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Waman Ramkrishna Ghotge Vs. Ganpat Mahadeo Nevagi - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case Number Cross First Appeal Nos. 193 and 237 of 1929
Judge
Reported in(1935)37BOMLR925
AppellantWaman Ramkrishna Ghotge
RespondentGanpat Mahadeo Nevagi
Excerpt:
transfer of property act (iv of 1882), sections 53, 5 - fraudulent transfer-transfer- partition-hindu law-partition is transfer. ;a partition of joint family immovable property between coparceners of the family operates as a transfer within the meaning of the term as defined in section 5 of the transfer of property act, 1882, and if fraudulent, falls within section 53 of the act.;atrabannessa bibi v. safatullah mia (1915) i.l.r. 43 cal. 504 and rasa gaundan v. arunachala goundan (1923) 44 m.l.j. 513, followed. - - 6 the learned subordinate judge has held that there is no reason for the plaintiff to complain about the partition......of the defendants, defendant no. 5 had a has share and defendant no. 6 a quarter share in the suit property. defendant nos. 5 and 6 together, therefore, have a twelve annas share, and one reason for making them responsible for the family debts would appear to be that the; had such a large share in the property.6. as regards the point that the suit should have been brought by the plaintiff in a representative capacity, our attention has been drawn to the decision c this court in shantilal v. munshilal : air1932bom498 where it has been held, following the rulings in burjorji dorabji patel v. dhunbai i.l.r.(1891) 16 bom. 1 and ishvar timappa v. deva venkappa i.l.r.(1902) 27 bom. 146 : 5 bom. l.r. 19, that a suit brought by a creditor to set aside a transfer of property under section 53.....
Judgment:

Sen, J.

1. These are two appeals against the decision of the First Class Subordinate Judge, Ratnagiri, in Regular Civil Suit No. 106 of 1927 in which the plaintiff sued for a declaration that the properties mentioned in the plaint were liable for attachment and sale in execution of the plaintiff's decrees against defendants Nos. 5 and 6, and that the farkhat and award referred to in the plaint were fraudulent and therefore liable to be set aside.

2. The facts, in this case, in brief, are as follows :- On December 5, 1921, the plaintiff and defendant No. 5 and one Pandurang Yeshvant Vengurlekar formed a partnership named ' Motiram Waman Vengurlekar ' as traders and commission agents in Bombay, and while Waman, the plaintiff, subscribed Rs. 5,000 towards the capital, defendant No. 5 for himself and defendant No. 6 for Vengurlekar each passed a promissory .note for Rs. 5,000 to plaintiff who advanced Rs. 10,000 towards the capital on those promissory notes. The firm continued to do business until August, 1924, when the plaintiff separated from the first, though he continued to remain a creditor of the firm. On December 3, 1924, the promissory notes of defendants Nos. 5 and 6 were renewed. In August, 1925, the plaintiff sued defendants Nos. 5 and 6 and got decrees in February, 1926, against both of them for the amounts due under the promissory notes. He filed darkhasts and got the plaint properties attached. The attachment was, however, raised on claims having been preferred by defendants Nos. 1, 2 and 3 under Order XXI, Rule 58, contending that defendants Nos. 2 and 3 had separated from the joint family of the defendants by a farkhat dated April 8, 1925, and, secondly, that on November 29, 1925, there had been a decree passed on an award by which there had been a partition between defendant No. 1 on the one hand and defendants Nos. 5 and 6 on the other. By that decree defendants Nos. 5 and 6 were made responsible for the debts of the firm.

3. The main reasons of the plaintiff for bringing this suit were that both the farkhat and the award decree were obtained or got passed with the intention of defrauding the creditor, i.e., the plaintiff, and the learned Subordinate Judge has held that this case accordingly falls under Section 53 of the Transfer of Property Act. The alleged fraud, so far as it is alleged to arise from the award decree, tonsists in this that defendants Nos. 5 and 6 are alleged to have been given less than their legitimate share in the family property, and that these shares taken together, do not suffice to pay off all the debts for which these two defend ants were made liable under the decree.

4. In the arguments advanced by the learned advocates for the two appellants the following two law points have been raised, viz., (1) that the suit should have been filed by the plaintiff in a representative capacity, as required b; Section 53 of the Transfer of Property Act, and (2) that the partition under the sarkhat and the award decree do not amount to a transfer within the meaning of that section. Besides these the following points have also been argued, viz, (1) whether as a matter of fact the share of defendants Nos. 5 and 6 taken to gether was sufficient to pay off the debts for which they were made responsible and also whether the share of each of them would be sufficient to pay the debt which would fall to the share of each ; (2) whether defendants Nos. 5 and were given less than their legitimate share, and whether that of defendan No. ]. was more than his proper share of the family property. A point which has been mentioned but not been pressed in this appeal is whether the debt in question were those of defendants Nos. 5 and 6, or whether they were the debts of the whole joint family.

