Bandaru Suresh Babu v. Vadlamuri Venkateswara Rao & another
A.S. No. 500 of 2025 — Judgment dated 26 September 2025
Before: Ravi Nath Tilhari & Maheswara Rao Kuncheam, JJ.
High Court of Andhra Pradesh, Amaravati
HEAD NOTES
1. Civil Procedure Code, 1908 — Order XXI Rule 58 —
Claim Petition — Maintainability —
Claim petition filed by third party under O.21 R.58 CPC
based on unregistered non-possessory agreement of sale executed after decree.
Held, such an agreement does not create any right, title or interest
in the property and cannot form the basis for resisting execution of a decree.
Execution Court justified in rejecting claim petition in limine.
Held: “Unregistered post-decree agreements are legally ineffective
and do not confer any proprietary right to obstruct execution proceedings.”
2. Transfer of Property Act, 1882 — Section 54 — Nature of Agreement of Sale —
An agreement of sale, even if genuine, is merely a contract to sell;
it does not transfer ownership.
When such agreement is unregistered and executed after the decree,
it is wholly ineffective to affect the rights of decree holder.
3. Execution — Collusive Decree — Allegation —
A bare allegation of collusion between decree holder and judgment debtor
without supporting material does not invalidate the decree
nor confer locus standi on a third party lacking any legal interest in the property.
4. Practice and Procedure — Summary Rejection of Non-Maintainable Claims —
Execution Court is competent to reject a claim petition
without numbering when, on the face of it, the petition discloses
no legally cognizable right or interest.
Such summary rejection is proper and does not offend principles of natural justice.
Result:
Appeal dismissed. No order as to costs.
Liberty granted to appellant to pursue any other independent civil remedy against the judgment debtor.
FACTS OF THE CASE
Original Suit:
The 1st respondent (plaintiff) filed O.S. No. 42 of 2021
in the Court of the XII Additional District Judge, Vijayawada,
against the 2nd respondent (defendant) for recovery of money based on two promissory notes.
The suit was decreed ex parte on 23 July 2022.
Execution Proceedings:
The decree holder initiated E.P. No. 44 of 2023 for execution of the decree.
Third-Party Claim:
The appellant, Bandaru Suresh Babu, a stranger to the decree,
filed an E.A. (unnumbered, G.L. No. 3138 dated 06.08.2025)
under Order XXI Rule 58 CPC, asserting that he had purchased the E.P. schedule property
from the judgment debtor through an unregistered
non-possessory agreement of sale dated 03.10.2022.
He claimed to have paid ₹75,00,000 on 01.10.2022 and
₹10,00,000 on 12.01.2023 by RTGS.
Alleged that the decree between the 1st and 2nd respondents was collusive.
Order of Execution Court (14.08.2025):
The XII Additional District Judge rejected the claim petition at the threshold,
holding that:
The agreement was subsequent to decree;
It was unregistered and therefore conferred no title or interest;
Claim petition not maintainable and hence not numbered.
Appeal Suit (A.S. No. 500 of 2025):
Appellant challenged the rejection before the High Court under Section 96 CPC.
The appeal was heard and dismissed on 26.09.2025.
HELD BY THE HIGH COURT
Per Ravi Nath Tilhari, J. (for the Bench):
The decree in O.S. No. 42 of 2021 was passed on 23.07.2022;
the alleged agreement of sale was dated 03.10.2022 — i.e., after the decree.
→ The appellant had no subsisting interest at the time of decree or attachment.
Under Section 54 of the Transfer of Property Act,
an agreement of sale does not itself create any ownership or
transfer of interest in the property; it is only a promise to transfer.
Since the agreement was unregistered and post-decree,
it was wholly ineffective to confer any title or interest
enabling the appellant to resist execution proceedings.
The Execution Court’s summary rejection of such claim was proper.
It need not have numbered or entertained a petition that,
on its face, disclosed no maintainable right.
“Such application, on the face of it, did not require any registration of number.
The learned Execution Court has rightly rejected the same.”
The allegation of collusion between decree holder and judgment debtor
was unsupported by evidence and therefore rejected.
The Court observed that although the claim petition was unsustainable,
the appellant was at liberty to pursue any other civil remedy,
such as a separate suit against the judgment debtor
for enforcement of the alleged contract or refund of money.
Result:
Appeal dismissed.
No order as to costs.
Interlocutory applications, if any, stood closed.
CASE ANALYSIS
Legal Principles Reaffirmed
Order XXI Rule 58 CPC:
A claim petition is maintainable only
if the claimant demonstrates a legal interest in the property as on the date of attachment.
Post-decree or post-attachment transactions are irrelevant.
Section 54 T.P. Act:
An agreement of sale does not convey title.
Registration is mandatory for conveyance of immovable property.
Execution Court’s Powers:
Execution Courts possess authority to summarily reject claim petitions that are facially untenable.
This does not constitute denial of opportunity or natural justice.
Collusion Allegations:
Allegations must be substantiated; otherwise, they do not affect the decree’s enforceability.
Remedy of Appellant:
Though he cannot interfere with execution,
he retains the right to institute a separate civil suit
for enforcement of his contractual rights.
Conclusion
The High Court of Andhra Pradesh in A.S. No. 500 of 2025 conclusively held that:
“An unregistered non-possessory agreement of sale executed
after the date of decree cannot create any right, title or interest
in favour of a third party to resist execution. Such a claim petition is not maintainable,
and its rejection by the Execution Court is proper.”
Appeal dismissed — No costs — Liberty reserved to file separate suit if so advised.
