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Arisetty Ramakrishnaiah and anr. Vs. Pattipati Vengayya and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAndhra Pradesh High Court
Decided On
Case NumberSecond Appeal No. 235 of 1958 and Civil Misc. Petn. No. 9316 of 1961
Judge
Reported inAIR1963AP6
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rule 63; Transfer of Property Act - Sections 53
AppellantArisetty Ramakrishnaiah and anr.
RespondentPattipati Vengayya and anr.
Appellant AdvocateM. Kesava Rao, Adv.
Respondent AdvocateN. Subba Reddy, Adv.
DispositionAppeal allowed
Excerpt:
.....person attaching some property of respondents - respondents claiming title to property as per partition decree - appellant contending partition as fraudulent - respondents alleging fraudulent transfer out of scope of claim suit - fate of fraudulent transfer can be sufficiently enquired in claim suit - held, lower court erring in considering fraudulent transfer as out of scope of claim suit. - 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 sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is..........sons were not bound by the decree obtained against bakkayya, that by the date of the decree in the suit, bakkayya got divided from his sons and that the plaintiff was not entitled to impeach the compromise decree in o. s. 182 of 1951 on the file of the sub-court, nellore.8. the district munsif in a well-considered judgment found that the attached property belting ed to the joint family, that the decree obtained by the appellant against bakkayya was debt incurred by bakkayya, when he was member of the family and for the purpose of the joint family business and that the compromise in the partition suit whereunder bakkayya relinquished all his interest in the joint family properties was collusive and would not be binding on the plaintiff and other creditors as being in fraud of creditors......
Judgment:

Narasimham, J.

1. This is an appeal preferred against the judgment dated 6-2-1957 of the Additional District Judge, Nellore in A. S. 186 of 1956 reversing the judgment of the District Munsif, Nellore, in O. S. 458 of T954 and dismissing the suit with costs.

2. The plaintiff is the appellant.

3. The respondents are the sons of one Bakkayya, who is said to have died about 2 months prior to the institution of the suit, O. S. No. 458 of 1954 on 21-10-1954.

4. The appellant had instituted S. C. 172 of 1952 on the file of the Principal Subordinate Judge's Court, Tenali, for recovery of the money borrowed for the family business carried on by the said Bakkaya and obtained a decree on 9-10-1952 for Rs. 1,000/- and, costs. The said Bakkayya was the head of a joint Hindu family comprising of himself and his three sons, the present respondents and one Perayya. The sons were not made parties to the suit for recovery of money. In execution, the appellant attached certain properties in Nellore. The 1st respondent (1st defendant) preferred a claim, claiming the properties as his own and not liable to attachment for satisfying the decree against Bakkayya. That claim was allowed on 19-10-1953. Against the said adverse order, the present appellant filed a claim suit alleging that the attached property was the family property in which Bakkayya had a share.

5. It would appear that Bakkayya had filed a suit for partition in the Court of the Subordinate Judge, Nellore, O. S. 182 of 1951 impleading his sons as the defendants claiming a 1/3rd share of the joint family properties and for rendition of an account of the income from the lime mortar business carried on at Nellore and for recovery of his share of the said income. The attached property was shown as an item of partible property in the suit. That suit was compromised on 15-1-1953, by and under which Bakkayya, the plaintiff therein, gave up his share in the properties, business and outstandings in favour of his sons.

6. The appellant alleged in his claim suit that the said compromise in the partition suit was collusive to defeat and defraud his creditors, including himself. He purported to file a representative suit on behalf of all the creditors of Bakkayya.

7. The suit was contested by the sons of Bakkayya pleading inter alia that the attached property belonged to the 1st respondent exclusively being his self-acquisition, that the sons were not bound by the decree obtained against Bakkayya, that by the date of the decree in the suit, Bakkayya got divided from his sons and that the plaintiff was not entitled to impeach the compromise decree in O. S. 182 of 1951 on the file of the Sub-Court, Nellore.

8. The District Munsif in a well-considered judgment found that the attached property belting ed to the joint family, that the decree obtained by the appellant against Bakkayya was debt incurred by Bakkayya, when he was member of the family and for the purpose of the joint family business and that the compromise in the partition suit whereunder Bakkayya relinquished all his interest in the joint family properties was collusive and would not be binding on the plaintiff and other creditors as being in fraud of creditors. He further observed that it would not be necessary to consider the binding nature of the decree debt on the sons in view of the appellant proceeding only against the share of Bakkayya in the attached property. In the result, he decreed the suit to the extent of a 1/4th share in the attached property, setting aside the adverse order to that extent.

