Pericherla Narayanama vs Sri Rama Fertilizers and Another

L. Narasimha Reddy, J.—The CMSA and the CRP are connected with each other. Hence, they are disposed of through a common order.

The parties to both the proceedings are common, and their array, except for the description of the appellant, is common. For the sake of convenience, the parties shall be referred to as arrayed in the C.M.S.A.

Kasani Satyanarayana, the second respondent, is the owner of the schedule premises, which is a residential house and shed. The appellant claimed that the second respondent executed an agreement of sale in her favour on 6.1.1984, for a consideration of Rs. 17,000/-, mainly for the purpose of discharging his debts to the Bhimavaram Co-operative Urban Bank. Alleging that the second respondent did not execute the sale deed in spite of demands, the appellant filed O.S. No. 81 of 1985 in the Court of Subordinate Judge, Bhimavaram, for specific performance of agreement of sale. The suit was decreed on 18.11.1985. In pursuance of the decree, the Court executed a sale deed in favour of the appellant.

The first respondent filed O.S. No. 76 of 1985 in the same Court, for recovery of certain amount from the second respondent. It obtained attachment before judgment, by filing I.A. No. 1134 of 1985. The suit was ultimately decreed. It filed E.P. No. 32 of 1986, to bring the same property to sale, to realize the suit claim. The appellant filed E.A. No. 155 of 1986, under Rule 58 of Order 21 C.P.C., making a claim to the suit schedule property, on the strength of an agreement of sale dated 6.1.1984, and the subsequent purchase under the decree in O.S. No. 81 of 1985. The first respondent resisted the application. Through its order, dated 28.2.1991, the executing Court rejected the claim of the appellant. Aggrieved thereby, the appellant filed A.S. No. 60 of 1991, in the Court of the District Judge, West Godavari, and the same was also dismissed on 5.3.1993. C.M.S.A. No. 23 of 1993 is filed against it.

The first respondent filed a Creditors I.P., being 1 of 1987, in the Court of the Subordinate Judge, Bhimavaram, against the second respondent. It impleaded the appellant herein as respondent No. 2 in the I.P. The property in question was shown as an item in the I.P., as being available for discharge of the debts. The appellant resisted the I.P. However, the trial Court ordered the I.P., through its judgment dated 28.2.1991, by rejecting the claim of the appellant. He filed A.S. No. 60 of 1997, in the same appellate Court, and it was dismissed through the judgment, dated 5.3.1993. C.R.P. No. 2264 of 1993 arose out of it.

Sri Y. Srinivasa Murthy, learned Counsel for the appellant, submits that the agreement of sale was much earlier in point of time, to the attachment before judgment, and the Courts below refused to give effect to it. He submits that though the sale of the property through Court, in favour of the appellant, had taken place subsequent to the order of attachment before judgment, the appellant had the possession of the property, on the strength of an agreement of sale, which is much anterior in point of time. He further contends that if for any reason, it becomes incompatible for this Court to accept the plea of the appellant, the possibility of permitting the appellant to hold the property, with an obligation to discharge the debt of the second respondent under the decree in O.S. No. 76 of 1985, may be considered. In support of this contention, he places reliance upon the judgment of the Supreme Court in Bai Dosabai Vs. Mathurdas Govinddas and Others, . Though the respondents are served with notices, they have not entered appearance.

The short question that falls for consideration in this C.M.S.A. and C.R.P. is, as to whether the appellant had any right of precedence, vis-a-vis, the suit schedule property, de hors the attachment before judgment ordered by the trial Court in I.A. No. 1134 of 1985 in O.S.No. 76 of 1985.

The very purpose of obtaining an order of attachment before judgment, under Order 38 Rule 5 C.P.C. in a suit, is to ensure that the item of property so attached is available to be proceeded against, in the event of the suit being decreed. Whatever may be the uncertainty about the right of the owner of such property to use and enjoy it, while the attachment is in force; it is certain that such property cannot be transferred, or otherwise encumbered, as long as the attachment subsists. Any transaction of transfer whether with or without knowledge of such attachment, is inoperative in law. Hardly any support from precedents is required for this.

If a third party had a right, claim or interest, in relation to a property attached before or after judgment, it is always open to him to put forward the same, before the Court, at an appropriate stage. The very purpose of enacting Rule 58 of Order 21 C.P.C. is to meet such contingency. In an application filed under Rule 58 of order 21 C.P.C. by any third party, opposing attachment, it is incumbent upon him to prove to the satisfaction of the Court, the manner in which he acquired the rights, which invariably shall be, before the attachment had taken place. Heavy burden lies upon such persons to prove the existence of any transactions, anterior to the attachment.

In the instant case, it is a matter of record that the attachment before judgment was effected on 4.10.1985. The appellant claims that there existed agreement of sale in his favour on 6.1.1984, in respect of that very property. The decree and the sale in his favour, in pursuance thereof in O.S. No. 81 of 1985, are of hardly any use for the simple reason that the sale took place on 18.11.1985, even while the attachment was in force. The appellant could have protected her rights only by satisfying the Court that there existed a genuine and valid agreement in her favour, much before the attachment before judgment was effected.

The agreement of sale, as such, was not placed before the trial Court in these proceedings. She relied upon the sale deed dated 18.11.1985, which was marked as Ex.A-1. Since the sale in pursuance of the decree in O.S.No. 81 of 1985 effected, even while the attachment was in force in O.S.No. 76 of 1985, Ex.A-1 is of hardly any use to the appellant. For reasons best known to her, the appellant did not place the original of agreement of sale, dated 6.1.1984, before the trial Court. Further, she did not enter the witness box. It was only her clerk that was examined as PW.1. PWs.2, 3 and 4 were examined to speak about her possession. This oral evidence is of no use to the appellant. If the appellant wanted to overcome and neutralize the effect of attachment before judgment, it was incumbent upon her to place the original of the agreement of sale, examine the persons connected therewith and prove it to the satisfaction of the Court. She did not choose to take any of these steps. Hence, the executing Court was left with no alternative, except to reject the claim of the appellant. Same is the situation as regards the claim put forth by the appellant herein in the I.P. Therefore, no exception can be taken to the orders under appeal or revision, as the case may be.

The learned Counsel for the appellant urged that the appellant be permitted to retain the property, with an obligation to discharge the debt of the second respondent towards the first respondent. This Court finds that the offer is fair enough. The very purpose of filing O.S. No. 76 of 1985 or I.P. No. 1 of 1987, by the first respondent, against the second respondent, was to realize the suit debt. The attachment before judgment and subsequent attempt to sell this property is to realize the decretal amount in O.S. No. 76 of 1985. As of now, there exists a sale deed in favour of the appellant, which in turn was executed by the trial Court, in the course of execution of decree in O.S. No. 81 of 1985. The Supreme Court analyzed the provisions of Sections 54 and 40 of the Transfer of Property Act and took the view that such course is permissible in law.

For the foregoing reasons, the orders under appeal and revision are modified, to the extent that in case the appellant deposits the decretal amount, in the decree passed in O.S. No. 76 of 1985, on the file of the Subordinate Court, Bhimavaram, in E.P. No. 32 of 1986 as a whole, and in I.P. No. 1 of 1987, on the file of that Court, insofar as it relates to the property purchased by the appellant, shall stand closed. In case the appellant fails to do so, on being insisted at the relevant stage, it shall be open to the Courts below, to give effect to the order under revision.

The CMSA and CRP are allowed partly, and the orders under appeal and revision shall stand modified, to the extent indicated above. There shall be no order as to costs.