Punjab-Haryana High Court
State Of Punjab And Anr. vs Tarlochan Lal on 15 October, 1999
Equivalent citations: (2000)124PLR706
Author: R.L. Anand
Bench: R.L. Anand
JUDGMENT R.L. Anand, J.
1. State of Punjab has filed the present regular second appeal against Shri Tarlochan Lal son of Shri Ram Lal and it has been directed against the judgment and decree dated 3.10.1979, passed by the Court of District Judge, Patiala, who set aside the judgment and decree dated 28.10.1978, passed by the Sub Judge, 2nd Class, Patiala, who dismissed the suit of Shri Tarlochan Lal for declaration and injunction as prayed for.
2. The pleadings of the parties can be summarised in the following manner. Shri Tarlochan Lal son of Shri Ram Lal, filed a suit for declaration that he is the owner of the House No. 696 along with Cheubara, as described in the heading of the plaint and situated at Amloh, and that it is not liable to be attached and sold in case of recovery by the Excise Department from the father of the plaintiff, and for permanent injunction for restraining the defendants from attaching or selling the aforesaid house and chaubara or interfering in the ownership and possession of the plaintiff.
3. The case set up by plaintiff was that he is the owner and in possession of the said house and Cahubara under a registered gift-deed dated 4.11.1968 executed in his favour by his father Shri Ram Lal. In this manner, Shri Ram Lal had no right, title or interest in the said property since 4.11.1968. According to the plaintiff, his father Shri Ram Lal allegedly took some excise contracts at Nabha and some amount was said to be due to the Department from him and that his father was a defaulter. The Deputy Excise and Taxation Commissioner, Patiala, ordered for the realisation of the amount due on account of the excise dues from his father and he was attaching and selling the property for the recovery of the excise dues. This action on the part of the defendant No. 2 was illegal, void and without jurisdiction. The plaintiff on coming to know that the house is going to be attached and sold in execution of the recovery made a prayer to defendant No. 2 not to attach and sell the property but to no effect In short, the plaintiff alleged that defend ants have no right to attach and sell the said house and as such, the suit should be decreed.
4. Notice of the suit was given to the defendants who, filed the written statement and denied the allegations. According to the defendants, Ram Lal, father of the plaintiff, was a defaulter in the payment of the licence fee of the country liquor vends which he purchased during the year 1968-69 and he defaulted in the payment of the licence fee totaling Rs. 6,54,998/-. This amount was declared as arrears of land revenue under the Punjab Land Revenue Act, 1887. Ram Lal, transferred the house in the name of his son Tarlochan Lal through gift deed in order to avoid the payment of the excise department and as such, the transfer of the house is to be ignored under Section 53 of the Transfer of Property Act. The defendants also took the stand that the suit of the plaintiff is not maintainable in the Civil Court and that the suit is also collusive between him and his father Shri Ram Lal.
5. From the pleadings of the parties, the learned trial Court framed the following issues:-
1. Whether Ram Lal, the father of the plaintiff and others, secured country liquor vends at Patiala Gate, Daladi Gate, Nabha and factory Area, Nabha for the year 1968-69, and they defaulted in the payment of license fee and the amount of Rs. 6,54,998/- is outstanding against them.
2. Whether Ram Lal, defaulter, transferred the house in the name of his son Tarlochan Lal vide gift deed dated 4.11.968, to avoid the payment of excise dues to the Government?
3. Whether this transfer was legally ignored keeping in view the provisions of Section 54 of the Transfer of Property Act and the gifted house was attached under Section 72 of the Punjab land Revenue Act, 1887 for the payment of Govt. dues? OPD
4. Whether the suit for permanent injunction is not maintain able against the State of Punjab and the defendants? OPD
5. Whether the jurisdiction of the Civil Court is barred to decide this matter?
6. Whether no cause of action arose to the plaintiff? OPD
7. Whether the suit is collusive to defraud the department and avoid the payment of the Government dues and as such, it is not maintainable? OPD
8. Whether a notice under Section 80 C.P.C. served upon the defendant-State before filing this suit? OPP
9. Whether the plaintiff is entitled to the injunction prayed for? OPP
10. Relief.
6. The parties led oral as well as the documentary evidence in support of their case and on the conclusion of the proceedings, the Trail Court held under issue No. 1 that Shri Ram Lal was a defaulter. Under issue No. 2, it was held that Shri Ram Lal transferred the house in question in the name of his son Shri Tarlochan Lal vide gift deed dated 4.11.1968 in order to avoid the payment of the excise dues. Under issue No. 3, the trial Court further held that the said transfer is liable to be ignored by virtue of the provisions of Section 53 of the Transfer of Property Act and the gifted house is liable to be attached and sold under Section 72 of the Punjab Land Revenue Act for the realisation of the Government dues. Issues No. 4 and 5 were also decided against the plaintiff. No finding was given on issue No. 6 being redundant. Issue No. 7 was decided against the plaintiff. Issue No. 8 was decided, however, in favour of the plaintiff. Issues No. 9 and 10 were again decided against the plaintiff and the suit of the plaintiff was dismissed with no order as to costs.
