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ishwar Dass Hem Raj Vs. Firm Radha Mal Arjan Dass and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtPunjab and Haryana High Court
Decided On
Case NumberFirst Appeal No. 95 of 1956
Judge
Reported inAIR1960P& H417
ActsTransfer of Property Act - Sections 53; Code of Civil Procedure (CPC), 1908 - Order 1, Rule 8 - Order 21, Rules 58 and 63; Provincial Insolvency Act - Sections 53 and 54
Appellantishwar Dass Hem Raj
RespondentFirm Radha Mal Arjan Dass and ors.
Cases Referred and Nabakishore v. Upendra Kishore
Excerpt:
.....brought the khata relating to the account of kesalpur colliery which was in the bahis of ishar dass sant ram. a practice has grown up in indian procedure of these in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing, accordingly, to furnish to the courts the best material for its decision. ishar dass's counsel has also contended that in this case the onus was on the plaintiff decree-holder, who had also failed in the proceedings under order xxi, rule 58, civil procedure code. the counsel in my view is right in this submission, but he ignores another equally well established rule that in every appeal it is incumbent upon the appellants to show some reason why the judgment appealed from should be disturbed,..........(regular first appeals nos. 95 and 106 of 1956) by ishar dass objector and firm radha mal arjan dass decree-holder respectively against the judgment and decree of the learned subordinate judge 1st class, moga, dated the 31st may 1956 whereby the suit of the decree-holder under order xxi, rule 63, civil procedure code, was decreed in part. it was stated in the plaint that firm radha mal-arjan dass secured a decree for rs. 13,625/- and costs against sant ram, ram lal and sham lal defendants nos. 2 to 4 on 31st december, 1954. the plaintiff sued out execution and got certain bricks attached from the brickklin situated at gagra. but ishar dass defendant no. 1 (who is appellant in one of these appeals) objected to the attachment claiming the brickklin to be exclusively owned by him. the.....
Judgment:

I.D. Dua, J.

(1) These are two cross appeals (Regular First Appeals Nos. 95 and 106 of 1956) by Ishar Dass objector and Firm Radha mal Arjan Dass decree-holder respectively against the judgment and decree of the learned Subordinate Judge 1st Class, Moga, dated the 31st May 1956 whereby the suit of the decree-holder under Order XXI, rule 63, Civil Procedure Code, was decreed in part. It was stated in the plaint that firm Radha mal-Arjan Dass secured a decree for Rs. 13,625/- and costs against Sant Ram, Ram Lal and Sham Lal defendants Nos. 2 to 4 on 31st December, 1954. The plaintiff sued out execution and got certain bricks attached from the brickklin situated at Gagra. but Ishar Dass defendant No. 1 (who is appellant in one of these appeals) objected to the attachment claiming the brickklin to be exclusively owned by him. The executing Court accepted the objections on the basis of a fictitious deed of dissolution of partnership by means of an order dated the 14th of May 1955. The decree-holder firm claimed in the plaint that the brickklin was exclusively owned by the Sant Ram defendant No. 2 and that the land underneath as well as the security was in his name.

It was also pleaded that in the earlier deed of partnership there was no mention of the brickklin in suit. Sant Ram was also alleged to be doing all the business at the brickklin and the document evidencing dissolution of partnership was described to be a fraudulent device adopted to deprive the plaintiff of his legitimate dues. By means of this dissolution it was pleaded that Sant Ram had transferred his entire property. It was also expressly stated that Ishar Dass was his real sister's son and defendants Nos. 3 and 4 are Ishar Dass's real brothers. On these allegations the decree for declaration, that Sant Ram defendant No. 2 is the sole proprietor of the brickklin situated at Gagra and that therefore the bricks mentioned in the plaint are liable to attachment and sale in execution of the plaintiff's decree, is claimed.

