Attachment Before Judgment and Pre‑Suit Transfers: Supreme Court Reaffirms Exclusive Recourse to Section 53 TPA in L.K. Prabhu v. K.T. Mathew

Attachment Before Judgment Cannot Extend to Pre‑Suit Transfers: Exclusive Recourse to Section 53 of the Transfer of Property Act Clarified in L.K. Prabhu v. K.T. Mathew

Case: L.K. PRABHU @ L. KRISHNA PRABHU (DIED) THROUGH L.Rs v. K.T. MATHEW @ THAMPAN THOMAS & Ors.
Citation: 2025 INSC 1364
Court: Supreme Court of India (Civil Appellate Jurisdiction)
Date of Judgment: 28 November 2025
Coram: B.V. Nagarathna, J. and R. Mahadevan, J. (per Mahadevan, J.)


I. Introduction

This judgment addresses a recurring and doctrinally important question in Indian civil procedure and property law:

  • Can a creditor, by obtaining attachment before judgment under Order XXXVIII Rule 5 of the Code of Civil Procedure, 1908 (CPC), reach property that had already been transferred by the debtor before the suit was filed?
  • If the creditor alleges that such pre‑suit transfer is fraudulent under Section 53 of the Transfer of Property Act, 1882 (TPA), can that allegation be adjudicated incidentally in attachment/claim proceedings, or must it be pursued through proceedings conforming to Section 53?

In L.K. Prabhu, the Supreme Court re‑affirms and sharpens the line of authority that protects bona fide pre‑suit transferees and limits the reach of attachment before judgment. The Court holds that:

  • Property validly transferred by the debtor before the institution of the creditor’s suit does not form part of the attachable estate for purposes of Order XXXVIII Rule 5 CPC.
  • The creditor’s remedy, if the transfer is alleged to be fraudulent, lies under Section 53 TPA, and a claim petition under Order XXXVIII Rule 8 read with Order XXI Rule 58 CPC cannot be treated as a surrogate Section 53 action in such a scenario.

The case therefore sits at the intersection of:

  • the preventive remedy of attachment before judgment (Order XXXVIII CPC),
  • the post‑decree execution framework (Order XXI Rule 58 CPC), and
  • the substantive law of fraudulent transfers (Section 53 TPA).

II. Factual Background and Procedural History

1. The Underlying Transaction

  • The predecessor of the appellants, L.K. Prabhu @ L. Krishna Prabhu (described as the “original applicant” or purchaser), entered into an agreement for sale on 10 May 2002 with Defendant No. 3, V. Ramananda Prabhu.
  • Under this agreement:
    • Defendant No. 3 acknowledged liability of ₹17,25,000 to the purchaser.
    • He undertook to discharge that liability within three years.
    • The agreement contained a stipulation that in case of default, Defendant No. 3 would convey 5.100 cents of property with a building in Ernakulam Village for a total consideration of ₹35 lakhs, on receipt of the balance sale consideration.
  • Endorsements on the agreement show that on 25 June 2004, the purchaser paid:
    • ₹3,00,000 in cash, and
    • ₹2,50,000 by cheque.
  • On alleged failure by Defendant No. 3 to honour his commitments, a registered sale deed was executed on 28 June 2004 in favour of the purchaser (Document No. 3752/2004, SRO Ernakulam).
  • The purchaser claimed to have been in possession and enjoyment of the property since then, using it as guest houses recognised by the Tourism Department, with assessments in his name.

2. The Creditor’s Suit and Attachment

  • On 18 December 2004, Respondent No. 1 – K.T. Mathew @ Thampan Thomas filed O.S. No. 684 of 2004 before the Sub Court, Ernakulam, seeking to recover ₹43,82,767 from Defendants 2 to 4.
  • Along with the suit, he filed I.A. No. 6530 of 2004 under Order XXXVIII Rule 5 CPC seeking attachment before judgment of the same property, asserting that it absolutely belonged to Defendant No. 3 under a 1982 partition deed.
  • The Sub Court passed an order of attachment before judgment on 13 February 2005.

