Research › Search › Judgment

Madras High Court · body

2025 DIGILAW 2896 (MAD)

Velpa International (P) Limited v. Priyadharshini

2025-08-08

P.B.BALAJI

body2025
ORDER : P.B.BALAJI, J. This revision has been filed by the plaintiff in O.S. No.8 of 2016, seeking to set aside the order in I.A. No.1 of 2021, in and whereby, the plaintiff sought direction under Section 151 of the Code of Civil Procedure, 1908 to set aside the sale deed dated 28.04.2021 in Doc.7359 of 2021 on the SRO, Palladam. 2. I have heard Mr.N.Manoharan, learned counsel for the revision petitioner and Mr.S.Mukunth, learned Senior Counsel for M/s.Sarvabhauman Associates for respondents 1 and 2 and Mr.V.Sivakumar, learned counsel for the fifth respondent. 3. The sum and substance of the arguments of the Mr.N.Manoharan, learned counsel for the revision petitioner is that in a suit for recovery of money, the contesting defendant had given an undertaking in the nature of furnishing security as mandated under the provisions of the Code of Civil Procedure and thereafter, in breach and gross violation of the said undertaking given by the defendants, the th defendants have proceeded to dispose of the property in favour of the 5 respondent. This necessitated the plaintiff to take out the Interlocutory Application in I.A. No.1 of 2021. However, the Trial Court has dismissed the said Application on the ground that there is a separate remedy prescribed under law and hence, finding no merit in the Application, the said I.A. No.1 of 2021 came to be dismissed. 4. The learned counsel for the revision petitioner Mr.N.Manoharan, referring to the Application filed under Order XXXVIII Rule 5 of CPC and the undertaking given by the defendants in the said Application, would contend that the conduct of the said defendants 1 and 2 can never be appreciated or condoned. 5. According to Mr.Manoharan, learned counsel having led the Court to accept the undertaking given that the property would be available as security for the suit claim, the defendants ought not to have alienated the same, pending the suit. He would further contend that if such conduct of the defendants who have no respect for law and Court is condoned, then it would result in grave miscarriage of justice. He would therefore state that the Trial Court, without even discussing any of the contentions advanced by the learned counsel on either side, in and by a cryptic and unreasoned order has proceeded to dismiss the Application, warranting interference in revision under Section 227 of the Constitution of India. 6. He would therefore state that the Trial Court, without even discussing any of the contentions advanced by the learned counsel on either side, in and by a cryptic and unreasoned order has proceeded to dismiss the Application, warranting interference in revision under Section 227 of the Constitution of India. 6. The learned counsel in support of his contentions, would also place reliance on the decision of this Court in A.B.Gurumurthi Chetti Vs. Sella Perumal Pillai, reported in Vol 44 L.W.714 and C.Sengottaiyan Vs. K.Saravanan, reported in 2013 (6) CTC 456 . 7. Per contra, Mr.S.Mukunth, learned Senior Counsel would submit that though an undertaking was given in the Application under Order XXXVIII, Rule 5 seeking attachment before the judgment, he would state that unless, the order of attachment was duly notified to the Sub Registrar concerned, the attachment would be void and of no effect. 8. In this regard, the learned Senior Counsel places reliances on Sri Humbi Hema Gooda and others Vs. Tamil Nadu State Transport Corporation (CBE) Limited Coimbatore Public Limited Company, having its registered office at No.37, Mettupalayam Road, Coimbatore, rep. By its Managing Director and others, reported in (2011) SCC online Mad 1709 and Sri Krishna Chit Funds (Sattur Private Limited), Sattur having its office at Door No.19, Pillaiyar Koil St, Sattur Town and Taluk Through its Managing Director Tmt.R.Umayal Vs. R.S. Pillai and another, reported in 2000 SC online Mad 336. The learned Senior Counsel would therefore state that there was no impediment for the defendants to dispose of the property since the mandate of Order XXXVIII, Rule 11(b) of CPC was not complied with by plaintiff. He would therefore seek dismissal of the revision petition. 9. Supporting the contentions of the learned Senior Counsel for th defendants 1 and 2, Mr.V.Sivakumar, learned counsel for the 5 respondent would invite my attention to the affidavit of undertaking where the undertaking affidavit has been given far in excess of the suit claim itself and he would therefore contend that the said affidavit is being th taken advantage, out of context. He would further state that the 5 respondent is a bonafide purchaser for value, having parted with the substantial sale consideration and also having taken possession and put up a new construction in the suit property. He would further state that the 5 respondent is a bonafide purchaser for value, having parted with the substantial sale consideration and also having taken possession and put up a new construction in the suit property. He would state that the doctrine of th lis pendens will not affect the purchase of the 5 respondent for the simple reason that the suit is one for recovery of money and there is also no communication of the order before the Sub Registrar concerned and th consequently, the 5 respondent cannot be blamed to have proceeded to purchase the suit property, free of encumbrances. 10. I have carefully considered the submissions advanced by the learned counsel for the parties. 