Adinarayana vs S. Gafoor Sab And Ors.

on 3 March, 2004

Adinarayana vs S. Gafoor Sab And Ors. on 3 March, 2004

Equivalent citations: AIR2004AP377, 2004(2)ALD736, 2004(2)ALT780, AIR

2004 ANDHRA PRADESH 377, (2004) 2 CIVILCOURTC 234, (2004) 2 ANDHLD
736, (2004) 2 ANDH LT 780, (2004) 3 CIVLJ 386, (2004) 3 CURCC 91, (2004) 4
ICC 96

ORDER

G. Yethirajulu, J.

1. This revision petition is filed against the order of the Principal Junior Civil Judge, Ananthapur in
E.P. No. 99/95 in O.S. No. 46/92.

2. The revision petitioner is the decree-holder in O.S. No. 46 of 1992. He filed E.P.No. 99 of 1995 for
realization of the decretal amount through attachment and sale of the schedule property. At the time
of filing the suit, the decree-holder filed I.A. No. 194 of 1992 and attachment before judgment was
ordered on 5.3.1992 under Order 38, Rule 5 CPC. Subsequent to the decree, he filed E.P. No. 99 of
1995 in O.S. No. 46 of 1992 for attachment and sale of the schedule property. The judgment debtors
(J.Drs.) resisted the execution petition contending that the schedule house was conveyed in favour
of Tarimala Nabi Sab by way of a registered sale deed by the Principal Senior Civil Judge,
Ananthapur as per the orders in E.P. No. 119 of 1992 in O.S. No. 56 of 1992 dated 7.8.1993 and
possession was also delivered on same day. The purchaser, Sri Tarimala Nabi Sab was inducted into
possession of the schedule house prior to the date of attachment. Since the J.Drs. are no more
owners of the property, the E.P. cannot be maintained, therefore, it is liable to be dismissed.

3. The purchaser of the property by name Tarimala Nabi Sab was added as one of the respondents in
that E.P. and he filed a counter stating that the schedule house was sold to him on 15.6.1990 by the
judgment debtors under an agreement of sale and as the J.Drs. failed to execute the sale deed, he
filed O.S. No. 56 of 1992 on the file of the Sub-Court, Ananthapur and it was decreed in his favour
directing the J.Drs. to execute the sale deed. Since the J.Drs. failed to execute the sale deed, he filed
E.P. No. 119 of 1992 and got the sale deed executed by the Court on 7.8.1993. He further contended
that as he had no knowledge about the attachment of the property and as the purchase of the
property was to the knowledge of the decree-holder, the E.P. is liable to be dismissed with costs.

4. The decree-holder filed E.A. No. 223 of 1993 in E.P. No. 119 of 1992 in O.S. No. 56 of 1992 under
Sections 64 and 151 C.P.C. contending that as he obtained attachment before judgment on 5.3.1992
in O.S. No. 56 of 1992, it prevails over the sale, therefore, E.P. No. 119 of 1992 is liable to be
dismissed. But, the decree-holder not pressed the E.A. No. 223 of 1993 on the ground that the
property was already conveyed to T. Nabi Sab by the Court in the E.P. proceedings.

Indian Kanoon - http://indiankanoon.org/doc/574586/ 1

 Adinarayana vs S. Gafoor Sab And Ors. on 3 March, 2004

5. The lower Court conducted an enquiry by receiving oral and documentary evidence from both
parties and ultimately held that as the schedule property was conveyed to Tarimala Nabi Sab
through a sale deed executed by the Principal Sub-Court, Ananthapur in a decree for specific
performance granted in pursuance of an agreement of sale, dated 15.6.1990, the E.P. schedule
property cannot be brought to sale.

6. The decree-holder, being aggrieved by the order of the lower Court, dated 26.10.1999 preferred
this revision petition questioning its validity and legality.

7. The learned Counsel for the revision petitioner-decree holder contended that since there was
attachment before judgment with effect from 5.3.1992, the subsequent sale deed will not have any
priority over the attachment. Therefore, the property is liable to be sold for recovery of the amount
covered by the decree in O.S. 46 of 1992.

