Whether the prior unregistered and non-possessory sale agreement prevails over the subsequent attachment before judgment for recovery of the suit claim based on promissory note and what are the equities in the event of the suit for recovery of money decreed ex parte and the suit for specific performance of the contract for sale also decreed on contest subsequent to the money decree in respect of recovery of money and in enforcement of the specific performance including from execution of sale deed by the Court pursuant to the specific performance decree and whether the Courts below in the concurrent finding upholding the attachment to prevail over the sale agreement are correct, more particularly, from the amendment to Section 64 C.P.C. without any amendment to the two limbs of Order 38 Rule 10 C.P.C. = claim petition filed by the non-possessory unregistered sale agreement holder as claimant by name, Ramayanam Satish Kumar against the decree holder by name, Thamada Bhaskara Rao of the money decree based on a promissory note said to have been executed by the judgment debtor by name, Smt.Pilla Supraja.= right prevails by operation under Section 47 of the Registration Act and Order 38 Rule 10 C.P.C. and the rigour imposed under Section 64 C.P.C. does not prevail is not fully correct from what is discussed supra so also for the case not coming under the spirit of Section 64(2) of the amended C.P.C. 32. Having regard to the above, the above substantial questions of law formulated are answered in saying the Courts below are not fully correct in dismissing the claim petition of the agreement holder, R.Satish Kumar, but for, to say the claim cannot be fully allowed of R.Satish Kumar against T.Bhaskara Rao and P.Supraja, who are the decree holder and judgment-debtor respectively of the money decree, where there was also an attachment before judgment prior to filing of the suit for specific performance and what the right the agreement holder has on the date of filing of the suit for specific performance was having is at best under Section 55 of the Transfer of Property Act, the charge, at best over the property for recovery of the advance sale consideration by virtue of the wording of Section 55 statutorily like a charge to the purchase for recovery on the property of unpaid consideration, in the event of the suit for specific performance filed and on contest decreed by also impleading the money decree holder-cum-person, who attached the property from the deemed notice, it was not done, though otherwise had it been done, the limit of the agreement holder is to the balance sale consideration to answer to the attachment before judgment has right in the property, which is subject to the sale agreement. - it is just to say the claimant, R.Satish Kumar (the specific performance decree holder) has to pay the original suit principal amount of the suit claim of Rs.6,00,000/- to T.Bhaskara Rao (the money decree holder) which amount of Rs.6,00,000/- includes adjustment by receiving back the amount deposited in the suit for specific performance in the Court with accrued interest to meet the same and also that includes any amount earlier paid under any settlement proposal through mediator or any direction of this Court or the Courts below. The said amount has to be paid within eight weeks from today, failing which T.Bhaskara Rao, money decree holder is entitled to execute and recover said Rs.6,00,000/- with interest at 12% p.a. from today onwards for balance after adjustment of what is stated supra. For any further claim of the money decree holder, T.Bhakara Rao is to proceed personally against respondent No.2/judgment debtor, Smt.P.Supraja if there is any other property of her for the reason Section 56 C.P.C., speaks a female is not liable for arrest for any recovery of a money decree.
HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO
SECOND APPEAL No.459 of 2017
03-04-2018
Ramayanam Satish Kumar .Appellant
1.Thamada Bhaskara Rao and another. Respondents
Counsel for the Appellant : Sri S.Subba Reddy
Counsel for the Respondent No.1: A.K.Kishore Reddy
Counsel for the Respondent No.2: T.V.Jaggi Reddy
<Gist :
>Head Note:
? Cases referred:
2008(1) ALT 10 (SC)
2 2015(5)ALT 634
3 2002 (3) SCC 676
4 1991(1) SCC 715
5 2004(2) ALD 736
6 1996 (3)SCC 289
7 AIR 1991 Kerala 152
8 1987(1) ALT 718
9 AIR 1935 Madras 193
10 AIR 1917 Madras 4
11 1939(2) MLJ 822
12 2016(1) SCC 411
HONBLE SRI JUSTICE Dr. B. SIVA SANKARA RAO
SECOND APPEAL No.459 of 2017
JUDGMENT:
This Second Appeal is arisen out of the judgment and
decree dated 31.03.2017 in A.S.No.129 of 2013 on the file of
the IV Additional District Judge, Kakinada, against the
dismissal of the claim petition in E.A.No.245 of 2012 in
E.P.No.115 of 2011 in O.S.No.498 of 2010 on the file of the
I Additional Senior Civil Judge, Kakinada filed by the
non-possessory unregistered sale agreement holder as
claimant by name, Ramayanam Satish Kumar against the
decree holder by name, Thamada Bhaskara Rao of the money
decree based on a promissory note said to have been
executed by the judgment debtor by name, Smt.Pilla
Supraja.
2. Heard both sides.
3. The parties herein are being referred with their names,
to avoid confusion and for more clarity.
4. The facts in brief for the purpose of second appeal are
that P.Supraja said to have been entered non-possessory
unregistered contract for sale (agreement of sale) on
28.02.2010 for Rs.2,000/- per square yard for 161.16 square
yards covered by Sy.No.290/2 of Ramanaiahpeta of Kakinada
Rural Mandal within the Kakinada Municipal Corporation
limits, which is a vacant house site surrounded by houses.
The agreement holder, R.Satish Kumar entered the
agreement having paid Rs.2,00,000/- as advance and
maintained the suit in O.S.No.40 of 2012 renumbered as 255
of 2012 before the II Additional Senior Civil Judge, Kakinada.
Undisputedly, T.Bhaskara Rao, who stated, lent the amount
under promissory note dated 08.09.2008, was not made a
party to the specific performance suit maintained by R.Satish
Kumar against P.Supraja supra.
5. The said T.Bhaskara Rao, who maintained suit for
recovery of the said amount based on a promissory note so
called lending of Rs.6,00,000/- with interest at Rs.2/- p.a.,
maintained the suit claim in O.S.No.498 of 2010 for
Rs.8,82,000/- or so. It is, at the time of filing of the suit for
recovery of the amount sought for attachment before
judgment in I.A.No.617 of 2010 ordered on 08.09.2010 and
affected on 20.09.2010. Even in the money suit of
T.Bhaskara Rao against P.Supraja and R.Satish Kumar, prior
agreement holder thereunder made a party. The fact further
remains from the above also clear that the suit for specific
performance is subsequent to the date of suit for recovery of
money and attachment before judgment. So far as the non-
possessory sale agreement concerned, it is difficult to
presume any notice including deemed notice contemplated
by Section 3 of the Transfer of Property Act but for so far as
the attachment before judgment since affected before the
date of filing of the suit for specific performance it can be
taken as a deemed notice.
