Citation Codes

Equivalent Citations

citation codes

Case Number

Civil Revn. Petn. No. 1591 of 1953

Attorney(S)

For the Appellant: A.L. NARAYANA RAO, K. SURYANARAYANA MURTHY, Advocates.

Judges

Umamaheswaram, J.

Acts

Section 283 (which corresponds to O. 21, R. 63 of the CPC of the old Code) (Act 14 of 1882).
SECTION 53 TRANSFER OF PROPERTY ACT
SECTION 44 EVIDENCE ACT

See more information ...

Smart Summary

Structured Summary of the Opinion (Civil Revision Petition)

Factual and Procedural Background

This Civil Revision Petition challenges findings recorded by the learned Subordinate Judge of Masulipatam on additional Issues 4 and 5 in O.S. No. 61 of 1950.

Procedural facts (as stated in the opinion):

The plaintiff-decree-holder sought to attach properties of the first defendant in O.S. No. 61 of 1950 (the petitioner before the revisional court) on the ground that they belonged to his judgment-debtor, the second defendant in that suit, in execution of a decree in O.S. No. 215 of 1945 (District Munsif's Court of Gudivada).
The petitioner filed a claim petition (E.A. No. 462 of 1949) under Order 21, Rule 58 CPC, and her claim was allowed by the executing court.
Consequently, the decree-holder filed O.S. No. 61 of 1950 seeking to set aside the order made on the claim petition. On the petitioner's pleading that the plaintiff's debt was bogus and the decree vitiated by fraud and collusion, additional Issues 4 and 5 were framed.
The learned Subordinate Judge held that in a suit under Order 21, Rule 63 CPC it is not open to the defendant to attack the decree or the debt on which it is based. The present revision challenges those findings.

Legal Issues Presented

Whether, in a suit under Order 21, Rule 63 of the Code of Civil Procedure, it is open to the defendant (or a claimant whose claim was allowed in execution) to attack the decree sought to be executed or to challenge the genuineness of the debt (including pleas of fraud and collusion in obtaining the decree).
Whether the findings recorded by the learned Subordinate Judge on Issues 4 and 5 in O.S. No. 61 of 1950 were correct, insofar as they held that the defendant could not attack the decree or the debt in such a suit.

Arguments of the Parties

Petitioner's Arguments (first defendant in O.S. No. 61 of 1950)

The petitioner pleaded that the debt claimed by the plaintiff-decree-holder was bogus and that the decree obtained by the plaintiff was vitiated by fraud and collusion.
Implicit in that pleading was the contention that, because the executing decree was procured by fraud or collusion, the petitioner should be permitted to establish that fact in the suit under Order 21, Rule 63 CPC in order to prevent attachment of her properties.

Respondent's Arguments (plaintiff-decree-holder)

