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

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in154Ind.Cas.688
AppellantM.R.M.A.S.P. Ramanathan Chettiar
RespondentMinor Mahalingam Chetti
Cases ReferredAbdul Khadir v. Ahammad Shaiwa Rowther
Excerpt:
civil procedure code (act v of 1908), section 48(2)(a) - mere fraudulent alienation of property by judgment-debtor, whether constitutes fraud--decree-holder not attempting to execute, whether entitled to claim exemption on the ground of fraud. - .....the date of the application,his case being that the judgment-debtor, the 1st defendant, 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 the 2nd defendant 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.4. the claim for exemption under section 48(2-a) is based on the following facts, which are admitted. on october 25, 1918, the deceased 1st defendant executed a sale deed with respect to his vegaikulam properties in favour of his friend and.....
Judgment:

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 1st defendant-judgment-debtor in O.S. No. 7 7 of 1911.

2. The appellant before us is the son of the deceased 1st defendant. He was a party to the suit as the 2nd defendant when the decree was passed and has been since recorded as his legal representative in E.A. No. 288 of 1928.

3. The decree sought to be executed was passed on November 27, 1911. The execution application was presented on July 27, 1928. Obviously, the petition for execution will be barred under the twelve years rule contained in Section 48(1), Civil Procedure Code, 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 executing 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 some time within twelve years immediately before the date of the application,

his case being that the judgment-debtor, the 1st defendant, 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 the 2nd defendant 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.

4. The claim for exemption under Section 48(2-a) is based on the following facts, which are admitted. On October 25, 1918, the deceased 1st defendant executed a sale deed with respect to his Vegaikulam properties in favour of his friend and relation, one Ramaswami Chettiar of Devakottah. 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 1st defendant, filed O.S. No. 208 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 has creditors. 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 1st defendant, which was definitely established by the High Court's decree on September 23, 1927, claimed exemption under Section 48(2-a) Civil Procedure Code, on the ground that the 1st defendant's fraud prevented the execution of the 'decree within twelve years before the date of the application and contended that, therefore, the application is not barred by limitation.

5. 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 of the Civil Procedure Code as the deceased 1st defendant executed the sale-dead 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 1st defendant with the intention of defrauding his creditors and it was decided finally in it on September 23, 1927, that it was so executed.

6. This point was decided in the lower Court in favour of the respondent-decree-holder and execution was allowed to proceed.

7. 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 exception under Section 48(2-a), Civil Procedure Code, unless she is able to show by evidence that on account of that fraud he was prevented from executing his decree in the manner indicated above.

8. We will now examine the decisions which have a bearing on this question. The earliest decision brought to our notice is Visalatchi Ammal v. Sivasankara Taker 4 M 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 No. 1867, obtained a decree against the husband of the petitioner, since deceased. 'The decree was kept alive till December 13, 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 September 26, 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 of the Code of Civil Procedure (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 Procedure Code. 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.

9. 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.

10. 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.

11. 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. The decision, read as a whole, leads to the conclusion that the mere fact of a fraud having been committed by (he judgment-debtor can be availed of by the decree-holder for claiming exemption under Section 48(2-a), Civil Procedure Code.

12. The next decision referred to is Seshachalam Chetti v. Rajan Chetty 8 M L.J. 203. 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.

13. 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.

14. 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 decree was, in fact, prevented, and no evidence was indicated which could have led him to such a finding.

15. 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.

16. The next case of importance is the decision in Abdul Khadir v. Ahmad Shaiwa Rowther 12 Ind. Cas. 679 : 35 M. 670 : 10 M.L.T. 413 : (1911) 2 M.W.N. 434 : 22 M.L.J. 35. 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 ho was prevented by the 1st defendant'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 Procedure Code, 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.

17. 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 Shephard, J., in Seshachalam Chetti v. Rajan Chetty 8 M L.J. 203 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.

18. In Mydeen Rowther v. Meera Rowther 53 Ind. Cas. 862 : 10 L.W. 566 the learned Judges, holding that the decree-holder is not disentitled to the benefit of Section 48(2), Civil Procedure Code by reason of the fraud being long anterior to the date of the last execution, did not accept the view of Shephard, J. in Seshachalam Chetti v. Rajan Chetty 8 M L.J. 203 though they held on the facts that in the case before them the application satisfied the rigid test insisted upon by the learned Judge in Seshachalam Chetti v. Rajan Chetty 8 M L.J. 203. In Syed Muhammad Rowther v. Soma Sundaram Chettiar 60 Ind. Cas. 630 : (1920) M.W.N. 788 : 12 L.W. 710 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 Shephard, J., in Seshachalam Chetti v. Rajan Chetty 8 M L.J. 203 and said with reference to it that

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

Odgers, J.

19. The other learned Judge, pointed out that the decision in Seshachalam Chetti v. Rajan Chetty 8 M L.J. 203 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. Rajan Chetty 8 M L.J. 203 was also dissented from in Ramanathan Chettiar v. Mohideen Saheb : AIR1924Mad836 .

20. Thus, according to the decisions of our Courts the result is this. The decision in Visalatchi Ammal v. Sivasankara Taker 4 M 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 Procedure Code 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. Rajan Chetty 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.

21. The next question is whether the fraud of the 1st defendant can be availed of as against the 2nd defendant. It was decided in Abdul Khadir v. Ahammad Shaiwa Rowther 30 Ind. Cas, 423 : 38 M. 419 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 appalled to the facts of the present case. The 2nd defendant, as mentioned at the commencement of the judgment, has been recorded as the legal representative of the deceased 1st defendant in the prior execution proceedings of the decree. It is true that the 2nd defendant cannot be affected by the fraud of the 1st defendant 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 1st defendant available for the execution of the decree in O.S. No. 77 of 1911 and since this has come into the hands of the 2nd defendant as his legal representative, we think the fraud proved against the 1st defendant can be availed of against his legal representative, the 2nd defendant.

22. For the above reasons we hold that execution of the decree in O.S. No. 7 7 of 1911 is not barred by limitation. We dismiss this appeal with costs.


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