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J.H. Zeissen and Co. Ltd., Represented by Official Liquidator, Malay Kumar Deb Vs. Satya Charan Das and anr. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1943Cal534
AppellantJ.H. Zeissen and Co. Ltd., Represented by Official Liquidator, Malay Kumar Deb
RespondentSatya Charan Das and anr.
Cases ReferredV.E.A.R. Firm v. Maung Ba Kyin
- .....district judge received the transmitted decree on 22nd september 1937. on 23rd november 1937, profulla executed in favour of his father-in-law the questioned conveyance. that conveyance included the one third share which profulla had in a zamindary being touzi no. 201/2 of the rang, pore collectorate and the subordinate interest in some specific parcels of land within the said zamindary which he had purchased before. those were the only substantial properties which he then had. a few properties in the town of rangpore which he then had and which were of small value, were not included in the conveyance. the ostensible price was rs. 13,000 which according to the conveyance was paid in the following manner : rs. 11,825 was applied by the purchaser, satya, in satisfaction of two.....

R.C. Mitter, J.

1. The question in this appeal is whether the conveyance (EX. 3) executed by one Profulla Kumar Dass, in favour of his father-in-law, Satya Charan Dass, on 23rd November 1937, on an alleged consideration of Rs. 13,000 represents a genuine or a fictitious transaction. I may at once say that it represents a sham transaction which was got up with a design to defeat the claim of the appellant company. Profulla Kumar Dass held a large number of shares in the aforesaid Company which were not fully paid up shares. The company went into liquidation sometime in 1930 and in due course the official liquidator entered Profulla's name in the list of contributories. On his application, this Court made an order against Profulla for the payment of Rs. 66,000 on 30th April 1934. For convenience I will call this order a decree. This order was first put in execution against Profulla in this Court and, in the proper Court at Alipore, with the result 0 that a small amount was realised between 1934 and the first part of 1937 from the properties of Profulla situate within the jurisdiction of those Courts. A very substantial amount, namely Rs. 63,098 odd still remained due. On 21st September 1937, the aforesaid decree was transmitted by this Court for execution to the Court of the District Judge at Rangpore within whose jurisdiction Profulla had admittedly at that time substantial properties. The learned District Judge received the transmitted decree on 22nd September 1937. On 23rd November 1937, Profulla executed in favour of his father-in-law the questioned conveyance. That conveyance included the one third share which Profulla had in a zamindary being touzi No. 201/2 of the Rang, pore Collectorate and the subordinate interest in some specific parcels of land within the said zamindary which he had purchased before. Those were the only substantial properties which he then had. A few properties in the town of Rangpore which he then had and which were of small value, were not included in the conveyance. The ostensible price was Rs. 13,000 which according to the conveyance was paid in the following manner : Rs. 11,825 was applied by the purchaser, Satya, in satisfaction of two promissory notes for Rs. 5000 and Rs. 4000 executed by Profulla in his favour on 13th September and 18th October 1932, respectively, and the balance, Rs. 1675 was said to have been paid to Profulla in cash.

2. On 10th December following, the liquidator filed his application for execution in the Court of the Second Subordinate Judge at Rangpore. The properties included in the said conveyance as well as the other minor items of property which were not so conveyed were attached. Profulla objected to the execution and later on a claim petition under Order 21, Rule 58, Civil P.C., was put in by Satya. He examined himself for supporting his_ claim which was rejected by the learned' Subordinate Judge by an order dated 31st January 1939. The suit in which this appeal arises was filed by Satya on 3rd February 1939, to set aside the said order. The learned Subordinate Judge has decreed the said suit holding that the conveyance to Satya represented a genuine transaction. I cannot agree with the learned Subordinate Judge, for in his judgment he has not considered the salient facts at all. He seems to have assumed that the case of the company was that the two promissory notes had been executed about the time of the conveyance and antedated. Proceeding upon that assumption he observed that that case cannot be true because the promissory notes bear 'an old and hallowed appearance' and the combined revenue and postage stamps which are affixed on them had been withdrawn from circulation long before the date of the conveyance. It is a fact that those stamps had been withdrawn from 1st April 1934, by a notification in the Official Gazette. The remaining parts of his judgment consist of special pleading and a review of the case law which has very little bearing on the facts of this case. In my judgment the material point for consideration is not when the promissory notes were executed but whether they were for consideration. My learned brother has discussed the question of onus, but assuming that the onus was on the company to prove that there was no consideration for the two promissory notes I hold that that burden has been discharged from the facts and circumstances proved in the case. I fully realise the fact that ordinarily it would be difficult for a stranger in the position of the official liquidator to discharge that burden but in this case he is in a happy position because of the positive case that Satya has made in respect of the said promissory notes