6. From this, the ex parte money decree was granted
against P.Supraja in favour of T.Bhaskara Rao vide decree
and judgment and practically with no lapse of time, since, it
was an ex parte decree and consequently, the money decree
holder, T.Bhaskara Rao filed E.P.No.115 of 2011 for
execution of the decree in O.S.No.498 of 2010. During
pendency of the execution proceedings in E.P.No.115 of
2011, based on the subsequent suit for specific performance
in O.S.No.40 of 2012 preceded by notice issued by R.Satish
Kumar against P.Supraja from her contentions of the reply to
the notice, from the suit filed, filed the claim petition in the
year 2012 based on that unregistered non-possessory sale
agreement dated 28.02.2010, as referred supra, even though,
the suit is, few days or months, filed prior to the claim
petition in E.A.No.245 of 2012; even later in the suit, the
money decree holder, T.Bhaskara Rao is not impleaded as co-
defendant. However, the suit O.S.No.40 of 2012=O.S.No.255
of 2012 for specific performance of the contract for sale was
decreed on 01.05.2014.
7. It is, in the meantime, the claim petition in E.A.No.245
of 2012 tried as a suit by the procedure contemplated for
deemed decree to be passed, was disposed of by the learned
I Additional Senior Civil Judge, Kakinada, on 23.04.2013. It is
made clear there from that by the time of disposal of the
claim petition, there was no decree for specific performance
of the contract for sale in favour of R.Satish Kumar. It is
subsequent to the said decree for specific performance
granted on 01.03.2014 R.Satish Kumar-decree holder
pursuant to the non-possessory unregistered sale agreement
dated 28.02.2010 and pursuant to the decree, filed execution
petition for registration of sale deed as contemplated by
Order 21 Rule 34 C.P.C. and obtained sale deed pursuant to
the draft through Court.
8. It is, from the dismissal of the claim petition supra and
subsequently obtaining of the decree in specific performance
supra, appeal in A.S.No.129 of 2013 against the claim
petition dismissal order maintained by R.Satish Kumar by
showing T.Bhaskara Rao and P.Supraja, who are the decree
holder and judgment debtor as respondents to the claim
petition and to the appeal. The appeal was also disposed of
on 31.03.2017 from hearing of both parties. However, it was
not considered the additional evidence application filed by
the said R.Satish Kumar/appellant, which is nothing but the
sale deed executed pursuant to the decree for specific
performance as additional evidence. The additional evidence
application is supposed to be decided by the Court in either
way, by virtue of the provisions of Order 41 Rules 27 to 29 if
not properly explained and if it is otherwise required for the
effective adjudication of the lis by invoking Order 41 Rule 27
(1)(b) C.P.C. as also held by the Apex Court in KRM Reddy Vs
M/s Net work inc., . reiterated by this Court in Cheedella
Padmavati Vs. Cheedella Radha Krishna Murthy . It was not
done by the lower Court in deciding the appeal against the
dismissal of the claim petition of subsequent specific
performance decree holder pursuant to the sale agreement
supra. It is there from maintained the present second appeal
by the unsuccessful claim petitioner non-possessory un-
registered agreement holder, who during pendency of the
appeal against dismissal of the claim petition, having
obtained pursuant to the decree for specific performance
sale deed, filed the sale deed that was not referred in the
lower appellate Courts judgment.
9. From the above factual background, the following
substantial questions of law are framed, while admitting the
second appeal:
1. Whether the prior unregistered and non-possessory sale
agreement prevails over the subsequent attachment
before judgment for recovery of the suit claim based on
promissory note and what are the equities in the event of
the suit for recovery of money decreed ex parte and the
suit for specific performance of the contract for sale also
decreed on contest subsequent to the money decree in
respect of recovery of money and in enforcement of the
specific performance including from execution of sale
deed by the Court pursuant to the specific performance
decree and whether the Courts below in the concurrent
finding upholding the attachment to prevail over the sale
agreement are correct, more particularly, from the
amendment to Section 64 C.P.C. without any amendment
to the two limbs of Order 38 Rule 10 C.P.C.
2. To what result
11. In deciding the above substantial questions of law
without need of referring to the factual matrix, since
referred supra, the important provisions relevant to extract
are Section 64 C.P.C. prior and subsequent to the C.P.C.
amendment by Act, 2002 w.e.f. 01.07.2002.
"64. Private alienation of property after attachment to be
void.- (1) Where an attachment has been made, any
private transfer of 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.
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 judgement-
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.]
Explanation. For the purposes of this section, claims
enforceable under an attachment include claims for the
rateable distribution of assets.
12. Further, Order 38 Rules 10 and 11A C.P.C. reads as
follows:
10. Attachment before judgment not to affect rights of
strangers nor bar decree-holder from applying for sale.
Attachment before judgment shall not affect the rights,
existing prior to the attachment, of 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 attachment in execution of such decree.
11-A. Provisions applicable to attachment. (1) The
provisions of this Code applicable to an attachment made
in execution of a decree shall, so far as may be, apply to
an attachment made before judgment which continues
after the judgment by virtue of the provisions of Rule 11.
(2) An attachment made before judgment in a suit which
is dismissed for default shall not become revived merely
by reason of the fact that the order for the dismissal of
the suit for default has been set aside and the suit has
been restored.
13. Sections 54 and 40 of the Transfer of Property Act, read
as follows:
54. "Sale" defined :- "Sale" is a transfer of ownership in
exchange for a price paid or promised or part-paid and
part-promised.
Sale how made :- Such transfer, in the case of tangible
immoveable property of the value of one hundred rupees
and upwards, or in the case of a reversion or other
intangible things, can be made only by a registered
instrument.
In the case of tangible immoveable property of a value
less than one hundred rupees, such transfer may be made
either by a registered instrument or by delivery of the
property.
Delivery of tangible immoveable property, takes place
when the seller places the buyer, or such person as he
directs, in possession of the property.
Contract for sale :- A contract for the sale of immoveable
property is a contract that a sale of such property shall
take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on
such property.
40. Burden of obligation imposing restriction on use of
land, or of obligation annexed to ownership but not
amounting to interest or easement :- Where, for the
more beneficial enjoyment of his own immoveable
property, a third person has independently of any interest
in the immoveable property of another or of any
easement thereon, a right to restrain the enjoyment in
particular manner of the latter property, or
Where a third person is entitled to the benefit of an
obligation arising out of contract and annexed to the
ownership of immoveable property, but not amounting to
an interest therein or easement thereon, such right or
obligation, may be enforced 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.
14. Sections 17, 23, 47 and 49 of the Indian Registration
Act read as follows:
17. Documents of which registration is compulsory :-(1)
The following documents shall be registered, if the
property to which they relate is situate in a district in
which, and if they have been executed on or after the
date on which, Act No.XVI of 1864, or the Indian
Registration Act, 1866, or the Indian Registration Act,
1871, or the Indian Registration Act, 1877, or this Act
came or comes into force, namely :--
(a) ..;
(b) ..;
(c) ..;
(d) ..;
(e) ..;
(f) ..; and
(g) agreement of sale of immovable property of the value
of one hundred rupees and upwards :]
Provided that the State Government may, by order
published in the Official Gazette, exempt from the
operation of this sub-section any leases executed in any
district, or part of a district, the terms granted by which
do not exceed five years and the annual rents reserved by
which do not exceed fifty rupees.
23. Time for presenting documents :- Subject to the
provisions contained in Sections 24, 25 and 26, no
document other than a will shall be accepted for
registration unless presented for that purpose to the
proper officer within four months from the date of its
execution :
Provided that a copy of a decree or order may be
presented within four months from the day on which the
decree or order was made, or, where it is appealable,
within four months from the day on which it becomes
final.