3. Purchaser’s Claim Petition

  • The purchaser claimed that he became aware of the attachment only in 2007.
  • He therefore filed I.A. No. 2627 of 2007 under Order XXXVIII Rule 8 CPC, seeking release of the property from attachment.
  • Respondent No. 1 opposed, alleging:
    • that the transfer in favour of the purchaser was fraudulent,
    • that it was intended to defeat creditors, and
    • that it was unsupported by genuine consideration, attracting Section 53 TPA.

4. Orders of the Trial Court and High Court

  • On 24 February 2009, the trial Court dismissed the claim petition, holding that:
    • the transfer was fraudulent, and
    • was hit by Section 53 of the Transfer of Property Act, 1882.
  • The purchaser appealed in RFA No. 347 of 2009 before the Kerala High Court. During pendency, he died and his legal heirs (appellants before the Supreme Court) were substituted.
  • By judgment dated 13 February 2023, the High Court:
    • upheld the rejection of the claim petition – i.e. it affirmed that the sale was collusive/fraudulent and that the attachment could operate against the property; but
    • partly allowed the appeal by remanding the matter for a limited enquiry before the trial court to determine:
      • what amount, if any, was genuinely paid by the purchaser, and
      • the extent of his entitlement to recover such amount from the debtor (Defendant No. 3).

5. Supreme Court Proceedings

  • The legal heirs of the original purchaser filed the present civil appeal (arising out of SLP (C) No. 15592 of 2023).
  • On 14 July 2023, the Supreme Court ordered maintenance of status quo regarding the property.
  • By final judgment dated 28 November 2025, the Court allowed the appeal, set aside the orders of the trial court and High Court, and upheld the validity of the purchaser’s title.

III. Summary of the Judgment

Core Legal Issues

  1. Whether the registered sale deed dated 28 June 2004 in favour of the original applicant (purchaser) constituted a fraudulent transfer under Section 53(1) TPA.
  2. Consequently, whether the attachment before judgment ordered on 13 February 2005 in O.S. No. 684 of 2004 could validly operate against the said property.

Key Holdings

  • The sale deed dated 28 June 2004 was executed and registered before the suit was instituted on 18 December 2004. Hence, as on the date of institution of the suit, the property did not belong to the defendant‑debtor.
  • Order XXXVIII Rule 5 CPC (attachment before judgment) can operate only on property that belongs to the defendant on the date of filing of the suit. It cannot be invoked against property already transferred prior to the suit.
  • While Order XXXVIII Rule 8 incorporates Order XXI Rule 58 for adjudication of claims to property attached before judgment, that mechanism is procedural and protective. It cannot be expanded to convert claim proceedings into a full‑fledged enquiry under Section 53 TPA in relation to pre‑suit transfers.
  • Any challenge to a transfer alleged to be fraudulent or collusive with intent to defeat creditors must be mounted in accordance with Section 53 TPA, which is a substantively distinct remedy, and not merely via an attachment‑related claim petition.
  • The creditor (Respondent No. 1) failed to establish fraud:
    • The burden of proof lies on the party alleging fraud under Section 53 TPA.
    • Mere suspicion or circumstances of apparent advantage to the transferee are not sufficient.
    • The consideration – including past debts and discharge of bank dues – was not shown to be sham or illusory; past debts are valid consideration under Section 25 of the Contract Act.
  • The purchaser was a bona fide transferee for value, and his rights are expressly protected by the proviso to Section 53(1) TPA.
  • Accordingly:
    • The sale deed dated 28 June 2004 is valid and binding.
    • The attachment before judgment dated 13 February 2005 cannot extend to this property.
    • The purchaser’s claim petition under Order XXXVIII Rule 8 ought to have been allowed; the contrary orders of the Sub Court and High Court were set aside.

