Exemption From Attachment - To Get Benefit Of Section 64(2) CPC, Subsequent Purchaser Must Plead & Prove That He Is A Bona Fide Purchaser : Supreme Court

The observation was rendered by the bench of Justices MR Shah and BV Nagarathna while considering a SLP assailing Andhra Pradesh High Court's order dated January 4, 2022 passed by the bench of Justice R. Raghunandan Rao.

The Top Court in Dokala Hari Babu V. Kotra Appa Rao & Anr. while upholding High Court's view remarked that,

"We have gone through the application filed by the petitioner under Order XXI Rule 58 of the CPC. In the entire application, there is no whisper and/or averment and/or pleadings that the petitioner is the bona fide purchaser and that there was an oral agreement prior to the order of attachment and that the part sale consideration/sale consideration of Rs.4,00,000/- was paid prior to the order of attachment. To get the benefit of sub-section (2) of Section 64 of the CPC, the objector and/or subsequent purchaser has to plead and prove that he is the bona fide purchaser, who has entered into the transaction prior to the order of attachment. In the present case, the same is missing."

As per Section 64(1) CPC, transfer of property after an attachment has been made is void. However, Section 64(2) carves out an exemption for transfer of property in pursuance to an agreement registered before the attachemnt.

Appearing for the petitioner, Advocate R Chandrachud while referring to Section 64(2) of CPC had submitted that the petitioner was a bona fide purchaser, who purchased the property in question prior to the order of attachment. It was also his contention that Agreement to Sell was an oral agreement and on the basis of that, the petitioner purchased the property on 26.12.2014 and the Sale Deed was registered on 06.01.2015. Counsel to further substantiate his contention for the petitioner being a bona fide purchaser relied on the books-of-accounts to show that the amount of Rs.4,00,000/- towards the sale consideration was paid prior to the order of attachment.

The bench while dismissing the petition said, "Under the circumstances, it cannot be said that the executing Court as well as the High Court have committed any error in rejecting the objection/obstruction submitted by the petitioner under Order XXI Rule 58 of the CPC. We are in complete agreement with the view taken by the High Court. The Special Leave Petition stands dismissed."

Case Title: Dokala Hari Babu V. Kotra Appa Rao & Anr.| Special Leave to Appeal (C) No(s). 4382/2022

Coram: Justices MR Shah and BV Nagarathna

Citation : 2022 LiveLaw (SC) 342