47. Time from which registered document operates :- 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.
49. Effect of non-registration of documents required to
be registered :- No document required by Section 17 or
by any provision of the Transfer of Property Act, 1882, to
be registered shall,--
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting
such property or conferring such power, unless it has been
registered :
Provided that an unregistered document affecting
immovable property and required by this Act, or the
Transfer of Property 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, [x x x x], or as evidence of any collateral
transaction not required to be effected by registered
instrument.
15. Had it been impleaded in the suit for specific
performance, the decree holder of the so called promissory
note money decree or atleast filed a third party appeal
against that so called ex parte money decree by the said
agreement holder-cum-decree holder in O.S.No.40 of
2002=255 of 2002, the outcome could be otherwise. It is for
the reason the money decree was ex parte without contest
by the judgment debtor, who is no other than defendant to
the specific performance decree denied in the reply to the
notice before suit for specific performance and even
contested the suit for specific performance, the decree
holder of money decree also did not make any third party
appeal against the decree for specific performance and had
it been also, the things could be otherwise. However, the
fact remains that with the necessary parties to the suit
though not proper parties impleaded, from the above, there
is even ex parte a money decree and there is on contest, a
specific performance decree against the very judgment
debtor by name, Smt.Pilla Supraja for money decree
obtained by T.Bhaskara Rao for specific performance decree
obtained by R.Satish Kumar respectively. The Court has to
proceed thereby from the finality attained of the money
decree and specific performance decree against the
judgment debtor and the persons claiming any right through
the said judgment debtor/defendant in both the matters
viz., the so called decree holders either for recovery of
money or for specific performance of contract, as the case
may be.
16. In this background, with no need of reproduction
from the very Section 54 of the Transfer of Property Act, it
deals not only of sale but also contract for sale to an
agreement of sale and if it is a possessory sale agreement or
agreement later evidencing delivery of possession in writing,
there is another protective shield of invoking doctrine of part
performance under Section 53A of the Transfer of Property
Act irrespective of the suit for specific performance barred
by limitation prescribed by Article 54 of the Indian Limitation
Act as laid down by the Apex Court in Shrimant Shamrao
Suryavanshi & Anr. Vs. Pralhad Bhairoba Suryavanshi .
17. Coming to Section 40 of the Transfer of Property Act,
which also no way requires reproduction again the second
limb relevant for the purpose speaks, where a third person is
entitled to the benefit of an obligation arising out of contract
and annexed to the ownership of immoveable property, but
not amounting to an interest therein or easement thereon,
such right or obligation, may be enforced 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. No doubt,
it speaks of the bonafide transferee for consideration. Thus,
bonafide transfer of a prospective right or enforceable right
is not the wording.
18. From this now coming to Section 17(1)(g) of the Andhra
Pradesh amendment to the Indian Registration Act came into
force by Act 4/99 w.e.f. 01.04.1999, an agreement of sale of
immovable property of the value of one hundred rupees and
upwards is a compulsory registerable one, though the sale
agreement in this case is dated 28.02.2000 subsequent to the
said amendment came into force on 01.04.1999, it was not a
registered one. The consequence of which as referred in the
proviso to Section 49 of the Registration Act with Central
amendment to it equally with Section 53-A of the Transfer of
Property Act by Act 48/2001 w.e.f. 24.09.2001, which also no
way requires reproduction but for to refer to it in saying that
in a suit for specific performance the agreement though
required to be registered not registered can be admitted in
evidence. However, that concession is not available in the
claim petition and that might be the reason in the claim
petition, the sale agreement was not exhibited even for a
collateral purpose, but for, in the suit for specific
performance for the main purpose from the statutory
concession of Section 49 proviso of the Registration Act
supra.
19. In the factual scenario with reference to the law supra,
coming to Section 47 of the Registration Act which also no
way requires reproduction from what is stated supra that to
be read at best with Section 23 of the Registration Act, that
also reproduced supra, from the date of the document
executed presented for registration other than for a will the
registration must be affected within four months and not
later and with reference to Section 23 supra. So far as
Section 47 supra, 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, to say, even registration
was later in point of time within four months from the date
of execution, the sale deed even subsequently registered
comes into operation from the date of execution. From this
though an effort is made by the learned counsel for the
claimant/appellant that the document requires a
comprehensive understanding by giving a liberal construction
of its meaning to trace back to the earlier unregistered sale
agreement as the same is outcome even from decreeing in a
suit for specific performance, based on the unregistered sale
agreement non-possessory dated 28.02.2000. Such a
contention cannot be accepted from the clear and
unambiguous meaning of Sections 23 and 47 of the
Registration Act supra. Thereby, no credence is given to the
contention and said contention is rejected for all practical
purposes as bound by law, so to reject.
20. From this, now coming to unamended Section 64 of
C.P.C. prior to 01.07.2002:
"64. Private alienation of property after attachment to be
void.- (1) Where an attachment has been made, any
private transfer of 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.
Explanation:- For the purposes of this section,
claims enforceable under an attachment include claims
for the rateable distribution of assets.
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 the
defendant from applying for the sale of the property
under attachment in execution of such decree."
Order 38 Rule 10 CPC speaks, where an attachment has been
affected, 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. Claims
enforceable under an attachment include claims for the
rateable distribution of assets. This Section, thereby,
prohibits a private transfer or delivery of property attached
or of any interest therein after attachment contrary to the
attachment order in making it as void against all claims
enforceable under the attachment to say a subsequent
transfer in any manner including of any interest including by
delivery is void. So far as enforceability of the attachment
concerned, however, after the C.P.C. amendment by the Act
of 2002 w.e.f. 01.07.2002 sub-section (2) of Section 64 was
incorporated before the explanation in relation to ratable
distribution by making the other portion supra as sub-section
(1). What sub-section (2) amended speaks even at the cost
of repetition for the necessity is that nothing in this section
(supra) 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.
21. Any ambiguity and cloud is clear by this
incorporation of the amended sub-section (2) of Section 64
C.P.C. in protecting the prior agreements and prior
alienations by transfer, before the attachment affected.
Though it is the contention of the learned counsel for the
claim petitioner/appellant, R.Satish Kumar there from of the
non-possessory sale agreement is saved though it is prior to
the amended Act came into force, the same was relied in the
suit for specific performance vis--vis the claim petition filed
subsequent to the said amendment came into force in his
saying sub-section (2) of Section 64 C.P.C. running in four
contingencies, i.e.,1) of any private transfer, 2) delivery of
property attached, 3) of any interest therein and 4) made in
pursuance of any contract for such transfer or delivery
entered into. This submission is totally in ignoring the
subsequent words and registered before the attachment,
any of the benefits arose if it is registered before the
attachment and not by mere execution of the written
document. Once that is missing in the case for the same is
not only non-possessory but also unregistered sale agreement
dated 28.02.2000, the claim petitioner/appellant cannot get
the benefit of the amended sub-section (2) of Section 64
C.P.C.
22. Coming to the other contentions, the expression of
the three Judge Bench of the Apex Court in Hamda Ammal v.