IV. Detailed Analysis

A. Statutory Framework and Its Interpretation

1. Order XXXVIII Rules 5–10 CPC: Attachment Before Judgment

The Court carefully recites and explains Order XXXVIII Rules 5 to 10 CPC. The scheme can be summarised as follows:

  • Rule 5: Enables the court, if satisfied that the defendant is about to dispose of or remove his property with intent to obstruct or delay execution, to:
    • direct him to furnish security, or
    • show cause why he should not furnish security,
    and to order conditional attachment.
  • Rule 6: If the defendant fails to show cause or furnish security, the court may order attachment. If he complies, existing attachment is to be withdrawn.
  • Rule 7: Mode of attachment is as in execution of a decree.
  • Rule 8: Any claim to attached property before judgment is to be adjudicated as if it were a claim to property attached in execution, i.e. by applying Order XXI Rule 58 CPC.
  • Rule 9: Attachment is to be withdrawn:
    • when the defendant furnishes the required security, or
    • when the suit is dismissed.
  • Rule 10: Crucially provides that attachment before judgment:
    • “shall not affect the rights, existing prior to the attachment, of persons not parties to the suit”,
    • nor bar other decree‑holders from applying for sale of the property.

The Court emphasises that attachment before judgment is purely protective and ancillary. It does not:

  • create any proprietary interest in favour of the plaintiff, or
  • displace the pre‑existing rights of third parties.

Attachment merely freezes the defendant’s existing attachable interest so as to prevent its dissipation pending adjudication of the suit.

2. Order XXI Rule 58 CPC (as amended in 1976) and Its Interface with Order XXXVIII Rule 8

Order XXI Rule 58 governs adjudication of claims and objections to attachment in execution of decrees. The 1976 amendment (Act 104 of 1976) radically transformed this provision by:

  • requiring the executing court to determine all questions relating to right, title or interest in the attached property between parties to the claim, and
  • giving such determination the force of a decree, thereby largely eliminating the need for separate suits that were earlier contemplated.

By virtue of Order XXXVIII Rule 8, this adjudicatory framework is extended to claims in respect of property attached before judgment. Thus, in principle, where a stranger to the suit claims independent title to attached property, the court hearing the claim petition must decide all issues of right, title and interest comprehensively within that proceeding, subject to appeal.

However—and this is the crux of the present decision—the Supreme Court insists that:

  • The procedural enlargement of the court’s power to adjudicate claims under Order XXI Rule 58 cannot be read to override substantive limitations inherent in the nature of attachment before judgment, especially:
    • the pre‑condition that the attached property must belong to the defendant at the time of suit (for Rule 5 to apply), and
    • the protection of pre‑existing rights of third parties under Order XXXVIII Rule 10.

In other words, even though the court can adjudicate title disputes in claim proceedings, it cannot, in the guise of such adjudication, circumvent the statutory scheme by treating property which never formed part of the defendant’s estate at the time of suit as attachable.

3. Section 53 TPA: Fraudulent Transfer

Section 53 TPA deals with fraudulent transfers of immovable property. The Court summarises its key features:

  • Every transfer made with intent to defeat or delay creditors is voidable at the option of such creditors.
  • The provision specifically protects transferees in good faith and for consideration.
  • A creditor’s suit to avoid such transfer must be brought on behalf of or for the benefit of all creditors.
  • Sub‑section (2) deals with transfers without consideration made with intent to defraud subsequent transferees.

The Court stresses that Section 53 requires:

  • proof of fraudulent intent (“intent to defeat or delay creditors”), and
  • respect for the saving of rights of bona fide transferees for value.

This is a substantive remedy, different in nature from the procedural remedy of attachment.


B. Precedents Cited and Their Influence

1. Hamda Ammal v. Avadiappa Pathar, (1991) 1 SCC 715

This case is central to the Court’s reasoning, and is strongly relied upon by the appellants. In Hamda Ammal:

  • A sale deed was executed by the debtor in favour of a third party before the institution of a creditor’s suit, though it was registered later.
  • The creditor obtained attachment before judgment after the execution but before registration.
  • The question was whether such attachment could prevail over the earlier executed sale.

