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2004 DIGILAW 1708 (MAD)

K. Palanisami v. R. Gomathi

2004-12-14

M.THANIKACHALAM

body2004
Judgment : 1. The petitioner third party in R.E.A.No.646/94 having failed in his attempt to set aside the sale under Order 21, Rule 72 r/w 90, C.P.C. concurrently, before the Courts below has preferred this C.R.P. 2. The same petitioner third party, in R.E.A.No.412 of 1994 on the file of the Subordinate Judge, Salem, having failed in his attempt, concurrently before the Courts below, to declare the attachment dated 19.8.1993 on the petition mentioned property; is illegal, void, not binding on the petitioner, has preferred this C.M.S.A., challenging the orders of the Courts below. 3. The first respondent in both the cases as plaintiff, has filed the suit O.S.No.19/93 on the file of the Sub Court, Salem, for recovery of certain amount against the second respondent/defendant. The second respondent/ defendant remained ex parte , resulting a decree in O.S.No.19/93 as prayed for. In pursuance of the decree obtained by the first respondent, she filed an execution petition against the judgment debtor in R.E.P.No.209/93, in which the petition mentioned property has been attached on 19.8.1993. In the execution proceedings also, even after the attachment, since the judgment debtor/second respondent has not paid the amount, the property was ordered to be sold in the Court auction and accordingly in the Court auction held on 16.6.1994, the third respondent, who is none else than the husband of the decree holder, appears to have purchased the property though the decree holder had obtained permission to bid and set off. 4. The appellant/petitioner/third party, claiming right over the property attached, which was subsequently sold in the Court auction, on the basis of an agreement dated 2.7.1992 in his favour said to have been executed by the owner of the property viz., the judgment debtor, had filed R.E.A.No.646/1994, to set aside the sale, as if the Court auction sale was proceeded by collusive decree, which cannot have any valid effect and that the decree holder having obtained permission to bid and set off, has not purchased the property, whereas the third respondent has purchased the property, violating the permission, which is an abuse of process of law, that there was no proper proclamation for sale and that the entire sale proceedings has been done irregularly, which affected the interest of the petitioner in the property materially. Before that he had filed an application in R.E.A.No.972/94 to declare that the attachment dated 19.8.1993 in respect of the suit property is illegal and void, since on the date of the attachment, the judgment debtor has no saleable interest, in view of the fact, he had agreed to sell the property in his favour by an agreement dated 2.7.1992. 5. The trial Court, considering the common interest involved in both the cases, as well as the fact that the subject matter is one and the same, tried both the cases jointly and rendered a common order on 18.1.1999. Before the trial Court, the agreement said to have been executed by the owner of the property dated 2.7.1992, is exhibited as Ex.P1. It seems, in respect of the same property, the original owner, had executed an agreement on 30.3.1992 in favour of Arayee, which is exhibited as B.1. Admittedly, the property was attached on 19.8.1993 i.e. subsequent to the alleged sale agreement in favour of the petitioner/appellant on 2.7.1992. Though the agreement was anterior in point of time to the attachment, the evidence revealed as per the conclusion of the learned District Munsif, that Ex.A1 agreement was not proved as true and genuine one, which should follow, that will not prevail over the attachment. Thus concluding, approving the Court auction sale also once again, he dismissed both the applications filed by the third party petitioner, which were challenged by the petitioner in A.S.No.33/99 and C.M.A.No.7/99 on the file of the District Judge, Salem. 6. The II Addl. District Judge, Salem upon consideration, felt that the learned Addl. Subordinate Judge has not committed any error, either on fact or on law, whereas the findings were rendered legally, properly appreciating the evidence available on record. Thus taking the view, both the appeal and the C.M.A. were dismissed, which are under challenge in this C.R.P. and C.M.S.A. 7. District Judge, Salem upon consideration, felt that the learned Addl. Subordinate Judge has not committed any error, either on fact or on law, whereas the findings were rendered legally, properly appreciating the evidence available on record. Thus taking the view, both the appeal and the C.M.A. were dismissed, which are under challenge in this C.R.P. and C.M.S.A. 7. This Court, while admitting the C.M.S.A. has not formulated any substantial question of law, though an attempt was made by the petitioner/appellant to say, that there are substantial questions of law, arising for determination in C.M.S.A. In the appeal memorandum, the learned counsel for the appellant formulated two substantial questions of law and they are: (i) Is the learned District Judge correct in dismissing the EA when the attaching creditor cannot ignore the obligation under the agreement to sell and proceed to bring the property to sale as if it remained the absolute property of the Judgment Debtor ? (ii) Is the learned District Judge correct in dismissing the application when the agreement to sell will prevail over the attachment as the pre-attachment agreement to sell is in respect of ownership of land whereas attachment is only of right, title and interest of the judgment debtor ? 