Can a Creditor Attach Property Already Sold? Supreme Court Clarifies the Law
In this judgment, the Supreme Court held that attachment before judgment under Order XXXVIII Rule 5 CPC cannot apply to property transferred prior to a suit, as the remedy for challenging such a transfer lies exclusively under Section 53 of the Transfer of Property Act. It clarified that claim proceedings cannot substitute a substantive inquiry into fraudulent transfers.
Facts Of The Case:
The dispute originated from a sale agreement dated May 10, 2002, between the original appellant, L.K. Prabhu, and the third defendant, V. Ramananda Prabhu, who acknowledged a liability of ₹17.25 lakhs. It was stipulated that upon default, the defendant would convey 5.100 cents of property with a building for ₹35 lakhs. On June 28, 2004, following further payments, a registered sale de...