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Azhagananth (Lawyer)     08 June 2017

Section 53 of t.p act - fradulent transfer and bonafide purchaser

I have filed main suit on the base of pro-note along with ABJ petition. The ABJ petition was partly allowed, ordering the respondent/defendant to furnish the security within a month.

But instead of obeying the court order the respondent/defendant tried to the sale the ABJ petition property to a third person taking advantage of Advocate boycott and posting of judge was vacant, to stop it i have filed stay petition before the registrar. the registrar has dismissed the application stating that, "unless there is a stay before court of law nothing can be done ". the ABJ property was sold by way of registered deed on the same date.

Aafter that sale the Defendant was not tracable till date. so in order to trace the defendant and taste the fruit of the decree in future i have filed "implead - Party adding petition" to add the Third party/ purchaser as second defendant. stating all the above.

Now its reserved for orders on 13th June 2017. The third party is taking defence as he is Bonafide purchaser stating that. "there was nothing in E.C about ABJ Petition or any other and no notice was served on his name before such sale deed" i need some Citation in this regard, i have already submitted, AIR 1973 Ori 229 and (2012) 7 MLJ 675 .

I need further more .. Experts please help me..



Learning

 10 Replies

Ramesh   15 August 2017

Hi,

I'm in similar situation of yours.  Has the court cancelled the  sale transfer to third party?

Thanks

Azhagananth (Lawyer)     16 August 2017

No, i have preferred CRP,Before High court..

The draw back in my case was ABJ was allowed partly - "only to furnish security".

As no attachment was ordered it was sold by the fradulaent defedanant. anyway will file the E.P for attachment of the property to same. because it was sold in lis pendence, to delay the creditor. have authority for that.

Ramesh   25 August 2017

my thoughts after reading many articles in net:
defendant sold the property when ABJ and money suit were pending.  The doctrine of lis pendens, embodied in Section 52 will not apply as the property was NOT the subject matter of the money suit.  

Does section52 apply when ABJ is pending?
Does section52 apply when Injunction IA petition is pending?

Azhagananth (Lawyer)     25 August 2017

AIR 1973 Ori 229 : (1973) 39 CLT 316

ORISSA HIGH COURT

SINGLE BENCH

JAYAKRISHNA DEBATA — Appellant

Vs.

CHAITAN PANI — Respondent

( Before : S. Acharya, J )

Second Appeal No. 14 of 1970

Decided on : 23-01-1973

·  Transfer of Property Act, 1882 — Section 53

Counsel for Appearing Parties

Samareswar Mohanty, for the Appellant; B.B. Mohanty, for the Respondent

Final Result : Allowed

JUDGMENT

S. Acharya, J.—The defendant has preferred this second appeal against the decision of the Additional Subordinate Judge, Cuttack in Title Appeal No. 202 of 1965 confirming the decision of the First Munsif, Cuttack in Title Suit No. 30 of 1960.

2. Defendant Jayakrishna Debata instituted Money Suit No. 112 of 1952 against one Jagannath Debata in the Court of the Subordinate Judge, Cuttack and obtained a money decree on 6-1-58 against the said Jagannath. When the said suit, instituted in 1952, was pending in the Trial Court, Jagannath Debata sold the suit property along with some other lands as per a registered sale deed dated 31-8-1956 in favour of the plaintiff and one Sari Debi. In execution of the decree obtained in Money Suit No. 112 of 1952 the defendant attached the suit property. The plaintiff, who purchased the suit land as mentioned above, preferred an objection under Order 21, Rule 58, CPC which was dismissed for default, whereupon he has filed this suit under Order 21, Rule 63, CPC for a declaration of his title and possession in respect of the suit property and for a permanent injunction on the defendant restraining him from selling the suit property in the said execution case.

3. The defendant, appellant herein, contests this suit, inter alia, on the ground that the sale deed dated 31-8-56 in favour of the plaintiff is a fraudulent and sham transaction and no consideration passed thereunder. The plaintiff was never in possession of the suit property and the said Jagannah Debata is still in possession thereof. It is also averred that the above-mentioned sale in favour of the plaintiff was with the intent to delay and/or defeat the defendant-creditor's claim against Jagannath Debata and it was not in good faith.

4. The learned Munsiff held that the sale deed was duly executed and was for consideration and that the plaintiff acquired good title to the suit property under the sale deed, and he has been in possession of the suit property since he purchased the same.