The respondent's counsel contended that in a suit under Order 21, Rule 63 CPC the defendant should not be permitted to attack the decree or the debt on which it is based.
The respondent relied on decisions (including the Bombay decision reported at 10 Bom 659) expressing the principle that allowing a claimant (or third party) to deny the plaintiff's right to execute by impeaching the decree as collusive would add to the difficulties of judgment-creditors and encourage collusive resistance by judgment-debtors and third parties.
At various points the respondent relied upon cases from Bombay, Calcutta and Patna High Courts (as indicated in the opinion) to support a restricted view of the scope of a suit under Order 21, Rule 63 CPC.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Najimunnessa Bibi v. Nacharaddin Sardar, AIR 1924 Cal 744	Describes the scope of a suit under O.21, R.63 — the claimant or decree-holder may "thrash out" title; the decree-holder may make out the debtor's title as in a suit for possession.	Cited for the proposition that a suit under O.21, R.63 is not restricted and may involve full examination of title; used to support permitting title and related attacks in the proceeding.
Masina Bavamma v. Yendru Papanna, AIR 1936 Mad 971	Holds that a suit under O.21, R.63 is not merely a continuation of the claim proceeding but essentially litigates the question of title.	Followed by the court as authoritative on the nature of O.21, R.63 suits and relied upon in preference to contrary decisions of other High Courts.
Subramanyam v. Narasimham, AIR 1929 Mad 323	States that claim enquiry settles possession, but the suit raises questions of title; the suit is in part a new legal proceeding and not limited to claim enquiry scope.	Applied to reinforce that the suit under O.21, R.63 permits consideration of title and is not confined to the limited scope of claim proceedings.
Naranayyan v. Nageswarayyan, 17 Mad 389	Held it was open to the defendant to show the decree under execution was collusively obtained; such a defence may not be necessary when the defendant is a stranger but applies in cases of interest in the property.	Described by the court as directly applicable; the court followed its reasoning and held that a defendant may raise a defence that the decree was procured by fraud or collusion.
Gulibai v. Jagannath Galvankar, 10 Bom 659	Expresses the principle that permitting a claimant to impeach a decree as collusive would impose additional difficulties on judgment-creditors and encourage collusive resistance.	The court considered the principle but declined to follow it as a bar to allowing third parties to show a decree was procured by fraud; the court dissented from this restriction.
Methar Rowther v. Sahu Moideen Rowdier, AIR 1937 Mad 366	Discusses that objections based on adverse possession or on the validity of the decree could not be raised in execution but could be raised in a suit under O.21, R.63.	Relied upon to support the view that issues attacking validity of decree or title can be inquired into in an O.21, R.63 suit.
Deoki Singh v. Raghavindra Bhagwan, AIR 1939 Pat 430	Referred to by respondent; the opinion notes that the cited decision did not discuss the specific point in issue.	The court noted there was no discussion of the relevant point in that case and declined to follow it on the present issue.
Hashim Ali Khan v. Hamidi Begum, AIR 1942 Cal 180	Held that a suit under O.21, R.63 is essentially a review of the summary order passed by the executing court and is a continuation of claim proceedings.	The court dissented from this view, preferring the Madras High Court authorities that treat O.21, R.63 suits as involving questions of title and broader inquiry.
Vellayya Reddiar v. Ramaswami Reddiar, 1954-2 Mad LJ 707	Single-Judge decision; noted no authority was cited for permitting the decree-holder's debt to be impeached by the defendant in O.21, R.63.	The court observed that the Single Judge had not been referred to the Madras Bench decision in Naranayyan v. Nageswarayyan and opined that had that authority been placed, the Single Judge would likely have followed it.

Court's Reasoning and Analysis

The court proceeded through a structured analysis, referring to precedent and to statutory principles stated in the opinion. The key analytical steps in the reasoning are:

Nature of O.21, R.63 suits:
The court accepted and applied authorities (Madras decisions and earlier Calcutta decision cited) holding that a suit under Order 21, Rule 63 is not limited to the narrow scope of a claim enquiry but may involve a full consideration of title and related defenses. The court quoted and relied on authorities stating that the decree-holder may "make out his debtor's title exactly as if it were a suit for possession by the judgment-debtor" and that the suit "is not merely a continuation of the claim proceeding" but litigates title.
Availability of defence challenging the decree:
Relying notably on the Bench decision in Naranayyan v. Nageswarayyan (17 Mad 389) and on authority discussing collusive judgments (including a treatise by Henry Campbell Black), the court held that it is open to the defendant (or affected third person) in the O.21, R.63 suit to establish that the decree being executed was obtained by fraud or collusion. The court explained that a third person whose rights would be injuriously affected by allowing a collusive judgment to stand may show in a collateral proceeding that it was procured through fraud and have it treated as void as to him.
Rejection of restricted approach:
The court rejected the narrower approach advocated by certain decisions of the Bombay, Calcutta and Patna High Courts which treated O.21, R.63 suits as limited to a review of claim proceedings and cautioned against permitting impeachment of decrees on grounds of collusion because of perceived difficulties for judgment-creditors. The court acknowledged the policy considerations but concluded that properties not belonging to judgment-debtors should not be proceeded against on the basis of decrees obtained by fraud or collusion and therefore rejected that restrictive view.
Statutory and evidential support:
The court observed that under Section 44 of the Indian Evidence Act the petitioner could establish that the decree sought to be executed against her was obtained by fraud or collusion. The court also referred to Section 53 of the Transfer of Property Act as relevant to representative suits (noting it without deciding ancillary representative-capacity questions).
Application to the present case:
Applying the above principles, the court concluded that the learned Subordinate Judge was in error in holding that the defendant could not attack the decree or the underlying debt in the suit under O.21, R.63. Accordingly, the court set aside the findings on Issues 4 and 5 and allowed the revision.
Procedural and ancillary observations:
The court noted that the question of jurisdiction had not been pressed before it and accordingly that aspect was left as it stood. The court directed that the suit should proceed in the light of the observations contained in the order and stated that costs of the revision petition would be provided for in the suit.

