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Narendra Manubhai Ghael v. Bhikhabhai Bhukhandas Modi
Factual and Procedural Background
This revision application was filed by the original defendants Nos. 2 and 3. The opponents Nos. 1 to 3 were the original plaintiffs and opponent No. 4 was original defendant No. 1. The plaintiffs had previously obtained a decree in Special Civil Suit No. 31 of 1960 for Rs. 20,000/-, which was passed against opponent No. 4 (the father of the applicants) and one G. K. Ghael.
In their plaint the plaintiffs alleged that a certain partition between the sons of opponent No. 4 was a transfer made in fraud of creditors and sought a declaration to that effect. The plaint also sought a declaration that the plaintiffs had the right to attach the property in question, and an injunction restraining the petitioners and opponent No. 4 from obstructing the plaintiffs from recovering their dues by attachment of the property.
The defendants raised various contentions in their written statement, including an objection to the maintainability of the suit. By judgment dated 39-8-61, the trial court held that the suit was properly filed and maintainable and that it was not barred by the provisions of Section 47 of the Code of Civil Procedure. That interlocutory order is the subject of the present revision.
The applicants (the original defendants Nos. 2 and 3) urged two main contentions in the revision: (1) that the suit, being one for declaration, was not maintainable; and (2) that the order regarding the Court-fee was incorrect.
Legal Issues Presented
- Whether the suit seeking a declaration that a partition was a transfer made in fraud of creditors is maintainable (in particular, whether such a declaration is maintainable when not brought in a representative capacity on behalf of all creditors).
- Whether a suit seeking a declaration that the plaintiffs are entitled to attach particular immovable property in execution of their decree falls within the scope of Section 42 of the Specific Relief Act (i.e., whether a decree-holder has "any right as to any property" to permit a declaratory suit for attachment rights).
- Whether the trial court's order regarding Court-fee was correct (although the opinion indicates this question may become academic depending on the maintainability findings).
Arguments of the Parties
Applicants' Arguments (original defendants Nos. 2 and 3)
- The suit was a suit for declaration and therefore not maintainable (applicants challenged the maintainability of the declaratory claims).
- The trial court's order regarding payment of Court-fee was incorrect.
The opinion does not contain a detailed account of the opponents' (plaintiffs') separate legal arguments in the revision proceedings beyond the allegations and prayers contained in the original plaint.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Jamnabai v. Dattatraya, ILR 60 Bom 226 (AIR 1936 Bom 160) | The distinction between the expressions "any right to any property" and "any right as to any property" in Section 42, Specific Relief Act; held that a right to attach particular property is a "right as to that property" and therefore falls within Section 42. | The court agreed with the reasoning of Sir John Beaumont in this case and applied it: a declaratory decree that a decree-holder is entitled to attach specific property falls within Section 42 and is therefore maintainable. |
| K. R. M. A. Firm v. Maung Po Thein, ILR 4 Rang. 22 (AIR 1926 Rang. 124) | Held (by the Rangoon High Court) that a right to attach immovable property under a decree for money is not a "right as to property" for the purposes of Section 42 and that the ordinary procedure is attachment first and, if challenged, a suit under Order 21 Rule 63, CPC. | The court noted this authority but did not follow it. It rejected the narrow construction adopted by the Rangoon decision and treated the right to attach as a right "as to" the property in a wider sense. |
| Mulkh Raj v. Ralla Ramrao Mal, ILR 7 Lah 235 (AIR 1926 Lah 348) | Reasoning similar to the Rangoon decision (i.e., narrower view of "right as to property" under Section 42). | The court recorded that Sir John Beaumont did not agree with the reasoning in this case and the court followed Beaumont's broader construction instead. |
| Nagendra Lal Chowdhury v. Fani Bhusan Das, ILR 45 Cal 785 (AIR 1919 Cal 835) | Calcutta High Court authority referenced in the Rangoon decision concerning declaratory relief and attachment procedures. | The court observed that the Rangoon High Court had referred to this Calcutta decision but had not followed the Calcutta view. The present court preferred the broader approach (as in Jamnabai). |
Court's Reasoning and Analysis
The court proceeded in a stepwise analysis limited to the arguments and authorities cited in the opinion:
- The plaint contained two separate declaratory claims: (a) that a certain partition was a transfer made in fraud of creditors; and (b) that the plaintiffs were entitled to attach the suit property in execution of their decree.