The Appellate Court on a consideration of the evidence on record confirmed the aforesaid findings of the Trial Court.

5. Mr. S.S. Mohanty, the learned counsel for the appellant, contends that the courts below proceeded to discuss this case entirely on an illegal and incorrect basis as they did not at all apply their minds to the various other aspects of the matter which they were called upon to decide in a suit of this nature. He also contends that the finding of the Appellate Court at paragraph 6 of its judgment that the question of fraud or defeating the claim of the creditor does not arise in this case as the plaintiff purchased the suit land long before the passing of the judgment in the money suit, and at that time there was no relationship of creditor or debtor between the parties to the money suit, is incorrect and illegal in view of the provisions of Section 53 of the Transfer of Property Act. He submits that in the aforesaid Money Suit it has been adjudged that the defendant in the present suit has some outstanding dues against Jagannath Debata, the plaintiff's vendor, and so the defendant, the decree-holder in the Money Suit, is in the position of a subsequent creditor in relation to Jagannath, the judgment-debtor in that suit, and accordingly the Court's decision to the above effect is absolutely incorrect and illegal. In support of this second contention Mr. Mohanty cites the Division Bench decision of the Madras High Court reported in AIR 1965 Mad 395, Umar Sait v. Union of India wherein it has been held:

"It is now well settled that for the purpose of avoiding a transfer by a debtor u/s 53 of the T. P. Act it is not necessary that the transferor should have been actually indebted at the time he makes the transfer. A transfer intended to cheat future creditors would be equally voidable at their instance."

Their Lordships after giving an illustration to support their above-mentioned view have quoted with approval the law on this subject as stated in Halsbury's Laws of England, 3rd Edition, Vol. 17 at page 660 which is as follows:

"With the above exceptions, all creditors who have been prejudiced by the alienation made with intent to defraud them, whether their debts were owing at the date it was made or were incurred subsequently, may avoid the alienation and share in the distribution of the property comprised therein. Although subsequent creditors have the same right to set aside an alienation made with intent to defraud them as creditors whose debts were due at the date of the alienation, they have a more difficult task than the latter class of creditors in proving a fraudulent intent on the part of the grantor in the case of a voluntary settlement. In such case they must prove either an express intent to defraud creditors, that, immediately after the settlement, the grantor had no sufficient means or reasonable expectation of being able to pay his then existing debts. In the absence of an express intent to defraud, a voluntary deed will not be set aside at the instance of a subsequent creditor if all creditors existing at the date of the deed have been paid off."

In the case reported in AIR 1954 Mad 173 at p. 176 (Kallubandi Nanjamma v. Kethe Rangappa) their Lordships have observed that u/s 53 of T. P. Act it is not merely the creditors who are in existence at the date of the transfer but also subsequent creditors that are entitled to avoid it.

In Magnibai Kishorjee v. Kesrimal Sewairam, AIR 1955 Madh Bha 159, it has been held that the word "creditors" in Section 53 would include even the future or subsequent creditors. Their Lordships have also held that any creditor whether he be one at the time of transfer or even a subsequent one is clothed with a substantive right u/s 53 of the Transfer of Property Act to avoid such a transfer.

In the case reported in AIR 1948 Bom 265, (Abdullakhan Daryakhan v. Purshottam Damodar) it is held:

"It (the term "creditor") includes not only those creditors who have obtained decrees against their debtors, but also ordinary creditors whose claims have yet to be proved in a Civil Court."

The decision reported in AIR 1931 333 (Oudh) is also to the same effect.

I am in full agreement with the above-mentioned decisions on this question.

6. It is provided in the last paragrah of Sub-section (1) to Section 53 of the T. P. Act and conceded by Mr. B.B. Mohanty, the learned counsel for the respondent, that the term "creditor" includes a decree-holder. Mr. B.B. Mohanty, however, contended that as the decree was passed subsequent to the aforesaid sale, the decree-holder was not in the position of a creditor in relation to the said Jagannath at the time of the said sale, and so the provisions of Section 53 of the T. P. Act will not enure to the benefit of the defendant-decree-holder. In view of the law as well settled in the above-mentioned decisions this contention is not acceptable, as for the purpose of avoiding a transfer by a debtor, u/s 53 of the T. P. Act it is not necessary that the money claims put forward against him should have been proved and decreed in the Civil Court or that the transferor should have been actually indebted at the time he makes the transfer. Moreover as seen from the above decisions the word "creditor" in Section 53 of the T. P. Act would include even the future or subsequent creditor. In the above view of the matter the defendant, being a subsequent decree-holder, is in the position of a subsequent creditor in relation to Jagannath, the judgment-debtor in the Money Suit. So the substantive right conferred u/s 53 of the T. P. Act will be available to him if the other requirements of the section are established in this case.

