Andhra Pradesh High Court - Amravati
Chitturi Venu Gopala Krishana vs M/S Sakthi Finance Company Limited on 16 April, 2026
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A.S.No.54 of 2026
APHC010046562026
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3572]
(Special Original Jurisdiction)
THURSDAY
THURSDAY, THE SIXTEENTH DAY OF APRIL
TWO THOUSAND AND TWENTY SIX
PRESENT
THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
THE HONOURABLE SRI JUSTICE BALAJI MEDAMALLI
APPEAL SUIT NO: 54/2026
Between:
1. CHITTURI VENU GOPALA KRISHANA, S/O SATYANARAYANA
MURTHY, HINDU, AGED ABOUT 58 YEARS, BUSINESS, R/O DR.
NO. 3-1235, SAVITRI NAGAR, RAJAMAHENDRAVARAM.
...APPELLANT
AND
1. M/S SAKTHI FINANCE COMPANY LIMITED, (THE COMPANY
INCORPORATED UNDER INDIAN COMPANIES ACT),
REPRESENTED BY ITS SENIOR MANAGER (LAW), NO. 62, DR.
NANJAPPA ROAD, COIMBATORE.
2. KARUTURI KISHORE, S/O (LATE) SATYANARAYANA, HINDU, AGED
ABOUT 48 YEARS, BUSINESS, R/O DR. NO. 82-6-6,
6, 2ND CROSS
STREET, VIDYUT COLONY, RAJAMAHENDRAVARAM,EAST
GODAVARI DISTRICT.
3. KARUTURI RAJA RATNAM, W/O (LATE) SATYANARAYANA, HINDU,
AGED ABOUT 69 YEARS, HOUSE
HOUSE-WIFE, R/O DR. NO. 82-6-6,
82 2ND
CROSS STREET, VIDYUT COLONY, RAJAMAHENDRAVARAM,
EAST GODAVARI DISTRICT.
...RESPONDENT(S):
Counsel for the Appellant:
1. SINGAMSETTY V.M. SANKAR
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A.S.No.54 of 2026
Counsel for the Respondent(S):
1. O UDAYA KUMAR
The Court made the following Judgment:
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A.S.No.54 of 2026
THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
&
THE HON'BLE SRI JUSTICE BALAJI MEDAMALLI
APPEAL SUIT NO.54 OF 2026
JUDGMENT:(per Hon'ble Sri Justice Balaji Medamalli)
1. The Appeal, under Section 96 of the Code of Civil Procedure, 1908 (for short, 'C.P.C.'), preferred by the appellant/third-party claimant, challenging the decree and order dated 05.12.2025 passed in E.A.No.47 of 2024 in E.P.No.556 of 2019 in A.C.No.89 of 2009 by the learned Judge, Family Court- cum-IX Additional District Judge, East Godavari at Rajamahendravaram (for short, 'the Executing Court'), whereby the Executing Court dismissed the petition filed under Order XXI Rule 58(1) of CPC, seeking to raise the attachment dated 03.06.2019, filed by the appellant/claim petitioner.
2. The gamut of facts relevant for the purpose of the present adjudication is as follows:
(i) The claim petitioner claims to be the absolute owner of the petition schedule property bearing D.No.82-6-6, comprising a ground and first floor, admeasuring 125 sq. yards situated on the eastern side of a total extent of 250 sq. yards in plot No.64 of APSEB layout, in R.S.No.202/A21 of Rajamahendravaram. Originally, the said property belonged to the 3rd respondent who is the 2nd judgment debtor, and one Chitturi Nagamani, who is none other than his sister. The said Nagamani and 3rd respondent for their legal necessities offered to sell the property to the appellant, as he is their 4 RNT, J & BM, J A.S.No.54 of 2026 neighbor, being the owner of the adjacent property on the western side of the petition schedule property, and also their relative. The appellant agreed to purchase the same for a total consideration of Rs.23,00,000/-. Accordingly, an agreement of sale dated 04.06.2018 was entered into upon payment of an advance sale consideration of Rs.2,50,000/-, with a condition to pay the balance sale consideration within a period of eight months for performance of the said agreement.
(ii) It was further stated that, at the request of the 3rd respondent and Chitturi Nagamani, the execution of the sale deed was postponed on several occasions. In the meantime, the appellant had paid a total sum of Rs.6,00,000/- to the vendors on various dates as part of the sale consideration. As the vendors continued to postpone the execution of sale deed, the appellant issued a notice dated 07.07.2019, expressing his readiness and willingness to pay the balance sale consideration and also requesting for registration of the sale deed. As there was no response, the appellant instituted a suit in O.S.No.58 of 2019 on the file of I Additional Senior Civil Judge's Court, Rajamahendravaram, wherein, the vendors contested the suit by filing written statement.
