Allahabad High Court
Smt. Vidyawati vs Lala Ram (D) By L.Rs. And Anr. on 28 September, 2007
Equivalent citations: 2008(1)AWC276, AIR 2008 (NOC) 603 (ALL.), 2008 (1) ALL LJ 355, 2008 (2) ABR (NOC) 284 (ALL.) = 2008 (1) ALJ 355, 2008 A I H C 1041, (2008) 104 REVDEC 151, (2008) 70 ALL LR 7, (2008) 1 ALL WC 276, (2008) 1 ALL RENTCAS 13
Author: Tarun Agarwala
Bench: Tarun Agarwala
JUDGMENT Tarun Agarwala, J.
1. The plaintiff Smt. Vidyawati filed a suit against Lala Ram and Chhotey Lal for the cancellation of the sale deed executed in favour of Lala Ram in Execution Case No". 3 of 1976 arising out of Original Suit No. 57 of 1972 with regard to plot No. 218 having an area of 8.14 acres. The ground alleged by the plaintiff was that she was a bona fide purchaser for value which she had purchased from defendant No. 2, Chhotey Lal on the basis of three sale deeds dated 31.10.1975, 20.4.1976 and 23.2.1977 and that her name was mutated in the revenue records. The plaintiff alleged that the defendant had knowledge about the execution of the sale deeds in her favour inspite of which he had concealed this fact and, in collusion with the defendant No. 2, fraudulently got the sale deed executed in execution proceedings. The plaintiff alleged that upon coming to know of the sale made by the defendants in execution proceedings, she had filed the present suit for the cancellation of the sale deed. The plaintiff further contended that at the time when the decree was put in execution, the defendant No. 2 was no longer the owner and consequently the property could not be attached. Further, the defendant No. 1, being a decree holder could not participate in the auction proceedings without the permission of the Court.
2. The suit was resisted by defendant No. 1 who contended that the trial court had no jurisdiction to decide the suit since the plot was bhumidhari and therefore, only the revenue court had the jurisdiction to decide the matter. The defendant further submitted that plot No. 218 was under attachment in Execution Case No. 23 of 1974 and again in Execution Case No. 3 of 1976 and, during the pendency of the attachment, the defendant No. 2 had illegally sold the property by means of three sale deeds in favour of the plaintiff which were void under Section 64 of the C.P.C. The defendant No. 1 submitted that Original Suit No. 57 of 1972 was filed against defendant No. 2 for the recovery of money which was decreed. The said decree was put in execution and in Execution Case No. 23 of 1974, the plot No. 218 measuring 10.53 acres was attached. During the attachment proceedings, the defendant No. 2 sold a portion of the property to the plaintiff by means of a sale deed dated 31st October, 1975. The said execution case was dismissed on 15.11.1975 and subsequently, fresh Execution Case No. 3 of 1976 was Instituted in which the property was again attached. In these proceedings, the defendant No. 2, namely, the judgment debtor filed an objection under Section 47 of the C.P.C. and during its pendency, the defendant No. 2 again executed two sale deeds dated 2.4.1976 and 23.2.1977 in favour of the plaintiff which fact was concealed by defendant No. 2. The executing court after considering the matter dismissed the objection of the judgment debtor under Section 47 of the C.P.C. The plot was put in auction in which the defendant No. 1 became the highest bidder. The auction was confirmed by an order dated 27.7.1979 and the sale deed was executed thereafter. The defendant contended that the sale deeds executed in favour of the plaintiff was null and void and that she was not a bona fide purchaser and had knowledge of the execution proceedings inspite of which she did not file any objection under Order XXI, Rule 89 or under Section 47 of the C.P.C. and therefore, the suit was barred by the provisions of Order XXI, Rule 92 of the C.P.C. The defendant also contended that the suit was hit by the doctrine of lis pendens as provided under Section 52 of the Transfer of Property Act.
