Kerala High Court
Abdul Jalal vs Mariya Financiers on 26 February, 2002
Equivalent citations: AIR2002KER276, AIR 2002 KERALA 276, ILR(KER) 2002 (2) KER 203, (2002) 1 KER LJ 482, (2002) 2 CIVILCOURTC 667, (2002) 2 KER LT 107, (2002) 3 RECCIVR 492, (2002) 4 CURCC 150
JUDGMENT S. Sankarasubban, J.
1. This appeal is preferred by the petitioner in E.A. No. 814 of 1997 in E.P. No. 447 of 1997 in O.S. No. 305 of 1994 of the Sub Court, Thrissur. The appellant filed the claim petition under Order 21 Rule 58 of the Code of Civil Procedure. According to the appellant, 1 cent of land in Sy. No. 1258/2 of Thrissur Village and the shop room thereon belong to the appellant. The appellant purchased the said property situated in Thrissur town and described in B schedule to the claim petition, E.A. No. 814 of 1997, as per sale deed No. 4653 of 1994 of Thrissur Sub Registry Office from one Rafi. The said Rafi had purchased the property as per sale deed No. 1688/1994 from one Beena, the second respondent in the appeal.
2. On 26.6.1997, the petitioner came to know that two cents of land and the shop rooms of which the appellant's land and the shop room form part, had been attached in the suit, O.S. No. 305 of 1994 on 11.3,1994. Ext. A2 sale deed was executed in favour of Rafi on 4.3.1994 and the said sale deed was registered on 11.3.1994. When Rafi took the sale deed, the suit had not been filed. The appellant also took Ext. A1 sale deed without knowledge of the attachment, since at the time of execution of the said document, Rafi also had no information about the suit or attachment. As soon as the appellant came to know of the attachment, he filed the claim petition.
3. Objections were filed by the decree holder as well as the judgment debtor. The decree holder filed objection stating that the property was not sold to Rafi on 4.3.1994. The judgment debtor, Rafi as well as the petitioner were aware of the fact of attachment of the petition schedule property. Sale deed No. 1688/94 was prepared and registered to defeat the claim of the decree holder. There is no consideration for this sale deed. This document was prepared collusively by the petitioner joining with Rafi and the second respondent.
4. The judgment debtor fifed an objection. According to her, the petitioner was pressing the judgment debtor for return of the amount due to him. The petitioner insisted that one of the rooms in petition A schedule property should be registered in his name. Rafi was inducted as a mediator. Due to the insistence of the petitioner, the northern room of petition A schedule property was registered in the name of Rafi. The petitioner told the judgment debtor that he would pay off the debt due to the decree holder and that the northern room should be assigned in his name. Making the judgment debtor believe that the petitioner had cleared the debt due to the decree holder, the petitioner managed to get the sale deed in respect of petition B schedule property in favour of Rafi. The attachment before judgment was effected on the same day. After execution of the sale deed the second respondent came to know that the petitioner did not clear the debt due to the decree holder. The sale deed happened to be registered in the name of Rafi only because of the insistence of the petitioner.
5. On the side of the claim petitioner, Exts. A1 to A8 were marked. The claim petitioner was examined as PW1. RW1 and RW2 were examined on behalf of the respondents. The lower court, on the basis of the decision reported in Cherichi v. Ittianam (2000 (1) KLT 415) held that the sale was complete after it was registered. Hence, it took the view that on the date on which the attachment was effected, the sale deed was not registered and the claim petition was not maintainable. It further relied on the deposition of the judgment debtor that there is no consideration of the transaction and the sale deed was a sham document at the instance of the petitioner. Thus, the claim petition was dismissed. It is against the above that the present appeal is filed.
6. Sri. P. Gopakumaran Nair appearing for the appellant contended that the lower court was not correct in holding that the sale takes effect only after the registration of the document. He contended that it takes effect on the date of execution. Further he contended that the attachment before judgment is ordered when the court is satisfied with the judgment debtor about the transfer or defeating the decree by transferring the property, so as to keep it away from the decree. In that situation, what is necessary to find out is whether the sale has been executed because once a sale has been executed and it is given for registration, the registration is automatically usual. He contended that the decision in Cherichi v. Ittianam, 2001 (1) KLT 415, was given on a different context. He relied on the decisions of the Supreme Court in Hamda Ammal v. Avadiappa Pathar and 3 Ors., JT 1990(4) SC 391 and Thakur Kishan Singh v. Arvind Kumar, AIR 1995 Supreme Court 73. There is no dispute that the sale deed was executed before attachment.