9. The respondents carried the matter in appeal to the Additional District Judge, Nellore. He reversed the judgment of the learned District Munsif observing that the learned District Munsif had misconceived the scope of the claim suit, that it did not fall to be decided whether the compromise decree is the partition suit was in fraud of creditors, that the only relevant question was whether the decree-holder-appellant had proved that the attacked property was joint family property and that be did not discharge that onus.

10. In this second appeal, Sri Kesava Rao for the appellant contends that the lower appellate Court was in error in holding that the plaintiff's case that the partition was in fraud of creditors, was extraneous to the scope of the suit and that the plaintiff should have sued to set aside the decree in the partition suit, and further that it ignored the evidence in the case and set aside the finding of the trial Court that the attached property was joint family property and that the share of the father was liable to be proceeded against in execution.

11. We are of the view that there is considerable force is the submissions made by Sri Kesava Rao. The observations of the lower appellate Court that the plaintiff-attaching creditor was bound to sue for setting aside the partition decree between the father and sons and that further the plaintiff's case that the said partition was in fraud of creditors, was extraneous to the suit under Order 21 Rule 63, Civil Procedure Code are clearly untenable from the legal standpoint.

12. There is a dear distinction between a person who impeaches a decree or a document to which he is not a party and a person who is a party. The distinction was made clear in Unni v. Kunchi Amma, ILR 14 Mad 26 and Chathu Kutty Nair v. Chathu Kutty Nair, 19 Mad LW 249 : (AIR 1924 Mad 611 (2). Both these decisions were referred to and the distinction restated in Vellayya Konar v. Ramaswami Konar, ILR (1940) Mad 73 : (AIR 1939 Mad 894). Therein Wadsworth, J., started thus: (at p. 76 (of ILR Mad) : (at pp. 895, 696 of AIR) ) :

'My attention has not been drawn to any decision which throws any real doubt on the general proposition that when a person seeks to establish title which cannot be established without removing a decree or an instrument to which he is himself a party, then whatever be the garb in which he dresses his suit, its substantial character must be a soft for the cancellation of the decree or instrument; but if the establishment of his title is being impeded by the effect of a transaction between other parties, he cannot legitimately ask for the cancellation of that transaction but can only ask for a declaration that so far as he is concerned it is not binding.'

and then later at p. 78 (of ILR Mad) ; (at p. 896 of AIR):

'What the creditors therefore seek is ..... a declaration that it is not valid so far as their claims are concerned. In other respects, it may be perfectly good; that is a matter which does not concern the creditors.'

13. The learned Judge of the lower appellate Court is also in error in supposing that the plaintiff's case whether the partition effected between the judgment-debtor and his sons was in fraud of creditors, cannot be enquired into in the suit under Order 21 Rule 63 Civil Procedure Code.

14. A Division Bench of the Madras High Court in Madina Bibi Sahiba v. The Ismail Durga Association, ILR (1940) Mad 808 : (AIR 1940 Mad 789) has gone into this very question. It was argued in that case that where the attaching creditor sued to set aside an adverse claim order, Order 21, Rule 63 Civil Procedure Code must be read entirely independent of the provisions of Section 53 of the Transfer of Property Act. That contention was repelled and Leach, C. J., who gave the judgment, observed thus at p. 813 (of ILR Mad) : (at p. 791 of AIR): -

'As the suit admittedly is one of the nature contemplated by Section 53 of the Transfer of Property Act, surely the provisions of that section must be applied, especially as there is nothing in the section incompatible with Order 21 Rule 63 of the Code of Civil Procedure.'

The ultimate decision in that case rested on construing the suit as one of the nature contemplated by Section 53 of the Transfer of Property Act.

15. We are not referred to any authority which has taken a contrary view. The learned Judge of the lower appellate Court has apparently ignored the plaintiff's case in this regard.

16. We may observe here that it is settled law in Madras that a partition can be impeached as in fraud of the creditors. In Firm Schwebo v. Subbiah, AIR 1944 Mad 381, Patanjali Sastri, J., after considering the prior authorities, laid down the following propositions as established:

'(a) Where the partition is unequal and the father has been allotted a smaller share than would be his due with intent to defeat his creditors, the latter can avoid the partition under Section 53 and proceed against what would be his proper share in the family properties in execution of decree obtained against him, ignoring the allotment of the properties at the partition;

(b) They cannot however proceed against the son's shares in such execution, as the division of status brought about by the partition will stand notwithstanding the avoidance of the partition as a fraudulent transfer; but

(c) Where the partition is fair and in accordance with the proper shares of the parties, it is not liable to be impeached under Section 53, although it was entered into with a view to prevent attachment of the son's shares in execution of decrees obtained against the father after the partition and was in that sense mala fide; and

(d) a mere colourable partition not meant to operate between the parties could be ignored and the creditor could enforce his remedies as if the parties still continued to be joint.'

