{"id":64772,"date":"2005-03-03T00:00:00","date_gmt":"2005-03-02T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ramasamy-raja-vs-p-subbayya-pillai-on-3-march-2005"},"modified":"2017-03-01T10:24:26","modified_gmt":"2017-03-01T04:54:26","slug":"ramasamy-raja-vs-p-subbayya-pillai-on-3-march-2005","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ramasamy-raja-vs-p-subbayya-pillai-on-3-march-2005","title":{"rendered":"Ramasamy Raja vs P. Subbayya Pillai on 3 March, 2005"},"content":{"rendered":"
Madras High Court<\/div>\n
Ramasamy Raja vs P. Subbayya Pillai on 3 March, 2005<\/div>\n
       \n\n  \n\n  \n\n \n \n BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT\n\nDATED: 03\/03\/2005\n\nCORAM\nTHE HONOURABLE MRS. JUSTICE PRABHA SRIDEVAN\n\nSecond Appeal No.130 of 1994\n\n1. Ramasamy Raja\t\t\t\t\n2. Kodandarama Raja\t\t\t\t.. Appellants\n\t\t\t\t\t\t(Defendants)\n\n\t\t\t\t-vs-\n\nP. Subbayya Pillai\t\t\t\t.. Respondent\n\t\t\t\t\t\t(Plaintiff)\n\n\t\t\nPrayer\n\n\nAppeal against the judgment and decree in A.S.No.262 of 1992 on\nthe file of Sub-Court, Ambasamudram dated 29.11.1993 confirming the judgment and\ndecree in O.S.No.648 of 1988 on the file of District Munsif Court, Ambasamudram\ndated 11.2.1992.\n\n!For Appellants  ... \tMr. T.V. Sivakumar for\n  \t           \tM\/s. K. Chandrasekaran\n\n^For Respondent  ... \tMr. G. Sridharan for\n\t           \tMr. T.M. Hariharan\n\n\n:JUDGMENT\n<\/pre>\n
\tThe person who has landed the appellants and the respondent in this
\nlitigation is not before us.  The following  dates are relevant.  The word
\n“property” refers to the suit property in O.S. No.648 of 1988, from which this
\nsecond appeal has arisen.\n<\/p>\n
12.03.1979 – The appellants sold the suit the “property” to one K. Subbayya (the
\nvillain in this story).\n<\/p>\n
06.04.1979 – K.Subbayya executed a pronote for a sum of Rs.50,000\/- being the
\nunpaid sale consideration (Ex.B-2).\n<\/p>\n
19.12.1979 – K.Subbayya entered into an agreement of sale of the “property” with
\nthe respondent.\n<\/p>\n
15.03.1982 – O.S.No.18 of 1982 was filed by the respondent against K.Subbayya
\nfor specific performance of the agreement dated 19.12.1979.\n<\/p>\n
05.04.1982 – O.S.No.23 of 1982 filed by the appellant for recovery of money due
\nunder Ex.B-2.\n<\/p>\n
05.04.1982 – Attachment Before Judgment of the “property” ordered in O.S. No.23
\nof 1982.\n<\/p>\n
13.04.1982 – Attachment effected.\n<\/p>\n
16.11.1982 – Ex-parte decree passed in O.S. No.23 of 1982.\n<\/p>\n
04.12.1982 – Ex-parte decree in O.S. No.18 of 1982.\n<\/p>\n
16.04.1985 – Court executed the sale deed in favour of respondent in execution
\nof decree in O.S.No.18 of 1982.\n<\/p>\n
24.04.1985 – Sale deed in respect of the “property” registered.\n<\/p>\n
20.12.1985 – The suit property purchased by the appellants\/decree holder in
\nCourt auction in execution of decree in O.S. No.23 of 1982.\n<\/p>\n
21.12.1986 – Court auction sale is confirmed.\n<\/p>\n
24.05.1986 – Property delivered to the appellants\/ Court auction purchasers.\n<\/p>\n
17.10.2003 – Property delivered to respondent.\n<\/p>\n
The present suit, O.S.No.648 of 1988, filed by the respondent is for declaration
\nand injunction and alternatively, for possession.  The trial court found that
\nonly the appellants were in possession and, therefore, granted the alternate
\nprayer for possession.\n<\/p>\n
\t2. In the plaint, the respondent claimed that the suit in O.S.No.23 of
\n1982 and all the proceedings pursuant thereto are collusive, brought about by
\nfraud between the appellants and the said K.Subbayya and that the possession of
\nthe appellants is wrongful.\n<\/p>\n
\t3. The appellants claimed that the suit O.S.No.18 of 1982 was a collusive
\none brought about by fraud between the respondent and the said Subbayya and that
\nsince the appellants had attached the property, any transfer after the
\nattachment was void as against the claims enforceable under the attachment as
\nper Section 64 C.P.C; and that the appellants alone were entitled to be in
\npossession. According to the appellants, their possession had been given
\npursuant to the confirmation of sale and is not wrongful possession and so the
\nrespondent is not entitled to mesne profits or any other relief.\n<\/p>\n
\t4. The trial Court found that it is not possible to decide whether K.
