attachment of the flat continued until the sale was confirmed by the Court, and that the private transfer of the flat to the First Respondent was void under Section 64 of the Civil Procedure Code. The Court further held that the confirmation of the sale related back to the date of the sale, and that the Appellant's title to the flat was not affected by the subsequent transfer to the First Respondent. The Court also held that the First Respondent was not a bona fide purchaser for value without notice, as he had failed to make proper inquiries about the previous litigation relating to the flat.
Issues: 1. Whether the attachment of the flat continued until the sale was confirmed by the Court? 2. Whether the private transfer of the flat to the First Respondent was void under Section 64 of the Civil Procedure Code? 3. Whether the confirmation of the sale related back to the date of the sale? 4. Whether the Appellant's title to the flat was affected by the subsequent transfer to the First Respondent? 5. Whether the First Respondent was a bona fide purchaser for value without notice?
Ratio Decidendi: 1. The Court held that the attachment of the flat continued until the sale was confirmed by the Court, relying on Section 64 of the Civil Procedure Code, which provides that any private transfer or delivery of property attached in execution of a decree is void as against all claims enforceable under the attachment. 2. The Court held that the private transfer of the flat to the First Respondent was void under Section 64 of the Civil Procedure Code, as the attachment of the flat was still in force at the time of the transfer. 3. The Court held that the confirmation of the sale related back to the date of the sale, relying on Section 65 of the Civil Procedure Code, which provides that where immovable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute. 4. The Court held that the Appellant's title to the flat was not affected by the subsequent transfer to the First Respondent, as the confirmation of the sale related back to the date of the sale and the First Respondent's transfer was void under Section 64 of the Civil Procedure Code. 5. The Court held that the First Respondent was not a bona fide purchaser for value without notice, as he had failed to make proper inquiries about the previous litigation relating to the flat.
Final Decision: The Court allowed the appeal and set aside the temporary injunction granted by the trial court. The Court also ordered the First Respondent to vacate the flat and transfer the shares in the co-operative housing society to the Appellant.
2. The material facts which have given rise to this Appeal are that the Second Respondent filed a suit in the Bombay City Civil Court against the Third Respondent, being Suit No. 8639 of 1969, to recover a sum of Rs. 20,041 with further interest on the principal sum of Rs. 20,041. It appears that in respect of some other dealings between these two Respondents the Second Respondent had filed a prosecution against the Third Respondent in which the Third Respondent was convicted and sentenced to imprisonment. The said suit No. 8639 of 1969 was decreed ex parte on March 31, 1970. The Second Respondent thereafter took out execution proceedings, and in the said execution proceedings a warrant of attachment was issued under O.XXI, R.54 of the Civil P.C. attaching the right, title and interest of the Third Respondent in a flat, namely, Flat No. 9, on the first floor of a building situate at 41-A, Podar Road, Santa Cruz (West), Bombay-54, belonging to Paresh Co-operative Housing Society Limited. The right, title and interest of the Third Respondent in the said flat were attached on Aug. 8, 1970. It appears that the shares in the said co-operative housing society with respect to the said flat belonged to one Ratilal Chande and his wife who sold them to the Third Respondent. The said shares were, got transferred by the Third. Respondent not in his own name but in the name of his wife Shashikala and his brother Hasmukh, who applied to the said society for transfer of the said shares to their names, which application was granted. Thus, in the record of the said society the registered holders of the said shares were the Third Respondent's wife and his brother Hasmukh. After the said flat was attached, the Third Respondent's brother Hasmukh took out a chamber summons on Sept. 11, 1970 to raise the said attachment on the ground that the said flat was in the sole and absolute ownership of himself and the Third Respondent's wife Shashikala. Shashikala herself did not adopt any proceedings to get the said attachment raised. The said chamber summons was made absolute on Nov. 27, 1970, but in a civil revision application filed in this Court against the said order, namely, Civil Revision Application No. 796 of 1970, this Court set aside the said order and remanded the said chamber summons to the City Civil Court to dispose of this matter in the light of the observations made in the said judgement. On remand the said chamber summons was dismissed on Sent. 30, 1971 by the City Civil Court on the ground that Shashikala and Hasmukh were not the owners of the said flat and had no right, title or interest therein. No steps were taken by Hasmukh to challenge the said order by filing a suit under O.XXI, R.103 of the Civil P.C., and accordingly the said order became final.
3. In Pursuance of the attachment levied on the said flat, the said flat was put up for sale, and on Nov. 25, 1971 the proclamation of sale was settled in the presence of the Third Respondent, and the sale by auction was fixed on March 1, 1972. On Feb. 14, 1972 the said society was served with a notice from the Court with respect to the holding of the said auction sale. On Feb, 28, 1972 the Third Respondent filed a suit in the said Court, namely, Suit No. 2011 of 1972, to set aside the said ex parte decree and took out a notice of motion to stay the said auction sale. On March 1, 1972 the said notice of motion was dismissed and the said flat was sold by auction. At this auction sale the secretary of the said society as also the Third Respondent were present. The highest bid, namely, of Rs. 24,000, was given by one Bhupendra, the brother of the Appellant, who gave the said bid on behalf of the Appellant. The Appellant duly deposited the full amount of his bid with the Sheriff of Bombay, and on March 15, 1972 a certificate to
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