Avadiappa Pathar was based on pre-amended Section 64
C.P.C. in its saying even an unregistered document can be
received as evidence for all purposes mentioned in the
proviso to Section 49 of the Registration Act and the fact that
the document of sale had been registered only after the
attachment makes no difference, when the document is prior
in point of time to the attachment. Here, the facts different
from that expression are not only the amendment to Section
64(2) C.P.C. but also the amendment to Section 17(1) of the
Registration Act in the State of Andhra Pradesh by
incorporation of clause (g) and the amendment to Section 49
of the Registration Act by Central Act 48 of 2001 referred
supra, thereby, the reliance placed on the expression in
Hamda Ammal (supra) has no application by virtue of
subsequent change of law, even by the time of filing the
claim petition and suit for specific performance by the
appellant herein.
23. Coming to the other expression placed heavily of
another Single Judge of this Court in Adinarayana v.
S.Gafoor Sab , wherein also referred Hamda Ammal (supra)
among others and the scope of Order 38 Rule 10 and Sections
40 and 64 C.P.C. In fact, though, the judgment was
subsequent in point of time to the C.P.C. amendment to
Section 64 incorporating sub-section (2) of Section 64 C.P.C.
and also Section 17(g) of the A.P.Registration amended Act
and Section 48 of 2001 Central Amendment to Section 49 of
the Registration Act, those were not discussed nor taken into
consideration therein, though simply reproduced amended
Section 64 C.P.C. in para-13 of the judgment.
24. Coming to the expressions referred therein besides
Hamda Ammal no way requires repetition among others, one
is in Noordeen v. V.S.Thiru Venkita Reddiar , under the
principle amended Section 64 C.P.C., wherein it is held by
the Apex Court that 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. There is no dispute on the
proposition, but for, the person, who claims as a transferee
is a bonafide transferee with absolute transfer and for
consideration and without notice of the prior attachment
before judgment, leave about no one can pretend no
encumbrance from the deemed notice by virtue of the very
attachment once ordered is affected as contemplated by the
C.P.C. also from the presumption under Section 114 of the
Indian Evidence Act of all official and judicial acts are duly
performed to draw of attachment ordered and affected was
duly affected.
25. The other expression of the Kerala High Court in
Narayanan Nair Ramakrishnan Nair v. Zacharia Kuriakose ,
a Single Bench 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 debtors right to
the unpaid purchase money. Even from this, what the Kerala
High Court held is an agreement holder has to pay the unpaid
purchase money in claiming the relief for specific
performance, has to recognize the right of the person who
attached his property for the balance sale consideration.
26. Coming to another Single Bench expression of this Court
in D.V.Narsimharao v. P.Ramayyamma , it was observed
that though 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 C.P.C. It referred section 64
C.P.C. saying the rigour imposed under Section 64 C.P.C.
does not prevail and the attachment before judgment does
not prevail over the contract for sale. In fact, the Kerala
High Court ignored the correct law in Narayanan Nair
(supra) in its saying the agreement holder in a contract for
specific performance has to recognize the attachment before
judgment of the holder of a suit claim to be decreed so far as
the non-payment of balance sale consideration to pass on
concerned, that is not at all discussed. In fact, even from
close reading of Section 54 of the Transfer of Property Act
with Section 40 of the Transfer of Property Act, the equitable
enforceable right created in a contract for sale from the
executant denies execution or not coming forward is to
maintain a suit for specific performance, which is, in fact, a
discretionary relief, the Court can decree or not to decree
depending upon the facts of the case. Though, Section 10 of
the Specific Relief Act, particularly, from the explanation (1)
clearly shows in exercize of discretion by the Court in a
specific performance suit, the breach of a contract to
transfer cannot be adequately relieved by compensation of
money in respect of the immovable property. For the same,
as per Section 10(b) an adequate relief for non-performance
to compensate except as otherwise provided in the chapter
from other sections covered by Sections 9 to 25 including
Section 20 of the Act, the discretionary relief, subject to the
foundation including from the pleading laid down under
Section 16 of the Act.
27. Coming to other expressions referred of the Madras
High Court in Veeraraghavayya v. Kamala Devi , wherein it
was observed that 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.
28. No doubt, in the case on hand, the suit O.S.No.40 of
2012 (255 of 2012) for specific performance in favour of
R.Satish Kumar against P.Supraja was on contest decreed and
the Court executed registered sale deed, which is pursuant to
the non-possessory unregistered sale agreement dated
28.02.2010 earlier to the filing of the suit for recovery of
money and attachment before judgment affected in 2010, to
say, though the sale deed executed through the Court in a
decree for specific performance is subsequent in point of
time to the attachment traced back to the sale agreement
prior to the attachment before judgment that can prevail.
However, had it been the money decree holder, who sought
the attachment impleaded in the suit for specific
performance, it could be different it was not done and
against the money decree, no third party appeal even filed.
29. The other judgment of the Madras High Court in Rebala
Venkata Reddi v. Yellappa Chetti referred the same view
and the subsequent Single Bench of the Madras High Court in
Diravyam Pillai v. Veeran Ambalam , the observation
particularly at page 831 referred was the question is not
whether any interest has passed under the contract for sale
but the attaching decree holder attaches not the physical
property, but only the rights of the judgment-debtor in the
property. Even from this, once there is a right of the
judgment debtor in the property attached, which is subject
to the prior sale agreement, it is for the unpaid purchase
money there is a right what is remained as on the date of
attachment.
30. Though, a contract for sale, does not having regard to
the terms of Section 54 of the Transfer of Property 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. This expression also
reiterates that prior contract for sale prevails over
subsequent attachment before judgment or attachment in
execution of a decree. However, so far as prevailing of the
agreement for sale concerned, the agreement holder is under
obligation to honour the attachment order out of what is to
be performed under the contract for sale.
31. The conclusion arrived in the expression of the Single
Bench of this Court in Adinarayana (supra) from the above in
saying right prevails by operation under Section 47 of the
Registration Act and Order 38 Rule 10 C.P.C. and the rigour
imposed under Section 64 C.P.C. does not prevail is not fully
correct from what is discussed supra so also for the case not
coming under the spirit of Section 64(2) of the amended
C.P.C.
32. Having regard to the above, the above substantial
questions of law formulated are answered in saying the
Courts below are not fully correct in dismissing the claim
petition of the agreement holder, R.Satish Kumar, but for, to
say the claim cannot be fully allowed of R.Satish Kumar
against T.Bhaskara Rao and P.Supraja, who are the decree
holder and judgment-debtor respectively of the money
decree, where there was also an attachment before
judgment prior to filing of the suit for specific performance
and what the right the agreement holder has on the date of
filing of the suit for specific performance was having is at
best under Section 55 of the Transfer of Property Act, the
charge, at best over the property for recovery of the advance
sale consideration by virtue of the wording of Section 55
statutorily like a charge to the purchase for recovery on the
property of unpaid consideration, in the event of the suit for
specific performance filed and on contest decreed by also
impleading the money decree holder-cum-person, who
attached the property from the deemed notice, it was not
done, though otherwise had it been done, the limit of the
agreement holder is to the balance sale consideration to
answer to the attachment before judgment has right in the
property, which is subject to the sale agreement.
