IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD WEDNESDAY, THE TWENTY THIRD DAY OF MARCH TWO THOUSAND AND ELEVEN PRESENT THE HON'BLE SRI JUSTICE K.C. BHANU CIVIL MISCELLANEOUS APPEAL No.2099 OF 1999 Between: The State Bank of Hyderabad .....APPELLANT AND Mirza Gaffar Baigh and others ....RESPONDENTS The Court made the following: THE HON’BLE SRI JUSTICE K.C. BHANU CIVIL MISCELLANEOUS APPEAL No.2099 OF 1999 JUDGMENT: This Civil Miscellaneous Appeal, under Order XXI Rule 58 (5) of the Code of Civil Procedure, 1908 (for short, “C.P.C.”), is directed against the order and decree, dated 18.06.1999, in E.A.No.429 of 1996 in E.P.No.59 of 1993 in O.S.No.36 of 1981, on the file of the Senior Civil Judge, Kothagudem, whereunder and whereby, the application, filed by respondent No.1 herein under Order XXI Rule 58 C.P.C., to raise attachment of the E.P. schedule property, was allowed. 2. Respondent No.1, who is third party, filed the claim petition stating as follows: The E.P. schedule property belonged to respondent Nos.2 to 6/judgment debtors. On 09.09.1993, respondent No.1 purchased the said property under an agreement for sale. On the same day, he paid Rs.50,000/-. On 28.11.1994, he paid Rs.15,000/-. The balance to be paid was Rs.5,000/-. Respondent Nos.2 to 6 agreed to receive the balance sale consideration and execute a regular sale deed in favour of respondent No.1. But, later they did not come forward to do so. Therefore, respondent No.1 got issued a notice on 14.12.1994 to respondent Nos.2 to 6. They received the said notice but failed to perform their part of contract. They were trying to alienate the property to others at higher rates. Respondent No.1 raised a dispute before elders but in vain. When respondent No.1 wanted to file a suit for specific performance, he came to know that the property was attached on 01.10.1996 for realization of the amount in execution proceedings. Respondent No.1 has got a right in the E.P. schedule property and it cannot be attached and brought for sale. Hence, the application. 3. Respondent Nos.2 to 6 filed counter in support of the claim of respondent No.1. 4. The appellant/decree holder contested the petition. Its case in brief is as follows: The alleged agreement for sale is false and it was brought into existence with the collusion of respondent Nos.2 to 6 to defeat and delay the execution proceedings. The agreement for sale is not supported by any consideration. Respondent No.1 is not a bona fide purchaser; he has nothing to do with the E.P. schedule property and he has no right in it. Hence, it prayed to dismiss the petition. 5. Basing on the above pleadings, the Court below framed the following point for determination: “Whether the attachment dated 01.10.1996 of the E.P. schedule property is liable to be raised?” 6. During trial, on behalf of respondent No.1/claim petitioner, PWs.1 to 3 were examined and Exs.A1 to A7 were got marked, and on behalf of the appellant/decree holder, RW.1 was examined but no document was marked. 7. The executing Court, after considering the evidence available on record, came to the conclusion that the agreement for sale, Ex.A1, was executed long prior to the attachment and that Ex.A1 was found to be true and genuine, and accordingly, raised attachment of the E.P. schedule property. Challenging the same, the present appeal is filed by respondent No.1. 8. Now the point for consideration is whether the order of the executing Court is correct, legal and proper? 9. Learned counsel for the appellant contended that Ex.A1 appears to be not a genuine transaction for the reason that there is no evidence of passing of consideration; that agreement of sale does not confer any right and title; that in spite of alleged payment of the entire sale consideration, possession of the E.P. schedule property was lying with respondent Nos.2 to 6, which shows that it is a collusive transaction and hence, he prays to set aside the impugned order. 10. Learned counsel for respondent No.1 contended that the evidence of PWs.1 to 3 would clearly go to show that Ex.A1 was a genuine transaction, which was entered in between the parties thereto long prior to attachment; that once Ex.A1 is found to be true and genuine document, the E.P. schedule property cannot be attached; that after consideration of evidence on record, the executing Court rightly raised attachment and hence, he prays to dismiss the appeal. 11. The factual matrix is not in dispute. One Venkata Narasaiah is the husband of respondent No.2 and respondent Nos.3 to 6 are their children. The appellant filed Original Suit No.36 of 1981 before the trial Court against the said Venkata Narasaiah for recovery of money, and the same was decreed by the trial Court. After their death, the appellant filed E.P.No.59 of 1993 against respondent Nos.2 to 6 for recovery of the decreetal amount. The property in question was attached on 01.10.1996. Thereafter, respondent No.1 filed the present Execution Application seeking to raise the attachment, which was allowed by the impugned order. The case of respondent No.1/agreement holder is that he purchased the property attached in the Execution Petition on 09.09.1993 under Ex.A1, agreement for sale, from respondent Nos.2 to 6, and after paying the consideration as mentioned