3. The trial court, after framing the issues, dismissed the suit holding that the plaintiff was not a bona fide purchaser and that her suit was not maintainable and was barred by Order XXI, Rule 92 of the C.P.C. and that the objections ought to have been filed either under Section 47 of the C.P.C. or under Order XXI, Rule 89 of the C.P.C. Further, the suit was hit by the principles of lis pendens. The trial court further found that the sale deeds executed by defendant No. 2 in favour of the plaintiff during the pendency of the attachment, were void.
4. Aggrieved by the dismissal of the suit, the plaintiff filed an appeal which was also dismissed and the findings of the trial court was affirmed. The appellate court also came to the conclusion that the sale deed executed in favour of the plaintiff was not bona fide and that * the defendant No. 2, on one hand, was contesting the execution proceedings and had filed his objections while, on the other hand, was executing the sale deeds in favour of the plaintiff. The appellate court further found that after the dismissal of the objections of defendant No. 2, he did not prefer any further appeal. The appellate court also concluded that defendant No. 2 was not only contesting the execution proceedings on his own behalf but also contesting the matter on behalf of the plaintiff. This finding was arrived at on the basis of the circumstances surrounding the execution of the sale deed. The appellate court further found that there was no fraud or collusion between the defendant Nos. 1 and 2 and that the auction was given, to defendant No. 1 whose bid was found to be the highest and which was neither low nor inadequate. Aggrieved, the plaintiff filed the present second appeal.
5. By an order dated 30.11.2004, four substantial questions of law was framed, namely:
(I) Whether in absence of plaintiff being party to either the Original Suit No. 57 of 1972 or Execution Case No. 3 of 1976, which was going on in between the defendants themselves, the Courts below erred in holding that the suit of the plaintiff was barred by the provisions of Section 47 and Order XXI, Rule 92 of the C.P.C, as the only remedy available to the plaintiff was by way of filing objections in Execution Case No. 3 of 1976 arising out of Original Suit No. 57/72?
(II) Whether in view of dismissal of Execution Case No. 3/76 on 2.4.77, the attachment, if any, of the disputed property came to an end and the sale deeds, dated 2.4.76 and 25.2.77 were therefore legal and operative?
(III) Whether the courts below erred in law by not giving effect to the sale deed dated 31.10.75 executed in favour of the plaintiff, which admittedly was executed prior to the order of attachment dated 23.3.76 in Execution Case No. 3/76, moreso, when the earlier Execution Case No. 23/74 stood dismissed?
(IV) Whether the sale deeds dated 31.10.75, 2.4.76 and 25.2.77 were hit by Section 52 of the Transfer of Property Act particularly when the Original Suit No. 57 of 1992 was a money recovery suit and was not in relation to the property in dispute and that the Execution Case No. 3/76 was only in respect of the money decree passed in Original Suit No. 57 of 1972?
6. Subsequently by an order dated 2.8.2006, another substantial question of law was framed, namely:
(V) Whether the findings of the courts below that the plaintiff-appellant was not a bona fide purchaser for value are perverse and based on no evidence?
7. Heard Sri Manoj Misra, the learned Counsel for the appellant, Sri R. P. Misra, advocate holding the brief of Sri B. B. Paul, the learned Counsel for defendant No. 1. The defendant No. 2 has nether appeared before this Hon'ble Court nor appeared before the court below and, inspite of service, had not filed his written statement.