\nSubbayya had colluded with the appellants or with the respondent. The trial
\nCourt decreed the suit on the ground that the respondent had a valid title and
\ntherefore, was entitled to possession.\n<\/p>\n
\t5. The lower appellate Court did not even consider the question whether
\nO.S.No.18 of 1982 or O.S.No.23 of 1982 was collusive. However, it confirmed the
\nfindings of the trial Court following the decision in Anarayanan Nair
\nRamakrishnan Nair and another Vs. Zacharia Kuriakose (died) and others  (AIR
\n1991 Kerala 151).\n<\/p>\n
\t6. The following substantial questions of law have been raised by the
\nappellants :-\n<\/p>\n
\t“a) Whether the courts below are right in not even adverting the challenge
\nmade by the appellants that the agreement, dated 19.12.1979 and the decree
\nthereon are all collusive and fraudulent and is also an abuse of process of
\nCourt and a fraud played on Court?\n<\/p>\n
\tb) Whether the court below is right in following the decision in 1991
\nKerala 152, which is easily distinguishable from 1974 Madras 16 and even if it
\nis not distinguishable, is the Court not bound by the decision of the Madras
\nHigh Court?\n<\/p>\n
\tc) Are the courts below right in granting relief to the respondent
\nespecially when all the proceedings laid by him in O.S.No.18 of 1982 were taken
\nwhen the attachment over the property was pending?”\n<\/p>\n
\t7. Orders were reserved in this matter on 18.2.2005.  However, on a
\nconsideration of the materials before me, I felt that the matter requires to be
\naddressed on other aspects too.  So, it was listed again today and after hearing
\nboth the counsel, orders were pronounced.\n<\/p>\n
\t8. More substantial questions of law arise for consideration relating to
\nthe application of Section 55(4)(b) of the Transfer of Property Act and to
\nentitlement of mesne profits.\n<\/p>\n
\t9. As regards the entitlement of mesne profits, this has not been decided
\nin accordance with law.  It is pertinent to see what is the definition of “mesne
\nprofits”. Mesne profits is defined as “profits which the person in wrongful
\npossession of such property actually received or might with ordinary diligence
\nhave received therefrom, together with interest on such profits”.\n<\/p>\n
\t10. Here, the possession of the appellants till the date of the decree of
\nthe trial Court cannot be stated to be wrongful, since they were put in
\npossession only by the act of the Court. They purchased the property in the
\nCourt auction. The sale was confirmed and they took delivery on 24.05.1986. The
\ntrial Court has categorically found that it is not possible to say whether the
\nplaintiff had colluded with K.Subbayya and obtained an exparte decree to defeat
\nthe rights of defendants or whether defendants have obtained a collusive decree
\nagainst K.Subbayya, who allowed the attachment order to become absolute, to
\ndefraud the plaintiff. The Appellate Court did not advert its attention to this
\naspect. Therefore, unless, there is a finding that the decree obtained by the
\nappellants is a void one, their possession after purchase at Court auction is
\nnot wrongful.\n<\/p>\n
\t11. As regards the question relating to Section 55(4)(b) of the Transfer
\nof Property Act (hereinafter be referred to as ‘the Act’ for short), this has
\nbeen referred to in the Appellate judgment, but no finding has been given
\nthereon. Since this essentially involves both issues on fact and law, it cannot
\nbe decided in second appeal. But, a finding must be given in this regard for
\nproper adjudication of the matter. The question cannot be left unanswered.\n<\/p>\n
\t12. Section 55(4)(b) of the Transfer of Property reads as follows :-
\n\t“55. In the absence of a contract to the contrary, the buyer and seller f
\nimmovable property respectively are subject to the liabilities, and have the
\nrights, mentioned in the rules next following, or such of them as are applicable
\nto the property sold:\n<\/p>\n
\t(1) – (3) \t*\t*\t*
\n\t(4) The seller is entitled –\n<\/p>\n
\t(a)\t*\t*\t*\n<\/p>\n
\t(b) where the ownership of the property has passed to buyer before payment
\nof the whole of the purchase money, to a charge upon the property in the hands
\nof the buyer, any transferee without consideration or any transferee with notice
\nof the non-payment, for the amount of the purchase money, or any part thereof
\nremaining unpaid, and for interest on such amount or part from the date on which
\npossession has been delivered.\n<\/p>\n
\t(5) – (6) \t*\t *\t* ”\n<\/p>\n
\t13.  The following decisions are helpful :-\n<\/p>\n
\ta) In Vidhyadhar Vs. Manikrao and another reported in (1999(3) SCC 573),
\nthe second defendant executed a document in favour of the first defendant for a
\nsum of s.1,500\/- and delivered possession to the latter. There was a stipulation
\nin the document that if the entire amount was returned to the first defendant
\nbefore a particular date, the possession of the property would be restored to
\nthe second defendant. The property was subsequently transferred by the second
\ndefendant to the plaintiff for a sum of Rs.5,000\/-. The plaintiff claimed that
\nthe second defendant had offered the entire amount to the first defendant, who
\ndid not accept the amount. It was pleaded that the document executed by the
\nsecond defendant in favour of the first defendant was a mortgage by conditional
\nsale and therefore, the property was liable to be redeemed.  The suit was filed
\nfor redemption of the mortgage by conditional sale or for specific performance.
