Attachment of Property

The rest of the proviso continues in the same vein, exempting among other things compulsory deposits and provident funds to which the Provident Funds Act applies, an expectancy of succession, a right to future maintenance, and an interest in property which the judgment-debtor cannot alienate.

Notice the pattern, because it makes the list memorable: the exemptions protect the necessities of life (a), the means of earning a living (b), (c), (h), (i), rights that are personal and not really property (e), (f), and provision for the future in the pension and provident fund entries.

Section 60(2) makes clear that nothing in the proviso shall be deemed to exempt houses and other buildings belonging to persons other than those mentioned in clause (c).

Section 61 allows the State Government to exempt from attachment such portion of agricultural produce as it thinks necessary for the next season's cultivation and for the support of the agriculturist and his family. Section 62 restricts the seizure of property in a dwelling-house: no outer door may be broken open unless it is in the occupancy of the judgment-debtor and he refuses access, and a room occupied by a woman who by custom does not appear in public must be given notice and time to withdraw, in the same terms as section 55.

The effect of attachment: section 64

Section 64(1): where an attachment has been made, any private transfer or delivery of the property attached, or of any interest in it, and any payment to the judgment-debtor of any debt, dividend or other monies contrary to the attachment, shall be VOID as against all claims enforceable under the attachment.

Section 64(2) is the qualification added by amendment: nothing in the section applies to a private transfer or delivery made in pursuance of a contract for such transfer or delivery entered into and REGISTERED BEFORE the attachment.

The Explanation provides that claims enforceable under an attachment include claims for the rateable distribution of assets under section 73.

Read those three together and the position is exact. A sale after attachment is not a nullity for all purposes; it is void as against the claims enforceable under the attachment. As between the judgment-debtor and his buyer it may stand; it simply cannot defeat the decree-holder. And a buyer under a registered contract predating the attachment is protected.

Section 63 deals with property attached in execution of decrees of several courts: where property is attached in execution of decrees of more than one court, the court which shall receive or realise it and determine any claim is the court of highest grade, or where the courts are of the same grade, the court under whose decree the property was first attached.

How different kinds of property are attached: Order XXI

The mode of attachment depends on what is being attached, and Order XXI provides for each.

Rule 41 allows the Court, on the decree-holder's application, to require the judgment-debtor to be orally examined as to his property, or to require him to file an affidavit stating his assets, which is how a decree-holder finds out what there is to attach.

Rule 43: movable property in the possession of the judgment-debtor is attached by actual seizure.

Rule 46: a debt, share or other movable property not in the judgment-debtor's possession is attached by a written order prohibiting the creditor from recovering the debt, the debtor from paying it, the person in possession from giving it over, and so on. That prohibitory order freezes the debt; Rules 46A to 46-I, next, are how the decree-holder actually gets the money.

Rule 54: immovable property is attached by an order prohibiting the judgment-debtor from transferring or charging it and all persons from taking any benefit from such a transfer or charge, and the order is proclaimed at some place on or adjacent to the property by beat of drum or other customary mode, and a copy affixed on a conspicuous part of the property and of the court-house.

Rule 57: where any property has been attached in execution of a decree and the Court dismisses the application for execution, it shall direct whether the attachment shall continue or cease, and shall record reasons.

Garnishee proceedings: Order XXI Rules 46A to 46-I

MU has asked "What is a garnishee notice?" or "Who is a garnishee?" in at least four papers, so this deserves its own treatment rather than a passing mention.

A garnishee is a person who owes money to the judgment-debtor. The decree-holder cannot sue him, because the debt is not owed to the decree-holder. What these rules do is let the Court order that third person to pay into Court instead of paying the judgment-debtor.

Take the standard example. Fatima holds a money decree against Ganesh. Ganesh has nothing to seize, but Harish owes Ganesh three lakhs. Harish is the garnishee.

