Unregistered guarantees and abandoned compromises cannot establish pre-existing rights defeating attachment.

Sun TV claimed rights over properties under a guarantee and undertaking executed in 2018, followed by a Joint Memorandum of Compromise recorded in proceedings under Section 9 of the Arbitration and Conciliation Act, 1996.

Sun TV later purchased the properties in 2021 and sought release of an attachment obtained by Marina Holdings in execution proceedings.

The properties had been attached by the High Court on 12 March 2020 and a further attachment was registered with the jurisdictional Sub-Registrar on 10 September 2020.

Marina Holdings opposed the application, arguing, among other things, that the guarantee and undertaking were unregistered and that the 2018 compromise had been challenged on grounds of fraud and forgery; a later compromise was entered into after the attachment.

Section 64 CPC generally renders a private transfer or delivery of attached property void against claims enforceable under the attachment; under Section 64(2), the exception applies to a contract for transfer or delivery that was entered into and registered before the attachment.

Order XXXVIII Rule 10 CPC provides that attachment before judgment does not affect rights existing prior to the attachment in favour of persons who are not parties to the proceedings in which it was made.

The Court noted that a pre-existing right may be relevant, but held that the claimed transfer or delivery contract must satisfy Section 64’s registration requirement to attract its protection.

No precedents were relied upon in the Court’s reasoning.

The Court found that the guarantee and undertaking relied on by Sun TV were unregistered, and therefore did not meet Section 64’s registration requirement.

It also considered that the 2018 compromise had been challenged by a signatory on grounds of fraud and forgery, and that the parties later entered into a fresh compromise, on the basis of which sale deeds were executed.

The later compromise post-dated the attachment, while the parties’ conduct indicated that the original compromise had not been acted upon.

The Court therefore concluded that the original compromise did not establish a pre-existing right and that neither Section 64(2) nor Order XXXVIII Rule 10 assisted Sun TV.

The application to release the attachment was dismissed, with no order as to costs.