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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. Sounthar, J.
A. Chinnasamy - Appellant
Vs.
Syedshah Rep. By his Power Agent Heera Begum Vaikkalmettu Street Kallakurichi, Kallakurichi Taluk, Villupuram District & Another - Respondent
CRP. No. 224 of 2021 & C.M.P. No. 2110 of 2021
Decided On : 05-03-2024
Fraudulent Transfer - Attachment before Judgment - Transfer of Property Act - Section 53, Order XXI Rule 58 of CPC
Fact of the Case:
The petitioner filed a suit for recovery of money against the 2nd respondent and sought attachment before judgment of the property belonging to the 2nd respondent. The 1st respondent filed a claim petition seeking raising of attachment, stating that he purchased the property from the 2nd respondent even prior to the attachment order. The Trial Court allowed the application filed by the 1st respondent, leading to the petitioner's challenge.
Finding of the Court:
The Court found that the plea of fraudulent transfer raised by the petitioner can be considered in a petition filed by the 1st respondent to raise the attachment. The Court held that the petitioner is entitled to raise the defense of fraudulent transfer and that the matter should be remitted back to the Trial Court for re-consideration.
Issues: The main issue was whether the transfer in favor of the 1st respondent was a fraudulent transfer hit by Section 53 of the Transfer of Property Act, and whether the Trial Court erred in not considering the defense of fraudulent transfer raised by the petitioner.
Ratio Decidendi: The Court relied on the provisions of Section 53 of the Transfer of Property Act and Order XXI Rule 58 of CPC to establish that the petitioner is entitled to raise the defense of fraudulent transfer in a claim petition and that the matter should be adjudicated upon as if it is a regular suit.
Final Decision: The Court set aside the order raising the attachment and remitted the matter back to the Trial Court with directions to consider the question of fraudulent transfer by affording ample opportunity to both parties, in accordance with law.
JUDGMENT :
(Prayer: Civil Revision Petition filed under Article 227 of Constitution of India, praying to set aside the fair and decreetal order dated 09.12.2020 in I.A.No.506 of 2016 in O.S.No.343 of 2014 on the file of the Principal Sub- Ordinate Court, Kallakurichi, Villupuram District.)
1. The Civil Revision Petition is filed challenging the order passed by the Trial Court allowing the application filed by the 1st respondent seeking raising of attachment before judgment.
2. The petitioner herein filed a suit for recovery of money against the 2nd respondent. Pending suit, he filed an application in I.A.No.987 of 2014 seeking attachment before judgment of the property belonging to the 2nd respondent. In the said application, notice was ordered to the 2nd respondent. The 2nd respondent entered into sale agreement to convey the property, in respect of which attachment was sought for, in favour of power agent of the 1st respondent and his mother, Heera Begum. On acquiring knowledge about the said agreement, the petitioner's counsel issued a notice to said Heera Begum on 01.12.2014 informing her about the suit for recovery of money filed by him against the respondent in O.S.No.343 of 2014 and the pendency of the petition filed by him for attachment before judgment against the property in respect of which agreement of sale was entered by her with 2nd respondent. After receipt of said notice, the power agent of the 1st respondent, Heera Begum issued a reply to petitioner's counsel on 20.12.2014 stating that the registered sale agreement entered between her and 2nd respondent on 20.10.2014 was cancelled on 10.12.2014. Thereafter, the Trial Court passed an order of attachment before judgment in I.A.No.987 of 2014 in O.S.No.343 of 2014 on 22.02.2016. Subsequently, the 1st respondent herein filed instant application in I.A.No.506 of 2016 seeking raising of attachment on the ground that he purchased the said property from 2nd respondent on 10.12.2014 itself. Therefore, the 1st respondent prayed for raising of attachment mainly on the ground that he got the sale deed in his favour even prior to the date of attachment.
3. The Court below by impugned order allowed the application filed by the 1st respondent on the ground that he purchased the property even prior to the attachment and hence, raised the attachment. In the case on hand as narrated above, when pendency of the suit as well as petition for attachment before judgment were brought to the notice of 1st respondent's power agent and his mother, Heera Begum, by way of legal notice issued by petitioner's counsel, she sent a reply on 20.12.2014 stating that agreement of sale entered by her with 2nd respondent was cancelled on 10.12.2014. From the acknowledgement card filed in the typed set of papers, it is clear that the above notice was received by power agent of 1st respondent on 04.12.2014. Subsequently, the 1st respondent herein filed the present claim petition seeking raising of attachment on the ground that he purchased the property on 10.12.2014 itself.
4. Assailing the impugned order, the learned counsel for the petitioner submitted that the sale deed executed in favour of 1st respondent by the 2nd respondent on 10.12.2014 is a fraudulent transfer hit by Section 53 of Transfer of Property Act and hence, the petitioner is entitled to ignore the same. In support of his contentions, the learned counsel relied on the judgment of this Court in the case of Kalyaniammal Vs Punjab National Bank by its Manager, Tirunelveli Town and Others reported in AIR 1992 Mad 176. The learned counsel submitted that the Trial Court, without considering the effect of Section 53 of Transfer of Property Act, on an erroneous view, allowed the petition for raising of attachment on the ground that 1st respondent purchased the property even prior to the attachment order. It is the submission of the learned counsel that 1st respondent purchased the suit property having full notice of the suit and pendency of the a
The main legal point established in the judgment is that a claim petition filed under Order XXI Rule 58 of CPC shall be adjudicated upon as if it is a regular suit, and any adjudication on the rights....
A transfer made with knowledge of an attachment before judgment can be contested as fraudulent under Section 53 of the Transfer of Property Act.
Rule 58 of Order XXI C.P.C., which is extracted as adjudication of claims to or objections to attachment of property.
Debt can be defined as an obligation to pay an ascertained sum of money, and therefore, a claim for compensation does not come within that purview.
The Court emphasized the importance of verifying the ownership of the property before making an attachment before judgment and upheld the rights of a third party purchaser under Order 38 Rule 10 of C....
Collusive transfer to defeat creditor voidable under execution proceedings despite preceding attachment if lacking bona fides.
Civil courts are enjoined to consider disputes between parties and when substantive rights are created and such rights are being flouted, it is for civil court to consider respective contentions and ....
The sale deed was upheld as valid under Section 53 of the Transfer of Property Act due to the absence of any fraud.
Executing court cannot invoke Section 53 TPA without plea and evidence; no interference if no saleable interest at attachment.
Transfers made during an injunction are void; claimants must prove bona fides as transferees to assert rights over attached property.
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