Veerappa Thevan, since ad judicated insolvent, The Official Receiver vs C.S. Venkatarama Aiyar

Cornish, J.—These appeals raise a common point. The three appellants were respondents of a decree-holder''s execution petition for the

sale of property attached prior to judgment. It appears that a temporary injunction had been obtained to restrain the owner of the property, the

later judgment-debtor, from alienating it. The matter was taken to the High Court on appeal, with the result that the order for an injunction was

discharged and the property was attached. The High Court order was dated 21st December, 1928, and the attachment was made on the 26th

December, 1928. Prior to the attachment the owner of the property had entered into agreements with the appellants, all on the same day the 26th

October, 1928 for the sale of the property. In pursuance of these agreements the property was conveyed by sale-deeds to the appellants

subsequent to the date of the attachment. The lower Court has found in favour of the validity of the agreements of sale, and this finding is not

disputed in appeal. It is also found that there were certain balances of purchase-money payable under the contracts, amounting to Rs. 32,500, Rs.

8,000, and Rs. 5,412-8-0 respectively, which were unpaid, at the date of the attachment. We see no reason for not accepting the correctness of

the lower Court''s finding on these heads. But the lower Court has ordered the sale of the property in execution for the recovery of these amounts

with 9 per cent, interest which is payable under the contracts. We are of opinion that this order for the sale of property cannot be justified. The

question is covered by Mr. Justice Venkatasubba Rao''s judgment in Veeraraghavayya v. Kamala Devi (1934) 68 M.L.J. 67 with the reasoning of

which we concur. The facts there were that two days prior to attachment there had been an agreement to sell the property. Subsequently a sale-

deed was executed and the payment of the purchase-money was completed at the same time. The learned Judge rejected the argument founded

on Section 64, Civil Procedure Code, that the sale was void against the attaching creditor, holding upon the authority of Madan Mohan Dey v.

Rebatti Mohan Poddar 21 C.W.N. 158 : 23 C.L.J. 115 and Venkatareddi v. Yellappa Chetty (1916) 5 L.W. 234 that the section could not

invalidate a sale in pursuance of an agreement to sell made prior to the attachment. In short, an agreement to sell creates an obligation to convey

the property, and a later attachment will not override the conveyance made in performance of that obligation. On the other hand the attachment

holds good in respect of such right as the vendor had in the property at the time of the attachment. ""What was and could be attached by the

creditor"" said Venkatasubba Rao, J., ""was the right, title and interest of his debtor at the date of the attachment and the right is as to the unpaid

balance of the purchase-money, and the attachment therefore holds good to the extent of that balance"". The Judgment of Pearson, J., in Taraknath

Mukerjee v. Sanatkumar Mukerjee I.L.R.(1919) 57 Cal. 274 is to the same effect. In both of those cases the purchase-money had been fully

paid, and it was held that the decree-holder was entitled to receive the portion paid subsequent to his attachment. When, as in the present case,

there is an unpaid balance of the purchase-money the attachment fastens to the judgment-debtor''s right to recover the money, that is to say, to the

charge which the unpaid vendor is given by Section 55(4)(b) of the Transfer of Property Act upon the property. But the property having passed by

conveyance from the judgment-debtor cannot be sold in execution of the decree against the judgment-debtor; see Moti Lal v. Bhagwan Das I.L.R.

(1909) 31 All. 443.

The appeals are accordingly allowed and the order for sale made by the lower Court is set aside. But we make no order as to costs because the

decree-holder is entitled to satisfy his decree out of the unpaid purchase money owing by the appellants, and they should have paid this money into

Court when the execution proceedings were taken against them and so discharged themselves of their liability.