In Petition for Special Leave to Appeal (C) No. 4382/2022-SC- Benefit of exemption u/s 64(2) of CPC can be sought if subsequent purchaser proves that he is bona fide purchaser who entered into transaction prior to attachment order: SC Justices M.R.Shah & B.V. Nagarathna [28-03-2022]

Read Order: DOKALA HARI BABU v. KOTRA APPA RAO & ANR. 

LE Correspondent

New Delhi, April 5, 2022: While dismissing a Special Leave Petition filed by the petitioner in order to attain the benefit of Section 64(2) of the Code of Civil Procedure, the Supreme Court has held that to get such benefit of exemption from attachment, 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 this case, the petitioner claimed that he had purchased the property in question prior to the order of attachment. It was also submitted that the Agreement to Sell was an oral agreement and on its basis, the petitioner purchased the property on December 26, 2014 and the sale deed was registered on January 6,2015. 

The petitioner’s Counsel relied upon Section 64(2) of the CPC and submitted that the petitioner was a bona fide purchaser, who purchased the property in question prior to the order of attachment. To strengthen this submission, some books-of-accounts were also produced to show that the amount of Rs 4,00,000 towards the sale consideration was paid prior to the order of attachment and on the basis of that, it was averred that the petitioner was the bona fide purchaser.

After perusal of the application filed by the petitioner under Order XXI Rule 58 of the CPC, the Division Bench of Justice M.R.Shah and Justice B.V. Nagarathna observed that in the entire application, there was no whisper or pleadings that the petitioner was the bona fide purchaser. It was also averred therein 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.

Section 64 of CPC makes private alienation of property after attachment to be void. But sub section (2) makes it clear that if such transfer is made before attachment order, it is not void.

Emphasizing on the aspect that it was important on the part of the petitioner to claim that he was the bonafide purchaser prior to attachment order, the Division Bench said, “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.”

Making the above stated observations, the Top Court held that neither the executing Court nor the High Court erred in rejecting the objection/obstruction submitted by the Petitioner under order XXI Rule 58 of  the CPC. 

The Apex Court was in complete agreement with the observations made by the High Court and hence dismissed the Special Leave Petition.