Contractual Obligation - The Legal Chamber

Can a Creditor Attach Property Already Sold? Supreme Court Clarifies the Law

18Feb

By The Legal ChamberNo Comments

Supreme Court

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...

Supreme Court Dismisses Arbitration Petition Due to Limitation Issues

The Supreme Court dismissed the petition for appointment of an arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996. The Court held that the underlying claim for recovery of money was hopelessly barred by limitation, rendering the appointment of an arbitrator untenable in law. Facts Of The Case: The case involves a dispute arising from a partnership deed containing an arbitration clause. The petitioner, residing in the UK, entered into a partnership with the respondent on 20.09.2014, succeeding an earlier partnership involving the petitioner’s sister. The petitioner alleged that he paid substantial sums amounting to Rs. 2.31 crores, relying on a clause entitling him to 75% of profits from a property purchased on 04.05.2016, but received nothing. The partnership wa...

Supreme Court Rules: GMADA Not Liable for Homebuyers’ Loan Interest in Delayed Housing Project

The Supreme Court ruled that while consumer commissions can award compensation for deficiency in service, including mental harassment and litigation costs, they cannot award interest on a loan taken by the consumer in addition to the stipulated contractual interest (8% compounded annually) on the refunded amount. The Court emphasized that the awarded interest sufficiently compensates for the deprivation of investment, and awarding interest under multiple heads for the same default is unsustainable. Facts Of The Case: The Greater Mohali Area Development Authority (GMADA) launched a residential scheme called 'Purab Premium Apartments' in 2011. Anupam Garg and Rajiv Kumar (respondents) applied for flats, with Anupam Garg paying an earnest money of ₹5,50,000 for a 2-BHK + Servant Room apar...