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Bhaskara Chalamiah (Died) Piler Khasim Saheb and ors. Vs. the Body of Creditors of Piler Khasim Saheb - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberLetter Patent Appeal No. 137 of 1963
Judge
Reported inAIR1965AP68
ActsTransfer of Property Act, 1882 - Sections 53
AppellantBhaskara Chalamiah (Died) Piler Khasim Saheb and ors.
RespondentThe Body of Creditors of Piler Khasim Saheb
Appellant AdvocateN. Ramamohan Rao, Adv.
Respondent AdvocateA. Bhujanga Rao, Adv.
Excerpt:
civil - representative suit - section 53 of transfer of property act, 1882 - judgment-creditor filed claim suit against adverse order raising attachment - suit decreed - appeal preferred - but dismissed on ground that as per section 53 judgment creditors can not impeach sale as one in fraud of creditors as he was only creditor - letter patent appeal considering question as to scope of section 53 - section 53 applicable with equal force and effect if debtor disposes of his property with intention of defeating even one single creditor - order of appellate court liable to be set aside. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting..........learned judge observed as follows at p. 668 :'if there be only one creditor, then the act of the debtor in transferring all his property to a stranger with a view to secrete the same and defeat the creditor would be fraudulent and the transfer would be set aside if the transferee had notice of the circumstances and of the debtor's evil design.'even these observations were by way of obiter. the question now placed before us did not directly arise for consideration then.(13) the learned counsel for the respondent has also placed reliance on a contrary view expressed in fakira singh v. majho singh, air 1917 pat 448, (450) (d. b. )where it was positively ruled that 'the section applies with equal force and effect if a debtor disposes of his property with the intention of defeating one.....
Judgment:

Narasimham, J.

(1) This is an appeal under the Letters Patent against an order of Chandrasekhara Sastry J. , in S. A. 1266 of 1959 remanding the case to the 1st Appellate Court for fresh disposal in the light of the observations that he made in his judgment .

(2) The relevant facts are these :

The suit out of which the appeal arises is one to set aside an adverse order made against the decree-holder in execution of his decree in S. C. 384/53 against one Piler Khasim Saheb. The said decree was obtained by Piler Miah Saheb on the foot of a pronote executed by the said Khasim Saheb, hereinafter to be referred to as the judgment - debtor on 5-12-50 for Rs. 260/-. The said judgment-debtor had earlier borrowed Rs. 500/- from one Bhaskara Chalamiah under a usufructuary mortgage of his lands on 17-8-1944, Ex. B. 1. The said Bhaskara Chalamiah obtained a sale deed of the lands covered by the mortgage from the judgment-debtor, Ex. B. 2 dt. 22-5-53 in discharge of his mortgage debt.

(3) When the judgment- creditor attached the said lands sold to Bhaskara Chalamiah, the latter filed a claim petition, E. A. 606/55 on 1-8-55 basing his claim on the sale deed obtained by him in discharge of his own mortgage debt. His claim petition was allowed and the attachment was raised. The judgment -creditor therefore filed a claim suit against the adverse order raising the attachment, and that is the suit out of which the appeal has arisen. He impugned the sale in favour of Bhaskara Chalamiah as made with intent to defeat and delay the creditors of the judgment-debtor and so he alleged that it had to be set aside.

(4) The Dt. Munsif, Madanapalle, decreed the suit of the judgment- creditor and permitted him to proceed with the sale of the suit lands subject to the mortgage in favour of Bhaskara Chalamiah. The learned Dt. Judge on appeal dismissed the suit holding on a preliminary point that the judgment- creditor could not impeach the sale as one in fraud of creditors as he was the only creditor. He observed that the crucial point was not properly canvassed before the trial Court.

(5) Our learned brother disagreed with this view and remanded the case with these observations :

'But these are questions of fact which have to be determined by the learned Dt. Judge in appeal and he has not determined them. He has first to determine on the evidence what is the proper value of the property, what was the debt owing, if at all, under the usufructuary mortgage, and whether the alienation under Ex. B. 2 was made for a proper value and also initially whether it was really intended to be an alienation at all or whether it is a nominal one'.

