Judgment : 1. This civil miscellaneous appeal has been filed against the order of the learned Subordinate Judge, Kancheepuram, dismissing the application filed by the appellant in I.A. No. 503 of 1989 in O.S. No. 53 of 1989 for raising the attachment over the schedule mentioned property. 2. The first respondent herein filed the suit against the second respondent herein for recovery of Rs.94,680 due on a promissory note executed on 10. 1988. The suit was filed on. 13. 1989. Alongwith the plaint, the first respondent filed an application under Order 38, Rule 5 and Section 151, C.P.C. for attachment before judgment of the property belonging to the second respondent. On the same date, the learned Subordinate Judge, passed the following order: "Notice and Heard. Respondent is directed to furnish security for a sum of Rs.75, 000 failing which attachment by 14. 89. On 23. 89 attachment was actually effected. Alleging that he had purchased the property on 13. 89 subject to two mortgages the appellant filed an application under Order 38, Rule 8 C.P.C. for raising of attachment. This application was opposed by the first respondent contending that the attachment order was passed as early as on 13. 89 and knowing fully well of the attachment order, the appellant had purchased the property. The sale deed was only a sham nominal and collusive transaction, that no consideration had passed under the sale deed, that the appellant was not a bona fide purchaser of the property, and that no grounds had been made out for raising the attachment. It was contended that even on the date of attachment it was only the second respondent who was in possession of the property. The learned Subordinate Judge, Kancheepuram, dismissed the application holding that the sale deed had come into effect after the date of attachments that the sale was also hit by the provisions of Section 53 of the Transfer of Property Act, that it was intended to defeat the. claim of the creditors. As against this order, the present appeal has been preferred. 3. Mr. N.Vanchinathan, learned counsel for the appellant submitted that on the date of purchase by the appellant, there was no order of attachment, but, attachment was effected only on 23. 1989.
claim of the creditors. As against this order, the present appeal has been preferred. 3. Mr. N.Vanchinathan, learned counsel for the appellant submitted that on the date of purchase by the appellant, there was no order of attachment, but, attachment was effected only on 23. 1989. The learned counsel further contended that the lower Court omitted to note that the order of attachment itself had not been passed as per the provisions of Order 38, rule 5, C.P.C., that the affidavit filed in support of the application for attachment did not contain the necessary particulars or allegations as contemplated under the said provision, that the provisions, of Order 38, Rule 5 and 6 had not been properly complied with, that attachment could take effect only from the date of effecting attachment and not from the date of order. The learned counsel further contended that no opportunity had been given to the second respondent to show cause as to why an order of attachment should not be made, that in any event the appellant was a bona fide purchaser and as undertaken in the sale deed he had already discharged two mortgages on the property. The learned counsel urged further that the lower Court was clearly wrong in holding that the appellant entered into the sale transaction fully aware of the order of attachment. The learned counsel also relied on the following two decisions; (1) P.Ramaswamy v. Sri Dhandayuthapani Finance, Sankari, 1986 (II) MLJ 387 : 99 L.W. 404 and (2) N.Papammal v. L.Chidambaram, 1984 (I) MLJ 148 . 4. Per contra, Mr. G.Subramaniam, learned senior counsel appearing for the first respondent submitted that having regard to the pro-visions of Order 21, rule 54, Clause 3 Madras Amendment, the attachment would take effect from the date of the Order, that the learned subordinate Judge had categorically found, that there was collusion between the appellant and the second respondent, that there were absolutely no bona fides on the part of the appellant, that there were vital discrepancies between what was stated in the sale deed and the oral evidence adduced, that the order of attachment was not in any way defective either in form or in substance, that the sale in favour of the appellant was not supported by consideration and had been executed only nominally for collateral purpose with a view to defeat the claim of the creditors.
The learned senior counsel also relied on the following judgments in support of his contentions, (1) Alameluv.Chinnasamy, 1989(1) L.W. 131 : 1988 (II) MLJ 395 ; (2) Jayalakshmi v. S.M.Muthiah, 1989 (I) L.W. 549 : 1989 (I) MLJ 411 ; (3) Punjab National Bank Ltd.. v. K.L.Kharbanda, AIR 1963 SC 487 ; (4) M/s. Southern Steelmet and Alloys Ltd. Vs.. B.M. Steel, Madras, AIR 1978 Mad. 270 and (5) Vengala Veeran v. Rajendran, 1997 (2) CTC 371 : 1997 (3) L.W. 471 . 5. Let us have a look at the dates and events. The suit is on a promissory note alleged to have been executed by the second respondent in favour of the first respondent on 10. 1988 for Rs.90, 000, The first respondent caused a notice to be issued to the second respondent on 13. 1989, calling upon him to discharge the liability under the promissory note. He filed a suit on 189. Alongwith the plaint, he filed an application on the very same day for attachment before judgment. In the affidavit, in support of the said application, he has alleged that the second respondent with a view to defeat and defraud his claim was bent upon creating sham. and nominal documents in favour of his wife, that he came to know about the same only recently and if he was allowed to do so, the realisation of the decree amount would be difficult and therefore he had to be directed to furnish security for the suit claim and in the meantime attachment before judgment of the property set out in the schedule to the petitions had to be granted. The learned subordinate Judge passed an order which has already been referred to, on the .same date. However, the second respondent executed a sale deed in favour of the appellant on 13. 1989. The attachment came to be effected on 23. 89 and the claim petition came to be filed on 14. 1989. 6. In Pappammals Case, 1984 (I) MLJ 148 relied on by the. learned counsel for the appellant Mr. N.Vanchinathan, the, plaintiff filed a suit for recovery of certain sum and alongwith the suit he prayed for an attachment before judgment of two items of immovable properties the suit is prayed for an attachment before judgment of two items of immovable properties belonging to the defendant. On 21.
learned counsel for the appellant Mr. N.Vanchinathan, the, plaintiff filed a suit for recovery of certain sum and alongwith the suit he prayed for an attachment before judgment of two items of immovable properties the suit is prayed for an attachment before judgment of two items of immovable properties belonging to the defendant. On 21. 1982, an order of interim attachment was made and notice ordered by 2. 1982. The defendant filed, counter affidavit on 2. 1982 opposing the application for attachment before judgment. From 2. 1982, the case was adjourned for enquiry to various dates and finally on 4. 1982 the Court made the interim attachment absolute the defendant filed a revision against the attachment- contending that it was not in accordance with Order 38, Rule 5 (1), CPC The learned-Judge held as follows: "In dealing with applications for attachment before judgment the Court must first be satisfied from the particulars made available that the defendant is about, to dispose of the whole or any part of his or her property from the local limits of the Courts jurisdiction with a view to defeat, delay or obstruct the execution of any decree that may execution of any decree that may be passed against him or her. Therefore, the Court should issue appropriate notice in Form con-forming to requirements of Order 38, Rule 5 (1) and setting out the necessary details specified there-under to the defendant within a time to be fixed by it calling upon him or her to furnish security in such sum as may be specified in the order or to produce and place at the disposal of the Court. The property, so specified in the application or the value of the same or even such portion there of as may be sufficient to meet the decree or the notice may merely direct the defendant to appear and show cause why he or she should not furnish security for the amount claimed in the suit It is, therefore essential to strictly conform to and comply with the requirements of Order 38, Rule 5 (1), CPC as otherwise, the order of attachment, if made and effected in violation of the requirements would be of no legal consequence and will be only a waste paper.
