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M.R.M.A.S.P. Ramanathan Chettiar Vs. Mahalingam Chetti - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1935Mad8
AppellantM.R.M.A.S.P. Ramanathan Chettiar
RespondentMahalingam Chetti
Cases ReferredAbdul Khadir v. Ahamed Shaiva Rowther
Excerpt:
.....in his plea under section 48(2-a) the decree-holder must show that the judgment-debtor has by fraud prevented the execution of the decree and this he cannot be considered to have shown unless there is evidence that he actually attempted to execute his decree against the property which formed the subject-matter of the fraudulent alienation and was defeated in getting execution. necessary for the decree-holder to succeed, to show that he proceeded against the alienated properties and failed in obtaining execution. it must be proved that the non-execution of the decree was brought about by the fraud complained of. 12. this paragraph apparently supports both the aspects of the appellant's contention, that if there was property which the respondent decree holder could have attached..........1927, claimed exemption under section 48(2-a), civil p.c. on the ground that defendant 1's fraud prevented the execution, of his decree within twelve years before the date of the application and contended that therefore the application is. not barred by limitation. the second point raised for determination in the lower court, which runs as follows, relates to the above contention.whether this petition is not barred by section 48, civil p.c. as the deceased defendant 1 executed the sale deed mentioned in the petition and the decree-holder in o.s. no. 65 of 1906 filing o.s. no. 208 of 1919 for a declaration that the sale deed was executed by the deceased defendant 1 with the intention of defrauding his creditors and it was decided finally in it on 23rd september 1927 that it was so.....
Judgment:

Madhavan Nair, J.

1. This civil miscellaneous appeal arises out of a petition for execution of the decree in O.S. No. 77 of 1911 (on the file of the Additional Sub-Court, Ramnad) by attachment of the decree in O.S. No. 153 of 1910 (Additional Sub-Court, Ramnad) obtained by the deceased defendant 1, judgment-debtor in O.S. No. 77 of 1911. The appellant before us is the son of the deceased defendant 1. He was a party to the suit as defendant 2 when the decree was passed and has been since recorded as his legal representative in E.A. No. 228 of 1928. The decree sought to be executed was passed on 27th November 1911. The execution application was presented on 27th July 1928. Obviously, the petition for execution will be barred under the twelve years rule contained in Section 48(1), Civil P.C. but the petitioner 'claimed exemption from the bar of limitation under Clause 2(a) of the-same section which says:

nothing in this section shall be deemed to preclude the Court from ordering the execution of a. decree upon an application presented after the expiration of the said term of twelve years, where the judgment debtor has, by fraud or force, prevented the execution of the decree at sometime within twelve years immediately before the date of the application,

his case being that the judgment-debtor, defendant 1, by his fraud, prevented the execution of the decree within twelve-years immediately before the date of the application. He also contended that the plea raised by defendant 2 is res judicata. by reason of the decision of the Madura. Sub-Court, in E.P. No. 109 of 1928.. This latter point, which was decided by the lower Court in favour of the appellant, was not pressed by the respondent, in his arguments and need not therefore be considered in this appeal. The claim for exemption under Section 48(2-a) is based on the following facts, which are admitted. On 25th October 1918 the deceased defendant 1 executed a sale deed with respect to his 'Vegaikulam' properties in favour of his friend and relation, one Ramaswami Chettiar of Devakottai. This was attached by the decree-holder in O.S. No. 65 of 1906 in execution of his decree, and, on Ramaswami Chettiar filing a claim petition, he, on behalf of all the creditors of the-deceased defendant 1, filed O.S. No. 20S of 1919 (Sub-Court of Ramnad at Madura) for a declaration that the sale deed executed in favour of Ramaswami Chettiar' was nominal and was executed with the intention of defrauding his creditors.

