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Achuta Yellamandaiah and ors. Vs. Kurakulakshmamma and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal No. 179 of 1972 and Memorandum of Cross-objections and Appeal No. 752 of 1972
Judge
Reported inAIR1976AP238
ActsCode of Civil Procedure (CPC), 1908 - Order 20, Rule 13
AppellantAchuta Yellamandaiah and ors.
RespondentKurakulakshmamma and ors.
Appellant AdvocateK. Subrahmanya Reddy and ;P. Kameswara Rao, Advs.
Respondent AdvocateB.V. Subbarao and ;R. Prasad, Advs.
Excerpt:
.....- appeal filed against judgment - once creditor is a party to suit, his claim does not get time barred - creditors who filed suit represent other body of creditors, their claim cannot be equally time barred - held, in case of administration suit moment creditors join as parties to suit their claim cannot be time barred at all. - - the facts of the case as given in the judgment do not clearly bring out the important aspect, namely, whether there are any other creditors who are not impleaded as parties to the administration suit. he told her that due to some family difficulties he was taking the sale deed in the name of the second wife, and that s the vendors were receiving the money there would not be any difficulty for them to execute the sale deed like that. regarding the..........was held by justice anantakrishna ayyar, j., who spoke for the bench as follows :'in one sense his suit is a suit for the benefit of all the creditors of the estate. but i think it is clear that the other creditors cannot be held to be represented by him in the sense that they are in effect parties to the suit from the outset. it is clear i think that, if during the pendency of the suit, before a preliminary decree for administration is made, a claim of one of the other creditors becomes barred by time it is gone: it cannot be enforced in the administration suit. that could not be if the other creditor had been represented by the plaintiff creditor and was in effect a party to the plaintiff creditor and was in effect a party to the suit from the start.'their lordships were therefore.....
Judgment:

Venkatrama Sastry, J.

1. These two appeals arise out of an administration suit. A.S. 179/72 is preferred by plaintiffs 1 and 3 to 5. A.S. 752/72 is preferred by defendants 29 to 32.

2. One Kuraka Subbarayudu died on 16-3-1968 leaving behind him defendants 1 and 2, his wives and defendants 5 to 9 his sons and daughters. He has left a large estate which is shown in A-schedule property which consists of immovable and B-schedule movable properties. Originally the suit was filed by five plaintiffs who re creditors of Subbarayudu. As the 2nd plaintiff died plaintiffs 6 to 12 were added as his legal representatives. The 1st plaintiff obtained a decree for Rs.6,000/- and odd and costs on 30-10-1970 under ex. A-1 against Subbarayulu and other defendants and his heirs. Similarly the 3rd plaintiff obtained a decree for Rs. 4,000/ and odd plus costs on 30-8-1968 under Ex. A-18. The 4th plaintiff also obtained similar decree for Rs. 10,223-76 on 30-6-1971 vide Ex. A-14. The 5th plaintiff lent a sum of Rs. 3,000/- on a promissory note dated 7-7-1967 which has been marked as Ex. A-7. There are two payments made on 4-1-1968 and 7-4-1968 of Rs. 1000/- each of which have been separately marked as Exs. A-7 (a) and A-7 (b). The plaintiffs claimed that all the properties in A and B schedules are liable to discharge the debts due to them and the other defendants. Originally some of the other creditors were impleaded as defendants but subsequently most of the other creditors got themselves impleaded by filing petitions on their own behalf. By the date of the disposal of the suit there were 75 defendants in the lower court out of which defendants 1 to 9 are the heirs of Subbarayudu while the other defendants are all the creditors and the legal representatives.

3. The main contest was raised by the 2nd defendant who happens to be the second wife of late Subbayudu. According to her, items 10 to 17 shown in A-schedule belonged to her as per separate property. She says that she has purchased those properties with her own funds, that she was alone in possession realising the rents, leasing out the lands and paying cist thereof. These properties, therefore cannot be proceeded against for recovery of debts due by Subbarayudu. There are also other defences raised by the 2nd defendant which are here not very relevant but one of the other defences raised by her in the lower court was that the debts claimed by the 5th plaintiff and the defendant Nos. 29 to 32 were barred by time by the date of the preliminary decree tough not by the date of the suit and hence they are not entitled to claim any share out of the assets of Subbarayudu. The other defendants have also pleaded that the debts contracted by Subbaraydu were Avyavaharika and the business debts incurred by Subbarayudu were not binding upon his sons. Item 2 was also claimed to be the self-acquired property by Subbarayudu.

