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2024 DIGILAW 1328 (KER)

V. Jyothi, W/O M. K. Vasavan v. Sathyabhama, W/O M. K. Raveendran

2024-10-16

T.R.RAVI

body2024
JUDGMENT : T.R.Ravi, J. The claimant in E.A.No.753 of 1999, E.P.No.19 of 1999, and O.S.No.258 of 1996, on the file of the Sub Court, Palakkad, has challenged the rejection of the claim in this appeal. 2. The respondents 1 to 3 filed O.S.No.258 of 1996 against the 4th respondent claiming maintenance. The 1st respondent is the wife of the 4th respondent and respondents 2 and 3 are the children of respondents 1 and 4. The suit was filed on 05.03.1996. In I.A.No.1294 of 1996 in O.S.No.258 of 1996, the Court had passed an order of injunction restraining the 4th respondent from alienating the plaint schedule property. While the order of injunction was in force, the brother of the 4th respondent, on the strength of a power of attorney executed by the 4th respondent in his favour on 5.3.1996, the day on which the order of injunction was issued, transferred the plaint schedule property in favour of the appellant, his wife, as per document No.3605 of 1996 (Ext.X1). The document was executed and registered on 12.09.1996. The claim petitioner availed a loan from Palakkad District Co-operative Bank on 19.11.1996 by creating an equitable mortgage by deposit of Ext.X1 document. The files of the Bank, which were produced before the Court, show that the claim petitioner’s husband, Sri Vasavan, had procured the encumbrance certificate. It is seen from the file that the judgment debtor had himself taken back the power of attorney from the Registry on 25.03.1996. 3. The suit O.S.No.256 of 2018 was decreed on 30.07.1998. Earlier the Court had passed an order of attachment against the properties in I.A.No.2178 of 1998. Respondents 1 to 3 filed E.P.No.19 of 1999 on 25.01.1999 for the execution of the decree and realisation of the amount of maintenance ordered in I.A.No.3352 of 1996 pending suit and to provide maintenance to the decree holders from 03.03.1996, by the sale of the judgment debtor's property. The amount due on the date of the execution petition was computed as Rs.1,19,000/-. E.P.No.267 of 1999 was filed claiming maintenance arrears from February 1999 to October 1999, and E.P.No.81 of 2000 was filed for maintenance arrears due from November 1999 to March 2000. The appellant filed E.A.No.753 of 1999 praying for a declaration that she is the actual owner of the plaint schedule property and that the same cannot be attached in execution of the decree. The appellant filed E.A.No.753 of 1999 praying for a declaration that she is the actual owner of the plaint schedule property and that the same cannot be attached in execution of the decree. An application was filed praying that the order attaching the plaint schedule property be lifted. 4. The petition schedule items in E.P.No.19 of 1999 are the decree schedule properties. The properties mentioned in E.P.Nos.267 of 1999 and 81 of 2000 belonged to the judgment debtor, and he had created documents of assignment in favour of the claim petitioner in E.A.Nos.463 of 2000 and 464 of 2000 after O.S.No.258 of 1996 was decreed. It appears that the claim petitioner in E.A.Nos.463 of 2000 and 464 of 2000 had married the judgment debtor/4th respondent, while the marriage between the 4th respondent and 1st respondent was subsisting. The court below had by a common order in E.A.No.753 of 1999 In E.P.No.19 of 1999, E.A.No.463 of 2000 in E.P.No.267 of 1999, and E.A.No.464 of 2000 in E.P.No.81 of 2000 dismissed all the claim petitions with cost to respondents 1 to 3. The court found that there had been an attempt to defeat the rights of the decree holders. It was found that sale deeds were executed while orders of injunction were in force and after the suit was decreed in favour of respondents 1 to 3. All the claim petitions have been preferred on the strength of sale deeds executed in such a manner. As far as the properties attached are concerned, the court clearly held that the same was sought to be transferred by the 4th respondent through his brother, who is the power of attorney holder, and that too in favour of his brother's wife, who is the appellant herein. The power of attorney was executed on the day on which the injunction order was passed, and the sale deeds were executed six months later, on 12.09.1996. The court found that the facts would reveal the fraud and collusion played by the claim petitioner, her husband, and the judgment debtor, and the attempt has been in some way or other to defeat the process of the court. The claim petitioner did not mount the box, and instead, her husband was examined as PW4. The court found that the facts would reveal the fraud and collusion played by the claim petitioner, her husband, and the judgment debtor, and the attempt has been in some way or other to defeat the process of the court. The claim petitioner did not mount the box, and instead, her husband was examined as PW4. The court held that the assignment deeds in favour of the claim petitioner are sham and false documents created in collusion and connivance with the judgment debtor and his brother. The court also noticed the fact that the sale consideration shown was only a sum of Rs.30,000/- for an extent of 1.88 Acres of land. 5. The counsel for the appellant relied on Ext.A1, which is stated to be an agreement for sale executed between the 4th respondent and his brother Vasavan on 01.09.1995 for the sale of the plaint schedule property. Reference is made to the reverse side of the agreement wherein it is stated that possession had been already handed over on 29.02.1996, immediately