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Case Number

Second Appeal No. 504 of 1932.

Attorney(S)

Mr. P.N Appuswami Ayyar for the Appellant.
Mr. S. Rajarama Ayyar for the Respondents.

Judges

Varadachariar, J.

Acts

SECTION 53 TRANSFER OF PROPERTY ACT

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Smart Summary

Summary of the Opinion — Second Appeal concerning Executability of Decree against Sons' Shares after Partition

Factual and Procedural Background

Two minors brought a suit seeking a declaration that the properties which, according to them, fell to their shares at a partition evidenced by Exhibit A were not liable to be seized in execution of a decree obtained against their father in S.C.S. No. 831 of 1928 on the file of the Sub-Court of Tinnevelly. The lower appellate court granted the declaration. The decree-holder appealed to this Court by way of a second appeal.

The partition (Ex. A) was effected shortly after the passing of the decree in the small cause suit. Both the lower courts viewed the timing and circumstances as suspicious and drew the inference that the partition had been brought about to prevent execution of the decree against properties that might be allotted to the minor sons. The opinion records that no oral evidence was adduced in the case.

Legal Issues Presented

If the partition is taken to be fraudulent (i.e., brought about to prevent a decree-holder from executing a decree against the father's property), does that circumstance preclude the decree-holder from executing his decree against the properties allotted to the sons at that partition?
More generally, whether and in what circumstances a decree obtained against a father alone can be executed against the shares allotted to his sons at a partition (distinguishing bona fide partitions and partitions held to be fraudulent or colourable).
Whether the timing of partition (before or after obtaining a money decree) or the idea that a father might be treated as "representing" his sons in certain suits alters the executability of a decree against the sons' allotted shares.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Subramania Aiyar v. Sabapathy Aiyar (1927) 54 M.L.J. 726 : I.L.R. 51 Mad. 361 (F.B.)	Regarded by some as warranting the view that no distinction should be drawn between (a) liability in a separate suit against the sons and (b) liability of the sons' shares to execution of a decree obtained against the father.	The Court observed that treating this Full Bench decision as supporting that broad proposition "does not appeal" to the judge as correct; the decision is referenced but not accepted as authorising the no-distinction view.
Krishnaswamy Konan v. Ramaswamy Aiyar (1899) 9 M.L.J. 127 : I.L.R. 22 Mad. 519	Contains observations suggesting that where a partition is fraudulent, the decree obtained against the father may be executed against properties allotted to the sons.	The Court notes that the observation in that case was made only as a reservation and "could scarcely be treated as a decision by itself," thus limiting its precedential weight for the proposition.
Indar Pal v. The Imperial Bank (1915) I.L.R. 37 All. 214	Authority cited for the proposition that where a partition is found to be colourable it may be ignored.	The Court accepts that if a partition is shown to be colourable, it can be ignored for the purposes contemplated in that authority.
Jagannatha Rao v. Viswesam (1924) 46 M.L.J. 590 : I.L.R. 47 Mad. 621	Illustrates that the terms 'bona fide partition' and 'mala fide partition' have been differently understood by judges.	The Court cites this case as evidence of divergent judicial understandings of those expressions.
Kishan Sarup v. Brijraj Singh (1929) I.L.R. 51 All. 932	Cited as one of several authorities relied upon by the appellant to support his contention regarding executability of decrees against sons' shares.	The Court refers to it among the cases cited but does not accept that these authorities conclusively support the appellant's position in the circumstances of the present case.
Gaya Prasad v. Murlidhar (1927) I.L.R. 50 All. 137	Listed among authorities reflecting different approaches to bona fide/mala fide partitions.	Cited by the Court to show variance in judicial treatment of the issue.
Atul Krishna Roy v. Lala Nandanji (1935) I.L.R. 14 Pat. 732 (F.B.)	Another authority referred to on the question of partition and creditors' rights.	Included among cases discussed; the Court considered but did not treat it as controlling for the appellant's claim.
Veerappa Chettiar v. Annamalai Chettiar (1934) 68 M.L.J. 157	Referred to in connection with Section 53 of the Transfer of Property Act and as an authority on objections where the father may have allotted himself a smaller share.	The Court cites it as illustrating that objections of the kind relating to allotting smaller share might be dealt with under Section 53; it is referenced as supporting that procedural avenue.
Annabhat Shankarbhat v. Shivappa Dundappa (1928) I.L.R. 52 Bom. 376	Cited in relation to circumstances where the person wanting his property exempted from attachment was a party to the money decree.	The Court holds that this authority does not help the appellant in the present case because the objecting person there was party to the money decree or his liability was directly raised in the money suit.
Suryanarayana v. Viswanadham (1936) 71 M.L.J. 518	Another case in which the person seeking exemption from attachment was concerned in the money suit itself.	The Court states that this case does not assist the appellant for the same reason as Annabhat Shankarbhat.
Duraiswami v. Nagaswami A.I.R. 1929 Mad. 898	Appears to favour the appellant's contention at first glance.	The Court notes that the decision relied upon the fact that the objecting sons had been impleaded in the suit against the father and treats that circumstance as the distinguishing factor; it does not adopt the decision as broadly applicable to the present facts.
Raghunandan Pershad v. Moti Ram (1929) I.L.R. 6 Luck. 497 (F.B.)	Quoted among authorities cited by the appellant relating to executability and partitions.	Placed on the list of cases cited by appellant; the Court considered the authorities collectively in assessing the weight of conflicting opinions.
Jawahar Singh v. Parduman Singh (1932) I.L.R. 14 Lah. 399	One of the cited authorities addressing the question of partition and creditor's rights.	Included among the cases referred to by the appellant and considered by the Court in reviewing divergent authority.
Kameswaramma v. Venkata Subba Rao (1915) 27 M.L.J. 112 : I.L.R. 38 Mad. 1120	Recognises distinction between the creditor's right to proceed by a separate suit against sons after partition and his right to attach the sons' shares in execution of a decree against the father.	The Court notes that this view has been consistently followed in this Court and treats it as supportive of distinguishing the two remedies (separate suit vs execution against shares).
Bapiraju v. Sreeramulu (1934) 40 L.W. 588	Referenced as a decision to be compared with the approach taken in this Court on the distinction between separate suitors and attachment in execution.	The Court cites it as part of the body of authority consistent with the Court's approach in this jurisdiction.