(6) It is argued before us that the judgment- creditor being the only creditor cannot maintain the suit contemplated by Section 53 of the Transfer of Property Act. The learned counsel argued that a pre-requisite of such a suit was that at the date of institution of the suit, there should be more creditors than one and that it should be established so. The correctness or otherwise of this contention is the question for our consideration.

(7) Sri Ramamohana Rao has relied on the language of section 53 of the Transfer of Property Act and particularly the reference to the creditors of the transferor in the first part of the section and that a suit shall be instituted on behalf of or for the benefit of all the creditors . The learned counsel has argued that from this the section has to be construed as contemplating a plurality of creditors on the date of the institution of the suit and consequently that a single creditor cannot avail of this provision .

(8) We have, however, to notice that the representative suit contemplated was made necessary for two reasons : firstly that the debtor shall not be harassed by a multiplicity of suits, and secondly that the assets of the debtor shall be made available to the general body of creditors .

(9) O. 1, R. 8, C. P. C. , which is the procedure prescribed for a representative suit, has the same purpose to achieve because it provides that

'Where there are numerous persons having the same interest in one suit, one or more of such persons may, with the permission of the court, sue or be sued, or may defend in such suit, on behalf of or for the benefit of all persons so interested.'

(10) Having regard to the reasons for the representative suit, it may not lead to the necessary inference that a creditors , assuming that he is the sole creditor, cannot avail of this provision .

(11) Sri Ramamohana Rao has relied on the observations of a single Judge of the Madras High Court in Thaher Unnissa Begum v. Sherfunnissa Begum, (S) AIR 1955 Mad 446. That was a case where a wife claimed the properties as hers by virtue of a patta given to her by her husband, the judgment debtor ; but it would appear that she did not press her prior claim petition with the consequence that it was dismissed. She did not also file any suit to set aside the dismissals of the claim petition within one year allowed by the law. The same plea raised by her later was held to be barred by res judicata and the decision in the case rested on that bar. It was also made clear in the judgment that the applicability of section 53 did not come up for consideration, as in that case there was no suit, but only an execution petition was filed by the decree-holder in the course of which a claim was made on the ground of an alleged transfer. The learned Judge observed thus :

'Simply because the lower Court observed, in its order, that this patta transfer was made with a view to defeat and delay the present decree-holder, section 53 will not be invoked. It is significant to note that the lower court itself did not say that the transfer was made with a view to defeat and delay the creditors, but only to defeat and delay the present decree-holder, one creditor of his. Section 53 will apply only when the transfer is made with intent to defeat and delay the creditors of the transferor, and not one single known creditor and that one learned brother that these observations were made by way of obiter and so it cannot be taken as laying down the proposition contended for by the learned counsel .

(12) As against this case, the learned counsel for the res has referred to the observations in Mohideen Tharagan v. Muhammad Mustappah Rowther, AIR 1930 Mad 665, (668) wherein the learned Judge observed as follows at p. 668 :

'If there be only one creditor, then the act of the debtor in transferring all his property to a stranger with a view to secrete the same and defeat the creditor would be fraudulent and the transfer would be set aside if the transferee had notice of the circumstances and of the debtor's evil design.'

Even these observations were by way of obiter. The question now placed before us did not directly arise for consideration then.

(13) The learned counsel for the respondent has also placed reliance on a contrary view expressed in Fakira Singh v. Majho Singh, AIR 1917 Pat 448, (450) (D. B. )where it was positively ruled that

'The section applies with equal force and effect if a debtor disposes of his property with the intention of defeating one single creditor.'

(14) Our learned brother agreed with this view and observed that he did not see sufficient reason for distinguishing between a case where a transferor had a single creditor and a case where a transferor had several creditors . We are inclined to agree with our learned brother and the view of the Division Bench of the Patna High Court, particularly having regard to the reasons for a representative suit.

(15) Further we have to notice that there is no pleading as such or an issue or a finding by the trial Court that the judgment-creditor was the only creditor of the judgment-debtor. The appellate Court had obviously assumed so and disposed of the case on the assumption. The finding of the appellate Court is therefore liable to be set aside for this reason also.

(16) In either view, the order of our learned brother remanding the case to the lower appellate Court with the observations as set out by us supra, is fully justified.

(17) The appeal therefore fails and is dismissed with costs.

IH/ R. G. D.

(18) Appeal dismissed.


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