5. Defendants Nos. 1, 2 and 3 are the sons of Mahadev who had a quarte share in the family property of the defendants, defendant No. 5 had a has share and defendant No. 6 a quarter share in the suit property. Defendant Nos. 5 and 6 together, therefore, have a twelve annas share, and one reason for making them responsible for the family debts would appear to be that the; had such a large share in the property.

6. As regards the point that the suit should have been brought by the plaintiff in a representative capacity, our attention has been drawn to the decision c this Court in Shantilal v. Munshilal : AIR1932Bom498 where it has been held, following the rulings in Burjorji Dorabji Patel v. Dhunbai I.L.R.(1891) 16 Bom. 1 and Ishvar Timappa v. Deva Venkappa I.L.R.(1902) 27 Bom. 146 : 5 Bom. L.R. 19, that a suit brought by a creditor to set aside a transfer of property under Section 53 of the Transfer of Property Act would seem to contraven the interpretation put on that section by this High Court in case the plaintiff have not brought the action in a representative capacity as representing themselves and all the other creditors of the defendants. To the same effect is the decision of the Calcu I.L.R.(1907) Cal. 999tta High Court in Hakim Lal v. Mooshahar Sahu . The Madras High Court, however, appears to have held a contrary view, an it is contended that the learned Subordinate Judge was wrong in relying on the Madras view in preference to the view of this High Court and the Calcutta High Court. It seems to us that there is considerable force in this argument but it does not appear to us that this point was raised in the pleadings in the lower Court, though a reference to this point is to be found in the judgment of that Court. Under Order VIII, Rule 2, the defendant must raise by his pleading all matters which show that the suit is not maintainable, or that the transactions impeached are either void or voidable in point of law,, and, as the is a point of procedure, the defendants must be held to have waived the objection on this head in the lower Court ; and we do not think that we can take this a ground either for dismissing the suit, or for taking any step to toring all possible parties on the record at this stage. We must hold that the defendants having waived their right of raising an objection on this head can not be allowed to do so at this stage in the present appeal.

7. As regards the second point, the question is whether a partition in a Hindu family by which the joint family property has been divided by metes and bounds can be held to operate as a transfer within the meaning of Section 53 of the Transfer of Property Act. That Act defines ' transfer ' in Section 5 as an act toy which a living person conveys property in present or in future to one of more other living persons. We do not find any ruling of this Court specifically on this point. Our attention has been drawn to the judgment in Atrabannesso Bibi v. Safatullah Mia I.L.R.(1915) Cal. 504, in which his Lordship said (p. 509):-

The object of a suit for partition is to alter the form of enjoyment of joint property by the co-owners ; or, as has sometimes been said, partition signifies the surrender of a portion of a joint right in exchange for a similar right from the co-sharer.

8. This argument has been adopted in a Madras case reported in Rasa Goundan v. Arunachala Goundan : AIR1923Mad577 . There a dictum of Spencer J. in Indoji Jithaji V Kothapalli Rama Charhi (1919) 10 L.W. 498 to the contrary effect, has been referred to, viz. 'It (partition) effects a change in the mode of enjoyment of property, but it is not an act of conveying property from one living person to another' Their Lordships, however, on the ground that no other authority is to be found in agreement with the opinion of Spencer J., adopted the argument in the Calcutta case and held that a partition is a transfer of property within the meaning of Section 53. It seems to us that the line of reasoning on which the view of the Calcutta High Court is based is sound, and that for purposes of Section 53 of the Transfer of Property Act, ' partition', where the immovable property has been partitioned among co-owners by metes and bounds, must be held to be ' transfer '. This does not appear to be an unreasonable or far-fetched interpretation : Partition can in fact be adequately described as a mixture of the surrender and the conveyance of rights in property. There can be no double that a partition can be effected with as fraudulent an intent as a transfer in the ordinary sense, and we have no sufficient reason to suppose that the mischief sought to be remedied by this section does not include the fraudulent conveyance of rights involved in a fraudulent partition. We would, accordingly, hold that the partition in this case was a transfer within the meaning of this section.

