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Chintalapudi Venkataramayya Vs. Potula Venkataramayya and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1938Mad78
AppellantChintalapudi Venkataramayya
RespondentPotula Venkataramayya and anr.
Cases ReferredKangal Chandra v. Nanda Lal
Excerpt:
- - raghava rao before me on two cases in favour of the view that a suit like the one in question is not prohibited by section 47, civil p. it may well be said in such, cases there could be no decree and therefore no appeal. chintakuuta srinivasa rau (1903) 26 mad 264 was decided before the passing of the new civil procedure code, it will not be applicable to cases like the present......the transfer by his order dated 14th march 1928. thereupon potula venkataramayya instituted the present suit against rednam-sitaramayya, the decree-holder in s.c.s. no. 208 of 1926 and chintalapudi venkataramayya, defendant 2, in whose favour the assignment of the said decree has been effected, for a declaration that the transfer was a sham and collusive transaction brought about in fraud of his rights and therefore invalid. the question therefore on these facts is whether such a suit is maintainable. the grounds on which the lower court decided the case are two, namely: (1) that the objection raised by the plaintiff to the transfer before the sub-court, amalapuram, in proceedings under order 21, rule 16, civil p.c. was not in the capacity of the judgment-debtor and therefore section.....
Judgment:

Venkataramana Rao, J.

1. The question in this second appeal is whether Section 47, Civil P.C., operates as a bar to the maintenance of the suit instituted by the plaintiff for a declaration that the transfer of a decree obtained by defendant 1 against him in favour of defendant 2 is invalid. Both the lower Courts took the view that it does not. This view is canvassed in second appeal. The question is whether it is sound. The material facts bearing on the question are these: Defendant 1, Rednam Sitaramiah obtained a decree in S.C.S. No. 208 of 1926 on the file of the District Munsif's Court of Amalapuram on 9th August 1926 against the plaintiff Potula 'Venkataramayya and another. Defendant 2 obtained a transfer of the said decree on 17th' February 1927, under Ex. 3-A, and as the transfer deed was defective, a later transfer was effected on 12th March 1927, under Ex. C. In pursuance of that transfer defendant 2 applied on 22nd March 1927 for leave to execute the decree Under Order 21, Rule 16, Civil P.C. The judgment-debtors oppose the application for execution. Their grounds of objection are these. On 22nd July 1926, one Pundareekashadu obtained a decree in S.C.S. No. 29 of 1926 on the file of the Sub-Court, Bezwada, against Rednam Sitaramayya, the decree-holder in S.C.S. No. 208 of 1926, the assignor of defendant 2. On 3rd February 1927, the said Pundareekashadu assigned the decree to Potula Venkataramayya, the present plaintiff, i.e. one of the judgment-debtors in S.C.S. No. 208 of 1926. In pursuance of the transfer he applied for leave to execute the said decree in S.C.S. No. 29 of 1926, got a transfer of the said decree to the District Munsif's Court of Amalapuram and attached the decree in S.C.S. No. 208 of 1926. Both the judgment, debtors in S.C.S. No. 208 of 1926 alleged that the transfer of the said decree in favour of defendant 2 was nominal and collusive and without consideration and was brought about to defraud the rights of Potula Venkataramayya under the decree in S.C.S. No. 29 of 1926.

2. Two questions were raised, namely whether the transfer in favour of defendant 2 was collusive and bears no consideration and whether he was only a name lender for the decree-holder Sitaramayya. The learned Subordinate Judge of Amalapuram overruled the objections of the judgment-debtors and upheld the transfer by his order dated 14th March 1928. Thereupon Potula Venkataramayya instituted the present suit against Rednam-Sitaramayya, the decree-holder in S.C.S. No. 208 of 1926 and Chintalapudi Venkataramayya, defendant 2, in whose favour the assignment of the said decree has been effected, for a declaration that the transfer was a sham and collusive transaction brought about in fraud of his rights and therefore invalid. The question therefore on these facts is whether such a suit is maintainable. The grounds on which the lower Court decided the case are two, namely: (1) that the objection raised by the plaintiff to the transfer before the Sub-Court, Amalapuram, in proceedings Under Order 21, Rule 16, Civil P.C. was not in the capacity of the judgment-debtor and therefore Section 47, Civil P.C., would not apply; and (2) the matter decided by the executing Court was not one relating to execution because it relates to the factum and the validity of the assignment. The relevant provisions of the Civil Procedure Code bearing on the matter are Order 21, Rule 16 and Section 47 (3). Order 21, Rule 16 provides that 'Where a decree has been transferred by assignment in writing', which is the case here,