Order 38, Rule 5 (4) is a protective measure conceived in the interest of the defendant and intended to invalidate orders of attachment before judgment of his or her properties passed indiscriminately without notice giving an opportunity to stave off-the attachment by the offer of security and without rigidly conforming to the requirements of Order 38, rule. 5 (1) of the Civil Procedure Code. In that case it was held that there had been no compliance either in letter or spirit with the earlier part of Order 38, Rule 5 (1), and Order 38, Rule 5 (4) and therefore the attachment effected was void. 7. The order in that case was in the following terms: Heard, interim attachment and notice dated 2. 1982. The learned Judge found that there was total non-application of mind by the lower Court in that case, that there was no non-compliance with the mandatory requirements of the relevant provisions. 8. In my view, this decision will not in any way help the case of the appellant herein. 9. In Ramaswamy v. Sri Dhandayutha-pani Finance, Sankari Case, 1986 (99) L.W. 404 the plaintiff along with the suit filed an application for attachment before judgment of a lorry belonging to the defendant. He had specifically asked for attachment before Judgment only after the defendant failed to furnish proper security after notice. The Court passed an order Heard counsel. Perused documents. Notice to respondent to offer security for Rs.50, 000 failing which to attach by 11th March, 1986. On the date of which the, bailiff .served the notice on the defendant, he straight- away attached the lorry. It was contended on behalf of the plaintiff in that case that the order passed by the lower Court was a conditional order of attachment. Having regard to the facts of that case, the learned Judge held that there was nothing in the order to spell out that it was a conditional order of attachment and when the plaintiff himself asked for issue of notice to the defendant to appear and show cause, he should not furnish security, there was no scope for the court below to pass the order under revision beyond what been prayed for. It was therefore held that the attachment order was void. 10. I am afraid this case also, does not in any way help the case of the appellant. 11.
It was therefore held that the attachment order was void. 10. I am afraid this case also, does not in any way help the case of the appellant. 11. In K.Jayalakshmi v. S.M.Muthaier, 1989 (I) L.W. 549 : 1989 (I) MLJ 411 ; Srinivasan. J (as the learned Judge then was) has referred to both the decisions (supra) and considered them and held that neither of, the decisions could apply to the case dealt with him. In the case before Srinivasan, J (as the learned Judge then was) the plaintiff filed a suit for recovery of some amount due on two promissory notes executed by the defendant in the suit. Pending suit, he applied for attachment before judgment. In support of -the application for attachment he alleged that the defendants husband had wound up his business at Madras and was attempting to sell the same to third parties, that the defendant had only one house at Madurai and with an intention to obstruct and delay the execution of the decree that might be passed in the suit, she was about to dispose of: the whole of the property belonging to her and to secrete the consideration herself, and that if she was allowed to do so, the plaintiff would not be able to recover any amount. The plaintiff also obtained a third party affidavit and filed the same into Court. That third party affidavit supported the stand of the plaintiff. On the application for attachment, the Court passed an order directing notice calling upon the appellant to furnish security and interim conditional attachment, The defendant engaged counsel and appeared before the Court, took time for counter. The matter-was being adjourned from time to time for filing counter and on a particular date after several adjournments, when no counter was filed, the Court passed the following order: "Counter is not filed. In the interest of justice the petition is allowed, attach-ment made absolute". It was contended for the appellant that the interim order of attachment made earlier was not in accordance with the provisions of Order 38, Rule 5, CPC and it was therefore null and void. It was also contended that the order making interim attachment absolute was also void. 12. The two decisions already referred to were relied on. The learned Judge while referring to the judgment in Papammal v. Chidambaram, 1984 (I) MLJ 148 made the following observations.
