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Athinarayana Konar and anr. Vs. V. Subramania Aiyar - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1942Mad67; (1941)2MLJ722
AppellantAthinarayana Konar and anr.
RespondentV. Subramania Aiyar
Cases ReferredNur Mahomed Peerbhoy v. Dinshaw Hormasji Motiwalla
Excerpt:
.....j. no doubt if the attachment is followed by a court-sale and the purchaser at the court-sale has no notice of this obligation, he will get a good title and the promisee under the private contract would be left to seek his remedy against his promisor. 770. but we are not concerned here with a purchaser for good consideration without notice of a contract to sell binding the vendor or judgment-debtor whose land is being sold. but if the registered sale deed is good, no amount of ignorance on the part of the court-auction purchaser will give him a good title. the protection given to a bona fide purchaser for value without notice is based upon the fact that the purchaser has paid cash in all innocence for an apparently good title, but there is no logical reason why a similar..........months later on 15th february, 1933, the respondent in execution of his decree brought the same land to sale in court-auction and purchased it himself and two years later he got delivery through court. thereafter the appellants are alleged to have entered upon the land and hence this suit.2. the trial court disposed of the suit in a very short judgment without giving any finding on the issue relating to the alleged agreement to sell dated 10th march, 1932. the learned district munsif expressed the opinion that after the attachment the agreement could not have been carried out by the debtors to the detriment of the plaintiff. in appeal the attention of the learned district judge was drawn to the decision in paparaju veeraraghavayya v. kamaladevi (1934) 68 m.l.j. 67 and other cases and.....
Judgment:

Wadsworth, J.

1. This appeal arises out of a suit by a Court-auction purchaser for possession of the land which he had purchased, from the appellants who are alleged to have trespassed upon that land after delivery through Court, claiming title to it under a private sale made at the time when the attachment was pending. The essential facts are that the appellants, who, were defendants 1 and 2 in the trial Court, held certain mortgages over the land in question and they allege that on 10th March, 1932 the mortgagor who was not a party in these proceedings entered into an agreement with them to sell to them* the mortgaged land. The written statement does not describe this agreement, but it is said in the course of arguments that it was an unregistered written agreement. Nearly a month later, on 3rd April, 1932 the present respondent in execution of a money decree against the mortgagor attached that land. It is not in evidence whether this attachment was with or without notice of the contract to sell. On 8th June, 1932, that is to say, two months after the attachment the mortgagor executed a registered sale deed in favour of the appellants conveying to them the land which was under attachment. Some eight months later on 15th February, 1933, the respondent in execution of his decree brought the same land to sale in Court-auction and purchased it himself and two years later he got delivery through Court. Thereafter the appellants are alleged to have entered upon the land and hence this suit.

2. The trial Court disposed of the suit in a very short judgment without giving any finding on the issue relating to the alleged agreement to sell dated 10th March, 1932. The learned District Munsif expressed the opinion that after the attachment the agreement could not have been carried out by the debtors to the detriment of the plaintiff. In appeal the attention of the learned District Judge was drawn to the decision in Paparaju Veeraraghavayya v. Kamaladevi (1934) 68 M.L.J. 67 and other cases and he found himself unable to agree with the District Munsif that the truth of the agreement of March, 1932, was not a matter to be considered in the suit, but he supported the trial Court's decision on the ground that there was nothing in the written statement to show that the plaintiff had notice of this agreement, apparently holding the view that, though a person who has rights under a contract to sell at the time of an attachment can enforce these rights as against the attaching decree-holder, the enforcement depends on the question whether the attaching decree-holder had at the time of the attachment notice of the existence of the contract and he also seems to think that it is the duty of the persons claiming under the contract to prove that the attaching decree-holder had notice.

3. Now, there is a line of decisions of this Court which make it quite clear that though a contract to sell does not, having regard to the terms of Section 54 of the Transfer of Property Act, create any interest in or charge on the property, it does give rise to an obligation which limits the right of the judgment-debtor and that the attachment of the right, title and interest of the judgment-debtor is subject to any such limitation by which the judgment-debtor was bound. The cases which have been quoted before me on this point are Bapineedu v. Venkayya (1910) 21 M.L.J. 82 Rebala Venkata Reddi v. Mangadu Yellappa Chetty (1916) 5 L.W. 234 Paparaju Veeraraghavayya v. Kamaladevi (1934) 68 M.L.J. 67 Veerappa Thevar v. Venkatarama Aiyar : (1935)69MLJ678 , Diravyam Pillai v. Veeranan Ambalam : AIR1939Mad702 , and there is a decision of the Privy Council which throws light on the same subject reported in Nur Mahomed Peerbhoy v. Dinshaw Hormasji Motiwalla (1922)45 M.L.J. 770. An attempt has been made to distinguish these decisions on the ground that they are cases in which the prospective purchaser has under his contract either paid money or got possession, but it does not seem to me that this is the basis of any of these decisions. The matter has been well put by Varadachariar, J., at page 831 of the decision in Diravyam Pillai v. Veeranan Ambalam : AIR1939Mad702 . The learned Judge says that:

