Shri Manoj Kr. Shah vs Shri Anand Kr. And Anr.
2006 Latest Caselaw 443 Del

JUDGMENT

Sanjiv Khanna, J.

1. The present Appeal is directed against the Order dated 4 April, 2003 passed by the learned Additional District Judge dismissing the objections filed by the appellant herein under Order XXI, Rule 58 of the Code of Civil Procedure, 1908 (hereinafter referred to as the Code, for short). The aforesaid objections under Order XXI, Rule 58 of the Code was filed by the appellant in Execution No. 2/97 titled Mr. Anand Kumar (decree holder) v. Mr. Sudesh Mehta (judgment debtor) for execution of a money decree for a sum of Rs. 3,65,345.58 plus costs and pendente lite and future interest @ 18% per annum.

2. The appellant herein claims that he has purchased property bearing No. 201 in building No. 4327 at 3, Ansari Road, Darya Ganj, Delhi from the judgment debtor under Agreement to Sell, affidavit, special power of attorney, possession letter, indemnity bond and a Will executed on 22nd April, 2000. The general power of attorney and the Will are duly registered documents. The appellant also relies upon a receipt dated 28 fe April, 2000 executed by the judgment debtor confirming that he had received a sum of Rs. 6 lakhs by way of a Pay Order from the appellant on account of the sale of the property in question.

3. It is submitted by the appellant that the learned Executing Court has erred in summarily dismissing the objections filed by the appellant without recording any evidence. It is also submitted that the learned Executing Court without any basis has come to the conclusion that the appellant is deemed to have knowledge about the decree passed in favor of the decree holder against the judgment debtor and the transaction between the judgment debtor and the objector is not a bonafide transaction for consideration.

4. Learned Counsel for respondent No. 1 has submitted that the learned Execution Court had examined the Agreement to Sell dated 22nd April, 2000 and held that the said document and other documents were prepared by the judgment debtor in collusion with the objector to frustrate the execution of the decree passed in favor of the decree holder. It is also stated that the Agreement to Sell and some of the documents were registered on 22 nd April, 2000 whereas admittedly the consideration was paid on 24 * April, 2000 and this is sufficient to prove that the transaction is not bonafide and the appellant is not a genuine purchaser for consideration.

5. A decree for sum of Rs. 3,65,345.58 + costs and pendente lite and future interest @ 18% per annum was passed in favor of the decree holder against the judgment debtor. Execution application was filed by the decree holder in December, 1996. However, he did not immediately file any application for attachment of the property in question and order to that effect attaching the property in question came to be passed only on 11 & May, 2001. These facts are admitted by both the parties.

6. The dispute pertains to series of documents executed by the judgment debtor on 22 nd April, 2000 and the receipt executed on 28 th April, 2000 in favor of the appellant herein. The appellant claims that these documents have been bonafidely executed for valuable consideration and the appellant did not have any knowledge or information about the decree passed in favor of respondent No. l. Whether the appellant had information about the decree and whether the alleged transaction is a bonafide transaction for valuable consideration are all questions of fact and law which can be decided only after parties are given full and fair opportunity before the Executing Court. For this purpose, I feel that the appellant should be given an opportunity to lead evidence to establish that he had no knowledge or information about the decree passed in favor of decree holder. It cannot be said that the objections raised by the appellant were totally sham or without any substance that can be dismissed summarily at the preliminary stage itself. The general power of attorney and the Will are registered documents. There is also a receipt issued by the judgment debtor admitting that he has received payment of Rs. 6 lakhs in the form of a Pay Order. Copy of the Pay Order has also been filed by the appellant along with the present Appeal. The said Pay Order appears to have been issued by Oriental Bank of Commerce, Sant Nagar, East of Kailash, New Delhi in favor of the judgment debtor.