The Supreme Court held that:

  • In the context of Order XXXVIII Rule 5, the phraseology is directed at transactions undertaken with the intent of obstructing or delaying execution.
  • Where the sale had already been executed before suit, Rule 5 has no application.
  • If a creditor wishes to assail such a transfer as fraudulent, the remedy lies under Section 53 TPA, not under Rule 5.
  • A sale deed executed prior to attachment (even if registered later) prevails over attachment before judgment.

The present judgment adopts this ratio almost verbatim and applies it to a context where the sale deed was both executed and registered well before the suit:

“Order XXXVIII Rule 5 CPC… would not apply where the sale deed has already been executed by the defendant in favour of a third person…. It would be a different case altogether if a creditor wants to assail such transfer by sale under Section 53 of the Transfer of Property Act….”

Thus, Hamda Ammal supplies the key doctrinal proposition: pre‑suit executed sales fall outside the reach of attachment before judgment.

2. Vannarakkal Kallalathil Sreedharan v. Chandramaath Balakrishnan, (1990) 3 SCC 291

In Vannarakkal, the Court held that:

  • An agreement for sale of immovable property creates an equitable obligation attached to the ownership, though it does not create a legal interest in the property (Section 54 TPA).
  • An attaching creditor can attach only the right, title and interest of the judgment‑debtor.
  • Therefore, if an agreement for sale precedes the attachment, the attaching creditor’s rights are subject to that contractual obligation, and the subsequent conveyance in pursuance of such prior agreement passes good title, despite the intervening attachment.

The Supreme Court in L.K. Prabhu quotes Vannarakkal extensively, thereby reaffirming that:

  • Attachment is not an absolute freeze on property but is conditional upon and limited by pre‑existing obligations.
  • Creditors cannot use attachment to leapfrog over earlier contractual obligations of the debtor relating to the property.

3. Rajender Singh v. Ramdhar Singh, (2001) 6 SCC 213

This decision follows Vannarakkal and reiterates that:

  • Where an agreement to sell is entered into before attachment, that agreement imposes an obligation binding on the debtor’s title.
  • An attaching creditor cannot acquire rights superior to those of the judgment‑debtor, and takes the property subject to existing obligations.

By invoking this line of authority, the Court situates L.K. Prabhu within a coherent doctrinal continuum: the attaching creditor attaches only what the debtor actually owns, and cannot wipe out prior obligations or interests.

4. Abdul Shukoor Saheb v. Arji Papa Rao, (1962) 2 SCR 55

This case is cited by Respondent No. 1 to argue that:

  • Even before the 1976 amendment, courts recognised that in claim proceedings under what is now Order XXI Rule 58, creditors could raise pleas under Section 53 TPA.

The present judgment does not expressly refute this proposition, but its structure subtly re‑positions the role of Section 53 in the post‑1976 environment:

  • It accepts that post‑1976, Order XXI Rule 58 allows comprehensive adjudication of right, title, and interest in claim proceedings.
  • However, it emphasises that this comprehensive power cannot be used to override the basic precondition that attachment must be over property that belonged to the defendant at the time of suit.

Thus, while Abdul Shukoor supports the idea that Section 53 issues may, in some scenarios, be examined in claim proceedings, the present judgment clarifies that this cannot justify attaching and adjudicating upon property that had validly left the debtor’s estate before the suit itself.


C. The Court’s Legal Reasoning

1. Temporal Sequence and the Core Precondition for Attachment

A crucial fact is the timeline:

  • Sale deed in favour of purchaser: 28 June 2004
  • Creditor’s suit filed: 18 December 2004
  • Attachment before judgment ordered: 13 February 2005

Based on this, the Court reasons:

  • At the time the suit was instituted (18 December 2004), the suit property had already been transferred out of the debtor’s ownership.
  • Therefore, the fundamental precondition for invoking Order XXXVIII Rule 5—that the defendant is about to dispose of property that presently belongs to him—was absent.