33. In view of the above and from this Courts duty in the
factual matrix to render equity to both the parties and any
party who received under benefit has to restore that extent
to the other to order restitution with pragmatic approach for
Court should not be oblivious of any unmerited hardship to be
suffered by any party as held by the Apex Court in City Bank
N.A. v. Hiten P.Dalal , it is just to say the claimant,
R.Satish Kumar (the specific performance decree holder) has
to pay the original suit principal amount of the suit claim of
Rs.6,00,000/- to T.Bhaskara Rao (the money decree holder)
which amount of Rs.6,00,000/- includes adjustment by
receiving back the amount deposited in the suit for specific
performance in the Court with accrued interest to meet the
same and also that includes any amount earlier paid under
any settlement proposal through mediator or any direction of
this Court or the Courts below. The said amount has to be
paid within eight weeks from today, failing which T.Bhaskara
Rao, money decree holder is entitled to execute and recover
said Rs.6,00,000/- with interest at 12% p.a. from today
onwards for balance after adjustment of what is stated
supra. For any further claim of the money decree holder,
T.Bhakara Rao is to proceed personally against respondent
No.2/judgment debtor, Smt.P.Supraja if there is any other
property of her for the reason Section 56 C.P.C., speaks a
female is not liable for arrest for any recovery of a money
decree.
34. Accordingly and to the above extent, the Second
Appeal is allowed with no costs.
35. Consequently, miscellaneous petitions, if any shall
stand closed. No order as to costs.
___________________________
JUSTICE Dr. B.SIVA SANKARA RAO
Date: 03.04.2018
SECOND APPEAL No.459 of 2017
03-04-2018
Ramayanam Satish Kumar .Appellant
1.Thamada Bhaskara Rao and another. Respondents
Counsel for the Appellant : Sri S.Subba Reddy
Counsel for the Respondent No.1: A.K.Kishore Reddy
Counsel for the Respondent No.2: T.V.Jaggi Reddy
<Gist :
>Head Note:
? Cases referred:
2008(1) ALT 10 (SC)
2 2015(5)ALT 634
3 2002 (3) SCC 676
4 1991(1) SCC 715
5 2004(2) ALD 736
6 1996 (3)SCC 289
7 AIR 1991 Kerala 152
8 1987(1) ALT 718
9 AIR 1935 Madras 193
10 AIR 1917 Madras 4
11 1939(2) MLJ 822
12 2016(1) SCC 411
HONBLE SRI JUSTICE Dr. B. SIVA SANKARA RAO
SECOND APPEAL No.459 of 2017
JUDGMENT:
This Second Appeal is arisen out of the judgment and
decree dated 31.03.2017 in A.S.No.129 of 2013 on the file of
the IV Additional District Judge, Kakinada, against the
dismissal of the claim petition in E.A.No.245 of 2012 in
E.P.No.115 of 2011 in O.S.No.498 of 2010 on the file of the
I Additional Senior Civil Judge, Kakinada filed by the
non-possessory unregistered sale agreement holder as
claimant by name, Ramayanam Satish Kumar against the
decree holder by name, Thamada Bhaskara Rao of the money
decree based on a promissory note said to have been
executed by the judgment debtor by name, Smt.Pilla
Supraja.
2. Heard both sides.
3. The parties herein are being referred with their names,
to avoid confusion and for more clarity.
4. The facts in brief for the purpose of second appeal are
that P.Supraja said to have been entered non-possessory
unregistered contract for sale (agreement of sale) on
28.02.2010 for Rs.2,000/- per square yard for 161.16 square
yards covered by Sy.No.290/2 of Ramanaiahpeta of Kakinada
Rural Mandal within the Kakinada Municipal Corporation
limits, which is a vacant house site surrounded by houses.
The agreement holder, R.Satish Kumar entered the
agreement having paid Rs.2,00,000/- as advance and
maintained the suit in O.S.No.40 of 2012 renumbered as 255
of 2012 before the II Additional Senior Civil Judge, Kakinada.
Undisputedly, T.Bhaskara Rao, who stated, lent the amount
under promissory note dated 08.09.2008, was not made a
party to the specific performance suit maintained by R.Satish
Kumar against P.Supraja supra.
5. The said T.Bhaskara Rao, who maintained suit for
recovery of the said amount based on a promissory note so
called lending of Rs.6,00,000/- with interest at Rs.2/- p.a.,
maintained the suit claim in O.S.No.498 of 2010 for
Rs.8,82,000/- or so. It is, at the time of filing of the suit for
recovery of the amount sought for attachment before
judgment in I.A.No.617 of 2010 ordered on 08.09.2010 and
affected on 20.09.2010. Even in the money suit of
T.Bhaskara Rao against P.Supraja and R.Satish Kumar, prior
agreement holder thereunder made a party. The fact further
remains from the above also clear that the suit for specific
performance is subsequent to the date of suit for recovery of
money and attachment before judgment. So far as the non-
possessory sale agreement concerned, it is difficult to
presume any notice including deemed notice contemplated
by Section 3 of the Transfer of Property Act but for so far as
the attachment before judgment since affected before the
date of filing of the suit for specific performance it can be
taken as a deemed notice.
6. From this, the ex parte money decree was granted
against P.Supraja in favour of T.Bhaskara Rao vide decree
and judgment and practically with no lapse of time, since, it
was an ex parte decree and consequently, the money decree
holder, T.Bhaskara Rao filed E.P.No.115 of 2011 for
execution of the decree in O.S.No.498 of 2010. During
pendency of the execution proceedings in E.P.No.115 of
2011, based on the subsequent suit for specific performance
in O.S.No.40 of 2012 preceded by notice issued by R.Satish
Kumar against P.Supraja from her contentions of the reply to
the notice, from the suit filed, filed the claim petition in the
year 2012 based on that unregistered non-possessory sale
agreement dated 28.02.2010, as referred supra, even though,
the suit is, few days or months, filed prior to the claim
petition in E.A.No.245 of 2012; even later in the suit, the
money decree holder, T.Bhaskara Rao is not impleaded as co-
defendant. However, the suit O.S.No.40 of 2012=O.S.No.255
of 2012 for specific performance of the contract for sale was
decreed on 01.05.2014.
7. It is, in the meantime, the claim petition in E.A.No.245
of 2012 tried as a suit by the procedure contemplated for
deemed decree to be passed, was disposed of by the learned
I Additional Senior Civil Judge, Kakinada, on 23.04.2013. It is
made clear there from that by the time of disposal of the
claim petition, there was no decree for specific performance
of the contract for sale in favour of R.Satish Kumar. It is
subsequent to the said decree for specific performance
granted on 01.03.2014 R.Satish Kumar-decree holder
pursuant to the non-possessory unregistered sale agreement
dated 28.02.2010 and pursuant to the decree, filed execution
petition for registration of sale deed as contemplated by
Order 21 Rule 34 C.P.C. and obtained sale deed pursuant to
the draft through Court.