4. On the above pleading the lower court framed appropriate issues and after a trial passed a preliminary decree directing the administration of the estate of Subbarayudu after excluding items 10 to 15 of the A-Schedule. The lower Court held that the 2nd defendant purchased those items under Ex. A-23 and Ex. B-1 with her own funds and, therefore, they should be treated as her own property and not the property of Subbarayudu. As regards the debts due to the 5th plaintiff and defendants 29 to 32 the lower court held that since these debts were barred by the date of the preliminary decree they were not entitled to claim any amounts. The lower court relied upon the decision in Ananthan Pillai v. Krishna Iyer : AIR1960Ker222 for coming to that conclusion. As regards the question of liability of the sons the lower court left it open and allowed the creditors to work out their remedies as against the sons in execution. They are so entitled to pursue their remedies against the other joint family properties. Even though the lower Court has held item 2 as the self acquired property the lower court directed that only a one-third of the said item should be sold for purpose of distribution to the creditors.

5. In the appeal preferred by the plaintiffs Sri K. Subrahmanya Reddy, learned counsel for the appellants has canvassed the findings given against the plaintiff by the lower court.

6. First of all he has attacked the findings of the lower court in regard to the debts due to the 5th plaintiff and defendants 29 to 32. According to the learned counsel, the debt due to the plaintiff was based upon a promissory note dated 7-7-1967 and there were two endorsements dated 4-1-1968 and 7-4-1968 marked as Exs. A-7 (a) and A-7 (b). The suit was filed on 5-10-1968. On that date the claim based upon that promissory note was not barred by limitation. The preliminary decree was passed by the lower court on 29-11-1971. It is no doubt true that by the date of the preliminary decree a claim based upon such a promissory note may be barred by limitation. But that is no ground to say that those creditors cannot be paid any amount out of the assets of Subbarayudu merely because the Court has taken a long time in the disposal of the suit. The learned counsel contends that when once the creditors are made parties to the suit to an administration suit their claims cannot get barred by limitation at all. Their rights will be determined according to the preliminary and final decrees to be passed in the suit. He has also questioned the correctness of the decision of the Kerala High Court in Anandhan Pillai v. Krishna Iyer : AIR1960Ker222 relied upon by the lower Court.

7. On the other hand Mr. R.V. Subba Rao, learned counsel for the 2nd defendant sought to justify this finding on the basis of the decision in Ananthan Pillai v. Krishna Iyer : AIR1960Ker222 . We will therefore, examine now the correctness of the view enunciated in Ananthan Pillai v. Krishna Iyer.

8. We may also at this stage mention that the point arising in A.S. 752/72 preferred by defendants 29 to 32 is also the same namely, whether the debts due by those defendants which were not barred on the date on which they applied to be made as parties to the suit became barred by the date of the preliminary decree or not. It is therefore, on this question, necessary to dispose of the first point raised by the learned advocate for the appellant in this appeal and also the connected appeal A.S. 752/72.

9. In Ananthan Pillai v. Krishna Iyer : AIR1960Ker222 decided by their Lordships Shankaran C.J. and Anna Chandy J., the appeal was preferred by the 8th defendant whose tarwad had conducted a chitty. The appeal arose out of an administration suit for collecting the assets of the chitty and for paying every amount of the chitty. A preliminary decree also was passed and a receiver was appointed to take the necessary steps for collecting the assets and distributing the same. When the properties of the 8th defendant's tarward were attempted to be sold in execution of the said decree the 8th defendant objected. He also filed an application for permission to pay the debts in instalments. It was opposed by some of the contesting counter petitioners. The main controversy was as to how many of the claims against the foreman had become barred by limitation. According to the 8th defendant's tarward the claims of the plaintiffs and also of defendants 42 and 44 were alone subsisting, while the claims of all the other creditors had become barred by limitation even before the date of the preliminary decree.

10. The trial court in that case took the view that after the institution of the suit the law of limitation would not operate as against any such claim and therefore the claims of several creditors have not become barred. That view was not accepted by the High Court and it was observed as follows:--

'The mere institution of an administration suit will not have the effect of suspending the law of limitation so far as the creditors are concerned. It is only with the passing of the preliminary decree that the Court takes charge of the chitty assets and proceeds to administer the same for the benefit of the creditors. After the date of the preliminary decree, the affairs of the chitty assets are in the hands of the court and hence the claims of the creditors will not be barred by the operation of the law of limitation. Prior to that date, those claims may get time barred. The question whether the claims of the creditors in this case had thus become time barred, before the date of the preliminary decree, has not been investigated. It has to be investigated and such of the claims which were alive upto to that date of the preliminary decree have to be entertained and provision made for satisfaction of those claims. For this purpose, the case has to be sent back to the lower court.'