- The court held that the first claim — a declaration that the partition was a transfer and fraud on creditors — was not maintainable because the suit was not filed in a representative capacity on behalf of all creditors. That defect made that particular declaratory relief unsustainable.
- Turning to the second claim, the court examined Section 42 of the Specific Relief Act which permits declarations as to "any legal character, or to any right as to any property." The key question was the construction of the phrase "any right as to any property."
- The court relied principally on the reasoning of Sir John Beaumont in Jamnabai v. Dattatraya (ILR 60 Bom 226 / AIR 1936 Bom 160), where it was held that a right to attach particular property is a right "as to" that property and therefore falls within Section 42. The court adopted this broader construction of "right" (supported by general jurisprudential observations that "right" can be used in a wide sense, including powers).
- The Civil Procedure Code (Section 51 and various provisions of Order 21 — Rules 54, 58, 60, 61, 63) was analysed to show that the CPC contemplates that a decree-holder may have a "right which he claims to the property" for attachment purposes and that where attachment objections are overruled an order may be made conclusive subject to a subsequent suit. Order 21 Rule 63 specifically contemplates the decree-holder instituting a suit to establish the right which he claims to the property in dispute.
- The court contrasted the broader view (Jamnbai/Bombay) with the narrower approach in Rangoon decisions (ILR 4 Rang. 22) and similar precedents which would restrict declaratory relief where attachment is available. The court rejected the narrow approach and agreed with Beaumont that the declaratory remedy under Section 42 can include a declaration of entitlement to attach particular immovable property.
- The court also addressed the policy observation in Jamnabai that courts should not encourage suits where attachment is a cheaper remedy, and said that if a decree-holder is entitled to sue under substantive law, a High Court should not refuse to permit that suit solely because a different remedy (attachment) may be available; the decree-holder is the best judge of the remedy appropriate to him.
- Because the court found the first declaratory claim (fraudulent transfer of partition) non-maintainable, the question raised about the Court-fee became academic and did not require further adjudication.
Holding and Implications
Holding: The civil revision application is dismissed.
Direct consequences and procedural implications identified in the opinion:
- The court held that a declaration that the plaintiffs are entitled to attach certain immovable property in execution of a decree falls within Section 42 of the Specific Relief Act (adopting the reasoning in Jamnabai v. Dattatraya), and thus a declaratory suit for entitlement to attach particular property is maintainable.
- The court held that the specific claim for a declaration that a certain partition was a transfer and fraud on the creditors was not maintainable because it was not brought in a representative capacity for all creditors; that part of the relief cannot be granted.
- Because the court found the first declaratory claim non-maintainable, any dispute about the Court-fee determined at trial did not survive and required no further decision in the revision.
- Costs: The applicants (original defendants Nos. 2 and 3) were ordered to pay half the costs to opponents Nos. 1 to 3.
Broader precedent note (as reflected in the opinion): The court expressly followed the decision in ILR 60 Bom 226 (AIR 1936 Bom 160) and rejected a contrary, narrower approach found in some other authorities (including ILR 4 Rang. 22). The opinion therefore applies and endorses the broader construction of "right as to any property" in Section 42 of the Specific Relief Act, as already articulated by the Bombay decision.
1. This is a revision application by the original defendants Nos. 2 and 3. Opponents Nos 1 to 3 were the original plaintiffs and opponent No. 4 was original defendant No. 1. The plaintiffs gbtained a decree in Special Civil Suit No. 31 of 1960 for Rs, 20,000/- which was passed against opponent No. 4 who is the father of the applicants and one G. K. Ghael. In the plaint filed by ihe plaintiffs, it was alleged that certain partition between the sons of opponent No. 4 was a transfer and fraud on the creditors and should be declared as such. A declaration was also prayed that the plaintiffs have right to attach the property in question. The plaint also prayed for an injunction to restrain the petitioners and opponent No. 4 from obstructing the plaintiffs from recovering their dues by attachment of the property.