\nThis was decreed by the trial Court and confirmed by the Appellate Court. The
\nHigh Court reversed it. Against that the aggrieved party went before the Supreme
\nCourt. The Supreme Court held that the definition of “sale” under Section 54 of
\nthe Act indicates that in order to constitute a sale, there must be a transfer
\nof ownership or one person to enter and though price constitutes an essential
\ningredient to the transfer of sale the words “price paid or promised or part
\npaid and part promised” indicate that the actual payment of price at the time of
\nexecution of sale deed is not a sine qua non to the completion of sale. The
\nSupreme Court also considered the right of the seller who has not been fully
\npaid.\n<\/p>\n
\tb) In Rajender singh Vs Ramdhar Singh and others reported in (2001 (6) SCC\n<\/p>\n
213), the Supreme Court held that the agreement of sale entered into by the
\njudgment debtor prior to the attachment of property in execution of a decree
\nwould prevail over the attachment itself. That was a case almost similar to the
\npresent one. The plaintiff filed a suit for recovery of money in Money Suit
\nNo.13 of 1974. He obtained an order of attachment before judgment on 26.03.1994.
\nThe attachment was effected. The defendant remained exparte. The suit was
\ndecreed on 11.10.1974. the plaintiff sent the decree for execution. An order of
\nattachment was made on 25.08.1976. The property was sold through Court auction
\non 19.11.1977. The decree holder himself purchased the attached property as in
\nthe present case. The respondents filed a case on 19.11.1997 claiming that they
\nhad purchased the properties from the judgment debtor on 27.4.1974 and that
\nprior to the sale deed there were agreements of sale dated 09.02.1974 and
\n16.12.1974. They also pleaded that the attachment was not made in accordance
\nwith law. This plea was accepted by the High Court. The Supreme Court set aside
\nthis finding with regard to non-compliance with the procedure  relating to
\nattachment, and remitted the matter back to the single Judge for consideration
\nof the effect which the agreements have on the attachment.\n<\/p>\n
\tc) In Vannarakkal Kallalathil Sreedharan Vs. Chandamaath Balakrishnan and
\nanother (1990 (3) SCC 291), the Supreme Court held as follows :\n<\/p>\n
    “5.  We may first draw attention to some of the relevant statutory
\nprovisions bearing on the question. Order XXXVIII Rule 10 of the Code of Civil
\nProcedure provides that attachment before judgment shall not affect the rights
\nexisting prior to the attachment of persons not parties to the suit. Under
\nSection 40 of the Transfer of Property Act, a purchaser under a contract of sale
\nof land is entitled to the benefit of an obligation arising out of that contract
\nand it provides that that obligation may be enforced inter alia against a
\ntransferee with notice. Section 91 of the Trusts Act also recognises this
\nprinciple that the transferee with notice of an existing contract of which
\nspecific performance can be enforced must hold the property for the benefit of
\nthe party to the contract. These are equitable rights though not amounting to
\ninterest in immovable property within the meaning of Section 54 of the Transfer
\nof Property Act which declares that a contract of sale does not create an
\ninterest in the property. On this line of reasoning it has been held by the
\nMadras High Court that the purchaser of (sic unde) an antecedent agreement gets
\ngood title despite attachment. See Paparaju Veeraraghavaya V. Killara Kamala
\nDevi (AIR<\/a> 1935 Madras 193, Veerappa Thevar Vs. C.S.Venkatarama Aiyar (AIR 1925
\nMadras 872 and Angu Pilla Vs. M.S.M.Kasiiswanathan Chettiar (AIR 1974 Madras 16.\n<\/p>\n
\t 6.  …\n<\/p>\n
\t 7.  …\n<\/p>\n
\t 8.  …\n<\/p>\n
    9. In our opinion, the view taken by the High Courts of Madras, Bombay,
\nCalcutta and Travancore-Cochin in the aforesaid cases appears to be reasonable
\nand could accepted as correct. The agreement for sale indeed creates an