7. Aggrieved by the judgment and decree of the trial Court, plaintiff Tarlochan Lal filed the first appeal before the court of District Judge, Patiala, who for the reasons given in para No. 7 of the impugned judgment set aside the judgment and decree of the trial Court and decreed the suit of the plaintiff and aggrieved by the judgment and decreed dated 3.10.79, passed by the Court of District Judge, Patiala, the present Regular Second Appeal has been filed by the State of Punjab.
8. I have heard Mr. S.K. Bhatia, advocate, on behalf of the appellants and nobody has appeared on behalf of the respondent and with the assistance given by the counsel for the appellants, 1 am disposing of this appeal.
9. Before I deal with the submissions raised by the counsel for the appellants, it will be useful for me to incorporate para No. 7, 8, and 9 of the judgment of the first appellate court in order to appreciate whether the reasons given by the first appellate Court are correct or not in the light of the submissions made by the counsel for the appellants.
"7. Issues No. 1, 3 to 5, 7 & 9. All these issues being connected are discussed at one place. The admitted facts of the case are that Ram Lal father of the plaintiff along with others took an excise contract some where in April, 1968, Ram Lal gifted the house in question to the plain tiff on 4.11.1968 through gift deed Ex. PA. The case of the plaintiff at the trial was that he was in possession of the house. The trial Court tried to find fault with the gift on the ground that the possession did not change hands. In Baba Partap Singh v. Fatta and Ors., 120 P.L.R. 1906, it was observed as under: -
"That the Divisional Judge failed to observe the distinction between the importance on the question of delivery of possession in a contest between the donor and done and the insignificance of the same question when the done is fighting with a third person and is supported by the donor"
To the similar effect the observation in Mst. Bano v. Fatech Khan and Anr., (III P.L.R. 1903 (F.B.) support for the aforesaid view is available from the observation is Rahib Bakhsh Khan and Anr. v. Gulam Nabi Khan and Ors., (61 Indian Cases 395.)
8. It is not the case of the defendant that the house in question was the only property of Ram Lal. Ram Lal alongwith the others had taken an excise contract. The liability of Ram Lal and his co-partners was joint and several. There is no clear evidence as to what was the liability of Ram Lal on 4.11.1968. When the gift deed was made. The written statement of the defendant contains no clear particulars of the fraud as contemplated by Order 6 Rule 4 C.P.C. if the amount of the State could be realised from the partners of Ram Lal or other properties of Ram Lal, the finding of the trial Court that the gift was fraudulent and made to avoid payment cannot be sustained.
9. In his case the plaintiff has not challenged the right of the State to realise the amount. His only case was that the house in question was not liable to attachment and sale and as such the Civil Court had jurisdiction. I reverse the findings of the trial Court and hold that the plaintiff is the owner of the house and that the same is not liable to attachment and sale in realisation of the amount due from Ram Lal".