in Ex.A1, as the owners failed to execute a registered sale deed in pursuance of Ex.A1, he got issued a notice through his counsel and the same was received by respondent Nos.2 to 6. But, still they have not executed any registered sale deed. Respondent Nos.2 to 6 received notices, dated 14.12.1994, under Exs.A3 to A7. They admitted the execution of Ex.A1 and the receipt of sale consideration of Rs.65,000/-. The executing Court having placed an implicit reliance on the evidence of PWs.1 to 3, came to the conclusion that Ex.A1 is a genuine transaction. PWs.1 to 3 have spoken to about the execution of Ex.A1 and passing of consideration under Ex.A1. Even assuming for a moment that Ex.A1 is a true and genuine document and by virtue of Ex.A1 an amount of Rs.65,000/- was paid to respondent Nos.2 to 6, but still it does not confer any right, title and interest over the E.P. schedule property to respondent No.1 so long as the transaction was not transformed into a regular sale deed. Even as on the date of passing of the impugned order, no suit is filed for enforcement of the agreement for sale, Ex.A1. Similarly, when the appeal is pending before this Court, respondent No.1 has not stated anywhere that he has filed a suit for enforcement of agreement for sale against respondent Nos.2 to 6. Even according to respondent No.1/agreement holder, PW.1, when respondent Nos.2 to 6 refused to execute a registered sale deed, he got issued a registered notice for the purpose of enforcement of the contract in the year 1994. If that is taken into consideration, the period of limitation commenced from the date of refusal to execute a registered sale deed by respondent Nos.2 to 6. So, within three years thereafter, the suit had to be filed. Even as on today, no suit is filed by respondent No.1 to enforce the contract under Ex.A1. So, this circumstance alone is sufficient to draw an inference that Ex.A1 is a collusive transaction and it is brought into existence to defeat the rights of the appellant/decree holder. 12. However, learned counsel for respondent No.1 placed reliance on a decision of this Court in D. Venkata Narasimharao v. Pilla Ramayamma and others[1], wherein it is held thus: “I respectfully agree with the above view and needs no reiteration. I am bound by the above ratio laid down by the Madras High Court. Thus I hold that though the agreement for sale does not create any right, title or interest in the property under Section 54 of the Transfer of Property Act, but it creates an interest in the property by operation of 2nd paragraph of Section 40 of the Transfer of Property Act, and this right prevails by operation of Order 38 Rule 10 C.P.C. Therefore, the rigour imposed under Section 64 of the Code does not prevail. The agreement of sale thereby is not void and the attachment before judgment does not prevail over the contract for sale.” The above decision makes it clear that agreement of sale is not void and the attachment before judgment does not prevail over the contract of sale. There cannot be any dispute about the ratio laid down by this Court. But the question is whether the agreement for sale is true and genuine transaction or not and whether respondent No.1 has got enforceable right existing so as to claim “interest” in the property. 13. Order XXI Rule 58 C.P.C. relates to adjudication of claims and objections to attachment of property in execution of proceedings on the ground that such property is not liable for attachment. It provides that all questions (including questions of right, title and interest) are to be settled finally in execution proceedings and not by a separate suit. The objector must establish that the property belonged to him in his own right and he was possessed of it. There cannot be any dispute that where an objection has been raised against attachment of property, the burden is on the claimant to prove that on the date of the attachment of property he had interest in or was in possession of the property attached and the property was not liable to attachment. If there is a valid contract or real agreement of sale between respondent No.1 and respondent Nos.2 to 6, then it can be said that respondent No.1 has got interest in the property. Admittedly, respondent No.1 is not in the possession of the property under attachment. Even assuming for a moment, agreement of sale is true and correct, it is clearly barred by limitation. When the claim of respondent No.1 is hopelessly barred by limitation, the question of “interest” in the property extinguished. The claim of respondent No.1 is a stale claim. Respondent No.1 has failed to establish his ‘interest’ in the property beyond preponderance of probability. This aspect of the case has been overlooked by the executing Court and as the limitation aspect is not considered in a right perspective, the impugned order is liable to be set aside. 14. Accordingly, the Civil Miscellaneous Appeal is allowed setting aside the order and decree, dated 18.06.1999, in E.A.No.429 of 1996 in E.P.No.59 of 1993, on the file of the Senior Civil Judge, Kothagudem. There shall be no order as to costs. _______________ K.C. BHANU, J March 23, 2011 MD THE HON'BLE SRI JUSTICE K.C. BHANU CIVIL MISCELLANEOUS APPEAL No.2099 OF 1999 March 23, 2011 [1] (A.P.) 1987 (1) Law Summary