Radhanath Swain v. Madhusudan Senapaty

Mohapatra, J.:— This is a plaintiff's second appeal, against the reversing judgment dated 31-8-1951 of Sri B.N Panda, Second Additional Subordinate Judge of Cuttack, arising out of a suit under O. 21, R. 63 of the CPC, the plaintiff being the judgment-creditor. Defendant 2 had executed a handnote in favour of the plaintiff on 24-4-1945 for a sum of Rs. 200/- on the basis of which the plaintiff obtained a decree on 14-7-1947, the S.C.C suit having been filed on 11-1-1947.

2. The plaintiff started execution against the judgment-debtor (defendant 2) on 19-1-1948 and claimed for attachment of the disputed property. Defendant 1, who alone is contesting the suit, filed a petition under O. 21, R. 58 of the CPC, alleging that defendant 2 had executed a kabala in respect of the deputed land for Rs. 90/- on 20-7-1946, and, as such, the property should be released for attachment. His petition under O. 21, R. 58 having been allowed by the Executing Court, the present suit has been brought by the judgment-creditor for a declaration that the sale in favour of defendant 1 is purely a sham and nominal transaction on the basis of which no title passed in favour of defendant 1. He has further prayed that the summary order passed in the miscellaneous case under O. 21, R. 58 be set aside.

3. Defendant 1 took up the simple plea that the Kabala in his favour was genuine and for consideration and he was in possession of the suit propel by since the date of purchase.

4. The trial Court gave a decree to the plaintiff on the finding that the transaction of sale excited by defendant 2 in favour of defendant 1 dated 20-7-1946 was a sham and nominal transaction. The lower appellate Court, however, has reversed the finding of the trial Court and dismissed the plaintiff's suit on two grounds, namely, (i) that the suit is not maintainable as, it being one under Section 53 of the Transfer of Property Act, it was incumbent on the part of the plaintiff to lake steps under O. 1, R. 8 of the CPC, and no such steps having been taken, the plaintiff is bound to be non-suited on that ground alone; and (ii) that the transaction of sale dated 20-7-1946 is a bona fide transaction for consideration and title has passed in favour of defendant 1.

5. In respect of the first point the learned lower appellate Court has solely relied upon a decision of Madras High Court in the case of — ‘Madina Bibi v. Ismail Durga Association’, AIR 1940 Mad 789 (A). That was also a suit under O. 21, R. 63. The decree-holder instituted the suit for cancellation of the sale-deed simply on the ground that it was executed with intent to defeat and delay the creditors.

6. It was held that the suit fell within the purview of Section 53 of the Transfer of Property Act and was incompetent for want of Court's permission under O. 1, R. 8 of the CPC and that the provisions of O. 21, R. 63 were not incompatible with Section 53 of the Transfer of Property Act. On a perusal of the decision of their Lordships, we find that the plaint in the Madras case is entirely different from the plaint before us. There the allegation in the plaint was that the deed was executed with intent to defeat and delay the creditors and on that ground decree-holder wanted to set aside the sale. It appears also that in that suit it was really for the benefit of all the creditors.

7. On a construction of the plaint, which of course is not produced in the judgment, their Lordships were of the view that it directly came within the purview of S. 53. In our case, however, on a perusal of the plaint, we are definitely of the view that this is a suit under O. 21, R. 63 simpliciter.

8. Here the plaintiff's main grievance is that the claim case filed by defendant 1 has been allowed and further the main ground on which he has brought this action is that the transaction in favour of defendant 1 is merely a nominal transaction under which no consideration passed and which was never meant to be acted upon, and it being purely a paper transaction, it is void ‘ab initio’ and conveys no title. Indeed in para. 3 of the plaint there is an allegation that it came into existence with the purpose of screening the property from the decrees of his creditors and in order to defraud them. But this comes simply as a motive for executing a nominal transaction.

9. But looking to the substance of the plaint, as appearing from the entire plaint, read as a whole, it appears to be one under O. 21, R. 63 alone which is clear particularly by reference to the prayer portion where the plaintiff makes it clear praying for two reliefs only that (i) defendant 1 did not acquire any right, title, interest or possession in the properties described in the schedule on the basis of kabala dated 20-7-1946, and as such, the properties are liable to be sold in execution of the decree obtained against defendant 2 and (ii) the summary order dated 1-3-1949 in Misc. Case No. 116/29 of 1948 be set aside.

10. There is no prayer for the transaction being declared as fraudulent as against the creditors. Furthermore it is important to note that within the four corners of the plaint there is nothing to indicate that it is on behalf of the creditors in general. On the passing of an order under O. 21, R. 58 against the decree-holder, he is under an obligation to bring a suit within one year of the order to set it aside, otherwise the order will be conclusive.

11. This individual right of the decree-holder-creditor is not in the least affected by the provisions of S. 53. It can never be suggested for a moment that any decree-holder-creditor, who has been defeated in a claim case under O. 21, R. 58, is bound to frame his suit in accordance with the provisions of Section 53 of the Transfer of Property Act and take steps under O. 1, R. 8 of the CPC as his suit is a representative one.

12. The decree-holder is absolutely free to enforce his right to bring a suit as against the summary order in the miscellaneous case by framing the suit in such a manner as to protect his own individual right of executing the decree against that property, without in the least minding the interests of other creditors.

13. I may refer here to a decision of the Patna High Court in the case of — ‘Sheo Gobind v. Ram Asray’, AIR 1939 Pat 5 (B) decided by Varma and Rowland, JJ. where the judgment was delivered by Rowland, J. Their Lordships observed

“there is no rule of law that a plaintiff who has been sought to be defeated by fraudulent and colourable transfer, which is a sham transaction, is limited to the remedy of S. 53”.

