Collusive transfer to defeat creditor voidable under execution proceedings despite preceding attachment if lacking bona fides.

JUDGMENT :

K. Murali Shankar, J.

The Second Appeal is directed against the judgment and decree made in A.S.No.2 of 2019 dated 06.11.2019 on the file of the Principal District Court, Pudukkotai, confirming the fair and decreetal order passed in E.A.No.96 of 2010 in E.P.No.102 of 2009 in O.S.No.153 of 2008 dated 29.08.2016 on the file of the Subordinate Court, Pudukkottai.

2. The appellant is a third party petitioner and he filed a claim petition under Order XXI Rule 58 of the Code of Civil Procedure seeking orders for setting aside the order attaching the property bearing House Plot No.1366, Town Survey No.8525 at Kamban Nagar, Rajagopalapuram, Pudukkottai.

3. For the sake of convenience and brevity, the parties hereinafter will be referred to as per their status / ranking in the Executing Court.

4. The case of the petitioner, in brief, is as follows:

(a) The petitioner is the absolute owner, in possession of the house property bearing House Plot No.1366 at Kamban Nagar, Rajagopalapuram, Pudukkottai District having purchased for a valid sale consideration to the tune of Rs.29 lakhs vide sale deed dated 19.12.2008. The said property was originally vested with the Housing Board, Tiruchirappalli and the same was allotted to the second respondent / judgment debtor / defendant and the same was purchased by the petitioner.

(b) It seems that the first respondent / decree holder / plaintiff had advanced a hand loan to the tune of Rs.2,50,000/- to the second respondent on 12.07.2008 and the second respondent in order to discharge the said loan issued a cheque on 18.08.2008 to the first respondent drawn on State Bank of India, Pudukkottai Branch, but the said cheque was returned and hence, the first respondent filed a suit in O.S.No.153 of 2008 for recovery of the said sum of Rs.2,50,000/- with interest and costs and the Subordinate Court was pleased to pass an ex- parte decree dated 02.07.2009. In pursuance of the ex-parte decree, the first respondent filed an execution petition against the second respondent for recovery of sum of Rs.2,75,294/- and brought the said property for attachment and sale, which property was purchased by the petitioner from the second respondent. The second respondent even prior to the passing of ex-parte decree on 02.07.2009 sold the said property to the petitioner.

(c) The petitioner obtained a loan from the HDFC Bank, Tiruchirappalli Branch to the tune of Rs.26 lakhs for purchasing the said property. Though the petitioner is working as a Civil Engineer at Chennai, his family is settled at Pudukkottai and therefore, he decided to purchase the house property at Pudukkottai. He verified the title deeds as well as the encumbrance of the property owned by the second respondent. He agreed to purchase the same for total sale consideration of Rs.29 lakhs for which he applied for a loan to the tune of Rs.26 lakhs and also the said loan was sanctioned by the HDFC Bank vide loan agreement dated 31.12.2008. The petitioner has been put in possession of the said property on the very next date of the execution of sale deed in his favour and since December 2008, the second respondent had never been in possession and enjoyment. The petitioner came to know about the filing of the suit by the first respondent only on 26.10.2009 when the notice regarding the attachment was attempted to serve on the second respondent at his residence. Since the property was owned by the petitioner even prior to the decree and the attachment made in the execution petition, the said property is not liable for attachment in execution of decree.

(d) The petitioner is an innocent and bonafide purchaser having purchased the said property for a valid sale consideration and he is no way connected with the alleged transactions between the first respondent and the second respondent. Hence, the petitioner was constrained to file the above claim petition for releasing