From this, the Court draws a structural inference:

“In such circumstances, the essential condition for invoking attachment before judgment under Order XXXVIII Rule 5 CPC—that the property belongs to the defendant on the date of institution of the suit—is absent. The plaintiff's remedy, if any, lies exclusively under Section 53 of the T.P. Act….”

2. Limits of Claim Proceedings under Order XXXVIII Rule 8 / Order XXI Rule 58

The High Court had effectively treated the claim proceedings as if they were a de facto Section 53 TPA suit, adjudicating on the alleged fraud and upholding the attachment. The Supreme Court finds this impermissible:

  • Order XXXVIII Rule 8 imports the procedural machinery of Order XXI Rule 58 to adjudicate claims to property validly under attachment.
  • But where, at the threshold, the property could not have been attached at all (because it did not belong to the debtor when the suit was filed), the court cannot cure this defect by using Rule 8 to inquire into and invalidate the prior transfer.
  • To do so would, in effect, amount to expanding the scope of attachment before judgment beyond what the Code allows.

Thus, the Court preserves a clear distinction:

  • Substantive invalidation of transfers as fraudulent belongs to the domain of Section 53 TPA, and
  • Procedural adjudication of claims to property under attachment must operate within the boundaries of what the attachment could legitimately cover.

3. Burden and Standard of Proof under Section 53 TPA

Even assuming that fraud could be examined in claim proceedings, the Court finds that the creditor did not discharge the burden under Section 53 TPA:

  • The burden of proving that a transfer was made “with intent to defeat or delay creditors” lies squarely on the party alleging it.
  • Mere suspicion—based on familial or community ties, timing of the transaction, or partial cash consideration—is not enough.
  • Courts may draw reasonable inferences from proved facts, but cannot substitute conjecture for proof.
  • There must be cogent evidence that:
    • the transfer was calculated to prejudice creditors, and
    • it effectively stripped the debtor of assets to an extent that execution of a potential decree would be obstructed or delayed.

In L.K. Prabhu, the Court notes the absence of evidence showing:

  • that the transfer rendered the debtor insolvent or substantially asset‑less, or
  • that the creditor suffered actual and irretrievable prejudice.

4. Consideration and Bona Fides of the Purchaser

The Court rejects the contention that the sale deed lacked genuine consideration:

  • The sale price included:
    • adjustment of earlier debts (~₹23.93 lakhs), and
    • discharge of bank dues (~₹8.57 lakhs).
  • Under Section 25 of the Indian Contract Act, 1872, past debt is a valid consideration.
  • The antecedent agreement dated 10 May 2002 and subsequent payments in June 2004 corroborate the commercial foundation of the transaction.

The Court dismisses the argument that execution of the sale deed earlier than the three‑year default period (mentioned in the 2002 agreement) necessarily indicates fraud:

  • Parties are legally free to vary or accelerate performance of contractual obligations by mutual consent.
  • Advancing the transfer date, in itself, does not evidence an intent to defraud creditors.

Given the absence of proof of collusion or notice of any fraudulent design, the Court holds that the purchaser qualifies as a “transferee in good faith and for consideration” within the saving clause of Section 53(1) TPA, whose rights are protected.

5. Delay in Filing Claim Petition

The lower courts had treated the delay (2005 attachment; 2007 claim petition) as strengthening the inference of fraud. The Supreme Court implicitly rejects this reasoning:

  • Delay may have relevance under the proviso to Order XXI Rule 58(1) (where the court can refuse to entertain a designedly or unnecessarily delayed claim).
  • However, delay by itself cannot transform an otherwise valid and bona fide pre‑suit transfer into a fraudulent one.

Given that the Supreme Court proceeds on the foundation that the property was never validly attachable at all, it does not treat delay as determinative.


