TaxTMI 
TaxTMI 
2026 (3) TMI 5
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....f India Limited, Ramanathapuram, Coimbatore ("CCI")/Respondent No. 1 primarily engages in the business of sale and purchase of cotton/cotton bales. On 22.01.1998, a sale agreement was entered into between the first and second respondents for the sale of cotton bales. On account of a dispute in recovery of the sale price of cotton bales supplied under the sale agreement dated 22.01.1998, the first respondent raised an arbitral dispute in AP No. 9 of 1999 for recovery of Rs. 37,51,380/- with interest and cost. On 11.06.2001, the learned arbitrator passed an award for a sum of Rs. 26,00,572.90/- with future interest at 18% per annum and cost. On 25.09.2001, Respondent No. 2 filed AOP No. 10 of 2006 before the Court of Principal District Judge, Coimbatore under Section 34 of the Arbitration and Conciliation Act, 1996. 3. The Appellant is the mother of the Managing Director of Respondent No. 2, wife of ex-director, and was also a non-executive director of the Respondent No. 2/Company from 2007 to 2012. 4. On 21.01.2013, AOP 10 of 2006 was dismissed, and has become final, since no appeal was filed by Respondent No. 2. 5. Respondent No. 2 is a borrower of ICICI Bank. For default ....
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....t No. 1 and Respondent No. 2. 6.2 Respondent No. 1 alleges collusion between the Appellant and Respondent No. 2 and brought into existence the sale deed dated 23.04.2015. The completion of the sale under the SARFAESI Act will not affect the right of the decree holder in AOP No. 10 of 2006. The Appellant is a purchaser subsequent to the arbitral award in favour of the first respondent. The executing court recorded the claimant's evidence and dismissed the claim petition. A finding relevant to the Appellant's claim is that the AOP had been pending since 1999 and concluded in 2013. Respondent No. 2 is under an obligation to disclose the award, as well as the pending AOP proceedings to the Appellant. The tripartite agreement preceding the sale deed has not been exhibited to establish the absence of collusion or ignorance of ongoing proceedings. The third-party claimant has taken the risk of the execution petition, and the objection is hit by Rule 102 of Order XXI of the Code of Civil Procedure Code, 1908 ("CPC"). The claim petition was thus dismissed by order dated 03.01.2022. The Appellant carried the order in revision before the High Court in CRP No. 469 of 2022. By the impugn....
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....y this Court in Danesh Singh and others v. Har Pyari (Dead) Thr. LRs. 2025 INSC 1434., for the proposition that the principle of lis pendens cannot, in terms, be excluded for money decrees. 10. In the facts and circumstances of the present case, the arbitral proceeding was instituted in 1999, and the award is dated 11.06.2001. Under Section 36 of the Arbitration and Conciliation Act, 1996, an arbitral award is enforceable in the same manner as if it were a decree of a court, essentially, a deemed decree. Order XXI Rule 102 of the CPC explicitly states that the protections available to bona fide claimants under Rules 98 and 100 do not apply to a transferee pendente lite. A transferee pendente lite is defined as someone to whom the property is transferred after the institution of the suit in which the decree was passed. The suit, i.e., the arbitration proceeding, was instituted in 1999, and the Appellant purchased the property on account of a sale deed dated 23.04.2015. Since the transfer occurred after the institution of the proceedings and the passing of the award, the Appellant is a transferee pendente lite/post arbitral award purchaser, and is barred by Order XXI Rule 102 from....
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....ncipal District Judge, Coimbatore, and was transferred to Tirupur. The transferee court, within whose jurisdiction the properties are situated ordered attachment for realisation of the arbitral award dated 11.06.2001. The Appellant presents the case as a third-party stranger. We may not hasten to conclude that there is fraud between the Appellant and Respondent No. 2 in the transfer of the EP Schedule Properties by sale deed dated 23.04.2015. But the non-production of tripartite agreement, which is the genesis for discharging the claim of ICICI Bank, as has been rightly held by the Executing Court, enables this Court to safely conclude that the sale in favour of Appellant, even if for consideration cannot be without notice of the existing liability of the Company/Respondent No. 2. The recovery proceedings under SARFAESI Act are independent and does not give any shield of protection to other claims against the Judgment Debtor/Borrower in default. In the circumstances of the case, we reject the argument that the sale in favour of the Appellant is without notice. 12. The next question for consideration is whether the sale in favour of the Appellant can be brought within the purview....