Wife’s Objection over Attached Property Accepted Despite Unregistered Sale Agreement – Sindh High Court.

ھأئیکورٹ نے قرار دیا کہ صرف غیر رجسٹرڈ سیل ایگریمنٹ اور بیوی ہونے کی بنیاد پر اعتراض کو بدنیتی پر مبنی قرار دینا درست نہیں

سندھ ہائی کورٹ نے قرار دیا:

1. اجزاء کی عدالت نے بغیر تحقیق اعتراض مسترد کیا، جو Order 21 Rule 58 CPC کی خلاف ورزی ہے۔

2. عدالت نے صرف غیر رجسٹرڈ سیل ایگریمنٹ اور بیوی ہونے کی بنیاد پر اعتراض کو بدنیتی پر مبنی قرار دیا، جو قانونی طور پر درست نہیں۔

3. Section 54 TPA کے تحت اگرچہ سیل ایگریمنٹ سے ملکیت منتقل نہیں ہوتی، مگر Section 53-A میں خریدار کو دفاعی تحفظ حاصل ہے۔

4. ہائی کورٹ نے دونوں ماتحت عدالتوں کے فیصلے کالعدم قرار دے دیے اور معاملہ دوبارہ سماعت کے لیے اجراء کی عدالت کو واپس بھیج دیا۔

📌 نتیجہ:

یہ فیصلہ اس اصول کو مضبوط کرتا ہے کہ جب کسی فریق کا اعتراض جائیداد پر ہو، خاص طور پر جب سیل ایگریمنٹ موجود ہو اور فریق قبضے میں ہو، تو عدالت کو مکمل تفتیش کرنا لازم ہے۔ صرف رجسٹری نہ ہونا یا ازدواجی رشتہ اعتراض کو مسترد کرنے کے لیے کافی بنیاد نہیں۔

Must read judgement

5. The Petitioner then resorted to the Revision, contending

that her objections had not been properly examined by

the Executing Court, as its view had been blinkered by

the misconception of a marital relationship. However, the

plea failed, with the Revisional Order reading thus:-

“From perusal of record reveals the applicant claims

herself as owner of the attached Shop No.15, Ground

Floor, measuring 36.77 sq. yards having 1.5 undivided

share in piece and parcel of land sub plot No.A-8,

Survey No.670, Garden Est. she became owner by

virtue of agreement of sale dated 19.01.2001 alleged

to have executed between Raja M. Iqbal s/o Saraj and

the applicant. Admittedly the shop in question still

registered in the name of owner.

The ownership has not been changed by registered

deed in favour of the applicant. Meaning thereby the

title is not changed and when no registered document

in her favour she could not claim herself as owner until

it is declared by the court where the suit for specific

performance is pending against said Raja M. Iqbal.

However the law referred by the applicant reported

in 1991 CLC Note Karachi 188 regarding the inquiry

by the executing, court on the objection, filed by the

objector where in claim ownership by the three

different person should not be dismissed summarily.

Obviously it should not be dismissed without

inquiry, but in the instant case the question of inquiry

does not arise as the property attached still registered

in the name of owner, it has not been transferred and

the law says mere agreement of sale does not confer

any, title, legal right. There in another referred case

law reported in 2001 MLD Karachi 1828 also pertains

to same point of title over the property. No doubt the

inquiry must be conducted but it should be where the

title is not clear. As such the above referred case law

are distinguished with the facts and circumstances of

the present case.

In the instant case the applicant herself has

admitted that an agreement of sale executed regarding

the shop in question but no sale deed was registered

in her favour, however she come before the court and

file suit for Specific Performance of contract against the

person who is JD in the present case, as such if it is

proved that she has any right, the learned trial Court

is competent to decide the same.