It was also contended that the order making interim attachment absolute was also void. 12. The two decisions already referred to were relied on. The learned Judge while referring to the judgment in Papammal v. Chidambaram, 1984 (I) MLJ 148 made the following observations. " As pointed out by the learned Judge in .that case, if the Court is satisfied that the defendant is about to dispose of the whole or part of his property with intent to obstruct or delay the execution of any decree that may be, passed in the suit, the Court is entitled to pass an interim order of conditional attachment even before notice and if the defendant fails to show cause why he should not be made to furnish security, the Court may order attachment by making the interim order absolute. In the present case, the respondent has made the necessary averments in the affidavit filed in support of the appli-cation for attachment and the same was supported by another affidavit of a third party The court below was satisfied within the meaning of 0.38, R.5 (1) and ordered notice and interim conditional attachment as provided in sub-rule (3) " 13. So far as the other decision is concerned, namely, Ramaswamy v.. Sri Dhandayuthapani Finance, Sankari, 1986 (99) L.W. 404 the prayer in the application for attachment itself was for attachment before judgment after the defendant failed to furnish proper security after notice, .The lower Court in that case passed a rolled up order, directing attachment on failure on the part of the defendant to offer security for a sum of Rs.50, 000. that order was made even before notice was issued to the defendant. It was in those circumstances the learned Judge held that the order was not valid as it did not satisfy the provisions of Order 38, Rule 5, C.P.C. 14. Those two decisions will not apply to the facts of the present case. The Court was well within its jurisdiction to pass conditional attachment even before notice. This is also the ratio of the decision in Jayalakshmi v. S.M.Muthaier, 1989 (I) L.W. 549 : 1989 (I) MLJ 411 . 15. In my view. Order 21, Rule 54 (3) Madras Amendment will also apply to the facts of this case.
The Court was well within its jurisdiction to pass conditional attachment even before notice. This is also the ratio of the decision in Jayalakshmi v. S.M.Muthaier, 1989 (I) L.W. 549 : 1989 (I) MLJ 411 . 15. In my view. Order 21, Rule 54 (3) Madras Amendment will also apply to the facts of this case. Order 21, Rule 54 (3) runs as follows: "Order of attachment shall be deemed to have been made as against transferees without consideration from the judgment-debtor from the date of the order of attachment and as against all other persons from the date on which they respectively had knowledge of the order of attachment or the date on which the order was duly proclaimed under sub-rule (2) whichever is earlier". 16. In the counter to the raising of attachment petition it is clearly alleged in para 2 as follows: " This respondent submits that the attachment order was passed as early as 13. 1989 and knowing fully well of the attachment order, the petitioner has purchased the property. The sale deed is only a sham nominal and collusive transaction between the petitioner and the second respondent. This res-pondent submits no consideration has been passed hence this respondent submits. that the petitioner is not a bona fide purchaser of the property." 17. The bona fides of the appellant has been discussed by the lower Court. It is now settled law that the attaching creditor need not file a separate suit under Section 53 of Transfer of Property Act in a representative capacity to putforth his case, that the transfer was in fraud of creditors, and that he is entitled to plead by way of defence in the claim proceedings vide Alamelu Ammal v. Chinaswamy Reddiar, 1988 (II) MLJ 395 : 1989 (I) L.W. 131 . In fact the question of filing a separate suit is barred after the amended provisions of Order 21, Rule 58, C.P.C. and all questions relating to title or interest in the property attached have to be decided and adjudicated only in the claim proceedings and not by separate suit. 18. In similar circumstances, E. Padmanabhan, J, in Vengalaveeran v. Rajendran and 4 others, 1997 (2) CTC 371 : 1997 (3) L.W. 471 , had considered the question as to the date from which the order of attachment will take effect.
