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Vasudev Raghunath Oka Vs. Janardan Sadashiv Apte - Court Judgment

LegalCrystal Citation
CourtMumbai
Decided On
Judge
Reported in29Ind.Cas.497
AppellantVasudev Raghunath Oka
RespondentJanardan Sadashiv Apte
Excerpt:
.....transferee. - - it is common ground now that the plaintiff must succeed in this suit, if his sale-deed is good and operative. in appeal, however, the learned first class subordinate judge with appellate powers came to the conclusion that though a part of the consideration was proved it was grossly inadequate, that the sale was effected with the object of defeating or delaying purshotam's creditors and that the plaintiff was aware of, and participated in, the fraudulent intentions of the vendors and was not a transferee in good faith. 4. the appellant, therefore, relies upon the wording of section 53 of the transfer of property act, and argues that the transaction is not voidable at the instance of the defendant, even though the findings of the lower appellate court, that the object..........of a money decree against the said purshotam and one gopal mahadev gadgil with full notice of the sale-deed in favour of the plaintiff. there was another similar sale-deed of the same date in favour of one deodhar. but the claim on that sale-deed between deodhar and the defendant has been compromised. it is common ground now that the plaintiff must succeed in this suit, if his sale-deed is good and operative. the objection taken by the defendant in the trial court was that it was not a real transaction, but entered into without consideration and with the fraudulent object of defeating the creditors of the vendors, whose right, title and interest he had purchased. the trial court found that the transaction was real and that there was consideration for it, and that it was not entered into.....
Judgment:

Shah, J.

1. The question in this second appeal is whether the sale-deed of the 19th February 1906, under which the plaintiff claims, is voidable under Section 53 of the Transfer of Property Act at the instance of the defendant, who is an auction-purchaser of the right, title and interest of the plaintiff's vendors in the takshim, with which we are concerned in this suit.

2. There is no dispute about the fact that the defendant purchased the right, title and interest of the heirs of the original owner, Purshotam Oke, in the takshim on the 22nd January 1909 in execution of a money decree against the said Purshotam and one Gopal Mahadev Gadgil with full notice of the sale-deed in favour of the plaintiff. There was another similar sale-deed of the same date in favour of one Deodhar. But the claim on that sale-deed between Deodhar and the defendant has been compromised. It is common ground now that the plaintiff must succeed in this suit, if his sale-deed is good and operative. The objection taken by the defendant in the trial Court was that it was not a real transaction, but entered into without consideration and with the fraudulent object of defeating the creditors of the vendors, whose right, title and interest he had purchased. The trial Court found that the transaction was real and that there was consideration for it, and that it was not entered into with the object of defeating or delaying the vendor's creditors. On these findings the plaintiff's claim was decreed by that Court. In appeal, however, the learned first Class Subordinate Judge with appellate powers came to the conclusion that though a part of the consideration was proved it was grossly inadequate, that the sale was effected with the object of defeating or delaying Purshotam's creditors and that the plaintiff was aware of, and participated in, the fraudulent intentions of the vendors and was not a transferee in good faith. Apparently it was not contended that apart from the objection under Section 53 of the Transfer of Property Act the transaction was sham and not real. The issues raised in both the Courts covered the controversy between the parties relating to Section 53 of the Transfer of Property Act, and did not indicate that the defendant really contended that the transaction was not real but a mere cloak for concealing the true ownership which remained with the vendors. The lower Appellate Court accordingly reversed the decision of the trial Court and dismissed the plaintiff's claim.

3. In the appeal before us Mr. Coyaji has argued on behalf of the appellant that Section 53 of the Transfer of Property Act cannot help the defendant, as he is not a person at whose option the deed is voidable under the section. He concedes that it is quite open to the defendant to raise the plea that the transaction is sham and colourable or that it is voidable under Section 53 of the Transfer of Property Act. As regards the former contention, he says that though it was raised in the written statement, no issue was framed on the point, and that in any event after the finding of the trial Court, it was practically given up. This position has not been seriously contested by Mr. Rao on behalf of the defendant. In my opinion, therefore, it must be assumed for the purposes of this case that whatever infirmity there may be in the transaction in virtue of the provisions of Section 53, it was not a sham but a real transaction between the vendors and the plaintiff. The findings recorded by the lower Appellate Court on the issues arising under Section 53 do not negative this assumption, and on the pleadings it would not be possible to say that the question was specifically raised or that it was urged before the lower Appellate Court.

4. The appellant, therefore, relies upon the wording of Section 53 of the Transfer of Property Act, and argues that the transaction is not voidable at the instance of the defendant, even though the findings of the lower Appellate Court, that the object of the sale was to defeat the creditors of the original owner and that the plaintiff was not a transferee in good faith, be accepted. It is quite clear that the defendant is not the person to defraud, defeat or delay whose claim this sale-deed could have been executed. The only persons whose claims were intended to be defeated were Purshotam's creditors, as suggested in the lower Courts. It is quite clear that the defendant is not a creditor and that he does not seek to avoid the document for the benefit of any creditors. It was suggested, however, that the defendant would be a subsequent transferee or a person having an interest in the property within the meaning of Section 53, paragraph 1. But the defendant is an auction-purchaser at a Court sale, and not a transferee by any act of the original owner. Having regard to the preamble as well as Section 5 of the Act, it seems to be clear that a person who steps in by operation of law and not by any act of the owner is not a subsequent transferee within the meaning of Section 53. He is clearly not a person having an interest in the property within the meaning of the section, which apparently refers to interest which exists in fact at the time of the transfer objected to. It is clear, therefore, that the deed is not voidable at the option of the defendant.

5. It remains to notice the argument of Mr. Rao that apart from Section 53 when it was proved that the plaintiff was not a transferee in good faith, and that he had participated in the fraudulent intentions of the transferor, no Court ought to help the plaintiff. The argument, in order to be effective, must amount to this that the sale-deed was not real and that the vendors really continued to be the owners. I have already dealt with this aspect of the case, and, in my opinion, there is a real and substantial difference between a sham, transaction and a transaction which is voidable under Section 53 in consequence of fraud at the instance of the person defrauded. It is difficult to understand how the defendant can succeed unless he is a person defrauded or the transaction is merely sham and colourable. As he is not a person at whose option the deed could be avoided and as the deed is not a sham transaction, I do not see how the mere finding that the plaintiff is not a transferee in good faith can help the defendant.

6. I would, therefore, reverse the decree of the lower Appellate Court and restore that of the trial Court with costs here and in the lower Appellate Court on the defendant.

Heaton, J.

7. I agree.


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