Rule 46A(1), the notice: the Court may, in the case of a debt other than a debt secured by a mortgage or a charge which has been attached under Rule 46, upon the application of the attaching creditor, issue notice to the garnishee liable to pay that debt, calling upon him either to pay into Court the debt due from him to the judgment-debtor, or so much of it as will satisfy the decree and the costs of execution, or to appear and show cause why he should not do so.

Rule 46A(2): the application shall be made on affidavit verifying the facts alleged and stating that in the belief of the deponent the garnishee is indebted to the judgment-debtor.

Rule 46A(3): where the garnishee pays the amount into Court, the Court may direct that it be paid to the decree-holder towards satisfaction of the decree and costs.

Two conditions are built into sub-rule (1) and both are examinable: the debt must already have been attached under Rule 46, and a secured debt, one secured by a mortgage or charge, is outside the procedure.

Rule 46B, if he ignores the notice: where the garnishee does not forthwith pay into Court and does not appear and show cause, the Court may order him to comply with the notice, and on that order execution may issue as though the order were a decree against him.

That is the sanction, and it is severe: the garnishee who ignores the notice ends up with an order enforceable against him personally as a decree.

Rule 46C, if he disputes the debt: where the garnishee disputes liability, the Court may order that any issue or question necessary for the determination of liability be tried as if it were an issue in a suit, and make such order as it deems fit on that determination. The proviso: where the sum is beyond the pecuniary jurisdiction of the Court, it shall send the execution case to the Court of the District Judge to which it is subordinate, which then deals with it as if the case had been originally instituted there.

Rules 46D and 46E, if somebody else claims the debt: where it is suggested or appears probable that the debt belongs to a third person, or that a third person has a lien, charge or other interest in it, the Court may order that person to appear and state and prove his claim; and after hearing him, or where he does not appear, the Court may make such order as is provided above or such other order on such terms as it thinks fit with respect to his lien, charge or interest.

Rule 46F, the garnishee's protection: payment made by the garnishee on notice under Rule 46A, or under any such order, is a valid discharge to him as against the judgment-debtor and any other person ordered to appear, although the decree in execution of which the application was made, or the order passed on it, may afterwards be set aside or reversed.

Rule 46F is what makes the procedure workable. Without it no garnishee would dare pay, because he would risk paying twice.

Rule 46G: the costs of a Rule 46A application and of any proceeding arising from it are in the discretion of the Court. Rule 46H: an order under Rule 46B, Rule 46C or Rule 46E is appealable as a decree. Rule 46-I: Rules 46A to 46H apply, so far as may be, to negotiable instruments attached under Rule 51 as they apply to debts.

Claims by strangers: Order XXI Rules 58 to 63

This is where the chapter meets [Questions to be Determined by the Executing Court]. Section 47 covers questions between the parties. A stranger who says the attached property is his proceeds here instead.

Rule 58(1): where any claim is preferred to, or any objection is made to the attachment of, any property attached in execution of a decree on the ground that the property is not liable to attachment, the Court shall proceed to adjudicate upon the claim or objection in accordance with these rules. Two provisos limit it: no such claim or objection shall be entertained where, before the claim is preferred or the objection made, the property has already been sold; or where the Court considers the claim or objection designedly or unnecessarily delayed.

Rule 58(2): all questions, including questions relating to right, title or interest in the property attached, arising between the parties to such a proceeding or their representatives and relevant to the adjudication of the claim or objection, shall be determined by the Court dealing with the claim or objection, and not by a separate suit.

Rule 58(3): on determining those questions the Court shall, in accordance with the determination and subject to the following rules, either allow the claim or objection and release the property from attachment, or disallow it, wholly or to such extent as it thinks fit.

Rule 58(4), and this is the crucial one: where any claim or objection has been adjudicated upon under this rule, the order made thereon shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree.

Rule 58(5) preserves a suit where the claim or objection was not entertained under one of the provisos to sub-rule (1).

