JUDGMENT Allsop and Sinha, JJ. - This is an appeal by Defendants Nos. 2 and 3 in a suit for possession and damages. There was in the city of Moradabad a firm styled Munauwar and Sons dealing in alopathic medicines. The firm was owned by two persons, Munauwar and Zafar. Munauwar and Zafar, as also some other persons who figure in this litigation, were, as appears from the pedigree set forth at page 54 of our paper book, related as below: 2. The firm appears to have flourished for some time, after which it fell on evil days and had to incur certain debts. Among the persons to whom they were indebted were Hamid Ali, Hamid Husain and B. M. Shah & Co of Bombay. On September 20, 1939 Munauwar and Zafar entered into an agreement to sell the articles in their shop to Hamid Ali. Out of the sale consideration agreed upon, Rs. 975 was paid by Hamid Ali by way of earnest money. On October 5, 1939 Hamid Husain, one of the creditors, brought a suit for recovery of Rs. 1,200, with interest, on a promissory note alleged to have been executed by Munauwar and Zafar on September 27,1939. In this suit Hamid Husain made a prayer for attachment before judgment. This prayer was granted and Hamid Ali was appointed supurddar. The sale-deed in pursuance of the contract of sale mentioned above was not executed by Munauwar and Zafar, with the result that Hamid Ali brought a suit against them for the return of Rs. 975. On October 26, 1939 Nisar Ahmad, another creditor, brought a suit against Munauwar and Zafar on the basis of his promissory note. It was while proceedings against the father and son had gone so far, that they executed on October 26, 1939 a sale of the articles in their shop for a sum of Rs. 3,500 in favour of Hamid Ali. The details of the sale consideration have been set forth at page 109 of the paper-book and they are as follows: 1. Allowed a set off to the vendee on account of the amount due under suit No. 2304 of the Court of the Judge of small causes, Moradabad ........... Rs. 1,119-4-0. 2. Left with the vendee for payment of the amount due under suit No. 411 of 1939 of the Munsif of Moradabad, to Hamid Husain, Plaintiff .......... Rs.
Allowed a set off to the vendee on account of the amount due under suit No. 2304 of the Court of the Judge of small causes, Moradabad ........... Rs. 1,119-4-0. 2. Left with the vendee for payment of the amount due under suit No. 411 of 1939 of the Munsif of Moradabad, to Hamid Husain, Plaintiff .......... Rs. 1,400 3. Left with the vendee for payment of the amount due under suit No. 2384 of 1939 of the Court of the Judge of small causes, Moradabad, to Nisar Ahmad, Plaintiff .......... Rs. 944 4. Received in cash in a lump sum from the vendee at the time of registration before the Sub-Registrar ........... Rs. 30-12-0 Total Rs. 3,500 3. After the execution of the sale deed the name of the firm was changed and it was called the Muslim Medical Stores. 4. On October 29, 1939 B. M. Shah & Co. obtained a decree for about Rs. 309 from the Court of small causes at Bombay, which was subsequently transferred at their instance to Moradabad and put into execution. They prayed for the attachment of the goods of the firm, the title to which had passed under the sale to Hamid Ali. On December 14, 1939 M. M. Shah & Co. and B. M Shah & Co., two of the creditors, made an application to the insolvency Judge of Moradabad, praying for the insolvency of Mohammad Husain Zafar as proprietor of Munauwar & Sons and also prayed for the appointment of an ad interim receiver. On December 19, 1939 the receiver took possession of the goods. It was in these circumstances that the present suit for possession was brought by Syed Hamid Ali on March 13, 1940. The plaintif's case was that the sale was a genuine sale executed by Zafar and Munauwar for discharging the genuine debts due from them and that he himself was a bona fide purchaser. To this suit were cited as Defendants M. M. Shah & Co. as .also B. M. Shah & Co. along with others, including Munauwar and Zafar. The defence, in the main, was that all the transactions which culminated in the sale of October 27, 1939 were fictitious transactions and the sale itself was not genuine.
To this suit were cited as Defendants M. M. Shah & Co. as .also B. M. Shah & Co. along with others, including Munauwar and Zafar. The defence, in the main, was that all the transactions which culminated in the sale of October 27, 1939 were fictitious transactions and the sale itself was not genuine. It was also pleaded that the Plaintiff had suffered no damage and, at all events, the leave of the insolvency Court was necessary for the institution of the suit. 5. The learned Civil Judge has found that the sale in favour of the Plaintiff was a genuine sale and that it was for value and consideration. He has also found that no permission was necessary and the Plaintiff was entitled to damages from Defendants Nos. 2 and 3. Against the above decree the Defendants have come up in appeal. 6. It must be borne in mind that the suit as originally framed was for recovery of the specific articles in the shop styled the Muslim Medical Stores. There was, later, an amendment and the relief, in the amended form was that " if any goods or medicines were spoiled, the Plaintiff may be awarded the price thereof." The question before us is whether the Plaintiff has succeeded in proving that all the transactions which culminated in the sale of October 27, 1939 and the sale itself were genuine transactions or whether the Defendants have succeeded in proving that they were not genuine. The law draws a clear distinction between a fictitious and a fraudulent transaction, and the attack by the learned Counsel for the Appellant Mr. Shambhu Nath Seth, has been directed against the transaction as though it were entirely fictitious and not merely fraudulent. It may also be clearly borne in mind that the burden of proving that a transaction is not real lies upon the person who says that it is not real. 7. One of the grounds on which the learned Counsel for the Appellants invites us to hold that the transaction in dispute is farzi is the relationship of the parties. We have already shown the relationship in the pedigree. Munauwar Husain is only a cousin of Mahfuzul Nisa and Mahbubul Nisa, the wives of Hamid Ali and Hamid Husain. It is not a case of relations who are members of the same family.
We have already shown the relationship in the pedigree. Munauwar Husain is only a cousin of Mahfuzul Nisa and Mahbubul Nisa, the wives of Hamid Ali and Hamid Husain. It is not a case of relations who are members of the same family. Assuming that they were close relations, to hold that they combined to help Munauwar and Zafar in saving the property in dispute is to be oblivious of the various steps which were taken by them in Courts of law to have their rights established against them. It is impossible to hold that all the steps which they had taken and which have been narrated above were collusive and fictitious. 8. The other ground on which the genuineness of the transaction is assailed is that Hamid Ali was indebted to the extent of Rs. 4,300 on the basis of a mortgage and it was not expected of him that he had Rs. 3,500 which he could spend on the purchase of the articles in dispute. It must, in the first place, be borne in mind that part of the consideration went in satisfaction of his own debt. It was by no means a small fraction of the sale consideration. It was Rs. 1,119-4-0 out of a total consideration of Rs. 3,500. It must also be borne in mind that Hamid Ali was carrying on some business of his own and it is not suggested that the business was not profitable. After all, a sum of Rs. 3,500 -even if no allowance is made for the sum of Rs. 1,119-4-0-is not a very large amount and it was not difficult for a man of Hamid Ali's means, assuming that he was indebted to the extent of Rs. 4,300, to have in his possession that sum. It has been argued that account books hav e been produced by him to show that he had in his possession Rs. 3,500. He may or may not have got account books. No attempt was made to summon them from his possession. It lay, after all, upon the Defendants to establish that the transaction was not a real transaction and this they have failed to do. 9. It has also been contended that in the agreement to sell there was a stipulation that the goodwill would also pass to the vendee; but that stipulation is absent from the find deed itself.
It lay, after all, upon the Defendants to establish that the transaction was not a real transaction and this they have failed to do. 9. It has also been contended that in the agreement to sell there was a stipulation that the goodwill would also pass to the vendee; but that stipulation is absent from the find deed itself. The stock-in-trade was there; Hamid Ali got it. It has not been suggested that the reputation of the firm was so high that any particular value was attached to the good-will over and above the contents of the shop. It was, after all, medicines worth only Rs. 3,500 which passed to the vendee, and it is not difficult to believe that he attached no particular significance to the good-will and the sale-deed therefore does not contain any clause to that effect. Lastly, it has been argued that Munauwar himself was employed in the firm Muslim Medical Stores and that this is very strong proof that the whole thing was a made up affair. Hamid Ali has gone into the witness box and has said that he was not acquainted with the business and Munawar was therefore employed on a salary of Rs. 30 a month. The Plaintiff is also an illiterate man. This explanation is natural and no reason has been suggested why it should not be accepted. Hamid Ali was carrying on a different business and any prudent man in his position would have done precisely what he did. At page 116 is a receipt dated November 1, 1939, for Rs. 90, which was received by Numuwar in advance and which also shows that he was employed on a salary of Rs. 30 a month. Nothing has been brought out in the evidence, either oral or documentary, to suggest that this receipt is not genuine. It is also clear that the business was not left entirely in the hands of Munauwar, but the Plaintiff himself used to sit at the shop, though he did not act as a salesman.
30 a month. Nothing has been brought out in the evidence, either oral or documentary, to suggest that this receipt is not genuine. It is also clear that the business was not left entirely in the hands of Munauwar, but the Plaintiff himself used to sit at the shop, though he did not act as a salesman. Abdul Wahid who is a witness for the Defendants and whose shop is three or four shops away from the Muslim Medical Stores, saw the Plaintiff, Hamid Ali, sitting at that shop This makes it clear that Munauwar was there not as the owner of the shop, as he used to be prior to the sale, but as the servant of Hamid Ali after the execution of the sale deed in his favour. 10. On a consideration of all the circumstances of the case, it is impossible to say that the sale in favour of Hamid Ali was not genuine sale. Defendants Nos. 2 and 3 who are the Appellants before as, have, in any case, not succeeded in placing before the Court sufficient materials to invalidate that transaction. 11. The learned Additional Civil Judge has held that leave of the Court was not necessary for the institution of the suit. We are relieved of the necessity of deciding this question in as much as the receiver has not preferred any appeal. 12. The only other question which falls to be decided is the amount to which the Plaintiff is entitled and against whom this decree should be passed. 13. The sale consideration was Rs. 3,500. The Plaintiff purchased medicines worth Rs. 1,864 after the sale. This makes a total of Rs. 5,364. He is entitled to profits at the rate of 10 per cent. which comes to Rs. 536 thus making an aggregate of Rs. 5,900. The Plaintiff admittedly sold away medicines worth Rs. 2,200. The receiver has in his hands Rs. 2,700 being the sale proceeds of the medicines of which he took possession. The latter two sums must be deducted from the total sum of Rs. 5,900. We thus arrive at the figure of Rs. 1,000 payable to the Plaintiff. 14. The next question is who is liable for the payment of this amount ?
2,700 being the sale proceeds of the medicines of which he took possession. The latter two sums must be deducted from the total sum of Rs. 5,900. We thus arrive at the figure of Rs. 1,000 payable to the Plaintiff. 14. The next question is who is liable for the payment of this amount ? It was the Appellants who moved the insolvency court on December 19, 1939, and it was at their instance that a receiver was appointed That receiver took possession of the property on December 19, 1939, inspite of the Plaintiff's objections. It is, therefore, the Appellants who must be held liable for all the loss which has been caused to the Plaintiff. In the case of Abdul Rahim v. Sital Prasad (1919) 17 A L J 856., the facts were briefly these. One Abdul Rahim kept a pedlar's shop. His father, Abdul Qayum, carried on the same business. The father was declared insolvent. Sital Prasad, a creditor of Abdul Qayum, applied that certain goods which really belonged to Abdul Rahim, be taken into the custody of the court, on the allegation that Abdul Qayum and not Abdul Rahim was the owner. The court ordered the receiver to attach the goods and the latter, acting upon the indication given by Sital Prasad, attached those goods. Abdul Rahim objected that the property was his and on inquiry it was found to be his. He thereupon prayed for the return of the goods. Sital Prasad objected to the delivery and said that he wanted to challenge the order by an appeal to the High Court and also prayed that the receiver might remain in possession of those goods. Sital Prasad appealed to the High Court and secured an injunction from this Court restraining the delivery of goods to Abdul Rahim. The appeal of Sital Prasad was ultimately dismissed by the High Court, but the goods had greatly deteriorated in the hands of the receiver and were delivered to Abdul Rahim in a damaged condition. In an action by Abdul Rahim for damages their Lordships in an appeal u/s 10 of the Latters Patent observed: The learned Judge of this Court rightly observes that from the moment Sital Prasad applied for this injunction a totally different set of considerations arises.
In an action by Abdul Rahim for damages their Lordships in an appeal u/s 10 of the Latters Patent observed: The learned Judge of this Court rightly observes that from the moment Sital Prasad applied for this injunction a totally different set of considerations arises. It was a fresh act done by Sital Prasad and he adds that it was necessary for Abdul Rahim, if he had a case, to show if he relied upon this act of Sital Prasad, that such act or application was a wrong to him and that the damage done by the animals was the result of that order.... The illegal attachment of Abdul Rahim's goods was the direct act of Sital Prasad for which he became immediately responsible in Law.... 15. On the principle which is the basis of the decision in the above case, the Appellants are the only persons liable for the loss caused to the Plaintiff. It was they, as said above, who set the machinery of the Court in motion against the Plaintiff and it was at their instance that the receiver was appointed and obtained possession of the goods which legitimately belonged in the Plaintiff in that they had passed to him under a valid sale. 16. We can, however, pass no decree against the Appellant in respect of the sum of Rs. 2,700 in the hands of the Receiver. The Plaintiff can, if so advised, move the Insolvency Court for such relief as the law allows him against the Receiver and it will be for that Court to consider his request and grant or refuse it. 17. In the result we modify the decree of the Court below to this extent that while maintaining the sale in favour of the Plaintiff, we hold the Appellant liable for the sum of Rs. 1,000 instead of Rs. 5,992-6-0 decreed against them by the learned Civil Judge. 18. In the circumstances of the case we direct the parties to bear their own costs.