G.R. Ramasethu vs K.R. Athappa Chettiar and Others

V. Ratnam, J.—The civil revision petition and the civil Miscellaneous Appeal have been preferred by the decree-holder/auction purchaser in

O.S. No. 342 of 1971, Sub-Court, Madurai, against the order of the Court below in EA. No. 1150. of 1981 in E.P. No. 164 of 1973 in O.S.

No. 342 of 1971 filed by the first respondent herein u/s 47 and Order 21, Rule 90, Code of Civil Procedure, setting aside the court sale held on

3-9-1979 and confirmed on 3-11-1979.

Briefly stated, the facts giving rise to these proceedings are as follows:- The second respondent had borrowed moneys from the petitioner in the

civil revision petition and the appellant in the civil miscellaneous appeal (hereinafter referred to as ''the decree-holder'') on a promissory note and

for the recovery of the amounts due from the second respondent, the suit in O.S.342 of 1971, sub-court, Madurai, was instituted. Even on the

very day on which the suit was filed, an application in I.A. No. 555 of 1971 praying for an attachment of the property bearing door No. 146,

North Masi Street, Madurai, belonging to the second respondent herein, was made. On 9-8-1971 despite counsel taking notice on behalf of the

second respondent, an order of interim attachment was passed in I.A. No. 555 of 1971. Pursuant to the order directing interim attachment, the

attachment on the property was effected on 15-8-1971. After several adjournments, finally, on 21-4-1972, in I.A. No. 555 of 1971, the order of

attachment passed earlier was made absolute. On 30-11-1972, a decree was also passed in O.S. No. 342 of 1971, Sub-Court, Madurai. While

matters stood thus, the second respondent herein purported to sell the attached property on 9-2-1972 in favour of the first respondent herein and

gave him possession by about February, 1973. The decree-holder executed the decree obtained by him in O.S. No. 342 of 1971 in E.P. No. 164

of 1973 and finally, after obtaining leave to bid and set off in E.A. No. 420 of 1979 purchased the property already attached by him in I.A. No.

555 of 1972 in the Court auction held on3-9-1979. Subsequently, on 3-11-1979, the court sale in favour of the decree-holder was confirmed.

Thereupon, the decree-holder/auction purchaser applied for delivery of possession and owing to obstruction offered by the first respondent,

proceedings were taken for the removal of obstruction and it was at that stage, on 31-3-1981, the first respondent herein filed EA. No. 1150 of

1981 purporting to be u/s 47 and Order 21, Rule 90, Code of Civil Procedure, to set aside the Court sale in favour of the decree-holder/auction

purchaser.

In that application, the first respondent claimed that only at the time when the Amin came on 11-3-1980 to deliver possession of the property

pursuant to the Court auction sale in favour of the decree-holder, he became aware of the obtaining of the decree in O.S. No. 342 of 1971 and

the holding of the sale as well as its confirmation and that the sale in favour of the decree-holder/auction purchaser was vitiated by several

infirmities and irregularities catalogued in paragraph 16 of the application filed by him. The first respondent also stated that by the court sale his

interest in the property had been affected and that owing to the fraud perpetrated by the decree-holder of the second respondent herein, he was

prevented from having knowledge of the proceedings and, therefore, the court sale held on 3.9.1979 and confirmed on 3.11.1979 should be set

aside.

The decree-holder in his counter refuted the claim of the first respondent and contended that the sale in favour of the first respondent herein was

not true and valid and that he had also intimated the first respondent about the void nature of the sale in his favour by a registered notice dated

7.1.1977 and further that the Court sale in his favour was not in any manner vitiated. An objection was also raised that the first respondent has no

locus standi to maintain the application and that it was also barred by limitation.

Before the court below, on behalf of the decree-holder, Exhibits B-1 to B.8 were marked and R.Ws. 1 and 2 were examined, while, on behalf

of the first respondent, Exhibits A-1 to A-22 were filed and PWs.1 to 5 gave evidence. On a consideration of the oral as well as the documentary

evidence, the Court below found that the application filed by the first respondent herein was maintainable u/s 47 and Order 21, Rule 90, C.P.C.

and that the application was also in time. Considering the irregularities put forth by the first respondent as vitiating the court sale, the court below

found that irregularities had been committed in the publication and the conduct of the sale and that it resulted in substantial injury to the first

respondent justifying the setting aside of the court sale. On those conclusions, the Court below allowed the application EA. No. 1150 of 1981

setting aside the Court sale in favour of the decree-holder/auction purchaser, the correctness of which is questioned in the civil revision petition and

also in the civil miscellaneous appeal (which was originally filed by way of abundant caution as C.M.A. No. 29 of 1983 before the District Court,

Madurai, and subsequently transferred to this Court).