10. The learned counsel for the appellant submitted that the judgment of the first appellate Court is liable to be set aside and that of the trial Court is liable to be restored and the suit of the plaintiff should be dismissed. She found fault in the judgment and decree of the first appellate Court and her first submission was that it is proved on the record that Shri Ram Lal was a defaulter as on 4.11.1968 and that the State of Punjab was a creditor and the gift deed has been executed by Shri Ram Lal in favour of Shri Tarlochan Lal, his son, in order to defeat and delay the creditors and the said gift is hit by the principles of Section 53 of the Transfer of Property Act. I find sufficient force in the argument raised by the learned counsel for the appellants. Section 53 of the Transfer of Property Act lays down that 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 defaulted or delayed. It further lays down that nothing in this Section shall impair the rights of a transferee in good faith and for consideration. Now it is to be seen whether the gift deed allegedly executed by Shri Ram Lal in favour of his son Shri Tarlochan Lal was with intention to defect and delay the creditors i.e. the Punjab State or not. It is proved on the record through the statement of K.C. Sharma, DW-3 that Shri Ram Lal and others took three country vends during the year 1968-69. Under the conditions and rules Ram Lal and others were liable to deposit every fortunately the instalment of the licence fee and in April 1968 Ram Lal made a default of the excise conditions and this accured up to 31.3.1968 and the total amount due to the Department was Rs. 6,54,998/-. This witness further deposed that Ram Lal made payment of one or two instalments in the month of April 1968 and thereafter, he started committing defaults and as such the Department was compelled to initiate the proceedings against Ram Lal and others for the recovery of the amount. It is the case of the plaintiff made in the plaint that he came to know that the Excise Department had started the proceedings against his father for the realisation of the some amount. In these circumstances, it can be reasonably said that the State was a creditor and Shri Ram Lal was a defaulter. Realising that he was not in a position to pay the dues of the Department, Shri Ram Lal executed gifts deed Ex. PA on 4.11.1968 in favour of the plaintiff with the intention to defeat and delay the creditor i.e. the Department and in these circumstances, the gift deed is definitely hit by the principles of Section 53 of the Transfer of Property Act. Such a document is voidable at the instance of the Department. The Department has categorically taken a stand in the written statement that the said transfer is hit by the principles of Section 53 of the Transfer of Property Act, and, there fore, it has to be inferred that the said gift deed will not convey any right, title or interest in favour of the plaintiff. It has been held in A.I.R. 1961 Punjab 361. Bachan Singh v. Banarsi Dass, that "however, suspicious a transaction, the Court's decision must always be based on legal grounds, legally brought on the record, and it must never rest on suspicions or on the Court's mere moral convictions. The burden of successfully assailing a transaction initially lies on the creditors. When the creditors have established facts, which show the prima facie intention of the debtor to defeat or delay the creditors, it is then for the debtor to meet the case made out and to explain the facts. According to general law, a man is presumed to intend the natural consequences of his acts, and that, fraud, from its very nature, has necessarily to be established by circumstantial evidence. The facts which militate against the bona fides of a transaction and whose cumulative effect establishes fraud, are many and varied. Unexplained secrecy is by and large, considered to be a badge of fraud, whereas notoriety might well rebut a presumption of fraud. Though all facts are to be considered cumulatively, yet the facts that the debtor is in embarrassed circumstances proceedings for attachment of his property having been initiated and the transactions is between close relations, who are otherwise not shown to be inimical to each other, may constitute good prima facie evidence of fraudulent intention; this would be still more so, when the entire property has been transferred by the debtor and no reliable evidence of the bona fides of the transferee has been placed on the record. The subsequent conduct of the vendee in not taking necessary steps for getting the requisite mutations entered in the revenue papers, is also not wholly unimportant in determining the fraudulent intent and the existence of collusion between the parties. A transaction, which does, in fact, result in defeating and delaying the existing creditors may legitimately be presumed to have been made with the intention of causing the above consequence, and this rule would perhaps be equally applicable even when there is only a single creditor of the debtor and he has been so defeated and delayed."
11. The above observations would show that the said gift deed is between the two relations. It is also established on the record that Shri Ram Lal was a defaulter and he started committing defaults right from April, 1968 onwards fully realising that he and his co-partners may not be in a position to clear the dues of the Department, Shri Ram Lal started transferring his property and in the present case he executed a gift in favour of his son Shri Tarlochan Lal. In A.I.R. 1971, Punjab & Haryana 325, Smt. Shallo Devi and Anr. v. Mohinder Singh and Ors., it was held that a creditor can exercise his option to avoid a fraudulent transfer by attaching the transferred property in execution of his decree and it is not necessary that he should file a regular suit. In the present case, with the filing of the written statement itself, the State has challenged the gift deed in favour of the plaintiff. Even if it is assumed for the sake of argument that Tarlochan Lal had a pre-existing interest in the property gifted in his favour and that the property was ancestral one; still his property can be sold in his hands as the son is liable to the pre-partition debts of his father even after partition under the theory of pious obligation if those debts are not immoral or illegal and for payment of which no arrangement was made in the partition. His case is simple that he received this property through gift.
12. Now let us see whether the gift in this case has been held to be proved. Section 122 of the transfer of Property Act defines gift. The gift is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. Such acceptance must be made during the lifetime of the donor and while he is still capable of giving the same.