(iii) During the pendency of the said suit, parties have settled the dispute before the Lok Adalat and an award dated 15.03.2023 came to be passed by the Legal Services Authority, under which, the appellant agreed to pay the balance sale consideration of Rs.17,00,000/- to his vendors i.e., 3rd 5 RNT, J & BM, J A.S.No.54 of 2026 respondent herein and C.Nagamani, within two months from the date of the said award, and to get the sale deed registered in his favour. In the event the vendors failed to execute the registered sale deed, the appellant would be at liberty to get the sale deed executed and registered through the process of Court.
(iv) It was further contended that, for the purpose of presenting the document for registration the appellant got being ready with the balance sale consideration, verified the records at the office of the Sub-Registrar and found that the subject property had been included in the list of prohibited properties in view of the order of attachment dated 03.06.2019 in the aforementioned execution proceedings. It was further stated that the appellant was a bona fide purchaser of the property in 2018, whereas, the attachment was ordered in 2019. Moreover, the attachment related solely to the half share of the property belongs to the 3rd respondent and did not affect the share of C.Nagamani, and accordingly, he prayed to raise the attachment.
3. Denying the aforesaid, the 1st respondent/Decree Holder (D.Hr) filed a counter contending that the said agreement of sale was created to defeat the rights of the D.Hr and to overcome the attachment made there under. The said agreement of sale is not genuine one and the same was not even placed on record along with the claim petition. Apart from that, the 1st respondent also raised various objections, inter alia, that as per the pleadings, the agreement of sale stipulated a time period of eight months, thereby making time is the 6 RNT, J & BM, J A.S.No.54 of 2026 essence of contract. The J.Drs No.1 and 2 are relatives, and in order to avoid the debt due to the D.Hr / 1st respondent, created the said document. The award passed by the Lok Adalat in O.S.No.58 of 2019 is not binding on the D.Hr / 1st respondent, as it was not a party to the said proceedings. The 3rd respondent/2ndJ.Dr, along with one C.Nagamani, purchased the property in an extent of 250 sq. yards in plot No.64, situated in R.S.No.201/2A1 of APSEB colony, from Garikipati Butchiramayya on 12.02.1986, vide document No.1199 of 1986. Subsequently, the said Nagamani and the 3rd respondent herein, jointly executed a registered gift settlement deed dated 27.07.1987 for an extent of 125 sq. yards on western side, out of total extent of 250 sq. yards in favour of the appellant. The 3rd respondent / 2ndJ.Dr got an undivided share in an extent of 62.5 sq. yards in the schedule property and the same was attached by an order dated 03.06.2019 by the Execution Court in E.P.No.556 of 2019. Therefore, petitioner is not a bona fide purchaser and prayed to dismiss the claim petition.
4. During the course of enquiry, the claim petitioner/appellant was examined as PW.1 and Exs.P1 and P2 were marked. On behalf of the respondents, RWs.1 and 2 were examined and Ex.R1 was marked.
5. The Execution Court, upon considering the material on record and after hearing both the appellant/claim petitioner as well as the Decree Holder, dismissed the E.A.No.47 of 2024 vide orders dated 05.12.2025. 7
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6. Aggrieved thereby, the appellant/ claim petitioner preferred the above appeal, inter alia, contending that the Trial Court erred in holding that section 64 of C.P.C., defeats the attachment in view of the appellant's pre-attachment agreement of sale through private alienation of property and the registration of an agreement is not a statutory pre-condition for maintaining a third-party claim under order XXI Rule 58 of CPC. The appellant further contended that non-registration of the agreement of sale dated 04.06.2018 is not fatal, and that registration is not per se compulsory unless the document is relied upon for the purpose of part-performance. An award passed by the Lok Adalat has the force of a decree between the parties and, therefore, cannot be ignored by the Court while adjudicating the above application.
7. Though several grounds were raised in the memorandum of appeal, the appellant confined his argument primarily to the issue of maintainability of an application by a third-party claimant under Order XXI Rule 58 of CPC and also that the agreement of sale is prior to the attachment made by the Executing Court in the above said proceedings and, therefore, in view of section 64(2) of the CPC, the transaction under the said agreement of sale cannot be treated as void and the said contract is saved from Section 64(1) of CPC.
