Gopalakrishnan v Sethumadhavan and others

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE THOMAS P.JOSEPH FRIDAY, THE 6TH DAY OF JANUARY 2012/16TH POUSHA 1933 RSA.No. 782 of 2004 ( ) ======================= AS.101/1997 of II ADDL.DISTRICT COURT,PALAKKAD OS.420/1991 of ADDL.SUB COURT, PALAKKAD APPELLANT(S)/APPELLANT/DEFENDANT ====================== GOPALAKRISHNAN, S/O.CHAMI, KOVILINGAL VEEDU, THOLANUR AMSOM AND DESOM, ALATHUR TALUK, PALAKKAD DISTRICT. BY ADV.SRI.K.V.SOHAN SMT.SREEJA SOHAN.K. RESPONDENT(S)/RESPONDENT/PLAINTIFF ======================= SETHUMADHAVAN, S/O.NARAYANAN, COYALMANNAM AMSOM DESOM ALATHUR TALUK PALAKKAD DISTRICT.(DIED) ## SUPPLEMENTAL RESPONDENTS: 2. OMANA, W/O.LATE SETHUMADHAVAN, RESIDING AT PUNAKUKALM, KUZHALMANNAM AMSOM AND DESOM, ALATHUR TALUK, P.O.KUZHALMANNAM, PALAKKAD DISTRICT. 3. SREEJA, D/O.LATE SETHUMADHAVAN, RESIDING AT PUNAKUKALM, KUZHALMANNAM AMSOM AND DESOM, ALATHUR TALUK, P.O.KUZHALMANNAM, PALAKKAD DISTRICT. 4. SHIJU, S/O.LATE SETHUMADHAVAN, RESIDING AT PUNAKUKALM, KUZHALMANNAM AMSOM AND DESOM, ALATHUR TALUK, P.O.KUZHALMANNAM, PALAKKAD DISTRICT. 5. REEJA, D/O.LATE SETHUMADHAVAN, RESIDING AT PUNAKUKALM, KUZHALMANNAM AMSOM AND DESOM, ALATHUR TALUK, P.O.KUZHALMANNAM, PALAKKAD DISTRICT. IT IS RECORDED THAT THE SOLE RESPONDENT IS DEAD AND SUPPLEMENTAL RESPONDENTS 2 TO 5 ARE IMPLEADED AS LRS. OF DECEASED SOLE RESPONDENT AS PER ORDER DATED 13.01.2005 IN IA NO.33/2005. BY ADV. SRI.SAJAN VARGHEESE K. SRI.LIJU. M.P THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 06-01-2012 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **THOMAS P. JOSEPH, J.** **-------------------------------------R.S.A. No.782 of 2004 -------------------------------------Dated this the 6[th] day of January, 2012.** ## **JUDGMENT** The following substantial questions of law are framed for a decision: i. Whether a suit for declaration and injunction is maintainable at the instance of purchaser of the property under a document from the judgment debtor, after auction sale was confirmed and delivery of the property was effected in favour of the auction purchaser? ii. Whether, when in a suit for specific performance a decree for realisation of the advance sale consideration is granted, is not a private sale hit by Section 52 of the Transfer of Property Act in view of statutory charge in favour of the decree holder? 3. The above questions arise in this Second Appeal preferred against the judgment and decree of learned II Additional District Judge, Palakkad in A.S.No.101 of 1997 confirming judgment and decree passed by the learned Additional Sub Judge, Palakkad in O.S.No.420 of 1991. 4. Short facts necessary for a decision of the questions raised are: Appellant entered into an agreement for purchase of suit property with one Appukkuttan on 25.01.1984 as per which the said Appukkuttan agreed to transfer his right, title, interest and possession of the suit property in favour of the appellant for consideration mentioned therein. It is stated that the said **RSA No.782/2004** 2 Appukkuttan received certain amount from the appellant by way of advance. Since Appukkuttan allegedly refused to execute assignment deed in favour of appellant, the latter filed O.S.No.245 of 1984 before the learned Sub Judge, Palakkad for a decree for specific performance. Appukkuttan contended that there was breach on the part of the appellant in taking the sale deed. Learned Sub Judge by Ext.B1, judgment dated 31.01.1987 concluded that there was breach on the part of appellant and Appukkuttan and granted a decree for recovery of `16,000/- with 12% interest per annum and cost from the said Appukkuttan. To execute that decree, appellant filed E.P.No.63 of 1987 and filed E.A.No.291 of 1987 against Appukkuttan, the judgment debtor alienating the property. Ext.B2 is the copy of E.A.No.291 of 1987. Appukkuttan (judgment debtor) undertook on 02.09.1987 that he will not alienate the property. In the meantime, appellant sought attachment of property in E.P.No.63 of 1987 and there was an order for attachment on 23.02.1988. 5. On 17.02.1989 by Ext.A1, Appukkuttan (judgment debtor in E.P.No.63 of 1987) assigned his right, title, interest and possession of the suit property to the respondent. 