If their Lordships intended to lay down as a general proposition even in the case of creditors who have been made parties to the administration suit, their claims would be barred if they are not alive by the date of the preliminary decree we respectfully differ from that view. The facts of the case as given in the judgment do not clearly bring out the important aspect, namely, whether there are any other creditors who are not impleaded as parties to the administration suit. When once the creditors are impleaded as parties to the suit their claims cannot get time-barred at all whenever the preliminary decree is passed in such a suit, which decree dates back to the date of the institution of the suit, the rights of the parties will have to be worked out in accordance with the preliminary decree. It would be rather monstrous to say that the claims of such creditors who were also parties to such a suit would get time barred unless the preliminary decree is passed within the time limited by the law of limitation for the enforcement of these debts.

11. We may also in this connection note that the Madras High Court in a Bench decision in Ramaswami v. Rangaswami, AIR 1931 Mad 683 has taken the view which we are now enunciating. It was held by Justice Anantakrishna Ayyar, J., who spoke for the Bench as follows :

'In one sense his suit is a suit for the benefit of all the creditors of the estate. But I think it is clear that the other creditors cannot be held to be represented by him in the sense that they are in effect parties to the suit from the outset. It is clear I think that, if during the pendency of the suit, before a preliminary decree for administration is made, a claim of one of the other creditors becomes barred by time it is gone: it cannot be enforced in the administration suit. That could not be if the other creditor had been represented by the plaintiff creditor and was in effect a party to the plaintiff creditor and was in effect a party to the suit from the start.'

Their Lordships were therefore laying down the principle that when once a creditor is a party to the suit his claim does not get time barred and if the creditor or creditors who filed the suit represent the other body of the creditors their claims also cannot be equally time barred. The law is, therefore, very clear that in the case of an administration suit the moment the creditors join as parties to the suit their claims do not get time barred at all. It may be difficult in the case of other creditors who are impleaded as parties to the suit. The same view was also taken by the Bombay High Court in Kissondas v. Jivatlal Pratapshi and Co. AIR 1936 Bom 423. We are, therefore, firmly of the view that the decision in Ananthan Pillai v. Krishna Iyer, : AIR1960Ker222 does not lay down the principle correctly and cannot be followed in this case. We therefore, hold that the finding of the lower court that the debts due to the 5th plaintiff and defendants 29 and 32 are barred cannot be sustained. In this view, A.S. 752/72 will have to be followed.

12. The next point urged by Mr. Subrahmanya Reddy is that in regard to items 10 to 15 claimed by the 2nd defendant the finding of the lower court that the 2nd defendant has established her claim to these items is not correct and sustainable. We shall now examine the evidence let is by both the parties to see whether the finding can be confirmed.

13. Ex. B. 23 is the sale deed dated 20-3-1967 executed in favour of the 2nd defendant by P.W. 5 and others for a sum of Rs. 3,500/-. The consideration consists of three items. The first item is a promissory note debt due to Subbarayudu, the husband of the 2nd defendant. The second item of consideration was a debt of Rs. 100/- due to one Mr. Venkatasubbaiah Chetty. The 3rd item of consideration is a sum of Rs.2645/- which the vendors say that they have received from the vendee for their family expenses. In proof of their case that the amount was paid by Subbarayudu the plaintiffs have examined one of the vendors as P.W. 3. She says that Subbarayudu alone purchased this land from her and he was alone in possession that Subbarayudu alone bargained with her and paid the amount to her. He told her that due to some family difficulties he was taking the sale deed in the name of the second wife, and that s the vendors were receiving the money there would not be any difficulty for them to execute the sale deed like that. The witness says that she has received the money and executed the sale deed as per his desire. She was positive that the 2nd defendant never came and negotiated with them for this purchase. Nothing has been elicited in cross-examination of this witness as to why her evidence should not be believed.

14. The 2nd defendant has examined D.W. 9 who is the other attestor of this sale deed. His evidence does not in any way support the case of the 2nd defendant. He too says that Subbarayudu called him to attest the document and he attested it. He is a stamp vendor. He does not say anywhere in his evidence that the 2nd defendant was present at the time of the execution of the sale deed.

15. The only other evidence regarding this document is that the 2nd defendant. We will consider her evidence after mentioning the other documents also.