8. Both the alleged questions of law cannot have separate identity and more or less it should be one and the same viz., “whether the sale agreement will prevail over the attachment as the pre-attachment agreement to sell is in respect of ownership of land, whereas the attachment is only of right, title and interest of the judgment debtor.” Thus formulating the above substantial questions of law, both the matters are taken up for hearing. 9. Heard the learned counsel for the appellant/petitioner, Ms. Pushpa Sathyanarayanan and the learned counsel for the first respondent, Mr. D. Shivakumaran and the learned counsel for the third respondent, Mr. K. Muralitharan. 10. Admittedly, the property mentioned in the applications originally belonged to Muthusamy, the second respondent herein, who is the judgment debtor in O.S.No.19/1993. It seems the second respondent had borrowed some money from the first respondent, which he failed to repay. Therefore, the first respondent by name R. Gomathi had filed the suit and obtained a decree in O.S.No.19/1993, whether it is ex-parte or otherwise, the same is valid, since not challenged and set aside. It seems the second respondent had borrowed some money from the first respondent, which he failed to repay. Therefore, the first respondent by name R. Gomathi had filed the suit and obtained a decree in O.S.No.19/1993, whether it is ex-parte or otherwise, the same is valid, since not challenged and set aside. Even after the decree, the judgment debtor has not paid the amount and therefore, to realise the fruits of the decree, the decree holder had filed R.E.P.No.209/93, wherein the property was attached on 19.8.1993. In the Court auction held on 16.6.1994, the third respondent, who is the husband of the first respondent appears to have purchased the property. The above facts are beyond controversy at present. 11. The appellant/petitioner claiming that the original owner of the property had agreed to sell the property in his favour on 2.7.1992, and in pursuance of the same, the possession of the property was also given and thereafter, the judgment debtor had no saleable interest, which should follow neither the attachment, nor the Court auction sale shall prevail, over the agreement and in this view, his interest should be protected. When the petition was filed for the declaration of attachment is void and illegal, it seems, there was no stay and therefore, the property was sold in the Court auction, thereby compelling the petitioner to file a petition, to set aside the sale also, as contemplated under Order 21, Rule 90, C.P.C. 12. Both the applications were opposed by the decree holder contending, that the sale agreement relied on by the petitioner/appellant is not true, valid and the same was intended only to defraud the degree holder in collision with the petitioner and the judgment debtor and therefore, the right of Court auction purchaser should not be deprived or affected. Though the petitioner had contended, that there was collision between the decree holder and the judgment debtor, to defeat the right of the agreement holder, it was not accepted. Though the petitioner had contended, that there was collision between the decree holder and the judgment debtor, to defeat the right of the agreement holder, it was not accepted. The trial Court elaborately considering the evidence adduced, came to the conclusion that Ex.A1 is invalid and the same must have been brought out in collision, because of the reason that the same property was the subject matter of another agreement under Ex.B1, that the petitioner has failed not only to prove the subsequent payment, but also failed to prove the alleged handing over of the possession, that since there is no recital in Ex.A1 regarding the cancellation of Ex.B1, it must be the document created for the occasion, that too to prove the genuineness of the agreement, the executant of the document has not been examined and that only in order to defeat the right of the decree holder in O.S.No.19/93, with ulterior motive, Ex.A1 might have been fabricated. Further, in the petition to set aside the sale, the trial Court has held that the petitioner has not made out any irregularity, so as to say that it materially affected his interest, that there was proper and effective publication as contemplated under the procedure and that the property purchased by the third respondent, though the first respondent had obtained the permission to bid and set off, will not affect the right of the auction purchaser in this case, since the participation of the third party in the Court auction sale was not precluded. Thus