6. Sri. Pius Kutiakose learned counsel appearing for the decree holder contended that a sale become effective only when it is registered and when the value is more than Rs. 100/-. In this case, the value is more than Rs. 100/-. Hence, according to him, on the date of attachment, there is no valid sale. He relied on the decision in 2001(1) KLT 415, AIR 1960 Supreme Court 1368, AIR 1941 Calcutta 78 and AIR 1936 Calcutta 17 to show that the attachment is not superseded by the sale deed, Learned counsel further contended that even though the document bears the date, 4.3.1994, actually, it was not executed on the same day. He drew sustenance for this argument from the evidence of the judgment debtor. He further submitted that the order of the court below may be confirmed.
7. First question to be considered is whether the Court below was correct in holding that since the sale deed was registered after the attachment was effected, the claim petition is not maintainable. The court below relied on a Division Bench decision of this Court in Cherichi v. Ittianam, 2001 (1) KLT 415. It is true that under Section 54 of the Transfer of Property Act, for a sale deed of which the value is more than Rs. 100/-, registration is necessary and the sale becomes complete only after the registration. Under Section 47 of the Registration Act, when a sale is complete, it will relate back from the date of execution. According to us, so far as the issue in question is concerned, the view of the court below is not correct. There is a direct decision on this aspect by the Supreme Court.
8. Before we deal with the decision, it is necessary to quote certain provisions of the Code of Civil Procedure. An attachment before judgment is resorted to under Order XXXVIII Rule 5 of C.P.C. where at any stage of a suit, the court is satisfied by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him is about to dispose of the whole or any part of his property or is about to remove the whole or any part of his property from the local limits of the jurisdiction of the court. Under Order XXXVIII Rule 10 of CPC attachment before judgment shall not affect the rights, existing prior to the attachment, or persons not parties to the suit, nor bar any person holding a decree against the defendant from applying for the sale of the property under the attachment in execution of such decree. Section 64 of CPC states that 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.
9. Same question came before the Supreme Court in Hamda Ammal v. Ayadiappa Pathan and 3 Ors., JT 1990 (4) SC 391. In that case, the appellant Hamda Ammal purchased the suit property from the respondents Govindraju Pathar, Muthulinga Asari and Gurusami Pathar by a sale deed executed in her favour on 9.9.1970. Hamda Ammal got the sale deed registered on 26.10.1970. Before registration of the sale deed, respondent Avadiappa filed a money suits for the recovery of Rs. 5,200/- on 13.9.1970, against the vendors and obtained attachment before judgment of the property in question on 17.9.1970. The question for consideration was whether Hamda Ammal is entitled to the property sold in her favour by virtue of sale deed dated 9.9.1970 but registered subsequently on 26.10.1970 or Avadiappa has a better claim to the property on account of an attachment before judgment made on 17.9.1970 in the suit filed by him on 13.9.1970. Dealing with this question, the Supreme Court held as follows:
"Section 54 of the Act defines sale "as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised". Thus after the execution of the sale deed with consideration all the ingredients of sale are fulfilled except that in case of tangible immovable property of the value of Rs. 100 and upwards it can be made only by registered instrument. Now, if we read Section 47 of the Registration Act, it clearly provides that a registered document shall operate from the time from which it would have commenced to operate it no registration thereof had been required or made and not from the time of its registration".
Rejecting the contention that the sale deed cannot affect the attachment, the court held as follows:
"We cannot accept the contention of learned counsel for the respondent that till registration, the execution of the sale deed does not confer any rights whatsoever on the vendee. Even S.49 of the Registration Act in its proviso inserted by Section 10 of the Transfer of Properly (Amendment) Supplementary Act, 1929, negatives the above contention of the learned counsel. The above provision lays down that an unregistered document affecting immovable property and required by this Actor by the Transfer of Properly Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as an evidence of part performance of a contract for the purpose of Section 53-A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be affected by registered instrument. Thus even an unregistered document can be received as evidence for the purpose mentioned in the proviso to Section 49 of the Registration Act".