Court's Reasoning and Analysis

The Court began by isolating the precise point for determination: assuming the partition was fraudulent (i.e., effected to defeat the decree-holder), did that fraud have the effect of preventing execution of the decree against properties allotted to the sons at that partition?

The Court reviewed conflicting authorities from different High Courts and identified several lines of reasoning adopted in those decisions:

Some authorities treat no distinction between liability in a separate suit against the sons and liability of the sons' shares to be proceeded against in execution of a decree obtained against the father; some relied on the Full Bench decision in Subramania Aiyar as supporting that approach. The Court, however, expressed doubt about applying that reading of Subramania Aiyar.
Another line draws a distinction depending on whether partition occurred before or after the decree — on the theory that if the decree preceded partition, the father might be deemed to have been sued in a representative character. The Court found this theory difficult to apply, especially in suits on a promissory note where the father's cause of action (on the note) differs fundamentally from any cause of action against the sons (which arises from Hindu law liabilities).
A further line distinguishes bona fide partitions from fraudulent ones and, relying on Krishnaswamy Konan and related observations, holds that in cases of fraudulent partition the decree against the father may be executed against properties allotted to the sons. The Court noted, however, that the meaning of 'fraudulent partition' varies in the authorities and that the particular observations in Krishnaswamy Konan were only reservations rather than a firm decision.

The Court then analysed the concept of fraud and its consequences. It emphasised two distinct consequences a creditor might seek to draw from an allegation of fraud in partition:

That the father allotted to himself a much smaller share than entitled (an objection the Court said would be suitably addressed under Section 53 of the Transfer of Property Act); and
That the partition should be ignored and the sons treated as still joint with the father for purposes of execution.

On principle the Court observed that members of a family who are legally entitled to partition at any time cannot be said to commit such a fraud merely by choosing an inconvenient time for creditors. The law provides remedies to creditors (notably, impleading the sons in the action against the father), and the preponderance of authority shows that a partition will not defeat the creditor's rights altogether — though partition may affect the procedure the creditor must adopt to realise his debt.

The Court applied the established distinction followed in this Court (notably in Kameswaramma v. Venkata Subba Rao) that the attachability of the sons' shares depends upon whether the father retains power to alienate those shares at the time the creditor seeks to attack them. If the partition is operative in law and effectually divides status between father and sons, the father's power to alienate the sons' allotted shares comes to an end; consequently the right of the creditor to attach such shares in execution of a decree against the father ceases.

The Court therefore concluded that, except where the mala fide character of the partition shows it was not intended to be operative at all (colourable partition), mere mala fides directed at defeating creditors do not justify ignoring an otherwise operative partition for execution purposes. Applying these principles to the present case, the Court upheld the lower appellate Court's conclusion.

Holding and Implications

Holding: The Court held that the conclusion of the lower appellate court was correct and accordingly the second appeal fails and is dismissed with costs.

Implications:

The immediate, direct effect is that the decree-holder (appellant) cannot execute his decree against the properties allotted to the minor sons at the partition in question, as held by the lower appellate court.
The Court emphasised established distinctions in the law: creditors have procedural remedies (such as impleading sons in the original suit or suing them separately) and a partition that is operative in law will generally defeat execution against shares even if the partition was timed to disadvantage creditors, unless the partition is colourable and not intended to be operative.
The opinion does not announce a novel principle of law beyond applying and reconciling existing authorities in the circumstances of this case; the decision resolves the dispute between these particular parties by confirming the lower appellate court's declaration and dismissing the second appeal with costs.

