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In Re: the Deccan Commercial Bank, Ltd. (In Liquidation) - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtChennai
Decided On
Reported in(1945)2MLJ573
AppellantIn Re: the Deccan Commercial Bank, Ltd. (In Liquidation);aga Mahomed Khaleel Shirodi (Since Deceased
Respondent;mohamed Nawaz Khan
Cases Referred and Ramaswami Goundan v. Karuppa Mudali
Excerpt:
- .....me and it was so stated by the master in his order that the shares were in fact transferred by the deceased contributory to his son, the present respondent, on the 21st july, 1941, i.e., over three years before his death.2. the respondent filed objection to the application for execution on the ground that he was the registered owner of the shares and was entitled thereto on his own account. it is admitted that the shares are so registered and that he, the respondent, is in possession of the certificates. the master has found that the respondent ' is in actual possession of these shares.' on this finding he rejected the application for attachment.3. objection is taken to this decision of the master on the ground that he should have heard and considered evidence in support of the.....
Judgment:

Clark, J.

1. This is an appeal against the order of the Master passed in execution. The applicants are the Official Liquidators of the Deccan Commercial Bank, Ltd. One Khan Sahib Md. Munir Khan Sahib Bahadur was a contributory of this company. He was placed on the list of contributories and an order was obtained against him for payment of the amount due from him in that respect. These execution proceedings are by the Official Liquidators to execute that order. This contributory died in January 1945 at which time he was on the list of contributories and the order for payment had been obtained against him. His son one Md. Nawaz Khan was brought on the record of the execution proceedings as his legal representative. Execution was sought by attachment of certain shares by way of an order prohibiting the Secretary of the Egmore Benefit Fund, Flowers Road, Egmore, Madras, from paying Mohamed Nawaz Khan the amount of shares standing in the name of his deceased father Khan Sahib Md. Munir Khan Sahib Bahadur, and it is stated in the execution petition that these shares ' have recently been transferred and now stand in the name of the said Md. Nawaz Khan.' But it is admitted before me and it was so stated by the Master in his order that the shares were in fact transferred by the deceased contributory to his son, the present respondent, on the 21st July, 1941, i.e., over three years before his death.

2. The respondent filed objection to the application for execution on the ground that he was the registered owner of the shares and was entitled thereto on his own account. It is admitted that the shares are so registered and that he, the respondent, is in possession of the certificates. The Master has found that the respondent ' is in actual possession of these shares.' On this finding he rejected the application for attachment.

3. Objection is taken to this decision of the Master on the ground that he should have heard and considered evidence in support of the liquidators' allegation that the transfer by the deceased contributory to the present respondent was a fraudulent preference. Reliance has been placed on the case of Ramaswami Chettiar v. Mallappa Reddiar : (1920)39MLJ350 . The Master has taken the view that this case has no application in the circumstances of this case and I agree with him. In that case it was held that an attaching creditor defendant in a claim suit under Order 21, Rule 63 may properly raise a defence that the transfer to the plaintiff was void as being in fraud of creditors. That furnishes no authority for the proposition that a similar plea may be raised by a petitioning creditor in the execution proceedings.

4. Under Order 21, Rule 58, Civil Procedure Code, when an objection is made to an attachment, as was the case here, the Court shall proceed to investigate the claim. Under Rule 59, the claimant or objector is required to adduce evidence 'to show that at the date of the attachment he had some interest in, or was possessed of the property attached.' I have already observed that it is admitted in this case that the respondent is possessed of the shares and that they are registered in his name in the company's register. In these circumstances no useful purpose could possibly have been served by the Master's allowing the Liquidators' application to call evidence on the point. Indeed I do not understand from his counsel that it was the point on which he wished to call evidence. He wished to call evidence to establish that the transfer by the deceased contributory to his son, the present respondent, was a fraudulent transfer. Evidence on that point would, in my view, be inadmissible in view of the relevant provisions of Order 21, dealing with the summary investigation of claims in execution. In such proceedings, the executing Court is concerned only with the question of the possession of the property and should not and cannot embark upon enquiries involving a decision as to the real, as opposed to the apparent, title to the property. (Vide Najimunnessa Bibi v. Macharuddin Sardar I.L.R.(1923)Cal. 548 and Ramaswami Goundan v. Karuppa Mudali (1927) 54 M.L.J. 321) There is of course nothing to prevent the liquidators from proceeding by way of a regular suit under the provisions of Rule 63 and that seems to me to be the proper course to follow, if they have reason to believe that this transfer by the deceased contributory to the respondent is for any reason ineffective, inoperative and void as against the creditors of this winding up.

5. The appeal is accordingly dismissed with costs.


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