So the structure mirrors section 47. All questions in one place, no separate suit, and the resulting order treated as a decree so that an appeal lies.

Rules 59 to 61 deal with the mechanics, and Rule 62 with the sale of the property notwithstanding a claim.

A worked example

Ganesh holds a money decree against Harish, a tailor.

What can he attach? Under section 60(1), Harish's land, house, goods, bank balance, debts owed to him, and his shares. Also property held by another in trust for Harish or on his behalf.

What is protected? His and his family's necessary wearing apparel, cooking vessels, beds and bedding; his wife's personal ornaments which by religious usage she cannot part with; his sewing machines as the tools of an artisan under clause (b); his books of account; and his salary to the extent of the first one thousand rupees and two thirds of the remainder, unless the decree is for maintenance.

How is each attached? The goods in his shop, by actual seizure, Rule 43. His bank balance and the debts owed to him, by a written prohibitory order, Rule 46. His house, by an order prohibiting transfer, proclaimed on the property by beat of drum and affixed on the property and the court-house, Rule 54.

Harish sells the house to Indu the day after the attachment. Section 64(1): the transfer is void as against the claims enforceable under the attachment. It does not help him.

Indu says she had a registered contract to buy it from before the attachment. Section 64(2) protects her: the section does not apply to a transfer made in pursuance of a contract for transfer entered into and registered before the attachment.

Harish's brother says the shop goods were always his. He is a stranger to the suit, so section 47 does not apply. His route is a claim or objection under Order XXI Rule 58, and the Court will determine all questions of right, title and interest in the attachment proceeding, not by a separate suit. Its order has the force of a decree, so he can appeal it.

He raises the claim only after the goods have been sold. The first proviso to Rule 58(1): the claim shall not be entertained. But by Rule 58(5), since it was not entertained, his remedy by suit is preserved.

Ganesh does not know what Harish owns. Rule 41: he may apply to have Harish orally examined as to his property, or require him to file an affidavit of assets.

What it does not mean

Attachment does not transfer the property. It prohibits dealings; the transfer happens at the sale.

A post-attachment sale is not void for all purposes. Section 64 makes it void as against the claims enforceable under the attachment.

A pre-existing contract is not defeated where it was entered into and registered before the attachment.

Exempt property is not attachable by consent or waiver of the exemptions, which the Code treats as protections rather than privileges.

A stranger's claim is not a section 47 question. It goes under Order XXI Rule 58, and the resulting order carries the force of a decree.

Quick revision

Section 60(1): land, houses, goods, money, negotiable instruments, securities, debts, shares, and all other saleable property belonging to the judgment-debtor or over which he has a disposing power for his own benefit, including property held by another in trust for him or on his behalf.

Exempt, by the proviso: necessary wearing apparel, cooking vessels, beds and bedding, and religious personal ornaments; tools of artisans and an agriculturist's implements, cattle and seed grain; the house of an agriculturist, labourer or domestic servant occupied by him; books of account; a mere right to sue for damages; a right of personal service; pensions and gratuities; wages of labourers and domestic servants; and salary to the extent of the first Rs. 1,000 and two thirds of the remainder, except under a maintenance decree.

Section 64: a private transfer after attachment is void as against the claims enforceable under the attachment; but not where made under a contract entered into and registered before the attachment. Claims enforceable include rateable distribution.

Modes: examination of the judgment-debtor as to assets, Rule 41; movables in his possession by seizure, Rule 43; debts and movables not in his possession by a prohibitory order, Rule 46; immovable property by a prohibitory order, proclaimed and affixed, Rule 54.