8. The learned Counsel for the plaintiff submitted that the plaintiff was a bona fide purchaser for value and had no knowledge about the execution proceedings in Execution Case No. 23 of 1974 or execution proceedings in Execution Case No. 3 of 1976 nor had any knowledge about the decree passed in O. S. No. 57 of 1972. The learned Counsel submitted that the plaintiff had purchased the land through three sale deeds for valuable consideration and was put in possession and that her name was duly recorded in the revenue record. The defendant No. 1, inspite of knowledge that the plaintiff was the owner and in possession fraudulently purchased the land in execution of the decree passed in O. S. No. 57 of 1972. The learned Counsel submitted that on the date of the auction, the defendant No. 2 was not the owner of the land and therefore, the land could not be attached or sold in execution proceedings and therefore, the auction was liable to be set aside. Further, the defendant No. 1, being a decree holder, could not participate in the auction without the permission of the Court. The learned Counsel for the petitioner submitted that there was no embargo upon the plaintiff in purchasing the property of the judgment debtor inspite of the fact that the property was under attachment. Assuming without admitting that the two sale deeds dated 2.4.1976 and 23.2.1977 was executed while the property was under attachment in Execution Case No. 3 of 1976, which could be hit by Section 64 of the C.P.C., nonetheless, the sale deed dated 31.10.1975, could not be held to be void, inasmuch as, the said sale deed was executed while the property was under the attachment order being passed in Execution Case No. 3 of 1976. The learned Counsel submitted that an attachment order was passed on 23.3.1976, and prior to the attachment, the sale deed was executed on 31.10.1975. Even otherwise, the attachment order in Execution Case No. 23 of 1974 could not come in the way, inasmuch as, the said Execution Case No. 23 of 1974 was dismissed on 15.11.1975. Upon the dismissal of Execution Case No. 23 of 1974, the attachment, if any, came to an end and the cloud on the plaintiffs title disappeared. The learned Counsel further submitted that the suit for cancellation of the sale deed was maintainable and that it was not necessary for the plaintiff to file an objection under Section 47 of the C.P.C. or an application under Order XXI, Rule 89 and that the suit was not barred under Order XXI, Rule 92 (3) of the C.P.C.
9. On the other hand, the learned Counsel for the opposite party submitted that the property was sold by the judgment debtor privately to the plaintiff during the subsistence of the attachment and therefore, the sale deed executed in favour of the plaintiff was void under Section 64 of the C.P.C. In support of his submission, the learned Counsel for the defendant No. 1 placed reliance upon a decision in Nancy John Lyndon v. Prabhati Lal Chowdhury and Ors. . The learned Counsel further placed reliance upon the decision in Azizul Rehman v. IX Additional District Judge, Moradabad and Ors. 1993 ACJ 1 : 1993 (1) AWC 595, in which it was held that once the auction sale was confirmed and became absolute under Order XXI, Rule 89, the said sale could not be set aside and the judgment debtor could not get back the property sold in execution of the decree under the provisions of Order XXI of the C.P.C.
10. Admittedly, the plaintiff was neither a party in O. S. No. 57 of 1972 nor was a party in Execution Case No. 3 of 1976 or Execution Case No. 23 of 1974:
Section 47 of the C.P.C. provides as under:
47. Questions to be determined by the Court executing decree.-(1) All questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit.
[***] (3) Where a question arises as to whether any person is or is not the representative of a party, such question shall, for the purposes of this Section, be determined by the Court.
11. A perusal of the aforesaid provision indicates that all questions arising between the parties to a suit in which a decree was passed or their representatives, and relating to the execution shall be determined by the Court executing the decree and not by a separate suit. Admittedly, the plaintiff was not a party in O. S. No. 57 of 1972. The question which now requires to be answered is, whether the plaintiff was a representative of the defendant in O. S. No. 57 of 1972? In Musarnmat Bhamphul Devi v. Rai Sahib Harbaksh Singh 1912 (14) 1C 40, it was held that a transferee of a judgment debtor's property is not a representative of the judgment debtor and an objection could not be filed by such a person under Section 47 of the C.P.C. and that a separate suit would be maintainable. In Ghafur-Ud-Din u. Hamid Husain and Ors. ILR 32 All 129, it was held that a purchaser of the property which was under attachment was not a representative of the judgment debtor.
12. In view of the aforesaid, this Court is of the opinion that the plaintiff was not a representative of the judgment debtor since she was not a party in O. S. No. 57 of 1972 and therefore, could not have filed an objection under Section 47 of the C.P.C.