D. Impact and Doctrinal Significance

1. Reaffirmation and Clarification of the Law on Attachment Before Judgment

The judgment firmly re‑entrenches the principle that:

  • Attachment before judgment is strictly limited to property belonging to the defendant on the date of the suit.
  • It is a protective, not proprietary, measure.
  • Pre‑existing rights of strangers are not affected (Order XXXVIII Rule 10).

This has significant implications:

  • Creditors cannot rely on attachment before judgment as a catch‑all device to freeze property that the debtor had already transferred away by the time they sue.
  • They must instead undertake timely due diligence and, where warranted, initiate appropriate Section 53 TPA proceedings.

2. Relationship Between Section 53 TPA and Claim Proceedings Post‑1976

Post‑1976, many courts had treated the expanded scope of Order XXI Rule 58 as allowing Section 53 issues to be adjudicated within claim proceedings, thereby reducing the need for separate suits.

L.K. Prabhu does not wholly deny this possibility, but it introduces an important qualification:

  • Where the impugned transfer occurred before the very institution of the suit, so that the property was never part of the defendant’s attachable estate, claim proceedings cannot be used as a substitute for a Section 53 action.
  • In such circumstances, the creditor must pursue the Section 53 remedy in a manner consistent with its substantive requirements (including its representative nature “for the benefit of all creditors”).

The doctrinal message is clear: procedural tools in execution or attachment cannot be used to circumvent substantive property law.

3. Enhanced Protection for Bona Fide Pre‑Suit Purchasers

The decision offers stronger comfort to bona fide purchasers who acquire property from persons who later face creditor suits:

  • If the purchase is prior to the creditor’s suit and for value, and in good faith, their title is secure against later attachments in such suits.
  • Even if creditors allege the transaction was designed to defeat them, they must meet the high threshold under Section 53 TPA and cannot dislodge the transferee’s rights through attachment machinery alone.

This promotes transactional certainty in the property market by ensuring that third‑party transferees are not lightly exposed to ex post claims premised on creditors’ disputes with their transferors.

4. Practical Lessons for Creditors and Litigators

  • For creditors:
    • Conduct title searches and due diligence before suing to understand whether the debtor still owns the property.
    • If suspect transfers have been made before suit, consider instituting a Section 53 TPA action (or appropriately framed proceedings) rather than relying solely on attachment.
    • Use injunctive relief and attachment proactively where the debtor still holds assets, rather than reacting late.
  • For purchasers:
    • Ensure timely registration and clear documentation of consideration and antecedent liabilities (which can later rebut allegations of sham consideration).
    • Maintain records (bank statements, agreements, endorsements) that can substantiate bona fides if challenged in litigation.

5. Subtle Tension and Future Questions

There is a nuanced tension within the judgment:

  • On one hand, it acknowledges that the 1976 amendment to Order XXI Rule 58 broadened the scope of adjudication and reduced the need for separate suits (including Section 53 suits) in many situations.
  • On the other, in the specific context of pre‑suit transfers, it insists that the creditor's remedy lies “exclusively” under Section 53 TPA and that claim proceedings cannot be converted into substantive Section 53 enquiries.

Future courts may be called upon to refine:

  • In which categories of cases Section 53 issues may still be decided within claim proceedings, and
  • When a separate Section 53 action remains necessary, especially in light of the representative character of such suits and the rights of other creditors.

V. Complex Concepts Simplified

1. What Is “Attachment Before Judgment”?

  • A preventive measure ordered by the court during the pendency of a suit.
  • It temporarily freezes the defendant’s property so that, if the plaintiff wins, there are assets against which the decree can be executed.
  • It does not:
    • make the plaintiff the owner of the property, or
    • destroy the rights of third parties that existed before the attachment.

2. Attachment in Execution vs. Attachment Before Judgment

  • Attachment in execution (Order XXI CPC):
    • Occurs after a decree is passed.
    • Is part of the process of realising the decree.
  • Attachment before judgment (Order XXXVIII CPC):
    • Occurs before the case is decided.
    • Is a safeguard to ensure that the defendant does not dissipate assets in anticipation of losing.