the transferee may apply for execution of the decree to the Court which passed it and the decree may be executed in the same manner and subject to the same conditions as if the application was made by the decree-holder.

3. Where therefore such an application for execution is made by a transferee, it is open to the judgment-debtor to say that he is not a representative of the decree-holder on the ground that there is no valid transfer and no vesting of the decree in him by virtue thereof. Under Section 47, Sub-rule (3), where a question arises as to whether any person is or is not the representative of a party, such a question which involves the validity of the transfer shall be determined by the Court. Unless that is done, the Court could not pass an order for execution. The validity of the transfer may be questioned on various grounds, Prima facie therefore the objections raised by the judgment-debtors to the application for execution of the decree made by defendant 2 Under Order 21, Rule 16 are questions which it was obligatory upon the Court before which such an application was made to decide. The objections having been determined, and the order for execution having been made by recognizing the transfer, it is a decree within the meaning of Section 47, Civil P.C. A separate suit will not lie and Section 47 appears to be a bar to the suit, Considerable reliance is placed by the lower Court and by Mr. Raghava Rao before me on two cases in favour of the view that a suit like the one in question is not prohibited by Section 47, Civil P.C. One case is Bommanapati Veerappa v. Chintakuuta Srinivasa Rau (1903) 26 Mad 264. and the other is Ishar Das Gorakh Ram v. Salig Ram (1929) 16 A.I.R. Lah 51 which purports to follow Bommanapati Veerappa v. Chintakuuta Srinivasa Rau (1903) 26 Mad 264. In Bommanapati Veerappa v. Chintakuuta Srinivasa Rau (1903) 26 Mad 264. It was held that a suit by an assignee of a decree for a declaration that he obtained a valid assignment of the decree might be brought and when such a suit is brought, the Court should simply decide as to the factum and validity of the assignment and should not declare that the assignee is entitled to execute the decree. It may be noticed that when the above decision was passed, the relevant provision of Section 244, corresponding to Section 47, Civil P.C., bearing on the present discussion, ran thus:

If a question arises as to who is the representative of a party for the purposes of this section, the Court may (either stay execution of the decree until the question has been determined by a separate suit or) itself determine the question (by an order under this section).

4. It will thus be seen that a separate suit was not prohibited by Section 47, Civil P.C. In the particular case, in Bommanapati Veerappa v. Chintakuuta Srinivasa Rau (1903) 26 Mad 264 the transfer was not recognized and the result of the said order was that the assignee was not treated as the representative of the decree-holder. It may well be said in such, cases there could be no decree and therefore no appeal. It does not decide whether a suit will lie if in fact an order for transfer is made and the assignee is treated as the representative. It seems to me therefore that, apart from the fact that Bommanapati Veerappa v. Chintakuuta Srinivasa Rau (1903) 26 Mad 264 was decided before the passing of the new Civil Procedure Code, it will not be applicable to cases like the present. The language of the present Code is different. It is rendered obligatory on the Court to decide the question, i.e. the validity of the transfer and an order determining it will, for the purpose of the section, amount to a decree. Ishar Das Gorakh Ram v. Salig Ram (1929). 16 A.I.R. Lah 51 merely purports to follow Bommanapati Veerappa v. Chintakuuta Srinivasa Rau (1903) 26 Mad 264. But Mr. Raghava Rao relied upon the following observation therein:

Besides, there is the practical inconvenience of entering upon an inquiry as to whether or not the assignment in favour of Salig Ram was genuine and for consideration or was intended to defeat the creditors of the assignors. It can hardly be said that this inquiry comes strictly within the purview of Section 47, Civil P.C.