7. On the facts of this case and in view of the well settled law on the subject as mentioned above, the approach of the Court to the above particular aspect of the matter and its conclusions thereon as stated in paragraph 6 of the impugned judgment are entirely illegal and incorrect. Thus the above-mentioned second, contention of Mr. B.B Mohanty is correct and justified.

8. On a perusal of the judgments of the two courts below and on hearing the counsel appearing for both the parties I also find that both the parties in the suit and the two courts below have not at all bestowed any consideration to and have not approached the matter in controversy in the correct legal perspective. Both the courts below bestowed their attention mostly to enquire and decide as to whether the sale deed executed in favour of the plaintiff was a valid one, whether the plaintiff acquired good title to the suit property under the same, and whether he was in possession of the same. The Trial Court of course correctly framed two issues (Issue Nos. 7 and 8) to decide whether the transfer made in favour of the plaintiff was with the intent to defeat or delay the creditors and whether the said transfer was made in good faith and for consideration. The aforesaid issues are the two most important issues in this case and are in conformity and/or in consonance with the provisions of Section 53 of the T. P. Act. But on a perusal of the judgments of the courts below I am left with the impression that neither the parties nor the courts below understood the true implication of the said two issues, or the scope of the suit, the matter in controversy and the specific questions which arise for consideration and decision in this case in the perspective of the provisions of Section 53 of the T. P. Act. The counsel for both the parties state that from the records of the case it is quite evident that both the parties were not correctly advised to bring into record the proper evidence necessary to decide issues Nos. 7 and 8 in the correct legal perspective. They are justified in their above submission. That being the position, in the interest of justice, the case should go back to the Trial Court in order to enable both the parties another opportunity to adduce fresh evidence on Issues Nos. 7 and 8 framed in this case. The Trial Court after recording fresh evidence, if adduced, to the above effect, should dispose of the matter in accordance with law keeping in view the provisions of Section 53 of the T. P. Act and the findings and observations contained in this judgment. The concurrent finding of fact that the sale deed in favour of the plaintiff was duly executed and it was for consideration and that the plaintiff has been in possession of the suit land since he purchased the same, shall not be disturbed, and the Trial Court should decide the matter in the context of the said concurrent finding.

9. In the result, therefore, the judgments and decrees of both the courts below are set aside and the suit is remanded to the Trial Court for a fresh decision of the matter in accordance with law and in accordance with the observations and directions given above.

The appeal accordingly is allowed. Costs will abide by the final decision of the case. The L. C. R. be sent back soon to the Trial Court.

Ramesh   26 August 2017

property sold after receiving summons but before ordering ABJ.  defendant just told to provide security, section52 never came, see below

https://www.lawweb.in/2013/11/attachment-before-judgment-deft.html

Azhagananth (Lawyer)     26 August 2017

May i  know your whats app number and gmail id?

Azhagananth (Lawyer)     26 August 2017

Sure section 52 and 53A were different: the finding of the judgmen is 
 
Rajasthan High Court - Jodhpur
Shyam Sunder Soni vs Mithu Lal Jain on 9 February, 2010
                    SBSWP NO.3456/2009- SHYAM SUNDAR SONI V/S MITHU LAL : JUDGMENT DTD.9.2.2010

 

1. This writ petition is directed against the order dtd.24.3.2009 passed by the learned court below while deciding the application under Order 38 Rule 5 C.P.C. and order 38 Rule 1 C.P.C. read with Section 151 C.P.C. filed by the plaintiff.

2. The learned court below has directed by the impugned order that since the defendant has already put in appearance in the court, the Court is not issuing any arrest warrant while disposing of the application under Order 38 Rule 1 C.P.C., but at the same time, the defendant within one month should deposit security for a sum of SBSWP NO.3456/2009- SHYAM SUNDAR SONI V/S MITHU LAL : JUDGMENT DTD.9.2.2010 Rs. 9,33,350/- against the probable decree which may be passed by the Court in the civil suit instituted for recovery of the said sum by the plaintiff - respondent. In the case of default of deposit of said security, the defendant shall undergo civil imprisonment and thus, the Court decided both the applications under Order 38 Rule 1 and Order 38 Rule 5 C.P.C.

