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Structured Summary of the Opinion — Second Appeal

Factual and Procedural Background

Plaintiffs sued to set aside a decree and the consequent execution proceedings in O.S. No. 940 of 1109, which had been obtained by the 1st defendant on the basis of a hypothecation bond executed by Mathevan Pillai Kesava Pillai (husband of the 1st plaintiff and father of plaintiffs 2 to 4). The 5th plaintiff was a vendee of the equity of redemption of item no. 5 from plaintiffs 1 to 4. The plaintiffs alleged that the decree was obtained without service of summons on the judgment-debtor and that it was for an inflated claim (failing to give credit for payments made by Kesava Pillai). They also alleged that the execution proceedings were conducted secretly and fraudulently.

The plaintiffs claimed they became aware of the earlier suit only when defendants 2 and 3 (to whom the 1st defendant had sold the equity of redemption of item no. 5) instituted O.S. No. 108 of 1121 against the 5th plaintiff. Plaintiffs deposited a sum of 2150 fanams which they said alone was due to the 1st defendant. As item no. 5 had been recovered in execution of the decree in O.S. No. 108 of 1121, plaintiffs sought a decree for recovery of that item with mesne profits.

Defendants 1 to 3 filed a joint written statement alleging the decree in O.S. No. 940 of 1109 was validly obtained, the execution proceedings were properly conducted, the amount sued for was genuinely due, and pleading that the suit was not maintainable and was barred by res judicata and limitation.

The trial court and the lower appellate court both decided the suit in favour of the plaintiffs, setting aside the decree and execution proceedings in O.S. No. 940 of 1109 and directing recovery of possession of item no. 5 with mesne profits. The present second appeal was preferred by defendants 2, 3 and 4 (heirs of the 1st defendant who died during the pendency of the trial).

Legal Issues Presented

  1. Whether the decree and the execution proceedings in O.S. No. 940 of 1109, which the plaintiffs sought to set aside, were vitiated by fraud.
  2. Whether the earlier decree was obtained by fraudulent suppression of summons (i.e., absence of proper service on Kesava Pillai).
  3. Whether the decree was for an inflated claim without giving credit for payments said to have been made by Kesava Pillai (in particular whether ext. P — a mortgage deed for 700 fanams — should have been given credit or treated as a benami transaction).
  4. Whether the execution proceedings were void or vitiated by fraud because of defects in notices in execution (service under O. XXI r. 22) or failure to affix proclamation of sale as required by O. XXI r. 67(1) read with r. 54(2).

Arguments of the Parties

Plaintiffs' Arguments

  • The decree in O.S. No. 940/1109 was obtained without service of summons on the judgment-debtor (Kesava Pillai) and thus was procured by fraud.
  • The decree was for an inflated claim because payments made by Kesava Pillai (evidenced by exts. B, C and D) were not credited; additionally they contended that ext. P (a mortgage deed for 700 fanams) should reduce the claim because Yesayya was allegedly a benamidar for the 1st defendant.
  • The execution proceedings (including sale and delivery) were conducted secretly and fraudulently; the plaintiffs relied on notices produced as exts. G and H to show irregularities and on alleged defects in service or proclamation of sale.
  • Plaintiffs deposited 2,150 fanams as representing the sum they considered due.

Defendants' / 1st Defendant's Arguments

  • The decree in O.S. No. 940/1109 was validly obtained and the execution proceedings were properly conducted.
  • The amount sued for was genuinely owing to the 1st defendant; the plea that ext. P discharged part of the debt (or was benami) was not pleaded and not proved.
  • The suit was not maintainable and, alternatively, was barred by res judicata and limitation.
  • Respondents (in the appeal context) attempted to rely on ext. Y (a notice under O. XXI r. 22) to contend that execution proceedings were void, but ext. Y was not properly admitted in evidence in the appellate court and could not sustain the contention.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Air 1940 Mad. 213 That a declaration regarding service of the notice may be implied and such an implied declaration is sufficient compliance with law (in contexts under O. XXI r. 22). Cited as authority for the proposition that an implied declaration of service can be sufficient; used to reject the contention that execution proceedings were void for want of an explicit declaration of service.
Air 1943 Mad. 55 Same proposition: implied declaration of service of notice is sufficient. Applied alongside other decisions to support the conclusion that absence of an express recorded declaration did not render execution proceedings void.
Air 1950 Assam 6 Same proposition regarding implied declaration of service being sufficient. Relied upon to demonstrate consistency in case law that the execution court's acceptance of service can be treated as sufficient compliance.
Air 1932 Oudh 326 Same principle: implied declaration of service may suffice. Used with the cluster of decisions to negate the argument that execution was void solely for lack of an express declaration.
Air 1934 Lahore 985 Same principle: implied declaration of service is acceptable. Included among authorities to show that implied declarations are recognised and therefore ext. Y (or absence of explicit record) did not invalidate execution.
Mariamma Mathew v. Ittoop Poulo (1952 KLT 116) Full bench decision on affixing attachment orders: when several properties are attached a copy should be affixed on each separate property; factual finding that order not affixed on the alienated property. The court distinguished this decision and held it does not support the proposition that omission to comply with O. XXI r. 54 necessarily renders a sale void; thus it does not assist plaintiffs in proving execution was void.
ILR 47 Mad. 525 Authority indicating that omission or irregularity in affixing orders/publication does not render the sale void. Cited to support the conclusion that non-compliance with affixing requirements does not automatically invalidate a sale and that the appropriate remedy is a timely application to set aside the sale.
18 Cal. 422 (Full Bench) Similar principle: sale not rendered void by omission to affix or other irregularities; remedial process available. Relied upon to show consistent precedent that such irregularities lead to remedies (setting aside within statutory period) rather than automatic nullification.
Air 1938 Cal. 699 Authority that omission/irregularities in publication/affixture do not make a sale void. Applied with other Calcutta decisions to support the court's view that the sale remained valid absent proper challenge in time.
Air 1942 Cal. 275 Same principle regarding non-voiding effect of irregularity in sale procedures. Used to reinforce the position that the procedural irregularity alone was insufficient to hold execution void.
Air 1923 Lahore 671 Rule that procedural non-compliance (as to publication/affixing) does not render sale void; appropriate remedy is a timely application to set aside sale. Reinforced the court's reliance on established authorities that irregularities should be remedied by prompt application and do not automatically vitiate sales.

Court's Reasoning and Analysis

The court approached the matter by separating its consideration of (A) whether the decree itself was fraudulently obtained and (B) whether the subsequent execution proceedings were vitiated by fraud.

(A) Whether the decree was fraudulently obtained

  • The court noted that the record of the earlier suit (O.S. No. 940/1109) had been destroyed and the summons issued to Kesava Pillai was not available; the decree recorded in ext. E showed an ex parte decree in favour of the decree-holder.
  • There was no direct material demonstrating fraudulent suppression of summons. The lower courts' inference that Kesava Pillai would necessarily have defended the suit had he known of it was unsupported by objective facts; the possibility that he might not have contested when sums were genuinely due could not be discarded.
  • Plaintiffs advanced evidence of payments (exts. B, C and D) and relied additionally on ext. P (a mortgage deed dated 5.8.1104 for 700 fanams to Yesayya). They asserted Yesayya was a benamidar for the 1st defendant and thus 700 fanams should have been credited.
  • The court held that ext. P and the benami contention were not pleaded as items of fraud in the plaint and that the benami plea is a matter that must be specifically pleaded and proved by the plaintiff. The lower courts were not justified in adjudicating and basing their decision on that unpleaded contention.
  • Crucially, the court held that even falsity of the underlying claim (without proper pleading and proof of benami or payment) is not a standalone valid ground for setting aside a decree on the basis of fraud. The trial court's finding that, except for ext. P, the amount sued for was correctly due led the court to conclude that the sum in O.S. No. 940/1109 was validly due to the 1st defendant.
  • Finally, the court observed that the question whether a decree is vitiated by fraud is not a pure question of fact where concurrent findings are invariably conclusive on appeal; hence interference was permissible where the legal standard and evidence did not support the finding of fraud.

(B) Whether the execution proceedings were vitiated by fraud

  • Plaintiffs' pleadings on execution alleged generally that the execution proceedings were secretly and fraudulently conducted but lacked specific averments that any particular notice had been suppressed or that any required step had not been conducted according to law.
  • Ext. Y (a copy of the notice sent under O. XXI r. 22) had been produced in the lower appellate court but there was no recorded order admitting that document in evidence and no reasons recorded for admitting additional evidence on appeal. The court emphasized that reception of additional evidence in appeal requires compliance with procedural safeguards and recording of reasons, which was absent.
  • Even if ext. Y were treated as admitted, the execution diary showed the court had accepted the notice as proper and proceeded, and the court relied on case law that an implied declaration regarding service of notice may suffice; thus ext. Y would not have established that the proceedings were void.
  • On the question of proclamation of sale (affixture), the court analysed O. XXI r. 67(1) read with r. 54(2) and found no evidence about the precise location of properties or whether the place where the proclamation was affixed was adjacent to the property. The omission to plead this point meant plaintiffs were not entitled to rely on it. The court also reviewed case law and concluded non-compliance with affixture/publication requirements did not necessarily render a sale void; the appropriate remedy is a prompt application to set aside the sale (within thirty days).
  • The notices relied upon by plaintiffs (exts. G and H) were inspected: ext. H bore attestation by Lukose Esayya and Narayana Pillai Janardhanan Pillai (pw.8); the trial court found pw.8's evidence unhelpful and the assumption that Esayya was a servant or dependant of the decree-holder lacked foundation. Irregularity in service, even if shown, would not entitle the judgment-debtor to set aside the sale without proving substantial injury and filing a timely application.
  • Ext. G (notice regarding delivery of possession) had a signature showing acceptance by the judgment-debtor. The lower courts' inference that Kesava Pillai could not have signed because he was suffering from cancer and died on 4.4.1116 (where ext. G was dated 5.2.1116) was found to be unjustified in the absence of expert evidence or proof of incapacity. Plaintiffs could have adduced hospital records but did not do so.
  • On the whole, the appellate court found the evidence insufficient to uphold the lower courts' finding that the execution proceedings were vitiated by fraud.

Because the court negatived the central fraud allegations both as to the decree and to the execution proceedings on the evidence and law, it found it unnecessary to consider whether the suit was barred by limitation or res judicata.

Holding and Implications

Holding: The second appeal is allowed and the decrees passed by the lower courts are reversed. The suit is dismissed with costs throughout.

Implications:

  • Direct effect on the parties: The trial court's and lower appellate court's orders setting aside the earlier decree and execution proceedings (in O.S. No. 940 of 1109) are set aside; the plaintiffs' suit seeking to impeach that decree and the execution is dismissed and plaintiffs will be liable for costs.
  • Legal and precedential effect: The opinion applies established authorities concerning (a) the sufficiency of an implied declaration of service in execution proceedings, and (b) the principle that non-compliance with publication/affixture requirements does not automatically render a sale void and that the proper remedy is a timely application to set aside the sale. The court did not purport to establish a new legal principle beyond application and reconciliation of existing authorities.

No other broader implications or novel legal principles were pronounced in the opinion beyond the application of the cited authorities and the reversal of the lower courts' factual and legal conclusions on the available evidence.

    Pakianathan Nadar Ponnayyan Nadar v. Karthiyani Pillai Parvathi Pillai.

