Athinarayana Konar and Another vs V. Subramania Aiyar

Wadsworth, J.—This appeal arises out of a suit by a Court-auction purchaser for possession of the land which he had purchased, from the

appellants who are alleged to have trespassed upon that land after delivery through Court, claiming title to it under a private sale made at the time

when the attachment was pending. The essential facts are that the appellants, who, were defendants 1 and 2 in the trial Court, held certain

mortgages over the land in question and they allege that on 10th March, 1932 the mortgagor who was not a party in these proceedings entered

into an agreement with them to sell to them* the mortgaged land. The written statement does not describe this agreement, but it is said in the course

of arguments that it was an unregistered written agreement. Nearly a month later, on 3rd April, 1932 the present respondent in execution of a

money decree against the mortgagor attached that land. It is not in evidence whether this attachment was with or without notice of the contract to

sell. On 8th June, 1932, that is to say, two months after the attachment the mortgagor executed a registered sale deed in favour of the appellants

conveying to them the land which was under attachment. Some eight months later on 15th February, 1933, the respondent in execution of his

decree brought the same land to sale in Court-auction and purchased it himself and two years later he got delivery through Court. Thereafter the

appellants are alleged to have entered upon the land and hence this suit.

The trial Court disposed of the suit in a very short judgment without giving any finding on the issue relating to the alleged agreement to sell dated

10th March, 1932. The learned District Munsif expressed the opinion that after the attachment the agreement could not have been carried out by

the debtors to the detriment of the plaintiff. In appeal the attention of the learned District Judge was drawn to the decision in Paparaju

Veeraraghavayya v. Kamaladevi (1934) 68 M.L.J. 67 and other cases and he found himself unable to agree with the District Munsif that the truth

of the agreement of March, 1932, was not a matter to be considered in the suit, but he supported the trial Court''s decision on the ground that

there was nothing in the written statement to show that the plaintiff had notice of this agreement, apparently holding the view that, though a person

who has rights under a contract to sell at the time of an attachment can enforce these rights as against the attaching decree-holder, the enforcement

depends on the question whether the attaching decree-holder had at the time of the attachment notice of the existence of the contract and he also

seems to think that it is the duty of the persons claiming under the contract to prove that the attaching decree-holder had notice.

Now, there is a line of decisions of this Court which make it quite clear that though a contract to sell 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 that 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. The cases which have been quoted before me on this point are Bapineedu v. Venkayya (1910) 21 M.L.J. 82 Rebala

Venkata Reddi v. Mangadu Yellappa Chetty (1916) 5 L.W. 234 Paparaju Veeraraghavayya v. Kamaladevi (1934) 68 M.L.J. 67 Veerappa

Thevan, since ad judicated insolvent, The Official Receiver Vs. C.S. Venkatarama Aiyar, , Diravyam Pillai and Another Vs. Veeranan Ambalam

and Others, , and there is a decision of the Privy Council which throws light on the same subject reported in Nur Mahomed Peerbhoy v. Dinshaw

Hormasji Motiwalla (1922)45 M.L.J. 770. An attempt has been made to distinguish these decisions on the ground that they are cases in which the

prospective purchaser has under his contract either paid money or got possession, but it does not seem to me that this is the basis of any of these

decisions. The matter has been well put by Varadachariar, J., at page 831 of the decision in Diravyam Pillai and Another Vs. Veeranan Ambalam

and Others, . The learned Judge says that:

The question is not whether any interest has passed under the contract to sell. An attaching decree-holder attaches not the physical property but

only the rights of the judgment-debtor in the property. As explained in the decisions and recognised in Section 40 of the Transfer of Property Act,

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.

It seems to follow therefore that a finding as to the truth and validity of this agreement dated 10th March, 1932, is an essential preliminary to the

disposal of the present suit.

It is however contended that even assuming the truth of this agreement, the attachment will prevail against the agreement unless the attaching

creditor had notice thereof. If this is the law, it seems to me obvious that the plaintiff who seeks to escape from the effects of the pre-existing

contract by reason of his ignorance of the contract must himself allege and prove that he had no knowledge of it, vide (1933) L.R. 61 I.A. 115

(Privy Council) and Attorney-General v. Biphosphated Guano Company (1879) 11 Ch. D. 327 . But I cannot myself see any legal basis for the

theory that an attachment will prevail against a pre-existing contract binding the owner of the land, if the attaching decree-holder has no notice of

the contract. No doubt if the attachment is followed by a Court-sale and the purchaser at the Court-sale has no notice of this obligation, he will get

a good title and the promisee under the private contract would be left to seek his remedy against his promisor. So much can be deduced from the

decision of the Privy Council in Nur Mahomed Peerbhoy v. Dinshaw Hormasji Motiwalla (1922) 45 M.L.J. 770. But we are not concerned here

with a purchaser for good consideration without notice of a contract to sell binding the vendor or judgment-debtor whose land is being sold. At the

time of the Court-sale there was already a registered sale deed in favour of the appellants which had been in existence for some eight months. How

the Court-sale could have been held without knowledge of that registered sale-deed is a matter for conjecture. But if the registered sale deed is

good, no amount of ignorance on the part of the Court-auction purchaser will give him a good title. The sale in favour of the appellants can only be

attacked on the basis of Section 64, CPC and in order to make this applicable it must be shown that this sale was a private transfer contrary to the

attachment. If the attachment was subject to the obligation under the previous contract, the sale in pursuance of the contract will not be a transfer

contrary to the attachment. It is therefore incumbent upon the respondent to show that an attachment will prevail against a pre-existing contract to

sell binding a judgment-debtor, if the attaching creditor had at the time of the attachment no notice of the existence of this contract. I have not been

referred to any authority for this position and it seems to me to be a position which it would be difficult to support in logic. That which the creditor

attaches is the right, title and interest of his judgment-debtor. When once it is conceded, as I think it must be in the light of the decisions quoted

above, that the right, title and interest of the judgment-debtor is limited by any obligations with reference to the land binding upon the judgment-

debtor, it is difficult to see how the attachment of that right, title and interest without knowledge of those limitations can enlarge the right, title and

interest which the decree-holder attaches. The protection given to a bona fide purchaser for value without notice is based upon the fact that the

purchaser has paid cash in all innocence for an apparently good title, but there is no logical reason why a similar protection should be given to an

attaching creditor who has not paid cash at all. Surely it is the duty of the attaching creditor to ascertain the extent of the rights of the judgment-

debtor and it is only over such rights as they actually exist that the attachment will operate. Moreover, I am of opinion in the present case, there

being no assertion by the plaintiff that he was ignorant of the defendants'' rights and no proof that he had no notice thereof, the lower appellate

Court was wrong in assuming that he had no notice merely because the written statement had failed to aver notice and the defendant had failed to

prove notice.

The appeal therefore succeeds and the suit will be remanded to the trial Court for fresh disposal after taking evidence and recording a finding on

issue No. 4. Costs throughout will abide the result. The court-fee on the memorandum of appeal will be refunded.

Leave to appeal is granted.