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2025 Supreme(Mad) 5110
IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.B.BALAJI, J.
M/s.Velpa International (P) Limited - Appellant
Vs.
Priyadharshini - Respondent
CRP. PD. No.2096 of 2023 and CMP. No.12825 of 2023
Decided On : 08-08-2025
Advocate Appeared:
For the Appellant : Mr.N.Manoharan
For the Respondent: Mr.S.Mukunth, Senior Counsel for M/s.Sarvabhauman, Mr.V.Sivakumar
An unrecorded court undertaking is unenforceable; thus, third-party purchasers maintain rights over property sold despite alleged breaches of such undertaking.
Headnote:(A) Code of Civil Procedure, 1908 - Section 151, Order XXXVIII, Rule 5 - Interlocutory Application challenging the sale deed in bankruptcy proceedings - Trial Court dismissed application citing alternate remedy available; court noted non-notification of attachment to Sub Registrar rendered it void - Court reinforced that merely filing an affidavit of undertaking without the Court taking it on record does not bind the defendants. (Paras 3, 12, 23)
(B) Legal undertakings in court proceedings - An undertaking must be formally recorded to be enforceable; if not recorded, rights of third-party purchasers remain intact despite alleges breaches of undertaking. (Paras 21, 24)
Facts of the case:
The plaintiff sought to set aside a sale deed made during ongoing money recovery proceedings, arguing that the defendants breached court undertakings to provide property as security. The Trial Court dismissed the application based on the premise that there was a separate legal remedy.
Findings of Court:
The absence of any formal recording of undertakings by the Court absolves the defendants of breach claims, allowing the sale to a bona fide purchaser.
Issues: Determining the applicability of legal undertakings and the effect of non-recording by the Court on third-party rights.
Ratio Decidendi: The court emphasized that unrecorded affidavits of undertaking do not bind parties and transactions made in good faith by third parties remain lawful.
Result: CIVIL REVISION PETITION DISMISSED.
| Table of Content |
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| 1. filing of suit based on alleged breach of financial agreement. (Para 1 , 11) |
| 2. various arguments regarding the validity of the sale deed and obligations under the undertaking. (Para 3 , 4 , 5 , 6 , 7 , 9) |
| 3. court's examination of the undertaking and procedural handling of the application. (Para 10 , 12 , 13 , 14 , 16 , 17 , 20 , 21 , 22) |
| 4. court clarifies that accepted undertakings must be recorded for enforcement. (Para 18 , 19 , 23 , 24) |
| 5. dismissal of the civil revision petition sans grounds of the trial court. (Para 25) |
ORDER :
P.B.BALAJI, J.
This revision has been filed by the plaintiff in O.S. No.8 of 2016, seeking to set aside the order in I.A. No.1 of 2021, in and whereby, the plaintiff sought direction under Section 151 of the Code of Civil Procedure, 1908 to set aside the sale deed dated 28.04.2021 in Doc.7359 of 2021 on the SRO, Palladam.
2. I have heard Mr.N.Manoharan, learned counsel for the revision petitioner and Mr.S.Mukunth, learned Senior Counsel for M/s.Sarvabhauman Associates for respondents 1 and 2 and Mr.V.Sivakumar, learned counsel for the fifth respondent.
3. The sum and substance of the arguments of the Mr.N.Manoharan, learned counsel for the revision petitioner is that in a suit for recovery of money, the contesting defendant had given an undertaking in the nature of furnishing security as mandated under the provisions of the Code of Civil Procedure and thereafter, in breach and gross violation of the said undertaking given by the defendants, the th defendants have proceeded to dispose of the property in favour of the 5 respondent. This necessitated the plaintiff to take out the Interlocutory Application in I.A. No.1 of 2021. However, the Trial Court has dismissed the said Application on the ground that there is a separate remedy prescribed under law and hence, finding no merit in the Application, the said I.A. No.1 of 2021 came to be dismissed.
4. The learned counsel for the revision petitioner Mr.N.Manoharan, referring to the Application filed under Order XXXVIII Rule 5 of CPC and the undertaking given by the defendants in the said Application, would contend that the conduct of the said defendants 1 and 2 can never be appreciated or condoned.
5. According to Mr.Manoharan, learned counsel having led the Court to accept the undertaking given that the property would be available as security for the suit claim, the defendants ought not to have alienated the same, pending the suit. He would further contend that if such conduct of the defendants who have no respect for law and Court is condoned, then it would result in grave miscarriage of justice. He would therefore state that the Trial Court, without even discussing any of the contentions advanced by the learned counsel on either side, in and by a cryptic and unreasoned order has proceeded to dismiss the Application, warranting interference in revision under Section 227 of the Constitution of India.
6. The learned counsel in support of his contentions, would also place reliance on the decision of this Court in A.B.Gurumurthi Chetti Vs. Sella Perumal Pillai, reported in Vol 44 L.W.714 and C.Sengottaiyan Vs. K.Saravanan, reported in 2013 (6) CTC 456.
7. Per contra, Mr.S.Mukunth, learned Senior Counsel would submit that though an undertaking was given in the Application under Order XXXVIII, Rule 5 seeking attachment before the judgment, he would state that unless, the order of attachment was duly notified to the Sub Registrar concerned, the attachment would be void and of no effect. 8. In this regard, the learned Senior Counsel places reliances on Sri Humbi Hema Gooda and others Vs. Tamil Nadu State Transport Corporation (CBE) Limited Coimbatore Public Limited Company, having its registered office at No.37, Mettupalayam Road, Coimbatore, rep. By its Managing Director and others, reported in (2011) SCC online Mad 1709 and Sri Krishna Chit Funds (Sattur Private Limited), Sattur having its office at Door No.19, Pillaiyar Koil St, Sattur Town and T