    1. This second appeal has been preferred by defendants 2,3 and 4 who were brought on the party array as heirs of the 1st defendant who died during the pendency of the suit in the trial court. The plaintiffs sued for setting aside the decree and execution proceedings in o. S. No. 940 of 1109 which was obtained by the 1st defendant on the basis of a hypothecation bond executed by mathevan pillai kesava pillai, The husband of the 1st plaintiff and the father of plaintiffs 2 to 4. The 5th plaintiff is a vendee of the equity of redemption of item no. 5 from plaintiffs 1 to 4. The decree was sought to be set aside on the ground that it was obtained without service of summons on the judgment - debtor and that it was for an inflated claim without giving credit to payments made by kesava pillai. The execution proceedings under which the 1st defendant had purchased the plaint properties and obtianed delivery were also sought to be set aside on the allegation that such proceedings were conducted secretly and fraudulently. According to the plaintiffs, They became aware of the suit only when defendants 2 and 3 to whom the 1st defendant has sold the equity of redemption of item no. 5 instituted o. S. No. 108 of 1121 against the 5th plaintiff for redemption of a mortgage under which he was in possession. The plaintiff deposited a sum of 2150 fanams which alone according to them was due to the 1st defendant. As item no. 5 was recovered in execution of the decree in o. S. No. 108 of 1121 the plaintiffs prayed that a decree be given to the 5th plaintiff to recover the said item with mesne profits. Defendants 1 to 3 jointly filed a written statement. The material averments were that the decree in o. S. No. 940 of 1109 was validly obtained, That the execution proceedings were properly conducted and that the amount sued for was really due to the 1st defendant. It was also pleaded that the suit was not maintainable, And that it was barred by res judicata and limitation. The courts below have concurrently decided the suit in favour of the plaintiffs, Setting aside the decree and execution proceedings in o. S. No. 940 of 1109 and directing recovery of possession of item no. 5 with mesne profits.

    2. The main question for decision is whether the decree and execution proceedings sought to be set aside are vitiated by fraud. Ext. E is copy of the decree in o. S. No. 940 of 1109 and ext. E1 is copy of the execution diary in the said case. It is convenient to consider the case regarding the decree and execution proceedings separately. The reasons which weighed with the lower courts in decreeing the suit are summarised in para. 14 of the trial court's judgment as follows:

    "the non - inclusion of ext. P amount in the plaint in ext. E suit, The affixing of the proclamation to a tree in a property not in the possession and enjoyment of 5th plaintiff, The attestation of ext. H notice by lukose esaya, A dependent of 1st defendant, The statement of pw. 8 that he attested before the endorsement was written on ext. E, The attestations by fictitious persons to the endorsement on ext. G, The suspicious endorsement itself and the signature to ext. G, Are circumstances pointing towards fraud. The fact that mathevan pillai kesava pillai was ailing with cancer and was an in - patient in the general hospital during that time, Confirms the inference of fraud. The conduct of mathevan pillai kesava pillai shows that had he but known about ext. E suit, And the subsequent proceedings he would not have remained passive but would have defended the suit, Or made other arrangement to have the plaint items. In these circumstances, And in view of the conduct of 1st defendant subsequent to ext. E decree, I have to infer that ext. E decree was secured without notice to kesava pillai and fraudulently suppressing the summons issued in his name and that the sale and delivery proceedings also were conducted fraudulently that as such, The plaintiffs are entitled to question ext. E decree and the execution proceedings and that they are liable to be set aside"
    .