 

3. The defendant - petitioner filed this writ petition challenging the said order. Mr. Suresh Shrimali, learned counsel appearing for the defendant - petitioner urged that the suit was instituted on 17.10.2008 and the application under Order 38 Rule 5 C.P.C. was filed by the plaintiff on 20.10.2008. However, still by 15.11.2008, service on defendant could not take place and summons were returned unserved on 15.11.2008 in which next date was fixed on 2.1.2009. The learned counsel for the defendants submitted that the defendant's counsel put in appearance before the Court below on 2.1.2009. He further submitted that the property which was sought to be attached had already been sold by the defendant on 27.10.2008 and therefore, the same is not hit by Order 38 Rule 5 C.P.C. and could not be attached by the court below. He further submitted that the purpose of Order 38 Rule 1 C.PC.. is to only secure the appearance of the defendant in a civil suit and therefore, the learned trial Court could not direct the deposit of security for entire decreetal sum of Rs.9,33,350/- by the impugned order while disposing of the SBSWP NO.3456/2009- SHYAM SUNDAR SONI V/S MITHU LAL : JUDGMENT DTD.9.2.2010 application under Order 38 Rule 1 C.P.C.

He, therefore, prayed for quashing of the impugned order of the learned trial Court. He relied upon the decision of Madras High Court in the case of V. Balakrishnan V/s T.M. Gowreishan and anr. Reported in AIR 2001 Madras 20, in which despite undertaking given by the respondent - defendant not to alienate the suit property, but since the suit property was already mortgaged and it was also known to the plaintiff - applicant and mortgagee brought the property for sale and the respondents - defendants have not received any money from mortgagee or from purchasers, the respondents cannot be said to have flouted undertaking given by them and no warrant of arrest could be issued against the respondents - defendants.

6. The purpose of securing his appearance is to secure the claim of the plaintiff himself and that is why the proviso provides that to avoid the execution of arrest warrant, the defendant can pay to the officer entrusted with the execution of the warrant any sum specified in the warrant. The said proviso does not mean that the Court itself cannot direct the deposit of entire sum to the extent of claim of the plaintiff while issuing the warrant under Order 38 Rule 1 C.P.C. itself. Moreso when the application under Order 38 Rule 5 C.P.C. filed by the plaintiff was also pending before the Court and the said application was also disposed of by the Court by the same order, no water tight compartment can be taken between these two applications, particularly, when the Court was faced with the situation that during the process of service of summons, the defendant had already alienated the suit property on 27.10.2008. This might have naturally raised a suspicion in the mind of the Court that unless the claim of the plaintiff is sufficiently secured, the decree may remain unsatisfied. Thus, in order to secure the claim of the plaintiff, if the Court below has directed deposit of security to the full extent of claim of the plaintiff, no valid exception can be taken to the same. The judgment cited by the learned counsel for the petitioner - defendant arises in different circumstances wherein mortgagee brought the property in question for sale and the respondent -

SBSWP NO.3456/2009- SHYAM SUNDAR SONI V/S MITHU LAL : JUDGMENT DTD.9.2.2010 defendant had not received any money from the mortgagee or from the purchaser and therefore, they could not be said to have flouted the undertaking given by them before the Court. Here the facts are different where the defendant has apparently disposed of the property on 27.10.2008 itself and has apparently received consideration of the same from the purchaser.

 

7. Consequently, this Court finds no force in this writ petition and the same is dismissed no order as to costs.

 

 

 

Azhagananth (Lawyer)     26 August 2017

if an arrest is ordered it favor then... before the judgment so that he/she may deposit the amount

Ramesh   27 August 2017

whatsapp number 928 310 6370

email: balapandian@yahoo.com

how long will be arrest, my defendant will not mind going to jail for short term like 3 months

Sathish   17 October 2017

Azhaganath,

files money  suite and IA for attachment  on 01.07.2004
registered sale agreement on same day 01.07.2004
attachment ordered  on next day 02.07.2004
attached property sold, sale deed dated 12.04.2007  -- protected by Section 64 of CPC
suit decreed on 01.02.2008.

please visit https://indiankanoon.org/doc/162166788/


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