Skip to content


Venkateswara Aiyar and ors. Vs. A.P.Ri. Executor, A.R.A.R. Somasundram Chettiar Through His Authorised Agent Mayandi - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1918Mad76; 44Ind.Cas.551
AppellantVenkateswara Aiyar and ors.
RespondentA.P.Ri. Executor, A.R.A.R. Somasundram Chettiar Through His Authorised Agent Mayandi
Cases Referredand Sukh Lal v. Madhuri Prasad
Excerpt:
limitation act (ix of 1908), schedule i, articles 11, 29, 120 - civil procedure code (act v of 1908), order xxi, rule 63--claim proceedings--order releasing attachment--suit by decree-holder to declare alienation fraudulent--limitation, commencement of--cause of action--transfer of property act (iv of 1882), section 53, scope of. - - 8. in this view it is not necessary to decide whether, if article 120 were applicable, the suit would be barred by limitation, but i am inclined to hold that the cause of action does not arise on the date of alienation, but on the date when the creditor seeking to set aside the alienation knows that he has been defrauded, defeated or delayed......and is not confined to suits based on fraud. if such a suit coming within article 120 is based on fraud, the time when the right to sue accrues must i think, be determined in consonance with the principle governing the other specific suits based on fraud, and that is that the time, when the fraud becomes known, becomes the starting point for limitation. in this case we have no evidence as to when the plaintiff became aware of the fraud, for the question of limitation was not raised in the lower courts, but it is incumbent on defendants to show that plaintiff had clear and definite knowledge of the fraud at a time which is too remote for a suit to be brought, if they wish to make limitation operative rahimbhoy habibbhoy v. charles agnew turner 20 i.a. 1and sukh lal v. madhuri prasad.....
Judgment:

Phillips, J.

1. Plaintiff obtained a decree against 1st defendant and attached his property, but the attachment was released on the application of 1st defendant's alienees, the 1st defendant having alienated the property to 2nd defendant just over 6 years before the present suit was filed. The suit now is for a declaration that the alienations are not binding on plaintiff, and that he can proceed against the property in execution of the decree against 1st defendant. Defendants Nos. 3, 4 and 9, alienees from 2nd defend- ant, are appellants here.

2. The first contention raised is that plaintiff cannot bring this suit on his own behalf, but must sue on behalf of all the creditors for a declaration that the alienation is invalid as against all of them.

3. This plea was not taken in either of the lower Courts and is one which might have been met, if necessary, in the first Court by an amendment of the plaint.

4. Whether the plea can be supported is doubtful Smith v. Hurst (1852) 10 Hare 30: 20 L.T. 303 and Blenkinsopp v. Blenkinsopp (1852) De G.M.& G. 495 : 21 L.J.Ch. 401: 91 R.R. 147 but without expressing an opinion' on it, we cannot allow it to be taken at this late stage.

5. Another plea that appellants are entitled to a charge on the property must also be disallowed, because it has not been taken before, and its decision would involve a fresh consideration of the evidence.

