IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH FRIDAY, THE 4TH JUNE 2010 / 14TH JYAISTHA 1932 WP(C).NO. 325 OF 2010(O) ------------------------------------- OS.684/2002 OF ADDL.MUNSIFF COURT,NEDUMANGAD .................... PETITIONER(S): --------------- 1. SARASAMMA, D/O.AMMU, AJITHA BHAVAN, MYLADI, KATTAKKODE, ETTURUTHI MURI, KULATHUMMAL VILLAGE, THIRUVANANTHAPURAM. 2. AJITHA, D/O.SARASAMMA, AJITHA BHAVAN, MYLADI, KATTAKKODE, ETTURUTHI MURI, KULATHUMMAL VILLAGE, THIRUVANANTHAPURAM. 3. SURESH, S/O.THANKAPPAN, AJITHA BHAVAN, MYLADI, KATTAKKODE, ETTURUTHI MURI, KULATHUMMAL VILLAGE, THIRUVANANTHAPURAM. 4. ANIL, S/O.THANKAPPAN, AJITHA BHAVAN, MYLADI, KATTAKKODE, ETTURUTHI MURI, KULATHUMMAL VILLAGE, THIRUVANANTHAPURAM. 5. BIJU, S/O.THANKAPPAN, AJITHA BHAVAN, MYLADI, KATTAKKODE, ETTURUTHI MURI, KULATHUMMAL VILLAGE, THIRUVANANTHAPURAM. BY ADV. SRI.G.P.SHINOD SRI.RAM MOHAN.G. SRI.T.V.ASHOK KUMAR RESPONDENT(S): ------------------------- MURUKAN, CHAMAVILA PUTHEN VEEDU, KURUSUMUTTATHU MURI, VILAPPIL VILLAGE, THIRUVANANTHAPURAM DISTRICT. ADV. SRI.NAGARAJ NARAYANAN FOR R1 SRI.SAIJO HASSAN FOR R1 SRI.A.S.SABU FOR R1 SRI.RAFEEK. V.K. FOR R1 SRI.BENOJ C AUGUSTIN FOR R1 SRI.PRATHAP PILLAI FOR R1 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04/06/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX --------------- PETITIONER'S EXHIBITS: ---------------------------------- EXHIBIT P1 A TRUE COPY OF THE JUDGMENT DATED 20.8.2004 IN O.S. NO.684 OF 2002 OF THE ADDITIONAL MUNSIFF'S COURT, NEDUMANGAD. EXHIBIT P2 A TRUE COPY OF THE DECREE DATED 20.8.2004 IN O.S. NO.684 OF 2002 OF THE ADDITIONAL MUNSIFF'S COURT, NEDUMANGAD. EXHIBIT P3 A RUE COPY OF THE APPLICATION FILED BY THE PETITIONER IN E.A. NO.300 OF 2009 IN E.P. NO.2 OF 2007 IN O.S. NO.684 OF 2002. EXHIBIT P4 A TRUE COPY OF THE OBJECTION FILED TO EXHIBIT P3. EXHIBIT P5 A TRUE COPY OF THE ORDER DATED 12.11.2009 IN E.A. NO.300 OF 2009 IN E.P. NO.2 OF 2007 IN O.S. NO.684 OF 2002 OF THE ADDITIONAL MUNSIFF'S COURT, NEDUMANAGAD. RESPONDENT'S EXHIBITS: ----------------------------------- NIL TRUE COPY THOMAS P.JOSEPH, J. ==================================== W.P(C) No.325 of 2010 ==================================== Dated this the 4th day of June, 2010 J U D G M E N T Exhibit P5, order dated 12.11.2009 in E.A. No.300 of 2009 in E.P. No.2 of 2007 in O.S. No.684 of 2002 of the court of learned Additional Munsiff, Nedumangadu is under challenge in this Writ Petition at the instance of judgment debtors. They executed what appeared to be an agreement for sale in favour of respondent agreeing to sell their property to him. On non-compliance respondent/plaintiff filed the suit for specific performance of the agreement for sale or in the alternative for recovery of advance amount. Petitioners contended that there was no such agreement for sale and that the document was executed at a time when they borrowed money from the respondent. Learned Munsiff while disposing of the suit found that there was no agreement for sale in favour of respondent, materials on record probabilised case of petitioners that agreement was executed only as a security and not intended to be acted upon as an agreement for sale. Accordingly respondent was given a decree for realisation of the amount with interest from petitioners and their assets. Pursuant to W.P(C) No.325 of 2010 -: 2 :- that decree respondent launched execution proceeding and attempted to bring property of petitioners for sale. Petitioners preferred E.A. No.300 of 2009 stating that the property is not liable to be sold fo the reasons stated in the application (Ext.P3). Executing court overruled the objections stating that decree creates charge over the suit property and hence petitioners are not entitled to raise objection under Section 60(c) of the Code of Civil Procedure. Learned counsel for petitioners contends that no charge has been created over the suit property sought to be sold and hence order under challenge cannot be sustained. Learned counsel for respondent placing reliance on the decision in Sebastian v. Bipin (2004 [1] KLT 159) contended that respondent is entitled to a statutory charge under Section 55(6) (b) of the Transfer of Property Act (for short, “the TP Act”). 2. Charge under Sec.55(6)(b) of the TP Act is available only to the vender for unpaid price. Necessarily that creates a statutory charge on the property. When a statutory charge is created over the property it is immaterial whether property is in the hands of bona fide purchaser without notice of the prior agreement. That is what this Court has held in Sebastian v. Bipin (supra). In this case trial court has found that there was no W.P(C) No.325 of 2010 -: 3 :- agreement for sale in favour of respondent. This is not a case where respondent was permitted to realise amount advanced for purchase of the property. Hence question of statutory charge under the TP Act coming into operation does not arise. 3. Then the question is whether finding of the learned Munsiff that document was executed merely as security for the loan transaction would create any charge over the property by operation of law. I stated that Sec.55(6)(b) of the TP Act has no application in this case. Respondent has not pointed out any other provision of law under which he got a charge over the property. To create charge as per agreement between parties, the document must disclose intention of parties to create such a charge. In Mohini Debi v. Purna Sashi (AIR 1932 Calcutta 451), V.Venkataratanam v. Damodar (AIR 1957 Orissa 32) and Hindustan Machine Tools Ltd. v. Nedungadi Bank Ltd. (AIR 1995 Karnataka 185) the view taken is that to make a proper security for payment of money there should be some expression to signify that the property is liable for such payment and that for that purpose the property must be specified and not described in such general terms. Here W.P(C) No.325 of 2010 -: 4 :- the document in question is in the nature of an agreement for sale. That document does not signify that it was intended between parties that property should be a charge for the amount borrowed by petitioner. In fact decree also does not provide for charge over the property. Instead it only states that respondent is permitted to realise the amount from petitioners and their assets. What is discernible from the operative portion of the decree is only that it is not merely personal decree against the petitioners but it could be realised from their assets as well. Therefore the executing court was not correct in dismissing E.A.No.300 of 2009 for the reason that a charge is created over the property. Resultantly, this Writ Petition is allowed setting aside the impugned order. I.A. No.300 of 2009 is remitted to the executing court for disposal after consideration of the contentions raised by the parties as to saleability of the property. THOMAS P. JOSEPH, JUDGE. vsv