N. Thirumal vs K. Somasundaram

T. Raja, J.—The present Civil Miscellaneous Appeal is directed against the order dated 19.4.2010 passed in E.A. No. 3 of 2008 in O.S. No. 3 of 2008 in O.S. No. 13 of 2008 on the file of the I Additional District Judge, Madurai.

Brief facts leading to the filing of this Appeal is hereunder :

The 1st Respondent/Plaintiff filed a Suit in O.S. No. 13 of 2008 on 31.1.2008 along with I.A. No. 43 of 2008 seeking order of attachment of the property during the pendency of the Suit. Since the main relief sought for in the Suit was for recovery of money of Rs. 9,60,800/- from the 2nd Respondent/Defendant, after issuing notice, the learned Trial Court ordered notice in I.A. No. 43 of 2008 on 2.2.2008. After the issuance of notice, the 2nd Respondent/Defendant sold the property on 7.2.2008 to the Appellant/Petitioner herein, by a registered Sale Deed. In view of the transaction taken place, alienating the property by the 2nd Respondent/Defendant in favour of the Appellant/Petitioner who is a subsequent purchaser, the learned Trial Court has passed the order of attachment on 3.3.2008. After sometime, on 12.3.2008, the said order was also made absolute. Aggrieved by the same, the Appellant/Petitioner who is a subsequent purchaser, filed. an Application in E.A. No.13 of 2008 in E.P. No.3 of 2008 in O.S. No. 13 of 2008 under Order 21, Rule 58, read with Order 38, Rule 8, and under Section 151 of the Civil Procedure Code, before the I Additional District Judge, Madurai, to raise the attachment order dated 3.3.2008. The learned Trial Court dismissed the said Application by assigning reasons. Aggrieved by the same, the present Appeal has been filed by the Appellant/subsequent purchaser.

Mr. Subramanian, learned Counsel for the Appellant placed threefold arguments. Firstly, it was contended that when the Suit for recovery of money was filed by the 1st Respondent Plaintiff, the Trial Court issued notice in both the Suit and I.A. No. 43 of 2008 on 2.2.2008 only to the 2nd Respondent Defendant. Subsequently, the Appellant/Petitioner has purchased the suit property only on 7.2.2008 without noticing the pendency of the matter before the Trial Court. When the Appellant/Petitioner was unaware of the pendency of the Suit filed by the 1st. Respondent/Plaintiff, the doctrine of lis pendens as held by the learned Trial Court cannot be put against the Petitioner, as the Petitioner was neither a party to the Suit nor was aware of the pendency of the lis between the 1st Respondent/Plaintiff and the 2nd Respondent/Defendant.

Secondly, it was contended that the entire transaction took place between the Appellant and the 2nd Respondent herein, is a valid and bone fide transaction, in view of the fact that the Appellant is a bone fide purchaser for valuable consideration.

Thirdly, it was also contended that the learned Trial Court while passing the order of attachment has not followed the criteria laid down under Order 38, Rule 5 of the Civil Procedure Code and by simply going through Section 52 of the Transfer of Property Act applied the doctrine of lis pendens, ignoring the fact that the Appellant/Petitioner had purchased the property only from the 2nd Respondent/Defendant, without noting the pendency of the Suit. Therefore, it was further contended that when there are conditions mentioned under Order 38, Rule 5, to show cause as to why the Defendant should not furnish security for production of property, by violating the said conditions, the Trial Court has passed the attachment order dated 3.3.2008, which is completely void as per Order 38, C.P.C. Rule 5 of the Civil it Procedure Code. When it was also brought to the notice of the Trial Court, no reasoning whatsoever was assigned by the Trial Court. In view of that, the impugned order is liable to be set aside.

In support of his submission, learned Counsel for the Appellant has relied upon the judgment of the Patna High Court in Kedarnath Lal and another v. Sheonarain Ram and others, AIR 1957 Pat 408. and the judgment of the Supreme Court in Hamda Ammal v. Avadiappa Pathar and three others, 1991 (1) SCC 715, to say that the attachment before judgment would be made where the Court is satisfied that the Defendant is about to dispose of the whole or any part of his property or is about to remove the whole or any part of his property from the local limits of the jurisdiction of Court with the intention to obstruct or delay the execution of any decree that may lie passed against him. But this provision would not apply where the Sale Deed has already been executed by the Defendant in favour of a third person Further, he added that the question of lis pendens cannot be made applicable to the money Suit Ignoring this vital aspect, the learned Trial Court has erroneously passed the impugned order, as a result, the Appellant has been put to great prejudice and therefore he prayed for interference.