Garnishee, Rules 46A to 46-I: a garnishee is a person who owes money to the judgment-debtor. On the attaching creditor's application on affidavit, and only where the debt has been attached under Rule 46 and is not secured by a mortgage or charge, the Court issues a notice calling on him to pay into Court or show cause, Rule 46A. If he neither pays nor appears, an order is made against him and execution issues as though it were a decree against him, Rule 46B. If he disputes liability the question is tried as an issue in a suit, and beyond the Court's pecuniary jurisdiction the case goes to the District Judge, Rule 46C. A third person claiming the debt is heard, Rules 46D and 46E. Payment by the garnishee is a valid discharge even if the decree is later set aside, Rule 46F. Orders under Rules 46B, 46C and 46E are appealable as decrees, Rule 46H, and the rules extend to negotiable instruments, Rule 46-I.

Order XXI Rule 58: a stranger's claim or objection is adjudicated in the execution proceeding, all questions of right, title and interest decided there and not by a separate suit; not entertained if the property is already sold or the claim was designedly delayed; the order has the force of a decree; and where it was not entertained, a suit survives.

Test yourself

1. What property is liable to attachment? Under section 60(1), lands, houses and other buildings, goods, money, bank notes, cheques, bills of exchange, hundis, promissory notes, Government securities, bonds, debts, shares in a corporation, and all other saleable property, movable or immovable, belonging to the judgment-debtor or over which he has a disposing power exercisable for his own benefit, whether held in his own name or by another in trust for him or on his behalf.

2. Name six kinds of property exempt from attachment. Necessary wearing apparel, cooking vessels, beds and bedding of the judgment-debtor and his family, and religious personal ornaments of a woman; tools of artisans and an agriculturist's implements of husbandry, cattle and seed grain; the house of an agriculturist, labourer or domestic servant occupied by him; books of account; a mere right to sue for damages; a right of personal service; pensions, gratuities and political pensions; the wages of labourers and domestic servants; and salary to the extent of the first one thousand rupees and two thirds of the remainder, except under a decree for maintenance.

3. What is the effect of attachment on a subsequent private sale? Under section 64(1) any private transfer or delivery of the attached property, or any payment to the judgment-debtor contrary to the attachment, is void as against all claims enforceable under the attachment. By section 64(2) this does not apply to a transfer made in pursuance of a contract for transfer entered into and registered before the attachment.

4. How is immovable property attached? Under Order XXI Rule 54, by an order prohibiting the judgment-debtor from transferring or charging the property and all persons from taking any benefit from such transfer or charge, the order being proclaimed at or adjacent to the property by beat of drum or other customary mode and a copy affixed on a conspicuous part of the property and of the court-house.

5. A stranger says the attached property is his. What is his remedy? A claim or objection under Order XXI Rule 58, which the executing court adjudicates, determining all questions of right, title and interest between the parties to that proceeding and not by a separate suit. The order made has the same force and is subject to the same conditions as to appeal as if it were a decree.

6. When will such a claim not be entertained? Where, before the claim was preferred or the objection made, the property attached had already been sold, or where the Court considers that the claim or objection was designedly or unnecessarily delayed. In those cases, by Rule 58(5), the party's remedy by suit is preserved.

7. What is a garnishee, and what is a garnishee notice? A garnishee is a person who owes a debt to the judgment-debtor. Under Order XXI Rule 46A, where such a debt, not being one secured by a mortgage or charge, has been attached under Rule 46, the Court may on the attaching creditor's application, made on affidavit verifying the facts and stating the deponent's belief that the garnishee is indebted to the judgment-debtor, issue notice to the garnishee calling upon him either to pay into Court the debt due from him to the judgment-debtor, or so much of it as will satisfy the decree and the costs of execution, or to appear and show cause why he should not do so.

8. What follows if the garnishee neither pays nor appears? Under Rule 46B the Court may order him to comply with the terms of the notice, and on that order execution may issue as though the order were a decree against him. If instead he disputes liability, Rule 46C allows the Court to order the issue to be tried as if it were an issue in a suit, and where the sum exceeds its pecuniary jurisdiction the execution case goes to the Court of the District Judge. A payment made by the garnishee is, by Rule 46F, a valid discharge as against the judgment-debtor even if the decree or order is afterwards set aside or reversed.