Additional procedural note appearing in the opinion: "Leave granted."

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S. Thirumalamuthu Adaviar v. Minor Subramania Adaviar By Court Guardian S. Rajarama Ayyar, And Others S

1. This second appeal arises out of a suit brought by two minors for a declaration that the properties which according to them fell to their shares at the partition evidenced by Ex. A are not liable to be seized in execution of the decree obtained against their father in S.C.S. No. 831 of 1928 on the file of the Sub-Court of Tinnevelly. The lower appellate court granted the declaration; hence this appeal by the decree-holder. The partition under Ex. A was effected soon after the passing of the decree in the small cause suit and in such suspicious circumstances that both the lower courts have taken the view that it must have been brought about for the very purpose of preventing the decree-holder in the small cause suit from executing his decree against the properties that might be allotted to the shares of the minor sons. In that sense, the partition may be said to be fraudulent or mala fide, and I see no reason to differ from that conclusion, though I must point out that that conclusion can be based only upon inferences from the proximity of dates and the fact that the plaintiffs being minors, there was no other reason for partition at that particular juncture. No oral evidence has been adduced in this case. The point for determination in the second appeal is, taking the partition to be fraudulent in that sense, has it the effect of precluding the decree-holder from executing his decree against the properties allotted to the shares of the sons in that partition?

2. So far as the decisions in this Court go, there can be little doubt that but for the fraudulent purpose of the partition the decree-holder cannot reach the son's shares in execution of the decree obtained against the father alone. Mr. Appuswami Aiyar has invited my attention to the decisions in the other High Courts which reveal considerable conflict of judicial opinion on the question of the executability of a decree obtained against the father alone as against the shares allotted to his sons at a partition. Some of them proceed on the footing that there is no justification for drawing a distinction between liability in a separate suit against the sons and the liability of the shares to be proceeded against in execution of the decree obtained against the father. In some, the decision of a Full Bench of this Court in Subramania Aiyar v. Sabapathy Aiyar (1927) 54 M.L.J. 726 : I.L.R. 51 Mad. 361 (F.B.) is regarded as warranting the above view, though, with all respect, I would observe that this does not appeal to me to be correct. In some cases again a distinction is drawn between a partition which takes place after the money decree has been obtained against the father and a partition which takes place before the money decree. This distinction is based on the ground that, where the decree is obtained before partition, though execution proceedings may be started after partition, the father might well be deemed to have been sued in a representative character and that therefore the decree, though in name only against the father might well be treated as a decree against the sons as well. It is sufficient for my present purpose to say that it will be difficult to apply this theory of representation when a suit is brought against the father on a promissory note executed by himself. It has often been pointed out that in a suit of that kind, the cause of action against the father is on the note and the cause of action as against the sons is on their Hindu Law liability, and it is difficult to speak. of the father as "representing" the sons in a suit on a promissory note when it will not be open to him to raise defences which will undoubtedly be open to the sons if they had been impleaded in the suit. Another line of authority draws a distinction between cases of bona fide partition and of fraudulent partition, and founding themselves upon the observations in Krishnaswamy Konan v. Ramaswamy Aiyar (1899) 9 M.L.J. 127 : I.L.R. 22 Mad. 519 they hold that where the partition is fraudulent the decree obtained against the father may even be executed against the properties allotted to the sons at such partition. Even if this view could be held to be right, there is considerable difference of opinion in the authorities as to what is exactly meant by the expression 'fraudulent partition'. If as was held in Indar Pal v. The Imperial Bank (1915) I.L.R. 37 All. 214 the partition is found to be colourable there should be no difficulty in ignoring it. If, on the other hand, it is merely what must be described as a fraud upon creditors, I do not see any justification for holding that for purposes of execution, such partition can be ignored.

3. That the expressions 'bona fide partition' and 'mala fide partition' have been differently understood by different judges and on different occasions can be gathered from the observations in Jagannatha Rao v. Viswesam (1924) 46 M.L.J. 590 : I.L.R. 47 Mad. 621 at 624, Kishan Sarup v. Brijraj Singh (1929) I.L.R. 51 All. 932 at 936, 937, 946, Gaya Prasad v. Murlidhar (1927) I.L.R. 50 All. 137 at 141 and Atul Krishna Roy v. Lala Nandanji (1935) I.L.R. 14 Pat. 732 (F.B.). I must also point out that when one speaks of a fraudulent partition brought about by a father with a view to defeat his creditors, two questions may be intended to be comprised in the consequences sought to be deduced therefrom. One is with reference to the possibility of the father allotting to himself a much smaller share than he would be otherwise entitled to. An objection on this score would presumably be one to be dealt with under Section 53 of the Transfer of Property Act. Cf. Veerappa Chettiar v. Annamalai Chettiar (1934) 68 M.L.J. 157. The other consequence sought to be implied is that the partition should be ignored and the sons treated as if they still continued to be joint with their father. No doubt the observation in Krishnaswamy Konan v. Ramaswamy Aiyar (1899) 9 M.L.J. 127 : I.L.R. 22 Mad. 519 would seem to support such a contention. But the observation was only made as a reservation in that case and could scarcely be treated as a decision by itself.