16. Ex. B. 1 is the other sale deed dated 29-1-1960 for Rs. 3,500 in respect of items 10 to 12 and 17. According to the recitals of the sale deed the entire amount of Rs. 3500/- was paid by Subbarayudu before the Sub-Registrar to the vendor. The vendors were not examined. The plaintiffs have examined the attestor as P.W. 1. He supported the case of the plaintiffs namely, that Subbarayudu alone purchased these items, that he belongs to the same village and that Subbarayudu has taken the sale deed. Ex. B-1 in the name of the wife and this witness was asked to attest. He also identified the vendors at the time of registration. He said that Subbarayudu alone paid the consideration. He also further says that Subbrayudu was not treating items 1 to 19 separately from the rest of the properties. Regarding the capacity of the 2nd defendant this witness says that her parents are poor people. It is no doubt elicited from this witness that he is one of the creditors impleaded as defendant No. 33. There is no reason why the evidence of this witness should be discarded. In cross-examination it was elicited by the 2nd defendant that the purchase was made in order to invest the black money of Subbarayudu. It was also further stated that he attested the marriage of the 2nd defendant and therefore he was aware of their wealth and property. Nothing has been suggested to this witness to discredit this evidence.

17. We now turn to the evidence given by D.W. 14, the 2nd defendant in this case. According to her she paid the consideration under both the sale deeds Exs. B. 23 and B. 31. She does not state as to how she has discharged the promissory notes under Ex. B.23. No other proof has been filed by her. In regard to the possession of the property she says that she has been paying the cist and obtaining cist receipts. Exs. B-61 to B. 63 have been relied upon as some of the cist receipts. But a reference to these cist receipts would reveal that they show the names of both the 2nd defendant and also Subbarayudu. She also relied upon other cist receipts for instance Ex. B. 60 which is a receipt issued in 1971 three years after the institution of the suit. She says that the lease amounts fixed was Rs. 10,000/- and that she paid half of the amount form her husband. There is absolutely no scrap of evidence to show that the lands were capable of fetching such heavy amounts. She says in cross-examination that at the time of the marriage she was given money by her father though her husband had not been paid any dowry. She says that she was lending that money through her parents for interest and that she was lending small amounts and that she had no account for the same. She was having cash of Rs. 7,000 and that she realised the debts and cash for purchasing the lands. When we read the evidence of D.W. 15, her mother we get an altogether different story namely that the 2nd defendant took Rs.4,000 from them, that is, her own money for purchase of the lands. The 2nd defendant further says that the vendors came to her and that she and her husband bargained for the lands. But no evidence of that effect had been produced before the court. P.W. 2 says that Subbarayudu alone came to her for the purchase and that the 2nd defendant was however in the picture. As regards the possession of the property also she says that her husband alone was in possession and he was selling grains and was giving her money. She has not examined any tenant nor filed any lease deed.

18. D.W. 15, her mother also says that they gave Rs. 5,000 to the 2nd defendant at the time of her marriage, though the son-in-law was not given any dowry. No documentary evidence has been produced to substantiate her version or their case that the 2nd defendant is possessed of such property. No other evidence has been adduced by the contesting defendants. On this evidence we do not find that there is justification for holding that the 2nd defendant purchased these items of properties with her own monies.

19. It may be noted that Subbarayudu was doing business on a large scale and that P.W. 4 says that even by 1959 he had debts to the tune of a lakh of rupees. Probably in order to escape the payment of such debts Subbarayudu must have purchased this property nominally in the name of his wife. The 2nd defendant appears to have come from a poor family and there is no evidence to show that she brought Rs. 5,000/- at the time of her marriage about 25 years ago which she was retaining in her hands by lending it for interest. We therefore hold that the evidence of D.W. 14 and the other evidence relied upon by her in support of her case that she had enough funds to purchase these properties cannot be relied upon. In the absence of any evidence it should be held that the properties were that of Subbarayudu himself.

20. Mr. Subba Rao, the learned counsel for the 2nd defendant wanted to contend that it is a case of benami purchase and the source of consideration is the main criteria. We have taken only that into consideration. As there is no reason to believe the evidence about the source of consideration for the 2nd defendant for the purchase of these properties we have to hold that these properties do not belong to her. In the result, we set aside the finding of the lower court that Items 10 to 15 does not belong to the estate: that they belonged to the 2nd defendant. It is admitted by both parties that item 17 is also part of the property purchased by the 2nd defendant under Ex. B-1. The cross-objections, therefore, of the 2nd defendant with regard to item 17 will stand dismissed. There would therefore be a direction for the sale of that item also. In regard to item 2, as it is found to be the self-acquired property, the whole of it will have to be sold in pursuance of the preliminary decree but not the one-third of the same as directed by the lower Court.

21. As regards the debts the direction given by the lower Court that the creditors are entitled to pursue their remedies in regard to the 2/3rd share as per their decrees and otherwise will stand. Their right to proceed in regard to the two-thirds share will remain unaffected by this judgment. In the result, these two appeals are allowed to the extent indicated above. There will be no order as to costs.

22. Appeals allowed.


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