2. Various contentions were raised in the written statement including one relating to the maintainability of the suit. By its judgment dated 39-8-61, the trial Court held that the suit was properly filed and was maintainable. It also held that the suit was not barred by the provisions of Section 47 of the Code of Civil Procedure. It is that order which is challenged in this revision, and the applicants' contentions urged in revision are (1) that the suit being one for declaration is not maintainable, and (2) that the order regarding the Court-fee is not correct.
3. Regarding ihe maintainability of the suit, it is to be noted that the plaint prayed for two declarations, one, that a certain partition was a transfer and fraud on the creditors. The suit was not filed in a representative capacity on behalf of all the creditors, hence the claim for such a declaration in the plaint is clearly not maintainable. But there was another claim in the plaint namely lor a declaration that the plaintiffs were entitled to attach the suit property in the course of the execution of the decree in Special Civil Suit No. 31 of 1960.
4. Declaratory reliefs are statutory reliefs, and unless a declaration falls under the provisions of Section 42 of the Specific Relief Act, it cannot be given. section 42 of that act reads as follows:
"Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying, or interested to deny, his title to such character or right, and the Court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any furlher relief:
Provided that no Court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so."
In the instant case, we are concerned with the construction to be placed on the words "any right as to any property" found in Section 42 of the Specific Relief Act. These words had been the subject-matter of the construction placed by Sir John Beaumont in Jamnabai v. Dattatraya, ILR 60 Bom 226: (AIR 1936 Bom 160). The learned Chief Justice made a distinciion between the expression "any right to property" and the expression "any right as to any property." The learned Chief Justice observed that "if the words in the section were 'any right to any property', the plaintiff cannot file a suit for declaration, as his claim is merely that of an execution-creditor and at present he has no right to the properly." The learned Chief Justice observed as follows :
"The question, however, is whether he has any right as to the property. The right which the plaintiff claims is a right to altach the property, and it seems to me that a right to attach particular property is a right as to that property."
The learned Chief Justice did not agree with the reasoning contained in K. R. M. A. Firm v. Maung Po Thein, ILR 4 Rang. 22: (AIR 1926 Rang. 124) and Mulkh Raj v. Ralla Ramrao Mal, ILR 7 Lah 235: (AIR 1926 Lah 348). At the end of his judgment, the learned Chief Justice observed as follows:
"It seems to me that what the plaintiff in substance is claiming is a declaration of his right as to this property. I think the proper form of declaration to make is this: The Court being of opinion that the purchase of the suit property in the name of defendant No. 2 was benami for defendant No. 1, it is declared that the plaintiff in execution of his decree against defendant No. 1 is entitled to attach the property. That seems to me to be a declaration which falls within Section 42 of the Specific Relief Act."
5. As Salmond points out in his Book on Jurisprudence,
"Of rights there arc four distinct kinds: (1) rights (in the strict sense), (2) liberties, (3) powers, and (4) immunities". The word 'right' is used in a wider sense in Section 42 of the Specific Relief Act. The distinction between the expression 'right as to any property' and the expression 'right to any property' is not very important.
6. Section 51, C. P. Code, provides that amongst other things a decree can be executed by attachment and sale or by sale without attachment of any property. Order 21, Rule 54 refers to the procedure of attachment of immoveable property. Order 21. Rule 58, C. P. Code deals with investigation of claims and objections to attachment of property. Order 21, Rule 60, C. P. Code refers to release of property from attachment under certain conditions. Order 21, Rule 61, C. P. Code refers to the circumstances in which a claim made or objection taken to the attachment of property may be disallowed. Order 21, Rule 63, C. P. Code, provides as follows:
"Where a claim or an objection is preferred, Ihe party against whom an order is made may institute a suit to establish the right which he claims to the property in dispute, but, subject to the result of such suit, if any, the order shall be conclusive."