4. Dealing with the matter on principle, it is difficult to see how the mere fact that members of a family who are in law entitled to enter into a partition at anytime they choose, happen to enter into a partition at a time more inconvenient to a creditor can make it fraudulent in the sense that the creditor can ignore it. The law provides ways, in which the creditor can avoid any injurious consequences arising therefrom, namely, by impleading the sons in the action that he may bring against the father, because it is now well established by the preponderance of authority in nearly all the Courts that a partition will not defeat the rights of the creditor, though it may have some bearing on the procedure to be followed by him for the realisation of his debt.

5. Having regard to the above considerations, I do not think I need do more than refer to the cases cited by Mr. Appuswami Aiyar on behalf of the appellant, namely, Kishan Sarup v. Brijraj Singh (1929) I.L.R. 51 All. 932, Jawahar Singh v. Parduman Singh (1932) I.L.R. 14 Lah. 399, Atul Krishna Roy v. Lala Nandanji (1935) I.L.R. 14 Pat. 732 (F.B.) and Raghunandan Pershad v. Moti Ram (1929) I.L.R. 6 Luck. 497 (F.B.). Annabhat Shankarbhat v. Shivappa Dundappa (1928) I.L.R. 52 Bom. 376 and Suryanarayana v. Viswanadham (1936) 71 M.L.J. 518 do not help the appellant, because in those cases the person who wanted to get his property exempted from the attachment was a party to the money decree or the question of his liability was raised in the course of the money suit itself. Duraiswami v. Nagaswami A.I.R. 1929 Mad. 898 may no doubt appear to be in favour of the appellant's contention. But, rightly or wrongly, the learned Judges based their decision on the ground that in that case the objecting sons had been impleaded as parties to the suit against the father, though in that suit they were exonerated. It is not for me to canvass the correctness of that decision, but the learned Judges expressly make this circumstance the distinguishing factor when they refer to the observations of Ananthakrishna Aiyar, J., in Subramania Aiyar v. Sabapathy Aiyar (1927) 54 M.L.J. 726 : I.L.R. 51 Mad. 361 (F.B.). The view taken in Kameswaramma v. Venkata Subba Rao (1915) 27 M.L.J. 112 : I.L.R. 38 Mad. 1120 has been consistently followed in this Court to the extent of recognising the distinction between the right of the creditor to proceed by a separate suit against the sons even after partition and his right to attach the sons' shares in execution of the decree obtained against the father. Cf. Bapiraju v. Sreeramulu (1934) 40 L.W. 588. See also Veerappa Chettiar v. Annamalai Chettiar (1934) 68 M.L.J. 157 and Appeal No. 25 of 1932. If, as recognised in Krishnaswamy Konan v. Ramaswamy Aiyar (1899) 9 M.L.J. 127 : I.L.R. 22 Mad. 519 and Kameswaramma v. Venkata Subba Rao (1915) 27 M.L.J. 112 : I.L.R. 38 Mad. 1120, the attach-ability of the sons' shares depends upon the power of the father to alienate it at the time the creditor seeks to attack the same, it is difficult to see how the fact of the partition being one intended to defraud creditors can make any difference. If it was intended to be operative and is in law operative, to bring about a division in status between the father and the sons, the father's power of alienating the shares allotted to the sons at such partition must have come to an end and with it the right of the creditor to attach such shares.

6. The question of the bona fides or mala fides of the partition has been referred to in some of the decisions for another reason, namely, the suggestion sometimes made that if the partition was bona fide, in the sense that sufficient provision has been made therein even for the discharge of the debts of the father, the shares allotted to the sons at such partition ought not to be held liable at all in any kind of proceeding for the pre-partition debts of the father. Whether that proposition is well founded or not, that appears to have been the reason for drawing the distinction in some of the cases between bona fide partitions and fraudulent partitions. Except in cases where the mala fide character of the partition is such as to lead the Court to come to the conclusion that the partition was not intended to be operative at all, I am unable to see how the mala fide character bears on the question of the creditor's rights to attach the sons' share in execution of a decree obtained against the father alone. I am therefore of opinion that the conclusion of the lower appellate Court is right. The second appeal fails and is dismissed with costs.

7. Leave granted.

S. Thirumalamuthu Ad... v. Minor Subramania Ada...