6. The chief ground of appeal is on the question of limitation, the contention being that the suit is governed by Article 120 and that more than six years have elapsed since the alienation by 1st defendant to 2nd defendant. The subsequent alienations to appellants need not be considered, as there is no finding that the alienation to 2nd defendant was merely a sham transaction--the finding being only that that it was effected in fraud of creditors. It has been held by this Court that a suit for a declaration that an alienation is not binding on a creditor under Section 53, Transfer of Property Act, is governed by Article 120 [Authikesavaloo Naicker v. Shah Abdulla (1915) M.W.N. 337 and Pachamuthu v. Chinnappan 3 Ind. Dec. 901 but it is contended for respondent that the present suit is one brought' under Order XXI, Rule 63, and that consequently Article 11 is applicable. The plaint gives as the date of the cause of action the date of the order setting aside plaintiff's attachment and the suit is evidently intended to be one under Order XXI, Rule 63. Objection is, however, taken that the order setting aside the attachment was correct in view of a recent decision of a Bench of three Judges of this Court in Second Appeal No. 691 of 1916 Subraruania Ayyar v. Muthia Chettiar 43 Ind. Cas. 651 that an alienation in fraud of creditors is valid until set aside and cannot be pleaded as a defence by a creditor in a suit by an alienee and that a suit under Order XXI, Rule 63, is really in the nature of an appeal vide Phul Kumari v. Ghansnyam Misra 7 C.L.J. 36: 10 Bom. L.R. 1 and Krishnappa Chetty v. Abdul Khader Saheb 25 Ind. Cas. 11 and that consequently the present suit cannot be treated as one under Order XXI, Rule 63, as it goes beyond the scope of the order in the claim petition, and asks for a relief which would be barred by limitation if the suit for that relief were brought in the ordinary course. The former case, a decision of the Privy Council upon which for this purpose the later case is based, was considered by a Full Bench of this Court in Kovouri Basirireddi v. Nidumoori Ramayya 36 Ind Cas. 445 : 31 M.L.J. 394 : (1916) 2 M.W.N. 107 : 20 M.L.T. 353 and it was held that a suit in respect of moveable property, a claim to which had been dismissed in execution proceedings, was governed by Article 11 and not by Article 29 and that although one of the reliefs sought would be barred under Article 29, it could be granted as the whole suit was governed by Article 11 which applies to suits under Order XXI, Rule 63. In the present suit plaintiff seeks to establish his right to proceed against the property of the 1st defendant, and incidentally to have it declared that the alienation to 2nd defendant is not binding on him. This right was negatived in the order on the claim petition, and consequently following Kovauri Basivireddi v. Nidumoori Ramayya 36 Ind Cas. 445 : (1916) 2 M.W.N. 107 I would hold that the present suit is One under Order XXI, Rule 63, being, as it is, one to establish the right which plaintiff claims to the property in dispute and is within the time allowed by Article 11.

7. The fact that the decision in Second Appeal No. 691 of 1916 Subramania Ayyar v. Muthia Chettiar 43 Ind. Cas. 651 : 33 M.L.J. 705 shows that the order in the claim petition, if worded differently, was correct, cannot affect the question of limitation, for Order XXI, Rule 63, gives a right to sue whether the order in the claim petition is correct or not.

8. In this view it is not necessary to decide whether, if Article 120 were applicable, the suit would be barred by limitation, but I am inclined to hold that the cause of action does not arise on the date of alienation, but on the date when the creditor seeking to set aside the alienation knows that he has been defrauded, defeated or delayed. Section 53, Transfer of Property Act, does not expressly give a right to sue, but gives to a creditor an option to avoid certain transactions, and it is in the exercise of his option that he obtains a right to sue. It is not until he obtains the option that the right to sue accrues, and I do not see how it can be said that he has a right of option at a time when he is unaware of the circumstances which give him such right. In all oases of fraud, misconduct, etc., the period of limitation for a suit begins to run from the time when the fraud, misconduct, etc., becomes known (vide Articles 90, 91, 95, 96, etc.), but no such provision could be inserted in Article 120, for it is a residuary Article and thus applicable to every variety of suit not otherwise provided for and is not confined to suits based on fraud. If such a suit coming within Article 120 is based on fraud, the time when the right to sue accrues must I think, be determined in consonance with the principle governing the other specific suits based on fraud, and that is that the time, when the fraud becomes known, becomes the starting point for limitation. In this case we have no evidence as to when the plaintiff became aware of the fraud, for the question of limitation Was not raised in the lower Courts, but it is incumbent on defendants to show that plaintiff had clear and definite knowledge of the fraud at a time which is too remote for a suit to be brought, if they wish to make limitation operative Rahimbhoy Habibbhoy v. Charles Agnew Turner 20 I.A. 1and Sukh Lal v. Madhuri Prasad (1905) AWN 88.

9. In this view also plaintiff's suit is within time and the second appeal must, therefore, be dismissed with costs.

Ayling, J.

10. I agree, I must confess to considerable doubt on the question of limitation; and I am not prepared to dissent from the conclusion of my learned brother that Article 11 of Schedule I of the Limitation Act applies and that the suit is within time.

11. The second appeal must, therefore, be dismissed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //