Dismissed

Punumacha Ashok Raju , Ashok v. Indukuri Venkata Gopala Krishnam Raju

Telangana HC1 Mar 2013AS/626/2012

Case brief

AI extract

What is this about?

Holding that an unregistered and collusive agreement of sale does not invalidate attachment before judgment, the High Court upheld the execution court's dismissal of the claim petitioner's application to raise attachment, noting the agreement was fabricated to defeat prior decrees.

What did the court decide?

The Appeal Suits were dismissed with no order as to costs, upholding the execution court's rejection of the claim to raise attachment.

Punumacha Ashok Raju , Ashok Vs Indukuri Venkata… — Execution and Attachment | Telangana HC (2013)

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*** THE HON’BLE SRI JUSTICE V. ESWARAIAH AND THE HON’BLE SRI JUSTICE B.N. RAO NALLA**

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+ A.S. Nos.563 AND 626 OF 2012

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% Date 01.03.2013 B e t w e e n: # Punumacha Ashok Raju @ Ashok s/o. Sitarama krishnam Raju

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Appellant

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A n d $ Indukuri Venkata Gopala Krishnam Raju and two others

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Respondents

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! Counsel for the Appellant: : Mr. Venkateswarlu Chakkilam ^ Counsel for Respondent No.1 : Mr.M.Adinarayana Raju < GIST :

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> HEAD NOTE :

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Referred Cases:

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[1] (1990) 3 SCC 291 2 (1991) 1 SCC 715 3 2004 (1) ALT 655 42004 (2) ALT 751 5 2004(2) ALT 780 6 2010 (4) ALD 312

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THE HON’BLE SRI JUSTICE V. ESWARAIAH AND THE HON’BLE SRI JUSTICE B.N. RAO NALLA

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APPEAL SUIT Nos.563 AND 626 OF 2012

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COMMON JUDGMENT: (per Hon’ble Sri Justice B.N. Rao Nalla)

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These appeals are filed assailing the common order dated 28^th June, 2012 in E.A.No.1 of 2012 in E.P. No.1 of 2012 in O.S.No.10 of 2001 (old E.A.No.30 of 2007 in E.P. No.56 of 2006) and E.A. No.4 of 2012 in E.P.No.2 of 2012 in O.S.No.22 of 1999 (old E.A. No.29 of 2007 in E.P.No.55 of 2006) respectively, on the file of the Additional District Judge, West Godavari, Kovvur.

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2. The appellant filed claim petitions in E.A.No.1 of 2012 and E.A. No.4 of 2012 for raising the attachment of item No.3 of the E.P. schedule property. In both the EPs, the E.P. schedule property is one and the same.

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3. For the sake of convenience the parties hereinafter referred to as they arrayed in the claim petitions.

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4. The brief averments of the claim petitions are as follows: Respondent No.1 filed two different suits O.S.No.10 of 2001 and O.S. No.22 of 1999 for recovery of amount based on the different promissory notes and obtained attachment before judgment, later the

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suits were decreed. Respondent No.1 filed E.P. Nos. 1 and 2 of 2012 seeking sale of three (3) items of the E.P. Schedule property. In both the E.Ps, the E.P. schedule property is one and the same. Since respondent No.1 filed E.Ps, the petitioner filed claim petitions in E.A.Nos.1 and 4 of 2012 raising the attachment against item No.3 of E.P. schedule property.

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5. The case of the petitioner is that he purchased item No.3 of the E.P. schedule property in both the E.Ps from respondent No.3 for a sale consideration of Rs.10,50,000/- under an agreement of sale dated 20.10.1998 and he paid Rs.4,00,000/- as earnest money. Later, he paid Rs.3,50,000/- on 05.09.2001 and Rs.2,90,000/- on 03.08.2004 and expressed his wiliness to perform his part of contract and demanded respondent No.3 to execute regular sale deed but she was avoiding to execute the same. He came to know that the said property being brought to sale in the E.Ps. filed by respondent No.1. Therefore, the petitioner filed claim petitions in E.A.Nos.1 and 4 of 2012.