concluding in both the cases, both the applications have been dismissed, which was confirmed by the appellate Court also. 13. The learned counsel for the appellant submitted, that the attachment effected in this case could not be free from the obligation incurred under the sale agreement and if at all, the Court auction sale should be subject to the obligation incurred under the contract of sale and in this view, as the agreement holder the petitioner/appellant is entitled to question not only the attachment, but also the Court auction sale, as the person whose interest is affected by the sale. Countering the above contention, the learned counsel for the respondents submitted, that the alleged agreement in favour of the petitioner/appellant, is not true and valid and in any event, in view of the suit filed by the petitioner for specific performance, which was dismissed, the petitioner/appellant is not entitled to any relief. Then the question would arise, whether an agreement holder, without performing his part of the contract and taking the sale deed, could prevent the decre holder in bringing the property of the judgment debtor for sale, in order to realise the money, in pursuance of the decree obtained by him, against the judgment debtor, because of the fact, the agreement has not ripened into sale deed, vesting absolute right and title in favour of the agreement holder. As an answer, a submission was made that the appellant has filed a suit for specific performance against the judgment debtor/second respondent, in O.S.No.462/94 and the same was pending, which is not challenged. If really, the petitioner had enforceable right under the agreement of sale viz., Ex.A1, he ought to have prosecuted O.S.No.462/94 effectively. Further, he ought to have even insisted the trial Court for joint trial of these applications along with O.S.No.462/94, in order to avoid conflicting decision. This procedure was not followed by the plaintiff. 14. The learned counsel for the appellant fairly conceded at the time of the argument, that the suit for specific performance viz., O.S.No.462/94 was dismissed for default and a petition has been filed, for the restoration of the suit, with a petition to condone the delay in filing the petition. When the matter was taken for hearing, as represented by either counsel, no order has been passed, on the petition to condone the delay, in filing the petition to restore the suit, which was dismissed for default. Therefore, it should be presumed at present, that there is no suit pending for decision, for specific performance, thereby showing, that the petitioner has lost the interest, in enforcing the suit for specific performance and in this view, having the agreement alone, he cannot resist the execution petition, for ever, as if his obligation incurred under the contract for sale should have life for ever, which cannot be. In this view also, at present, it could be said with certainty, that the petitioner is not a person, affected by the attachment or by the Court auction sale and in this view, it should be further held, that both the petitions are not maintainable. Even assuming that there may be a chance for the restoration of the suit, it should be seen, whether the attachment is liable to be raised, or it should be declared as illegal and void and whether the Court auction sale is liable to be set aside. 15. Order 21, Rule 58, C.P.C. contemplates adjudication of claims, conferring power upon the Court to decide all questions including the right, title or interest in the property attached, arising between the parties to a proceeding or the representatives, under this rule, thereby preventing filing a separate suit, unless the Court refuses to entertain the petition. Here the petition was entertained and therefore, undoubtedly, all questions, which include the right of the petitioner, to enforce the agreement, its validity are all have to be decided. Only in this way, the parties have proceeded before the trial Court, letting in oral evidence, as well as documentary evidence. Therefore, unless the petitioner/appellant had established that he had entered into a valid agreement in respect of the suit property with the second respondent/judgment debtor viz., the original owner of the property, he cannot succeed before this Court, only raising the question of law, though the law is well settled. 16. In Angu Pillai v. Kasiviswanathan Chettiar, 1973 MLJ 334 a Division Bench of this Court, has held that the right of the judgment debtor, on the date of the attachment is qualified by the obligation incurred by him, under an earlier contract to sell the property attached. The relevant portion in the judgment reads: “An attaching decree-holder attaches not the physical property but only the right of the judgment-debtor in the property. As recognised in Section 40 of the Transfer of Property Act, the right of the judgment-debtor in the property is, on the date of the attachment qualified by the obligation incurred by him under the earlier contract to sell and the attaching creditor cannot claim to ignore that obligation and proceed to bring the property to sale as if it remained the absolute property of the judgment-debtor. If the attachment is followed by a Court sale and the purchaser at the Court sale has no notice of the obligation, he may get a good title and the promisee under the private contract would be left to seek his remedy against his promisor.” Thus on the basis of the above ratio laid down by the Division Bench of this Court, if at all the decree holder can bring the property for sale only subject to the right of the appellant, under the contract for sale and for that also, the sale agreement should be established. 