Learned Counsel for the Appellant also relied on a judgment of this Court in Sri Humbi Hema Gooda Sri Gayathri Peda Sri Devanga Jagathgum Charitable Trust, Santhama Naickenpalayam, Palladam Taluk, Coimbatore District, rep. by its Power Agent R. Krishnasamy (a) Girikannan v. The Tamil Nadu State Transport Corporation (CBE) Ltd., Coimbatore Public Limited Company, Coimbatore, rep. by its Managing Director and two others, 2012 (1) CTC 407, for a proposition that if any property is purchased when there was no order of attachment, such purchaser has to be considered as a bona fide purchaser and owner of the property In the present case, it was also contended that on the date of purchasing the suit property by a registered Sale Deed dated 7.2.2008 admittedly, there was no order of attachment passed against the property or against the 2nd Respondent Defendant, therefore, the learned Counsel for the Appellant submitted that the Trial Court should have allowed the Application filed by the Appellant/Petitioner, as it did not do so, the present Appeal filed against that order deserves to be allowed.

Learned Counsel for the Appellant has also pressed into service Order 38, Rule 11-B of the Civil Procedure Code, which states that any order of attachment passed under Rule 5 or 6 of this Order raising the attachment passed under Rule 9 of this order shall be communicated to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in such order is situate. On this basis, he prayed for interference with the impugned order. Finally, by relying on Section 52 of the Transfer of Property Act, he attempted to bring the case of the Appellant out of the doctrine of lis pendens.

In reply, Mr D. Malaisamy, learned Counsel for the 1st Respondent/Plaintiff has submitted that the impugned order does not call for any interference for the reason that the Petition in E.A. No. 13 of 2008 in E.P. No.3 of 2008 in O.S. No. 13 of 2008 under Order 21, Rule 58, read with Order 38, Rule 8, and under Section 151 of the Civil Procedure Code was filed by the Appellant as a power agent of N. Thiruma, who is a third party Claimant/subsequent purchaser of the suit property. When the schedule mentioned property was purchased by the 2nd Respondent/Defendant and his wife on 13 3 2006. the 2nd Respondent sold the undivided share of the property on 7.2.2008 for valuable consideration in favour of the Appellant only after receiving notice issued by the Trial Court in both the Suit in O.S. No 13 of 2008 & I.A.No.43 of 2008 on 2.2.2008. The very conduct of the Defendant m selling the property in favour of the Appellant/Petitioner on 7.2.2008 during the pendency of the Suit filed against him clearly shows that he has decided with calculated plan to defeat the parties to the Suit, by alienating the property. Therefore, the Sale Deed dated 7.2.2008 which is admittedly after the issuance of notice on 2.2.2008 is to be held as void and it also runs contrary to Sections 52 & 53 of the Transfer of Property Act.

He further submitted that as per Section 52 of the Transfer of Property Act, transfer of property during the pendency of the Suit is to be held void and as per Section 53, every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.

Learned Counsel for the 1st Respondent/Plaintiff has further submitted that the learned Trial Court by applying the doctrine of lis pendens, for the reason that the 2nd Respondent/Defendant after receiving the notice dated 2.2 2008 had sold the property by way of a registered Sale Deed on 7.2.2008, held against such transaction as void transaction as per Sections 52&53 of the Transfer of Property Act. He also pleaded, one another aspect to be taken note of by this Court as rightly taken note of by the Trial Court, that unless the Appellant/Petitioner and the 2nd Respondent/Defendant appeared and spoken to about the bona fideness of the Sale Deed dated 7.2.2008, the said Sale Deed cannot be considered as valid.

Adding further, it was argued that it is a clear case of breach of trust committed by the 2nd Respondent/Defendant by alienating the property during the pendency of the Suit filed by the 1st Respondent/Plaintiff. Therefore, he prayed that the impugned order passed by the Trial Court should not be interfered with.

