Report No. 27
The question has been raised as to the effect of section 63(2), (which provides that nothing in the section shall be deemed to invalidate any "proceeding taken by a Court" executing one of the several decrees referred to in the section) on an order allowing a set-off to a decree-holder auction-purchaser. Does it accept the amount so allowed to be set-off from rateable distribution? Most High Courts1-2-3-4 have answered the question in the negative, though the Calcutta High Court5 takes a contrary view. The correct position seems to be, that the word "proceeding" does not include such order. No clarification on the subject appears to be necessary.
1. Megraj v. Corporation of Madras, AIR 1936 Mad 797 (798).
2. Ramaswamy v. Krishnasa, AIR 1935 Mad 988 (994).
3. Ram Chandra v. Digambar, ILR 1960 Born 8: AIR 1960 Bom 230 FB.
4. AIR 1946 All 294.
5. Ahinath v. Nepal Chandra, AIR 1937 Cal 55 (56).
Section 64 and pre-attachment agreements
1. The question has been raised whether a transfer actually made after the attachment but in pursuance of an agreement made before the attachment is invalidated by section 64. One view is that the section does not apply in such cases.1-2-3-4
A contrary view has been taken into other cases.5-6-7-8-9-10
2. In the draft Report which was circulated for comments, an exception was proposed to section 64 to the effect that "Nothing in this section applies to any private transfer or delivery of the property attached or of any interest therein, made in execution of any contract for such transfer or delivery entered into before the attachment." But after careful consideration, it has been decided not to make any such exception. A sweeping provision of this kind might be abused, and the practice of bringing into existence agreements which are really executed after attachment but are ante-dated to an earlier date, might be encouraged by such exception.
3. The decision as to how far such a transfer should be recognised as valid by the court, would seem often to depend on the equities of each case. Some of the decisions are based on the specific provisions of Order XXXVIII, rule 10; a few exhibit special features arising out of the passing of a decree for specific performance. So far as other situations are concerned, the equities of the case should, it is considered, be taken by the court into account.
1. Babala Venkata Reddy v. Mangadu Yellappa Chetty, AIR 1917 Mad 4 (5); (Abdur Rahim and Srinivasa Ayyangar JJ.).
2. Ghusaram v. Parashram, AIR 1936 Nag 163 (165); (Pollock J.). (Discusses specific performance).
3. Yeshwant v. Pyaraji, AIR 1943 Born 145 (Attachment after judgment).
4. Rango Ramchandra v. Gurlingappa, AIR 1941 Born 198 (200-201) Attachment before judgment).
5. Tarak Nath v. Sanat, ILR 57 Cal 274: AIR 1929 Cal 494 (495) (DB), distinguishing Madan Mohan v. Rebati Mohan, 21 CWN 158.
6. Buta Ram v. Sayyad Mohammad, AIR 1935 Lah 71 (74).
7. Usha Rani v. Jagbandhu, AIR 1955 Tripura 30 (32).
8. As to enforcement of specific performance, see AIR 1945 Born 481.
9. The case-law is reviewed in AIR 1952 TC 467.
10. In Nur Muhammad v. Dinshaw, AIR 1922 PC 39, the point was not decided.
A suggestion to the effect that a "defence" based on benami should also be barred (just as a suit based on benami is barred) where the name of the Benamidar is entered in the sale certificate, has been considered. According to this suggestion, where the real owner is in possession, and the Benamidar whose name is entered in the sale certificate sues him for possession, the real owner should be barred from raising a defence that the plaintiff was only a nominal purchaser. It has, however, been decided not to extend section 66 to such cases.