The learned Judge thereafter applied these propositions in the decision of that case.

17. The said view was followed in Picha Mooppanar v. Velu Pillai, AIR 1947 Mad 203.

18. In the view that the learned Judge of the lower appellate Court has taken, which is clearly untenable in law, the matter has necessarily to be remitted to the lower appellate Court for a consideration of the point whether the partition between the judgment-debtor and his sons was in fraud of creditors.

19. Sre Kesava Rao for the plaintiff-appellant has taken us through the allegations in the plaint in this regard to maintain his argument that the plaintiff's suit is of the nature contemplated under Section 53 of the Transfer of Property Act. In particular, he has referred us to the allegations in paras 6, 7 and 9 of the plaint which are thus: -

'Para 6. Moreover the said Bakkaya filed O. S. 182 of 1951 on the file of Subordinate Judge, Nellore for partition and separate possession of his 1/3rd share in all the joint family properties. Bakkayya has shown in the schedule this schedule mentioned property as property belonging to the joint family in which he claimed 1/3rd share. Subsequently all the parties compromise and with a view to deceive and defraud the 1st plaintiff herein the said Bakkayya has voluntarily given up his rights in all the joint family properties without any consideration whatsoever. The said compromise is not binding on this plaintiff as all the defendants too were well aware of the decree of the plaintiff against Bakkayya.

Para 7. The compromise decree in O. S. 182 of 1951 dated 15-1-1953 is a collusive compromise to defeat and defraud the 1st plaintiff herein.

Para g. The compromise is also to defeat and defraud the creditors of Bakkayya including the plaintiff. So, the suit is filed as a representative suit, representing all the creditors of Bakkayya, including the plaintiff herein.'

He has also filed a petition C. M. P. 9316 of 1961 for an amendment of the plaint by adding a further relief in these terms: -

'Para 12 (a-1): Declaring that the compromise in O. S. 182 of 1951 on the file of the Court of Subordinate Judge, Nellore, is not binding on plaintiffs being sham, collusive and in fraud of creditors of Pattipati Bakkayya.'

20. We do not entertain any doubt that the substantial allegations in the plaint reflect the true nature of the suit as one contemplated under Section 53 of the Transfer of Property Act. The prayer now sought for, an addition in the relief para of the plaint, is of a formal nature and cannot be seriously opposed. We would, therefore, order this addition in the relief para of the plaint.

21. Sri Kesava Rao makes it clear in his arguments that he is impugning the said partition only in so far as it pertains to the property attached by him in execution and that the other items of property comprised in the partition do not come within the scope of this suit. It is mainly on that ground that he urges that no separate court-fee is payable by him.

22. This is essentially a case where the plaintiff is seeking a relief that he could proceed against his judgment-debtor's share in the attached property on the ground that it is joint family property and that the partition entered into by the judgment-debtor and his sons divesting himself of any share in the properties is in fraud of creditors. Broadly stated, the relief sought is one though the claim has to be made out on various grounds, to wit, showing that the attached property is joint family property and further showing that the property is still liable to satisfy the plaintiff's decree as the judgment-debtor's share in such property could be proceeded against as the partition entered into by the father and his sons was in fraud of creditors.

23. So, we are inclined to accept the argument of Sri Kesava Kao on the facts of this case.

24. We have also to notice that the Judge of the lower Appellate Court bas reversed the decision of the trial Court that the attached property was joint family property in which the father had a share, in a perfunctory discussion. The trial Court has considered this matter elaborately in para 6 of the judgment extending to two printed pages, referring to the relevant documents and evidence. The learned Judge of the lower appellate Court hardly devoted a few lines in para 8 of his judgment to this vital matter and reversed the finding. We would refrain from expressing our view in this matter, as we have decided to remit the case even otherwise. This matter should also be gone into with the attention that it deserves.

25. In the result, we allow the second appeal and remit the matter for reconsideration by the lower appellate Court and for disposal according to law in the light of this judgment. The costs will abide the result.


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