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DELHI HIGH COURT
S.Ravindra Bhat, Najmi Waziri, JJ.
Baldev Raj Jaggi - Appellant
Versus
National Agricultural Co-Operative Marketing Federation of India Ltd. & Ors. - Resopndent
EFA (OS) 37/2011, CM. 19815/2011 (for stay) & 19816/2011 (for filing additional documents)
Decided On : 28-11-2013
Attachment - Property Dispute - Arbitration and Conciliation Act, 1996, Section 9 - Order XXI, Rule 58 CPC - Sections 52 and 53 of the Transfer of Property Act - The court discussed the attachment of the property in question, the conditions imposed by the court, the doctrine of lis pendens, and the sale of the property in question. The court held that the property in question was specifically vacated from attachment, the transfer did not violate Section 52 of the Transfer of Property Act, and the sale did not fall within the mischief of Section 53 of the Transfer of Property Act.
Fact of the Case:
The property in question was the subject matter of attachment in a dispute between NAFED, Kripa Overseas, and M/s Rital Impex Ltd. The appellant, Shri Jaggi, preferred objections, contending that he had clear title to the property and was an innocent third party purchaser without any knowledge of any prior dispute or encumbrance in respect of the said property. The appellant's objections were dismissed by the learned Single Judge.
Finding of the Court:
The court found that the property in question was specifically vacated from attachment, the transfer did not violate Section 52 of the Transfer of Property Act, and the sale did not fall within the mischief of Section 53 of the Transfer of Property Act. The court held that the appellant's rights over the property were not the subject matter of any attachment, impediment, or restriction as to defeat its title. The impugned order was set aside, and the appeal was allowed.
Issues: The issues included whether the property in question was still under the cover of attachment at the time of the execution of the sale deed, whether the transfer violated Section 52 of the Transfer of Property Act, and whether it violated Section 53 of the Transfer of Property Act.
Ratio Decidendi: The court held that the property in question was specifically vacated from attachment, the transfer did not violate Section 52 of the Transfer of Property Act, and the sale did not fall within the mischief of Section 53 of the Transfer of Property Act. The court emphasized that the burden of proving want of good faith in the transferee was on the creditor who impugns the transactions.
Final Decision: The impugned order was set aside, and the appeal was allowed. There shall be no order as to costs.
S. Ravindra Bhat, J.
The present appeal arises n order of the learned Single Judge dismissing objections (under Order XXI, Rule 58 CPC) pfrom a referred 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
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