Delhi High Court: Transfer after property is identified in execution proceedings remains subject to the decree, even before attachment

An arbitral award dated 6 November 2021 was passed against the judgment debtors, and the decree-holder filed an execution petition on 13 May 2022.

The execution petition identified House No. 161, Gali No. 4, Durgapuri Extension, Shahdara, Delhi, as property belonging to Judgment Debtor No. 5 and sought its attachment and sale.

After Judgment Debtor No. 5 was served with notice of the execution petition on 30 July 2022, she transferred her undivided one-half share to the appellant, her sister-in-law and the owner of the other half; the transfer preceded formal attachment.

The appellant’s first objection under Order XXI Rule 58 CPC, asserting that the share had been transferred before attachment, was dismissed on 24 April 2023 and was not appealed.

The Executing Court later ordered sale of Judgment Debtor No. 5’s undivided share; it was auctioned for ₹84,50,000 to the appellant’s son-in-law, while the appellant’s original half-share was not sold.

The Executing Court dismissed the appellant’s subsequent objections and confirmed the sale on 3 June 2026.

1. Whether the transfer made after the property had been identified in the execution petition, but before formal attachment, removed Judgment Debtor No. 5’s share from the reach of execution

2. Whether the appellant could reopen her proprietary claim after her first Order XXI Rule 58 objection had been dismissed and not appealed, including by relying on the Agreement to Sell omitted from that objection

3. Whether the circumstances of the transfer brought it within Section 53(1) of the Transfer of Property Act, 1882, and whether the appellant could resist execution by challenging the award or its delivery

4. Whether the appellant could invoke the residential-house exemption under Section 60(1)(ccc) CPC or challenge the auction because the share sold was undivided

Section 64 CPC does not invalidate a transfer made before attachment; however, under Section 52 of the Transfer of Property Act, a transfer during a proceeding in which rights to identified immovable property are directly and specifically in question remains subject to rights determined or enforced in that proceeding.

Section 53(1) TPA makes a transfer intended to defeat or delay creditors voidable at a creditor’s option, while protecting a transferee in good faith and for consideration; consideration alone does not establish good faith.

An adjudication under Order XXI Rule 58(4) CPC has the force and appeal conditions of a decree, and a claim already adjudicated cannot be reopened by raising a ground that could and ought to have been raised earlier.

Under Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman, (1970) 1 SCC 670, an executing court may examine an inherent jurisdictional defect apparent on the record, but not disputed matters requiring evidence.

Section 12(5) of the Arbitration and Conciliation Act, 1996, as introduced by the 2015 amendment, does not apply to proceedings commenced before 23 October 2015 absent agreement to the contrary.

Section 31(5) requires delivery of a signed award; knowledge from another source is not a substitute for statutory delivery.

A post-award transferee pendente lite cannot use the acquired interest to resist execution under Order XXI Rules 58 and 102 CPC.

Section 60(1)(ccc) CPC, as applicable in Delhi, protects the judgment debtor’s qualifying residence and is personal to the judgment debtor; an undivided share may be transferred or sold, though it does not confer exclusive possession of a defined portion absent partition.

The Court held that Section 64 CPC did not apply because the Sale Deed preceded formal attachment.

But the particular property had already been identified in the execution petition, and attachment and sale had been sought before the transfer; the share therefore remained subject to enforcement in the pending proceedings under Section 52 TPA.

The appellant’s first Rule 58 objection had already raised the same claim that the transfer removed the share from execution.

Because she did not appeal its dismissal, she could not relitigate that claim by relying on an Agreement to Sell that was available but omitted earlier.

The Court also found, on the balance of probabilities, that the transfer was intended to defeat or delay enforcement: it followed service of the execution petition, substantially all the stated consideration was paid afterward, and possession and use of the home continued within the family.

The circumstances did not establish the appellant’s good faith.

The award-related objections either did not disclose a patent jurisdictional defect or required factual inquiry beyond execution jurisdiction.

The Court expressly made no finding on whether the award had been delivered to Judgment Debtor No. 5 under Section 31(5); it held only that the appellant, as a post-award transferee pendente lite, could not rely on that question to resist execution.

Finally, the appellant could not claim the personal exemption available to the judgment debtor, and the sale of Judgment Debtor No. 5’s undivided share was not invalid merely because it was undivided.

It held that the pre-attachment transfer did not remove that share from the pending execution; the appellant could not reopen her previously adjudicated proprietary claim, challenge execution through the award-delivery issue, invoke Section 60(1)(ccc) CPC, or invalidate the sale because the interest was undivided.

Pending applications were disposed of.