8. Heard Sri S.V. Maruti Sankar, learned counsel for the appellant and Sri O. Uday Kumar, learned counsel for the 1st respondent / D.Hr. 8
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9. After considering the pleadings, the findings of the Executing Court, and the submissions made by the learned counsel on either side, this Court is of the view that the following points arise for determination:
1) Whether an application under Order XXI Rule 58 of CPC is maintainable for raising an attachment on the basis of an agreement of sale?
2) Whether the appellant's case falls within the scope of section 64(2) of CPC?
3) Whether the order of the Executing Court warrants interference?
POINT NOs.1 to 3:
10. It is relevant to note the following dates which are relevant for the purpose of deciding the aforesaid points: On 12.02.1986, the 3rd respondent herein and C. Nagamani purchased an extent of 250 sq. yards from Garikipati Butchiramayya. Thereafter, on 27.07.1987, a registered gift settlement deed was executed in favour of the appellant/third party claimant for an extent of 125 sq. yards on the western of the said property. Subsequently, on 08.01.2011, an arbitral award was passed by the sole arbitrator against the J.Drs No.1 and 2 in favour of the 1st respondent / D.Hr. While so, on 04.06.2018, the vendors (2nd J.Dr and C. Nagamani) stated to have executed an agreement of sale in favour of the appellant for the remaining extent of 125 sq. yards, for a total sale consideration of 23,00,000/-, receiving an advance of Rs.2,50,000/-, and that the appellant subsequently paid further sums of Rs.3,00,000/- and Rs.50,000/- on 15.12.2018 and 07.06.2019, respectively. In 9 RNT, J & BM, J A.S.No.54 of 2026 the meanwhile, the D.Hr, seeking realization of the award amount, filed E.P.No.556 of 2019 on 21.01.2019 and sought for attachment of the scheduled property and accordingly, the property was attached on 18.06.2019.
11. While so, basing on the alleged agreement of sale dated 04.06.2018, the appellant herein filed a suit in O.S.No.58 of 2019 before the I Additional Senior Civil Judge, Rajamahendravaram, against his vendors for specific performance on 29.07.2019 and the same was settled before the Lok Adalat on 13.05.2023, and accordingly, an award came to be passed by the Lok Adalat. The appellant came to know of this award on 14.10.2023 and, accordingly filed the present E.A.No.47 of 2014 before the Executing Court, claiming rights over the schedule property.
12. The learned Executing Court considered the said application and passed orders holding that the claim petitioner failed to place the agreement of sale dated 04.06.2018 before the Court. Further, the 1st respondent/D.Hr, was not party to the proceedings before the Lok Adalat in O.S.No.58 of 2019, and accordingly, the award passed by the Lok Adalat was held not to be binding on the D.Hr. After considering section 54 of the Transfer of Property Act as well as section 64(2) of the CPC, the Executing Court held that no agreement was forthcoming. Even assuming, for the sake of argument, even the said agreement itself will not create any interest in the property in view of the section 54 of the Transfer of Property Act. Moreover, to claim protection 10 RNT, J & BM, J A.S.No.54 of 2026 under any such agreement, must have been registered prior to the attachment, in accordance with section 64(2) of the CPC.
13. Learned counsel for the petitioner submitted that the Executing Court failed to appreciate that an application filed by a third party under Order 21 Rule 58 of CPC is maintainable when a right has been created in favour of such third party pursuant to an agreement of sale, as such, the Executing Court erred in dismissing the application without duly considering the said aspect. The agreement of sale creates rights in favour of the appellant and casts an obligation attached to the ownership of the property, thereby giving rise to a cloud over the title. It was argued that the decree-holder is entitled to attach only the right, title and interest of the judgment-debtor, and such attachment cannot be free from the obligations arising out of the prior contract for sale. Since the agreement of sale was prior to the attachment, the same is protected under section 64(2) of the CPC.
14. It is relevant to extract the provisions of Order 21 Rule 58 of CPC and section 64 of CPC:
Order 21 Rule 58. Adjudication of claims to, or objections to attachment of, property.
(1) Where any claim is preferred to, or any objection is made to the attachment of, any property attached in execution of a decree on the ground that such property is not liable to such attachment, the Court shall proceed to adjudicate upon the claim or objection in accordance with the provisions herein contained:
Provided that no such claim or objection shall be entertained:
(a) where, before the claim is preferred or objection is made, the property attached has already been sold; or 11 RNT, J & BM, J A.S.No.54 of 2026
(b) where the Court considers that the claim or objection was designedly or unnecessarily delayed.
(2) All questions (including questions relating to right, title or interest in the property attached) arising between the parties to a proceeding or their representatives under this rule and relevant to the adjudication of the claim or objection, shall be determined by the Court dealing with the claim or objection and not by a separate suit.