8. It is, from the dismissal of the claim petition supra and
subsequently obtaining of the decree in specific performance
supra, appeal in A.S.No.129 of 2013 against the claim
petition dismissal order maintained by R.Satish Kumar by
showing T.Bhaskara Rao and P.Supraja, who are the decree
holder and judgment debtor as respondents to the claim
petition and to the appeal. The appeal was also disposed of
on 31.03.2017 from hearing of both parties. However, it was
not considered the additional evidence application filed by
the said R.Satish Kumar/appellant, which is nothing but the
sale deed executed pursuant to the decree for specific
performance as additional evidence. The additional evidence
application is supposed to be decided by the Court in either
way, by virtue of the provisions of Order 41 Rules 27 to 29 if
not properly explained and if it is otherwise required for the
effective adjudication of the lis by invoking Order 41 Rule 27
(1)(b) C.P.C. as also held by the Apex Court in KRM Reddy Vs
M/s Net work inc., . reiterated by this Court in Cheedella
Padmavati Vs. Cheedella Radha Krishna Murthy . It was not
done by the lower Court in deciding the appeal against the
dismissal of the claim petition of subsequent specific
performance decree holder pursuant to the sale agreement
supra. It is there from maintained the present second appeal
by the unsuccessful claim petitioner non-possessory un-
registered agreement holder, who during pendency of the
appeal against dismissal of the claim petition, having
obtained pursuant to the decree for specific performance
sale deed, filed the sale deed that was not referred in the
lower appellate Courts judgment.
9. From the above factual background, the following
substantial questions of law are framed, while admitting the
second appeal:
1. Whether the prior unregistered and non-possessory sale
agreement prevails over the subsequent attachment
before judgment for recovery of the suit claim based on
promissory note and what are the equities in the event of
the suit for recovery of money decreed ex parte and the
suit for specific performance of the contract for sale also
decreed on contest subsequent to the money decree in
respect of recovery of money and in enforcement of the
specific performance including from execution of sale
deed by the Court pursuant to the specific performance
decree and whether the Courts below in the concurrent
finding upholding the attachment to prevail over the sale
agreement are correct, more particularly, from the
amendment to Section 64 C.P.C. without any amendment
to the two limbs of Order 38 Rule 10 C.P.C.
2. To what result
11. In deciding the above substantial questions of law
without need of referring to the factual matrix, since
referred supra, the important provisions relevant to extract
are Section 64 C.P.C. prior and subsequent to the C.P.C.
amendment by Act, 2002 w.e.f. 01.07.2002.
"64. Private alienation of property after attachment to be
void.- (1) Where an attachment has been made, any
private transfer of 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.
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 judgement-
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.]
Explanation. For the purposes of this section, claims
enforceable under an attachment include claims for the
rateable distribution of assets.
12. Further, Order 38 Rules 10 and 11A C.P.C. reads as
follows:
10. Attachment before judgment not to affect rights of
strangers nor bar decree-holder from applying for sale.
Attachment before judgment shall not affect the rights,
existing prior to the attachment, of 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 attachment in execution of such decree.
11-A. Provisions applicable to attachment. (1) The
provisions of this Code applicable to an attachment made
in execution of a decree shall, so far as may be, apply to
an attachment made before judgment which continues
after the judgment by virtue of the provisions of Rule 11.
(2) An attachment made before judgment in a suit which
is dismissed for default shall not become revived merely
by reason of the fact that the order for the dismissal of
the suit for default has been set aside and the suit has
been restored.
13. Sections 54 and 40 of the Transfer of Property Act, read
as follows:
54. "Sale" defined :- "Sale" is a transfer of ownership in
exchange for a price paid or promised or part-paid and
part-promised.
Sale how made :- Such transfer, in the case of tangible
immoveable property of the value of one hundred rupees
and upwards, or in the case of a reversion or other
intangible things, can be made only by a registered
instrument.
In the case of tangible immoveable property of a value
less than one hundred rupees, such transfer may be made
either by a registered instrument or by delivery of the
property.
Delivery of tangible immoveable property, takes place
when the seller places the buyer, or such person as he
directs, in possession of the property.
Contract for sale :- A contract for the sale of immoveable
property is a contract that a sale of such property shall
take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on
such property.
40. Burden of obligation imposing restriction on use of
land, or of obligation annexed to ownership but not
amounting to interest or easement :- Where, for the
more beneficial enjoyment of his own immoveable
property, a third person has independently of any interest
in the immoveable property of another or of any
easement thereon, a right to restrain the enjoyment in
particular manner of the latter property, or
Where a third person is entitled to the benefit of an
obligation arising out of contract and annexed to the
ownership of immoveable property, but not amounting to
an interest therein or easement thereon, such right or
obligation, may be enforced 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.
14. Sections 17, 23, 47 and 49 of the Indian Registration
Act read as follows:
17. Documents of which registration is compulsory :-(1)
The following documents shall be registered, if the
property to which they relate is situate in a district in
which, and if they have been executed on or after the
date on which, Act No.XVI of 1864, or the Indian
Registration Act, 1866, or the Indian Registration Act,
1871, or the Indian Registration Act, 1877, or this Act
came or comes into force, namely :--
(a) ..;
(b) ..;
(c) ..;
(d) ..;
(e) ..;
(f) ..; and
(g) agreement of sale of immovable property of the value
of one hundred rupees and upwards :]
Provided that the State Government may, by order
published in the Official Gazette, exempt from the
operation of this sub-section any leases executed in any
district, or part of a district, the terms granted by which
do not exceed five years and the annual rents reserved by
which do not exceed fifty rupees.
23. Time for presenting documents :- Subject to the
provisions contained in Sections 24, 25 and 26, no
document other than a will shall be accepted for
registration unless presented for that purpose to the
proper officer within four months from the date of its
execution :
Provided that a copy of a decree or order may be
presented within four months from the day on which the
decree or order was made, or, where it is appealable,
within four months from the day on which it becomes
final.
47. Time from which registered document operates :- 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.
49. Effect of non-registration of documents required to
be registered :- No document required by Section 17 or
by any provision of the Transfer of Property Act, 1882, to
be registered shall,--
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting
such property or conferring such power, unless it has been
registered :
Provided that an unregistered document affecting
immovable property and required by this Act, or the
Transfer of Property 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, [x x x x], or as evidence of any collateral
transaction not required to be effected by registered
instrument.
15. Had it been impleaded in the suit for specific
performance, the decree holder of the so called promissory
note money decree or atleast filed a third party appeal
against that so called ex parte money decree by the said
agreement holder-cum-decree holder in O.S.No.40 of
2002=255 of 2002, the outcome could be otherwise. It is for
the reason the money decree was ex parte without contest
by the judgment debtor, who is no other than defendant to
the specific performance decree denied in the reply to the
notice before suit for specific performance and even
contested the suit for specific performance, the decree
holder of money decree also did not make any third party
appeal against the decree for specific performance and had
it been also, the things could be otherwise. However, the
fact remains that with the necessary parties to the suit
though not proper parties impleaded, from the above, there
is even ex parte a money decree and there is on contest, a
specific performance decree against the very judgment
debtor by name, Smt.Pilla Supraja for money decree
obtained by T.Bhaskara Rao for specific performance decree
obtained by R.Satish Kumar respectively. The Court has to
proceed thereby from the finality attained of the money
decree and specific performance decree against the
judgment debtor and the persons claiming any right through
the said judgment debtor/defendant in both the matters
viz., the so called decree holders either for recovery of
money or for specific performance of contract, as the case
may be.