(2) The suit was contested both by Ishar Dass and Sant Ram--Ishar Dass claiming the sole ownership of the entire brickklin and Sant Ram disowning all connections with the same. Sant Ram in his written statement admitted that previously he had one-fourth share in the brickklin but under a registered deed of dissolution of partnership dated the 28th of September 1954 that one-fourth share had also became the property of Ishar Dass. Since he was unable to pay the loss incurred by the firm. Sant Ram, according to his plea, had to give up his share in favour of Ishar Dass, defendant No. 1. Ishar Dass also admitted Sant Ram's original title with respect to one-fourth share in the brick-klin. He further pleaded that the firm owned a Karkhana for grinding, rolling, carding, sawing etc., as well as the brick-klin in question: the business of the Karkhana having become slack the firm suffered considerable loss necessitating dissolution of the partnership firm.

The accounts were thereupon gone into and understood by the parties and ultimately the firm was dissolved by means of a deed dated the 28th of September, 1954 under which Sant Ram gave up his one-fourth share in two brickklins with the result that the brickklin in question along with all the bricks became his (Ishar Dass's) property. As Sant Ram had absolutely no means to pay the amount of the loss, the steps taken by him were based on good faith and were not tainted with any fraud or dishonesty. The pleadings of the parties gave rise to two principal issues:

1. Whether Sant Ram defendant No. 2 is the exclusive owner of the brickklin at Gagra and therefore the exclusive owner of the bricks in dispute ?

2. Whether the deed of dissolution of partnership was executed to defraud the plaintiff who is a creditor of defendants Nos. 2 to 4. If so its effect ?

The trial Court after considering the entire evidence came to the conclusion, under issue No. 1, that the brickklin in dispute, now situated at the Gagra, was the same brickklin which was previously situated at Gloti and the name of which is mentioned in the partnership deed, Exhibit P. 1. On this finding the Court concluded that Sant Ram's share in the brickklin in question was thus only one-fourth. Under issue No. 2, after considering all the attending circumstances, including (1) heavy indebtedness of Sant Ram at the time of the alleged dissolution, (2) that he owed about Rs. 50,000/- to the plaintiff firm which was to be paid by instalments, out of which only had been paid, and for the remaining instalments a suit had to be filed, (3) that the suit in execution of the decree of which the present proceedings arose, was pending on the date of the alleged dissolution, (4) that in the course of the proceedings of the said suit Sant Ram filed an affidavit stating that he had no intention to transfer any of his properties, (5) that all the other partners of the firm were near relations of Sant Ram, (6) that Sant Ram got nothing out of the dissolution of partnership, and (7) the complete absence of any evidence on the record to show that any debt was in fact due from Sant Ram-the Court below came to the conclusion that the dissolution deed, Exhibit P. 2, was a fictitious and sham document and was brought about to defraud the creditors of Sant Ram who was heavily indebted. One-fourth share in the brickklin was thus held liable, as belonging to Sant Ram, in execution of the decree of firm Radha Mal-Arjan Das. As already observed, both Ishar Dass and firm Radha Mal-Arjan Dass, feeling aggrieved, have preferred cross-appeals in this Court, and this judgment will dispose of both of them.

(3) In Ishar Dass's appeal the only question which arises for decision is whether the deed of dissolution represents a genuine transaction or is merely a colourable or a sham transaction not intended to be effective and meant merely to save the partnership assets to the extent of Sant Ram's share from being proceeded against in execution of the plaintiff firm's decree. His learned counsel has submitted that the document was duly registered and is prima facie a good and genuine document, it is, accordion to him, for the plaintiff decree-holder to establish affirmatively that the document does not represent the true share of affairs.

He has taken us through the entire oral evidence led in the case and has submitted that nothing has been elicited from the witnesses produced by Ishar Dass which would throw any real suspicion on the genuineness of the dissolution. He has also submitted that Sant Ram owned no obligation to his creditors to continue this partnership business and if for reasons, which appealed to him, he wanted to walk out of the partnership, the plaintiff decree-holder had no right, in law, to prevent him from doing so. Even if Sant Ram's motive was to delay or defeat the claim of the plaintiff decree-holder, the dissolution could not be assailed or set aside at the instance of the present plaintiff. He has in the course of his arguments made a reference to Section 53 of the Transfer of Property Act which makes transfers of immovable property, made with intent to defeat or delay the creditors of the transferor, voidable at the option of any creditor so defeated or delayed.

