The main legal point established in the judgment is that the property was not under attachment at the time of the sale, and the transfer did not violate Sections 52 and 53 of the Transfer of Property Act.

S. Ravindra Bhat, J.

1. The present appeal arises from an order of the learned Single Judge dismissing objections (under Order XXI, Rule 58 CPC) preferred by the appellant, (hereafter “the objector”) concerning the sale of property bearing No. A-13, Block B-1, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi, 110044 (hereinafter “the property in question”).

2. The property in question was the subject matter of attachment in a dispute between the National Agricultural Cooperative Marketing Federation of India Ltd. (hereafter “NAFED, the decree-holder), Kripa Overseas (and its director Mr. Sandeep Khanna) and M/s Rital Impex Ltd (and its director Mr. Pradeep Khanna) – collectively referred to hereafter as “judgment debtors”.

3. The material facts are narrated hereafter. NAFED and the judgement debtors were involved in arbitral proceedings, the subject-matter of which does not concern the Court today. During the course of those proceedings, NAFED preferred a petition under Section 9 of the Arbitration and Conciliation Act, 1996, in OMP No. 291/2006. That petition resulted in an order of injunction, dated 06.07.2006, restraining the sale of several properties, including the property in question, in order to secure NAFED’s claims. Subsequently, the three parties entered into a settlement dated 03.05.2007, recording, inter alia, that (operative clause 3):

“3. Rs. 20 Cr. shall be paid within next 60 days upon raising loan by mortgaging the property bearing No. A-13/B-1 and E-16/B-1, Mohan Co-Operative Industrial Estate, Mathura Road, New Delhi-110044. For this purpose M/s Rital impex will provide copy of the sanctioned and release orders issued by the concerned bank along with an undertaking that aforesaid money will be paid to NAFED as per above admitted dates”

4. Accordingly, the property in question was mortgaged with ICICI Bank, Green Park Branch against an advance of Rs. 1.5 crores. Subsequently, other properties which had been the subject matter of attachment, in Section 9 proceedings, were released from the attachment by an order of the Court on 14.12.2007 (while considering I.A. No. 5743/2007, in OMP 291/2006) in the following terms:

“..............In view of the compromise inter se the parties the attachment of the above said properties No. E-18, East of Kailash, New Delhi and E-16, Block B-1, Mohan Co operative Industrial Estate Limited, Extension, New Delhi is being released to be put on sale..........”

5. This order, as is evident, did not refer to the property in question; it described another property, i.e. E-16, instead of A-13. Another application was moved by the judgment debtor, asking for correction of the order, to incorporate the description of the property in question, to facilitate its sale. The order was, therefore, corrected by the Court and the previous order modified accordingly through an order of 18.12.2007 (in considering I.A. No. 14641/2007); the property in question was allowed to be sold by the owner/judgment debtor.

6. Subsequently, a sale deed was executed by one of the judgment debtors, as the director of M/s. Rital Impex Ltd. in favour of the objector, for a total consideration of Rs. 3.5 crores. In this, a payment of Rs. 1.5 crores was made to the ICICI Bank to clear the mortgage and recover the title deeds, and the remainder to the owner/judgment debtor. Later, in the arbitration proceedings between the three parties (NAFED, and the two judgment debtors) an award dated 24.09.2009 was made, in terms of the settlement dated 03.05.2007, as modified by the subsequent order dated 04.04.2008, holding, inter alia, that

“NAFED is (sic) held entitled to the outstanding amount by sale of the properties, mentioned in the deed of settlement dated 3.5.2007, by public auction, as agreed and ordered in the order of Mr. Justice S.L. Bhayana dated 4th April 2008............................”

7. NAFED instituted execution proceedings (Ex.P. 223/2009), where the property in question was