The court upheld the dismissal of a third-party claim for property in execution proceedings, emphasizing that a purchaser during litigation has constructive notice and cannot claim ownership against a valid auction sale.

JUDGMENT

Dated this the 23^rd day of June, 2025

This appeal is filed challenging the order dated 24.07.2023 in E.A.No.64 of 2013 in E.P.No.148 of 2006 in O.S.No.267 of 2005 of the Principal Subordinate Judge's Court, Palakkad. Appellant was the petitioner/third party in the E.A. Respondents were the respondents in the E.A. Parties are hereinafter referred to as per their status in the E.A.

2. Petitioner (appellant) is a third party in the suit proceedings. He had filed the E.A., which is a claim petition invoking Order 21 Rule 99 of the Code of Civil Procedure (CPC). He contended that the petition schedule property was purchased by him in the year 2006 for valuable consideration from one Mariyamma Joseph and her four children, including the judgment debtor/1^st respondent, who is the co-owner and power of attorney holder of the other sharers. Petitioner claimed that since 2006, he has been in actual ownership, physical possession and peaceful enjoyment of the petition schedule property and had been remitting land tax regularly. He has also obtained a possession certificate from the Village Office, and he has effected considerable improvements in the property. Before the purchase of the property, he had made thorough enquiries about the property in the Sub-Registrar Office, Village Office, etc. and had also obtained an encumbrance certificate wherein no encumbrances, common liabilities or court attachments had been noted on the petition schedule property. It is only when Amin came to the premises on 17.12.2012 that the petitioner got information that O.S.No.267 of 2005 had been filed and that the petition schedule property was ordered to be attached before judgment. The fact that there was an attachment against the petition schedule property in the year 2005 itself was not disclosed by the judgment debtor to the petitioner at the time of purchase of the petition schedule property in the year 2006. The judgment debtor had led the petitioner to believe that the property was free from encumbrances. The petitioner was a bona fide purchaser, and the judgment debtor had been colluding with the decree holder. The decree holder and the judgment debtor had played a fraud upon the petitioner in respect of the court sale. The entire property is sold for a paltry amount of Rs.3 lakhs, which is stated to be not reasonable and justifiable. It was thus the case of the petitioner that he being the bonafide purchaser, who had purchased the property after due enquiries and after obtaining an encumbrance certificate free of liabilities, is entitled for an order of re-delivery of the petition schedule property. The 3^rd respondent, however, contended that the petition is not maintainable and that the petitioner has no right to file the same. He contended that the petition was the result of the collusion between the petitioner and the 1^st respondent. According to the 3^rd respondent, the petition schedule property was purchased by him in court auction after complying with all the legal procedures and the purchase certificate had been registered from the court. Thereafter, delivery of the petition schedule property was also effected by Amin, deputed from the court. Hence, it was contended by the 3^rd respondent that the petition schedule property is in his absolute possession and ownership. It was also contended that document No.3148 of 2006 wherein the property was stated to have been conveyed to the petitioner, has not been proved, and the same is only a result of the collusion between the petitioner and the 1^st respondent/judgment debtor with an intention to defraud the creditors. The said document was termed as a sham document.

3. The Sub Court framed two points for consideration and the parties tendered evidence. On the side of