\nobligation attached to the ownership of property and since the attaching
\ncreditor is entitled to attach only the right, title and interest of the
\njudgment-debtor, the attachment cannot be free from the obligations incurred
\nunder the contract for sale. Section 64, CPC no doubt was intended to protect
\nthe attaching creditor, but if the subsequent conveyance is in pursuance of an
\nagreement for sale which before the attachment, the contractual obligation
\narising therefrom must be allowed to prevail over the rights of the attaching
\ncreditor. The rights of the attaching creditor shall not be allowed to override
\nthe contractual obligation arising from an antecedent agreement for sale of the
\nattached property. The attaching creditor cannot ignore that obligation and
\nproceed to bring the property to sale as if it remained the absolute property of
\nthe judgment-debtor. We cannot, therefore, agree with the view taken by the
\nPunjab and Haryana High Court in Mohinder Singh (AIR 1971 P & H 381)”.\n<\/p>\n
\t14. The learned counsel for the appellants relied on the decision reported
\nin Bharat Petroleum Corporation Llimited and another Vs. N.R. Vairamani and
\nanother 2004 (4) MLJ 147 (SC), where the Supreme Court had issued a warning
\nregarding placing reliance on decisions without discussing how the factual
\nsituations fit in the instant context and quoted the following words of Lord
\nDenning” :-\n<\/p>\n
\t“Each case depends on its own facts and a close similarity between one
\ncase and another is not enough because even a single significant detail may
\nalter the entire aspect, in deciding such cases, one should avoid the temptation
\nto decide cases (as said by Cordozo) by matching the colour of one case against
\nthe colour of another. To decide therefore, on which side of the lane a case
\nfalls, the broad resemblance to another case is not at all decisive.”
\n\t*** *** ***
\n\t“precedent should be followed only so far as it marks the path of justice,
\nbut you must cut the dead wood and trim off the side branches else you will find
\nyourself lost in thickets and branches. My plea is to keep the path to justice
\nclear of obstructions which could impede it.”\n<\/p>\n
\t15. In the present case, the trial court had specifically stated that it
\nis not possible to come to a decision as to which suit is collusive. This aspect
\nwas totally ignored by the Appellate Court. It merely recorded the finding of
\nthe trial Court without saying anything more, while specifically referring to
\nSection 55(4)(b) of the Act.\n<\/p>\n
\t16. In the written statement filed by the appellants, it is stated in
\nparagraphs 4 and 5 that the agreement which was specifically enforced, was
\nbrought about by the respondent and the said Subbayya, with a view to defraud
\nthe appellants.   We have to see whether Section 55(4)(b) of the Act has
\napplication to the instant case. For this, the Appellate Court will have to
\ndecide whether the respondent is a transferee with notice, or a transferee
\nwithout consideration.\n<\/p>\n
\t17. The learned counsel for the appellants posed the question as to how in
\nequity, the appellants can lose on all counts. They are unpaid sellers, who have
\nnot been paid Rs.50,000\/-. Their suit on the pronote was decreed. They have
\npurchased the property at a Court auction, which is taken away from them by the
\ndecree in this suit and to compound the injury they have also been asked to pay
\nthe mesne profits. The paragraph extracted from the judgment of the Supreme
\nCourt shows that the lien of the unpaid seller is an equitable lien. If so, the
\nquestion whether the respondent is a transferee without notice, ought to have
\nbeen answered by the Appellate Court, as the final court of fact. This ground
\nhas been raised in the ground of second appeal, though not framed as a
\nsubstantial question of law.\n<\/p>\n
\t18. It is also important to note that Section 64 of the Civil Procedure
\nCode has undergone a change. The earlier Section 64 is retained as Section
\n64(1).  Section 64, CPC reads thus:-\n<\/p>\n
