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Gaurishankar Kirpashankar Joshi Vs. Hiralal Ramchandra Dave - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case Number Second Appeal No. 33 of 1908
Judge
Reported in(1910)12BOMLR822
AppellantGaurishankar Kirpashankar Joshi
RespondentHiralal Ramchandra Dave
DispositionAppeal dismissed
Excerpt:
assignment-rights of third party to impeach-assignment deframing the third party.;ordinarily an assignment cannot be impugned by a third party when the assignor admits. but it is otherwise where the question is whether the transaction to which the assignment relates is colorable and intended to defraud that third party. - - the judge in appeal found that the evidence relating to its execution was involved in a good deal of obscurity, and he also found that the evidence as to consideration was unsatisfactory......not be accepted by us in second appeal, because in the court of first instance, so far as the question of consideration was concerned, there was no controversy between the parties, and so far as the other question about the assignment was concerned it was not open to defendant no. 5 to dispute it, as the assignor, namely, defendant 4, having been impleaded as a defendant, had admitted the assignment.3. as to the question of consideration, in one sense it is true that the question of consideration was not raised in specific terms. but it was involved necessarily in the larger question whether the mortgage in dispute was a real or a sham transaction. defendant no. 5's case in the court of first instance was that that document was a sham transaction got up by the plaintiff and.....
Judgment:

N.G. Chandavarkar, Kt., J.

1. It would be unnecessary to consider whether the finding of the Court below that the document (mortgage bond) in dispute is not proved is erroneous in law by reason of the fact that that Court has recorded that finding under the impression that the Transfer of Property Act applies to the document, if the decree can be supported on the ground of the Court's findings on the other issues raised. Those findings are that assuming the document sued on to be genuine, it is not supported by consideration; that the plaintiffs case as to his title derived under an assignment from defendant 4 is not true; and that the document was got up by the plaintiff and defendant 4 for the purpose of defeating the rights of defendant 5 and defrauding him.

2. It is contended before us by Mr. Gokuldas for the appellant that the finding as to consideration and also as to the assignment should not be accepted by us in second appeal, because in the Court of first instance, so far as the question of consideration was concerned, there was no controversy between the parties, and so far as the other question about the assignment was concerned it was not open to defendant No. 5 to dispute it, as the assignor, namely, defendant 4, having been impleaded as a defendant, had admitted the assignment.

3. As to the question of consideration, in one sense it is true that the question of consideration was not raised in specific terms. But it was involved necessarily in the larger question whether the mortgage in dispute was a real or a sham transaction. Defendant No. 5's case in the Court of first instance was that that document was a sham transaction got up by the plaintiff and defendant 4 in collusion for the purpose of defrauding his (defendants's) rights. And it was for the purposes of that defence that issue No. 2 was raised in the Court of first instance. For the purposes of that issue it was material to consider whether the mortgage was supported by consideration; and whether the plaintiff had the document assigned to him by defendant 4 as a genuine and honest transaction. If it were not for those purposes the second issue in the Court of first instance would be meaningless.

4. The Judge in the Court of first instance found on both those parts of the case in plaintiff's favour. He found that there was consideration and that the assignment was a genuine transaction. But the appeal Court has taken a different view of the facts. It has found that there was no consideration for the mortgage bond; that there was no genuine assignment by the 4th defendant to the plaintiff; and that the whole transaction was got up for the purpose of defeating and defrauding defendant 5's rights. This finding is decisive of the main question as to whether the document was a sham transaction or not. It is no doubt the law that, ordinarily, an assignment cannot be impugned by a third party when the assignor admits it. But it is otherwise where the question is whether the transaction to which the assignment relates is colourable and intended to defraud that third party. See Mulji Govindji v. Nathubhai Hirachand ILR (1890) 15 Bom. 1, where Sargent C. J. says that 'even in England, where the assignment is not by deed, the true nature of it as a sham transaction may be proved; and a long list of authorities in this Presidency, of which it is sufficient to cite Rajan Harji v. Ardeshir Hormusji Wadia ILR (1879) 4 Bom. 70 and the cases referred to in the foot-note, establish that in this country it is in all cases open to third parties to show that such was the case.'

5. It is from this point of view that the lower appellate Court has substantially dealt with the appeal before it, and its findings being those of fact, we must confirm its decree with costs.

Heaton, J.

6. I quite agree in this conclusion. I think, on the facts found by the Judge in the first appeal Court, that the conclusion which he comes to is undoubtedly correct. I do not think that he has raised or discussed any matter of fact which did not properly arise. The plaintiff sued to recover on a mortgage bond which had been passed in 1889 to defendant No. 4. The defendant No. 5 was one of two mortgagees. Defendant 4 was the other to whom another bond was passed at a later date in 1893. In the present suit defendant No. 5 contested the validity and the reality of the earliar bond of 1889. Therefore it became incumbent on the plaintiff to prove that earlier bond. The Judge in appeal found that the evidence relating to its execution was involved in a good deal of obscurity, and he also found that the evidence as to consideration was unsatisfactory.

7. The plaintiff was put to proof of the bond on which he sued and the genuineness of that bond was challenged. The plaintiff in these circumstances chose to allow his case to go forward and come to an end without satisfactory proof that the consideration for the bond was given. He is himself responsible if the appeal Court, finding that the consideration is not proved to have passed, doubted the genuineness of the bond. For the plaintiff allowed one of those circumstances, which would, if proved, tell strongly in favour of the genuineness of the bond to go without satisfactory proof. The Judge in appeal in the case has, it seems to me, done no more than attach importance to the circumstance that though the genuineness of the bond was challenged, the plaintiff has been content to allow his case to come to a conclusion without satisfactory evidence that the consideration for the bond was passed. Upon the whole I am of opinion that this appeal fails.


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