13. A question still remains to be answered, namely, whether the plaintiff could have applied under Order XXI, Rule 89 for setting aside the sale? The provisions of Order XXI, Rule 89, as applicable in the State of U. P., reads as under:
Order XXI, Rule 89. Application to set aside sale on deposit.-(1) Where immovable property has been sold in execution of a decree [the judgment debtor, or any person deriving title through the judgment debtor, or any person holding an interest in the property sold at the time of the sale or at the time of making the application, or acting for or in the interest of such person] may apply to have the sale set aside on his depositing in Court,
(a) for payment to purchaser, a sum equal to five per cent of the purchase-money; and
(b) for payment to the decree-holder, the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered, less any amount which may, since the date of such proclamation of sale, have been received by the decree holder.
(2) Where a person applies under Rule 90 to set aside the sale of his immovable property, he shall not, unless he withdraws his application, be entitled to make or prosecute an application under this Rule.
(3) Nothing in this Rule shall relieve the judgment-debtor from any liability he may be under in respect of costs and interest not covered by the proclamation of sale.
14. In Jugal Kishore and Anr. v. Smt, Aiysha Khatun and Ors. 1987 All LJ 27, a single Judge of this Court: held as under:
If there is sale made in execution of decree of property which at the relevant date did not belong to the judgment-debtor and had been acquired through purchase by a third person from the judgment-debtor prior to the auction sale, there is obviously a wrong done to him. To this wrong there must be a remedy. Rule 89 is not the remedy because thereunder the Court will not grant relief to him on the strength of his paramount title. The Court will instead insist upon his making the requisite deposit to get the property released. I see force in the contention that a person who is not a party to the decree or the judgment-debtor and the property purchased by whom is not encumbered cannot be under obligation to pay up the decretal amount or compensate the auction purchaser. The provisions of Rule 89 are in the nature of an indulgence to the judgment-debtor or others covered thereunder in the form of a 1st opportunity upon the terms of satisfying the decretal debt and of paying compensation to the auction purchaser, for the loss of bargain. But these are not exhaustive. In the case of a sale under a mortgage decree, for example, the sale can be set aside under Order XXXIV, Rule 5 at any time before the confirmation of the sale on payment as provided under that sale even though a prior application under Rule 89 may have been rejected. The bar created under Rule 92 (3) operates in relation to the person against whom "such order" is made. The words "such order" have reference to "the order confirming the sale" appearing in Sub-rule (1) preceding. The sale, it is true, thereupon becomes absolute but this is only consequential to the confirmation. That too would in the context operate against such person only for whom it be incumbent to avail of the summary remedy under Rules 89, 90 and 91, and not against one who banks upon his paramount title to the property and raises the issue that there was no right, title or interest of the judgment debtor, to be conveyed by auction. Such a claim is foreign to the purview of these rules which would mean in other words that his ordinary remedy under Section 9, Civil P.C. or Section 34, Specific Relief Act, 1963, lies unaffected. This, in my view, is the interpretation which should be applied to Rule 93 (3)/(l) read with Rule 89 in the contextual setting.
15. This Court is in entire agreement with the aforesaid judgment. The plaintiff, being not a party to the decree and not being a representative of the judgment debtor, was not under an obligation to pay the decretal amount or compensate the auction purchaser under Order XXI, Rule 69 of the C.P.C. Rule 89 is not an appropriate remedy for the plaintiff. The provision of Rule 89 are in the nature of indulgence to the judgment debtor or others covered thereunder in the form of a first opportunity upon the terms of satisfying the decretal debt by paying the compensation to the auction purchaser for the loss of bargain. This provision is not exhaustive and consequently the provisions of Order XXI, Rule 92 (3) cannot be attracted nor can it bar a suit. In my view, in the facts and the circumstances of the case, this Court is of the opinion that the suit of the plaintiff does not come within the purview of Order XXI, Rule 92 (3) of the C.P.C. This Court is of the opinion that the plaintiffs suit was maintainable. In view of the aforesaid, the question of law is answered accordingly,
16. In Execution Case No. 3 of 1976, an attachment order was passed on 23.3.1976. The execution case was dismissed in default on 2.4.1977 but was restored on 23.4.1977. It was urged that once the execution case was dismissed in default, the attachment order dated 23.3.1976 came to an end and the attachment order did not revive upon the restoration of the execution application. Consequently, the sale deed executed on 2.4.1976 and 23.2.1977 was not hit by Section 64 of the C.P.C. In my view, the second substantial question of law, as framed aforesaid, is squarely covered by a decision of the Supreme Court in Nancy John Lyndon v. Prabhati Lal Chowdhury and Ors. , wherein the Supreme Court held:
In the present case, both the sale by the judgment debtor to Bharat Shamsher Jung Bahadur Rana and the sale by Bharat Shamsher Jung Bahadur Rana to the respondent, were effected during the subsistence of the attachment and before the title execution case was dismissed for default. In our view, even if a doubt were to be entertained as to whether an order for restoration of the suit or execution application would have the effect of restoring the attachment retrospectively so as to affect alienations made during the period between dismissal of the suit or execution application and the order directing restoration, it is clear that an order of restoration would certainly restore or revive the attachment for the period during which it was in subsistence, namely, prior to the dismissal of the suit or execution application.