\t“64. Private alienation of property after attachment to be void.-
\n\t(1) Where an attachment has been made, any private transfer of delivery of
\nthe property attached or of any interest therein and any payment to the
\njudgment-debtor of any debt, dividend or other moneys contrary to such
\nattachment, shall be void as against all claims enforceable under the
\nattachment.\n<\/p>\n
\t(2) Nothing in this Section shall apply to any private transfer or
\ndelivery of the property attached or of any interest therein, made in pursuance
\nof any contract for such transfer or delivery entered into and registered before
\nthe attachment.\n<\/p>\n
\tExplanation – For the purposes of this section, claims enforceable under
\nan attachment include claims for the rateable distribution of assets.”\n<\/p>\n
\t19. If a new law speaks in a language which indicates expressly or
\notherwise that it takes in pending matters, the Court of appeal must give effect
\nto that intention. In the decision reported in AIR 1966 SC 1423 (DAYAWATI -VS-
\nINDERJIT), the Supreme Court in para 10 held as follows :-\n<\/p>\n
    “10.  … Matters of procedure are, however, different and the law affecting
\nprocedure is always retrospective. But it does not mean that there is an
\nabsolute rule of inviolability of substantive rights. If the new law speaks in
\nlanguage, which, expressly or by clear intendment, takes in even pending
\nmatters, the Court of trial as well as the Court of appeal must have regard to
\nan intention so expressed, and the Court of Appeal may give effect to such a law
\neven after the judgment of the Court of first instance. The distinction between
\nlaws affecting procedure and those affecting vested rights does not matter when
\nthe Court is invited by law to take away from a successful plaintiff, what he
\nhas obtained under a judgment.  … ”\n<\/p>\n
Head Note 1 in the decision reported in AIR 1959 SC 577 (KOTTURUSWAMI -VS-
\nVEERAVVA) reads thus :-\n<\/p>\n
    “It is well settled that the appellate Court is entitled to take into
\nconsideration any change in the law.”\n<\/p>\n
\t20. It is worthwhile to examine the reports of the Law Commission of India
\nin this regard.  The 27th report submitted in December 1964 is extracted
\nhereunder :-\n<\/p>\n
\t“64(1). The question has been raised whether a transfer actually made
\nafter the attachment but in pursuance of an agreement made before the attachment
\nis invalidated by Section 64.  One view is that the Section does not apply in
\nsuch cases vide Babala Venkata Reddy Vs. Mangadu Yellappa Chetty (AIR 1917
\nMadras 4, 51), (Abdur Rahim and Srinivasa Ayyangar JJ), Ghuaram Vs. Parashram
\n(AIR 1936 Nag. 163, 165) (Pollock, J.), Yeswant Vs. Pyaraji – Attachment after
\njudgment (AIR 1943 Bom 145) and Ranga Ramachandra Vs. Garbingappa – Attachment
\nbefore judgment (AIR 1941 Bom 198, 200, 201).\n<\/p>\n
\t64(2). In the draft Report which was circulated for comments an exception
\nwas proposed to Section 64 to the effect that “Nothing in this section applies
\nto any private transfer or delivery of the property attached or of any interest
\ntherein, made in execution of any contract for such transfer or delivery entered
\ninto before the attachment”. But, after careful consideration, it has been
\ndecided not to make any such exception. A sweeping provision of this kind might
\nbe abused, and the practice of bringing into existence agreements which are
\nreally executed after attachment but are ante-dated to an earlier date, might be
\nencouraged by such exception.\n<\/p>\n
\t64(3). The decision as to how far such a transfer should be recognised as
\nvalid by the Court, would seem often to depend on the equities of each case.
\nSome of the decisions are based on the specific provisions of Order XXXVIII,
\nrule 10; a few exhibit special features arising out of the passing of a decree
\nfor specific performance. So far as other situations are concerned, the equities
\nof the case should, it is considered, be taken by the Court into account.”
