Punjab-Haryana High Court
Shallo Devi And Anr. vs Mohinder Singh And Ors. on 28 October, 1970
Equivalent citations: AIR 1971 PUNJAB AND HARYANA 325
JUDGMENT
1. The plaintiff-appellants filed a suit under a suit under Order 21. Rule 63, Civil P. C. for a declaration that they are the owners in possession of the attached land mentioned in para 1 of the plaint and defendant 2 had no concern or connection therewith, and that for this reason, defendant 1 had no right to get that land attached and sold in execution of his decree against defendants 2 and 3. The plaintiffs are the wives of the sons of defendant 2, Vishan Singh who is the fathers brother of Girdhar Gopal, defendant 3. A sum of Rs. 5,250.00 was due to defendant 1 (Mohinder Singh) from defendants 2 and 3 on the basis of a bond dated August 31, 1958. Since he was not being paid the amount, he served notices through his counsel on defendants 2 and 3 for the payment of the amount due to him. the notices are dated March 28, 1959 but were sent by registered post to the two defendants on April 6, 1959. A copy of the notice is Exhibit D. 1 while postal receipts are Exhibits D. 2 and D. 3.
On May 1 1959, the plaintiff-appellants filed a suit in the Court of Shri Nathu Ram Sharma, Subordinate Judge First Class, Karnal for the possession of 150 kanals of land against Vishan Singh defendant 2 on the allegation that the defendant 2 on the allegation that the parties were living in Shujabad, district Multan, before the partition of the country and defendant 2 had gifted about 70 acres of his land to the plaintiffs for their maintenance as well as that of their children. The gift was pleaded to be oral accompanied by possession. They continued to be in possession. They continued to be i possession of that place owing to te partition of the country and for this reason mutation of the land in their favour could not take place. Since the land was not mutated in their names in Pakistan, and continued to remain in the name of defendant 2, the latter was allotted land in lieu thereof in India, but he gave possession of that land to the plaintiffs who continued to receive its produce. Defendant 2 gold them that he would get the land mutated in their names after proprietary rights were conferred upon him. the proprietary rights, were conferred on defendant 2 in 1955, but he refused to get the land mutated in the names of the plaintiffs so much so that he took possession of the land about a year prior to the institution of the suit. For this reason, they were forced to file the suit for possession of the land against defendant 2. This suit was registered on May 4, 1959, and summons were ordered to be issued to the defendant for May 16, 1959, but on May 5, 1959, the plaintiffs and the defendant appeared before the Court and a decree was passed in favour of the plaintiffs against the defendant as prayed on the admission of the plaintiffs claim by Vishan Singh defendant. This admission was contained in an application filed by the parties on May 5, 1959, to the effect that they had compromised the matter as a result of which the defendant had admitted the claim of the plaintiffs. The plaintiffs based their title to the land on that decree.
2. Defendant 1 contested the suit and pleaded that the decree obtained by the plaintiffs against defendant 2 on May 5, 1959, was a collusive one and had been manoeuvred by defendant 2 in order to defeat and delay his creditors including himself. The said defendant had obtained the decree for Rs. 5,300.00 against defendants 2 and 3 on the basis of an award made by an arbitrator and agreed to by all the parties. This decree was passed on May 28, 1959. Defendant 1 pleaded that the decree passed in favour of the plaintiffs against defendant 2 for the possession of the land on May 5, 1959, was not binding on him and he was entitled to get the land attached and sold as belonging to defendant 2. The learned trial court framed the following issues on the pleadings of the parties:-
1. Whether the plaintiff is the owner in possession of the suit property? D. P.
2. Whether the decree has been obtained collusively and with a view to defraud the creditors and its effect ? O. D.
3. Relief.
Issue No. 1 is not happily worded because there are two plaintiffs in the suit whereas this issue mentions only a plaintiff in singular. The issue should have been-
"Whether the plaintiffs are the owners in possession of the suit property?"
The parties led their evidence and after considering the same, the learned trial Court came to the conclusion that the decree dated May 5, 1959, was a collusive one which did not make the plaintiffs owners in possession of the land in suit and defendant 1 was entitled to have that land sold in execution of his decree. This decree was passed on October 31, 1961, and the plaintiffs, being aggrieved against that decree, have filed the present appeal.
3. The learned counsel for the appellants has relied on the decree passed in favour of the appellants against defendant 2 on May 5, 1959, for establishing the title and possession of the appellants to the land in suit. There is no other documentary evidence to support the claim. The oral evidence of Mool Chand, attorney of the plaintiffs, and other witnesses has been disbelieved and, in our opinion, rightly. If the land had been actually gifted to the appellants in Pakistan, there would have been some entries in the revenue records to that effect. No date of th gift in favour of the appellants in Pakistan has been stated. If the land had really been gifted by defendant 2 in favour of the appellants in Pakistan, he would have got the quasi-permanent allotment in favour of the appellants instead of himself. It cannot also be believed that he was promising to have the land, allotted to him in India in lieu of the land left by him in Pakistan and which had been gifted to the appellants, mutated in favour of the plaintiffs after obtaining the proprietary rights but he refused to abide by his compromise after he had obtained the proprietary rights in 1955 and that he took back the possession of the land from them about a year prior to the institution of the suit. If that were so, defendant 2 would not have admitted the claim of the appellants on the very second day of the registration of their suit without even the summons being issued to or served on him. there is, therefore, no doubt that defendant 2 got the suit filed against himself by the appellants and, after admitting their claim, got the decree passed in their favour. The decree is clearly a collusive one and was manoeuvred in order to make the land unavailable to the creditors of defendant 2 and thus to defeat and delay them in the recovery of their debts. Defendant 1 had already served a notice on defendants 2 and 3 on April 6, 1959, before the plaintiff-appellants filed their suit on May 2, 1959, in which the decree was passed in their favour on May 5, 1959. Defendants 2 and 3 agreed to refer the dispute between them and defendant 1 on the basis of the bond dated August 31, 1958, to arbitration by an agreement dated May 25, 1959. Shri Puran Singh was appointed the sole arbitrator who gave his award which was got made the rule of the Court on May 28, 1959, and a decree on the basis of that award was passed in favour of defendant 1 against defendants 2 and 3 for Rs. 5,300.00. it is quite evident from of the plaintiffs in their suit and thinking that the land had gone out of th reach of defendant 1, they agreed to the decree being passed against them on May 28, 1959, on the basis of the award. Defendant 1 has stated that he had no knowledge of the collusive decree which had been passed in favour of the plaintiffs against defendant 2 on May 5, 1959. He therefore got that land attached in execution of his decree on December 29, 1959. Against that attachment, the plaintiffs filed an application under O. 21 R. 58, Civil P. C. on January 20, 1960, which was dismissed by the learned Senior Subordinate Judge, Karnal, on June 28, 1960.