16. In this background, with no need of reproduction
from the very Section 54 of the Transfer of Property Act, it
deals not only of sale but also contract for sale to an
agreement of sale and if it is a possessory sale agreement or
agreement later evidencing delivery of possession in writing,
there is another protective shield of invoking doctrine of part
performance under Section 53A of the Transfer of Property
Act irrespective of the suit for specific performance barred
by limitation prescribed by Article 54 of the Indian Limitation
Act as laid down by the Apex Court in Shrimant Shamrao
Suryavanshi & Anr. Vs. Pralhad Bhairoba Suryavanshi .
17. Coming to Section 40 of the Transfer of Property Act,
which also no way requires reproduction again the second
limb relevant for the purpose speaks, where a third person is
entitled to the benefit of an obligation arising out of contract
and annexed to the ownership of immoveable property, but
not amounting to an interest therein or easement thereon,
such right or obligation, may be enforced 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. No doubt,
it speaks of the bonafide transferee for consideration. Thus,
bonafide transfer of a prospective right or enforceable right
is not the wording.
18. From this now coming to Section 17(1)(g) of the Andhra
Pradesh amendment to the Indian Registration Act came into
force by Act 4/99 w.e.f. 01.04.1999, an agreement of sale of
immovable property of the value of one hundred rupees and
upwards is a compulsory registerable one, though the sale
agreement in this case is dated 28.02.2000 subsequent to the
said amendment came into force on 01.04.1999, it was not a
registered one. The consequence of which as referred in the
proviso to Section 49 of the Registration Act with Central
amendment to it equally with Section 53-A of the Transfer of
Property Act by Act 48/2001 w.e.f. 24.09.2001, which also no
way requires reproduction but for to refer to it in saying that
in a suit for specific performance the agreement though
required to be registered not registered can be admitted in
evidence. However, that concession is not available in the
claim petition and that might be the reason in the claim
petition, the sale agreement was not exhibited even for a
collateral purpose, but for, in the suit for specific
performance for the main purpose from the statutory
concession of Section 49 proviso of the Registration Act
supra.
19. In the factual scenario with reference to the law supra,
coming to Section 47 of the Registration Act which also no
way requires reproduction from what is stated supra that to
be read at best with Section 23 of the Registration Act, that
also reproduced supra, from the date of the document
executed presented for registration other than for a will the
registration must be affected within four months and not
later and with reference to Section 23 supra. So far as
Section 47 supra, 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, to say, even registration
was later in point of time within four months from the date
of execution, the sale deed even subsequently registered
comes into operation from the date of execution. From this
though an effort is made by the learned counsel for the
claimant/appellant that the document requires a
comprehensive understanding by giving a liberal construction
of its meaning to trace back to the earlier unregistered sale
agreement as the same is outcome even from decreeing in a
suit for specific performance, based on the unregistered sale
agreement non-possessory dated 28.02.2000. Such a
contention cannot be accepted from the clear and
unambiguous meaning of Sections 23 and 47 of the
Registration Act supra. Thereby, no credence is given to the
contention and said contention is rejected for all practical
purposes as bound by law, so to reject.
20. From this, now coming to unamended Section 64 of
C.P.C. prior to 01.07.2002:
"64. Private alienation of property after attachment to be
void.- (1) Where an attachment has been made, any
private transfer of 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.
Explanation:- For the purposes of this section,
claims enforceable under an attachment include claims
for the rateable distribution of assets.
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 the
defendant from applying for the sale of the property
under attachment in execution of such decree."
Order 38 Rule 10 CPC speaks, where an attachment has been
affected, 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. Claims
enforceable under an attachment include claims for the
rateable distribution of assets. This Section, thereby,
prohibits a private transfer or delivery of property attached
or of any interest therein after attachment contrary to the
attachment order in making it as void against all claims
enforceable under the attachment to say a subsequent
transfer in any manner including of any interest including by
delivery is void. So far as enforceability of the attachment
concerned, however, after the C.P.C. amendment by the Act
of 2002 w.e.f. 01.07.2002 sub-section (2) of Section 64 was
incorporated before the explanation in relation to ratable
distribution by making the other portion supra as sub-section
(1). What sub-section (2) amended speaks even at the cost
of repetition for the necessity is that nothing in this section
(supra) 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.
21. Any ambiguity and cloud is clear by this
incorporation of the amended sub-section (2) of Section 64
C.P.C. in protecting the prior agreements and prior
alienations by transfer, before the attachment affected.
Though it is the contention of the learned counsel for the
claim petitioner/appellant, R.Satish Kumar there from of the
non-possessory sale agreement is saved though it is prior to
the amended Act came into force, the same was relied in the
suit for specific performance vis--vis the claim petition filed
subsequent to the said amendment came into force in his
saying sub-section (2) of Section 64 C.P.C. running in four
contingencies, i.e.,1) of any private transfer, 2) delivery of
property attached, 3) of any interest therein and 4) made in
pursuance of any contract for such transfer or delivery
entered into. This submission is totally in ignoring the
subsequent words and registered before the attachment,
any of the benefits arose if it is registered before the
attachment and not by mere execution of the written
document. Once that is missing in the case for the same is
not only non-possessory but also unregistered sale agreement
dated 28.02.2000, the claim petitioner/appellant cannot get
the benefit of the amended sub-section (2) of Section 64
C.P.C.
22. Coming to the other contentions, the expression of
the three Judge Bench of the Apex Court in Hamda Ammal v.
Avadiappa Pathar was based on pre-amended Section 64
C.P.C. in its saying even an unregistered document can be
received as evidence for all purposes mentioned in the
proviso to Section 49 of the Registration Act and the fact that
the document of sale had been registered only after the
attachment makes no difference, when the document is prior
in point of time to the attachment. Here, the facts different
from that expression are not only the amendment to Section
64(2) C.P.C. but also the amendment to Section 17(1) of the
Registration Act in the State of Andhra Pradesh by
incorporation of clause (g) and the amendment to Section 49
of the Registration Act by Central Act 48 of 2001 referred
supra, thereby, the reliance placed on the expression in
Hamda Ammal (supra) has no application by virtue of
subsequent change of law, even by the time of filing the
claim petition and suit for specific performance by the
appellant herein.
23. Coming to the other expression placed heavily of
another Single Judge of this Court in Adinarayana v.
S.Gafoor Sab , wherein also referred Hamda Ammal (supra)
among others and the scope of Order 38 Rule 10 and Sections
40 and 64 C.P.C. In fact, though, the judgment was
subsequent in point of time to the C.P.C. amendment to
Section 64 incorporating sub-section (2) of Section 64 C.P.C.
and also Section 17(g) of the A.P.Registration amended Act
and Section 48 of 2001 Central Amendment to Section 49 of
the Registration Act, those were not discussed nor taken into
consideration therein, though simply reproduced amended
Section 64 C.P.C. in para-13 of the judgment.