6. In E.P.No.63 of 1987 the suit property was brought for sale on 10.08.1989 and it was sold. The property was purchased by the appellant towards satisfaction of the decree amount. The sale was confirmed on 16.10.1989. Appukkuttan, the judgment debtor filed E.A.No.923 of 1989 to set aside the sale under Rule 90 of Order XXI of the Code of Civil Procedure (for short, “the Code”). That application was dismissed on 10.09.1990. Going by the records in E.P.No.63 of 1987 it would appear that the property was delivered **RSA No.782/2004** 3 over to the appellant on 12.02.1990. 7. While so respondent, claiming title and possession of the suit property as per Ext.A1, dated 17.02.1989 filed O.S.No.420 of 1991 against the appellant for declaration of his title and for prohibitory injunction. That suit was resisted by the appellant on various grounds including that the suit is not maintainable as the remedy if any of the respondent was to approach the executing court under Rule 99 of Order XXI of the Code in so far as property was delivered to the appellant. He also claimed that pursuant to the delivery he is in possession and enjoyment of the property. It was contended that respondent did not acquire any right, interest and title over the property. Learned Sub Judge answered the issues in favour of the respondent and granted a decree. That was confirmed by learned Additional District Judge in A.S.No.101 of 1997 from which this Second Appeal has arisen. 8. It is contended by learned counsel for appellant that suit is not maintainable since respondent claims to be a representative of Appukkuttan, the judgment debtor in E.P.No.63 of 1987 in O.S.No.245 of 1984 and hence the remedy if any of respondent was to approach the executing court invoking Rule 99 of Order XXI of the Code. Reliance is placed on the decision in **Unnikrishnan v. Kunhibeevi (2011 (1) KLT 508)** . It is contended by learned counsel that the records of the execution proceedings in E.P.No.63 of 1987 would show that property was delivered over to the appellant. It is argued that regularity of proceedings of the court must be presumed and hence from the delivery report of the Amin it must be taken that suit property was delivered **RSA No.782/2004** 4 over to the appellant on 12.02.1990. It is argued that there is no material to hold that no such delivery was effected. It is argued that proceedings of the executing court in E.P.No.63 of 1987 would show that the property was attached in which case it must be taken that the attachment was properly effected. If that be so, sale in favour of the respondent as per Ext.A1 dated 17.02.1989 is hit by Sec.64 of the Code and hence cannot stand against auction sale. The further argument is that at any rate, O.S.No.245 of 1984 was for specific performance of the agreement for sale, it directly concerned right over the suit property, even if the decree was only for recovery of advance amount, appellant was entitled to a charge over the property under Sec.55(6)(b) of the Transfer of Property Act (for short, “the TP Act”). It is argued that the statutory charge would run as a covenant wherever the property goes and notwithstanding that Ext.A1, assignment deed is executed in favour of the respondent on 17.02.1989 it was open to the appellant to proceed against the property wherever it was to enforce the charge over it, sale of property in E.P.No.63 of 1987 is in enforcement of that statutory charge and hence the transfer in favour of respondent as per Ext.A1 dated 17.02.1989 is hit by Sec.52 of the TP Act. Reliance is placed on ## the decision in **Kunju Meethian Kunju Meeran Kunju & Others v. Abdulkathiru Pathummal Kunju & Others ((1965) 1 KLR 458)** . 