9. Coming now to questions of fact, the main question that arises in this case is whether the share allotted to defendants Nos. 5 and 6 under the award decree was sufficient to pay off the debts for which these two defendants were responsible. It is evident that if their share was sufficient for this purpose, the members of the family could not have intended to defraud or delay their creditors by effecting such partition. It is, therefore, essential for the plaintiff to prove that the share which went to defendants Nos. 5 and 6 was insufficient to pay off these debts. On this point the learned Subordinate Judge, at page 6, para-graph 14, of his judgment, has computed the value of the different shares that were allotted to the different defendants. The plaintiff does not appear to have raised any objection to these figures, which were based on the valuations, made by the Commissioner appointed in this case. The figures are also accepted by both sides in this Court. According to those figures the value of the property allotted to defendant No. 5 has been taken as Rs. 28,200. This, it has been pointed out by Mi. Walavalkar, does not include the value of the ship called ' Sakri'. That value has been estimated by the learned Subordinate Judge at Rs. 1,000 or Rs. 1,200, and we see no reason for not accepting that figure. The value of defendant No. 5's share thus comes to Rs. 29,200. The value of the share allotted to defendant No. 6 is estimated by the learned Subordinate; Judge at Rs. 13,500. This includes Rs. 1,000 taken as the value of the ship ' Satyavati', which was given to defendant No. 6. Mr. Walavalkar has shown us that the learned Subordinate Judge himself put the value of this ship at Rs. 10,000. We think, therefore, that the value of his share must be taken at Rs. 9,000 more, i.e., at Rs. 22,500. The two shares together thus come to Rs. 51,700. The secured debt for which the two defendants were made liable come to Rs. 22,900 with interest Rs. 10,000, i.e., in all Rs. 32,900. These do not include the debts which are the subject-matter of this suit amounting to Rs. 10,000. The total debts, therefore, come to Rs. 42,900. It is, therefore evident that the value of the shares of defendants Nos. 5 and 6 taken together is more than sufficient to pay off all the debts for which they have been made liable.

10. Next, taking each of these defendants separately, the debts for which defendant No. 5 can be held responsible would be half the secured debts with interest, i.e., Rs. 16,450 plus Rs. 5,000 due under the decree against him obtained by the plaintiff, i.e., in all he is liable for Rs. 21,450. The value of his share as estimated by us is, it will again be seen, sufficient to pay off these debts.

11. As regards defendant No. 6 the learned Subordinate Judge has held that there is no reason for the plaintiff to complain about the partition. That being so, it does not seem to us to be necessary to inquire whether defendants Nos. 5 and 6 were given less, or others were given more, than their respective legal shares.

12. The other point, viz., whether the debts were the debts of defendants Nos. 5 and 6, or those of the family, was not pressed, but it is evident that the decrees, in question were passed against the two defendants personally and not against the other members of the family.

13. In this view of the case we must hold that the learned Subordinate Judge' was not right in holding that the award is liable to be set aside as repugnant to< the provisions of Section 53 of the Transfer of Property Act. In the result, therefore, we allow the Appeal No. 237 of 1929 and dismiss the suit. The plaintiff to' pay the costs throughout.

14. Appeal No. 193 of 1929 is dismissed with costs which should be paid to> defendant No. 3.

Barlee, J.

15. I agree.

16. As a point of law, which is new to this Court, has been raised, I shall add a; few words.

17. A partition is not specifically mentioned in the Transfer of Property Act; but if it be a conveyance, it may come under the definition of 'transfer' in Section 5. If a partition in a joint family be carried into effect so that each member acquires a sole interest in a part of the joint family property, I think the transaction amounts to a conveyance, It, is certain that each member loses his interest in the property awarded to the other, and it is difficult to see how there can be a loss without a corresponding gain. Partition is certainly a transaction within the mischief of the section. This view was accepted by a bench of the Madras High Court in Rasa Goundan v. Arunachala Goundan : AIR1923Mad577 which follows a decision in Atrabannessa Bibi v. Sajatullah Mia I.L.R.(1915) Cal. 504. The point decided was that a benamidar cannot maintain a suit for partition of joint immoveable property, but the ground of the decision was that a suit for partition of immoveable property should be included in the same category as a suit for possession of land, and the learned Judge decided as follows (p. 509):'-

The object of a suit for partition is to alter the form of enjoyment of joint property by the co-owners ; or, as has sometimes been said, partition signifies the surrender of a portion of a joint right in exchange for a similar right from the co-sharer. Partition is thus the division made between several persons, of joint lands which belong to them as co-proprietors, so that each becomes the owner of the part which is allotted to him.

18. Thus his Lordship puts the case of a partition in the category of exchange, and we accept this view as the correct one.

19. On the facts, I agree with my learned brother that Appeal No. 193 must be dismissed and Appeal No. 237 succeed.


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