V S THIRU VENKITA REDDIAR Vs. S NOORDEEN

JUDGEMENT

(1.) The petitioner in E.A. 57/75 who was also one of the respondents in E A. 1061/74 in E. P. 91/66 in O. S. 38/60 on the file of the Quilon Sub Court is the revision petitioner. His application to set aside the court sale of items Nos. 1 to 7 in the proclamation schedule filed in execution of the decree in O.S. 38/60 was allowed by the Sub Court, Quilon, but dismissed in appeal by the District Court. While dismissing the appeal the District Judge observed that the application to set aside the sale was misconceived in the sense the petitioner who claims to be a purchaser under an earlier charged decree and who is in actual possession of the property can assert his rights in the property and also his right to remain in possession of it when he is sought to be dispossessed in execution of the present decree and the exact nature of his rights and the question whether these rights can prevail against the decree holder are matters which are to be properly determined at that stage. The lower appellate court in so observing lost sight of the fact that the petitioner came to court on receiving a notice to show cause why he shall not be evicted from the properties to put the decree holder auction purchaser in O.S. 38/60 in possession of the same as per the sale certificate and application tiled by him as E.A. 1061/74. The petition and objection filed by the revision petitioner before the Sub Court were really one in answer to that on asserting his preferential right to the property as against the respondent decree holder auction purchaser and so in deciding whether the court sale in O.S. 38/60 is invalid and liable to be set aside this question arises for consideration. This question is also material in considering whether the petitioner's predecessor's right is affected by the sale to apply under O.21 R.90 CPC. The execution court dismissed the application for delivery and allowed the petitioner's application. So the petitioner's right under the decree in O. S. 95/53 and the court sale following it on 26-6-1969 calls for consideration in this case and the case has been argued before me on that basis.

(2.) The Palai Central Bank Ltd. had filed a suit, O. S. 95/53, against the 2nd respondent herein for recovery of a very large amount due from him on the basis of an equitable mortgage. Before decree the present disputed items were attached on the ground that the properties mortgaged are insufficient to realise the amount due to the bank. Ext. X3 is the copy of the plaint in O.S. 95/53 and Ext. X2 is the copy of the report and of the list of properties attached. That suit was compromised and Ext. X5 is the copy of the compromise petition. Ext. X4 is the copy of the judgment to the effect that the suit is decreed in terms of the compromise. The copy of the decree produced in the case also shows that the decree contains the terms of the compromise. The bank subsequently went into liquidation and the Liquidator could bring the property to sale only on 26-6-1969. The Liquidator himself was the purchaser. He sold the property to the revision petitioner under Ext. X1 on 25 4 1974 for Rs 35,000/- and the latter discharged the prior encumbrances in the property amounting to Rs. 55,000/-. In the meanwhile the 1st respondent, another creditor of the 2nd respondent, filed a suit O.S. 38/60 and obtained a money decree against the 2nd respondent. In execution of the decree he also attached the same and other properties, brought them to sale and himself purchased for Rs. 12,000/-and odd. The 2nd respondent had taken steps to set aside the sale, but did not succeed. After obtaining the sale certificate the 1st respondent applied for delivery of possession In the meanwhile the revision petitioner had come into possession of the disputed properties under the proceedings referred to earlier and so in answer to the notice of the application for delivery he put forward his claim to the properties.

(3.) In this connection two questions arise for consideration. Firstly what is the effect of a prior attachment against an earlier sale in pursuance of a subsequent attachment and secondly whether the decree holder in O. S. No. 95/53 had obtained an enforceable charge by the compromise decree. An attachment is an order prohibiting and restraining the defendant from transferring or charging the attached property by sale, gift or otherwise and all persons from so receiving it (See O.21 R.54 and Appendix E Form No. 24, Code of Civil Procedure) and S.64 of the Code of Civil Procedure provides that private transfer or delivery of property attached shall be void against all claims enforceable under the attachment. Its effect therefore is only to prevent alienation and not to confer title by way of charge or otherwise on the attaching decree holder. Further it is only aimed at private alienations. It does not prevent involuntary alienations. On this aspect of the matter there is no difference between attachment in execution of a decree and an attachment before judgment. O.38 R.10 CPC. makes this position clear. That rule provides that the attachment before judgment shall not affect the rights existing prior to the attachment or persons not parties to the suit, nor bar any person holding decree against the defendant from applying for sale of the property attached. Such being the effect of an attachment, whether before or after decree, it does not bar a court sale in execution of another decree and with the court sale the interest of the judgment debtor passes to the auction purchaser and there is nothing left to be sold later at the instance of another decree holder who may have attached the properly earlier. The purpose of the attachment is solely for the purpose of protecting the attaching creditor's right to bring to sale in execution the right, title and interest in the attached property of the judgment debtor and there is no reason for holding that it continued to affect the attached property in any way when the attached property no longer continues to be the property of the judgment debtor. The auction purchaser takes the property free from attachment. The consequence no doubt to an earlier attaching creditor is very serious, but his rights are sufficiently safeguarded in such a situation by entitling him a ratable distribution of the proceeds of the sale. This is the only way left to a money-decree holder when other like decree holders proceed against the same property in execution. If this were not so complications will arise between an earlier attaching creditor and a subsequent attaching creditor. If the sale was under a private alienation with the earlier sale there is nothing left with the transferor to transfer subsequently to another. In the same manner the prior sale in pursuance of an attachment will prevail over a subsequent sale even if the latter sale was in pursuance of an earlier attachment. In other words with the court sale all attachment subsisting on the property will fall to the ground. I am supported in these conclusions by the decisions of the Calcutta High Court in Kashi Nath Roy Chowdhry v. Surbanand Shaha (ILR 12 Calcutta 317), of the Madras High Court in Chamiyappa Tharagan v. Rama Ayyar (ILR 44 Madras 232), of the Patna High Court in Harnandan v. Pran Nath Roy (AIR 1921 Patna 409) and of the Travancore High Court in Civil Revision Petition No. 333 of 118 (Vol. XIV TLT 767). If this was not so, it would give rise to great hardship and seriously affect court sales and there may not be any bidders in court sale. Hence it must be taken as fairly settled that when a property is sold in execution of a money decree it cannot be sold again at the instance of the decree holder who had attached before actually sold. The consequence is on the happening of a judicial sale all previous attachment effected upon the property sold fall to the ground. On the facts of this case if the revision petitioner's right is only based on attachment before judgment in O. S. No. 95/53 he has no right over the properties because before he actually sold them in execution of the above decree they had been attached and sold in execution of the decree obtained by the respondent. The fact that the case before confirmation of the sale in O. S. No. 38/60 the sale in O. S. No. 95/53 was confirmed is also irrelevant for S.65 C. P. C. provides that with the confirmation the vesting of title will relate back to the date of sale (See also 1921 Pat. 409).