Ram Chand v. Mathura Chand

Rafiq, J.:— It appears that Maharaj Singh and his son Ram Chandra alias Ratan Singh were members of a joint undivided Hindu family and had some joint family property. Daring the time that the family was joint a certain item of property was acquired by right of pre-emption. On the 27th of February 1903 Maharaj Singh executed a tamliknama in favour of his son Ram Chandra in respect of the said property. On the 12th of December 1914 Mathuta Prasad and Parbhu Dayal obtained a decree or their share of profits in a certain village against Maharaj Singh. In execution of that decree they attached the property that had been conveyed by the tamliknama of the 27th of February 1903 to Ram Chandra the son of Maharaj Singh. He objected to the attachment on the ground that the property attached belonged to him. The objection was disallowed on the 7th of July 1917. Thereupon the suit out of which this appeal has arisen was instituted by Ram Chandra against the decree-holders Mathura Prasad and Parbhu Dayal for a declaration that the property sought to be attached by them was not liable to attachment and sale in execution of their decree.

2. The claim was resisted on various grounds. It was urged on behalf of the defence that the tamliknama relied upon by the plaintiff conveyed no title to him inasmuch as the property, the subject of the tamliknama, was part gt the joint family property and the family being joint one member of it could not transfer any portion of the joint property to the other. Moreover section 53 of Act IV of 1882 was also pleaded in bar of the claim. The court of first instance dismissed the claim. On appeal the decree of the first court was affirmed. In second appeal so this Court it is contended on behalf of Ram Chandra that the defence under section 53 of Act IV of 1682 is not open be the defendants inasmuch as they did not bring, as they ought to have brought, a tegular suit to have it declared that the tamliknama of the 27th of February 1933 was inoperative and not binding against the creditors of Maharaj Singh. This contention is based on the case of Subramania Ayyar v. Muthia Chettiar (1). The contention for the plaintiff appellant is no doubt borne out by the case relied upon by him bub it appears to me that on the findings of the courts below this appeal can be disposed of without expressing an opinion on the question whether the defence under section 53 of Act IV of 1882 is open to the defendants in the present case.

3. It has been found by the lower appellate Court that Maharaj Singh and Ram Chandra were members of a join undivided Hindu family at the time that the tamliknama was executed and that the property conveyed by the said deed was part of the joint family property. Under these circumstances the deed of the 27th of February 1903 was an invalid deed that conveyed nothing to Ram Chandra. A member of a join undivided Hindu family cannot legally transfer a portion of the joint family property to another member of the family. The transfer being therefore merely a paper transaction under which ??? interest passed to the transferee the case relied upon by the Seamed Vakil for the plaintiff appellant is not in point. The plaintiff cannot therefore maintain the present suit on the basis of the deed of the 27th of February 1903. The conclusion arrived at by the lower appellate Court in my opinion was a correct one and I would dismiss the appeal.

Stuart, J.:— While concurring with the decision of my learned colleague that the finding, to the effect that the property which the tamliknama purported to brass let was the joint property of a joint Hindu family governed by the Mitakshara law, is fatal to the success of the appeal, I think it advisable to note a decision on two legal points, which have been argued by the learned Vakil for the appellant. The first point is this. He argued that inasmuch as the debt due from Maharaj Singh, which formed the basis of the simple money decree against him, had not been incurred (and could not necessarily have been incurred) at the time that the tamliknama of the 27th of February 1903 was executed, the provisions of section 53 of Act IV of 1882 had no explication. His case here was that the provisions of that section did not protect future creditors. It has usually, been considered settled law that the provisions of that section do protect future creditors, but I have not been referred to any decision of this Court to support the proposition Thee b, however a decision of the Madras High Court in Thomas Pillay v. Muthurama Chettyar (2) which decides that subsequent creditors are within the rule enunciated in the first clause of section 53, Act IV of 1882. The section in question reproduces the provisions of the Statute of Elizabeth, 13 Eliz. C. 5, and in the interpretation of the words of that section, guidance may be sought from English decisions upon the subject. The Bench of the Madras High Court which arrived at the decision that I have just quoted, have cited certain English cases in support of their decision. I add the dictum of Wood, V.C, in Holmss v. Penney, (3) “Where, in order to evade the statute, a person being considerably indebted makes a voluntary settlement, which would be void if impeached by those who were then his creditors, and afterwards pays there off, and a new set of creditors stand in their places…. such a settlement would be void against the subsequent creditors, because it would be a fraud on the statute.” It is unnecessary to quote other authorities. As I understand it, the law is clear. Where a man makes a fraudulent transfer in order to evade his existing obligations, that transfer can be impeached by creditors whose obligations are of a later data.

