Neelacanda Iyer vs Parameswara Kurup

Sankaran, J.—The judgment and decree passed in this second appeal on 21-10-1123 having been reviewed and set aside, the appeal has again come up for a fresh decision oh its merits. The question for decision is as to which of the two court auctions in respect of the suit properties, one in favour of the Plaintiff and the other in favour of the Defendant, has to prevail.

The plaint properties originally belonged to a tarwad known by the name of Kuzhikandathil. The karanavan of this tarwad had conducted a chitty on behalf of the tarwad and in that connection the tarwad owed money to some of the subscribers to the chitty. The present Defendant is one Such subscriber and for the chitty money due to him from the kuzhikandathil tarwad he had instituted the suit O.S. No. 71 of 1096 in the Parur District Court. That suit was decreed in his favour. For the decree-debt thus due to him he had attached the properties involved in the present suit on 8-4-1104. Ext. IV is copy of the attachment report. At this stage the members of the Kuzhikandathil tarwad executed a partition deed dated 22-4-1104 in respect of their tarwad properties. Ext. I is copy of the partition deed. Provision was made in this document for the discharge of the chitty debts including the debt due to the Plaintiff in O.S. No. 71 of 1096.

Another Subscriber to whom also chitty money was due from this tarwad filed O.S. No. 251 of 1107 in the Vaikom District Munsiff''s Court for the recovery of the amount due to him. The properties involved in the present suit which had been ear-marked under the partition deed Ext. I for the payment of the chitty debts were scheduled to the plaint in O.S. No. 251 of 1107, and a decree had been claimed as against the assets of the Kuzhikandathil tarwad and also as a charge on the properties thus scheduled to the plaint. Even though the karnavan of the tarwad who was Defendant 1 in that suit had resisted that suit as is evident from Ext. III which is copy of the written statement filed by him in that case his contentions were negatived and the suit was decreed in terms of the plaint. In execution of the decree in that case the suit properties were sold in court auction and then present Plaintiff who was a stranger to that litigation became the auction-purchaser. On 9-2-111(sic) got delivery of possession of the properties through court. Ext. D is copy of the delivery list in his favour.

It may be mentioned at this stage that the present Defendant who had obtained the (sic) in O.S. No. 71 of 1096 of the Parur District Court had intervened in the execution proceedings in O.S. No. 251 of 1107 and had filed a petition claiming rateable distribution of the sale proceeds. Ext. F is copy of the petition and Ext. C is copy of the order thereon. The order shows that his claim for rateable distribution was negatived by the execution court. That matter ended there.

Thereafter the Defendant chose to ignore the execution proceedings in O.S. No. 251 of 1107 and to execute his own decree in O.S. No. 71 of 1096 on the strength of the attachment which he had already placed on the properties which were sold in court auction in O.S. 251 of 1107. Accordingly these properties were brought to sale in court auction in O.S. 71 of 1096 and were purchased by him. He obtained delivery of possession of those properties through Court on 30-10-1115. Ext. V is copy of the delivery report in his favour.

The present Plaintiff who was thus dispossessed instituted the present suit for declaration of his title to these properties on the basis of the court sale and delivery in O.S. 251 of 1107 and for recovery of the properties from the Defendant with mesne profits. The Defendant resisted the suit and impeached the decree and the execution proceedings in O.S. 251 of 1107 as fraudulent and collusive. He also contended that the decree and execution proceedings in O.S. 251 of 1107 were invalid and inoperative as against the attachment in O.S. 71 of 1096 and that therefore the court sale in O.S. 71 of 1096 had to prevail over the court Bale in O.S. 251 of 1107. These contentions were repelled by the trial Court which decreed the suit in favour of the Plaintiff. That decree was confirmed by the lower appellate Court. The Defendant has therefore come up in second appeal.

The allegation that the decree and execution proceedings in O.S. 251 of 1107 are vitiated by fraud and collusion has been found to be baseless and unsustainable by the Courts below. In view of such a concurrent Ending the same matter cannot be allowed to be re agitated in second appeal. The main point Urged on behalf of the Defendant-Appellant is that the court sale and delivery in O.S. 251 of 1107 cannot in any way affect his rights based on the attachment which had already been placed on these properties on 8-4-1104 as per the order in O.S. 71 of 1096.

The provision contained in Section 64, CPC is relied on by the Appellant in support of this contention. That section runs as follows:

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 judgment-debtor of any debt, dividend or other monies contrary to such attachment shall be void as against all claims enforceable under the attachment.

It is obvious that the section hits only a private transfer or delivery of'' the property attached or of any interest therein. The passing of a decree by a court of law declaring a charge On such property or the court sale and delivery of the property in execution of such a decree can in no sense be said to be a private transfer or delivery of the property or of any interest therein.

In dealing with the scope of this section the judicial Committee of the Privy Council ruled in - ''Mahomed Afzal Khan v. Abdul Rahman'' AIR 1932 PC 235 (A) that a transfer made pursuant to a decree for partition made on an award in arbitration with or without the intervention of a court is only a transfer under an order of the court and cannot be deemed to be a private transfer as contemplated by Section 64, Code of Civil Procedure. The decisions in - Damodar Sukram Marwadi Vs. Kashinath Bhikaji Zende, and in - Saburdas Mahasukhram Gandhi Vs. Gopalji Nandas Patel, are also to the same effect. In these cases it was pointed out that Section 64 affords protection to an attaching creditor only against a private transfer and not against an enforced transfer in obedience to a decree of a court and that the charge created by a decree passed on an arbitration award is not a private transfer which can be treated as ineffective u/s 64 as against the claim enforceable against the charged property under a prior attachment.

A distinction was however made in the case of arbitration proceedings which could be proved to be collusive and sham. It was pointed out that a device to invest a private arrangement between the parties with the appearance of a public adjudication will in itself be a collusive transaction and that where the reference to arbitration is thus collusive and sham, the award obtained would only be a camouflage to disguise the private character of the transaction and that therefore the transfer effected in pursuance of a decree passed on such an award can only be treated as a private transfer for the purpose of Section 64.

On the facts it was definitely found in Damodar Sukram Marwadi Vs. Kashinath Bhikaji Zende, that the Plaintiff and the Defendant had come to a private settlement that upon the property of the Defendant which had already been under attachment in favour of Anr. creditor a charge should be created in favour of the Plaintiff and that the reference to arbitration and the subsequent award and decree were all the result of such a collusion.

Nothing like that can be said about the circumstances that led to the decree in O.S. 251/1107. Even to the partition arrangement under Ext. I entered into by the members of the Kuzhikandathil tarwad the Plaintiff in O.S. 251 of 1107 was not a party. It cannot therefore be said that under that document any property or interest therein had been transferred in his favour by the debtor tarwad. The partition deed did not also create any charge in his favour over the properties of the tarwad in respect of the debt due to him. On the other hand it was only in the plaint filed by him in O.S. 251 of 1107 that a specific charge was claimed by him over the properties scheduled to the plaint. Such a claim was upheld by the court and by the decree passed in that case a charge was created in his favour. It was in enforcement of that decree that the properties were sold in court auction.

A stranger like the present Plaintiff had bid the properties in auction and, under due process of law, he was put in possession of the properties by the court. As already stated, there has been no fraud or collusion in respect of these proceedings and the present Defendant was also aware of such proceeding and his conduct in having filed the original of Ext. F petition claiming rateable distribution of the proceeds realized in O.S. 251 of 1107 clearly shows that he accepted the decree and the execution proceedings in that case as proper and valid.

Under these circumstances it is clear that there is no basis for the contention of the Appellant that the enforced transfer of the properties effected in favour of the Plaintiff by the court on the strength of the decree and execution proceedings in O.S. 251 of 1107 amounts to a private transfer as contemplated by Section 64, Code of Civil Procedure. The Court sale in that case as per the decree which had declared the debt as a charge on the properties resulted in an extinguishment of the attachment that had been placed over the properties on the strength of the order in O.S. 71 of 1096. That attachment had not the force of a charge over the properties and it cannot therefore be said that the court Sale was subject to the attachment from O.S. 71 of 1096. The Plaintiff who became the auction-purchaser of these properties in O.S. 251 of 1107 got full title to these properties and thereafter the Defendant could not enforce any claim on the basis of the attachment in O.S. No. 71 of 1096 against these properties.

It follows therefore that the subsequent court sale in O.S. 71 of 1096 in favour of the Defendant is invalid and inoperative as against the title claimed by the Plaintiff over these properties on the basis of the earlier court sale in O.S. 251 of 1107. The view taken by the lower courts that the court Sale in O.S. 251 of 1107 in favour of the present Plaintiff has to prevail over the court sale in O.S. 71 of 1096 in favour of the present Defendant and that the Plaintiff is entitled to get recovery of possession of the properties on the strength of his superior title, is correct. The decree passed in favour of the Plaintiff does not therefore call for any interference.

In the result this second appeal is dismissed with costs.