17. The Supreme Court of India in Vannarakkal K. Sreedharan v. Chandrammath Balakrishnan, 1990 (3) SCC 291 had the occasion to consider the effect of Order 38, Rule 10 and Section 64 of C.P.C., where a dispute had been raised which right would prevail, when there was an agreement, as well as attachment. The Hon’ble Supreme Court has held as follows: “The agreement for sale indeed creates an obligation attached to the ownership of property and since the attaching creditor is entitled to attach only the right, title and interest of the judgment-debtor, the attachment cannot be free from the obligations incurred under the contract for sale. Section 64, CPC no doubt was intended to protect the attaching creditor, but if the subsequent conveyance is in pursuance of an agreement for sale which was before the attachment, the contractual obligation arising therefrom must be allowed to prevail over the rights of the attaching creditor. The rights of the attaching creditor shall not be allowed to override the contractual obligation arising from an antecedent agreement for sale of the attached property. The attaching creditor cannot ignore that obligation and proceed to bring the property to sale as if it remained the absolute property of the judgment-debtor.” To apply the above ratio also, the prime requirement is that there should be a true, valid enforceable agreement prior to the attachment of the property. 18. In this case, the first respondent, in pursuance of the decree, attached the property on 19.8.1993. The factum of attachment is not in dispute. As recorded by both the Courts below, the attachment is valid and it cannot be set aside, for mere asking, as claimed by the petitioner/appellant. Though it is said that the attachment is not legal, valid, they remain only as dead letters, for want of proof. The factum of attachment is not in dispute. As recorded by both the Courts below, the attachment is valid and it cannot be set aside, for mere asking, as claimed by the petitioner/appellant. Though it is said that the attachment is not legal, valid, they remain only as dead letters, for want of proof. If at all, only the petitioner/appellant could succeed, establishing Ex.A1 as true, then imposing an obligation upon the decree holder or the auction purchaser that their right if any accrued, under the Court auction sale, should be subject to obligation incurred by the judgment debtor under the agreement for sale. If this is established, then the question of setting aside the sale may not arise for consideration, since as held by the Apex Court, the sale in favour of the auction purchaser must be subject to the right of the agreement holder. Only in order to say, that agreement is anterior in point of time to the attachment, Ex.A1 is produced as if it was executed by the original owner of the property, on 2.7.1992 i.e. prior to the attachment. 19. The trial Court, as well as the first appellate Court have, properly analysing the evidence produced by the parties, evaluated the same, from proper perspective, which brought to surface that Ex.A1 is not a true and genuine agreement, having the force of enforceability. This is purely a finding based on evidence i.e. question of fact, not liable to be disturbed in the second appeal, though it is called Civil Miscellaneous Second Appeal. The learned counsel for the appellant also, failed in her attempt to bring to my notice, any finding perverse in nature against the evidence available on record, not appreciating the same properly. By going through the judgments of the Courts below, I am fully satisfied, that both the Courts below have recorded the findings, only in accordance with the evidence and not against the evidence or not considering the evidence, which deserves acceptance. 20. The trial Court mainly relied on Ex.B1 to say that Ex.A1 is not true and genuine one and it might have been prepared for the occasion, to defeat the decree obtained by the first defendant, against the judgment debtor. Ex.A1 is an unregistered document, though it is valid. 