9. In response it is argued by learned counsel for respondent that there is no evidence to show, as found by the courts below concurrently that the order of attachment was effected and at any rate, intimated to the Sub **RSA No.782/2004** 5 Registrar concerned. Learned counsel has invited my attention to Sec.89(5)(b) of the Registration Act to contend that attachment is not effective so far as it is not intimated to the Sub Registrar. It is also pointed out by learned counsel from Exts.A6 and A7, encumbrance certificates for the period from 01.01.1997 till 26.07.1991 that those documents would not show that attachment was intimated to the Sub Registrar. If that be so, the mere fact that there was an order of attachment will not affect sale in favour of the respondent as per Ext.A1, dated 17.02.1989. It is further argued by the learned counsel that undertaking made by the judgment debtor in E.P.No.63 of 1987 (vendor of the respondent) on 02.09.1987 in E.A.No.291 of 1987 which was for an order of injunction to restrain him from alienating the property will not bind the property, nor will it run as a covenant along with the property. According to the learned counsel, that order of injunction if violated would only make the judgment debtor liable for prosecution under Rule 2A of Order XXXIX of the Code. It is also argued by the learned counsel that the rule of lis pendense under Sec.52 of the TP Act cannot be applied to the facts of the case as learned Sub Judge in O.S.No.245 of 1984 found that there was breach on the part of the appellant as well and hence no statutory charge is available to the appellant. If that be so, sale in favour of respondent as per Ext.A1 dated 17.02.1989 cannot be said to be hit by Sec.52 of the TP Act. Reliance is placed on the decisions in **Ibrayi v. Pokkan (1989 (1) KLT 581- paragraph 3)** and **Perera A.J. v. Nalini Nethiyar and others (2010 (4) KHC 789- paragraphs 9 and 10)** . **RSA No.782/2004** 6 10. Before going into the substantial questions of law formulated, it is necessary to settle the facts of the case. It is not disputed that Ext.A1, assignment deed was executed in favour of the appellant by Appukuttan, the judgment debtor in O.S.No.245 of 1984 on 17.01.1989. Ext.B1, judgment in O.S.No.245 of 1984 was passed on 31.01.1987. It is not very much in dispute that there was no attachment of the property before judgment and the attempt to attach the property was only in E.P.No.63 of 1987 and that order of attachment was passed on 23.01.1988. Reading Sec.89(5)(b) of the Registration Act it is clear that attachment to be effective has to be intimated to the Sub Registrar concerned. In the present case appellant did not adduce evidence to show either that the attachment effected at spot or that the order of attachment intimated to the Sub Registrar. Finding entered by the courts below is to the effect that there is no evidence to show that the attachment was effected. If the attachment is not effected and the order is not intimated to the Sub Registrar concerned, mere fact of order of attachment is of no consequence and a transfer made after such order attachment is not hit by Section 64 of the Code. Therefore, appellant cannot take refuge under the order of attachment dated 23.02.1988. 11. So far as E.A.No.291 of 1987 filed by the appellant in E.P.No.63 of 1987 for an order of injunction restraining judgment debtor (Appukkuttan) from alienating the suit property and the undertaking made by Appukkuttan on 02.09.1987 that he will not alienate the property is concerned, I must draw a distinction from an order against alienation and an order of attachment of the **RSA No.782/2004** 7 property. An attachment of the property binds the property and would run with it. But an order of injunction will not have effect over the property; it binds the person against whom the order is passed. If the judgment debtor, in violation of the undertaking dated 02.09.1987 has executed Ext.A1, dated 17.02.1989, I am unable to say that the sale in favour of the respondent in violation of the undertaking is affected in any manner; it may bind the judgment debtor (Appukkuttan) personally and he may be liable to answer a prosecution under Rule 2A of Order XXXIX of the Code. Hence, it is no argument to say that Ext.A1, dated 17.02.1989 is executed in violation of the undertaking dated 02.09.1987. 12. Then the question is whether the transfer in favour of the respondent as per Ext.A1, dated 17.02.1989 is hit by Section 52 of the TP Act. No doubt, if on the date of execution of Ext.A1 (17.02.1989) there was a statutory charge in favour of the Appukkuttan necessarily it related to right over the property and hence a transfer of property while the statutory charge is in force can be said to be hit by Sec.52 of the TP Act. That is the principle laid down in **Kunju Meethian Kunju Meeran Kunju & Others v.