Holding and Implications

Holding:

Revision allowed. The court set aside the findings recorded by the learned Subordinate Judge on Issues 4 and 5 in O.S. No. 61 of 1950.

Direct consequences and implications (as stated in the opinion):

The findings on Issues 4 and 5 that the defendant could not attack the decree or the debt were set aside; the O.S. No. 61 of 1950 is to proceed in the light of the observations contained in this order.
Costs of the revision petition were ordered to be provided for in the suit.
The question of jurisdiction was not pressed before the revisional court and therefore the earlier position on jurisdiction was left undisturbed.
The court expressed the legal implication (based on authorities it followed) that in a suit under Order 21, Rule 63 CPC a defendant or affected third party may, where appropriate, raise and establish that the decree being executed was obtained by fraud or collusion and thereby seek to prevent attachment of properties not belonging to the judgment-debtor.

Note: The summary above is confined to and derived exclusively from the statements and reasoning contained in the provided opinion. No facts or conclusions beyond the opinion have been added.

Show full summary ...

Gurajada Vijaya Lakshmamma v. Yarlagadda Padmanabham And Others

1. This Civil Revision Petition is filed against the findings recorded by the learned Subordinate Judge of Masulipatam on additional Issues 4 and 5 in O.S No. 61 of 1950 on his file.

2. The plaintiff-decree-holder sought to attach the properties of the first defendant in O.S No. 61 of 1950 (Petitioner herein) as belonging to his judgment-debtor who is the second defendant in that suit, in execution of the decree in O.S No. 215 of 1945 (District Munsif's Court of Gudivada). The petitioner herein filed a claim petition (E.A No. 462 of 1949) under O. 21, R. 58 of the CPC and her claim was allowed. The plaintiff-decree-holder consequently filed O.S No. 61 of 1950 seeking to set aside the Order made on the claim petition. One of the pleas raised in that suit by the petitioner herein was that the debt due to the plaintiff was a bogus one and that the decree obtained by him was vitiated by fraud and collusion. On that pleading, additional issues 4 and 5 were raised. The learned Subordinate Judge held that in a suit filed under O. 21, R. 63 of the CPC, it is not open to the defendant to attack the decree or the debt on which it is based. The present revision petition is, therefore, filed by the first defendant in O.S No. 61 of 1950, Sub-Court, Masulipatam. From the facts stated above, it is clear that the claim preferred by the petitioner herein was upheld by the executing Court, and the decree-holder had consequently to file the suit under O. 21, R. 63 of the CPC. In such a suit, he has to establish that the properties sought to be attached belong to the judgment-debtor and it is certainly open to the defendant to raise all defences to non-suit the plaintiff. If the defendant is in a position to prove that the plaintiff is not at all a creditor or that the decree obtained by him was one obtained by fraud or collusion, the suit will have to fail. I am not, however, concerned with the question whether the suit having been filed in a representative capacity, it is not open to the other creditors to continue the suit or not.

3. The nature and scope of a suit under O. 21, R. 63 of the CPC, has been well set out by Najimunnessa Bibi, Wife Of Subia Sheikh…Plaintiff v. Nacharaddin Sardar…Defendant .’, AIR 1924 Cal 744 at p. 748 (A), and is in the following terms:

“The suit, if brought, is not limited by any special standard of evidence or of law. The claimant may, if necessary, thrash out his title in the fullest and most ultimate sense. But, if the tide which he claims is not the ultimate full title to the property, then, of course, he must be content to assert whatever the title claimed may be. So, too, the decree-holder may make out his debtor's title exactly as if it were a suit for possession by the judgment-debtor”.

4. In — ‘Masina Bavamma v. Yendru Papanna’, AIR 1936 Mad 971 at pp. 972–973 (B), Venkataramana Rao J., held:

“When a suit is instituted under O. 21, R. 63 of the CPC, it is not merely a continuation of the claim proceeding, but what is essentially litigated is a question of title”.