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6. The respondent No.1 filed counter stating that the claim petitioner is no other than the son -in -law of the own sister of respondent No.2 - Satyavathi, and respondent No.3 - Kavitha is no other than the daughterin -law of respondent No.2. Respondent No.1 filed suit O.S. No.10 of 2001 against respondent Nos. 2 and 3 and suit O.S.No.22 of 1999 against respondent Nos.2 and 3 and son of respondent No.2 for recovery of the amount and the suits were decreed against the respondents and their properties were brought to sale. To defeat the fruits of the decrees, respondent Nos. 2 and 3 got filed these claim petitions collusively through this petitioner. Further, in order to avoid payments of debt, respondent No.2 filed O.P. No.307 of 2004 for probate based on the alleged will said to have been executed by her husband, and her son filed I.P. No.69 of 2005 to avoid debts to the third parties.

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7. Respondent Nos.2 and 3 were set ex parte.

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8. Based on the pleadings, the execution Court framed the following points for consideration.

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i. Whether the claim of the petitioner on the strength of agreement of sale dated 20.10.1998 for the raising of the attachment over the petition schedule property (item No.3) of the E.P. Schedule property in both the E.Ps is bonafide or whether these petitions are the outcome of the collusion between the petitioner and the respondent 2 and 3 as contended by the 1^st respondent/Dhr? ii. ` Whether the petitioner is entitled for the raising of the attachments over the petition schedule properties in both the petitions? iii. To what relief?

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9. Claim petitioner was examined as PW.1 and Exs.A.1 to A.4 were marked, whereas respondent No.1 was examined as RW.1 and Exs. B.1 to B.22 were marked in E.A.No.1 of 2012, which was adopted in E.A.No.4 of 2012.

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10. The execution Court taking into consideration the material made available on record and after hearing both sides, dismissed the claim petitions holding that the agreement of sale is fabricated and collusive one and the attachment of E.P. schedule property cannot be raised. Aggrieved thereby, the petitioner filed these Appeal Suits.

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11. Heard the learned counsel for the petitioner (appellant herein) and the learned counsel for respondent No.1.

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12. The learned counsel for the petitioner contended that the executing Court ought to have seen that the attachment before judgment

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is subsequent to the execution of agreement of sale by respondent No.3 and that when respondent No.3 is avoiding to execute the sale deed, the petitioner filed suit O.S. No.52 of 2006 for specific performance of the agreement and obtained a decree. The learned counsel contended that the executing Court has no jurisdiction to hold that the decree obtained by the petitioner from a competent civil Court in O.S. No.52 of 2006 is a collusive one. The learned counsel contended that the executing Court has erred in holding that non filing of the agreement of sale in claim petitions is a strong suspicious circumstance to disbelieve the case of the petitioner, in fact, the petitioner filed certified copy of the agreement of sale. The learned counsel contended that the executing Court has travelled beyond its scope in holding that neither the scribe nor the attesters of the agreement of sale were examined, when the competent civil Court having satisfied with the evidence adduced by the petitioner, passed the decree in O.S.No.52 of 2006 for specific performance of agreement. The learned counsel contended that the executing Court ought to have seen that since the agreement of sale is prior to the attachment before judgment, the only remedy available to respondent No.1 is to file a suit questioning the validity of the decree obtained by the petitioner.

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13. The learned counsel for the petitioner relied on the decisions in Vannarakkal K. Sreedharan v. Chandramaath Balakrishnan^[1] , Hamda Ammal v. Avadiappa Patha r^[2] , Madhavarapu Haranadhababa v. Kaligineedi Mahalakshmamma (died) per L r^[3] , T.Nabi Saheb v. V.P. Sivaiah^[4] , Adinarayana v. S.Gafoor Sab^[5] , and Gopisetti Venkata Lakshmi Narasimharao Venkata Ramayya v. Satya Financial Services Narasapura m^[6] , in support of his

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contentions.