This shows that where a claim or an objection is preferred and an order is passed against a decree-holder, the decree-holder may institute a suit to establish the right, which he (decree-holder) claims to the property in dispute. The Civil Procedure Code therefore contemplates that a decree-holder who seeks an attachment to the property of a judgment-debtor, can be said to have a right to the property in dispute. The expression used is "right which he claims to the property". The expression used is not "right which he claims as to the property". It is, therefore, recognised by the Civil Procedure Code that the right to attach property is a right to the property sought to be attached. That would be so in view of the wide sense in which the word 'right' can be construed as already pointed out above. If a right to attach immoveable- property is a right to the property sought to be attached, then a declaratory decree can be given under Section 42 of the Specific Relief Act.
7. In ILR 4 Rang. 22 : AIR 1926 Rang. 124, it was held that the ordinary procedure would be for a decree-holder to apply for attachment of the property and if an objection to the claim to the attachment is roade successfully, to institute a suit under Order 21. Rule 63, C. P. Code. The learned Judges of the Rangoon High Court also held that a right to attach an immoveable property under a decree for money is not a right as to property b';t as to immoveable property. The learned Judges of the Rangoon High Court referred to a decision in Nagendra Lal Chowdhury v. Fani Bhusan Das, ILR 45 Cal 785: (AIR 1919 Cal 835), arid observed that in cases where there is no attach ment, the decree-holder ought not to be allowed to sue for a declaration under Section 42 of the Specific Relief Act. The learned Judges of the Rangoon High Court did not follow the High Court of Calcutta.
8. In the instant case, a declaration was sought to declare that the plaintiffs are entitled to attach certain immoveable property in execution of a decree such a suit would, therefore, fall under the provisions of Section 42 of the Specific Relief Act. I, therefore, agree with the conclusion of the learned Chief Justice Sir Beaumont in ILR 60 Bom 226: (AIR 1936 Bom 160).
9. For the reasons already given, the word 'right' in the expression 'right as to any property' would be construed in a wide sense and not in a narrow sense and if so construed the right to attach property would be a right to that property.
10. The learned counsel for the applicants relied on the following observations in ILR 60 Bom 226, at p. 231: (AIR 1936 Bom 160 at p. 162):
"I entirely agree that the Court ought not to encourage the filing of suits where the relief claimed can be sought expeditiously and cheaply in attachment; and if I thought that the plaintiff in this case could have obtained the relief, which he seeks, in attachment, I should not be prepared to make any declaration in his favour. But it is apparent from the judgment of the trial Court that the question whether the purchase in the name of defendant No. 2 was benami for defendant No. 1 was a somewhat complicated one, and I doubt very much whether a Court would deal with the question in execution. I think it would probably refer the parlies to a suit; and I see no reason for doubting that it was because the plaintiff took that view that he withdrew his attachment in the first instance. If in the exercise of my discretion I refuse to make a declaratory order here, it would be open to the plaintiff to attach the property again; defendant No. 2 would again raise her objection; the execution Court would probably refuse to deal with the matter, and the parties would then have to bring another suit of exactly the same nature as the present suit. I do not think that any useful purpose will be served by putting the parties to so much expense and delay."
If a decree-holder has a right to file a suit under the substantive law it is not open to a High Court to say that it will not allow him to file a suit, because he has got a better remedy. It is the decree-holder who is the best judge to decide as to what remedy is best suited to him and convenient to him. Therefore, the above observations in ILR 60 Bom 226: (AIR 1936 Bom 160) have no bearing on the controversy in this matter.
11. In view of my finding that a suit for a declaration that a certain partition was a transfer and fraud is not maintainable, the question about the Court-fee does not survive.
12. The civil revision application is. therefore, dismissed. The applicants to pay half the costs to opponents Nos. 1 to 3.
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