\nIn the 54th report submitted in February 1973, the relevant passages are
\nextracted hereunder:-\n<\/p>\n
\t“1.E.48. Section 64 is as follows :\n<\/p>\n
\t’64. Where an attachment has been made, any private transfer or delivery
\nof the property attached or of any interest therein and any payment to the
\njudgment-debtor of any debt, dividend or other monies contrary to such
\nattachment, shall be void as against all claims enforceable under the
\nattachment.\n<\/p>\n
\tExplanation – For the purpose of this Section, claims enforceable under an
\nattachment include claims for the rateable distribution of assets.’<\/p>\n
\tThere has been a conflict of decisions on the question whether a transfer
\nmade after attachment in pursuance of an agreement entered into before
\nattachment is void. The Commission in its Report on the Code (27th Report, Page
\n118, Note on Section 64), considered this conflict; but was not inclined to
\nsuggest a change. It noted that in the draft Report which had been circulated to
\nState Governments, High courts etc.) for comments, an exception was proposed to
\nSection 64 to the effect that “Nothing in this Section applies to any private
\ntransfer or delivery of the property attached or of any interest therein, made
\nin execution of any contract for such transfer or delivery entered into before
\nthe attachment”. But, after careful consideration, the Commission decided not to
\nmake any such exception. The Principal consideration which weighted with the
\nCommission was thus stated –\n<\/p>\n
\t‘A sweeping provision of this kind might be abused and the practice of
\nbringing into existence agreements which are really executed after attachment
\nbut are ante-dated to as earlier date, might be encouraged by such exception.’<\/p>\n
  The Commission also added –\n<\/p>\n
\t‘The decision as to how far such a transfer should be recognised as valid
\nby the Court would seem often to depend on the equities of each case. Some of
\nthe decisions are based on the specific provisions of Order 38 Rule 10; a few
\nexhibit special features arising out of the passing of a decree for specific
\nperformance. So far as other alterations are concerned, the equities of the case
\nshould, it is considered be taken by the Court into account.’\n<\/p>\n
\t1.E.49. We have carefully considered the matter. We agree that a sweeping
\nprovision saving every transfer made in pursuance of a pre-attachment agreement,
\nmight lead to fictitious claims, as was noted by the previous Commission. But we
\nthink that a provision of a limited character, applicable only where the
\nagreement itself is registered before the attachment, would be harmless. A
\ntransfer in pursuance of such agreement should override the attachment, if the
\nagreement precedes the attachment.\n<\/p>\n
\tRecommendation
\n\t1-K.50. We therefore, recommend that the following Exception be added
\nbelow Section 64 :\n<\/p>\n
\t‘Exception-Nothing in this Section applies to ay private transfer or
\ndelivery of the property attached or of any interest therein, made in execution
\nof any contract for such transfer or delivery entered into and registered before
\nthe attachment’.”\n<\/p>\n
\t21. This amendment was actually introduced only in 2002 and in the
\nstatement of objects and reasons to the Code of Civil Procedure (Amendment Act
\n2002).  Paragraph 3(l) reads as follows :-\n<\/p>\n
\t“Sections 39, 64 and Rules 32 and 92 under Order 21 of the Code shall be
\namended on the basis of the 54th, 139th and 144th reports of the Law Commission
\nof India. These amendments are clarificatory in nature”.\n<\/p>\n
Therefore, Section 64(2) only clarifies what the Legislature always intended the
\nSection to mean.\n<\/p>\n
\t22. It may also be worthwhile to look at the other Acts, where somewhat
\nsimilar provisions have been introduced. Section 64(2) refers to an agreement of
\nprivate transaction. Such agreements are not required to be registered. But yet
\nthe Legislature has protected only such of those agreements which have been
\nregistered before the attachment; from the effect of Section 64(1), which
\nrenders void, all private transactions.\n<\/p>\n
\t23. For example, Section 21-A of the Tamilnadu Land  Reforms (Fixation of
\nCeiling on land) Act is in the nature of a proviso to Section 22 of the Act. It
\nis well known that partition can be effected even orally and such division be
\nrecorded later in writing. But to avail of the benefit of the proviso\/protection
\nof Section 21-A, there has to be a registered instrument of partition,
\notherwise, the authorised Officer may declare the partition to be void, if he
\nfinds that the partition defeats any of the provisions of this Act.\n<\/p>\n
\t24. Here the Act only protects instruments of partition which are
\nregistered, only to ensure that the objects of the Act are not defeated.\n<\/p>\n
\t25. Similarly, in Chapter XXC of the Income Tax Law, restrictions were
\nimposed on transfer of immovable property and there can be no transfer of any
\nimmovable property exceeding Rs.5 lakhs, unless, it is preceded by an agreement
\nfor transaction, which is reduced in writing in the form of a statement, as
\nprovided in Section 269UA. Agreement for transaction was defined in Section
\n269UA, which is as follows:-\n<\/p>\n
\t“Agreement for transfer” means an agreement, whether registered under the
\nRegistration Act, 1908 916 of 1908), or not, for the transfer of any immovable
\nproperty.”\n<\/p>\n
Therefore, though one could transfer immovable property by way of sale without