7. These documents are purportedly executed in April, 2000 and the order directing attachment of the property was passed on 11th May, 2001. It may be stated here that respondent No. 1-decree holder admits that the appellant-third party/purchaser of the property in question is not related to the judgment debtor and there is no evidence or material on record to show that he was connected with the judgment debtor or had personal relationship or connection with him. The question whether these documents were executed by the judgment debtor to defraud the decree holder has to be examined taking into consideration various aspects in accordance with the provisions of Order XXI, Rule 58 of the Code. The aforesaid provision provides and requires the Court executing a decree to adjudicate upon a claim or objection made by any third party in respect of any property attached during the course of execution of a decree. Sub- section (2) states that it is only the Court executing a decree can decide and adjudicate upon a claim/objection made by a third party against attachment of a property made in execution proceedings and such objections or claims cannot be decided by way of a separate suit. Sub-section (4) further provides that once a claim or objection is adjudicated upon, the judgment/order made thereon shall have the same force as if it is a decree. Several amendments were made in Order XXI, Rule 58 of the Code by the Code of Civil Procedure (Amendment) Act, 1976 by which the right of a third party to file a separate suit objecting to attachment was taken away to avoid multiplicity of proceedings and unnecessary delays. It may be mentioned here that Order XXI, Rule 58 of the Code requires the Executing Court to adjudicate upon the claim or objection raised in accordance with the said provision.

8. Objections made under Order XXI, Rule 58 of the Code can be dismissed at the preliminary stage as provided in the proviso (a) to Sub-section (1). Proviso (b) to Sub-section (1) requires the Executing Court to dismiss the claim or objection if the same is made unnecessarily or designedly to delay the execution proceedings. The claim/objection filed by the appellant is on the basis that he is a bonafide purchaser who had no knowledge whatsoever of the decree passed in favor of the decree holder. The Executing Court has not come to a conclusion that the claim or objection has been filed only with a view to unnecessarily delay the execution proceedings or was designed with that object in mind. The contentions and objections raised by the appellant can be decided only after recording evidence as there are disputed questions of fact involved and not on the basis of pleadings and statements made in the objection petition and the reply thereto.

9. It has also been submitted by the appellant that Rs. 6,00,300/- was debited in his account on 28th April, 2000 and thereafter a Pay Order for a sum of Rs. 6 lakhs bearing No. 909063 was prepared in favor of the judgment debtor. Rs. 300/- being bank charges for preparation of the Pay Order. It is a common knowledge that in a bank statement only the cheque number is mentioned and Pay Order number issued thereafter is not mentioned. I, therefore, do not think the learned Executing Court was right in making the observation that the Pay Order number is not mentioned in the bank statement filed by the appellant and therefore it can be presumed that the appellant is not a bonafide purchaser. These aspects and issues are all disputed and can only be decided after parties have been given a chance to lead evidence and prove and establish their cases.

10. Similarly the appellant must be given an opportunity to lead evidence and explain on what account in the Agreement to Sell and other documents it has been stated that consideration of Rs. 6 lakhs stands paid when as per the case of the appellant himself Rs. 6 lakhs was paid by a Pay Order dated 28th April, 2000. This aspect requires clarification and explanation on the part of the appellant. It may be mentioned here that the appellant has argued before this Court that there was nothing which prevented the appellant and the judgment debtor from executing the said documents on 28 th April, 2000 as no Order for attachment was passed by the Execution Court till 11 th May, 2001.

11. The Execution Court has also held that the judgment debtor is deemed to have knowledge that the decree holder wanted to execute the decree by way of attachment and sell the property and doctrine of lis pendens by virtue of Section 52 of the Transfer of Property Act (hereinafter referred to as the Act, for short) was applicable. Section 52 of the Act is clearly not applicable as the immovable property was not the subject matter of the suit, which was for recovery of money. Section 52 of the Act applies where a right to an immovable property is directly and specifically in question. Section 53 of the Act is applicable where transfer of immovable property is made with the intent to defeat or delay the creditors. Section 53 requires that immovable property should be transferred by a judgment debtor to defraud the creditors and transaction should not be bonafide. In such cases the transfer is voidable at the option of any creditor. However, the said provision is not applicable where a transferor purchases the property in good faith and for consideration. To declare a transaction to be hit by Section 53 of the Act, Court has to reach a definite and conclusive finding that Section 53 is applicable. For this parties must be given an adequate and a fair opportunity to lead and prove their case.

12. The above conclusions arrived at by me are duly fortified by a judgment of this Court in the case of Canara Bank v. Gurmukh Singh and Ors. .

13. In view of the above findings, the Order dated 4th April, 2003 is set aside and the matter is remanded back to the learned Court executing the decree to adjudicate and decide the objections filed by the appellant after recording evidence and giving a fair opportunity to the parties to prove and establish their case. However, it is clarified that the observations made in this order are tentative in nature and should not be construed as a finding on merits.

14. Parties to appear before the learned Execution Court on 27th March, 2006.

15. Keeping in view the facts and circumstances of the case, there shall be no order as to costs.