5. Elaborating that point, the learned Judge observed as follows:

“For example, it may be the claimant in the claim proceedings would have succeeded by merely showing that he was a trespasser, but the decree-holder can establish in a suit which he filed under O. 21, R. 63, that the trespass was not of sufficient duration to confer any title in the successful claimant and the property still belonged to the judgment-debtor and that therefore he is entitled to attach the property as that of the judgment-debtor”.

6. The learned Judge followed the observations of Wallace J., in — ‘Subramanyam v. Narasimham’, AIR 1929 Mad 323 (C), which runs thus: “The claim enquiry merely settles whether the claimant is in possession of the property in his own behalf or on behalf of the judgment-debtor. But the claimant in his suit has to establish right which he claims to the property, that is, the question of title is also raised for decision. The suit is, therefore, really in part a new legal proceeding, and is not entirely restricted to the questions within the scope of the claim enquiry”.

7. The point that arises for consideration in the present case arose for decision in — ‘Naranayyan v. Nageswarayyan’, 17 Mad 389 (D) and it was held that it was open to the defendant to show that the decree in execution of which the property in dispute was attached was collusively obtained. The learned Judges held that such a defence would not be ordinarily available or necessary when the defendant is an utter stranger, in no way connected with the judgment-debtor, unless it may be when the decree makes the debt a charge on the property claimed or when the defendant is interested in setting up a defence—either as a reversioner or as a co-parcener interested in the property sought to be proceeded against. The learned Judges distinguished the decision of the Bombay High Court in — ‘Gulibai v. Jagannath Galvankar’, 10 Bom 659 (E) and held that, in their opinion, Section 283 (which corresponds to O. 21, R. 63 of the CPC of the old Code) (Act 14 of 1882). did not introduce an exception to the rule that the defendant is bound to set up every defence available to him. It was further held that it would be unreasonable to compel the defendant to submit to a decree that might result in his eviction, and thereafter to bring a fresh suit for restoration of possession. I am of opinion that the reasoning contained in this judgment directly applies to the facts of the present case. When the decree-holder seeks to seize the petitioner's properties in execution of a decree, she is certainly entitled to raise all defences open to her. The learned counsel for the respondent contended that the scope of the decision ought to be confined only to a decree making the debt a charge on the property claimed or to reversioners or co-parceners interested in the attached property. I do not think that there is any warrant for so restricting the principle laid down by the Bench.

8. The decision of Varadachariar J., in — ‘Methar Rowther v. Sahu Moideen Rowdier’, AIR 1937 Mad 366 (F) also supports that conclusion. In discussing the scope of a suit under O. 21, R. 103 of the CPC, the learned Judge observed as follows:

“If I found that there was any substance in the issue about adverse possession or the issue which attacks the validity of the decree in the promissory note suit, I should have directed an enquiry into those issues, because I cannot agree that even such questions could have been raised in the obstruction proceedings”.

9. So, according to the learned Judge, though objections based on adverse possession or on the validity of the decree could not be raised in execution, it was open to raise those objections in a suit under O. 21, R. 63 of the CPC.

10. Dealing with judgments obtained by fraud and collusion, in “A Treatise on the Law of Judgments” Vol. I, (second edition), by Henry Campbell Black, the following rule is laid down at page 293:

“However the rule may be in regard to parties and privies, it is very well settled that any third person, a stranger to the judgment, whose rights would be injuriously affected if it were allowed to stand as against him, may show, in a collateral proceeding that it was procured through the fraudulent contrivance of the debtor or the collusion of both parties, with a design to hinder or defraud him, and so have it considered and treated as void as to him. As stated in an American case:

“A Collusive Judgment is open to attack whenever and wherever it may come in conflict with the rights or the interest of third persons. Fraud is not ‘a thing that can stand, even when robed in a Judgment’.”

Or, as a rule is sometimes more broadly stated, a judgment which is not founded on an actual debt or odier legal habihty, due or enforceable at the time of its entry, will not be upheld against the creditors of the judgment-debtor. Hence, a judgment confessed without any consideration and with fraudulent intent, may be questioned by other judgment and execution-creditors of the defendant, and as to them, the judgment and execution thereon will be vacated and set aside”.