prior to the order of injunction. Annexure R1, produced along with I.A.No.1 of 2020 is relied on to submit that the 4th respondent had received a sum of Rs.26,000/- towards sale consideration for the sale executed by his brother as per assignment deed Nos.86 of 1999 and 87 of 1999 dated 07.01.1999 to the claim petitioner. It is hence submitted that the appellant is a bonafide transferee for valid consideration and her rights cannot be defeated. Reliance is placed on the judgment of the Hon'ble Supreme Court in Vannarakkal Kallalathil Sreedharan vs Chandramaath Balakrishnan & Anr. [1990 KHC 984] to submit that the right of the attaching creditor cannot override the rights flowing from a sale that was effected pursuant to an antecedent agreement for the sale of the attached property. The counsel also relied on Annexure A1 produced along with I.A.No.28 of 2010 to submit that building tax has been assessed against the claim petitioner with respect to the building situated on the property. It is submitted that the right of the decree holders is only the right to maintenance, and hence, it is not a right over immovable property, and hence, the right of the appellant as a transferee in good faith and for valid consideration cannot be affected in any manner. It is submitted that the right of the decree holders is only the right to maintenance, and hence, it is not a right over immovable property, and hence, the right of the appellant as a transferee in good faith and for valid consideration cannot be affected in any manner. It is also contended that the judgment debtor cannot be allowed to state that he has violated the order of injunction, and hence, the sale may be nullified, and the property may be given back to him. 6. The counsel for the plaintiffs/respondents 1 to 3 contended that the sale deeds in favour of the claim petitioner executed by her own husband do not make any reference to Ext.A1 or the consideration as per Ext.A1. It is submitted that there is nothing to link Ext.A1 with the sale which was executed in violation of the order of injunction. It is hence submitted that no interference is called for regarding the finding of the trial court that the documents are sham documents intended to defeat the rights of the decree holder. 7. Senior Counsel Sri.Lakshmi Narayanan, appearing for the 4th respondent decree-holder, submitted that the claim has to be proved by the claimant by mounting the box and giving positive evidence. It is submitted that no reliance can be placed on the version of PW4. Senior Counsel submitted that the matter ought to be remitted to the trial court for fresh consideration on the basis of Annexure R1, which is stated to be a receipt issued by the 4th respondent. 8. I have considered the arguments advanced by the counsel on either side. In Surjith Singh & Ors. v. Harbans Singh & Ors.[ AIR 1996 SC 135 ], the Hon'ble Supreme Court held that an assignment made in defiance of a restraint order would defeat the ends of justice and the prevalent public policy. It was held that when the Court intends a particular situation to exist during the pendency of litigation, the said situation must continue to exist till the court orders otherwise. The Court further held that it has the duty as also the right to treat the alienation/assignment as having not taken place at all. (See also Vidur Impex & Traders (P) Ltd.& Ors v. Tosh Apartments Pvt.Ltd.& Ors [ (2012) 8 SCC 384 ] and Jehal Tanti & Ors v. Nageshwar Singh through LRs. The Court further held that it has the duty as also the right to treat the alienation/assignment as having not taken place at all. (See also Vidur Impex & Traders (P) Ltd.& Ors v. Tosh Apartments Pvt.Ltd.& Ors [ (2012) 8 SCC 384 ] and Jehal Tanti & Ors v. Nageshwar Singh through LRs. [ AIR 2013 SC 2235 ]. In the case on hand, admittedly, the sale in favour of the claimant by her husband in his capacity as the Power of attorney holder of the judgment debtor was six months after the order of injunction was passed against the judgment debtor. What the judgment debtor could not have done himself, cannot be done by his power of attorney holder, who is as much bound by the order of injunction. The dictum laid down in Surjith Singh (supra) hence squarely applies, and this Court has a duty to treat that the alienation in favour of the claimant has not taken place at all. The reliance placed on V.K. Sreedharan (supra) also is not well founded. V.K. Sreedharan (supra) was a case where a property that was the subject matter of an agreement to sell was attached after the date of the agreement, and the sale deed was executed after the order of attachment. This court had held that the agreement to sell does not create any interest in the property and the sale can only be subject to the attachment. Unlike the above, in the case on hand, the attachment itself is after the sale. Moreover, in V.K. Sreedharan (supra), there was no order interdicting the judgment debtor from selling the property, as in this case. Hence, the decision does not really have any application. 