The counsel has submitted that the plaintiff decree-holder has not proceeded under this provision of law and indeed he could not so proceed because there is no transfer of any immovable property with the intent contemplated by this section. The suit is under Order XXI, rule 63, Civil Procedure Code, and therefore, so argues the counsel, the Court below was wrong in approaching the consideration of the case with the object of finding out whether or not this dissolution had been brought about to defraud the creditors of Sant Ram. The counsel also submitted that there were four partners of the concern as disclosed in Exhibit P. 1, and although Ishar Dass and also one of the partners, there were also two more individuals, Radha Kishan and Lekh Raj, and if they all considered it advisable to dissolve the firm, no suspicion should attach to this conduct.

I have no hesitation in agreeing with the counsel that Section 53 of the Transfer of Property Act has nothing to do with the present case. To begin with, that section deals with transfers of immovable property and it is doubtful if a dissolution of partnership can, strictly speaking, be considered to be such a transfer; besides a suit under this section has to be instituted on behalf of or for the benefit of all the creditors and admittedly such is not the scope of the plaint in the present suit which has not been properly constituted either as to parties or otherwise. There is also authority for the view that if permission under Order1, Rule 8, Code of Civil Procedure is not obtained, suit under Order XXI, Rule 63, cannot be considered to be representative within the scope of Section 53. Transfer of Property Act: (See Mt. Banto Devi v. Firm Lal Shiv Parshad Sri Kishen Das, AIR 1943 Lah 96). It is true that the principles of this section, based as they are on principles of equity, are in some authorities considered to be of universal application and thus applicable even to localities where this Act is not directly applicable, and it has also sometimes been applied to transfers of goods and transfers by operation of law, to which in terms this section is inapplicable.

But this provision of law, as stated above, is intended to safeguard the interests of the general body of creditors and, in my opinion, it does not hit a transaction by which one creditor is given preference over others, for which contingency, proceedings will have to be had under some other law, for instance. Sec 53 or 54 of the Provincial Insolvency Act. A benami transfer per se may also not come within the mischief of this section and the facts and circumstances of such a transferee may have to be taken into account.

The question, however, remains that ignoring Section 53, Transfer of Property Act, altogether, if the finding of the Court below, in real substance, is that the deed of dissolution is a sham document not intended to be operative and acted upon, then is it not open to the Court to give relief to the decree-holder and permit him to proceed against Sant Ram's interest in the partnership in question. Mr. Aggarwal on behalf of the plaintiff decree-holder has drawn our attention to Exhibit D.W.2/1, a work-order form No. 49/300, dated the 6th of November 1954, in which attention of Shri Sant Ram contractor is drawn by the Government Department concerned to the conditions on the back of the form relating to the purpose of the contract and other details. This form also contains a list of payments made to 'Shri Sant Ram kiln contractor at Gagra kiln' and on the 6th of November 1954 some payments are said to have been made to him, the total amount coming to Rs. 1,293/-. In this document, Mr. Aggarwal emphasises that Shri Sant Ram kiln contractor at Gagra Kiln is still shown as carrying on business on behalf of this kiln. Particular attention has been drawn to some of the conditions which include that slack coal, if received at the kiln in question, was to be delivered to the contractor at 24 tons per lakh of bricks at stock rate as received.

The rates mentioned in this document include all charges to be received by the contractor for T and P Moulds, royalties, octroi and sales tax and other taxes of the Government or Local Bodies. It is submitted that this document is almost a clincher and goes a long way in showing that Sant Ram never intended to part which his interests in the partnership kiln and the deed of dissolution was obviously intended to be a camouflage and a mere eyewash. In developing this argument stress has been laid on the fact the other three partners are no strangers to Sant Ram but on the other hand are his near relations In this connection our attention has been drawn to the statement of Ishar Dass plaintiff as his own witness at page 23 of the printed paper-book re: Regular First Appeal No. 95 of 1956, where he has admitted that Sant Ram is his maternal uncle, Ram Lal and Sham Lal are his real brother and Radha Kishan is a son of his father's elder brother and his mother's sister and Lekh Raj is the son of his maternal uncle.