20. The trial Court mainly relied on Ex.B1 to say that Ex.A1 is not true and genuine one and it might have been prepared for the occasion, to defeat the decree obtained by the first defendant, against the judgment debtor. Ex.A1 is an unregistered document, though it is valid. The same judgment debtor under Ex.B.1, in respect of the same property, had agreed to convey the property in favour of one Arayee on 30.3.1992 i.e. prior to Ex.A1, under a registered document. The said document was written by P.W.3, who has written Ex.A1 also. Therefore, there is every possibility to infer, that he should have informed about the previous agreement to the petitioner, if really he had intended to purchase the property from the second respondent. Further, he should have informed the petitioner also about the previous registered document. The absence of any recital regarding the cancellation of Ex.B.1 and the subsistence of that agreement at the time of alleged execution of Ex.A1, makes it clear, that Ex.A.1 should have come into existence, only after the attachment of the property, probably to deprive the right of the decree holder. The very fact, that there are number of agreements, in respect of the property attached also would suggest, that the agreement for sale cannot be a genuine one, intended to be enforced and that is why, the petitioner has also not filed the suit forthwith. Then having filed the suit also, he has allowed to be dismissed for default, and not filed any restoration petition also within the time. Considering all these facts and circumstances of the case, both the Courts below have recorded the findings on fact, regarding the execution of Ex.A1, as if it is not a true and genuine document, intended to be enforced, which should be accepted by this Court, since there is no chance to take contra view. In view of the finding recorded concurrently, by the Courts below, Ex.A1 has no force of enforceability and therefore, the settled position of law fails to come to the aid of the petitioner/appellant, either setting aside the sale or setting aside the attachment. 21. The contention of the petitioner/third party in the petition to set aside the sale under Order 21, Rule 72 r/w, 90, C.P.C. are all not available on facts, as rightly held by the Courts below. 21. The contention of the petitioner/third party in the petition to set aside the sale under Order 21, Rule 72 r/w, 90, C.P.C. are all not available on facts, as rightly held by the Courts below. It seems, the decree holder/first respondent had obtained permission from the Court to bid and set off. But, she has not availed that permission, whereas her husband viz., the third respondent had purchased the property in the auction held. The Code of Civil Procedure does not bar the parties, in participating in the Court auction, where the decree holder had obtained permission to bid and set off. Even in the case of the permission obtained by the decree holder to purchase the property by himself or herself and to have set off, it is open to the third party to participate in the auction, since it is a public auction, the further fact being, that will be beneficial to the judgment debtor, in the sense, it will fetch more amount than the decreed amount. Therefore, on the ground that the decree holder violated Order 21, Rule 72, C.P.C. or she failed to purchase the property, the sale cannot be set aside, which is also not the ground available Order 21, Rule 90, C.P.C. 22. Order 21, Rule 90(3), C.P.C. mandates: “No application to set aside a sale under this rule shall be entertained upon any ground, which the applicant could have taken on or before the date on which the proclamation was drawn up.” The petitioner claims that he is an agreement holder on and from 2.7.1992. Admittedly, the property was attached on 19.8.1993. Thereafter, proclaiming, drawing sale papers, etc., only on 16.6.1994, the Court auction was held. Since the petitioner/appellant claim that he is in possession of the property, he should have had the knowledge of the attachment of the property. Therefore, he ought to have filed the application to questioning the sale before the date on which the proclamation of sale was drawn up, which he did not do so, in this case. In this way, it could be said that the petition itself is barred. Therefore, he ought to have filed the application to questioning the sale before the date on which the proclamation of sale was drawn up, which he did not do so, in this case. In this way, it could be said that the petition itself is barred. Even assuming that he had no knowledge, the petition to set aside the sale could be maintained on the ground of irregularity or fraud, etc., there is no evidence indicating, how the publications were not effected as per the procedure, what are the frauds said to have been committed, etc. Neither in the petition, I find no detailed plea, nor in the evidence, as recorded by the Courts below, touching the alleged irregularity, etc. In view of the facts recorded by the Courts below, that there was no irregularity in the publication or any fraud in the conduct of the sale, the auction purchaser is entitled to have the benefits of the Court auction sale and the same cannot be set aside on any grounds, as rightly held by the Courts below. For the foregoing reasons, I do not find any merit in both the appeal and the revision petition, and both are liable to be dismissed. In the result, both the appeal and the revision petition are dismissed, with costs, confirming the order of the lower Court in A.S.No.33/99 on the file of the District Judge, Salem, and in C.M.A.No.7 of 1999 on the file of the District Judge, Salem.