9. However, it is worthwhile to consider what exactly is the dictum laid down in V.K. Sreedharan (supra). The Hon’ble Supreme Court was considering a case prior to the amendment of Section 64 of the Code of Civil Procedure in 2002. The Court accepted the views expressed in the judgments of the High Courts of Madras, Bombay, Calcutta, and Travancore Cochin, and held that an 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. The Court held that 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. Evidently, the Court was not considering a case where, after the agreement of the sale, a restraint order of the court intervened, prohibiting the sale. 10. The question would then be whether the sale in favour of the claimant falls under a sale intended to defraud the creditor, under Section 53 of the Transfer of Property Act. The question whether the executing court can go into the question of the validity of the sale in view of Section 53 of the Transfer of Property Act, came up for consideration of a Full Bench of this Court in Verizon Builders and Developers Ltd vs. Jyothi Susan John and another [(2018) SCC OnLine Kerala 5291]. Paragraph 23 of the said judgment reads thus: “23. When the legislature deemed it fit that “any claim” to attach property is to be considered under O. XXXVIII R.8, there is no reason why the power of the Court should be curtailed and should stop short of a plea u/s 53 of TP Act. The procedural difficulties in considering a claim u/s 53 should not be a reason to deprive the Court from considering a claim and the defence. Civil courts are enjoined to consider the disputes between the parties and when substantive rights are created and such rights are being flouted, it is for the civil court to consider the respective contentions and arrive at a proper decision. That the consideration of such matters would be comprehensive should never be a reason to take away the jurisdiction of a civil court. Civil Court is bound to consider all suits of a civil nature except, suits of which their cognizance is expressly or impliedly barred.” The Full Bench while holding that the executing court can go into the question of the validity of the transfer under Section 53 of the Transfer of Property Act, held that the decision in Rajan @ Rajan Gopinathan v. Dr. D. Jayashree Nayar [ 2010 (1) KLT 142 ] did not lay down the correct law. In Sherikath & Ors. v. Shamseena & Anr. D. Jayashree Nayar [ 2010 (1) KLT 142 ] did not lay down the correct law. In Sherikath & Ors. v. Shamseena & Anr. [(2017) SCC OnLine Kerala 1028], a Division Bench of this Court held that once it is proved or an inference can be drawn that it is a fraudulent transfer under Section 53 of the Act, then the burden is heavy on the objector to prove that he is a bonafide purchaser for valid consideration in good faith. This has to be established by the objector/claimant, and if they fail to discharge the same, then they will lose their claim. 11. Keeping in mind the above principles, it can be seen that the judgment debtor on the day on which an order of injunction was issued against him restraining him from alienating his property, executed a power of attorney in the name of his brother. Ext.A1, an unregistered agreement of sale of the property between the judgment debtor and his brother executed on 1.9.1995 is sought to be relied upon to justify a later sale deed executed by the judgment debtor’s brother in favour of his wife. The said sale deed is executed 6 months after the order of injunction is issued. Later, the Court issued an order of attachment regarding the property. The suit was also decreed. It is during the execution stage that the claim petition is filed by the claimant, putting forward the sale in her favour. It is taking note of the above facts that the Court held that the transactions are sham transactions intended to defraud and avoid the maintenance decree. 12. In the above admitted facts, going by the principles of law stated above, it is for the claimant to prove that she is a bonafide transferee for value. The claimant did not even choose to mount the box and state her claim. Instead, her husband, who is the power of attorney holder of the judgment debtor who is bound by the order of injunction issued on 5.3.1996, chose to lead evidence. Such evidence is clearly not admissible to prove the bonafides of the claimant. I do not find any reason to interfere with the order of the trial court. 13. Before parting with the case, there is an aspect that needs to be clarified with regard to the law on the subject. Such evidence is clearly not admissible to prove the bonafides of the claimant. I do not find any reason to interfere with the order of the trial court. 13. Before parting with the case, there is an aspect that needs to be clarified with regard to the law on the subject. Section 64 of the Code of Civil Procedure reads thus: “64. Private alienation of property after attachment to be void.—(1) 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. (2) Nothing in this section shall apply to any private transfer or delivery of the property attached or of any interest therein, made in pursuance of any contract for such transfer or delivery entered into and registered before the attachment. Explanation.—For the purposes of this section, claims enforceable under an attachment include claims for the rateable distribution of assets.” 14. Sub-section (2) of the Section was introduced by way of an amendment by Act 22 of 2002 with effect from 1.7.2002. The decision in V.K.Sreedharan (supra), was prior to the above said amendment. As per the decision, all cases where alienation was preceded by an antecedent contract for sale, effected prior to the attachment, were saved. However, by the amendment, the Legislature confined the protection only to those antecedent agreements that have been registered prior to the attachment. Sub-section (2) thus limits the effects of the decision in V.K.Sreedharan (supra), to bonafide transfers. It is only where the contract for sale is executed and registered before the attachment, the mischief of sub-section (1) shall not apply. (See paragraph s.64.3 at page 317 of Mulla on The Code of Civil Procedure (Abridged) 18th Edition). The appeal fails and is dismissed.