2. The suit was decreed in favour of the creditors in February 1922. The claimant's appeal against the decree was dismissed by the High Court in September 1927. The decree-holder, relying upon the fraudulent alienation of property by the deceased defendant 1, which was definitely established by the: High Court's decree on 23rd September 1927, claimed exemption under Section 48(2-a), Civil P.C. on the ground that defendant 1's fraud prevented the execution, of his decree within twelve years before the date of the application and contended that therefore the application is. not barred by limitation. The second point raised for determination in the lower Court, which runs as follows, relates to the above contention.

Whether this petition is not barred by Section 48, Civil P.C. as the deceased defendant 1 executed the sale deed mentioned in the petition and the decree-holder in O.S. No. 65 of 1906 filing O.S. No. 208 of 1919 for a declaration that the sale deed was executed by the deceased defendant 1 with the intention of defrauding his creditors and it was decided finally in it on 23rd September 1927 that it was so executed.

3. This point was decided in the lower Court in favour of the respondent decree-holder and execution was allowed to proceed. The appellant contends that in order to succeed in his plea under Section 48(2-a) the decree-holder must show that the judgment-debtor has by fraud prevented the execution of the decree and this he cannot be considered to have shown unless there is evidence that he actually attempted to execute his decree against the property which formed the subject-matter of the fraudulent alienation and was defeated in getting execution. This argument was presented in another aspect also, namely, that the decree-holder, in order to succeed, will have also to show that he took steps to proceed against all the other properties of the judgment-debtor before proceeding against the alienated properties in execution. It is only if these conditions are fulfilled that the Court can say, according to the appellant's contention, that the judgment-debtor has by fraud prevented the execution of the decree....' In other words, the mere fact of a fraud having been committed by the judgment-debtor cannot be availed of by the decree-holder for claiming exemption under Section 48(2-a), Civil P.C., unless he is able to show by evidence that on account of that fraud he was prevented from executing his decree in the manner indicated above.

4. We will now examine the decisions which have a bearing on this question. The earliest decisions brought to our notice is Visalatchi Ammal v. Sivasankara Taker (1882) 4 Mad. 292. This supports the respondent's contention completely. The facts as stated in the head-note are these. The respondent, as plaintiff in a small cause suit in 1867, obtained a decree against the husband of the petitioner, since deceased. The decree was kept alive till 13th December 1876, when the decree-holder brought a suit to set aside certain alienations made by the judgment-debtor and alleged to be fictitious and fraudulent. Having succeeded in the suit and in. rendering the property alienated available for attachment under his decree, the respondent again applied for execution in 1879, but not against the property fictitiously alienated. Lastly, the respondent applied on 28th September 1880, more than 12 years after decree, for execution against certain immovable property of the judgment-debtor, other than the-property fictitiously alienated in the-petitioner's possession. It was held that the application was not barred by Section 230, Civil P.C. (corresponding to Section 48 of the present Code). This decision shows that fraudulent alienation of property constitutes 'fraud' within the meaning of Section 48, Civil P.C. It also shows-and this is more important-that in order to establish that he was prevented from executing the decree by fraud, a decree-holder need not have attached the property comprised in the fraudulent alienation. The following observations of the-learned Judges make this point clear:

The decree-holder, as the result of Suit No. 211 showed, had a right to execute against, all the properties comprised in it, and if he was obstructed, as the institution of Suit No. 211 shows, he must have been, in obtaining execution against those properties, he was prevented within the meaning of the section.

5. Further on the learned Judges say:

The question is not affected by the fact of the-application being made in respect of property-other than that comprised in the Suit No. 211 of 1877.

7. The last observation disposes of the-argument of the appellant that it is. necessary for the decree-holder to succeed, to show that he proceeded against the alienated properties and failed in obtaining execution. In the course of the judgment the learned Judges observed

that there was the house in possession of the-widow against which execution could have been had.... But there is nothing to show that, this house is sufficient to satisfy the decree.

8. Upon this observation is built up the argument that the decree-holder must, show that he has proceeded against all the other properties of the judgment-debtor available for execution before resorting to the alienated properties, and unless he does this, he cannot say that he was prevented by fraud from; executing his decree. This observation only states a fact in approval of the conduct of the decree-holder and does-not in our opinion purport to lay down, any principle of law.