\nentering into an agreement, restraints were imposed with regard to transfer of
\nimmovable property of a certain value. So, while a private agreement for
\ntransfer may be oral, an agreement for transfer in Chapter XXC had to be reduced
\nin writing and in the form of a statement. There were striking distinctions
\nbetween the two with regard to the manner in which they should be signed,
\nverified, declare their terms, spell out his consideration etc.\n<\/p>\n
\t26. This was introduced to “Check, Proliferation of black money in real
\nestate transactions and to introduce declaration of the true market value of the
\nimmovable property in question which is the subject matter of transaction
\nbetween the parties so as to prevent evasion of taxes.\n<\/p>\n
\t27. Therefore, documents or transactions, which did not require the
\ntransaction to be in writing, had to be either registered or, reduced into a
\nstatement for the purpose of obtaining the protection of a certain legal
\nprovision. With regard to Section 64(2) of the Civil Procedure Code, it was to
\nprotect the transaction from being rendered void on account of the attachment of
\nproperty. Therefore, while introducing Section 64(2) of the Civil Procedure
\nCode, the Legislature has only introduced what has been under consideration from
\nthe time of the 27th Report. The Legislature has been conscious that agreements
\ncan be brought about to nullify the right of the attaching decree holder and
\nthey have finally clarified in the Amendment Act 2002 that Section 64(1) of the
\nCode of Civil Procedure will not apply if the agreements have been registered
\nbefore the attachment. In the instant case, while the pronote in favour of the
\nappellant has been registered and it has even been marked as exhibit, the
\nagreement based on which the specific performance suit was filed was not marked
\nbefore the trial Court. In fact, even in the pleadings, there is nothing to show
\nthat the respondent had entered into a registered agreement before he filed a
\nspecific performance suit.  Section 64, C.P.C. refers to private alienation,
\nwhereas in the present case, the sale deed was executed by the Court pursuant to
\nthe decree for specific performance. In AIR  1945 MADRAS 412 (IMPERIAL BANK OF
\nINDIA -VS- BALASUBRAMANIA PANDIA), a Division Bench of this Court held that for
\napplying Section 64, C.P.C. court orders passed with consent of the parties have
\nno higher sanction than that of a mere private transfer. By analogy, the sale
\ndeed executed by the Court, in execution of an exparte decree for specific
\nperformance of an agreement also stands on the same footing as a part sale. It
\nis not an involuntary sale. Again, if the issue raised by the appellant, that
\nthe suit O.S.No.18 of 1982 is a collusive one, is answered against the
\nrespondent, then as per the decision reported in 1994 (1) SCC 1 = AIR 1994
\nS.C.853 (S.P. CHENGALVARAYA NAIDU -VS- JAGANNATH) the appellant must suceed.  In
\nparagraphs 1 and 7 therein, it is held as follows :-\n<\/p>\n
\t“1. ‘Fraud-avoids all judicial acts, ecclesiastical or temporal’ observed
\nChief Justice Edward Coke of England about three centuries ago.  It is the
\nsettled proposition of law that a judgment or decree obtained by playing fraud
\non the court is a nullity and non est in the eyes of law.  Such a
\njudgment\/decree – by the first court or by the highest court – has to be treated
\nas a nullity by every court, whether superior or inferior.  It can be challenged
\nin any court even in collateral proceedings.”\n<\/p>\n
\t……\n<\/p>\n
\t“5. The principle of ‘finality of litigation’ cannot be pressed to the
\nextent of such an absurdity that it becomes an engine of fraud in the hands of
\ndishonest litigants.  The courts of law are meant for imparting justice between
\nthe parties.  One who comes to the court, must come with clean hands.  We are
\nconstrained to say that more often than not, process of the court is being
\nabused.  Property-grabbers, tax-evaders, bank-loan-dodgers and other
\nunscrupulous persons from all walks of life find the court process a convenient
\nlever to retain the illegal-gains indefinitely.  We have no hesitation to say
\nthat a person whose case is based on falsehood, has no right to approach the
\ncourt.  He can be summarily thrown out at any stage of the litigation.”\n<\/p>\n
\t28. The learned counsel for the appellants relied on the decision in
\nVengalaveeran Vs. Rajendran and 4 others (1997(II) CTC 371), where the decree
\nholders obtained an order of attachment on 05.06.1986 and the revision
\npetitioner is alleged to have been purchased the property on 16.6.1986. The
\nattachment was effected on 17.06.1986. This Court held that the petitioner as
\nwell as his vendor with the full knowledge of the order of attachment had
\nexecuted the deed with the object of defeating the claims of the petitioner.\n<\/p>\n
\t29. In this case, the appellate Court did not give a finding regarding the
\nquestion whether the respondent had the knowledge of the attachment and had
\npurchased the property to defeat the rights of the appellants. The trial Court
\ntook an ambivalent stand and held that it is not possible to state whether the
\nappellants and K.Subbayya colluded to defeat the rights of the respondent and
\nfiled O.S.No.23 of 1982 or whether the respondent and the said K.Subbayya had
\ncolluded to defeat the right of the appellants and filed O.S.No.18 of 1982.\n<\/p>\n
\t30. The learned counsel for the respondent relied on Padmavathi Ammal Vs.
