Allowed

Reji Varghese v. James

Kerala HC9 Jun 2023FAO/19/2023

Case brief

AI extract

What is this about?

Appeal against an interim injunction restraining a third defendant from alienating property pending a suit for return of advance sale consideration. The Court held that intimation to the registry of the claim for charge under Section 55(6)(b) of the Transfer of Property Act and Lis Pendens provides adequate safeguard, while the injunction would cause irreparable injury to the third defendant.

What did the court decide?

Impugned order of injunction set aside. Registry directed to communicate to Sub Registry Office for endorsement of suit pendency and charge claim affecting the Encumbrance Certificate.

Reji Varghese Vs James — Specific Performance | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE SATHISH NINAN

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FRIDAY, THE 9^TH DAY OF JUNE 2023 / 19TH JYAISHTA, 1945

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FAO NO. 19 OF 2023

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AGAINST THE ORDER DT. 15.12.2022 IN IA 2/2022 IN OS 17/2022 OF PRINCIPAL SUB COURT, IRINJALAKUDA

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APPELLANT/RESPONDENT/3RD DEFENDANT:

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REJI VARGHESE, AGED 52 YEARS, S/O KIZHAKKEKARA VARGHESE, CHEERACHI DESOM, OLLUR P.O, THRISSUR, PIN - 680306

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BY ADVS. SAJU J PANICKER KURIAN K JOSE

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RESPONDENT/PETITIONER/PLAINTIFF:

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JAMES, AGED 68, S/O KIDANGATH CHACKO, KODAKARA DESOM, KODAKARA P.O, CHALAKUDY, THRISSUR, PIN – 680684.

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BY ADV SRI. MANOJ T N

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THIS FIRST APPEAL FROM ORDERS HAVING COME UP FOR HEARING ON 09.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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SATHISH NINAN, J.

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= = = = = = = = = = = = = = = = = = F.A.O. No.19 of 2023

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= = = = = = = = = = = = = = = = = = Dated this the 9^th day of June, 2023

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J U D G M E N T

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Challenging an order of interim injunction against

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alienation, the third defendant is in appeal.

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The suit is for return of advance sale

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consideration. Ext.A1 agreement for sale dated

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08.08.2016 was executed between the plaintiff and defendants 1 and 2 whereunder, 19.43 Ares of property was agreed to be conveyed to the plaintiff. The period stipulated was 9 months. According to the plaintiff, the period of the agreement was extended initially till 08.08.2017 and subsequently as per oral agreement it was extended up to 31.12.2021. Defendants 1 and 2 had obtained a total advance consideration of

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` 1,09,50,000/- in several instalments on various occasions. On 13.06.2018, as per the instructions of the

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plaintiff, an extent of 8.09 Ares was conveyed by

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F.A.O. No.19 of 2023 -: 2 :-

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defendants 1 and 2 in favour of the plaintiff's daughter

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and son-in-law. The consideration for the same was appropriated from the advance amount paid by the plaintiff. On 17.08.2021, in breach of the agreement with the plaintiff, defendants 1 and 2 conveyed the remaining extent of property, which is the plaint schedule property, in favour of the third defendant. On discussions with defendants they repaid an amount of 5 lakhs. After deducting the said amount and a sum of 60 lakhs being the sale consideration for which the sale deed was executed in favour of the plaintiff's daughter and son-in-law, the balance advance sale consideration with defendants 1 and 2 is ` 44,50,000/-. It is for realisation of the same that the suit has been filed.

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Along with the suit, the plaintiff filed an application for interim injunction against the 3^rd defendant, as IA 2/2022. As per the impugned order, the application was allowed restraining the third defendant from alienating or encumbering the property. It is

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F.A.O. No.19 of 2023

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-: 3 :-

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challenging the same that the third defendant is before this Court.

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Heard Sri.Saju J. Panicker, learned counsel for

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the appellant and Sri.T.N.Manoj, learned counsel for the respondent.

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In the suit, the plaintiff has sought a charge

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on the property for the advance sale consideration, in terms of Section 55(6)(b) of the Transfer of Property Act. The third defendant is making preparations to encumber/alienate the property. Creation of third party interests would defeat/delay the enforcement of the charge. It is on the said contention that the plaintiff seeks for an interim injunction against alienating/ encumbering the property.

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The claim for charge in terms of Section 55(6) (b) if upheld by the Court, then even if there occurs subsequent dealings with the property the charge runs

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with the same. As regards the statutory charge under Section 55(6)(b) of the Transfer of Property Act, it is

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F.A.O. No.19 of 2023

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-: 4 :-

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no defence to contend that the assignee is a bona fide purchaser for value and without notice. Though prior to the year 1929, a bona fide purchaser was protected against the statutory charge under Section 55(6)(b), such protection is no more available to bonafide purchasers or transferees without notice as per the Amending Act No. 20 of 1929. The buyer is entitled to statutory charge for the purchase price paid [Ibrayi v Pokken (1989 (1) KLT 581] .

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So also, since there is a claim for charge over the property, dealings with the property if any made pending the suit will be hit by Lis Pendens. If the transaction was pendente lite, even a bonafide purchaser for value and without notice will not be protected (See Annie M. Mathew v. M.K.Thomas(deceased) and others 2019 (3) KHC 693) .

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If after trial it is found that the plaintiff is entitled to charge over the property then, irrespective

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F.A.O. No.19 of 2023

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-: 5 :-

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of the change of hands, the charge will subsist and the transfer will be hit by Lis Pendens. The plaintiff will not be put to any loss. However, if the third defendant is restrained from dealing with the property and ultimately the charge claimed by the plaintiff is declined, the third defendant will be put to irreparable injury. Therefore the factors, balance of convenience and irreparable injury, which are to go into the zone of consideration while ordering an injunction application, weigh in favour of the third defendant.

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The interest of the plaintiff could be

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adequately safeguarded by intimating the concerned Sub Registry Office to make an endorsement in the relevant records with regard to the pendency of the suit and the claim for charge over the property to ensure that the same is reflected in the Encumbrance Certificate. This would afford sufficient notice to any person who deals with the property, regarding the claim of charge.

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F.A.O. No.19 of 2023

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-: 6 :-

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In the light of the above, it is not necessary

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to maintain the order of injunction.

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In the result, this appeal is allowed. The order impugned is set aside. The Registry shall communicate a copy of this order forthwith to the Kallettumkara Sub Registry Office for making necessary endorsements in the relevant registers and records with regard to the charge claimed over the 11.34 Ares in Sy. No.1362/3-2 of Kodakara Village included in Sale Deed No.1558/2021 dated 17.08.2021, in OS 17/22 on the files of the Principal Sub Court, Irinjalakkuda, so that it would be reflected in the encumbrance certificate.

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Sd/- SATHISH NINAN JUDGE

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kns/-

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//True Copy//

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P.S. to Judge

Reji Varghese v. James

Case brief

What is this about?

What did the court decide?

Reji Varghese v. James

Case brief

What is this about?

What did the court decide?

What the court decided

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