9. The decision, read as a whole leads to the conclusion that the mere fact of a fraud having been committed by the judgment-debtor can be availed of by the decree holder, for claiming exemption under Section 48(2-a), Civil P.C. The next decision referred to is Seshachalam Chetti v. Rajam Chetty : (1898)8MLJ203 . This decision is by a single Judge and it supports the contentions of the appellant. It is stated in the judgment that

in order to bring the case within the proviso to Section 230, two things have to be proved. It has to be proved that the judgment debtor used stratagems designed to prevent the execution of the decree, and that the execution of the decree was by such means prevented.

10. As regards the second point which is the argument urged strenuously by the appellant, it must be said that the statement is a mere obiter dictum, for the learned Judge himself pointed out,

there being no evidence of fraud, it is hardly necessary to discuss the second point, viz. whether by reason of the debtor's conduct the execution of the decree has been prevented.

11. Still the learned Judge proceeded to discuss the point in the next paragraph thus:

It is obviously not enough to prove fraud at some time during the 12 years period, because it is quite consistent with such fraud that the decree holder may at a later period have had full facility for executing his decree. It must be proved that the non-execution of the decree was brought about by the fraud complained of. Apparently, there was property which could be attached, and the attachment of which was in no way impeded by the debtor. The Judge does not find that execution of the decree was, in fact, prevented, and no evidence was indicated which could have led him to such a finding.

12. This paragraph apparently supports both the aspects of the appellant's contention, that if there was property which the respondent decree holder could have attached before resorting to the alienated properties then it could not be said that he was prevented by fraud from executing his decree, and that in order to prove that he was prevented from executing the decree he must show that the non-execution of the decree was brought about by the fraud complained of. The next case of importance is the decision in Abdul Khadir v. Ajiyur Ahammad (1912) 35 Mad. 670. In that case, the second argument for the appellant was that even if the finding of fraud was upheld, it has not been proved, in the case that the plaintiff exercised due diligence in the execution of his decree and that he was prevented by defendant 1's fraud from realising the amount due to him. With reference to this argument the learned Judge, Sundara Ayyar, J., made some observations which are relevant to the question under consideration. After quoting Section 48, Civil P.C. the learned Judge says:

Fraud at some time within 12 years prior to the application for execution being sufficient to entitle the decree holder to ask for execution, it is clear that it is not incumbent on him to show continuous diligence during all the time prior to the application. The language of the section also shows clearly that the decree holder is not bound to show that, but for the fraud or force complained of, he would have realised the fruits of his decree. All that has to be proved is that the judgment-debtor, by fraud or force, at some time prevented the execution, that is, in my opinion, made the decree-holder's attempts to execute at the time to which the fraud relates, unsuccessful.

13. The first two observations dispose of the argument of the appellant that it is necessary for the decree holder to prove that he had been taking steps to execute the decree against other properties of the judgment-debtor. The last observation 'all that has to be proved, etc.', is relied on by the appellant to show that there must be some evidence to prove that the decree holder made attempts to execute the decree but the execution was prevented by the fraud of the judgment-debtor; that is, he proceeded against the alienated properties but failed in obtaining execution. It cannot be said that the language is not susceptible of this interpretation; but the learned Judge distinctly dissents from the judgment of Shepherd, J., in Seshachalam Chetti v. Rajam Chetty : (1898)8MLJ203 which is the decision strongly relied upon by the appellant in support of the argument that the decree holder should show that he proceeded against the alienated properties and failed to get execution. Having regard to this fact, we are not inclined to accept the interpretation put upon it by the appellant's counsel. Mr. Krishnaswami Ayyar for the respondent says that in the circumstances the passage only means that the decree holder should show that he had taken some steps to execute the decree before he made the application in question, and that, it is not disputed, he has done in this case.