\nM.Maruthachalam Pillai and others (1966(1) MLJ 413), wherein it was held that
\nwhen several steps as required under Order 21, Rule 54(2) have been in fact
\ntaken, a presumption can be made, as to the regularity of the steps proved to
\nhave been taken. But the presumption does not come in, when there is no evidence
\nthat the act has been performed and that the mere report of the amin that “I
\nhave attached” will not be sufficient to prove that everything needful to effect
\na valid attachment has been made. It was held that a property purchased after an
\ninvalid attachment in execution of a decree would not be affected by Section 64,
\nCPC.\n<\/p>\n
\t31. So, the learned counsel for the respondent submits that when in
\nO.S.No.23 of 1982, the trial Court had ordered attachment on the date on which
\nthe suit was taken on file, it cannot be said to have been complied with as
\ncontemplated under Order 38 Rule 5(4), C.P.C. and therefore, Order 38 Rule 5(5)
\nwill come into play.\n<\/p>\n
\t32. We must also take note of Order 21 Rule 54 of the Code of Civil
\nProcedure. Sub-Rule 3 of Madras amendment reads as follows :-
\n\t“Madras – (a) Substitute the following for  sub-rule (2) :\n<\/p>\n
\t(2) The order shall be proclaimed at some place on or adjacent to such
\nproperty by beat of drum or other customary mode. A copy of the order shall be
\naffixed on a conspicuous part of the property and on a conspicuous part of the
\nCourt-house. Where the property is land paying revenue tot he Government a copy
\nof the order shall be similarly affixed in the office of the Collector of the
\ndistrict where the land is situated. Where the property is situated within
\nCantonment limits, the order shall be similarly affixed in the office of the
\nLocal Cantonment Board and the Military Estates Officer concerned, and where the
\nproperty is situated within the limits of municipality,in the office of the
\nMunicipality within the limits of which the property is situated”.\n<\/p>\n
\t(b) Add the following as sub-rule (3) :\n<\/p>\n
\t(3) The order of attachment shall be deemed to have been made as against
\ntransferees without consideration from the judgment-debtor from the date of the
\norder of attachment, and as against all other persons from the date on which
\nthey respectively had knowledge of the order of attachment, or the date on which
\nthe order was duly proclaimed under sub-rule(2), whichever is earlier.”\n<\/p>\n
\t33. In Chinnasamy Vs. Subakmul Gulecha (AIR 2003 Madras 46), it was held
\nthat since the appellants did not examine the persons who read out the order of
\nattachment and effected tom tom and since the mandatory formalities had been
\ncomplied with, the sale in favour of the appellants was hit by Section 64 of the
\nCode of Civil Procedure and therefore, void.\n<\/p>\n
\t34. In the above circumstances, questions of law relating to the
\napplicability of Section 64(2) of the Civil Procedure Code, the applicability of
\nSection 55(4)(b) of the Transfer of Property Act and the entitlement of mesne
\nprofits arise for consideration.  These questions must be answered before
\narriving at the correct decision; and for this, factual findings are necessary.
\nTherefore, the judgment and decree of the appellate Court is set aside and the
\nmatter is remanded to the lower appellate Court.  The lower appellate Court
\nshall hear the appeal afresh after affording an opportunity to both the parties
\nto adduce evidence, if necessary, then decide and give findings on the following
\nfactual issues :\n<\/p>\n
\ti) whether the respondent had knowledge of the fact that the appellants
\nare unpaid sellers?\n<\/p>\n
\tii) Whether the agreement entered into between the respondent and
\nK.Subbiah is a registered one and entered into bonafide?\n<\/p>\n
\tiii) Whether the attachment effected in O.S.No.23 of 1982 is in accordance
\nwith law?\n<\/p>\n
\tiv) Whether the respondent is entitled to mesne profits and if so from
\nwhat date?\n<\/p>\n
\tv) Whether the suit O.S.No.18 of 1982 is a collusive suit?\n<\/p>\n
\tvi) Whether the suit O.S.No.23 of 1982 is a collusive suit?\n<\/p>\n
\t35. The second appeal is, therefore, allowed and the matter is remanded to
\nthe lower appellate Court. The appellate Court shall decide the matter without
\nbeing influenced in any way by any of the observations made in this judgment.
\nNo costs.\n<\/p>\n
To<\/p>\n
1. The Subodinate Judge,
\n   Ambasamudram. (with records)<\/p>\n
2. The District Munsif,
\n   Ambasamudram.\n<\/p>\n
3. The Record Keeper, VR Section,
\n   Madurai Bench of Madras High Court, Madurai.\n<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"
Madras High Court Ramasamy Raja vs P. Subbayya Pillai on 3 March, 2005 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 03\/03\/2005 CORAM THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVAN Second Appeal No.130 of 1994 1. Ramasamy Raja 2. Kodandarama Raja .. Appellants (Defendants) -vs- P. Subbayya Pillai .. Respondent (Plaintiff) Prayer Appeal against the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-64772","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"\nRamasamy Raja vs P. 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