11. This rule applies to the present case as well. When the plaintiff (respondent herein) relies upon the decree and judgment obtained by him as against the judgment-debtor for proceeding against the properties of the petitioner herein in execution, it is also open to the petitioner under the terms of Section 44 of the Evidence Act, to establish that the decree sought to be executed against her was obtained by fraud or collusion. The learned counsel for the respondent relied on the decision in 10 Bom 659 (E) The principle on which that decision was based is expressed in the following terms:

“to allow the claimant to deny the plaintiff's right to bring the suit, by impeaching the decree which the latter is seeking to execute as collusive, would be, we fear, to add to the difficulties (already very great) of judgment-creditors in enforcing their decrees, by affording additional encouragement to collusive resistance by judgment-debtors and third parties.”

12. While the principle laid down is no doubt commendable, still in my opinion properties not belonging to the judgment-debtors should not be allowed to be proceeded against on the basis of decrees obtained by fraud or collusion. When the claim is allowed and when a suit is instituted by the decree-holder, he has to satisfy the Court that he is a creditor, that he filed the suit in a representative capacity under Section 53 of the Transfer of Property Act and that the property belongs to the judgment-debtor. The decree may no doubt afford ‘prima facie’ evidence that a debt is due to him. But that does not prevent the claimant-defendant from establishing that the debt is not true or that the decree is not valid and binding. As already stated, the decision of the Bombay High Court referred to above was rightly dissented from by the Madras High Court in 17 Mad 389 (D).

13. The next case relied on by the learned counsel for the respondent is — ‘Deoki Singh v. Raghavindra Bhagwan’, AIR 1939 Pat 430 (G); there is, however, no discussion in that case of the point involved in this case and I am not prepared to follow that decision.

14. Reliance was next placed on the decision of the Calcutta High Court in — ‘Hashim Ali Khan v. Hamidi Begum’, AIR 1942 Cal 180 (H). The learned Judges held that a suit under O. 21, R. 63 of the CPC is in essence a review of the summary order passed by the executing Court on the claim and that it is merely a continuation in a different forum of the claim proceedings. Following the decisions of the Madras High Court already cited, I dissent from the view expressed in this case, as to the nature and scope of the suit under O. 21, R. 63 of the CPC. The learned Judges preferred to follow the view in 10 Bom 659 (E) and AIR 1939 Pat 430 (G) to the view expressed by the Madras High Court in 17 Mad 389 (D). I am, however, of opinion that the rule is correctly laid down by the Bench decision of the Madras High Court in 17 Mad 389 (D) and I follow it in preference to the decisions of the Bombay, Calcutta and Patna High Courts.

15. At the close of the argument, a decision of a single Judge of the Madras High Court in — ‘Vellayya Reddiar v. Ramaswami Reddiar’, 1954-2 Mad LJ 707 (I) was brought to my notice. A careful perusal of that judgment shows that none of the cases cited before me were placed before the learned Judge, who states at p. 708 of the report as follows:

“No authority was cited for the position that in a suit under O. 21, R. 63 of the CPC, it will be open to the plaintiff to require the decree-holder to prove that the debt in respect of which he has obtained the decree is a genuine one.”

16. I have no doubt that, if the learned Judge's attention had been drawn to the Bench decision of the Madras High Court in ‘Naranayyan v. Nageswarayyan (D)’, the learned Judge would have followed it and come to a different conclusion.

17. Moreover on the facts of that case there is a further difference that the suit under O. 21, R. 63 of the CPC, was filed by the claimant and not by the decree-holder.

18. In the result, I set aside the findings recorded by the learned Subordinate Judge on Issues 4 and 5 and allow the Civil Revision Petition. The findings on the question of jurisdiction has not been pressed before me by the petitioner, and therefore, it stands. Costs of this revision petition will be provided for in the suit. The suit will be proceeded with, in the light of the observations-contained in this order.

K.S.B

19. Revision allowed.

Gurajada Vijaya Lakshmamma v. Yarlagadda Padmanabham And Others

Structured Summary of the Opinion (Civil Revision Petition)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner's Arguments (first defendant in O.S. No. 61 of 1950)

Respondent's Arguments (plaintiff-decree-holder)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Gurajada Vijaya Lakshmamma v. Yarlagadda Padmanabham And Others

Comments