14. In Mydeen Rowther v. Abdul Gaffur Rowther 1919 Mad. 197 the learned Judges, holding that the decree holder is not disentitled to the benefit of Section 48(2), Civil P.C., by reason of the fraud being long anterior to the date of the last execution, did not accept the view of Shepherd, J., in Seshachalam Chetti v. Rajam Chetty : (1898)8MLJ203 though they held on the facts that in the cases before them the application satisfied the rigid test insisted upon by the learned Judge in Seshachalam Chetti v. Rajam Chetty : (1898)8MLJ203 . In Ayyavu v. Soma Sundaram Chettiear 1920 Mad. 492, Sir Abdur Rahim, J. pointed out that it is not necessary for the judgment creditor to prove by positive evidence that but for the conduct of the judgment debtor he would have realised the decree, or, in other words, that he was actually prevented from executing the decree by the fraud complained of. Discussing the law on the subject the learned Judge referred to the dictum of Shepherd, J. in Seshachalam Chetti v. Rajam Chetty : (1898)8MLJ203 and mid with reference to it that:

it does not appear that the authorities on the point were brought to the notice of the learned Judge.

15. Odgers, J., the other learned Judge, pointed out that the decision in Seshachalam Chetti v. Rajam Chetty : (1898)8MLJ203 , turned on the finding that there was no evidence of fraud in that case, that is, that the observation relied on in that judgment had only the value of a mere obiter dictum. The decision in Seshachalam Chetti v. Rajam Chetty : (1898)8MLJ203 was also dissented from in Ramanathan Chettiar v. Moihideen Saheb 1924 Mad. 836. Thus according to the decisions of our Courts the result is this. The decision in Visalatchi Ammal v. Sivasankara Taker (1882) 4 Mad. 292 has stood as good law all these years. That decision, as stated at the commencement, completely supports the contentions of the respondent. {According to that decision the mere fact of a fraud having been committed by the judgment debtor can be availed of by the decree holder for claiming exemption under Section 48(2), Civil P.C. and in order to succeed it is not necessary for him to show by evidence that on account of that fraud he was actually prevented from executing his decree. The decision to the contrary in Seshachalam Chetti v. Rajam Chetty (1898) 8 M.L.J. 203 relied on by the appellant has been dissented from in the various subsequent rulings of this Court referred to above and should not therefore be followed. It is true that in many cases there will be proof forthcoming to show that as a direct result of the fraud the decree-holder was actually prevented from executing his decree; it will be so in a case where, when proceedings are taken against the judgment-debtor, by wilful evasion of arrest or by frauds of a similar nature the judgment-debtor is able to prevent the decree-holder from executing the decree. It is easy in such cases to establish the connection between the fraud perpetrated by the judgment debtor and the failure of the decree holder to execute the decree on account of the fraud. Cases of this description should not be used to restrict the meaning of the expression

where the judgment debtor has, by force or fraud, prevented the execution of the decree.

16. The next question is whether the fraud of defendant 1 can be availed of as against defendant 2. It was decided in Abdul Khadir v. Ahamed Shaiva Rowther 1916 Mad. 1 (FB) that the fraud committed by one of several judgment debtors cannot be relied on by the decree holder as against the other judgment debtor or judgment debtors; but this decision cannot be applied to the facts of the present case. Defendant 2, as mentioned at the commencement of the judgment, has been recorded as the legal representative of the deceased defendant 1 in the prior execution proceedings of the decree. It is true that defendant 2 cannot be affected by the fraud of defendant 1 in his individual capacity as a judgment debtor in the decree in O.S. No. 77 of 1911; but the decree sought to be attached is part of the assets of the deceased defendant 1 available for the execution of the decree in O.S. No. 77 of 1911; and since this has come into the hands of defendant 2 as his legal representative we think the fraud proved against defendant 1 can be availed of against his legal representative, defendant 2. For the above reasons, we hold that execution of the decree in O.S. No. 77 of 1911 is not barred by limitation. We dismiss this appeal with costs.


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