5. There is no discussion by the learned Judges of Sub-rule 3 of Section 47, Civil P.C. It is not even noticed. I am not able to understand what the practical inconvenience the learned Judges envisage by entering upon an inquiry contemplated. The Rule provides that the question whether a person is or is not the representative for the purpose shall be decided by the Court and when the statute imposes an obligation to determine the said question, which as I have already pointed out involves of necessity all questions relating to the validity of the transfer, I do not see how any question of inconvenience is a matter of consideration at all. With great respect to the learned Judges who decided that case, I am unable to follow their view.

6. The next point raised by Mr. Raghava Rao is that the objection raised by the present plaintiff was not in the capacity of a judgment-debtor and therefore the present suit is not barred by Section 47. He outlined his argument thus. The present plaintiff occupied the position of attaching creditor of the decree in Section S.C.S. No. 208 of 1926 by virtue of the attachment effected in execution of the decree in S.C.S. No. 29 of 1926. Therefore according to him, the main question was whether defendant 2 was entitled to execute the decree or the present plaintiff as attaching creditor was entitled to execute decree and therefore not being a question between the parties or their representatives, but in effect between rival decree-holders, Section 47 cannot be a bar. I may at once say that a recent decision of the Madras High Court reported in Narasimha Ayyar v. Venkatachalapathy Ayyar, : AIR1934Mad181 is against this view. There is also authority for the other view: Raman Chettiar v. Chokkalinga Chettiar : AIR1926Mad691 and Ramakrishna Iyer v. Mari Goundan : AIR1927Mad1025 and other decisions noticed therein. It seems to me unnecessary to decide between this conflict and express my opinion as to whether Narasimha Ayyar v. Venkatachalapathy Ayyar : AIR1934Mad181 is right or wrong. In my opinion the plaintiff, when he put forward his objections, cannot be deemed to have urged them in a capacity different from the capacity of the judgment-debtor which he occupied in the suit. His objection is that the transfer in favour of defendant 2 is a nominal and collusive transaction and therefore the property in the decree did not vest in defendant 2. Mr. Raghava Rao concedes that this is an objection which the plaintiff qua judgment, debtor can legitimately raise and could be decided by the Court. But what he contends is the other objection that the transfer was executed with a view to defraud his rights as the transferee of the decree in S.C.S. No. 29 of 1926 can only be in the capacity of the decree-holder in S.C.S. No. 29 of 1926 and not in the capacity of the judgment-debtor in S.C.S. No. 208 of 1926.

7. I am unable to agree with this view. As judgment debtor, it was legitimately open to him to say that the transfer could not avail against him because by virtue of the transfer of the decree and by virtue of the attachment he had certain rights which he can assert against his assignor which he had been deprived of by virtue of the fraudulent transfer. For example, to the extent of the amount of the decree in S.C.S. No. 29 of 1926, satisfaction has to be entered up and for the balance only execution can be had Kangal Chandra v. Nanda Lal : AIR1934Cal465 . The question of satisfaction of the decree is one which can be raised. It is unnecessary to decide what the effect of that contention may be, but it is certainly a contention which it is open to him to raise and arises by virtue of his occupying the position of the judgment-debtor. Therefore the substantial objection from which certain rights will flow in the present case is the objection that the assignment is a sham and collusive transaction and that being a question which is legitimately open to him qua judgment-debtor, it was raised and adjudicated by the Court by an order dated 14th March 1928, and it is therefore not open to him to agitate it again by a separate suit. I therefore overrule the objections of Mr. Raghava Rao and set aside the decrees of both the lower Courts and dismiss the suit with costs throughout. Leave to appeal granted.


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