Madras High Court
M. Govinda Gounder vs Pichandi Pillai And Parasurama Gounder on 6 September, 2002
JUDGMENT K.P.Sivasubramaniam, J.
1. This Civil Miscellaneous Second Appeal is directed against the judgment of the learned Additional Subordinate Judge, Vellore, in C.M.A.No.19 of 1988 confirming the order of the learned District Munsif, Ranipet, in E.A.No.275 of 1987 in E.P.No.560 of 1985 in O.S.No.245 of 1984. The applicant/appellant herein is a third party claimant.
2. In the Claim petition, the applicant/appellant herein, contended that he had purchased the petition mentioned schedule property from the defendant/judgment-debtor and also from his son for a valid consideration of Rs.7,900/- on 19.9.1985 by a registered sale deed and since then he is in possession and enjoyment of the property as a bona fide purchaser. The appellant came to know that on 1.4.1987 that the respondent/plaintiff had obtained a money decree against the defendant and had attached the schedule property. According to the appellant, he had purchased the property before the attachment and he had no knowledge about the debt of the defendant or decree against the defendant. The defendant had no right or title over the schedule property as on the date of the attachment as he had already purchased the same on 19.9.1985 itself. Therefore, the attachment made by the plaintiff was illegal and invalid and the petitioner prayed for the removal of the attachment over the property.
3. In the counter filed by the plaintiff, it is contended that the sale was only to defraud the decree and the purchase was not bona fide. The purchase was only vexatious.
4. On a consideration of the said pleadings and evidence let in by both parties both the Courts below concluded that the sale was entered into with a motive to defeat the claims of the decree-holder and with the result, the Courts below dismissed E.A.No.275 of 1987. Hence, the above miscellaneous Second Appeal.
5. At the time of admission of the Second appeal the following substantial questions of law have been framed for consideration:-
(i) Whether the appellant herein is not a bona fide purchaser for value and whether the Court below is right in dismissing the application filed by the appellant who has purchased the property much earlier to the attachment and without any knowledge about the debt of the first respondent.
(ii) Whether the entire judgment of the Court below is not vitiated by its wrong approach in applying the principle of a case under Section 53 of the Transfer of Property Act when the question before the Court is one arising under Order XXI Rule 58 C.P.C.
(iii) Whether the Court below has exercised its jurisdiction in considering the question of title when under Order XXI, Rule 58(2) the Court below should have restricted its enquiry in considering the questions relating to the claim or objection.
(iv) The appellant having produced the original sale deed and the document Exhibit A.2 to show his possession, whether the Court below is right in dismissing the application when the respondent herein has failed to substantiate his case by proving the same and giving evidence before the Court?
6. Learned counsel for the appellant contends that the appellant is a bona fide purchaser of the property not having been put on notice about the debt of the judgment-debtor; nor about the decree obtained by the plaintiff in the present suit. The purchase was effected on 19.9.1985 whereas the attachment was ordered only on 10.10.1985 and hence there is no question of any attempt to defraud the plaintiff in terms of Section 53 of the Transfer of Property Act. Learned counsel also took me through the recitals in the sale deed which clearly, according to him, establishes that the purchase was bona fide. He was directed to discharge only certain specific loans outstanding against the defendant to be paid to the Tamil Nadu Agricultural Bank. He would further submit that the only reasoning of the Courts below was that there was inconsistency between the evidence of the claimant and the recitals in the sale deed, as regards whether the amount was paid to the vendor at the time of execution of the sale deed, or whether the amount was received by the vendor even earlier. Learned counsel also contends that in spite of the plaintiff having raised the defence of fraud, he has not adduced any oral or documentary evidence. Therefore, both the Courts below have come to an erroneous conclusion. Learned counsel also relies on some of the rulings which will be referred to later.
7. Though the notice has been served on the respondents, neither of them had appeared in person or through counsel.
8. I have considered the submissions of learned counsel for the appellant. It is not disputed as could be seen from the records that the claimant has purchased the property on 19.9.1985 whereas the attachment was only subsequent to that namely, on 10.10.1985. Therefore, the burden to prove that the purchase was to defraud the creditor is very much on the plaintiff. A perusal of the counter filed by him shows that the counter is a very short one bereft of details except for stating that the purchase was not bona fide. Curiously the plaintiff has not got into the box; nor has he produced any other evidence to support his claim that the sale is vitiated by fraud. Ultimately the burden to prove the allegation of fraud is very heavy on the person pleading fraud and in the present case the plaintiff has not made any attempt to adduce any evidence. I am inclined to hold that on that basis alone the defence of the plaintiff ought to have been rejected by the Courts below.
9. A further ground which is mainly relied on by the Courts below to have come to the conclusion that the sale by the plaintiff/defendant was not bona fide is that while the claimant contends that he had discharged the loans due to the Co-operative Agricultural Bank; recitals in the sale deed do not reflect the said fact. According to the Courts below, the recitals disclose that the amount was paid to the vendor.
10. I am unable to come to any adverse conclusion only on the basis of the said fact. It is seen that the purchaser/appellant herein has filed Exs.A.3 to A.7 being receipts issued by the Agricultural Co-operative Bank for the discharge of the amounts by instalments. All the said payments have been made prior to the completion of the sale. Much importance cannot be attached to the recitals in the sale deed which are incorporated only with a view to comply with the formality to state that full consideration has been received. Even in the sale deed, all that is stated is that the sale was being effected for the discharge of the loan due towards the Co-operative Bank and also for family expenses. Therefore, the alleged contradiction between the evidence of the appellant/claimant and the recitals of the document, cannot result in ignoring the transaction and holding that the transaction was fraudulent.
11. Learned counsel also refers to the judgment of V.Ratnam,J. as he then was, in PONNUSWAMI GOUNDER v. RAMASAMI CHETTIAR (1985 (I) M.L.J., 302) and the observation of the learned Judge that under Section 53 of the Transfer of Property Act, payment of a particular debt pursuant to the sale and non-payment of some of the other debts will not by itself tantamount to fraud on the creditors. Reference is also made to the judgment of a Division Bench of this Court in LAKSHMAN CHETTIAR v. JAYARAMA CHETTIAR . The Division Bench held that where a debtor has several creditors and if he transfers one of his properties to one of the creditors alone, it cannot be termed to be a case of fraudulent preference, without further materials and circumstances.
12. Considering the over all circumstances, I am satisfied that the reasonings given by the courts below to reject the claim petition, are not satisfactory. As stated earlier, the plaintiff has not taken any effort to adduce any oral or documentary evidence to substantiate his allegation of fraud against the claimant. The burden of proof is on him and the same has not been discharged satisfactorily. Therefore, the appellant is entitled to succeed and the above appeal is allowed. No costs.