3. In para. 1 of his plaint he states that his son-in-law represented to him that he required Rs. 5000 to meet the settlement costs of his zamindary. On that representation, he paid him Rs. 5000 and the first promissory note was executed. Shortly thereafter, his son-in-law again approached him with the representation that the sum of Rs. 5000 had proved to be insufficient and he required a further sum of Rs, 4000 to meet the Settlement costs. This sum was advanced on the second promissory note which was executed within a few days of the first. In his deposition, the plaintiff states that he was a police officer but he had retired on pension in August 1932. He had three houses in Calcutta, one occupied by himself and his family, and the other two let out to tenants. Pie got from his mother Government Promissory notes of the face value of Rs. 7000, cash Rs. 5000 and ornaments worth Rs. 5000. His wife was a rich man's daughter and had money. His son was also earning money. Ha wanted to give the Court the impression that he was a man of substance and had the capacity to lend his son-in-law Rs. 9000 in the course of a month. It however transpires from his evidence that the highest pay he drew was Rs. 98 a month, and his pension was Rs. 21 a month. His son was not earning in 1932 but got his employment much 9 later. In support of his other statements, e.g., his inheritance from his mother, the income from his two houses and the financial position of his wife he did not produce at that at age, namely, during his examination, in chief and cross examination, any documentary evidence. In cross-examination he stated that he had no account books to support the advances to his son-in-law as ha kept none. He admitted that after retirement he had a bus, but that business did not yield him profits and he gave it up. One fact which is of great importance is that in his cross-examination he admitted that of the h nine thousand rupees said to have been advanced to his son-in-law, Rs. 7000 came from his own pocket and the balance of Rs. 2000 was made up by his wife. This sum of rupees 7000 he said he got from his attorney Mr. Hem Chandra De. He was asked in cross-examination if he had made any enquiry in his attorney's office if there was any record in that office of the fact of payment to him of the said sum and his answer was in the negative. His cross examination and re-examination were finished on 26th July 1939.

