No Shred of Evidence to Substantiate That the Transfer Was Sham or Fraudulent | Madras High Court Lifts Property Attachment Under Order 21 Rule 58 CPC
Isabella Mariam
The High Court of Madras Single Bench of Justice Abdul Quddhose allowed an application filed under Order 21 Rule 58 of the Code of Civil Procedure, 1908. The Court raised the order of attachment passed in execution proceedings and held that the applicant had established ownership over the attached property. The application was allowed with consequential directions to the concerned authorities.
The application was filed under Order 21 Rule 58 of the Code of Civil Procedure, 1908 by a third party applicant in E.P. No. 68 of 2024, seeking to raise an order of attachment dated 10.02.2025 issued by the High Court in execution of an arbitral award. The attached property was a residential property situated in Chennai. The applicant is the brother of the fifth respondent and uncle of respondents three and four, who along with respondent two, are the judgment debtors. The first respondent is the decree holder in the execution proceedings.
The applicant claimed to be the absolute owner of the attached property and contended that the attachment was wrongful. He relied on a series of documents to establish his title. These included a Joint Memorandum of Compromise dated 21.11.2023 signed by the legal heirs of the deceased owner, V.C. Ganesan; a cancellation of power of attorney dated 19.08.2024; and a registered release deed dated 15.07.2024 through which all other legal heirs had relinquished their shares in his favour.
The applicant’s counsel submitted that the release deed had been presented for registration prior to the date of the execution petition and the date of the attachment. Although the registration was completed later, he argued that under Section 47 of the Registration Act, the release deed relates back to the date of presentation. He further submitted that the arbitral proceedings had nothing to do with the attached property, which was not the subject matter of the arbitration or award.
The Court had earlier directed the judgment debtors to file affidavits confirming whether they held any rights in the attached property. In compliance, affidavits were filed by the judgment debtors, affirming that they had no title, share, or claim over the property and that they would not assert any such claim in the future.
The first respondent/decree holder opposed the application, arguing that the transfer was gratuitous and not supported by consideration, which, according to counsel, rendered the application unfit for summary adjudication under Order 21 Rule 58 CPC. It was argued that the ownership could only be determined after trial. The respondent also argued that the fifth respondent, being a legal heir, retained an undivided interest and that the property could not have been transferred by release deed validly. Counsel for the decree holder relied on multiple decisions to contend that summary adjudication was inappropriate in such cases, especially where high-value property was transferred on the ground of love and affection.
The applicant’s counsel submitted that all contentions regarding the Will of the deceased owner were irrelevant, as the application relied solely on the Joint Memorandum of Compromise and the release deed. It was further argued that the Will had never been probated, and the testamentary case had been withdrawn before the current application. The applicant denied any fraudulent intention and contended that there was no triable issue requiring trial.
“The wording of Order 21, Rule 58 CPC also does not stipulate that necessarily only after trial, the application can be adjudicated by the Executing Court.”
The Court recorded that the attached property was not the subject matter of the arbitration proceedings and the award merely concerned a monetary claim between the decree holder and the judgment debtors.
“The arbitral claim had nothing to do with the property attached, but, it was a mere money claim arising out of the non-payment of outstanding dues to the first respondent/decree holder by the respondents 2 to 5/judgment debtors under a contractual relationship between them which did not involve the applicant.”
The Court found that the documents produced by the applicant, including the Memorandum of Compromise and the release deed, clearly established title. It held:
“The release deed dated 15.07.2024 has neither been cancelled nor been challenged by the first respondent/decree holder or any other party...”
“No shred of evidence has been placed on record by the first respondent to substantiate this contention.”
Regarding the gratuitous nature of the release, the Court stated: “Order 21, Rule 58 CPC does not differentiate between conveyance for consideration and gratis transfer.”
The Court also addressed the affidavit submitted by the judgment debtors:
“The fifth respondent/judgment debtor has also filed an affidavit dated 07.04.2025 stating that the respondents 2 to 5 do not have any right / title over the attached property, and that they will not claim any right over the same in the future as well.”
The Bench considered the applicability of Section 47 of the Registration Act:
“Section 47 of the Registration Act... specifies that once a document is presented for registration and subsequently registered, the date of execution... will relate back to the date of presentation...”
Referring to the decision in Vannarakkal Kallalathil Sreedharan v. Chandramaath Balakrishnan, the Court stated:
“Though in the instant case the document in question is a release deed and not a sale agreement, the same principle is also applicable... Order 21, Rule 58 CPC does not differentiate between conveyance for consideration and gratis transfer.”
On the respondent’s argument for a trial, the Court stated:
“If the Court finds without any doubt that the applicant is entitled for a decree as prayed for... there is no necessity for the Court to direct the parties to go for trial.”
“The discretion is vested with the Court to decide in what manner such adjudication should take place.”
The Court concluded: “The documents relied upon by the applicant do not create any doubt in the mind of this Court with regard to the ownership of the attached property by the applicant.”
The application is allowed. The order of attachment passed by this Court in E.P. No. 68 of 2024 dated 10.02.2025 is hereby raised. The applicant is permitted to communicate this order to all the statutory authorities including the registration department.
All concerned authorities are directed to act accordingly and remove the encumbrance (order of attachment) from their respective records.
Advocates Representing the Parties
For the Petitioner: P.R. Raman, Senior Counsel for S. Sandesh Saravanan
For the First Respondent: A. Palaniappan, G.V. Sridharan
Case Title: Ganesan Prabhu v. Dhanabakkiam Enterprises & Others
Neutral Citation: 2025:MHC:993
Case Number: A. No. 1582 of 2025 in E.P. No. 68 of 2024
Bench: Justice Abdul Quddhose