8. In the light of the contention of the revision petitioner, the points for consideration are;

(1) Whether the agreement of sale is true and valid ?

(2) Whether the agreement of sale prevails over the attachment made subsequent to the agreement
of sale?

Point No. 1:

9. The J.Drs. contended that they executed an agreement of sale in favour of Tarimala Nabi Sab on
15.6.1990 and in pursuance of a decree for specific performance in O.S. No. 56 of 1992 the Principal
Sub-Court, Ananthapur executed a registered sale deed on 7.8.1993 in favour of Tarimala Nabi Sab
and as the attachment was subsequent to the date of agreement of sale, it will not have any effect.
The agreement of sale was accepted by the Court and the suit was decreed in pursuance of the said
document in favour of Tarimala Nabi Sab, The decree of the said Court became final and the sale
deed was also executed by the said Court in favour of Tarimala Nabi Sab. Therefore, there is no need
to probe into the genuineness or otherwise of the agreement of sale in this matter.

Point No. 2:

10. The agreement of sale was executed on 15.6.1990. The attachment before judgment was obtained
on 5.3.1992. The registration of the sale deed was made on 7,8.1993. Though the sale deed was
executed subsequent to the date of attachment before judgment, the agreement of sale was prior to
the date of attachment. Before referring to the legal position I wish to refer to the relevant
provisions of the Code.

11. Order 38, Rule 10 C.P.C. reads as follows:

"Attachment before judgment shall not affect the rights, existing prior to the
attachment of persons not parties to the suit, nor any person holding a decree against

Indian Kanoon - http://indiankanoon.org/doc/574586/ 2

 Adinarayana vs S. Gafoor Sab And Ors. on 3 March, 2004

the defendant from applying for the sale of the property under attachment in
execution of such decree."

12. This provision makes it clear that the attachment before judgment shall not effect the rights
existing prior to attachment of persons not parties to the suit.

13. Section 64 C.P.C. which prohibits private alienation of property after attachment reads as
follows:

"64. Private alienation of property after attachment to be void:--(1) Where an

attachment has been made, any private transfer or delivery of the property attached
or of any interest therein and any payment to the judgment-debtor of any debt,
dividend or other moneys contrary to such attachment, shall be void as against all
claims enforceable under the attachment.

(2) Nothing in this section shall apply to any private transfer or delivery of the
property attached or of any interest therein, made in pursuance of any contract for
such transfer or delivery entered into and registered before the attachment.

Explanation :--For the purposes of this section, claims enforceable under an attachment include
claims for the rateable distribution of assets."

14. The Supreme Court in Hamda Amma v. Avadiappa Pathar, , clarified the point whether the
agreement of sale entered into between the parties prevails over the attachment made subsequent to
the agreement of sale.

15. In the above decision the Supreme Court while considering the scope of Order 38, Rules 5 and 10
and Section 64 CPC held that the sale-deed executed prior to attachment before judgment can be
registered subsequently and it will prevail over the attachment. The Court further held that a
transaction of sale having already taken place even prior to the institution of the suit cannot be said
to have been made with the intention to obstruct or delay the execution of any decree. Order 38,
Rule 10 also makes it clear that the attachment before judgment shall not affect the rights, existing
prior to the attachment, of persons not parties to the suit. The Court also held that when the
property belonged to the judgment-debtors and when the sale-deed had already been executed by
them prior to the attachment before judgment and only registration remains, then neither the
attachment before judgment nor a subsequent attachment or Court sale of the property would
confer any title by preventing the relation back. The fact that the document of sale had not been
registered only after the attachment makes no difference. Even an unregistered document can be
received as evidence for purposes mentioned in the proviso to Section 49 of the Registration Act.
The contention that till registration, the execution of the sale-deed does not confer any rights
whatsoever on the vendee cannot be accepted.