Reference has also been made in this connection to the evidence of Chandar Parakash, Sub-Divisional Clerk, Garley Canal Sub-Division Dera, who has produced. Exhibit D.W.2/1, and has proved, with respect to the departmental register, that Sant Ram was entered in that register to be the person who had to supply bricks from the kiln at Gagra. It is significant that this witness was not cross-examined at all and no explanation is sought from him as to what had happened after the dissolution of partnership. On the other hand what has been elicited from him is that Sant Ram contractor is entered as owner of the kiln at Gagra and the account stands in the name of Sant Ram kiln contractor.

This evidence, in my opinion, also throws considerable amount o suspicion on the genuineness of the dissolution deed. If, after the 28th of September 1954, the date of dissolution, Sant Ram, who had been according to Ishar Dass's case, put to heavy losses, was not in a position to continue the kiln business, it is not understood how he was allowed to continue to carry on, the business of the supply of bricks to the Government. Departments, representing himself to be the kiln contractor owing the kiln in question. It is nobody's case that Sant Ram was re-employed as an employee of this concern to carry on the supply of bricks to the Government.

(4) The counsel for the decree-holder has also stressed the point that in the dissolution deed a reference is made to the investment of more than Rs. 61,000/- in the Hind Coal Company and a Colliery Company, Jharia, for the realisation of which there was no hope, the said concerns having suffered considerable loss, but on effort was made to substantiate the correctness of that assertion by any evidence in the trial Court. Indeed, the counsel submits, that, in the circumstances of the present case, mere recitals in the deed to dissolution cannot possibly have any binding effect on the plaintiff decree-holder. There is also a recital in this deed that a promissory note Rs. 10,000/- was executed by Sant Ram in favour of Radha Kishan, the second party, but there is hardly any evidence adduced to substantiate this recital either.

It would not have been difficult for the accounts of the partnership also to have been produced in Court for the purpose of showing that this deed of dissolution was actually acted upon and that it was the record of a genuine transaction. Corroborative evidence, so argues the counsel, which could easily have been got produced by Ishar Dass is not forthcoming; in this connection the relationship inter se Ishar Dass, Sant Ram and other members of the partnership is contended not to be wholly without significance.

(5) Mr. Sodhi has, in reply, placed reliance on Exhibit P. 3, which is a transliteration of entries appearing at leaf No. 111 of the Khata relating to Bhatha situate at Gagra, and in which against 11th August 1954 there occurs an item of Rs. 432/-, the counsel suggests that may be, that this item relates to the payment of Rs. 432/-, entered in Exhibit D.W.2/1, on the 6th November 1954, to have been received by Sant Ram kiln contractor. It is not possible for me to accept this argument. The counsel has frankly admitted that there is no other material on this record to show that this entry actually corresponds with the amount said to have been paid by the Government Department on the 6th of November 1954 as is shown in Exhibit d.W.2/1 which was produced by Shri Chandra Parkash. The payment contained in the Government document relates to work-order No. 49. In Exhibit P. 3 there occurs a figure '55' in between the date 11th August and the amount Rs. 432/-.

The counsel has not been able to explain as to what the figure '55' represents. It is relevant at this stage to observe that Chander Parkash produced D.W. 2/1 in the Court on 4th May 1956 and Ishar Dass appeared as his own witness five days later on the 9th May 1956. Although in cross-examination the only thing that was elicited from Chandar Parkash was that Sant Ram Kiln contractor was entered as owner of the kiln at Gagra, nevertheless Ishar Dass did not choose to explain either the oral evidence given by Chandra Parkash or the contents of Exhibit D.W.2/1. I have, therefore, no hesitation in repelling the contention raised by Mr. Sodhi that the entries contained in Exhibit D.W. 2/1 might have been explained, if his clients had been given an express notice thereof. Mr. Sodhi tried to make capital of the fact that Babu Ram Munim of the partnership had been produced as a witness and that it was open to the decree-holder firm to examine the witness with respect to the books of account which he had brought to Court.