Dealing with Order XXXVIII Rule 5, the court held thus :
"The proviso would not apply where the sale deed has already been executed by the defendant in favour of a third person. A transaction of sale having already taken place even prior to the institution of a suit cannot be said to have been made with the intention to obstruct or delay the execution of any decree. It would be a difference case altogether if a creditor wants to assail such transfer by sale under Section 53 of the Transfer of Property Act, 1882 on the ground of a fraudulent transfer". The court further held as follows: "...neither in Section 64 CPC nor in the form prescribed for attachment there is any prohibition for submitting the document of sale, for registration, the act of submitting the sale deed for registration which has already been executed prior to an attachment is not an act of transfer which is prohibited under the above provisions....
Section 47 of the Registration Act...... clearly provides that a registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made and not from the time of its registration......"
10. During the course of the discussions, the court relied on the decision of the Supreme Court in Ram Saran Lall and Ors. v. Mst. Domini Kuer and Ors., AIR 1961 Supreme Court 1747. In fact, this decision was strongly relied on by the respondent on the ground that the judgment was rendered by a Bench consisting of more number of Judges. But as stated, in this case, viz., AIR 1961 Supreme Court 1747 what is considered is the question of pre-emption. Under the law regarding pre-emption, preemption can be exercised only after the sale is completed. On the question whether when a sale is complete, the court held that the sale is complete only after the registration. We are of the view that this decision does not have any relevance to the facts of the present case. As a matter of fact, in the decision reported in Vannarakkal K. Sreedharan v. Chandramaath Balakrishnan and Anr. (1990) 3 Supreme Court Cases 291, a similar question arose. There, the appellant entered into a contract for sale. After that the sale deed was executed. But before the execution of the sale deed, the property was attached. Question that arose for consideration was whether since the sale deed was subsequent to the attachment the vendee can have any right for filing a claim petition. Allowing the appeal, the Supreme Court held as follows: "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. 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. Though Section 64 CPC 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". Thus, if a person in whose favour the agreement for sale is executed, he can avoid the attachment. Certainly a person in whose favour the sale is executed before attachment has valid claim.
11. Learned counsel for the respondents, as already stated, relied on the decision in 2001 (1) KLT 415 by a Division Bench decision of this Court. There, the Division Bench held that the title passes only after the registration is made. According to us, that question does not arise here, because, here we are concerned with the impact of Order XXXVIII Rule 5 read with Section 64 of CPC. Learned counsel for the respondent cited two decisions reported in Gobardhan v. Gundahar, AIR 1941 Calcutta 78 and Naresh Chandra Dutta v. Girish Chandra Das and Anr. - AIR 1936 Calcutta 17. According to us, those two decisions are not applicable to the facts of the present case.
12. Thus, we hold that since the sale deed was executed prior to the attachment, it cannot be ignored. Learned counsel then submitted that as a matter of fact, the judgment debtor has given evidence to show that the document was not executed on the same date, which document bears. We are not able to accept this contention, because, when the document is executed on aparticular day, it requires more evidence * than solitary evidence of the defendant to show that it was not executed on that day. Learned counsel for the respondents then submitted that as a matter of fact the transfer of property was with the intention to defeat the creditor of the defendant and hence, it is voidable at the option of any creditor. Learned counsel relies on Section 53 of the Transfer of Property Act. Learned counsel submitted that this matter has not been considered by the court below. Since this has not been considered by the court below, we direct the court below to consider the question whether the transfer was effected in order to defeat the creditors.
13. In the above view of the matter, the order of the court below is set aside and the case is remanded to the court below to consider the question whether the transfer is hit by Section 53 of the Transfer of Property Act. Parties are allowed to give further evidence, if necessary.
Appeal is disposed of as above. Parties are directed to appear in the court below on 25.3.2002.