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K.JAGANNATHA SHETTY, R.M.SAHAI
Vannarakkal Kallalathil Sreedharan – Appellant
Versus
Chandramaath Balakrishnan – Respondent
What is the effect of a sale deed executed after an attachment order, but in pursuance of an agreement for sale entered into before the attachment?
Key Points: - An agreement for sale creates an obligation attached to the ownership of the property [1000220750004][1000220750008]. - An attaching creditor is entitled to attach only the right, title, and interest of the judgment-debtor [1000220750005][1000220750008]. - An attachment cannot be free from the obligations incurred under a prior contract for sale [1000220750008]. - A sale deed executed after an attachment, in pursuance of an agreement for sale entered into before the attachment, will prevail over the attachment [1000220750006][1000220750008]. - The contractual obligation arising from an antecedent agreement for sale must be allowed to prevail over the rights of the attaching creditor [1000220750008]. - The attaching creditor cannot ignore the contractual obligation and proceed to bring the property to sale as if it remained the absolute property of the judgment-debtor [1000220750008]. - The High Court's view that the sale would be subject to attachment was reversed [1000220750002][1000220750009]. - The judgment cited and approved decisions from Madras, Bombay, Calcutta, and Travancore-Cochin High Courts [1000220750004][1000220750006]. - The judgment overruled decisions from Punjab & Haryana and Lahore High Courts [1000220750007][1000220750008].
Judgment
K. JAGANNATHA SHETTY, J.- Special leave granted.
2. An extent of 80 cents of land which is in dispute in this appeal was jagreed to be sold in favour of the appellant under an agreement dated [October 9, 1978. Before the sale deed was executed, a third party in execution of a decree got the property attached on November 16,1978. The sale deed was executed on November 23, 1978. The question is: Does the sale prevail over the attachment?
3. The High Court of JOrala in the judgment under appeal has held that the sale would be subject to attachment This appears from the following observation:
"The sale deed was executed at a time when the property was already under attachment. It is true that even before effecting attachment there was an agreement for sale by Sarojini Ramakrish-: nan in favour of the appellant. But the agreement for sale will not create any interest in the property. The fact that Ex. A-12 sale deed was executed on the basis of an agreement executed before the attachment will not place the appellant in any better position. He could take the 80 cents under Ex. A-12 only subject to the attachment."
4. The correctness of the view taken by the High Court has been calle
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