18. In similar circumstances, E. Padmanabhan, J, in Vengalaveeran v. Rajendran and 4 others, 1997 (2) CTC 371 : 1997 (3) L.W. 471 , had considered the question as to the date from which the order of attachment will take effect. In that case, the revi-sion petitioner filed an E.A. in an execution petition under Order 21, Rule 58 C.P.C. to raise the attachment dated 2. 1994 stating that he had purchased the property on 16. 1986 and was the exclusive and absolute owner of the suit property, that he had been in enjoyment of the same, that the order of attachment effected on 2. 1994 as if it was still owned by respondents 3 to 7 judgment-debtors, was a misconception. The executing court, on a consideration of oral and documentary evidence, rendered a finding that with full knowledge of the attachment order dated 6. 1986, Ex.P.1 sale deed had been created without payment of any consideration, that a sham and nominal sale deed has been created with a view to defeat the claims of the decree-holder, that the claim petition was highly belated as the first attachment ordered on 6. 1986 and the claimant had purchased the same only on 16, 6.1986 with fun knowledge of the order of attachment. The first Appellate Court confirmed the fair and decretal order passed by the executing Court. The purchaser fixed a revision petition and contended that he was a bona fide purchaser for value and that he was not aware of the attachment order dated 6. 1986 and effected on 16. 1986 and he had fixed the present application for raising the attachment ordered in the Execution Petition on 2. 1994. It was further contended that on the date when the order of attachment was passed in the Execution Petition, the petitioner was the owner as he had purchased the property on 16. 1986 as seen from Ex.P.1 and that the attachment was inoperative and invalid.The learned Judge held as follows: " The findings of the two Courts below are that the transfer has been effected without consideration by the judgment-debtor and actually also, the judgment-debtor as well as the present petitioner were very much aware of the order of attachment on the date when they presented the sale deed for registration. The further findings are that possession continued with the vendor under Ex.
The further findings are that possession continued with the vendor under Ex. P.1 and that the sale transaction is not supported by consideration and it is only a sham and nominal transaction. The petitioner had full knowledge of the first attachment and he had kept quiet for several years without filing an application raise the attachment or a claim petition. The petitioner had claimed that he had no knowledge of the first attachment, but, it is to be pointed out that the first attachment continued throughout even after the decree that has been passed in the suit. As such, it cannot be contended that on the second attachment or re-attachment, the petitioner had got right to put forth his claim and seek to raise the attachment. This is because, the petitioner had full knowledge of the first attachment. In the present case, the statutory rule, viz., sub-rule (3) of Rule 54 of Order 21 stares at the petitioner and he had full knowledge of the order of attachment and his action is deliberate as found by the two Courts below and his transaction is not supported by consideration, nor the sale had been given effect to by the petitioner being inducted into possession, nor there has been payment of sale consideration as found by the Courts below " 19. In the present case, the oral evidence of the appellant is eloquent on the absence of bona fides. The consideration is stated to be Rs.1,15,000. In his evidence he has stated that at the time he purchased the property, there were two encumbrances each of Rs.50, 000, that he had taken those liabilities also into consideration while purchasing the property, that those amounts were payable to Mohanambal and Narayanasamy, and that he discharged those liabilities in March 1990, and 1991 respectively. It is also significant that there is no recital in the document that the appellant paid Rs.15, 000 on the date of sale deed. But in his evidence he has stated that he paid Rs. 15,000 to the second respondent. There is candid admission on his part that the liabilities were discharged only after the attachment. In this state of evidence and materials, the lower court was justified in holding that the sale in favour of the appellant was absolutely lacking in bona fides and had been brought about to defeat the claims of the creditors.
There is candid admission on his part that the liabilities were discharged only after the attachment. In this state of evidence and materials, the lower court was justified in holding that the sale in favour of the appellant was absolutely lacking in bona fides and had been brought about to defeat the claims of the creditors. It has been rightly concluded that the sale was not supported by consideration and had been executed only nominally for a collateral purpose with a view to stave off creditors and that the transaction is vitiated. No other conclusion is possible having regard to the facts and cir-cumstances of the case. 20. Consequently, I hold that the order of the lower Court cannot be taken exception to and it is not in any way defective nor is the order of attachment originally passed either in form or in substance wanting. In any event, having regard to the provisions of Order 21, Rule 54 (3) Madras Amendment, the attachment in the instant case must be taken to have come into effect on the date the order was passed and not on the date when it came to the know-ledge of the appellant. 21. There are no merits in the appeal and the same is dismissed. However, there will be no order as to costs. Consequently, CMP . No. 5262 of 1993 is also dismissed.