It is significant that this witness has clearly stated that he had not brought other Bahis and that he had only brought the Khata relating to the account of Kesalpur Colliery which was in the Bahis of Ishar Dass Sant Ram. He has also deposed that at the time of the execution of the deed of dissolution of partnership he did not state about the accounts. According to this witness there was also one other Munim working for the firm. The vague reference to Chitha having been brought in Court, in my opinion, does not absolve Ishar Dass of his duty to produce all the relevant accounts on the record of this case, in order to depict a clear picture of the circumstances in which the deed to dissolution was actually acted upon as asserted. Mr. Sodhi submits that when the Munim says that Sant Ram has nothing to do with the partnership business after the dissolution, we must believe him implicitly without expecting any further corroboration, in the absence of the decree-holder placing material on the record discrediting his testimony.

He has in this connection placed reliance on the proposition that the apparent title must always prevail and the party who asserts that the prima facie tenor of a document does not represent the correct situation must prove the assertion. The contention, in its broad sense, may be unexceptionable, but one has to bear in mind the observations of the Privy Council in Murugesam Pillai v. Gnana Sambandha Pandara Sannadhi, AIR 1917 P. C. 6, which were reiterated in Rameshwas Singh v. Bajit Lal Pathak, AIR 1929 P. C. 95 and approved by the Supreme Court in Hiralal v. Badkulal, AIR 1953 S. C. 225, and which are as under:

'A practice has grown up in Indian procedure of these in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing, accordingly, to furnish to the Courts the best material for its decision. With regard to third parties this may be right enough-they have no responsibility for the conduct of the suit; but with regard to the parties to the suit it is in their Lordships' opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the written evidence in their possession which would throw light upon the proposition'.

In the present case not only were the relevant accounts not produced on the record of this case by Ishar Dass, but it is doubtful even if all the relevant account books were present in Court, though I think even if they were present in Court, no duty was cast upon the decree-holder to question to Munim with respect to them, about which they had apparently no knowledge. An attempt was certainly made by the decree-holder to elicit information about the accounts and the financial position of the Kesalpur Colliery but this Munim expressed complete ignorance in this connection. Ishar Dass's counsel has also contended that in this case the onus was on the plaintiff decree-holder, who had also failed in the proceedings under Order XXI, Rule 58, Civil Procedure Code.

The counsel in my view is right in this Submission, but he ignores another equally well established rule that in every appeal it is incumbent upon the appellants to show some reason why the judgment appealed from should be disturbed, and that there must be some balance in their favour, when all the circumstances are considered, to justify the alteration in the judgment that stands. The burden of showing that he judgment appealed from is wrong lies upon the appellant and if all he can show is nicely-balanced calculations which lead to the equal possibility of the judgment on either the one side or the other being right he cannot succeed. (See Mt. Fakrunissa v. Izarus, 63 Ind Cas 898: (AIR 1921 PC 55) and Nabakishore v. Upendra Kishore, 65 Ind Cas 305: (AIR 1922 PC 39). The contention of the presumption of the dissolution deed representing the correct position can also not avail the counsel, because in this case the facts have actually been brought on the record which clearly show that this document does not represent the factual situation correctly; there is thus no occasion of raising presumptions. In view of the above discussion, Ishar Dass's appeal must fail.

(6) Coming to the second appeal, Mr. Aggarwal has merely contended that in the partnership deed there was no specific mention of the brick kiln at Gagra and that Sant Ram having represented himself to the Government Departments to be the owner of the kiln in question, it should be held that the whole of the kiln belongs to him. It is not possible for me to sustain this contention. The Court below has for very good reasons repelled this contention and nothing substantial has been shown to us justifying reversal of the finding. This appeal must also therefore fail.

(7) For the reasons given above, both the cross-appeals fail and are hereby dismissed, but in the circumstances of the case there will be no order as to costs in this Court with respect to both of them.

Mehar Singh, J.

(8) I agree.

(9) Appeals dismissed.


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