11. Admittedly, I find that the suit has been filed for recovery of a sum of Rs.50,00,000/-, together with interest at the rate of 12% per annum, Rs.67,00,000/- in all. The cause of action for the suit is based on a memorandum of understanding dated 26.11.2012 entered into between the plaintiff and defendants and alleging failure on the part of the husband and father of the defendants, Vidhyaprakash, the plaintiff has sought for refund of monies paid under the memorandum of understanding. In fact, it is also contended by learned Senior Counsel Mr.S.Mukunth, that even in the typedset of papers that has been filed by the revision petitioner/plaintiff themselves before this Court, there is a reference to a subsequent memorandum of understanding on 22.11.2017 between the plaintiff and the first defendant, in and whereby, the parties have novated the original contract between themselves and therefore, the plaintiff could not have filed the suit and suit itself was premature. 12. In this connection, he would refer to the various Clauses in the two memoranda of understandings. However, the fact remains that though an undertaking affidavit was filed in the Application for attachment before judgment, where the first defendant, wife of Vidhyaprakash has stated that the Hon’ble Court has directed her to furnish security to the tune of Rs.4,29,00,000/- and though the suit claim is false, the first defendant has stated that she is willing to bind herself and her heirs and placed at the disposal of the Court when required from her, the properties specified in the schedule which would be sufficient to satisfy the decree. This affidavit is dated 18.11.2016. This affidavit is dated 18.11.2016. Therefore, the said affidavit was filed before the second memorandum of understanding dated 22.11.2017 in and whereby, the defendants had agreed to substitute another property in respect of the settlement, of the claim of the plaintiff. However, it is seen from the order and also the counter affidavit filed in I.A. No.1 of 2021 that the second memorandum of understanding was not even brought to the notice of the Court. It is therefore, not fair on the part of the defendants to contend that the Court has not taken note of the subsequent events and ought to have dismissed the Application as premature. 13. Coming to the undertaking itself, as rightly pointed out by the th learned counsel for the 5 respondent, though suit claim itself is only Rs.67 lakhs, it is not known as to why the first defendant has filed an affidavit stating that she is willing to place at the disposal of the Court, the property of a value of about Rs.4 crores 29 lakhs. The Court did not direct the defendants to furnish security to such a claim of Rs.4 crores 29 lakhs, which is also not even the claim of the plaintiff in the suit. However, the fact that the first defendant has chosen to file such an affidavit need not be even discussed at this stage. The fact remains that after the affidavit came to be filed, the same though received by the Trial Court, no orders came to be passed, accepting the undertaking, in order to bind the defendants 1 and 2 to such undertaking. 14. I find from the adjudications that after filing of the said Application in I.A. No.11 of 2016, though the plaintiff prayed for an order directing security to be furnished, sufficient to satisfy the decree, only notice was ordered on the Application. Thereafter, the defendants 1 to 3 in the said Application have taken notice and entered appearance and sought time to file counter. On 15.11.2016, the matter was adjourned to 18.11.2016, for filing counter of R1 to R3. Finally, on 18.01.2016, the first defendant has filed the undertaking affidavit. Thereafter, the defendants 1 to 3 in the said Application have taken notice and entered appearance and sought time to file counter. On 15.11.2016, the matter was adjourned to 18.11.2016, for filing counter of R1 to R3. Finally, on 18.01.2016, the first defendant has filed the undertaking affidavit. The learned counsel for the first and second defendants has also filed a memo on the same date stating that in view of the undertaking affidavit filed by the first defendant, no further encumbrance would be made on the property that is sought to be furnished as security. 15. Thereafter, it is seen that the Application was adjourned to enable the revision petitioner/plaintiff to file objections and the matter has been adjourned on two occasions, thereafter, under the same caption. Subsequently, after completion of pleadings, the Trial Court recorded draft issues has been filed and hence the Application came to be closed. Thus it is seen that at no point of time, the said undertaking given by defendants 1 and 2 came to be recorded by the Court. Even when the Applications in I.A. No.11 of 2016 was closed, it was not on account of affidavit of undertaking filed by the first defendant, but only because the pleadings had been completed and issues had to be framed. 16. Coming to the contentions of the learned counsel for the revision petitioner that the defendants have misled the Court by giving an undertaking affidavit and thereafter, proceeded to dispose of the property to the detriment of the revision petitioner, though such arguments appear to be attractive, the fact remains that the undertaking was never recorded by the Court and the revision petitioner also did not ensure that the Court recorded the undertaking and passed a speaking order on the said affidavit of undertaking. 