Heard the learned Counsel for the parties and perused the materials available on record.

At the very outset, it has to be made clear that the present Civil Miscellaneous Appeal filed under Order 43, Rule 1, read with Order 21, Rule 58(4) of the Civil Procedure Code, against the impugned order passed by the Trial Court in E.A No. 13 of 2008 in E.P. No. 3 of 2008 in O.S.No. 13 of 2008 deserves to be dismissed for three reasons. Firstly, when a Suit was filed by the 1st Respondent Plaintiff in O.S. No.13 of 2008 against the 2nd Respondent/Defendant to recover a sum of Rs. 9,60,800/- on the same date of filing the Suit, the 1st. Respondent/Plaintiff also moved an Application in I.A. No. 43 of 2008, seeking an order of attachment of the property belonging to the 2nd Respondent/Defendant. When sufficient reasons were given in the Application filed by the Plaintiff in I.A. No.43 of 2008 to pass an order of attachment before judgment, the learned Trial Court issued notice on 2.2.2008 to the 2nd Respondent/Defendant. Unfortunately, the 2nd Respondent/Defendant after receipt of the notice did not turn up, but. executed a registered Sale Deed on 7.2.2008 selling the undivided half share belonging to him in the suit property to the Appellant/Petitioner.

Secondly, the Defendant after selling the half of his undivided share in the suit property, knowing well that no order of attachment can be passed against the property belonged to his wife chose to remain ex parte. In view of that, the Trial Court in order to protect the interest of the Plaintiff came to pass the impugned order of attachment on 3.3.2008 and the same was subsequently made absolute on 12.3.2008. But unfortunately, the Petitioner/Appellant while challenging the order .of attachment dated 3.3.2008 has not even challenged the subsequent order dated 12.3.2008 making the earlier order as absolute, hence for this reason also this Appeal has to fail.

Thirdly, the learned Trial Court while considering the case of the Appellant/Petitioner has rightly applied the doctrine of lis pendens as contemplated under Section 52 of the Transfer of Property Act. It is relevant to extract Sections 52 and 52 of the Transfer of Property Act for perusal of the same.

"52. Transfer of property pending Suit relating thereto.� During the pendency in any Court having authority within the limits of India excluding the State of Jammu and Kashmir or established beyond such limits by the Central Government, of any Suit or proceeding which is not collusive and in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the Suit or proceeding 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 and on such terms as it may impose.

[Explanation.� For the purposes of this section, the pendency of a Suit. or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a Court of competent jurisdiction, and to continue until the Suit. or proceeding has been disposed of by a final decree or order, and complete satisfaction or discharge of such decree or order has been obtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force.]

Fraudulent transfer.� (1) Every transfer of immoveable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration.

Nothing in this sub-section shall affect any law for the time being in force relating to insolvency.

A Suit. instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, all the creditors.

(2) Every transfer of immoveable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee.

For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.

A bare reading of the above said provisions makes it abundantly clear that if any property against which suit is filed, should not be alienated or transferred during the pendency of the Suit. If any such property is transferred or otherwise dealt with by any other party to the Suit so as to affect the rights of any other party thereto under any decree or order which may be made therein, the same shall be hit by the doctrine of lis pendens namely, such transaction shall be held as void. In the present case, admittedly as I mentioned above, when the Suit filed by the 1st Respondent/Plaintiff was pending, notice was issued both in the Suit and I.A. No.43 of 2008 on 2.2.2008 to the 2nd Respondent/Defendant, who remained ex parte before the Trial Court and also before this Court, but cleverly chose to alienate only his share in the undivided suit property in favour of the Appellant/Petitioner by a registered Sale Deed dated 7.2.2008, which in my opinion is nothing but a well planned transaction with an intention to defeat the rights. of the 1st Respondent/Plaintiff in whose favour, the order of attachment was passed. Therefore, as rightly held by the Apex Court in the case of Hamda Ammal v. Avadiappa Pathat and three others, 1991 (1) SCC 715, which states that any transaction alienating the suit property during the pendency of the Suit proceedings is void, this Court is not inclined to interfere with the impugned order.

In the result, the Civil Miscellaneous Appeal fails and the same is dismissed. M.P.(MD)No. 1 of 2010 is closed. No costs.