'Seven-Year Stay' Decides the Day: Supreme Court Restores Attachment on Disputed Property.


16 October 2025 Property Dispute Asbestos >> Property & Real Estate  

The Supreme Court of India, in the exercise of its Civil Appellate Jurisdiction, has set aside a Madras High Court order and reinstated an attachment on a property in a long-pending recovery suit, partly due to the fact that its interim stay on the High Court's order had been in force for more than seven years.

The ruling was rendered on October 16, 2025, by a bench of Hon'ble Mr. Justice Surya Kant and Hon'ble Mr. Justice Joymalya Bagchi, granting the appeal made by Tulasikannu (Appellant) against Ammavasai & Anr. (Respondents).


 

 

The Background of the Dispute:

The genesis of the dispute was in a recovery suit, O.S. No. 205/2004, instituted by the appellant, Tulasikannu, against Respondent No. 2.
In the present suit, the appellant prayed for attachment of the property of Respondent No. 2. Seriously, prior to the order of attachment, Respondent No. 2 had already disposed of the said property by selling it to Respondent No. 1 (Ammavasai) through a sale deed dated 23.09.1999.
After Respondent No. 2 defaulted in depositing security as ordered by the Trial Court, the Court went ahead and attached the property through its order dated 19.07.2000.

High Court's Rationale:

Respondent No. 1, the buyer (vendee), objected to this attachment order before the Madras High Court, Madurai Bench. The High Court, vide its order dated 29.06.2017, revoked the attachment on the following reasons:
Doctrine of Lis Pendens not applicable: The High Court ruled that the money suit was not specifically about the right over the subject property and hence made the doctrine of lis pendens (which prohibits transfer of property while a suit relating to it is pending) inapplicable.
Section 53 of the Transfer of Property Act, 1882: Fraudulent transfer under this section was seen to normally involve a plurality of creditors, a requirement the High Court inferred was not present here.
Invalid Attachment: The attachment was also invalid under Section 64 of the Code of Civil Procedure, 1908.

The Supreme Court's Operative Decision:

The appellant moved the Supreme Court against the High Court order. Notice was given on 02.02.2018 and a significant stay on the enforcement of the High Court order was granted.
The Supreme Court observed that this interim stay had run for more than 7 years, and no counsel was quite sure about the status of the ongoing proceedings (either before the trial court or the first appellate court).
In view of the long extended period of interim stay, the Apex Court granted leave in appeal, reversing the order of the High Court. The order of the Court is as follows:
  • The challenged order of the High Court dated 29.06.2017 is hereby set aside.
  • The initial order of attachment made by the Trial Court on 19.07.2000 stands restored.
  • The restoration is without prejudice to the vendee's right, Respondent No. 1 (Ammavasai). This proviso allows Respondent No. 1 to continue to have the right to protect his title in the continuing substantive proceedings.
  • The correct forum (Trial Court or First Appellate Court) is hereby asked to determine the principal issue at an early date, ideally within six months.
The Court explained that its ruling rested on the practical exigency of the extended interim order, but it has not given any opinion on the merits of the case in itself. Liberty has been accorded to the parties to approach for modification of this order in case of necessitating circumstances.

This ruling is a major reminder of the effect of long-standing interim orders on parties' substantive rights and the judiciary's eagerness to determine the main dispute in a hurry.