** **Abdulkathiru Pathummal Kunju & Others** . But, the question is whether statutory charge over the suit property was available to the appellant on the day Ext.A1, assignment deed was executed by the judgment debtor and in favour of respondent. Sec.55(6)(b) of the TP Act states that the buyer (here, the appellant) is entitled, unless he has improperly declined to accept delivery of **RSA No.782/2004** 8 the property, to a charge on the property as against the seller and all persons claiming under him to the extent of the seller's interest in the property for the amount of any purchase money properly paid by the buyer in anticipation of delivery and for interest on such amount. It is seen from Ext.B1, copy of the judgment in O.S.No.245 of 1984 (see pages 24 and 25) that learned Sub Judge after consideration of the relevant materials came to the conclusion that appellant was not vigilant in performing his part of the contract, that appellant and Appukkuttan (defendant-judgment debtor) are responsible for the breach of agreement and that Appukkuttan alone cannot be blamed for non-performance of the agreement. In otherwords, it was found that appellant was at breach though, the seller also was at breach. 13. I must bear in mind that the learned Sub Judge having found that appellant was at breach was not inclined to grant a decree for specific performance but, allowed the appellant to realize the advance sale consideration (with 12% interest per annum and cost). So far as advance money is concerned, it is settled position that it becomes part of purchase price when the transaction is gone through. It is also settled that unlike in the case of earnest money the buyer is entitled to refund of the advance money notwithstanding who is at default though the seller has a right to adjust the loss if any suffered by him on account of breach on the part of the buyer. On account of the finding that the appellant was at breach, appellant could not justifiably claim that statutory charge under Sec.55(6)(b) of the TP Act continued over the property. The decree in favour of the appellant did not provide any charge over **RSA No.782/2004** 9 the property. Certainly it is in recognition of that position of law that appellant wanted attachment of the property in E.P.No.63 of 1987. If that be so, as on the date (17.02.1989) Ext.A1, assignment deed was executed by Appukkuttan (defendant-judgment debtor in O.S.No.245 of 1984) in favour of the respondent on 17.02.1989 there was no statutory charge over the property so that the sale in favour of the respondent is hit by Sec.52 of the TP Act. 14. The next question is whether the contention of respondent that notwithstanding of report of the Amin that delivery of property was effected on 12.02.1990 respondent is in possession of the property. Learned counsel on both sides invited my attention to Ext.B4, copy of the report dated 12.02.1990 prepared by the Amin. There, it is stated that the property was taken delivery from the counter petitioner (obviously, referring to the judgment debtor – Appukkuttan) and given to the possession of the appellant. In Ext.B4, it is also stated that the judgment debtor was not available at the spot at the time delivery was allegedly effected. 15. The mere fact that there is a report of delivery by itself is not sufficient to show that the property was actually delivered. I must bear in mind that in Ext.A1, assignment deed dated 17.02.1989, judgment debtor has recited that property was given into the possession of respondent as on that day. It is seen from Ext.A10 series that respondent has paid revenue for the suit property from 31.01.1990 while the alleged delivery was on 12.02.1990. Exts.A4 and A5 are possession certificates dated 03.08.1991 and 11.07.1989, respectively, **RSA No.782/2004** 10 issued by the Tahsildar and Village Officer concerned certifying that respondent, pursuant to Ext.A1, assignment deed is in possession of the suit property. In the above circumstances, I must hold that there was no possession with the judgment debtor in O.S.No.245 of 1984 on 12.02.1990 to be delivered over to the appellant. If that be so, appellant cannot contend that he got possession of the property on 12.02.1990. 