3. Claim Petition (Order XXI Rule 58 / Order XXXVIII Rule 8)

  • When property is attached (in execution or before judgment), a third party may say: “This property is mine, not the debtor’s. It should not be attached.”
  • That third party files a claim petition under:
    • Order XXI Rule 58 – if attachment is in execution; or
    • Order XXXVIII Rule 8 – if attachment is before judgment (which applies Order XXI Rule 58 procedures).
  • The court then decides whether the property:
    • should remain attached,
    • should be released, or
    • is subject to some prior charge or interest.

4. “Voidable” Transfer under Section 53 TPA

  • A voidable transfer is one that is valid unless and until it is set aside at the instance of an entitled party (e.g. a creditor).
  • Under Section 53(1) TPA:
    • A transfer made with intent to defeat or delay creditors is voidable at the option of those creditors.
    • It is not automatically void; someone must challenge it successfully.
  • Importantly, such voidability is subject to the rights of transferees in good faith and for consideration, which are protected.

5. “Transferee in Good Faith and for Consideration”

  • A person who:
    • pays value for the property (not a gift or sham), and
    • acts honestly, without knowledge of, or participation in, any scheme to defeat creditors.
  • Such a transferee’s rights are protected even if the transferor (the debtor) intends to defeat creditors, unless the transferee shares that intent or has clear notice of it.

6. “Past Consideration” under Section 25 Contract Act

  • Consideration is the “price” for which a promise is bought.
  • Under Indian law, past acts or debts can also constitute valid consideration if:
    • they were done at the promisor’s desire, or
    • they represent an existing legal liability being discharged or acknowledged.
  • Thus, using an existing debt as part of the sale consideration is legally valid consideration.

VI. Conclusion: Key Takeaways and Broader Significance

  • Temporal boundary for attachment:
    Attachment before judgment under Order XXXVIII Rule 5 CPC cannot reach property that was validly transferred away before the suit. The debtor must own the property on the date of suit for attachment to operate.
  • Section 53 TPA as the proper remedy for pre‑suit transfers:
    When creditors allege that a pre‑suit transfer is fraudulent or collusive, their remedy lies under Section 53 TPA. Claim proceedings under Order XXXVIII Rule 8/Order XXI Rule 58 cannot be converted into a full‑blown Section 53 action to invalidate such transfers.
  • Procedural vs. substantive domains:
    The judgment clearly demarcates the procedural role of attachment and claim proceedings from the substantive law of fraudulent transfers. Procedural rules cannot be stretched to undo transfers that had already taken the property outside the debtor’s estate.
  • Burden of proving fraud:
    Under Section 53 TPA, the onus is on the creditor to prove intent to defeat or delay creditors. Suspicion, timing, or relationship alone cannot substitute for proof of fraudulent design.
  • Protection of bona fide purchasers:
    The rights of a transferee in good faith and for consideration are expressly protected. This decision reaffirms that such transferees are not lightly divested of their rights by subsequent attachments in creditors’ suits.
  • Continuity with prior jurisprudence:
    The Court reinforces and systematises principles from Vannarakkal, Hamda Ammal, and Rajender Singh: the attaching creditor attaches only the debtor’s existing right, title, and interest—which may be encumbered or diminished by prior contracts and transfers.

In the broader legal landscape, L.K. Prabhu v. K.T. Mathew is significant not because it radically alters the law, but because it consolidates and clarifies existing principles in a post‑1976 CPC environment where the scope of execution‑related adjudication has broadened. By reaffirming the priority of substantive property rights and the structured remedy under Section 53 TPA over procedural attachment mechanisms, the judgment enhances both doctrinal coherence and commercial certainty in the law of debtor‑creditor relations.

Case Details

Year: 2025
Court: Supreme Court Of India

Judge(s)

Justice R Mahadevan

Advocates

MOHAMMED SADIQUE T.A.

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