Section 64 CPC | Private Alienation Of Attached Property Is Void: Madras High Court Slaps Contempt Fine On Judgment Debtors, Holds Mortgages Null & Void

"Section 64 of the CPC declares that any private transfer of title or interest in a property that has been attached by an order of Court is void. There is no doubt that the alleged mortgage, in this case, is by way of private transfer by Respondents 2 and 3 in favour of Respondent 5. Hence, the said transfer by way of the alleged mortgage is void." Madras High Court, in a significant ruling dated August 21, 2026, held that any private alienation or creation of encumbrance over property under court attachment is void under Section 64 of the Code of Civil Procedure, 1908 (CPC) and amounts to contumacious contempt of court.

A Division Bench comprising Justice P. Velmurugan and Justice K. Govindarajan Thilakavadi affirmed a Single Judge order declaring subsequent mortgages and loan agreements executed by judgment debtors as illegal, null, and void for wilfully flouting an attachment and prohibitory order operating since 2005. The Bench emphasized that under Article 215 of the Constitution, the High Court possesses inherent plenary powers to punish for contempt which cannot be curtailed by statutory technicalities.

Execution Stalled For Decades Through Collusive Pledges

The dispute traces back to a 1987 builder agreement between decree-holder Vanbey Holdings and the judgment debtors concerning prime commercial property in Chennai, culminating in a consent compromise decree dated September 13, 1993, in C.S. No. 1338 of 1992. Upon non-compliance, execution proceedings were initiated in E.P. No. 194 of 2004, leading to an attachment order on April 19, 2005, and a prohibitory order on April 21, 2005. Despite six successive sale proclamations, the judgment debtors stalled the execution by creating subsequent unregistered mortgages and initiating insolvency proceedings before the National Company Law Tribunal (NCLT) through related parties. Aggrieved by the Single Judge's findings on contempt and deferment of auction sale pending NCLT determination, both sides preferred Original Side Appeals.

Scope Of Plenary Powers And Impact Of IBC Moratorium

The primary question before the court was whether the creation of equitable mortgages over attached property constituted wilful contempt of prohibitory orders, rendering such private alienations void under Section 64 of the CPC. The court was also called upon to determine whether High Court contempt proceedings under Article 215 of the Constitution are barred without the Advocate General's consent under Section 15 of the Contempt of Courts Act, and whether execution sales must be deferred during an Insolvency and Bankruptcy Code (IBC) moratorium.

High Court Plenary Power Under Article 215 Is Unfettered

The Division Bench rejected the contemnors' objection that the contempt application was unmaintainable for want of written consent from the Advocate General under Section 15 of the Contempt of Courts Act, 1971.

Court Holds High Court Plenary Powers Cannot Be Curtailed By Statute

The judges observed that the High Court, being a court of record under Article 215 of the Constitution of India, wields inherent powers to punish for contempt of itself, which statutory provisions cannot restrict. The Bench noted that the Contempt of Courts Act merely serves as a guiding framework for determining punishment once contempt is established.

Notice To Contemnors Satisfies Natural Justice

The Bench underscored that once the affected decree-holder sets the contempt process in motion and the court satisfies itself on the available record, it is fully competent to proceed by treating the matter as civil contempt after affording due opportunity to the parties.

Prohibitory Orders Restrain Both Debtors And Third Parties

Examining the merits of the breach, the Bench affirmed that a charge over the execution schedule property was recognized under the 1993 consent decree itself, and the subsequent attachment and prohibitory orders in April 2005 explicitly barred both judgment debtors and third parties from dealing with or receiving the property.

Private Transfer Of Attached Property Is Void Under Section 64 CPC

The court analyzed the unregistered loan agreement dated June 19, 2009, and subsequent mortgage deeds executed by the judgment debtors in favour of the promoter's mother-in-law, observing that these transactions suppressed ongoing execution proceedings and were prima facie designed to frustrate the decree.

"The mortgage created over the property by the loan agreement dated 19.06.2009 is illegal, null and void because it contravenes the prohibitory order and attachment order."

Contemnors Cannot Benefit From Egregious Defiance

The Bench firmly held that third parties colluding with corporate debtors cannot claim immunity from contempt jurisdiction when they knowingly accept encumbrances over attached property in violation of court prohibitions.

Title Deeds Kept In Custodia Legis To Prevent Misuse

Affirming the direction to deposit all original title deeds with the Registrar General of the High Court, the Bench ruled that parties who act contumaciously must not be allowed to retain the fruits of their wrongful actions.

Execution Sale Deferment Upheld Pending NCLT Resolution

Addressing the interplay between the execution proceedings and the corporate insolvency resolution process, the Bench upheld the deferment of the auction sale until the NCLT adjudicates on the maintainability of the insolvency petitions and the allegations of fraud.

Section 14 IBC Moratorium Bars Parallel Coercive Steps

The court noted that while parallel corporate insolvency proceedings were initiated before the NCLT, the statutory moratorium under Section 14 of the IBC prevents civil execution sales from proceeding against the corporate debtor until the resolution process or moratorium concludes.

Parties Free To Agitate Fraud Before Statutory Tribunal

The Division Bench clarified that it remains open to all stakeholders to establish before the NCLT whether the insolvency petitions were instituted fraudulently, granting liberty to the decree-holder to revive execution proceedings once the insolvency proceedings reach finality.

Contempt Fines And Default Sentences Upheld

The High Court dismissed all the Original Side Appeals and affirmed the monetary penalties and default simple imprisonment sentences imposed on the individual judgment debtors, directors, and the complicit third-party relative. The Bench concluded that the property documents shall strictly remain in safe custody with the Joint Registrar (Original Side) to ensure that the sanctity of judicial orders is safeguarded.

Date of Decision: August 21, 2026