For the foregoing reason, it is crystal clear the order

of the learned trial Court not require interference, it is

just and proper, hence it is maintained

4. A perusal of the Order made on those Applications by the

Executing Court reflects that in the estimation of that

forum, the Petitioner’s plea was disingenuous, hence did

not warrant in depth consideration. The operative part of

the Order reads as follows:-

“It is matter of record that the applicant Mst. Zara

Begum was Judgment Debtor/ defendant in Suit

No.627/2004 but she did not contest the suit as

evidence from perusal of Judgment. It is admitted

that present applicant is wife of J/D No.2. There is

no difference in law that sale agreement is not titled

document and does not create any right in favour of

any person. The applicant/JD No.5 has filed both

these applications by claiming the right and interest

in attached property on basis of sale agreement,

which is not a titled document in favour of plaintiff.

In record of rights the attached property is still in

name of J/D No.2 and he is shown exclusive owner

of the same. The sale agreement under which

applicant (wife) has purchased the attached

property from J/D No.2 (her husband), was

executed on 09.01.2001. This sale agreement is not

a registered sale agreement nor is attached

document. This shows that it was merely prepared

and kept malafidely for purpose to deal with the

consequences and effects of Judgment and Decree,

if passed against Defendants/JDs No.5 never

demanded specific performance of the same since

its preparation or execution in year 2001. In these

circumstances it is clear that there was collusion

between J/D No.2 and present applicant/JD No.5

and they acted malafidely during proceedings of

suit as well as in present execution proceedings. It

is sure that applicant/JD No.5 being wife of J/D

No.2 was in knowledge of suit as well as Judgment

and Decree passed against J/D No.2. She has also

joined in suit as defendant/JD No.5 under order I

Rule 10 CPC but despite this she malafidely kept

herself deliberately at distance from legal

proceedings. However, she was in knowledge about

the facts of present suit and its pendency.

In view of above discussion and the fact that J/D

No.2 is still owner of attached property and still

record of attached property is in his name. The

applicant /JD No.5 has no right and interest in

attached property on the basis of unregistered sale

agreement dated 09.01.2001. Therefore, the present

application does not bear merits and dismissed

with no order as to costs. Let writ of possession be

issued with police aid and possession of attached

property be given to the Nazir District Court KarachiEast.”

3. The Suit had initially been filed by the Respondent No. 1

(the “Claimant”) against the Respondents Nos. 2 to 5, for

recovery of an amount of 2,000,000/- said to have been

advanced by the Respondent No.4 to the Respondents

Nos. 2 and 3 (the “Beneficiaries”) through a convoluted

transaction, against the strength of a guarantee extended

by the Claimant, which was in turn backed by the title

documents of certain immovable properties, including

Shop No. 15, Sub-Plot No. A-8, Garden East Quarters,

Karachi (the “Property”) deposited by the Beneficiaries

with the Claimant coupled with the execution of an

irrevocable General Power of Attorney in his favour. The

Petitioner was not one of the original defendants to the

action, but was subsequently impleaded through an

Application under Order 1 Rule 10 CPC moved by the

Claimant in the wake of the plea taken by one of the

original defendants that the Property had been sold to

her. Be that as it may, the judgment that came to be

passed on 04.03.2010 was directed only against the

Beneficiaries, whereby they were held to jointly and

severally liable for payment of the aforementioned sum

along with mark-up at the rate of 14% from the date of

the decree till realization. Per the Petitioner, she was

never served with any notice/summons, hence had no

knowledge of the Suit until attachment of the Property

during the course of the Execution brought to bear by the

Claimant for satisfaction of the judgment and decree.

However, even at that stage, no application under Section

12 (2) CPC or Order 9 Rule 13 CPC was filed. Instead,

recourse was made to the aforementioned Applications,

placing reliance on the Sale Agreement, with it being

contended by the Petitioner that she was a bona fide

purchaser of the Property, hence the same was not liable

to attachment and foreclosure at the behest of the

Claimant.

2. The aforementioned Rules of the CPC provide as follows:

26.

