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Judges : G.VISWANATHA IYER
THIRU VENKITA REDDIAR - Appellant
Versus
NOORDEEN - Respondent
Case No : C. R. P. No. 3395 of 1976
Decided On : 06/24/1977
Advocates Appeared :
S. A. Nagendran; N. N. Divakaran Pillai; For Petitioner P. Krishnamoorthy; P. C. Chacko; For Respondent
Attachment of property in execution of a decree is governed by Order XXI Rule 54 of the Code of Civil Procedure (CPC). Section 64 of the CPC provides that private transfer or delivery of attached property shall be void against all claims enforceable under the attachment. The court cites Order XXXVIII Rule 10 CPC, which states that attachment before judgment does not affect rights existing prior to the attachment or persons not parties to the suit. The court also refers to Section 17(2)(vi) of the Registration Act, which exempts decrees and orders of a court from registration, except when the decree or order is expressed to be made on a compromise and comprises immovable property other than that which is the subject-matter of the suit or proceeding. The court discusses the interpretation of this exception and cites precedents from the Madras, Bombay, and Rajasthan High Courts.
Fact of the Case:
The petitioner, who claims to be a purchaser under an earlier charged decree and is in possession of the property, seeks to set aside the court sale in execution of a subsequent decree. The court must determine the nature of the petitioner's rights and whether they can prevail against the decree-holder. The court sale prevails over prior attachments, and the auction purchaser takes the property free from attachment. The compromise decree in O.S. No. 95/53 created an enforceable charge over the disputed properties, which is not affected by the subsequent attachment and sale in O.S. No. 38/60. The decree-holder auction-purchaser has the right to the properties, and the respondent is not entitled to recover possession from the petitioner.
Finding of the Court:
The court analyzes the effect of prior attachments, the nature of a court sale, and the enforceability of a charge created by a compromise decree. It cites precedents from the Calcutta, Madras, Patna, and Travancore High Courts to support its conclusions.
Ratio Decidendi: Attachments do not bar a court sale in execution of another decree, and the auction purchaser takes the property free from attachment. A compromise decree creating a charge over properties is enforceable even if the properties were not scheduled to the plaint. The charge is not affected by subsequent attachments and sales. The decree-holder auction-purchaser has the right to the properties.
Result: The court upholds the petitioner's right to the properties and dismisses the respondent's claim for possession.
Key Points: - The court held that attachments do not bar a court sale in execution of another decree and the auction purchaser takes the property free from attachment (!) . - A compromise decree creating a charge over properties is enforceable even if the properties were not scheduled to the plaint, and such charge remains effective despite subsequent attachments and sales (!) (!) (!) . - The prior attachment’s effect is to protect the attaching creditor’s right to realization, but it does not prevent the court sale from transferring title to the auction purchaser; prior attachments fall to ground on judicial sale, with ratable distribution of sale proceeds among attaching creditors (!) (!) (!) . - The right of the decree-holder auction-purchaser prevails over the respondent’s claim to possession where a valid charge existed via the compromise decree (!) (!) . - The question whether the disputed properties formed part of the subject-matter of the suit or proceeding for registration purposes is resolved in favor of the compromise charge being effective and not necessitating registration under the Registration Act, given the compromise terms and attachment context (!) (!) (!) (!) (!) . - Vesting of title relates back to the date of sale upon confirmation of the court sale (!) .
1. The petitioner in E.A. 57/75 who was also one of the respondents in E A. 1061/74 in E. P. 91/66 in O. S.38/60 on the file of the Quilon Sub-Court is the revision petitioner. His application to set aside the court sale of items Nos.1 to 7 in the proclamation schedule filed in execution of the decree in O.S. 38/60 was allowed by the Sub Court, Quilon, but dismissed in appeal by the District Court. While dismissing the appeal the District Judge observed that the application to set aside the sale was misconceived in the sense the petitioner who claims to be a purchaser under an earlier charged decree and who is in actual possession of the property can assert his rights is the property and also his right to remain in possession of it when he is sought to be dispossessed in execution of the present decree and the exact nature of his rights and the question whether these rights can prevail against the decree-holder are matters which are to be properly determined at that stage. The lower appellate court in so observing lost sight of the fact that the petitioner came to court on receiving a notice to show cause why he shall not be evicted from the properties to put the decree holder auction purchaser in O.S. 38/60 in possession of the same as per the sale certificate and application tiled by him as E.A. 1061/74. The petition and objection filed by the revision petitioner before the Sub Court were really one in answer to that on asserting his preferential right to the property as against the respondent-decree holder-auction purchaser and so in deciding whether the court sale in O.S. 38/60 is invalid and liable to be set aside this question arises for consideration. This question is also material in considering whether the petitioner's predecessor's right is affected by the sale to apply under Order XXI R.90 CPC. The execution court dismissed the application for delivery and allowed the petitioner's application. So the petitioner's right under the decree in O. S 95/53 and the court sale following it on 26 61969 calls for consideration in this case and the case has been argued before me on that basis.
2. The Palai Central Bank Ltd. had filed a suit, O S.95/53, against the 2nd respondent herein for recovery of a very large amount due from him on the basis of an equitable mortgage. Before decree the present disputed items were attached on the ground that the properties mortgaged are insufficient to realise the amount due to the bank. Ext. X3 is the copy of the plaint in O.S 95/53 and Ext. X2 is the copy of the report and of the list of properties attached. That suit was compromised and Ext. X5 is the copy of the compromise petition. Ext. X4 is the copy of the judgment to the effect that the suit is decreed in terms of the compromise. The copy of the decree produced in the case also shows that the decree contains the terms of the compromise. The bank subsequently went into liquidation and the Liquidator could bring the property to sale only on 26 61969. The Liquidator himself was the purchaser. He sold the property to the revision petitioner under Ext. X1 on 25 41974 for Rs 35,000/-and the latter discharged the prior encumbrances in the property amounting to Rs. 55,000/-. In the meanwhile the 1st respondent, another creditor of the 2nd respondent, filed a suit O.S. 38/60 and obtained a money decree against the 2nd respondent. In execution of the decree he also attached the same and other properties, brought them to sale and himself purchased for Rs. 12,000/ -and odd. The 2nd respondent had taken steps to set aside the sale, but did not succeed. After obtaining the sale certificate the 1st respondent applied for delivery of possession In the meanwhile the revision petitioner had come into possession of the disputed properties under the proceedings referred to earlier and so in answer to the notice of the application for delivery he put forward his claim to the properties.
3. In this connection two questions arise for consideratio
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