    as regards the question whether the decree was fraudulently obtained, The main point for consideration is whether there was fraudulent suppression of summons by the plaintiff in that suit so as to keep the defendant out of knowledge of the institution of the suit. The records relating to the trial court proceedings in that suit were destroyed before the suit was filed and the summons issued to kesava pillai is no longer available. It is therefore not possible to say whether the summons was personally served on him or not. All that can be gathered from ext. E is that the decree was passed ex - parte. Kesava pillai was the 1st defendant in that suit, The 2nd defendant being one adichan yogan who was impleaded as a subsequent encumbrancer in that suit. There is absoloutely no material in this case to show that the decree was obtained by fraudulent suppression of summons from the defendants. The courts below expressed the opinion that kesava pillai would have contested the suit if he was aware of the same. This assumption is not supported by any fact. If the amount sued for was really due from kesava pillai there was no reason to suppose that he would have contested, If he had received notice of the suit. In view of the paucity of evidence regarding the service of summons, The main attempt of the plaintiffs was to show that the earlier suit was for an inflated claim without giving credit to payments made by kesava pillai. They set up certain payments in discharge of the amount due under the hypothecation bond. These are evidenced by exts. B, C and d. These payments were not disputed and the learned munsiff found that but for a payment not pleaded in the suit, The amount claimed in o. S. No. 940 of 1109 was correct. Reference has to be made to ext. P in this connection. It is copy of a mortgage deed dated 5. 8. 1104 executed by kesava pillai in favour of one yesayya for a sum of fs. 700. During the evidence stage of the suit the plaintiffs advanced a case that ext. P was really taken by the 1st defendant and yesayya was only a benamidar for him. It was therefore argued that a sum of 700 fanams also should have been given credit to when the 1st defendant instituted the suit. Though this was not a payment pleaded as an item of fraud in the plaint, The courts below considered it proper to adjudicate on this contention. The courts below were not justified in entering a finding on this point or basing the decree on such finding. It is an elementary rule that allegations, However strong be the language in which the same are couched, Will not entitle the plaintiff to get any releif. It was not stated in the plaint or in the replication that 700 fanams out of the amount due under the hypothecation bond had been discharged by the execution of ext. P or that the mortgagee was only a benamidar of the 1st defendant. The plea of benami is also one to be set up and proved by the plaintiff. In these circumstances the courts were not justified in upholding this contention. Even if the plea had been properly raised, The evidence would not have justified the conclusion which was based on a vague statement by some of the witnesses that yesayya was a dependant of the 1st defendant and that the fact that he figured as attesting witness in one of the notices served on kesava pillai in execution. Apart from all these aspects the falsity of the claim on which a decree was obtained is not a valid ground for setting aside the decree. The finding of the trial court is that the only sum not given credit to by the 1st defendant is the amount under ext. P. It mut therefore be found that the amount sued for in o. S. No. 940/1109 was validly due to the 1st defendant. The grounds relied on for setting aside the decree are unsustainable. It was urged on behalf of the plaintiffs that the courts below having come to a concurrent finding that the decree was vitiated by fraud, It is not open for this court to interfere with the same. I am unable to accept this argument because the question whether a decree is vitiated by fraud is not a pure question of fact on which concurrent findings would be conclusive.

    3. The next question is whether the execution proceedings are vitiated by fraud. Except for a vague allegation in the plaint that the proceedings in execution were conducted secretly and fraudulently there was no specific averment that any notice in execution was fraudulently suppressed or that any step preceding the same was not conducted in accordance with law. Learned counsel for the respondents sought to support the decree by raising a contention that the execution proceedings were void. This argument was sought to be supported by ext. Y, A copy of the notice sent to kesava pillai under o. Xxi r. 22 of the code of civil procedure. Ext. Y was produced in the lower appellate court. It is seen from the records that the learned judge has not passed any order admitting the same in evidence although it was marked as ext. Y. No reliance was placed on it either. If ext. Y has to be deemed as admitted in evidence, It has to be observed that the learned judge has not complied with the provisions of law regarding admission of evidence in the appellate court. The only reason alleged by the plaintiffs for producing this document in the appellate court was that they were not advised by counsel that the document was useful for proving their case. This is hardly a justifiable ground for the reception of evidence in appeal. Even apart from this, The appellate court is bound to record reasons for admitting additional evidence. As pointed out earlier, There is no such order on the application for admission to ext. Y in evidence. It may also be stated that the plaintiffs had no case that the execution proceedings were void on account of any defect in the service of notice under o. Xxi r. 22. The alleged defect was that the court had not made a declaration that the service of the notice was proper. The execution diary in that case shows that the court accepted the same as proper and proceeded to take further steps in execution. Ext. Y, Even if it had been produced in the trial court, Would not therefore have supported the arguments regarding the void nature of the proceedings in execution. It has been decided in several reported decisions that a declaration regarding service of the notice may be implied and that such an implied declaration is sufficient compliance with law. Vide air 1940 mad. 213, Air 1943 mad. 55, Air 1950 assam 6, Air 1932 oudh 326 and air 1934 lahore 985. Another ground urged in support of the same argument is that the proclamation of sale was not affixed on item no. 5. This ground was also not taken in the pleadings. R. 67 (1) of o. Xxi provides that every proclamation of sale should be made and published as nearly as may be in the manner prescribed by r. 54 sub - r. (2) relating to attachment of immovable properties. What is provided in r. 54 (2) is that the order should be proclaimed at some place on or adjacent to such property by beat of drum or by customary mode. There is no evidence in this case regarding the location of the properties sold in execution or as to whether the place where the proclamation of sale was affixed was or was not adjacent to other properties. In the absence of pleadings on the point, The plaintiffs are not entitled to rely on this fact. My attention was drawn to the decision of a full bench of this court in mariamma mathew v. Ittoop poulo (1952 klt 116). The question that arose in that case was whether an alienation made by the judgment - debtor was after the property was attached. It was found by the trial court in that case that the attachment order was not affixed on the property alienated. After referring to several reported decisions it was held by the full bench:

    "regard being had to the purpose with which the provision that in causing an attachment of immovable property a copy of the order of attachment should be affixed on the property sought to be attached is embodied into the code we are not inclined to differ from the view taken in these cases that when several properties are attached a copy of the order should be affixed on each separate property. In the case before us the properties situate in one muri were treated as one lot and a copy of the order was affixed on one item comprised in each lot. We cannot agree that that would satisfy the requirements of the provision referred to"
    .

    as the order of attachment was not affixed on the property alienated, The alienation was upheld as one not contrary to the attachment. This decision cannot support the proposition that the omission to comply with the requirements under o. Xxi r. 54 would render the sale void. The decisions reported in ilr 47 mad. 525,18 cal. 422 (fb), Air 1938 cal. 699, Air 1942 cal. 275, Air 1923 lah. 671 lay down that in such a case the sale would not be void. Even if there were material irregularities in publishing and conducting the sale the remedy of the judgment - debtor was to apply for setting aside the sale within thirty days of the same.

    4. Two notices issued in execution were relied on to show that execution proceedings were conducted fraudulently. The notices had been produced as exts. G and h. Ext. H is a notice dated 13. 6. 1113 relating to the decree - holder's prayer for allowing him to bid in auction. The endorsement on the notice shows that it was served by affixture as the judgment - debtor refused to accept the same. The attestors are lukose esayya and narayana pillai janardhanan pillai, Of whom the latter was examined as pw. 8. The trial court found that his evidence was not helpful. The courts below were of opinion that the fact that esayya attested this notice was suspicious. In expressing this opinion the courts below were assuming without any foundation that esayya was a servant or dependant of the 1st defendant. Even if there was an irrgularity in the service of this notice, The judgment - debtor would not have been entitled to have the sale set aside without proof that he sustained substantial injury by reason of the sale. Moreover an application for setting aside the sale should have been filed within thirty days of the sale. It is significant to note that the plaintiffs do not rely on s. 18 of the limitation act. Ext. G is the notice regarding delivery of

    possession. It is seen to have been accepted by the judgment - debtor and the endorsement should prima facie be taken as genuine. The main ground relied on by the courts below for holding that the signature of the judgment - debtor in ext. G is not genuine is that he was suffering from cancer at that time. The courts below assumed that the judgment - debtor could not have signed ext. G as he died of cancer on 4. 4. 1116. Ext. G is seen to have been served on 5. 2. 1116. It was assumed by the courts below that a man suffering from cancer could not have accepted a notice two months before his death. In the absence of expert evidence on the matter the assumption was unwarranted, Especially in the absence of evidence regarding the exact nature of the malady. The plaintiffs had a case that kesava pillai was undergoing treatment at the general hospital, Trivandrum, Until a few weeks before his death when he was discharged from the hospital. It would have been easy for the plaintiffs to prove that kesava pillai was undergoing treatment at the hospital at the time when ext. G is seen to have been served on him. The plaintiffs did not care to adduce any evidence on this point. In these circumstances i am unable to uphold the finding that execution proceedings in o. S. No. 940 of 1109 were vitiated by fraud. The finding reached by the lower courts is not warranted on the evidence available in the case.

    5. In view of the conclusions reached above it is unnecessary to consider whether the suit is barred by limitation or resjudicata.

    6. In the result, Second appeal is allowed reversing the decrees passed by the lower courts. The suit will stand dismissed with costs throughout.

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    Pakianathan Nadar Ponnayyan Nadar v. Karthiyani Pillai Parvathi Pillai.
    (Mar 6, 1955)