When court may stay execution.- (1) The Court to

which a decree has been sent for execution shall, upon

sufficient cause being shown, stay the execution of such

decree for a reasonable time, to enable the judgment-debtor

to apply to the Court by which the decree was passed, or to

any Court having appellate jurisdiction in respect of the

decree or the execution thereof, for an order to stay

execution, or for any other order relating to the decree or

execution which might have been made by such Court of

first instance or appellate Court if execution had been issued

thereby, or if application for execution had been made

thereto.

(2) Where the property or person of the judgment-debtor has

been seized under an execution, the Court which issued the

execution may order the restitution of such property or the

discharge of such person pending the result of the

application.

58.

Investigation of claims to, and objections to

attachment of, attached property.- (1) Where any claim is

preferred to, or any objection is made to the attachment of,

any property attached in execution of a decree on the ground

that such property is not liable to such attachment, the Court

shall proceed to investigate the claim or objection with the

like power as regards the examination of the claimant or

objector, and in all other respects, as if he was a party to the

suit:

[Provided that no such investigation shall be made where it

appears to the Court that the claim or objection (whether

made before or after the sale) has been designedly or

unnecessarily delayed, or was not made within a reasonable

time or within one year of the date of the first attachment of

the said property in the execution of the said decree,

whichever is earlier, unless the claimant or objector:-

(a) proves title acquired in good faith and for consideration

subsequent to the date of the first attachment;

(b) proves that his predecessors-in-interest, whether their

interest existed at the time of such attachment or was

acquired thereafter, fraudulently omitted to make a claim or

objection; and

parties.]

(2) Postponement of sale. Where the property to which the

claim or objection applies has been advertised for sale, the

Court ordering the sale may postpone it pending the

investigation of the claim or objection.

IN THE HIGH COURT OF SINDH,

AT KARACHI

C. P. No. D-2847 of 2012

Present:

Ahmed Ali M. Shaikh, CJ

and Yousuf Ali Sayeed, J

Petitioner

Mst. Zaria Begum

(since

Deceased) through her legal

heirs through Naeem Akhtar,

Advocate.

Respondent No.1 :

Zafar Iqbal through Imran

Raza, Advocate.

Respondents

No.2 to 8

Nemo.

Date of hearing

25.08.2022.

ORDER

YOUSUF ALI SAYEED, J. -

The Petitioner has invoked the

jurisdiction of this Court under Article 199 of the

Constitution, impugning the Order dated 30.07.2012 made by

the learned IIIrd Additional District Judge, Karachi, East,

dismissing Civil Revision Application No.67/2012 filed by the

Petitioner against the Order of the learned IInd Senior Civil

Judge, Karachi, East, dated 12.05.2012, whereby the

Applications filed by her under Order XXI Rule 26 CPC and

Order XXI Rule 58 CPC respectively in Execution No.19/2010

emanating from Civil Suit No.627/2004 were dismissed.

17. Furthermore, as to the scope of an investigation under

Order 21, Rule 58 CPC, in the case reported as

Ramaswami Goundan and Ors. v. Karuppa Mudali AIR

1928 Madras 163, it was held by the High Court that:

“In investigating the claim preferred by the

claimants, the only questions which the Court is

competent to consider are whether the property

when it was attached was in the possession of the

judgment-debtor as his own property; if such

property was in the possession of some other

person, whether it was in his possession in trust for

the Judgment-debtor, or in the claimant’s

occupation as the tenant of the judgment-debtor. In

this case it is not upon any of these grounds that

the claim has been disallowed, but it is upon the

finding that the title to the properties was in

Nallasami Goundan exclusively and on his death

the properties have come to his wife and daughters

under a settlement made by him. An investigation of

such questions of title to the properties is entirely

beyond this scope of the investigation directed by

the Code when a claim to attached properties is

preferred.”

