Report No. 54
1E.48. Section 64 is as follows:-
"64. Where an attachment has been made, any private transfer or delivery of the property attached or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment.
Explanation-For the purpose of this section, claims enforceable under an attachment include claims for the rateable distribution of assets."
There has been a conflict of decisions on the question whether a transfer made after attendance in pursuance of an agreement entered into before attachment is void. The Commission in its Report on the Code,1 considered this conflict; but was not inclined to suggest a change. It noted that in the draft Report which had been circulated (to State Governments, High Courts etc.) 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, the Commission decided not to makes any such exception. The principal consideration which weighed with the Commission was thus stated-
"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."
The Commission also added-
"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 38, 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. 27th Report, note on section 64.
1E.49. We have carefully considered the matter. We agree that a sweeping provision saving every transferm ade in pursuance of a pre-attachment agreement, might lead to fictitious claims, as was noted by the previous Commission. But we think that a provision of a limited character, applicable only where the agreement itself is registered before the attachment, would be harmless. A transfer in pursuance of such agreement should override the attachment, if the agreement precedes the attachment.
1E.50. We therefore, recommend that the following Exception be added below section 64:-
"Exception-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 and registered before the attachment."
1E.51. Section 66 is as follows:-
"66. (1) No suit shall be maintained against any person claiming title under a purchase certified by the Court in such manner as may be prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of someone through whom the plaintiff claims.
(2) Nothing in this section shall bar a suit to obtain a declaration that the name of any purchaser certified as aforesaid was inserted in the certificate fraudulently or without the consent of the real purchaser, or interfere with the right of a third person to proceed against that property, though ostensibly sold to the certified purchaser, on the ground that it is liable to satisfy a claim of such third person against the real owner."
1E.52. The earlier Report on the Code1 contains this discussion as to this section-
"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 Benamindar 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."
1. 27the Report.
Recommendation for amending section 66
1E.53. We have considered this question carefully, and have come to a different conclusion. In our opinion, it would be more consistent with recent trends to bar such defence also. Accordingly, we recommend that in section 66(1), the following words should be added at the end-
"and in any suit by a person claiming title under a purchase so certified, no defence shall be pleaded on the ground that the purchase was made on behalf of the defendant or on behalf of someone through whom the defendant claims."
1E.54. With reference to section 73 of the Code, the case-law as to the meaning of the expression "same judgment-debtor", was examined in the earlier Report1 and the result of the examination revealed no need for amendment. We have examined the later cases on the subject and, in our view also, there is no need to amend it.
1. 27th Report, note on section 73.