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14. On the other hand, the learned counsel for respondent No.1 submitted that in order to defeat the fruits of the decree obtained by respondent No.1, respondent Nos. 2 and 3 have brought the collusive and fabricated agreement of sale in to existence through the petitioner and based on that collusive agreement of sale, ex parte decree was obtained and filed the present claim petitions. The learned counsel submitted that the agreement of sale is unregistered one and it cannot be relied on, further, there is no proof with regard to payment of sale consideration by the petitioner to respondent No.3 under agreement of sale. The learned counsel submitted that the executing Court has given cogent and convincing reasons while passing the impugned order, and as such, it does not suffer from any infirmity warranting interference from this Court and the appeal suits are liable to be dismissed.

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15. Having regard to the submissions made on either side and the facts and circumstances of the case, the point that arises for consideration is whether there are any grounds for allowing these appeals?

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16. It is seen that the respondent No.1 filed two separate suits i e. O.S. No.10 of 2001 against respondent Nos. 2 and 3 and O.S. No. 22 of 1999 against respondent Nos. 2 and 3 and son of respondent No.2 for recovery of amount based on promissory notes and he also filed petition for attachment before judgment and the E.P. schedule property was attached on 16.06.1999 and the attachment was made absolute on 17.07.2001. Later, the suits were decreed and respondent No.1 initiated execution proceedings vide E.P. Nos.1 and 2 of 2012 for sale of the E.P. schedule property. In both the EPs, the E.P. schedule property is one and the same. Meanwhile, the petitioner filed the claim petitions in

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E.A.Nos.1 and 4 of 2012 for raising attachment of item No.3 of the E.P. schedule property stating that he entered into an agreement of sale with respondent No.3 on 20.10.1998 and as she did not come forward to execute the registered sale deed, he filed O.S. No.52 of 2006 for specific performance of agreement on the file of the I Additional District Judge, Eluru. After filing of the clam petitions, the petitioner obtained ex parte decree in O.S. No.52 of 2006. The petitioner is son- in- law of the sister of respondent No.2, and respondent No.3 is daughter- in -law of respondent No.2. It is pertinent to note that the agreement of sale was not put to proof in the suit filed by the petitioner as respondent No.3 did not contest the suit and the petitioner obtained ex parte decree. Even respondent No.3 did not contest the E.P. proceedings initiated by the petitioner for execution of sale deed. Further, the petitioner has not filed the agreement of sale in the claim petitions. The petitioner did not examine the scribe or the attesters of the agreement of sale. The agreement of sale was not registered. The respondent No.2, who is mother- in- law of respondent No.3, filed written statement in O.S.10 of 2001 on 03.09.1999 wherein she did not mention about the alienation of the E.P. schedule property in favour of the petitioner.

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17. Petitioner as PW.1 deposed that he did not know whether the E.P. schedule property is the ancestral property or the self acquired property of respondent No.3 and he did not know whether the source of title was recited in the agreement of sale. He deposes that one of the attesters of agreement of sale is the husband of respondent No.3 and he could not say the address and surname of the other attester of the agreement of sale. He did not know the full name and address of the scribe. He deposed that he has no relationship with respondent Nos.2 and 3 and son of respondent No.2 and he also deposed that he does not know whether his mother – in - law and respondent No.2 are own sisters. He

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deposed that he did not make enquiry about the existing encumbrances over the property he purchased under the agreement of sale. He deposed that he is an engineering graduate and civil contractor. He deposed that his income tax returns does not disclose the purchase of the property from respondent No.3 under agreement of sale dated 20.10.1998 and that he made part payments towards the transaction on different dates. He deposed that the property purchased by him is still in the enjoyment of respondent No.3 and she has been enjoying the income therefrom.