18. Under the given circumstances, we are view that the

Courts below have adopted an overly restricted approach

on the touchstone of Section 54 of the Act while failing to

consider the principles otherwise laid down in the

aforementioned case law. Hence, the impugned Orders

made by the fora below on 12.05.2012 and 30.07.2012

respectively cannot sustain. That being so, without

expressing any view on the merits of the Petitioner’s

claim, we hereby allow the Petition so as to set aside both

the aforementioned Orders and remand the matter to the

executing Court for decision afresh on the underlying

Applications.

JUDGE

16. Referring to that judgment, the Indian Supreme Court

subsequently went on to elaborate in the case reported as

Kancherla Lakshminarayana vs Mattaparthi Syamala &

Ors (2008) 14SCC 258 that:

“Again, it cannot be said that the present appellant

has no locus standi to raise an objection to the sale

for the simple reason that he had filed a suit on the

basis of an Agreement of Sale. The factum of the

Agreement of Sale was not denied by the second

respondent. Therefore, whether the Agreement of

Sale was a good Agreement of Sale entitling the

appellant for specific performance on the basis of

that agreement is essentially a question to be

decided subsequently in the suit (though the suit is

earlier to the suit filed by the first respondent).

Under such circumstances there was a cloud on the

property and a person like appellant who had the

obligation qua the property in the shape of an

Agreement of Sale could not be held to be an utter

outsider having no locus standi to take the

objections. This is the import of the aforementioned

decision in Vannarakkal Kallalthil Sreedharan's

case. To the same effect is the judgment in Purna

Chandra Basak v. Daulat Ali Mollah [AIR 1973 Cal.

432] where the learned Single Judge of that Court

has held:

"An attaching creditor can only attach the

right, title and interest of his debtor at the

date of the attachment and on principle, his

attachment cannot confer upon him any

higher right than the judgment-debtor had at

the date of the attachment. If a person,

having a contract of sale in his favour, has

such pre-existing right the attachment could

not be binding upon him. If the promise get a

conveyance, after the attachment, in

pursuance of his contract, he takes a good

tile inspite of the attachment. "

The observations would only highlight the

importance of the Agreement of Sale which is prior

in time

“Section 53-A does not confer or create a right,

and its use is defensive as has been continuously

held by this Court, including in the in cases of

Shamim

Akhtar

Muhammad

Rasheed,

Muhammad Yousaf v. Munawar Hussain and in

Amirzada Khan v. Ahmad Noor where this Court

held, “it is well-settled principle of law that

performance of a contract can only be used by a

defendant as a shield in defence of his right and

not as a weapon of offence as intended in the

present case”. The cases cited by the learned Mr.

Chaudhry state as much. In Taj Muhammad v.

Yar Muhammad Khan it was held, that “It is true

that section 53-A does not confer or create any

right but it provides a defence to a transferee to

protect his possession.”

14. In the case of Gokarakonda Audinarayudu v.

Surapureddi Mangamma AIR 1943 Mad 706 the principle

was applied to a judgment creditor, with it being held

that:

“The expression “claiming under the transferor” is

wide enough in S. 53A to include a judgmentcreditor in the situation in which the appellant in

this appeal now stands. On the facts, as already

stated, the claim of the respondent based upon S.

53A has been accepted and there can be no

interference in this matter in second appeal.”

15. In the case of Vannarakkal Kallalathil v. Chandramaath

Balakrishnan 1990 SCC (3) 291, it was held by the

Supreme Court of India as follows:-

“7. Hence, under a contract of sale entered into

before attachment, the conveyance after attachment

in pursuance of the contract passes on good title

inspite of the attachment. To the same effect are the

decisions of the Bombay High Court in Rango

Ramachandra Kulkarni v. Gurlingappa Chinnappa

Muthal and Yashvant Shankar Dunakhe v. Prayarji

Nurji Tamboli. The High Court of TravancoreCochin in Kochuponchi Varughese v. Ouseph

