The Division Bench of the Andhra Pradesh High Court, comprising Justice Ravi Nath Tilhari and Justice Maheswara Rao Kuncheam, has upheld the dismissal of a claim petition, ruling that a sale deed executed after the date of an order of attachment is void under Section 64(1) of the Code of Civil Procedure (CPC). The Court held that the existence of a mortgage prior to the attachment does not automatically save a subsequent private transfer unless the transfer was made pursuant to a contract registered before the attachment.
Background of the Case
The appeal (Appeal Suit No. 696 of 2025) challenged the judgment and decree dated October 29, 2025, passed by the Principal District Judge, Visakhapatnam. The dispute arose from execution proceedings (E.P.No.56 of 2020) in O.S.No.289 of 2017.
The 1st Respondent (Decree Holder) had obtained a money decree against the 2nd and 3rd Respondents (Judgment Debtors). During the suit, the subject property was attached vide an order dated July 25, 2017, and the attachment was effected on August 5, 2017.
The Appellant (Claim Petitioner) filed a petition under Order XXI Rule 58 CPC, claiming title to the attached property based on a Sale Deed dated January 27, 2020, and an Agreement of Sale-cum-General Power of Attorney (GPA) dated September 11, 2018. The Trial Court dismissed the claim petition, holding that the transfer was void under Section 64(1) CPC as it was executed after the attachment.
Arguments of the Parties
The counsel for the Appellant argued that the property was initially mortgaged to a Finance Company on July 30, 2016, which was prior to the date of attachment (July 25, 2017). The Appellant contended that the Sale Deed dated January 27, 2020, was executed in pursuance of this pre-attachment mortgage contract.
Relying on Section 64(2) of the CPC, the Appellant submitted that the sale deed should not be considered void but rather saved, as the mortgage pre-dated the attachment.
Court’s Analysis and Observations
The Court analyzed Section 64 of the CPC, specifically distinguishing between sub-section (1) and sub-section (2). The Bench observed that for Section 64(2) to apply, the private transfer must be made “in pursuance of any contract for such transfer or delivery entered into and registered before the attachment.”
1. Timeline of Events: The Court noted the undisputed chronology:
- Date of Mortgage: 30.07.2016
- Date of Attachment: 25.07.2017
- Agreement of Sale-cum-GPA: 11.09.2018
- Sale Deed: 27.01.2020
The Bench pointed out that the Agreement of Sale-cum-GPA (Ex.A7) was executed after the attachment. Furthermore, no registered contract for sale in favour of the Appellant prior to the attachment was placed on record.
2. Application of Section 64 CPC: Referring to the Supreme Court judgment in Dokala Hari Babu v. Kotra Appa (2022), the Court reiterated that to seek the benefit of Section 64(2) CPC, the subsequent purchaser must plead and prove they entered into a registered transaction prior to the order of attachment.
The Court stated: “In the present case, the claim petitioner has not entered into the transaction prior to the order of attachment. The sale deed is after the date of attachment and there is no agreement of sale in favour of the claim petitioner of a date prior to the order of attachment.”
3. Nature of the Transfer and GPA: The Court rejected the Appellant’s argument regarding the pre-attachment mortgage. The Bench clarified that the Sale Deed (Ex.A1) was not a transfer by the mortgagee (Finance Company) exercising its rights. Instead, the Finance Company executed the sale deed merely as a Power of Attorney holder for the Judgment Debtor.
Citing the Supreme Court’s decision in Suraj Lamp and Industries Private Limited v. State of Haryana (2012), the Court observed that a Power of Attorney is not an instrument of transfer regarding right, title, or interest in immovable property.
4. Mortgagee’s Power of Sale: The Court analyzed Section 69 of the Transfer of Property Act, which deals with a mortgagee’s power of sale. The Bench observed that the sale was not conducted by the mortgagee in default of payment under the specific conditions of Section 69(1), nor was there compliance with the notice requirements under Section 69(2).
The Court held: “The date of mortgage 30.07.2016, which is prior to attachment is not relevant in the present case, since the sale is not by the mortgagor as mortgagee.”
Conclusion
The High Court concluded that the Sale Deed dated January 27, 2020, was void against the claims enforceable under the attachment as per Section 64(1) CPC. The Court held that the exception under Section 64(2) was not attracted as there was no prior registered agreement of sale.
The Bench declared: “Section 64(1) C.P.C. is attracted. The sale deed (Ex.A1) is void.”
Accordingly, the Appeal Suit was dismissed, and the order of the Principal District Judge, Visakhapatnam, was upheld.
Case Details:
- Case Title: Sri Podilapu Srinivasa Rao vs. Sri Gandreti Ugadi and two others
- Case Number: Appeal Suit No. 696/2025
- Court: High Court (Bench of Justice Ravi Nath Tilhari and Justice Maheswara Rao Kuncheam)