13. Thus, delivery of possession of the property gifted and its acceptance are the two essential ingredients before it can be said that a gift is valid. Plaintiff Shri Tarlochan Lal while giving his statement on 26.8.1977 stated that the house in dispute was given to him by his father as his share and that he was not aware whether the possession of the house was also delivered to him or not. Meaning thereby, that the gift was not valid. This witness again appeared on 16.8.1978 in rebuttal and he made the improvements by stating that he signed the gift in token of acceptance. In these circumstances, it can be reasonably held that in View of the contradictory statements made by the plaintiff, the gift in this case is not a complete transaction rather it was a transaction which was executed with the intention to defeat and delay the claim of the creditors. If this statement is accepted as on 16.8.1978 regarding the acceptance or the delivery of the possession, by that time the demand of the Department had already come and if that gift has been executed by Shri Ram Lal with the intention to defeat the claim of the creditors, such transaction would be held bad in view of the provisions of Section 53 of the Property Act and the Department was well within its right to ignore that gift deed by virtue of the provision- of Section 53 of the Transfer of Property Act.
14. There is one more angle of vision through which the present appeal can be disposed of. Section 3 of sub clause 8 of the Punjab Land Revenue Act defines a defaulter which means a person liable for the arrears of the land revenue and includes a persons who is responsible as surety for the payment of the arrears; and a village officer who collects the land revenue or any other sum recoverable as land revenue and does not pay the same to the State Government in accordance with the rules framed under the Act. The licencee fee under the Excise Act is payable as arrears of land revenue. In these circumstances, it can be again reason ably held that Shri Ram Lal was a defaulter. As per Section 67 of the said Act, which talks of process for recovery of arrears, the arrears of land revenue can be recovered by proceedings against the other immovable property of the defaulter.
15. I have already held that no valid title has passed in favour of Tarlochan Lal on account of the fraudulent transfer. Section 72 of the Punjab Land Revenue Act further lays down how the attachment of the estate can be effected. According to the Section at any time after an arrears of land revenue has accrued, the Collector may cause the estate Or holding in respect of which the arrear is due to be attached and taken under his own management or that of an agent appointed by him for that purpose. Section 78 prescribes the remedies open to a person denying his liability for an arrear and according to this Section, when proceedings are taken under this Act for the recovery of an arrear, the person against whom the proceedings are taken may, if he denies his liability for the arrears or any part thereof, and pays the same under protest made in writing at the time of payment and signed by him or his agent, institute a suit in a Civil Court for the recovery of the amount so paid. Meaning thereby that it was obligatory on the part of the plaintiff to deposit at the first instance the amount of the demand made by the Department and then he could challenge the demand by way of separate suit. Admittedly, neither the plaintiff nor his father deposited the said amount.' Section 158 of the Punjab Land Revenue Act sub clause (xiv) lays down that a civil Court shall not exercise jurisdiction over any of the matters namely, any claim connected with, or arising out of, the collection by the Government, of any process for the recovery of land revenue, or any sum recoverable as an arrear of land revenue. This Section, thus, again bars the suit of the plaintiff to be instituted in the civil Court. In this regard, reliance can be placed on A.I.R. 1983 Punjab and Haryana 428 Roshan Lal v. State of Punjab, wherein his Lordship held that if the plaintiff filed a suit for injunction challenging the action of the State as being without jurisdiction, certainly, the Civil Court has the jurisdiction to entertain the suit. However, the question of jurisdiction of the Civil Court will depend only after the facts are found. If it is found that the whole amount is due then the jurisdiction of the Civil Court to grant relief would be ousted. It is established on the record that a sum of Rs. 6,54,998/- was due to the State from Shri Ram Lal and his co-partners on account of the excise licence money. Shri Ram Lal was not in a position to pay the amount and so he started transferring his property in favour of his sons in order to defeat the claim. The case set up by the plaintiff is that he is not liable for the payment of the arrears. It has been held in 1978 Revenue Law Reporter 301, Punjab State v. Kirpal Singh, that if a person denies his liability for the payment of the arrears, such person cannot sue for obtaining injunction against the State. Such a person should make the payment under protest and then file the suit for the recovery. Admittedly, the plaintiff has not deposited the money and, therefore, his suit was not legally maintainable.
16. In spite of the proved facts, the learned first appellate Court decreed the suit of the plaintiff for the reasons given in para Nos. 7, 8 and 9 of the judgment already quoted. I have gone through these reasons. There was clear and cogent evidence on the record that Shri Ram Lal was in liability much prior to 4.11.1968. His liability started from the very beginning he committed default in the payment of the licence fee. He could only make one or two payments. The first appellate Court has not rightly appreciated the evidence of this case. Even the gift in this case is also not proved as there is no evidence of the delivery of the possession and the acceptance of the gift.
17. In this view of the matter, I am of the clear opinion that the first appellate Court committed an error in setting aside the judgment and decree of the trial Court. Resultantly, I allow this appeal, set aside the judgment and decree of the first appellate Court and restore the judgment and decree of the trial Court and dismiss the suit of the plaintiff-respondent with no order as to costs.