16. In S. Noordeen v. V.S. Thiru Venkita Reddiar, , the Supreme Court held as follows:

Indian Kanoon - http://indiankanoon.org/doc/574586/ 3

 Adinarayana vs S. Gafoor Sab And Ors. on 3 March, 2004

The attachment before the judgment is an encumbrance preventing the owner of the
property to create encumbrance, sale or create charge thereon. Attachment before
judgment does not create any right, title or interest, but it disables the
judgment-debtor to create any encumbrances on the property.

17. In Narayanan Nair Ramakrishnan Nair v. Zacharia Kuriakose, , a single Bench of the Kerala High
Court held that a judgment made after a contract for specific performance does not affect a prior
agreement to sell and attachment could only fasten the debtor's right to the unpaid purchase money.

18. In D.V. Narsimharao v. P. Ramayyamma, 1987 (1) ALT 718, a Single Bench of this Court presided
over by Justice K. Ramaswamy, as he then was, considered the scope of Section 64, Order 38, Rule
10 CPC and Sections 40 and 54 of the Transfer of Property Act and held that a contract for sale of
property prevails over subsequent attachment of the same property before judgment. It was clarified
by the Court that though the agreement for sale does not create any right, title or interest in the
property under Section 54 of the Transfer of Property Act, it creates an interest in the property by
operation of second paragraph of Section 40 of the Transfer of Property Act and this right prevails
by operation of Order 38, Rule 10 CPC. Therefore, the rigour imposed under Section 64 of the Code
does not prevail and the attachment before judgment does not prevail over the contract for sale. The
learned Judge considered this aspect at length by quoting certain paragraphs of Mulla's Book on
Transfer of Property Act, 1882, Fifth Edition and also the case law relating to this point.

19. In the case covered by the above decision, the first respondent contended that the third
respondent entered into an agreement of sale on 25-2-1975 to sell the attached property to them for
a valuable consideration of Rs. 35,000/- and a sum of Rs. 20,000/- was paid under a Demand Draft
drawn on the State Bank of India and the balance amount was paid by discharging the debts of third
respondent and cash payments from time to time and the time for execution of the sale-deed was
xtended up to 31-3-1978. The first respondent purchased stamps for registration of the documents
on 20-12-1977 and two separate sale-deeds were executed in favour of Respondents 1 and 2 on the
same day and were registered on 4-1-1978, therefore, the first respondent contended that he has title
to the property on the date when the attachment before judgment was made.

20. The petitioner resisted the contentions of respondents 1 and 2, but the Court did not accept the
contentions of the petitioner. The Single Bench after taking into consideration the provisions of the
Code of Civil Procedure, Transfer of Property Act and the legal position held that the agreement of
sale, which was executed prior to the date of attachment, prevails over the attachment.

21. Section 40 of the Transfer of Property Act, 1882 reads thus:

"Where, for the more beneficial enjoyment of his own immovable property, a third
person has independently of any interest in the immovable property of another or of
any easement thereon a right to restrain the enjoyment in a particular manner of the
latter where a third person is entitled to the benefit of an obligation arising out of
contract and annexed to the ownership of immovable property, but not amounting to
an interest therein or easement thereon, such right or obligation may be enforced

Indian Kanoon - http://indiankanoon.org/doc/574586/ 4

 Adinarayana vs S. Gafoor Sab And Ors. on 3 March, 2004

against a transferee with notice thereof or a gratuitous transferee of the property

affected thereby but not against a transferee for consideration and without notice of
the right or obligation, nor against such property in his hands."

22. In Paragraph No. 10 at page 199 of the Mulla's Transfer of Property Act, 1882, Fifth Edition, it is
mentioned thus:

'There is a conflict of decisions as to whether the obligation annexed by this section to

the ownership of property by a contract of sale will prevail against claims enforceable
under an attachment, If after a creditor C has attached A's property, A sells it to B,
the conveyance to B will be subject to the claims of C enforceable under the
attachment. This is because under Section 64 of the Code of Civil Procedure any
private transfer by A after the attachment will be void as against such claims. But, if
the subsequent conveyance was in pursuance of an agreement of sale which was
before the attachment will the claims of C enforceable under the attachment be
subject to the obligation created by the contract of sale to B ?"