14. It is clear to our mind that Section 53 of the Transfer of Property Act does not in the least affect any independent right of any individual creditor to bring a suit for enforcement of such a right and he is not compelled to bring suit under Section 53 of the Transfer of Property Act and if he properly frames the suit, the suit is maintainable. In the present case, on a fair construction of the plaint, we are definitely of the view that it is not hit by the provisions of Section 53 of the Transfer of Property Act. The lower appellate Court has gone wrong in law and his finding that the suit is not maintainable must be set aside.

15. Regarding the second point whether the transaction in suit is merely a nominal transaction, besides the dates we have indicated in stating the facts of the case, we may observe a few other circumstances transpiring in the case. On 20-7-1946, that is the date when the kabala in question was executed by defendant 2 in favour of defendant 1, defendant 2 also executed two other kabalas, and those three kabalas are in respect of the entire properties of defendant 2 including his homestead.

16. It is further significant to remark that on 8-5-3948 defendant 2 had executed three documents (Exs. 13-c. 13-d and 13-e) cancelling the previous three kabalas. It is defendant 2 who produced the title-deed, water-rate receipts and rent-receipts. Furthermore defendant 2 took out the document in question from the registration office. It is to be noted in spite of these telling circumstances against the genuine nature of the transaction, defendant 1 who claims title on the basis of the sale-deed has not examined himself.

17. On a careful perusal of the two judgments, we find, the trial Court at the outset had formulated the main tests laid down from time to time by high authorities for the purpose of determining whether the transaction is real or nominal and after a very close and exhaustive discussion of all the oral and documentary evidence on record and the circumstances transpiring came to the finding that the transaction was a nominal one. The lower appellate Court, however, has committed clear illegalities ins respect of very important points.

18. Undoubtedly the test whether any consideration passed on the transaction in suit is invariably taken to be a very important criterion. The plaintiff adduced evidence by examining the man who identified the deed before the Sub-Registrar who says that in fact no consideration passed. The defence version is that the transaction was executed, for the purpose of paying off D.W 4, a creditor of defendant 2, on the basis of a handnote (Ex. B) for a sum of Rs. 80/-.

19. The trial Court discussed the oral evidence on the point and being impressed by the manifest suspicious nature of Ex. B came to the conclusion that, the handnote (Ex. B) was not genuine and no consideration passed. The lower appellate Court however has committed serious illegality in deciding this point by throwing the onus on the plaintiff to prove that Ex. B is a false document, simply because the executant of Ex. B, defendant 2, admitted his signature and thumb-impression and put forth a case that they were taken on a blank piece of paper. Relying upon a single Bench decision of the Patna. High Court — ‘Sahdeo Mauar… v. Pulesar Nonia…Opposite Party.’, AIR 1930 Pat 598 (C) he observes

“in view of this admission there is a heavy onus on defendant 2 and as a matter of fact on the plaintiff to show to the satisfaction of the Court as founder what circumstances defendant 2 put his signature and thumb mark………………”

20. He has further gone on to observe

“that this statement (of defendant 2 that he put thumb impression and signature on a blank sheet of paper) tantamounts to a tacit admission regarding, the genuineness of the handnote Ex. B”.

21. In our view, this approach is clearly illegal. Mere admission of the thumb impression or the signature on a blank sheet of paper does not mean an: admission of execution which means that the executant must have signed or put his thumb impression only after the document is fully read out. The lower appellate Court has completely ignored quite a number of Bench decisions even of the same High Court. We may refer only to two decisions of the Patna High Court appearing in the same volume reported in — ‘Chulhai Lal Dass v. Kuldip Singh”, AIR 1931 Pat 266 (D) and — ‘Ram Lakhan Singh v. Gog Singh’, AIR 1931 Pat 219 (E).

22. The finding of the lower appellate Court is further vitiated on the most important point of consideration on account of the reason that while the judgment of the trial Court was based on full discussion of the oral evidence on the point, the lower appellate Court, without discussing the oral evidence, has dislodged the finding on a wrong view of the position of onus. We may note here, Ex. B, the handnote, on a mere look, appears to be so suspicious, as can never be found to be genuine. The signature appearing on the document is clearly of a different ink from the body. The defence, without any explanation as to the difference in ink, persisted that there was no such difference. In our view, the trial Court's finding on the point must be upheld.

23. Furthermore on the question of custody of the document, which is always taken to be a very important test, the finding of the lower appellate Court is wholly unsatisfactory. The explanation offered by the defence as to why defendant 1 could not get possession of the title-deed, is that defendant 2 took the document for the purpose of getting, the name of the vendee mutated in the water-rate-department This explanation was rejected by the trial Court after thorough discussion of the oral evidence on record. The lower appellate Court without any discussion of the evidence on the point has given a halting and dubious finding. “The story that the kabala was made over to defendant 2 for getting the name of the vendee entered in the water-rate department is not altogether improbable and unworthy of credit”.

24. The entire case depended to a large extent ion the appreciation of the oral evidence of the witnesses examined on behalf of the parties. It has always been held that in such cases great weight is to be attached to the opinion of the trying Judge who had the opportunity of seeing and examining the witnesses for himself. The lower appellate Court has not only treated the opinion of the trial Court shabbily but has committed the aforesaid illegalities. In our view, the reasons given by the trial Court appear to be very cogent and convincing in respect of his finding as to each of the tests. We therefore conclude that the judgment of the lower appellate Court must be set aside. In conclusion, the appeal is allowed, the judgment and decree of the lower appellate Court are set aside and the judgment and decree of the trial Court are confirmed. The appellant is entitled to costs throughout.

Misra, J.:— I agree.

D.S.P

25. Appeal allowed.