17. Merely because, an affidavit has been filed undertaking that the subject property would not be encumbered or alienated, it cannot be put against the defendants 1 and 2, when there was no positive orders passed on the said affidavit of undertaking or even in the Application in I.A. No.11 of 2016 for attachment of judgement. In fact, considering the manner in which the Application has been dealt with by the Trial Court, on filing of the affidavit of undertaking, the Trial Court has only posted the matter for objections on the side of the revision petitioner. In fact, considering the manner in which the Application has been dealt with by the Trial Court, on filing of the affidavit of undertaking, the Trial Court has only posted the matter for objections on the side of the revision petitioner. It is an admitted fact that the revision petitioner did not file any objection. At the same time, the revision petitioner has not been diligent enough to protect his interest by calling upon the Court to accept and record the said affidavit of undertaking and pass suitable orders in I.A. No.11 of 2016. What has been ordered by the Court alone would be relevant and mere filing of affidavit of undertaking cannot be sufficient to bind the defendants when such affidavit of undertaking was merely received by the Court and no further orders were passed thereon. 18. In the decision that is relied on by the learned counsel for the petitioner, Mr.N.Manoharan, in A.B.Gurumurthi Chetti's case (referred herein supra), this Court held that when a Court accepts an undertaking given by a party its order amounts in substance to an injunction restraining him from acting in breach thereof and if the undertaking violated by him, the Court has jurisdiction to deal with such violation by even order his arrest and imprisonment. 19. In the decision in C.Sengottaiyan's case (referred herein supra), this Court found that settlement deeds had been executed is violation of the undertaking to the Court and the said settlement deeds were unenforceable and void. However with regard to the decision in A.B.Gurumurthi Chetti's case (referred herein supra), it is seen that on the facts in the said case, the Application came to be closed recording the affidavit of undertaking given by the defendant. Under such circumstances, this Court held that when the Court had accepted an undertaking any breach thereof would amount to violation. 20. In the case of C.Sengottaiyan's case (referred herein supra), this Court set aside the settlement deeds also it as was an admitted position in the said case that the offer of security was accepted and recorded by the Court and therefore, there was no order of attachment consequently passed. However, unfortunately in the present case, the offer of security was never recorded by the Court and no orders were passed on the said affidavit of undertaking. Therefore, both these decision will not apply to the facts of the present case. 21. However, unfortunately in the present case, the offer of security was never recorded by the Court and no orders were passed on the said affidavit of undertaking. Therefore, both these decision will not apply to the facts of the present case. 21. Even insofar as the decisions that had been relied by the learned Senior Counsel appearing for the respondents 1 and 2, both these decisions, again, are of no relevance to the facts of the present case, since in both the cases, an order of attachment had been passed and the question was only whether non communication of the said order of attachment to the Sub Registrar concerned was fatal or not. 22. In the present case, there is no question of any order of attachment at all since the affidavit of undertaking was only pertaining to an asset that was offered to be given as security for the suit claim. Therefore, the question of even an attachment before the judgement did not arise before the Trial Court, leave alone requirement of communicating the same to the Sub Registrar Office. 23. In view of the above, though the Trial Court has proceeded to dismiss the Application in a very cryptic manner and without assigning any reasons, excepting for stating that there was alternate remedy available to the revision petitioner to challenge the sale deed, yet I am unable to convince myself to set aside the sale deed in a suit for recovery of money for an alleged breach of an affidavit of undertaking placing the property at the disposal of the Court as security for the suit claim and thereafter, proceeding to dispose of the said property in violation of the said affidavit of undertaking, when the said undertaking, though received by the Court, by way of the affidavit from the first defendant was not taken up further to record the undertaking given by the first defendant and dispose of the Application for attachment before judgment suitably. 24. The doctrine of lis pendens also will not apply to the facts of the present case, since there was no order of the Court requiring even security to be furnished in the first place, leave alone an order of attachment before judgment. 24. The doctrine of lis pendens also will not apply to the facts of the present case, since there was no order of the Court requiring even security to be furnished in the first place, leave alone an order of attachment before judgment. Moreover, the suit is only one for recovery of money and therefore, in such circumstances, the purchaser for value cannot be prejudiced by a direction being issued to set aside the sale deed under which the third party purchaser has proceeded to acquire the property for valuable sale consideration when admittedly, there was no order prohibiting the sale of the property and in fact, even an order for furnishing of security had not been passed leave alone an order of attachment before the judgment. 25. In view of the above, though not for the reasons assigned by the Trial Court but on account of discussions made herein above, I do not see any requirement to allow I.A. No.1 of 2021 in O.S. No.8 of 2016 to set th aside the sale deed in favour of the 5 respondent. Accordingly, this Civil Revision Petition is dismissed. No costs. Connected Miscellaneous Petition is also dismissed.