Rights under agreements to sell, which are assignable and saleable, are liable for attachment
Delhi High Court Upholds Attachment of Assignable Rights in Property Sale Agreements. Court Rules Assignable Rights Under Agreements to Sell Qualify as Property for Attachment in Execution Proceedings
News Report: In a significant judgment, the Delhi High Court has upheld the attachment of rights under agreements to sell as enforceable property under Section 60(1) of the Code of Civil Procedure, 1908 (CPC). The Division Bench, comprising Justices Anil Kshetarpal and Harish Vaidyanathan, dismissed the appeal filed by Kavita Agarwal challenging the order of attachment of her rights under two agreements to sell property in Hauz Khas Enclave, New Delhi.
The appellant, Kavita Agarwal, contested the order passed by a Single Judge, asserting that the rights under the agreements to sell were merely contingent and thus exempt from attachment. However, the High Court confirmed that such rights, being assignable and saleable, qualify as actionable claims and are liable for attachment.
The judgment references the precedent set by the Allahabad High Court in Bhairon Prasad Chaurasiya v. Smt. Tara Devi, which established that rights to acquire property are distinct from ownership and constitute a saleable property under Section 60 of the CPC. The court emphasized that the assignability of rights under the agreements to sell and the appellant's possession of the property demonstrated substantive and enforceable rights, not contingent or speculative ones.
The court also addressed concerns about potential collusion or prejudice to co-owners, noting that safeguards under Section 64 and Order XXI Rule 64 of the CPC protect the interests of co-owners during execution proceedings. The judgment reiterated that the rights under the agreements to sell are actionable claims subject to execution, thereby upholding the Single Judge’s order for attachment.
The decision marks a pivotal interpretation of property rights under the CPC, affirming the enforceability and saleability of assignable rights under agreements to sell, even before the transfer of ownership.
Bottom Line:
Rights under agreements to sell, which are assignable and saleable, are liable for attachment under Section 60(1) of the CPC, even if they do not confer immediate ownership or proprietary interest in the property.
Statutory provision(s): Code of Civil Procedure, 1908 Section 60(1), Transfer of Property Act, 1882 Section 54, Code of Civil Procedure, 1908 Section 64, Order XXI Rule 64
Kavita Agarwal v. Avneet Soni, (Delhi)(DB) : Law Finder Doc Id # 2779605