17. In view of the categorical pronouncement made by the Supreme Court, it is held, that in view of the attachment of the property and in view of Section 64 of the C.P.C. the sale deeds dated 2.4.1976 and 23.2.1977 executed by defendant No. 2 in favour of the plaintiff was void, illegal and inoperative. The second substantial question of law is answered accordingly.
18. This leads to the next question as to whether the sale deed dated 31.12.1975 executed in favour of the plaintiff was legal and operative. Admittedly, the sale deed was executed by defendant No. 2 in favour of defendant No. 1 during the pendency of the attachment in execution proceeding No. 23 of 1974. The said Execution Case No. 23 of 1974 was dismissed on 15.11.1975. The attachment, if any, came to an end on 15.11.1975. The question is, whether the sale deed could be treated to be a void document under Section 64 of the C.P.C? For facility, the provision of Section 64 of the C.P.C. has to be read alongwith the provisions of Order XXI, Rule 57 which are quoted hereinunder:
Section 64. Power to order property attached to be sold and proceeds to be paid to person entitled,-Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or sufficient portion thereof, shall be paid to be party entitled under the decree to receive the same.
Order XXI, Rule 57. Determination of attachment.-(1) Where any property has been attached in execution of a decree and the Court, for an reason, passed an order dismissing the application for the execution of the decree, the Court shall direct whether the attachment shall continue or cease and shall also indicate the period up to which such attachment shall continue or the date on which such attachment shall cease.
(2) If the Court omits to give such direction, the attachment shall be deemed to have ceased.
19. In my view the provision of Section 64, contemplates only one attachment and no other. Once an attachment is made, if there is any transfer or delivery of the attached property which is contrary to such attachment, in that event, such a transfer would be void as against all claims enforceable under that attachment. The word attachment occurs thrice in this provision, namely, it occurs first as "an attachment", then as "such attachment", and finally as "the attachment". The attachment during the subsistence of which the transfer is effected must be the same attachment under which all claims of the attaching creditors are enforceable. Consequently, if the enforcement of the claim, at the time of attachment under which the claim is enforced is different from the earlier attachment, then the earlier attachment cannot be utilised nor can the creditor take advantage of the earlier attachment, inasmuch as, the earlier attachment ceased to exist for one reason or the other.
20. Order XXI, Rule 57, C.P.C. indicates that the attachment ceases to exist and that it comes to an end upon the dismissal of the execution application. That being so, on a bare reading of Section 64 of the C.P.C. this Court is of the opinion that the first attachment came to an end on 15.11.1975 and even though, the sale deed was executed during the pendency of the said attachment no advantage can be availed of by defendant No. 1 since the said attachment came to an end on 15.11.1975. Similar view was held in Moti Lal Madan Chand Lodha v. Ragho Danqji Patil and Ors. .