4. On 4th August 1989, he was recalled on his own application. On that date he produced some documents to support his statements that his mother and his wife had got money and property from their respective father's estate. The Municipal tax bills of the two houses let out to tenants were also proved. Those bills show that he could not have got more than Rs. 100 a month from those two houses. Two of such documents were certified copies obtained from the Court at Alipore. They are Exs. 17 and 18, a plaint and the order sheet of a suit which his wife had brought against her relatives in the year 1920. The copies produced by him on that date and marked Exs. 17 and 18 show that he applied for certified copies at Alipore, 24 Parganas, on 29th July and 1st August 1939, respectively and obtained those copies on the said dates. He had returned to Calcutta from Rangpur after 26th July 1939, when his re-examination was finished, searched for and collected old papers relating to his wife's and mother's affairs and produced them in Court on 4th August 1939 when he was recalled and examined again. He even went to the length of applying for and obtaining certified copies of the plaint and order sheet of his wife's suit for ornaments. The papers which he produced and proved on 4th August 1939, had only a remote bearing on his case in view of his statement that he had advanced to his son-in-law Rs. 7000 from the money he had received from his attorney Mr. Hem Chandra De. But he did not care to obtain any documentary evidence from Mr. Hem Chandra De's office at Calcutta, which was quite near to his house and much nearer than the Alipore Court, in support of the payment of that sum to him. He did not cite any employee of Mr. De's office to produce any paper from his office. It is unthinkable that an experienced solicitor of this Court like Mr. Hem Chandra De would have given such a heavy sum to the plaintiff without a proper receipt or without keeping any written record of that fact. In my judgment a Court would be justified in drawing the in. ference that the plaintiff did not get Rs 7000 or any sum from Mr. Hem Chandra De and that the sum which according to him was paid to this son-in-law from his own pocket was not paid at all. Such being the position, it would also be proper to hold that the story of the payment of Rs. 2000 by his wife was as imaginative as the payment of Rs. 7000 by him. In view of these facts which are confirmed by the subsequent conduct of the plaintiff. I hold that the promissory notes were without consideration. The substantial part of the consideration mentioned in the questioned conveyance is therefore illusory. I am not much impressed by the observations of the learned Subordinate Judge that the promissory notes have a hoary appearance and bear stamps which had been with, drawn from circulation in April 1934. As soon as the company went into liquidation, it was quite clear to Profulla that a heavy liability would be fastened on him. In fact the order for payment was made by this Court on 29th April 1934. I cannot believe his father-in-law when he says that he did not know till 1937 the embarrassed position of his son-in-law. In these circumstances, it was not unlikely that the promissory notes were got up either on the dates they bear, or some time in 1934, before April, to serve the purpose of creating evidence. I have already noticed the time when the conveyance was executed. It was after the decree had been transmitted to Rangpore for execution. Satya had no landed property outside the limits of Calcutta and was not admittedly conversant with zemindary management. He never made enquiries about the property and what is strange the price was left to be settled in a huff by a pleader of Alipore, Mr. Rama Nath Sinha, who had not seen the property and who did not apparently know anything about the District of Rangpur. The scribe was Profulla's pleader's clerk and all the 9 witnesses to the conveyance were Profulla's men, and the property is being all along managed by Profulla's men. A significant admission to the effect that Profulla was in possession of the zamindary even in April 1938 is made in Ex. C an application filed by Profulla himself. There is no independent evidence relating to the payment of Rs. 1675 in cash. Satya does not even know the amount of revenue kists payable for the property. For the suit he sent blank papers signed by him to be used as a plaint. He never gave any instruction to a lawyer for drawing up the plaint. The plaint was verified by Anantalal De who was then and thereafter an employee of Profulla. He does not know how the suitis being financed and repudiates Anantalal De as his tadbirkar. All these facts confirm the view I take that the questioned conveyance is a fictitious one. For these reasons, I agree with my learned brother. The appeal is accordingly allowed and the suit dismissed. Defendant 1 will have costs of the lower Court and of this Court from the plaintiff. Hearing fee, 20 gold mohurs.

Khundkar J.

5. This appeal arises out of a suit under Order 21, Rule 68 instituted by the respondent Satya Charan Das against the appellant who is the official liquidator of a limited company called J.H. Zeissen & Co., and it relates to certain zamindary property which was attached in execution of an order having the force of a decree passed against the appellant's son-in-law Profulla Kumar Das. The case of the plaintiff Satya Charan was that the property had originally belonged to his son-in-law, but that it had been conveyed to him for valuable consideration, and in circumstances which rendered it immune from attachment by Profulla's creditors.

6. A chronological statement of certain events is necessary for a proper understanding of the case. Profulla was the holder of certain shares in the Firm of Zeissen & Co. which went into liquidation in the year 1930. The case for the plaintiff was that at some time about 13th September 1932, the plaintiff had advanced to his son-in-law by way of loan a sum of Rs. 5000 against the latter's handnote, and that on 18th October he had advanced to Profulla a further sum of Rs. 4000 also on the security of a handnote. These sums, it was alleged, were required by Profulla for the expenses of settlement operations in his zemindary. The shares held by Profulla in Zeissen & Co. were not fully paid up, and after that company went into liquidation Profulla was unable to meet the calls. Accordingly, the official liquidator moved this Court, and on 29th April 1934 obtained an order against Profulla for the payment of Rs. 66,000. This order was first put into execution in this Court, and also in a Court at Alipore, but so small an amount was realised from Profulla's properties within the jurisdiction of these Courts that in the year 1937 there was outstanding against him a sum of over Rs. 63,000. The order of this Court, which for all relevant purposes had the force of a decree, was on 21st September 1937, transferred for execution to the Court of the District Judge at Rangpore where was situated an extensive zemindary in which Profulla had a one-third share, and this order was received by the District Judge on 23rd September 1937.