Section 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.] [Inserted by the Code of Civil Procedure (Amendment) Act, 2002, Section 3 (w.e.f. 1.7.2002).] Explanation .-For the purposes of this section, claims enforceable under an attachment include claims for the rateable distribution of assets.
15. Section 64 of CPC stipulates two conditions i.e., subsection(1) stipulates any private transfer or delivery of the property attached or of any interest therein, and any payment to the J.Dr of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the said attachment. Subsection (2) stipulates that nothing in this section shall apply to any transfer or delivery of the property or any interest therein, made in pursuance of any contract for such transfer or delivery entered into "and registered" before the attachment. Thus, alienations effected subsequent to the attachment are held to be void, whereas those made prior to the attachment, and duly registered before such attachment, are saved under sub-section (2) of section 64 of the CPC.
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16. In the instant case, the said agreement of sale has not been placed on record. It is also not the case of the appellant/third-party claimant that such agreement of sale was a registered document.
17. Learned counsel for the appellant contends that an application under order XXI Rule 58 of the CPC is maintainable even in respect of the attachment of immovable properties, and that the mere fact that the properties have been sold or that the sale has been confirmed will not deprive the Court of its jurisdiction to adjudicate upon such a claim. In support of this contention, reliance was placed on the judgment of the Hon'ble Supreme Court in Kancherla Lakshminarayana v. Mattaparthi Syamala1,wherein it was held as follows:
23. Again, it cannot be said that the present appellant has no locus standi to raise an objection to the sale for the simple reason that he had filed a suit on the basis of an agreement of sale. The factum of the agreement of sale was not denied by the second respondent. Therefore, whether the agreement of sale was a good agreement of sale entitling the appellant for specific performance on the basis of that agreement is essentially a question to be decided subsequently in the suit (though the suit is earlier to the suit filed by the first respondent). Under such circumstances there was a cloud on the property and a person like the appellant who had the obligation qua the property in the shape of an agreement of sale could not be held to be an utter outsider having no locus standi to take the objections. This is the import of the aforementioned decision in VannarakkalKallalathil Sreedharan case [(1990) 3 SCC 291] . To the same effect is the judgment in Purna Chandra Basak v. Daulat Ali Mollah [AIR 1973 Cal 432] where the learned Single Judge of that Court has held: (Purna Chandra Basak case [AIR 1973 Cal 432] , AIR p. 434, para 8) "8. ... An attaching creditor can only attach the right, title and interest of his debtor at the date of the attachment and on principle, his attachment cannot confer upon him any higher right than the judgment-debtor had at the date of the attachment. If a person, having a contract of sale in his favour, has such pre-existing right the attachment could not be binding upon him. If the promisee 1 (2008) 14 SCC 258 13 RNT, J & BM, J A.S.No.54 of 2026 gets a conveyance, after the attachment, in pursuance of his contract, he takes a good title in spite of the attachment."
18. In the case on hand, the application filed by the appellant was entertained by the Executing Court and adjudicated upon, and was dismissed on merits, holding that the agreement of sale said to have been entered into on 04.06.2018 does not attract the provisions of section 64(2) of the CPC and cannot defeat the attachment over the subject property. The judgment relied upon by the learned counsel for the appellant has no relevance for the reason that the learned Executing Court had, in fact, entertained the application filed under Order XXI Rule 58 of CPC and dismissed the same on its own merits. The Executing Court never held that such an application is not maintainable. Therefore, the maintainability issue does not arise at all and such an application in fact is maintainable.
19. Learned counsel for the appellant has also placed reliance on the judgment of the Hon'ble Supreme Court in V.K. Sreedharan v. Chandramaath Balakrishnan2, wherein it held as follows:
7. Hence under a contract of sale entered into before attachment the conveyance after attachment in pursuance of the contract passes on good title in spite of the attachment. To the same effect are the decisions of the Bombay High Court in Rango Ramachandra Kulkarni v. Gurlingappa Chinnappa Muthal [AIR 1941 Bom 198 : 43 BLR 206] and Yeshvant Shankar Dunakhe v. PyarajiNurji Tamboli [AIR 1943 Bom 145 : 45 BLR 208] . The High Court of Travancore-Cochin in Kochuponchi Varughese v. Ouseph Lonan [AIR 1952 TC 467 : ILR 1952 TC 201] has also adopted the same reasoning.
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9. In our opinion, the view taken by the High Courts of Madras, Bombay, Calcutta and Travancore-Cochin in the aforesaid cases appears to be reasonable and could be 2 (1990) 3 SCC 291 14 RNT, J & BM, J A.S.No.54 of 2026 accepted as correct. The agreement for sale indeed creates an obligation attached to the ownership of property and since the attaching creditor is entitled to attach only the right, title and interest of the judgment-debtor, the attachment cannot be free from the obligations incurred under the contract for sale. Section 64 CPC no doubt was intended to protect the attaching creditor, but if the subsequent conveyance is in pursuance of an agreement for sale which was before the attachment, the contractual obligation arising therefrom must be allowed to prevail over the rights of the attaching creditor. The rights of the attaching creditor shall not be allowed to override the contractual obligation arising from an antecedent agreement for sale of the attached property. The attaching creditor cannot ignore that obligation and proceed to bring the property to sale as if it remained the absolute property of the judgment-debtor. We cannot, therefore, agree with the view taken by the Punjab and Haryana High Court in Mohinder Singh case [AIR 1971 P & H 381 : 73 Punj LR 257] .
20. The agreement of sale indeed creates an obligation attached to the ownership of the property. Since the attaching creditor is entitled to attach only the right, title and interest of the judgment-debtor, such attachment cannot be free from the obligations arising under the contract of sale. While section 64 of the CPC is intended to protect the attaching creditor, any subsequent conveyance pursuant to an agreement of sale executed prior to the attachment must be allowed to prevail, and the contractual obligations arising therefrom cannot be disregarded in favour of the attaching creditor.
21. In the case on hand, the alleged agreement of sale dated 04.06.2018 has neither been placed before the Executing Court nor before this Court. Section 64(2) of CPC mandates the requirement of registration and the said document, which in fact, intended to avoid the debt had been created / brought into existence subsequent to the attachment. However, for the reasons best known, the appellant/claim petitioner failed to place the same on record. Further, the appellant/claim petitioner and the judgment debtors are 15 RNT, J & BM, J A.S.No.54 of 2026 closely related, and the subject property abuts the claim petitioner's property and there is no whisper either from the judgment debtors or the appellant/claim petitioner regarding the existence of the alleged agreement of sale. Such conduct reflects adversely upon the appellant /claim petitioner and the J.Drs (respondents 2 and 3), indicating that, it is an attempt to defeat the claim of the decree holder, the appellant/claim petitioner relied on the plea of an agreement of sale, followed by the award of a Lok Adalat between the appellant/claimant and his vendors, who is the 2ndJ.Dr and Smt. C.Nagamani. Thus, the judgment relied upon by the learned counsel for the appellant has no relevance to the factual matrix in the case on hand.
22. In Podilapu Srinivasa Rao V. Gandreti Ugadi3, a coordinate bench of this Court considered a very similar issue and held that:
14. Section 64 C.P.C deserves reproduction, which reads as under:
"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 monies 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."
15. Sub-section(2) of Section 64 C.P.C provides that nothing in Section 64(1) 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.
16. A perusal of Section 64 C.P.C makes it evident that to attract sub- section (2) of Section 64 C.P.C, the private transfer or delivery of the 3 2026 Supreme(Online)(AP) 4494 16 RNT, J & BM, J A.S.No.54 of 2026 attached property or of any interest thereon must have been made pursuant to any contract of transfer entered into and registered before the attachment.
23. Supra, the alleged agreement of sale is not a registered document nor the same is placed on record, thus, the reliance placed by the learned counsel for the appellant on the above-referred judgments, has no avail. The Executing Court, after considering the material on record, rightly concluded that the claim of the appellant is devoid of merits and dismissed the petition.
24. In light of the foregoing discussions, we are of the considered view that the Executing Court has not committed any illegality or irregularity in passing the impuged order. Accordingly, the points are answered.
25. In the result, the Appeal Suit is dismissed without costs by confirming the Decree and Order in E.A.No.47 of 2024 in E.P.No.556 of 2019 in A.C.No.89 of 2009, dated 05.12.2025 on the file of the learned Judge, Family Court-cum-IX Additional District Judge, East Godavari at Rajamahendravaram.
Miscellaneous applications pending, if any, shall stand closed.
__________________________ JUSTICE RAVI NATH TILHARI __________________________ JUSTICE BALAJI MEDAMALLI Date: 16.04.2026 SAK 17 RNT, J & BM, J A.S.No.54 of 2026 THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI THE HONOURABLE SRI JUSTICE BALAJI MEDAMALLI APPEAL SUIT NO: 54/2026 (Per Hon'ble Sri Justice Balaji Medamalli) Date: .04.2026 SAK