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Thiagaraja Aiyar Vs. Narayanaswami Pillai and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1938Mad684; (1938)1MLJ867
AppellantThiagaraja Aiyar
RespondentNarayanaswami Pillai and ors.
Cases ReferredGreender Chunder Ghose v. Mackintosh I.L.R.
Excerpt:
.....of such debts. it would also have been necessary to raise this issue clearly in the suit, in order that the parties might let in what evidence on that point. 6. even apart from the failure to raise this point and to discuss it in the pleadings, i do not think the first defendant can succeed in this suit. and before permitting the 1st defendant to proceed against that property, the court would have to be satisfied that equitable reasons for applying the remedy existed. clearly, it would not be competent for an executing court to attach the property of a stranger on purely equitable consideration......to which reference has just been made, the first defendant is entitled to proceed against the suit property, and to ignore the mortgage. it has been pointed out by varadachariar, j., in a full bench case of this court, kanchamalai pathar y. ry. shahaji rajah sahib (1935) m.l.j. 162 (f.b.) that the liability of a legal representative is a personal one up to the amount of the property he received from the testator or last male holder. if, for example, he pays off the debts otherwise than from the property inherited, then the property of the deceased in his hands cannot be proceeded against; that is, there was nothing of the nature of a charge on the property. it would therefore have been necessary for the first defendant to prove in a more satisfactory way than he has done that are.....
Judgment:

Horwill, J.

1. The third defendant obtained the property of the late Govinda Pillai by way of surrender from his daughter; but he gave an undertaking that he would pay off certain debts. He mortgaged usufructuarily a substantial item of property in favour of the plaintiff; and the consideration for it was partly to discharge e debt of the late Gbvinda Pillai and partly to discharge the private debt of the third defendant. The first defendant claimed to be a creditor of the late Govinda Pillai; and he obtained a decree against the daughter of Govinda Pillai, that is, the second defendant, and against the third defendant. In execution of that money decree, he attached certain property said to belong to the late Govinda Pillai, including the property which had been usufructuarily mortgaged to the plaintiff. He alleged that this mortgage was nominal and false. The plaintiff resisted the attachment of this property; but was unsuccessful. He therefore filed this suit under Order 21, Rule 63, Civil Procedure Code, to set aside the summary order; and it has been held by the lower appellate Court that this was not a nominal transaction and therefore passed a decree as prayed for.

2. It has been argued that Exs. G and H are false documents, fabricated for the purposes of this litigation - and this contention seems to have found favour with the trial Court; but the learned Subordinate Judge in appeal came to the conclusion that the principal documents filed by the plaintiff were genuine, true, and supported by consideration. It has been argued that the lower appellate Court overlooked certain evidence; but I find no reason to think that it was unaware of the evidence to which reference has been made. I am not therefore prepared to disturb this finding of fact of the lower appellate Court.

3. The next contention is that as the third defendant had obtained possession of the property as the legal representative of Govinda Pillai and made an alienation to the plaintiff and that as the plaintiff knew that the debt of the deceased Govinda Pillai had not been completely paid off and that the consideration or part of it was not utilised for the discharge of such debts, the first defendant is entitled to ignore the alienation to the plaintiff and to attach the property in the same way as if the alienation had not been made. Reliance is placed on Greender Chunder Ghose v. Mackintosh I.L.R.(1879) 4 Cal. 897 in which it was held that the law in India was the same as in England and that the creditors of the testator or ancestor can follow the land into the possession of a purchaser from the heir or devisee, if it can be proved that such purchaser knew (1) that there were debts of the ancestor or testator left unsatisfied and also (2) that the heir or 'devisee to whom he paid his purchase money intended to apply it otherwise than in the payment of such debts. I think it has rightly been argued that the plaintiff had a constructive knowledge - if not actual knowledge - of the terms of the surrender, in which mention is made of the debt of the first defendant and that he should therefore have enquired whether the debts had been paid off. It is also clear that the consideration for this alienation was not applied entirely for the discharge of Govinda Pillai's debts; but I do not think that these facts alone entitled the defendant to attach the property.