4. The second point taken by the learned Vakil is this. A Full Bench case, Subramania Ayyar v. Muthia Chettiar lays down the proposition that when a decree bolder attaches property which he states to be the property of the judgment-debtors, and a third party pleads in execution that property is not the property of the judgment-debtor, because it has been trans forced by a good and valid deed and is met with the reply that the deed is a fraudulent deed, and when the court of execution decides that fine deed is a fraudulent deed and upholds the attachment, it is not open to the decree-holder to plead, in a subsequent suit brought against him by that third party for a declaration that the deed is a valid deed, that the deed is fraudulent, unless he has previously himself filed a suit for a declaration that the deed is fraudulent, and obtained a decree. This is a decision of a very far-reaching nature. It decides finally a most important question of procedure. It drives such a decree-holder into court to bring a regular suit, and deprives him of the right, which at first sight he would appear to have, to impeach the validity of a fraudulent document. It remains to be seen what arguments were advanced by the learned Judges of the Madras High Court who arrived at this conclusion.

5. The judgments are very short. Ayling, J., who gave the first decision stated that he based it entirely upon a previous decision of a Bench of the Madras High Court. He recognized the fast that the view which he took was opposed to the view taken by a Bench of the Calcutta High Court in the case of Abdul Kader Ali v. Meah (4). Seshaglri Aiyar, J., who had been a party to the previous decision on which Ayling, J. relied, stated that he saw no reason to change the view at which he had arrived in the former case. Bakeweli, J., agreed. It is therefore necessary to examine the views taken by the learned Judges who decided the previous case. That case is reported in Palaniandi Chetty v. Appavu Chettiar, (5) The facts closely resemble the facts in the appeal before us. A decree-holder attached certain property in execution of his decree; a third party came forward and claimed that property by virtue of a deed of transfer from the judgment-debtor. The court of execution found the dead of transfer to be void or voidable at the instance of the decree-holder. The attachment was upheld. The third party then brought a suit against the decree-holder for a declaration that the transfer was good. The learned Judges, who heard the appeal, decided that it was not open to the decree-holder as a defendant to challenge the validity of the dead. They held that, unless and until he had obtained a decree as plaintiff declaring the deed to be invalid, his mouth was closed, and that such a plea was not open to him.

6. Courts Trotter, J., (the learned Judge whose decision appears first in the report) stated that section 53 was a reproduction of the Statute 13 Eliz. C. 5 and that the English decisions on that Statute were authorities on the construction of the Indian section. I agree with that view. It appears to me that the next conclusion drawn by that Judge does not follow from the previous conclusion.

7. The next conclusion is that unless the English procedure permits the decree-holder to plead in subsequent proceedings that a transaction is fraudulent he cannot be permitted to bake such a plea in an Indian Court. For the interpretation of section 53 the courts would undoubtedly go to the English authorities, as the section in effect contains the rule of law in England upon the point, but with regard to the question of procedure it does not appear to me that the practice in England can bind courts in India, as the procedures in courts in India and courts in England are based upon different rules of practice and different enactments. Courts Trotter, J., went carefully into the question whether such a decree-holder in England as the decree-holder in the case before him could raise such a plea by way of a defence in a suit in which he was a defendant. He arrived at the conclusion that in an English Court he would not be permitted to raise such a plea. I need not discuss whether such a person in England could raise such a plea. The question which we have to decide is whether he can raise such a plea in India, and it depends for its answer on a decision whether there is anything in the Code of Civil Procedure or elsewhere which forbids him to bake such an attitude. I have been unable to discover any thing in the Code of Civil Procedure or any other law which prevents such a person from baking such an attitude, and in the circumstances, applying the general principles that courts should not add any thing to the existing law, and not narrow the door open to litigants, I decide that it was open to the respondents to take the position that they did. The decision of the other Judge, Seshaglrl Aiyar, J. was to the same effect as the decision of Courts Trotter, J. The view of the Madras High Court is opposed to the view taken by the High Court in Calcutta. In Abdul Kadir v. Ali Meak, two learned Judges of the Calcutta High Court laid down that in such circumstances the decree-holder could bring an independent suit himself, bus that he could also do as a defendant what he could have dona as a plaintiff. In Hem Chandra Sarkar v. Lalit Mohan (6), the Bench of the Calcutta High Court arrived at the same principle in slightly different circumstances. That Bench laid down that where a mortgage executed by a guardian legally appointed for a minor, was executed without the permission of the court, the mortgage was voidable at the instance of the minor. The decision proceeds that it is not necessary for the minor after attaining majority to set aside the transaction bub he may declare his will to rescind by way of defence in an action against him. The views taken in Calcutta appear to me to be based upon a correct construction of the law on the subject I therefore consider that there is no force in either of the pleas raised by the learned Vakil for the appellant and concur in the order dismissing this appeal with costs.

8. By the Court:— The order of the Court is that the appeal fails and is dismissed with costs.

9. Appeal dismissed.