23. In the said book, the learned author noticed conflicting views of the Calcutta and Madras High
Court and commented as follows:

"The Madras High Court has taken the same view on the ground that if a creditor
attaches property which is subject to a particular obligation, he should not be able to
override it. In the case of an attachment before judgment this is so expressly provided
by Order 38, Rule 10 of the Code. Again if after the attachment the vendee filed a suit
for specific performance of the contract and the Court endorsed execution of a
conveyance, it is clear that such conveyance would not be a private transfer subject to
the provisions of Section 64 of the Civil Procedure Code."

24. In Veeraraghavayya v. Kamala Devi, AIR 1935 Mad. 193, the Madras High Court considered the
effect of attachment of property and subsequent sale in pursuance of the contract and held thus:

"Where a purchase is subsequent to the attachment, but the agreement in pursuance

of which the purchase is made, is prior to attachment, the purchase prevails against
the attachment."

25. The Madras High Court took the same view in Rebala Venkata Reddi v. Yellappa Chetti, AIR
1917 Mad. 4.

26. In Diravyam Pillai v. Veeran Ambalam, 1939(2) MLJ 822, Varadachariar, J., as he then was, at
page 831 held as follows:

'The question is not whether any interest has passed under the contract to sell. The
attaching decree-holder attaches not the physical property, but only the rights of the
judgment-debtor in the property."

Indian Kanoon - http://indiankanoon.org/doc/574586/ 5

 Adinarayana vs S. Gafoor Sab And Ors. on 3 March, 2004

27. This view was followed by Wardsworth, J., in Athinarayana v. Subramania, AIR 1942 Mad. 67,
wherein the learned Judge has held thus;

"Though a contract to sell does not having regard to the terms of Section 54 of the
Act; create any interest in or charge on the property, it does give rise to an obligation
which limits, the right of the judgment-debtor and the attachment of the right, title
and interest of the judgment-debtor is subject to any such limitation by which the
judgment-debtor was bound. Therefore, where subsequent to a contract to sell
certain property, is attached in execution of a decree, the attachment does not prevail
over the pre-existing contract to sell even though the attachment creditor has no
notice of the contract to sell. The right of the judgment-debtor in the property is on
the date of the attachment qualified by the obligation incurred by him under the
earlier contract to sell and the attaching creditor cannot claim to ignore that
obligation and proceed to bring the property to sale as if it remained the absolute
property of the judgment-debtor."

28. K. Ramaswamy, J., while agreeing with the views of the Madras High Court and by expressing
that the learned Judge is bound by the ratio laid down by the Madras High Court held that though
the agreement of sale does not create any right, title or interest in the property under Section 64 of
the Code of Civil Procedure, it creates an interest in the property by operation of second paragraph
of Section 40 of the Transfer of Property Act, 1882 and this right prevails by operation of Order 38,
Rule 10 CPC, therefore, the rigour imposed under Section 64 does not prevail. The agreement of sale
is not thereby void and the attachment does not prevail over the contract for sale.

29. In the case on hand, the agreement of sale was executed on 15-6-1990 and the attachment before
judgment was ordered on 5-3-1992. Though the sale-deed executed by the Court on 7-8-1993 was
subsequent to the date of attachment, the agreement of sale, which was executed prior to the date of
attachment, prevails over the attachment. In the light of the above legal position, I have no
hesitation to hold that the agreement of sale prevails over the attachment before judgment;
therefore, the schedule property cannot be brought to sale. The lower Court rightly concluded that
the agreement of sale prevails over the attachment before judgment. There are no grounds to
interfere with the order of the lower Court.

30. In the result, the revision petition is dismissed. The impugned order of the lower Court is
confirmed. No order as to costs.

Indian Kanoon - http://indiankanoon.org/doc/574586/ 6