Lonan, has also adopted the same reasoning

53-A. Part performance. Where any person

contracts to transfer for consideration any

immovable property by writing signed by him or on

his behalf from which the terms necessary to

constitute the transfer can be ascertained with

reasonable certainty;

and the transferee has, in part performance

of the contract, taken possession of the property

or any part thereof or the transferee, being already

in possession continues in possession in part

performance of the contract and has done some

act in furtherance of the contract,

and the transferee has performed or is

willing to perform his part of the contract, then

notwithstanding that the contract, though required

to be registered, has not been registered, or, where

there is an instrument of transfer, that the transfer

has not been completed in the manner prescribed

therefore, by the law for the time being in force, the

transferor or any person claiming under him shall

be debarred from enforcing against the transferee

and claiming under him shall be debarred from

enforcing against the transferee and persons

claiming under him any right in respect of the

property of which the transferee has taken or

continued in possession, other than a right

expressly provided by me terms of the contract:

Provided that nothing in this section shall affect

the rights of a transferee for consideration who has

no notice of the contract or of the part performance

thereof.

13. It merits consideration that it has consistently been held

throughout a long line case law that Section 53-A of the

Act serves to shield possession of property obtained in

part performance of a contract of sale, and if any

authority is required in that in that regard, one may look

to the judgment off the Honourable Supreme Court in the

case reported as Syed Athar Hussain Shah v. Haji

Muhammad Riaz and another 2022 SCMR 778, where it

was held as follows:-

9. It is apparent from a perusal of the title of the plaint that

there is disparity between the names of the JD No.2 and

the Petitioner’s husband, with the former being arrayed

as Raja M. Iqbal and the latter identified as the wife of

one Malik M. Iqbal Khan.

10. Furthermore, it is discernible from the tenor of the Order

dated 12.05.2012 that considerable emphasis was placed

by the executing Court on the supposed relationship

between the Petitioner and the JD No.2, with it being

reasoned on that very basis that the Sale Agreement was

mala fide and collusive, and that the Petitioner had

knowledge of the Suit, yet chose not to come forward. As

such, the executing Court was clearly swayed by what

appears to be a misconception.

11. Whilst the point of such an error was raised by the

Petitioner through the Revision Application, the same

does not appear to have been considered. Indeed, the

Order made by the Revisional Court contains no

discussion in that regard, but merely endorses the view

of the lower forum that no investigation was required in

terms of Order 21, Rule 58 CPC as the purported sale

agreement did not serve to create any right or interest in

the Property in favour of the Petitioner.

12. While the Orders of the fora below appear to be

predicated in that respect squarely on Section 54 of the

Transfer of Property Act 1882, (the “Act”) which clarifies

that a contract for the sale of immovable property “does

not, of itself, create any interest in or charge on such

property”, both the lower forums failed to consider that

Section 53-A of the Act provides as follows:

6. Proceeding with his submissions, learned counsel for the

Petitioner drew attention to the finding of the executing

Court that the counter-party to the Sale Agreement had

been the husband of the Petitioner, which reflected that

she had knowledge of the Suit and the transaction was

collusive and merely a device to frustrate the decree. He

pointed out that the name of the vendor (i.e. the JD No.2)

was different from that of the Petitioner’s husband and

contended that such error had swayed the executing

Court in its decision to dismiss the Petitioners

Applications without undertaking an investigation. He

contended further that the error of identity had been

raised before the Revisional Court, but had not been

considered, with the Court proceeding to dismiss the

Revision whilst concurring with the finding of the lower

forum that a Sale Agreement did not create any right and

interest in attached property.

7. In response, learned counsel for the Claimant supported

the Orders of the fora below, while arguing that the

Petitioners Applications had been rightly dismissed on

the basis that the Sale Agreement did not serve to create

any interest in the property.

8. We have heard the arguments advanced at the bar and

considered the same in light of the relevant material on

record.