@JUDGMENTTAG-ORDER
Roshan Dalvi, J.@mdashThe applicants have applied for raising attachment levied under the provisions of Order 21 Rule 54 of the CPC by this Chamber Summons taken out under Order 21 Rule 38(2) thereof. Pursuant to an award dated 20th June, 2009, warrant of attachment came to be levied on 26th July, 2012 and the flat claimed by the applicants in this Chamber Summons came to be attached on 7th August, 2012. The society where the flat is situate was informed about the attachment on 27th August, 2012 by their undated letter. The applicants claim to have been sold a flat by the Respondent who is the Judgment Debtor (JD) under the award under an agreement for sale executed on 6th October, 2010. The agreement has been registered on 8th October, 2010.
2. The agreement is between family members. The applicants are the transferees. They claim to have paid consideration mentioned in the agreement to the JD and his wife in their personal names.
3. The bank accounts of the applicants show payment made to one Oberoi Multimedia Ltd. In fact the bank account shows the precise amount of consideration deposited in their account one day before it is withdrawn. The entire consideration of Rs. 35 lacs shown under the cheque No. 713587 is upon the deposit of precisely upon Rs. 35 lacs a day prior thereto. Similarly, another amount paid also to Oberoi Multimedia Ltd. on 3rd September, 2010 from another account shows that Rs. 35 lacs which is paid has been deposited in that account two days prior to its withdrawal on 1st September, 2010.
4. Mr. Sarogi argued on behalf of the applicants that whatever be the award, the document is registered and hence when the attachment is levied prior to the sale of the flat, the flat could be sold. This is inconsonance with Section 64 of the CPC, the relevant part of which runs thus:
64. Private alienation of property after attachment to be void. [(1)] Where an attachment has been made, any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment.
5. However, there is a exception to that section U/s. 64(2) of the CPC, which runs thus:
[(2)] Nothing in this section shall apply to any private transfer or delivery of the property attached or of any interest therein, made in pursuance of any contract for such transfer or delivery entered into and registered before the attachment.
6. The purpose of Section 64(2) which came to be inserted by the amendment Act of 2002 is essential to see the registration of the document since registration would show prima facie admission of execution of the documents. Further that has to be seen alongside its bonafides. Registration of the document by and between two family members who are aware of an impeding attachment under a legal proceeding or an arbitration and who seek to only create evidence of the sale between them when materially there is transfer of possession or in fact ownership, would be wholly lacking in bonafides.
7. That is because U/s. 53 of the Transfer of Property Act a fraudulent transfer to defeat and delay creditors is expressly made voidable. Section 64 of the CPC would be required to read alongside section 53 of the Transfer of Property Act relevant parts of which run thus:
53. Fraudulent transfer.-(1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.
Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration.
8. The material aspect, therefore, is the intent of the transferor/JD with regard to the attached properties.
9. The transferor may, of course, be able to show good faith and consideration that has passed under such transaction. In this case the passing of consideration from the applicant/transferee to the JD/transferor is not shown in view of the fact that both are Oberois. The consideration passed and credited to Limited Company of Oberoi Multimedia is not shown to be that of the JD. The good faith and consideration is, therefore, not shown by the transferee. Lack of good faith is in fact apparent.
10. Since a transaction between JD and a third party is voidable at the instance of the creditor if it is made to defeat or delay the creditors claim, a suit would be expected to be filed by the creditor to avoid the transaction. That is under the separate law of transfer of immoveable properties, the Transfer of Property Act 1882 u/s 53 which came to be enacted under the amendment Act of 1929. That was when the Civil Procedure Code, 1908 was in force. It has been since amended in 1976. Order 21 with regard to execution of decrees, which includes awards, came to be extensively amended under the 1976 amendments. The JC is required only to file an execution application. All questions that would arise in the execution application would be decided by way of an application made therein (such as the present Chamber Summons) and not by way of separate suit under Order 21 Rule 101 thereof. Consequently an applicant would seek to show in Chamber Summons taken out in an execution application how an attachment levied in execution would be required to be raised. The JC would also be entitled to show how the transaction of an applicant as the transferee lacks bonafides or does not show good faith and consideration so as not to raise the attachment sought to be raised.
