Property Law

Maya Devi v. Lalta Prasad

(2015) 5 SCC 588; AIR 2014 SC 1356

Facts

Lalta Prasad obtained a money decree against Prem Chand Verma.
In execution, he sought attachment of a property said to belong to the judgment-debtor.
Maya Devi objected, claiming that she had purchased the property from Nirmal Verma through:
a registered general power of attorney;
agreement to sell;
possession letter;
receipt;
affidavit; and
Will.
The transaction had occurred in 2006, before the final decision in Suraj Lamp.
The executing court rejected her objection, holding that a GPA did not confer title.
The High Court affirmed without properly investigating the competing documents and possession.

Whether the principles in Suraj Lamp could be mechanically applied to invalidate a genuine transaction completed before that decision.
Whether property claimed by a third party could be attached without determining that party’s rights.

A GPA by itself is an instrument of agency and does not operate as a conveyance of title.
However, the final ruling in Suraj Lamp:
operated prospectively;
did not invalidate genuine past transactions;
did not prohibit examination of agreements, powers of attorney and possession for the limited legal rights they created.
Under Order XXI Rules 58 and 97–101 CPC, an executing court must adjudicate all questions of title and interest raised by a third-party objector.
Absence of a defence in the original suit does not justify automatic attachment of property belonging to someone else.

Maya Devi was not the judgment-debtor and had not been a party to the money suit.
Her property could be attached only after a proper finding that it legally belonged to the judgment-debtor.
She produced a set of registered and contemporaneous documents and claimed actual possession.
The executing court did not properly test:
the genuineness of those documents;
the transferor’s title;
the date and nature of possession; or
whether the decree-holder had any competing interest in the property.
It treated Suraj Lamp as retrospectively erasing all rights arising from earlier GPA-related transactions.
That approach was incorrect.
The Court did not declare that every GPA transaction conveys ownership.
Rather, it held that a genuine pre-Suraj Lamp transaction must be examined according to the law and evidence applicable when it occurred.
A decree-holder’s sympathy or entitlement to recover money cannot justify taking a stranger’s property.
Maya Devi’s independent claim had to be protected against attachment in that execution.

The objection to attachment was allowed.
The orders attaching Maya Devi’s property were set aside.
Suraj Lamp could not be retrospectively and mechanically used to reject the earlier transaction.
The decree-holder remained free to proceed against property actually belonging to the judgment-debtor.