4. The learned counsel for the appellants has, however, argued that conceding the decree dated May 5, 1959, to be a collusive one between the appellants and defendant 2, it was a good decree qua them which passed a valid title and possession of the land to the appellants. Mohinder Singh respondent could not get the land in suit attached and sold in execution of his decree but he should have filed a suit for avoiding the decree dated May 5, 1959, in accordance with Section 53 of the Transfer of Property Act, which reads as under:-
" 53. (1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.
Nothing in this sub-section shall affect any law for the time being in force relating to insolvency.
A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, all the creditors.
(2) Every transfer of immoveable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee.
For the purposes of this sub-section, not transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made."
We, however, find no substance in this submission. Under Section 53 of the Transfer of Property Act, it is not necessary that the creditor or creditors , who have been delayed or defeated, have to file a suit for avoiding dispossession of the property by the judgment-debtors. The transfer of immoveable property made with intent to defeat or delay the creditors of the transferor is voidable at the option of any creditor so defeated or delayed and such a creditor can avoid that transfer. It was held by a Full Bench of the Madras High Court in n. N. L. Ramaswami Chettiar v. Mallappa Reddiar, AIR 1920 Mad 748 (FB) that -
"it is open to an attaching decree-holder to plead in defence to a suit by the alienee from the judgment-debtor whose claim has been rejected, that the transfer top him was fraudulent under Section 53, Transfer of Property Act, without the creditor himself filing a suit to avoid the transfer."
The contrary view in Subramania Ayyar v. Muthis Chettiar, (1918) ILR 41 Mad 612 = (AIR 1918 Mad 421) (FB) was overruled. This matter was again considered by a learned Single Judge of the Madras High Court in Kallubandi Nanjamma v. Ketha Rangappa, AIR 1954 Mad 173, and it was held that -
"it is well settled that creditor having the right to avoid a transfer under Section 53, Transfer of Property Act, can do so by any act which shows clearly and unambiguously an intention to avoid it."
and that -
"when a decree-holder entitled to avoid a transfer of property under Section 53, Transfer of Property Act, has elected to do so by bringing the properties to sale in execution of his decree, that avoidance endures for the benefit of the auction purchaser, notwithstanding that he is not himself a creditor or transferee".
We are in respectful agreement with the view propounded by the Madras High Court in the above two cases and hold that it was not necessary for defendant-respondent 1 to file a suit under Section. 53 of the Transfer of Property Act to avoid the collusive decree obtained by the he appellants against defendant 2 on May 5, 1959, but that he could avoid that decree by asking for the attachment and sale of the land in execution of his decree. It has also to be borne in mind that Section 53 of the Transfer of Property Act is not in force in the State of Haryana to which the parties belong and its procedural technicality cannot be pleaded to defeat the claim of the attaching creditor. It was held by a Division Bench of this Court (Mehar Singh and Gosain, JJ. ), in Badri Dass v. Chuni Lal, ILR (1961) 2 Punj 378 = AIR 1961 Punj 398) that -
"it is true that the last portion of sub-s. (1) of S. 53 of the Transfer of Property Act specifically provides that a suit of this nature shall be instituted on behalf of , or for the benefit of the creditors. If the Transfer of Property Act were in force in the Punjab, we would have no option but to accept the contentions raised on behalf of the appellant. the Act, however, is not in force in this State and although the principles underlying it, based as they are on uniformally accepted notions of justice, equity and good conscience have been invariably followed, the technicalities and procedure prescribed in certain sections of the Act have never been treated as the prevailing law."
5. For the reasons given above, we hod that defendant 2 transferred the land in suit in favour of the plaintiff-appellants by means of the decree dated May 5, 1959, in order to defeat and delay his creditors particularly defendant-respondent 1, and that the latter was entitled to have the land in suit attached and sold in execution of his decree and that it was not necessary for him to file a suit for avoiding that collusive decree of May 5, 1959. The plea of fraudulent transfer in order to defeat and delay the creditors could be taken by way of defence to the suit of the appellants filed under Order 21, Rule 63, Civil Procedure Code. There is thus no merit in this appeal which is dismissed but without any order as to costs.
6. During the pendency of the appeal, the land in suit was sold and was purchased by Chander Bhan. An application (C. M. 1680/C of 1962) was made for impleading him as a respondent to the appeal. this application was directed to be heard along with the appeal by Shamsher Bahadur, J., on January 18, 1962. Chander Bhan is represented by counsel at the hearing of this appeal. In fact, the appeal has been contested only by him. He has no objection to the application being granted. Accordingly we allow the application and make Chander Bhan a respondent to the appeal.
7. Appeal dismissed.