11. In this case the JC has of course, not appeared. Service is shown to be effected by service under the Advocate''s letter. However the glaring facts of the case must drive the Court in exercising caution and restraint to raise attachment simpliciter upon a copy of the Chamber Summons being shown to have been served upon the JC under the letter of the Advocate of the applicant as has been sought to be done.
12. In fact, the spirit of such contentions have been considered by the Division Bench of the Calcutta High Court, since 1909 in the case of Abdul Kader Vs. Ali Mia & Ors., XVI CWN 717 in which it has been held that even in a suit filed by a claimant who had purchased an attached property, the JC would be entitled to show the fraudulent nature of the transfer as his defence so as to content that the transfer was not binding against him. This was held u/s 278 of the CPC, 1882 (even prior to coming into force of the CPC 1908). The interesting observation in that case was the reason for upholding such a defence-that such a creditor who attaches the property is more than a creditor; he is "the Judgment Creditor." It is observed that he could bring an independent suit by himself and hence he can do as defendant what he could have done as the Plaintiff. Considering his right U/s. 53 of the Transfer of Property Act it is held that, therefore, the defendant in such a suit had every right to say that the title claimed by the transferee was upon fraud and, therefore, ineffectual as against him.
13. In the case of Subramanian Ayyar V. Muthia Chettiar, ILR XLI Mad 612, the Full Bench of three Judges of the Madras High Court disagreed with the ruling in the case of Abdul Kader (Supra) and, placing reliance upon the earlier Division Bench Judgment of the Madras High Court in the case of
14. In the later case of N.N.L. Ramaswami Chettiar Vs. Mallappa Reddiar, AIR 1920 Mad 748, the Full Bench of five Judges of the Madras High Court, upon reference to a number of precedents before them concluded that that view was incorrect and required to be referred to a larger bench.
15. In that case the person setting out a gift in his favour sought to challenge an attachment in execution of decree obtained by the Plaintiff. An application under Order 21 Rule 58 of the CPC was dismissed and he was directed to file a suit to set aside that order and obtain a declaration that the property was not liable to be attached. The JC was the defendant. It was sought to be argued that the JC should have sued for declaration that the gift deed in favour of that applicant was void in view of Section 53 of the Transfer of Property Act which allowed a transfer which was fraudulent to be declared void. It was held that in the case of Subramanian Ayyar V. Muthia Chettiar the Full Bench failed to hold that it was not imperative for the JC to sue for declaration of voidability merely because he seeks to avoid a transfer made with intent to defeat or delay this right as the creditor.
16. In the converse case of
17. After the amendment to the CPC in 1976 and incorporation of Order 21 Rule 101 the suit would be replaced by an application in execution itself. The sustentative rights of the parties under the sustentative law relating to Transfer of Property would have to be similarly considered in Chamber Summons such as this. The amendment of the CPC has resulted in these claims being adjudicated upon in that execution proceedings and not by a separate suit. The substance is the same. The inquiry with regard to fraudulent nature of the transaction, or the bonafides of the transferee by payment of valuable consideration are inquiries required to be made by the Court.
18. When it is patently shown by the very nature of the transaction relied upon by the applicant that the transfer is made between family members only to defeat and delay the claim of an independent JC, the Court can never countenance such an application.
19. Even the payment of consideration to Oberoi Multimedia Ltd., (which is the same name as the applicants themselves) would show that it was paid to the business concern of the applicants themselves who are the transferees and not the JD who is the transferor as has been sought to be argued by Mr. Sarogi. There is nothing to show that the amounts have been paid to the limited company only of the JD as no documents in that behalf are produced.
20. The transferor as well as transferees are seen to be from the same family as they are Oberois. The transaction is therefore, seen to be made only to defeat and delay the claim of the Judgment Creditor (JC)/claimant in the execution application. It wholly lacks bonafides. Consequently the application is dismissed.