24. Coming to the expressions referred therein besides
Hamda Ammal no way requires repetition among others, one
is in Noordeen v. V.S.Thiru Venkita Reddiar , under the
principle amended Section 64 C.P.C., wherein it is held by
the Apex Court that 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. There is no dispute on the
proposition, but for, the person, who claims as a transferee
is a bonafide transferee with absolute transfer and for
consideration and without notice of the prior attachment
before judgment, leave about no one can pretend no
encumbrance from the deemed notice by virtue of the very
attachment once ordered is affected as contemplated by the
C.P.C. also from the presumption under Section 114 of the
Indian Evidence Act of all official and judicial acts are duly
performed to draw of attachment ordered and affected was
duly affected.
25. The other expression of the Kerala High Court in
Narayanan Nair Ramakrishnan Nair v. Zacharia Kuriakose ,
a Single Bench 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 debtors right to
the unpaid purchase money. Even from this, what the Kerala
High Court held is an agreement holder has to pay the unpaid
purchase money in claiming the relief for specific
performance, has to recognize the right of the person who
attached his property for the balance sale consideration.
26. Coming to another Single Bench expression of this Court
in D.V.Narsimharao v. P.Ramayyamma , it was observed
that though 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 C.P.C. It referred section 64
C.P.C. saying the rigour imposed under Section 64 C.P.C.
does not prevail and the attachment before judgment does
not prevail over the contract for sale. In fact, the Kerala
High Court ignored the correct law in Narayanan Nair
(supra) in its saying the agreement holder in a contract for
specific performance has to recognize the attachment before
judgment of the holder of a suit claim to be decreed so far as
the non-payment of balance sale consideration to pass on
concerned, that is not at all discussed. In fact, even from
close reading of Section 54 of the Transfer of Property Act
with Section 40 of the Transfer of Property Act, the equitable
enforceable right created in a contract for sale from the
executant denies execution or not coming forward is to
maintain a suit for specific performance, which is, in fact, a
discretionary relief, the Court can decree or not to decree
depending upon the facts of the case. Though, Section 10 of
the Specific Relief Act, particularly, from the explanation (1)
clearly shows in exercize of discretion by the Court in a
specific performance suit, the breach of a contract to
transfer cannot be adequately relieved by compensation of
money in respect of the immovable property. For the same,
as per Section 10(b) an adequate relief for non-performance
to compensate except as otherwise provided in the chapter
from other sections covered by Sections 9 to 25 including
Section 20 of the Act, the discretionary relief, subject to the
foundation including from the pleading laid down under
Section 16 of the Act.
27. Coming to other expressions referred of the Madras
High Court in Veeraraghavayya v. Kamala Devi , wherein it
was observed that 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.
28. No doubt, in the case on hand, the suit O.S.No.40 of
2012 (255 of 2012) for specific performance in favour of
R.Satish Kumar against P.Supraja was on contest decreed and
the Court executed registered sale deed, which is pursuant to
the non-possessory unregistered sale agreement dated
28.02.2010 earlier to the filing of the suit for recovery of
money and attachment before judgment affected in 2010, to
say, though the sale deed executed through the Court in a
decree for specific performance is subsequent in point of
time to the attachment traced back to the sale agreement
prior to the attachment before judgment that can prevail.
However, had it been the money decree holder, who sought
the attachment impleaded in the suit for specific
performance, it could be different it was not done and
against the money decree, no third party appeal even filed.
29. The other judgment of the Madras High Court in Rebala
Venkata Reddi v. Yellappa Chetti referred the same view
and the subsequent Single Bench of the Madras High Court in
Diravyam Pillai v. Veeran Ambalam , the observation
particularly at page 831 referred was the question is not
whether any interest has passed under the contract for sale
but the attaching decree holder attaches not the physical
property, but only the rights of the judgment-debtor in the
property. Even from this, once there is a right of the
judgment debtor in the property attached, which is subject
to the prior sale agreement, it is for the unpaid purchase
money there is a right what is remained as on the date of
attachment.
30. Though, a contract for sale, does not having regard to
the terms of Section 54 of the Transfer of Property 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. This expression also
reiterates that prior contract for sale prevails over
subsequent attachment before judgment or attachment in
execution of a decree. However, so far as prevailing of the
agreement for sale concerned, the agreement holder is under
obligation to honour the attachment order out of what is to
be performed under the contract for sale.
31. The conclusion arrived in the expression of the Single
Bench of this Court in Adinarayana (supra) from the above in
saying right prevails by operation under Section 47 of the
Registration Act and Order 38 Rule 10 C.P.C. and the rigour
imposed under Section 64 C.P.C. does not prevail is not fully
correct from what is discussed supra so also for the case not
coming under the spirit of Section 64(2) of the amended
C.P.C.
32. Having regard to the above, the above substantial
questions of law formulated are answered in saying the
Courts below are not fully correct in dismissing the claim
petition of the agreement holder, R.Satish Kumar, but for, to
say the claim cannot be fully allowed of R.Satish Kumar
against T.Bhaskara Rao and P.Supraja, who are the decree
holder and judgment-debtor respectively of the money
decree, where there was also an attachment before
judgment prior to filing of the suit for specific performance
and what the right the agreement holder has on the date of
filing of the suit for specific performance was having is at
best under Section 55 of the Transfer of Property Act, the
charge, at best over the property for recovery of the advance
sale consideration by virtue of the wording of Section 55
statutorily like a charge to the purchase for recovery on the
property of unpaid consideration, in the event of the suit for
specific performance filed and on contest decreed by also
impleading the money decree holder-cum-person, who
attached the property from the deemed notice, it was not
done, though otherwise had it been done, the limit of the
agreement holder is to the balance sale consideration to
answer to the attachment before judgment has right in the
property, which is subject to the sale agreement.
33. In view of the above and from this Courts duty in the
factual matrix to render equity to both the parties and any
party who received under benefit has to restore that extent
to the other to order restitution with pragmatic approach for
Court should not be oblivious of any unmerited hardship to be
suffered by any party as held by the Apex Court in City Bank
N.A. v. Hiten P.Dalal , it is just to say the claimant,
R.Satish Kumar (the specific performance decree holder) has
to pay the original suit principal amount of the suit claim of
Rs.6,00,000/- to T.Bhaskara Rao (the money decree holder)
which amount of Rs.6,00,000/- includes adjustment by
receiving back the amount deposited in the suit for specific
performance in the Court with accrued interest to meet the
same and also that includes any amount earlier paid under
any settlement proposal through mediator or any direction of
this Court or the Courts below. The said amount has to be
paid within eight weeks from today, failing which T.Bhaskara
Rao, money decree holder is entitled to execute and recover
said Rs.6,00,000/- with interest at 12% p.a. from today
onwards for balance after adjustment of what is stated
supra. For any further claim of the money decree holder,
T.Bhakara Rao is to proceed personally against respondent
No.2/judgment debtor, Smt.P.Supraja if there is any other
property of her for the reason Section 56 C.P.C., speaks a
female is not liable for arrest for any recovery of a money
decree.
34. Accordingly and to the above extent, the Second
Appeal is allowed with no costs.
35. Consequently, miscellaneous petitions, if any shall
stand closed. No order as to costs.
___________________________
JUSTICE Dr. B.SIVA SANKARA RAO
Date: 03.04.2018
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