A. Kulandaivelu Pillai vs Sowbagyammal

Chandrasekhara Ayyar, J.—The plaintiff is the appellant. He purchased the property at an auction held by the Official Receiver on 20th

December, 1927. The defendant is a purchaser of the same property on 25th April, 1940, in execution of a charge decree in her favour of the year

1911. At first, the suit was only for an injunction but later a prayer for possession was added on the ground that the defendant dispossessed the

plaintiff. The District Munsiff decreed the plaintiff''s suit holding that he was a bona fide purchaser for value without notice of the charge decree in

execution of which the defendant purchased the property. But on appeal the Subordinate Judge dismissed the plaintiff''s suit not because the

plaintiff was not such a bona fide purchaser but on the ground that the plaintiff''s purchase from the Official Receiver was affected by the doctrine

of lis pendens. The Us Q.S. No. 44 of 1911, fructified into a charge decree for maintenance on 30th September, 1913. It is for some arrears due

under this decree that the suit property was brought to sale and purchased by the defendant (who is herself the decree-holder). To O.S. No. 44 of

1911, the insolvents were parties. In fact the charge was obtained against them on their adjudication. The Official Receiver was brought on record

in their place On 10th February, 1927.

Mr. Ramabhadrachariar, the learned advocate for the appellant, raised three points in support of the appeal.

He contended that under the law as it stood prior to the amending Act of 1929 introducing the explanation to Section 52 of the Transfer of

Property Act a sujt which had resulted in a decree would not furnish a basis for the application of the doctrine of lis pendens as regards a transfer

or alienation made by one of the parties when no execution of the decree was pending. The second point was that Section 52 will not apply as the

properties became vested in the Official Receiver by operation of law under the Insolvency Act. The third point which he urged is that a bond fide

transferee for value without notice is protected against a charge u/s 106 of the Act, notwithstanding, lis pendens.

There is no substance in the first point. Even without the explanation, Madras has always taken the view that a suit does not end with the decree

but only with satisfaction of the decree or when its execution becomes barred by limitation and that till then, so long as there is no collusion

between the parties, the suit must be deemed to be pending and actively being prosecuted. The explanation was: added apparently to give sanction

to this view as the correct one, as against the views taken by other Courts as regards the meaning to be given to the words "" contenttious"" and

active prosecution "" which were found in the section and which led to the consideration of nice questions as to whether the non-prosecution of a

suit for a certain period and consequent delay would negative the application of the doctrine and whether the suit can be regarded as contested

until a written statement is filed. The learned advocate cited Madhuram Sand v. Kirtya Nand (1944) 2 M.L.J. 343 as a recent decision indicating

that in cases governed by the old section as it stood minus the explanation, the Privy Council were of the opinion that the other view about

necessity for the pendency of execution proceedings was right. There is no warrant whatever for importing any such idea into the judgment. They

happened to deal with a case that arose before the explanation was introduced and where there was an execution proceeding actively being

prosecuted. They referred to these two facts to repel the contention of the counsel for the appellant in that case that the suit was not being actively

prosecuted.

The Second point is a hollow one also. We are not concerned with the question whether the vesting of the property in the Official Receiver was

by the operation of law but with the question whether the sale by the Official Receiver to the plaintiff is governed by Section 52. It is a private sale

undoubtedly and not a sale by operation of law. How the Official Receiver got his title is foreign to the scope of the question now under

consideration.

What is to happen in the case of a conflict between Sections 52 and 100 is the only point that remains for answer. While Section 100 says that a

charge will not prevail against a bona tide transferee for value without notice, Section 52 seems to deprive him of this privilege--is the argument of

Mr. Ramabhadrachariar, One answer to the question is probably what was given by the Nagpur High Court in Chasiram v. Mt. Kundanbai (1944)

2 M.L.J. 343, namely, that a charge given by a decree of Court cannot be described as a charge created by the act of parties or by operation of

law. The learned Judges who decided that case have given good reasons for holding; that the omission to refer to charge decrees in this section

was probably intentional and not accidental. But it is not necessary to pursue this line further as I think there is another answer. There is no real

conflict at all between the two sections. Section 52 expressly provides for all cases of decrees in suits relating to immovable property whether they

involve a mortgage or a charge or recovery of possession and states that no party to the suit can transfer or otherwise deal with the property ""so as

to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court. It

makes no exception in favour of a bona tide transferee for value without notice. It hits against all transfers which would affect the rights of the other

party. It is only in cases where there is no such express provision of law which is in force that the principle underlying Section 100 can come into

play, namely, the postponement of the rights of a charge-holder to the right of a bona tide purchaser for value without notice. Where the charge

falls within the ambit or scope of Section 52 there is an end altogether of the transfer or alienation prevailing over the rights of the party in whose

favour a charge has been created under the decree. The addition is the second paragraph of Section 100 made by the Amending Act of 1929

does not introduce any new law. It clarifies what the rights and liabilities of a charge holder have always been held to be and this only means that so

long as there is no other law which enacts the contrary, the charge is not to be enforced against a person to whom the property has been

transferred for consideration without notice.

The second appeal is dismissed with costs. (No leave).