21. There is another aspect of the matter. A transfer of the property during the pendency of the judgment is only void as against all the claims enforceable under that attachment and not otherwise, that is to say, that the transaction was only void in relation to the claims enforceable under that attachment. Once the attachment is lifted, the embargo of a void document is also lifted automatically. To elucidate the matter further, for example, a property under attachment may not be auctioned or transferred and the debt could be discharged in some other manner once the decretal amount is paid or the decree is satisfied, the attachment could be withdrawn and the holder of the property regains all his right and could deal with it in any manner he likes. Consequently, there is no embargo upon a transferee purchasing the property from the judgment debtor during the attachment proceedings. The only embargo is, that the transferee's title is under a cloud till the subsistence of the attachment.
22. A person can purchase the property under an attachment in the hope that if the attachment is eventually withdrawn he would become the complete owner thereof. Once the attachment is withdrawn, the transfer, though made during the pendency of the attachment, would be perfectly valid conferring a right in the transferee.
23. In view of the aforesaid, Section 64 has to be viewed from this aspect of the matter. The said provision provides a safeguard to the creditors but it is not meant to deprive the owner of his interest in the property under attachment.
24. In view of the aforesaid, this Court is of the opinion that even though the sale deed dated 31.10.1975 was executed by defendant No. 2 in favour of the plaintiff during the subsistence of attachment in Execution Case No. 23 of 1974, the cloud on the title of the plaintiff came to an end upon the dismissal of the execution application on 15.11.1975 and no advantage could be given to the decree holder, defendant No. 1 on his execution application No. 3 of 1976. Consequently, the substantial question No. 3, as framed aforesaid, is answered accordingly.
25. This leads us to the next question of law framed, namely, whether the appellant was a bonafide purchaser or not? Chhotey Lal, the judgment debtor, had knowledge of the execution proceedings as well as of the attachment order. Inspite of the attachment, the property was sold to the plaintiff. The auction was held in which the defendant No. 1 was found to be the highest bidder. The auction was confirmed and the objection of the judgment debtor was rejected. He did not prefer any appeal, as in the meanwhile, he succeeded in transferring the title to the plaintiff by three sale deeds. In the suit, he did not file the written statement. The question which arises for consideration is, whether the plaintiff had knowledge of the execution proceedings and whether she had bona fidely purchased the property for value? The lower appellate court found that the auction sale was conducted on the spot. Nothing has come on record to prove that the plaintiff was residing elsewhere. The lower appellate court further found that Chhotey Lal, defendant No. 2, was contesting the execution proceedings not only on his behalf but also on behalf of the defendant and eventually when the objections of defendant No, 2 was rejected in execution proceedings, the present suit was filed by the plaintiff. The lower appellate court held that the plaintiffs suit was purely mala fide to defraud the creditors. The trial court while deciding issue No. 7 held that the plaintiff did not appear in the witness box to depose that she had no knowledge of the execution proceedings or of the attachment or of the auction proceedings and that a witness of the plaintiff had admitted that the sale deed was executed without payment of the entire consideration. The trial court therefore, concluded that the sale deed was executed without payment of any consideration and therefore, held that the plaintiff was not a bona fide purchaser since no consideration was paid. In my opinion, the findings arrived at by the trial court as well as by the lower appellate court is based on findings of fact which cannot be reopened or reconsidered in a second appeal. In view of the specific findings given by the trial court namely, that the sale deeds were executed without payment of any consideration, consequently, this Court is of the opinion that the suit was filed mala fidely by the plaintiff in order to defraud the decree holder defendant No. 1. The trial court was therefore, justified in dismissing the suit.
26. In view of the aforesaid, even though the sale deed dated 31.10.1975 was executed during the pendency of the suit in Execution Case No. 23 of 1974 which came to an end on 15.11.1975, the said sale deed is a void document since no consideration was passed on to the judgment debtor.
27. In view of the aforesaid, this Court is of the opinion that the plaintiff was not a bona fide purchaser for value. Substantial question of law as framed aforesaid is decided accordingly.
28. Insofar as the fourth substantial questions of law is concerned, in view of the aforesaid pronouncement, it is not necessary to answer this question as it has become irrelevant.
29.In view of the aforesaid the second -appeal is dismissed with cost.