7. On 23rd November of that year, Profulla executed a conveyance of his share in the Rangpur zemindary in favour of his father-in-law, the consideration for which was stated to be a sum of Rs. 13,000 made up of the amount of Rs. 11,825 still due on account of principal and interest in respect of the transactions represented by the promissory notes of 13th September and 18th October 1932, and a further amount of Rupees 1675 paid by Satya to Profulla in cash on 23rd November 1937. An application for execution was filed by the official liquidator in the Rangpore Court on 10th December 1937, to which a petition of objection purporting to be under Section 47, Civil P.C., was preferred by Profulla on 20th April 1938. In this petition it was not stated that the judgment-debtor had conveyed his interest to his father-in-law, but there was a vague allegation that he had no title to the property which was sought to be attached. On 30th April a further petition of objection was filed by Profulla in which he opposed attachment on the ground that it would hamper collection of rents, and in which he undertook not to transfer the property until after the disposal of his objection under Section 47, Civil P.C. Profulla's objection to execution was rejected on 9th July and on 25th July, the present plaintiff Satya, got his name registered as purchaser of the properties in Rangpur. These embraced Profulla's one-third share of Touzi No. 201/2 of the Rangpur Collectorate, and some subordinate interests in lands within that zemindary. Profulla's appeal to this Court against the order disallowing his objection under Section 47 having been dismissed, Satya Charan preferred a claim to the attached property under Order 21, Rule 58 in December 1938, but this was dismissed on 31st January 1939. The present suit was instituted on 3rd February 1939. The learned Subordinate Judge decreed the suit, holding that the conveyance to Satya Charan of the property in dispute was a bona fide sale for valuable consideration and that Profulla had no right, title or interest therein on the date of the filing of the application for execution in the Rangpur Court. The learned Subordinate Judge found that the two promissory notes represented genuine transactions, and that the sum of Rs. 1765 was paid by Satya to his son-in-law in cash on 23rd November 1937, on which date the conveyance was executed. It is these findings which have been challenged in this appeal.

8. On behalf of the appellant it has been contended that in a suit under Order 21, Rule 63 where the decision of a Court rejecting a claim under Order 21, Rule 58 is sought to be set aside, the burden is on the claimant to prove that the documents of title on which he relies are genuine and not collusive. In support of this proposition reliance has been placed upon Jamahar Kumari Bibi v. Askaran Boid ('16) 3 A.I.R. 1916 Cal. 666 and on Dhirendra Nath v. Indra Chandra : AIR1939Cal578 . In the latter case, it was held following the principle enunciated in the former case, that in a suit of this description, the burden is on the plaintiff, and it cannot be discharged merely by pointing to the innocent appearance of the instruments under which the plaintiff claims, he must prove that they are as good as they look, and it is not for the defendant to make out that they are collusive. In Nannhi Jan v. Bhuri Karam Ali Khan ('08) 30 All. 321 it was held that the plaintiff must give prima facie evidence to establish the genuineness of the document upon which he relies. The same principle was laid down in Appathurai Chettiar v. Vellayan Chettiar ('32) 19 A.I.R. 1932 Mad. 302 and in Mohammad Ali Mohammad Khan v. Mt. Bismillah Begum 0049/1930 . The case in V.E.A.R. Firm v. Maung Ba Kyin is distinguishable upon facts from the cases just noted, because there the plaintiff was not only the holder of a registered deed of sale, but out of the total purchase price of Rs. 20,000 consideration amounting to Rupees 17,000 was clearly established to have passed.