16. Then the other question raised for a decision is whether respondent being a person claiming under the judgment debtor was required to file an application under Rule 99 of Order XXI of the Code. Learned counsel for appellant has invited my attention to E.A.No.923 of 1989 filed by the judgment debtor in O.S.No.245 of 1984 to set aside the sale under Rule 90 of Order XXI of the Code. Learned counsel has also brought to my attention the explanation to Rule 90 of Order XXI that the mere absence of or defect in attachment of the property sold is not by itself a ground to set aside the sale. It is argued by learned counsel that since judgment debtor (vendor of the respondent) failed in his attempt to set aside the sale, that order binds the respondent also. 17. Explanation to Rule 90 of Order XXI of the Code operates in a different field. That question will arise only when the judgment debtor or anybody claiming under him sought to set aside the sale under Rule 90 of Order XXI of the Code on the ground that there was either no attachment or that the attachment was not proper. In such cases, the decree holder can warded off the challenge by resort to the Explanation to Rule 90 of Order XXI of the Code. That **RSA No.782/2004** 11 is not the situation here. May be, judgment debtor in O.S.No.245 of 1984 filed E.A.No.923 of 1989 to set aside the sale and that application was dismissed on 10.09.1990 but, even much before that by Ext.A1, assignment deed dated 17.02.1989 respondent had acquired title and possession of the property. If that be so, dismissal of E.A.No.923 of 1989 cannot bind the respondent. 18. I must also bear in mind that by court sale what is conferred on the purchaser is whatever right judgment debtor had in the property as on the date of the sale. In this case the court sale was on 10.08.1989. On that day judgment debtor had no right over the property as it was already assigned to the respondent as per Ext.A1, assignment deed dated 17.02.1989. 19. Now the last question is whether in the above circumstances, respondent was required to file an application under Rule 99 of Order XXI of the Code or he could bring a suit of the present nature. Rule 99 of Order XXI of the Code deals with dispossession by decree holder or purchaser. In the present case I found that there was no delivery of property on 12.02.1990, as on that day, judgment debtor had no possession of the property and going by Ext.A1, and other documents produced by the respondent he was in possession of the property since 17.02.1989 and even in Ext.B4, there is no case that possession of property was delivered over to the appellant from the respondent. If that be so, and if respondent continues to be in possession of the property, I am not inclined to think that he must prefer an application complaining that he has been dispossessed. Even without recourse to any of the provisions in the Code **RSA No.782/2004** 12 respondent was entitled to protect his possession. If his possession is attempted to be interfered with, there is no reason why he should not bring a suit for injunction. The decision relied by learned counsel ( **Unnikrishnan v.** **Kunhibeevi** ), true stated that even a third party complaining of dispossession can have recourse to Rule 99 of Order XXI of the Code. But, that is a case where the third party was actually dispossessed from the suit property in execution of the decree. No such situation arises in this case. In such circumstances the suit filed by respondent is maintainable. Substantial questions raised are answered accordingly. Second Appeal fails. It is accordingly dismissed. No cost. All pending interlocutory applications will stand dismissed. **THOMAS P.JOSEPH, Judge.** ## **cks** In the judgment dated 6.1.2012 in R.S.A.No.782/2004 B, a 'full stop' is inserted after the words “no statutory charge over the property” occurring in the last sentence of paragraph 13 in page 9 and rest of the words occurring in the last sentence of paragraph 13 are deleted and the following sentence is inserted: **RSA No.782/2004** 13 “Hence, the sale in favour of respondent is not hit by Sec.52 of the T.P. Act.” Vide order dated 29.3.2012 in I.A.No.909/2012 in R.S.A.No.782/2004. Sd/-Registrar (Judicial)