4. In the first place, it is clear that the scope of the enquiry in the execution proceedings and in the suit was confined to the genuineness of this transaction; and it was not argued either during the execution proceedings or during the present suit that because of the equitable principle to which reference has just been made, the first defendant is entitled to proceed against the suit property, and to ignore the mortgage. It has been pointed out by Varadachariar, J., in a Full Bench case of this Court, Kanchamalai Pathar y. Ry. Shahaji Rajah Sahib (1935) M.L.J. 162 (F.B.) that the liability of a legal representative is a personal one up to the amount of the property he received from the testator or last male holder. If, for example, he pays off the debts otherwise than from the property inherited, then the property of the deceased in his hands cannot be proceeded against; that is, there was nothing of the nature of a charge on the property. It would therefore have been necessary for the first defendant to prove in a more satisfactory way than he has done that are debt was a debt of the deceased Govinda Pillai and that the third defendant had not already paid off debts of an amount equivalent to the value of the property inherited. It would also have been necessary to raise this issue clearly in the suit, in order that the parties might let in what evidence on that point. The issues actually framed were:

(1) Whether the usufructuary mortgage bond relied on by plaintiff is true and supported by consideration?

(2) Whether plaintiff is entitled to the declaration prayed for? and

(3) To what relief is'the plaintiff entitled?

5. When the parties went to suit, it seems clear that they did not intend to raise the point which has been argued so fully in this Court; nor does this contention seem to have been argued in the lower appellate Court.

6. Even apart from the failure to raise this point and to discuss it in the pleadings, I do not think the first defendant can succeed in this suit. It seems clear that Mr. Justice Pontifex, in his judgment reported in Greender Chunder Ghose v. Mackintosh I.L.R.(1879) 4 Cal. 897 did not think that the question of the liability of property transferred to a stranger could be decided in execution. He says:

Presumably these words (the language of Sections 252 and 203 of the then Procedure Code) were intended to confine the procedure under the sections in question to property remaining in the possession of the legal representative, leaving the creditors to follow property improperly alienated by the legal representative by a separate suit. It could not be intended that property alienated should be subject to execution in a suit to which the alienee was not a party.

7. It is contended that the plaintiff has intermeddled with the property and he is therefore a legal representative; but I cannot agree that a mere alienee from a legal representative is a legal representative.

8. It has been held by this Court that a transfer that is not binding on a particular person can be held to be so in execution proceedings. For example, a transaction that can be set aside under Section 53 of the Transfer of Property Act can be declared to be not binding on a person in the course of execution proceedings; but in the present instance, it cannot be said that this alienation in favour of the plaintiff is a void transaction or is in any way voidable. The right of the first defendant to proceed against the property which is in the plaintiff's possession is an equitable right; and before permitting the 1st defendant to proceed against that property, the Court would have to be satisfied that equitable reasons for applying the remedy existed. Clearly, it would not be competent for an executing Court to attach the property of a stranger on purely equitable consideration.

9. Section 52(1), Civil Procedure Code, gives a creditor a right to proceed against the property of the deceased in the hands of a legal representative and Section 52(2) gives the creditor the right to proceed personally against the legal representative if he cannot satisfy the Court that he has properly accounted for the property in his hands. It does not give the creditor a right to proceed against property which is no longer in the hands of the. judgment-debtor. To proceed against a transferee, he must therefore establish his equitable right to do so in a separate suit.

10. The land in question has not been sold to the plaintiff, but only usufructuarily mortgaged. A right in that property still enured therefore in the 3rd defendant; and that right can be attached by the defendant. The part of the decree of the lower appellate Court which declares that the property was not liable for attachment by the 1st defendant is not therefore correct and will have to be modified by saying that it can be attached subject to the plaintiff's rights. It is also pointed out that the decree restrains the 1st defendant by a permanent injunction from interfering with the plaintiff's possession, although the plaintiff was not then in possession. This part of the decree will have to be modified by deleting the injunction and adding a declaration that the plaintiff' is entitled to possession. This possession he can obtain by restitution proceedings.

11. In other respects, the appeal fails and is dismissed with costs.


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