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2024 Supreme(Online)(MAD) 19753
HIGH COURT OF MADRAS
Honourable Mr.Justice P. DHANABAL
M. Srinivasan – Appellant
Versus
M. Durai – Respondent
A registered sale agreement executed prior to property attachment prevails over post-attachment claims, maintaining contractual obligations.
Headnote:
CPC - Execution Proceedings - Code of Civil Procedure - Sections 64, 151, Order XXI Rules 26, 35, 91 - The Court analyzed the priority of sale deeds in relation to attachments and determined that a properly registered sale agreement preceding an attachment upholds the legitimacy of subsequent sales, thus validating the execution of property delivery.
Fact of the Case:
A third party petitioner contested an order allowing the delivery of a property to the first respondent who had executed a sale deed after the petitioner had attached the property due to a previous decree. The petitioner claimed that this sale was fraudulent to defeat their rights.
Issues: Which transaction, the sale deed executed post-attachment or the pre-existing sale agreement, should be upheld given the conflict in property rights?
Ratio Decidendi: The court established that an antecedent sale agreement, even if registered after an attachment, maintains its validity and the attachment cannot override the contractual obligations arising from such agreement.
Final Decision: The civil revision petitions are dismissed.
COMMON ORDER
The Civil Revision petition has been preferred as against the order passed in E.A. No.1 of 2021 in E.P. No.76 of 2019 in O.S. No.30 of 2017, wherein the 1st respondent herein has filed E.A. No.1 of 2021 for delivery of possession of the property and the same was allowed.
2. The petitioner is the third party to the proceedings and the 2nd respondent herein has borrowed a sum of Rs.3 lakhs from the petitioner on 09.03.2014 and agreed to repay the same @ 12% per annum. Again he borrowed a sum of Rs.3,50,000/- on 06.04.2014 and executed a promissory note to repay the said amount @ 12% p.a.. Thereafter, due to non-payment of the said amount, the petitioner has filed a Suit in O.S. No.83 of 2015 on the file of Sub Court, Arakkonam and obtained a decree dated 01.04.2016. Thereafter, he filed an E.P. No.104 of 2016 for attachment of the schedule mentioned property and the property was also attached on 03.08.2017. Thereafter, the attached property was brought for sale and the sale action was also held on 23.08.2021 and the sale was confirmed in favour of the petitioner on 26.10.2021. The Sale certificate was issued on 23.04.2022. The 2nd respondent had suppressed the fact that already in respect of the Suit property, there was an agreement between the 1st and the 2nd respondents. Thereafter, the petitioner came to know through encumbrance certificate dated 05.04.2022 that the 2nd respondent had executed a Sale Deed dated 22.04.2021 in favour of the 1st respondent. The respondents collusively and fraudulently entered into sale transaction dated 22.04.2021 in order to defeat the legitimate rights of the petitioner. The respondents collusively created an agreement dated 20.03.2017 and also filed a Suit in O.S. No.30 of 2017 on the file of the II Additional District and Sessions Court, Ranipet for the relief of specific performance of contract and the decree was passed on 23.07.2018. Thereafter, the 1st respondent filed an E.P. No.76 of 2019 and the Suit was decreed dated 24.02.2021. Thereafter, a Sale Deed was executed on 24.02.2021 by the court and thereafter E.A. No.1 of 2021 was filed for delivery of the property and the same was allowed. Now, the petitioner came to know about the delivery through execution proceedings and thereby, he filed this civil revision petition after obtaining permission from this Court to grant leave to file the above civil revision petition and the same was allowed. Therefore, the order passed by the Trial Court delivering the property to the 1st respondent is liable to be set aside.
3. The learned counsel appearing for the petitioner would contend that the 2nd respondent borrowed money from the petitioner and due to non- payment, he filed the main Suit in O.S. No.83 of 2015 and thereafter obtained a decree and thereafter the same was executed and thereafter, he purchased the property through Court action held on 23.08.2021 and a Sale Certificate was issued on 23.04.2022 in his favour. Thereafter, he came to know that the 1st and the 2nd respondents had collusively created a Sale Agreement dated 20.03.2017 and hence he filed a Suit in O.S. No.30 of 2017 on the file of the II Additional District and Sessions Court, Ranipet and the same was decreed and thereafter the 1st respondent got sale deed through the Court and now the property was delivered to him through E.A. No.1 of 2021. The above said agreement was created by the respondents collusively in order to defeat the legitimate rights of the petitioner and they got decreed and the property was also delivered. Before sale, the property was attached by the petitioner through Court. Therefore, a Sale Deed was executed in favour of the 1st respondent by the 2nd respondent is not valid. The petitioner is not a party to the said execution proceedings in O.S. No.30 of 2017 in E.P. No.76 of 2019 in E.A. No.1 of 2021. However, by ordering delivery of the property of the 1st respondent, sale deed obtained by the petitioner. Therefore, Court action will be