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18. From the above circumstances, a shadow is cast upon the genuinity of the agreement of sale and it is under a cloud. Unless and until the agreement of sale is held to be a genuine one, the question of attaching any value to the sale deed does no arise, and as such no importance can be attached either to the agreement of sale or the sale deed. If there is sufficient proof that an agreement of sale was executed in the ordinary course prior to the date of attachment and in pursuance of such genuine transaction if a sale deed is executed subsequent to the date of attachment, then only the attachment does not prevail over the pre-existing contract of sale.

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19. As per Order XXI Rule 58(2) of Code of the Civil Procedure,1908, the executing Court is empowered to adjudicate the questions relating to right, title or interest in the property attached in the claim petition.

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20. In Vannarakkal K. Sreedharan’s case (supra 1), the Apex Court held that sale will prevail over the attachment as contractual obligation created by the pre-attachment agreement of sale is in respect of ownership of the land while the attachment is only of right, title and interest of the judgment debtor. But, in the case on hand, the agreement of sale is not genuine, it is collusive in nature and it is brought into existence to defeat the fruits of the decree obtained by respondent No.1.

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The ownership of the property and/or right, title or interest therein may necessarily involve the determination of the validity or otherwise of the agreement of sale, as has been done by the executing Court in this case. Therefore, the contention raised by the learned counsel for the petitioner that the executing Court has got no jurisdiction and power to determine the validity of the agreement of sale cannot be accepted.

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21. In Hamda Ammal’s case (supra 2), the Apex Court held that sale deed executed prior to attachment before judgment can be registered subsequently and will prevail over the attachment. In the case on hand, respondent No.3 executed an alleged agreement of sale dated 20.10.1998 and as such, the above decision is not applicable to the facts of this case.

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22. I n Madhavarapu Haranadhababa’s case (supra 3), the attachment before judgment is after execution of the regular sale deed by the judgment debtor therein. This decision is also not applicable to the facts of the case on hand since respondent No.3 executed only the alleged agreement of sale and not the sale deed.

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23. In T. Nabi Saheb’s case, (supra 4), the decree holder is known about executing of agreement of sale by the judgment debtor in favour of third party and at the time of agreement of sale, the property in question was delivered to third party. But in the case on hand, the transaction took place behind the back of respondent No.1 and respondent No.2, who filed written statement in O.S. No.10 of 2001, did not mention about the alleged transaction. Further, possession was not delivered to the petitioner at the time of the alleged agreement of sale.

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24. The decision in Adinarayana v. S. Gafoor Sahab (supra 5) is not applicable to the case on hand as the agreement of sale is not genuine,

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it is collusive in nature and it is brought in to existence, and as such, the alleged agreement of sale would not invalidate the effect of attachment before judgment.

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25. I n Gopisetti Venkata Lakshmi Narasimharao Venkata Ramayya’ case (supra 6), the agreement of sale is registered one, whereas in the case on hand, the agreement of sale is not registered and fabricated.

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26. Therefore, having regard to the facts and circumstances of the case and in the light of the above discussion, we are of the opinion that the executing Court came to a right conclusion in refusing the relief sought for by the claim petitioner and we find no grounds to interfere with the well reasoned impugned common order dated 28.06.2012 in E.A. No.1 of 2012 in E.P.No.1 of 2012 in O.S. No.10 of 2001 and E.A.No.4 of 2012 in E.P.No.2 of 2012 in O.S.No.22 of 1999 passed by the Additional District Judge, West Godavari, Kovvur.

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27. In the result, the Appeal Suits are dismissed. There shall be no order as to costs.

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__________________ V. ESWARAIAH, J

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___________________ B.N. RAO NALLA, J

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Date:01.03.2013

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Note: L.R.copy to be marked. B/o. Stp

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[1] (1990) 3 SCC 291 [2] (1991) 1 SCC 715 [3] 2004 (1) ALT 655 [4] 2004 (2) ALT 751