The question is not whether any interest has passed under the contract to sell. An attaching decree-holder attaches not the physical property but only the rights of the judgment-debtor in the property. As explained in the decisions and recognised in Section 40 of the Transfer of Property Act, the right of the judgment-debtor in the property is on the date of the attachment qualified by the obligation incurred by him under the earlier contract to sell and the attaching creditor cannot claim to ignore that obligation and proceed to bring the property to sale as if it remained the absolute property of the judgment-debtor.

It seems to follow therefore that a finding as to the truth and validity of this agreement dated 10th March, 1932, is an essential preliminary to the disposal of the present suit.

4. It is however contended that even assuming the truth of this agreement, the attachment will prevail against the agreement unless the attaching creditor had notice thereof. If this is the law, it seems to me obvious that the plaintiff who seeks to escape from the effects of the pre-existing contract by reason of his ignorance of the contract must himself allege and prove that he had no knowledge of it, vide Bhup Narain Singh v. Gokul Chand Mahton and Attorney-General v. Biphosphated Guano Company (1879) 11 Ch. D. 327 . But I cannot myself see any legal basis for the theory that an attachment will prevail against a pre-existing contract binding the owner of the land, if the attaching decree-holder has no notice of the contract. No doubt if the attachment is followed by a Court-sale and the purchaser at the Court-sale has no notice of this obligation, he will get a good title and the promisee under the private contract would be left to seek his remedy against his promisor. So much can be deduced from the decision of the Privy Council in Nur Mahomed Peerbhoy v. Dinshaw Hormasji Motiwalla (1922) 45 M.L.J. 770. But we are not concerned here with a purchaser for good consideration without notice of a contract to sell binding the vendor or judgment-debtor whose land is being sold. At the time of the Court-sale there was already a registered sale deed in favour of the appellants which had been in existence for some eight months. How the Court-sale could have been held without knowledge of that registered sale-deed is a matter for conjecture. But if the registered sale deed is good, no amount of ignorance on the part of the Court-auction purchaser will give him a good title. The sale in favour of the appellants can only be attacked on the basis of Section 64, Civil Procedure Code and in order to make this applicable it must be shown that this sale was a private transfer contrary to the attachment. If the attachment was subject to the obligation under the previous contract, the sale in pursuance of the contract will not be a transfer contrary to the attachment. It is therefore incumbent upon the respondent to show that an attachment will prevail against a pre-existing contract to sell binding a judgment-debtor, if the attaching creditor had at the time of the attachment no notice of the existence of this contract. I have not been referred to any authority for this position and it seems to me to be a position which it would be difficult to support in logic. That which the creditor attaches is the right, title and interest of his judgment-debtor. When once it is conceded, as I think it must be in the light of the decisions quoted above, that the right, title and interest of the judgment-debtor is limited by any obligations with reference to the land binding upon the judgment-debtor, it is difficult to see how the attachment of that right, title and interest without knowledge of those limitations can enlarge the right, title and interest which the decree-holder attaches. The protection given to a bona fide purchaser for value without notice is based upon the fact that the purchaser has paid cash in all innocence for an apparently good title, but there is no logical reason why a similar protection should be given to an attaching creditor who has not paid cash at all. Surely it is the duty of the attaching creditor to ascertain the extent of the rights of the judgment-debtor and it is only over such rights as they actually exist that the attachment will operate. Moreover, I am of opinion in the present case, there being no assertion by the plaintiff that he was ignorant of the defendants' rights and no proof that he had no notice thereof, the lower appellate Court was wrong in assuming that he had no notice merely because the written statement had failed to aver notice and the defendant had failed to prove notice.

5. The appeal therefore succeeds and the suit will be remanded to the trial Court for fresh disposal after taking evidence and recording a finding on issue No. 4. Costs throughout will abide the result. The court-fee on the memorandum of appeal will be refunded.

6. Leave to appeal is granted.


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