9. The authorities undoubtedly indicate that in suits under Order 21, Rule 63, where the plaintiff relies on documents to prove his title the initial onus is on him to establish the genuine nature of the documents he produces. Be that as it may, there can be no question as to the incidence of the burden of proof in the present case. Where the circumstances surrounding the execution of the document from which the plaintiff's title is said to be derived are not free from suspicion, it is clearly for him to establish the genuine nature of the transaction of which that document is evidence. In the present case the plaintiff relies on the Kobala Ex. 3 dated 23rd November 1937, but that was executed two months after the decree against the plaintiff's son-in-law who has conveying the property, had been transfer, red for execution to the Rangpur Court. The evidence makes it clear that the scribe of the document as well as the only other attesting witness were persona whom Profulla was in a position to influence. The document contains a 'Schedule of details of money' to show in what manner the sum of Rs. 1675 was paid by Satya on that day. Although trouble was taken to append such a schedule and although it is stated that part of the sum consisted of '15 pieces of one hundred rupee notes' the number of these notes were not given. The subsequent conduct of Profulla in relation to this conveyance was not that of a man who had nothing to conceal. As stated before he filed a petition of objection to the execution under Section 47, Civil P.C., on 20th April and another on 30th April 1938. In neither of these did he mention the fact of this conveyance, but on the contrary undertook in his second. petition not to transfer his property till after the disposal of his objection. There can be no doubt that the suppression of so-material a fact as the conveyance was the outcome of a deliberate desire to mislead both the Court and the executing creditor.

10. In these circumstances the burden of proving that the conveyance was a bona fide transaction for valuable consideration lay heavily upon the plaintiff. That the onus was accepted and sought to be discharged is apparent from the evidence of the plaintiff who examined himself for the purpose of proving consideration, the two promissory notes of 13th September and 18th October 1982 were produced, and the plaintiff deposed that his circumstances were sufficiently affluent to enable him to lay his hands on the not inconsiderable sums of Rs. 5000 and Rs. 4000 which the promissory 'notes represented. I may say at once that in his attempt to prove that he ever had the capacity to advance these sums the plaintiff has signally failed.

11. The plaintiff admitted that neither he nor his wife had any banking account, and that he kept no books in which the sums advanced to his son-in-law could be entered, j He also admitted that he was drawing a pension of only Rs. 21 per month, and that his son was not in employment in the year 1932 when the money was advanced. He deposed that out of the total sum of Ra. 9000 which he had lent to his son-in-law, Rs. 2000 belonged to his wife, but there was no evidence to support this beyond the plaintiff's uncorroborated testimony. Some documents were produced for the purpose of showing that the plaintiff's mother and wife had both inherited money but this evidence is largely irrelevant in view of the plaintiff's positive case, that Rs. 7000 was his own money. With regard to this amount ha stated that he had taken it from his attorney Mr. Hem Chandra De, but the attorney wag not examined nor was any evidence oral or documentary produced to prove this fact. The plaintiff stated that he was the owner of three houses in Calcutta. He lived in one of them, and the rents of the other two did not amount to more than Rs.150 per month.

12. These infirmities in the story of plaintiff's ability to make a loan of Rs. 9000 have to be considered along with certain improbabilities. It was stated that the money was required by Profulla for the expenses of settlement operations, but the plaintiff took no steps to ascertain whether this was so. Before the conveyance was executed, the plaintiff made no independent enquiries about this zemindary, and the deal was arranged through a pleader who settled the price although he had never seen the property. The plaintiff had no knowledge whatever of zamindary management, and was unaware even of the amount of revenue and cess and the kists in which they were to be paid. In my judgment, the conveyance which is challenged was executed under circumstances which strongly suggest collusion, and the plaintiff has failed to prove that it was a bona fide transaction for valuable consideration. This appeal, in my opinion, must succeed and the suit must be dismissed with costs. The hearing fee is assessed at 20 gold mohurs.

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