The first question that arises for consideration is whether the application filed by the first respondent in E A. No. 1150 of 1981 is maintainable at

his instance u/s 47 and Order 21, Rule 90, C.P.C. There is no dispute that on the date of institution of the suit in O.S.342 of 1971, Sub-Court,

Madurai, in I A. No. 555 of 1971, an order for interim attachment of the property was passed and the attachment was effected on 15-8-1971 and

that on 21-4-1972, the attachment was also made absolute. Though the first respondent, in the course of paragraph 16 of his application, stated

that the attachment before judgment was not applied for on valid grounds and that the attachment was also not effected in accordance with law, it

is seen from paragraph 13 of the judgment of the Court below that the first respondent did not adduce any evidence in support of the invalidity of

the attachment. Indeed, it is seen that the Court below, in paragraph 13 of its judgment, has also recorded a concession made by the counsel for

the first respondent that there is no material to establish the invalidity of the attachment made. Apart from this, it is seen from Exhibits B-3 and B-4

that even the order for interim attachment was passed in the presence of the counsel for the second respondent after he took notice and the

attachment was effected on 15-8-1971 and subsequently the matter had been adjourned till 21-4-1972, when the attachment was made absolute.

It is, therefore, clearly established that from 9-8-1971 onwards, the property belonging to the second respondent had been under attachment. It is

during the period of subsistence of the attachment in IA. No. 555 of 1971, on 9-2-1972, the second respondent had purported to sell the attached

property to the first respondent under Exhibit A-5. u/s 64, C.P.C. a private transfer of property after an attachment has been made, contrary to

such attachment, shall be void as against all claims enforceable under the attachment. An Explanation to Section 64, C.P.C. states that for

purposes of this section, claims enforceable under the attachment include claims for the rateable distribution of assets. The Court below was of the

view that the private sale by the second respondent in favour of the first respondent under Exhibit A-5 was not totally void, but partially void and

the sale would be affected only to the extent of meeting the claim of the decree-holder and he cannot be debarred from claiming right over the

property on the ground that he had purchased it after the attachment before judgment and that the sale is, therefore, totally void. This process of

reasoning by the Court below not only overlooks the object of Section 64, C.P.C, but also its scope. It would be useful in this connection to refer

to Srinivasa Aiyangar v. Velayan Ambalam 1 M.L.J.143 : AIR 1926 Mad. 966 where the effect of a private sale contrary to a Court attachment

as well as the scope and object of declaring the void nature of such a private transfer have been succinctly set out. At page 144, the Division

Bench observed as follows:

When property is sold in Court auction, what is sold is the right, title and interest of the judgment-debtor as it is on the date of the sale, and any

private alienation of transfer pending the attachment is void against all claims enforceable under the attachment. u/s 64 of the Code of Civil

Procedure, an auction purchaser gets title to the property free of any encumbrances or any title created by the judgment-debtor after the property

was attached so as to preserve the title of the judgment-debtor as it was on the date of the attachment for the benefit of the attaching creditor and,

therefore, any title created after the date of the attachment to the prejudice of the attaching creditor cannot avail against the judgment-debtor as

well as the auction purchaser. The auction purchaser gets it free from any encumbrances or any burden that might have been created by the

judgment-debtor after the date of the attachment.

From the observations referred to above, it obvious that the principle behind Section 64, C.P.C. is to preserve the title of the judgment-debtor as

on the date of attachment totally unaffected by any private alienations made by him and any private alienation is also declared void as against a

claims enforceable under the attachment. Another Division Bench in K. Balachandran v. A.M. Muthayyan Mudalia 87 L. W. 812 also pointed out

that where a private alienation is effected while an attachment is in force, certainly the auction purchaser of the attached property can invoke

Section 64, C.P.C. and successfully contend that the private alienation is void as against him. Unfortunately, the Court below, in this case, has

misunderstood and misinterpreted the declaration of the void nature of the private alienation after the attachment, as confined to that part of the

claim of the decree-holder enforceable under the decree in O.S. No. 342 of 1971. It is not possible, on the facts of this case, to declare that the

private sale in favour of the first respondent is partly void to the extent of the claims of the decree-holder arising under O.S. No. 342 of 1971. In

so holding, the Court below omitted to note that the decree-holder in OS. No. 342 of 1971 was against the property sold by the second

respondent in favour of the first respondent after the attachment of the same, as if the property belonged still to the second respondent unfettered

by that sale, taking advantage of the declaration u/s 64, C.P.C. that with reference to the execution by the decree-holder of the decree in O.S. No.

342 of 1971, he was entitled to treat the private transfer by the second respondent in favour of the first respondent as void. Yet another aspect

completely overlooked by the court below was that the Court auction sale in favour of the decree-holder was nothing but the culmination of the

enforcement of his claims under the decree in O.S. No. 342 of 1971 and in that connection, Section 64, C.P.C. declares that the private alienation

in favour of the first respondent by the second respondent is void for the purpose of execution of the decree in O.S. No. 342 of 1971 and this

would show that insofar as the decree-holder, who had purchased the property in execution of the decree in O.S. No. 342 of 1971, is concerned,

the private alienation was void. If the decree-holder was thus entitled to ignore the private alienation in favour of the first respondent by the second

respondent and proceed against the property of the second respondent in execution of his claims under the decree in O.S. No. 342 of 1971, it

follows that so far as the execution of the decree in O.S. No. 342 of 1971 is concerned, the private alienation would be void. The Court below

was, therefore, in error in holding that despite Section 64, C.P.C. the first respondent would be entitled to maintain the application on the strength

of his sale under Exhibits A-5, dated 9.2.1972.

There is also a related aspect which has not been focussed upon by the Court below. If, as a result of the operation of Section 64, C.P.C, the

decree-holder is entitled to treat the private alienation made by the second respondent in favour of the first respondent as void and proceed against

the property as if it belonged to the second respondent, it would be difficult to regard the same transaction as a valid one in so far as the first

respondent is concerned to sustain or maintain an application to set aside the Court sale. The declaration of the void nature of the private transfer

u/s 64, C.P.C, is with reference to all the claims enforceable under the decree in O.S. No. 342 of 1971. Those claims have been actually enforced

by the sale of the property and purchased by the decree-holder in the Court auction sale. If the private alienation by the second respondent in

favour of the first respondent is void u/s 64, C.P.C. for the purpose of enforcing the claims under the decree in O.S. No. 342 of 1971 culminating

in the Court sale in favour of the decree-holder, it follows that even for other proceedings arising out of the claims enforced under the decree in

O.S. No. 342 of 1971, the private sale in favour of the first respondent should still be treated as void. Otherwise, the results will be startling for,

though with reference to enforcement of the claims under the decree in O.S. No. 342 of 1971, the private sale by the second respondent in favour

of the first respondent would be void, it would be valid in order to enable the first respondent to claim some interest in the property sold in Court

auction and on that footing, make an application for setting aside the sale. Thus, with reference to the enforcement of the claims arising under the

decree in O.S. No. 342 of 1971, the sale under Exhibit A-5 cannot be void and valid at the same time between the decree-holder and the first

respondent herein. When u/s 64, C.P.C. the private sale is declared void, that would ensure not only for the purpose of enabling the decree-holder

to bring the property to sale in enforcement of the claims arising under the decree in O.S. No. 342 of 1971 but also for other matters arising out of

the very same decree. If the private transfer by the second respondent in favour of the first respondent is void for purposes of enabling the decree-

holder to enforce his claims under the decree in O.S. No. 342 of 1971 and such enforcement culminates in the court sale in favour of the decree-

holder, even for purposes of setting aside the sale, the private sale in favour of the first respondent would still be void as the court sale sought to be

set aside is only the outcome of claims enforceable under the decree in O.S. No. 342 of 1971 on the footing that the private sale is void. In that

event, the first respondent cannot as against the decree-holder contend that he had acquired an interest in the property under the private transfer

and as one interested in the property, as a representative of the judgment-debtor u/s 47, C.P.C, he can maintain an application either u/s 47 or

even under Order 21, Rule 90, C.P.C. when the court sale in favour of the decree-holder had taken place on the footing that the private sale in

favour of the first respondent by the second respondent was void, it follows that between the decree-holder and the first respondent, the legal

effect of the private sale cannot be otherwise and it follows that under the private sale, the first respondent cannot claim that he is a representative

of the second respondent, entitled to maintain the application, for, the effect of Section 64, C.P.C. is to still retain title to the property sold in court

auction, in the judgment-debtor. In other words, the first respondent cannot, on the strength of the private sale declared void u/s 64, C.P.C.

between the decree-holder and himself, claim that he is a representative of the judgment-debtor and maintain the application u/s 47, C.P.C. If the

transaction is declared void u/s 64, C.P.C. for purposes of execution of the decree in O.S. No. 342 of 1971, it follows that the first respondent

does not have any subsisting interest in the property as to enable him to maintain the application as a representative of the judgment-debtor within

the meaning of Section 47, C.P.C. Viewed even as an application under Order 21, Rule 90, C.P.C, the private sale under Exhibit A-5 would not

clothe the first respondent with any interest in the property on the same parity of reasoning applicable to the consideration of the question of the

first respondent being the representative of the judgment-debtor for purposes of maintaining the application u/s 47, C.P.C. and the first respondent

cannot claim to be a person interested in the property so that even the application under Order 21, Rule 90, C.P.C. cannot be maintained by him

on the ground that his interests are affected by the Court sale. The Court below is, therefore, in error in holding that the application styled as one

falling u/s 47 and Order 21, Rule 90, C.P.C. was maintainable.

Even on the footing that the first respondent can maintain the application either u/s 47 or even under Order 21, Rule 90, C.P.C, it is seen that

the application is barred by limitation. Considering the application as one falling under Order 21, Rule 90, C.P.C, under Article 127 of the

Limitation Act, 1963, such an application should have been filed within sixty days of the date of sale. Admittedly, in this case, the sale was held on

3-9-1979 and the application was filed only on 31-3-1980. The case of the first respondent that he became aware of the decree, attachment, etc.,

in O.S. No. 342 of 1971 only on 11-3-1980 cannot be accepted. The decree-holder had sent Exhibit B-5, dated 7-1-1977 to the. respondents

herein as well as the son of the second respondent. That notice had been received on behalf of the first respondent by one Annamalai as could be

seen from the postal acknowledgment Exhibit B-8, dated 8-1-1977. In Exhibit B-5, the decree-holder has pointedly drawn the attention of the first

respondent herein to the fact that he instituted O.S. No. 342 of 1971 against the second respondent herein, obtained an order of attachment

before judgment and that it was also made absolute and despite that, the first respondent had purported to take a private sale of the property from

the second respondent. Though he attempted to say that he did not have any knowledge of the institution of the suit, the attachment before

judgment and the other proceedings, in his cross-examination as P.W.I, was forced to admit that Annamalai, who had signed Exhibit B-8, was his

employee and he worked from 1975 and that he (P.W.I) used to go out often for business purposes. Exhibit B-8 had been signed by the

employee of the first respondent and it is not the case of the first respondent that Annamalai was not authorised to receive letters on his behalf. It,

therefore, follows that the first respondent had knowledge of the proceedings in O.S. No. 342 of 1971 even as far back as 8-1-1977, when

Exhibit B-5 had been received, and his case that he became aware of the proceedings only on 11-3-1980, at the time when the Amin came to

deliver possession of the property pursuant to the court auction sale, cannot therefore be accepted. Though the first respondent had also stated

that by practice of fraud, he did not have the knowledge of the proceedings, he had not given the particulars with reference to the so-called acts of

fraud and he had not also substantiated the same by reliable or acceptable evidence. On the evidence, no fraud at all has been established and the

case of the first respondent that owing to fraud he did not have the knowledge of the proceedings in O.S. No. 342 of 1971 cannot, therefore, be

accepted. It follows that the first respondent had knowledge of the attachment, the passing of the decree as well as the invalidity of the private sale

in his favour after attachment even on 8-11-1977 and he should have, therefore, taken steps at least within three years thereafter, assuming that

Section 47, C.P.C. would be applicable. Therefore, even considering the application filed by the first respondent as maintainable and falling u/s 47

and Order 21, Rule 90, C.P.C, it is seen that the application filed on 31-3-1980 was hopelessly out of time. On these two short grounds, the

application in EA. No. 1150 of 1981 filed by the first respondent has to be dismissed and it is unnecessary to consider the other aspects.

Consequently, the civil revision petition and the civil miscellaneous appeal are allowed with costs and the Order of the Court below in EA. No.

1150 of 1981 in E.P. No. 164 of 1973 in O.S. No. 342 of 1971 setting aside the court sale in favour of the decree-holder on 3.9.1979 is set

aside and that application will stand dismissed with costs.