Research › Browse › Judgment

Kerala High Court · body

1967 DIGILAW 114 (KER)

National Steamship Co. , Limited v. Abu

1967-06-02

V.BALAKRISHNA ERADI

body1967
Judgment :- 1. The first defendant in O. S.92/58 of the Munsiff's Court, Kozhikode is the appellant in this Second Appeal. The said suit was brought by the first respondent herein for a declaration of his title to 3 items of suit properties and to set aside the summary order passed against him in E. A. 966/57 in O. S.108/55. The short facts necessary for appreciating the contentions of the parties are as follows: 2. The first defendant company had to obtain certain amounts from the second defendant and his brother-in-law, one Abubacker, in respect of the breach of the terms of an indemnity bond executed to the company by the said two persons. The suit properties belonged to the second defendant. He had purported to execute a mortgage over the properties under a registered hypothecation bond dated 5 4 54 in favour of one Abdulla and subsequently under Ext. A 4 dated 7 6 55 the properties were purported to be assigned by the second defendant in favour of the plaintiff for a consideration of Rs. 6000/-, the plaintiff being a son-in-law of his co-debtor Abubacker. The first defendant company brought a suit against Abubacker as well as the present second defendant for recovery of the amounts due to it and the said suit (0. S.108/55 of the Subordinate Judge's Court, Calicut) was decreed as prayed for in favour of the company by judgment dated 31157 (Ext. B-7). In execution of the said decree the suit properties were brought to sale by the decree-holder company as properties belonging to the second defendant. The plaintiff thereupon filed E. A. 966/57 to establish his right over the properties contending that the properties had been validly assigned to him by the second defendant under the sale-deed Ext. A-4 and were not therefore liable to proceed against in execution of the decree obtained by the company against the second defendant. This claim petition was dismissed by the executing court on 15 158 and the order passed on the petition is produced and marked in the present suit as Ext. A-1. The plaintiff has come forward with this suit to get the claim order set aside and he seeks a declaration from court of his title and possession of the suit properties. The first defendant company who is the contesting defendant in the case raised the contention that Ext. A-1. The plaintiff has come forward with this suit to get the claim order set aside and he seeks a declaration from court of his title and possession of the suit properties. The first defendant company who is the contesting defendant in the case raised the contention that Ext. A-3 mortgage stated to have been executed by the second defendant in favour of Abdulla was a collusive and sham transaction, the document itself being an ante dated one, that the promissory-note debt receipted therein was false, that the plaintiff herein who is the son-in-law of Abubacker had no means at all to advance the consideration stated to have been paid for the sale Ext. A-4, that the transaction Ext. A-4 was not a true or bona fide transaction but a mere colourable and collusive transaction created only for the purpose of delaying the realisation by the company of the amount due to it from the second defendant, and that the order passed by the executing court on E. A, 966/57 was perfectly correct and should not be set aside. 3. The trial court after careful discussion of the evidence adduced in the case found that Ext. A 3 is not a bonafide transaction and that it had been brought about under highly suspicious circumstances. It has found that the said document was ante dated and had been executed on stamp papers purchased on different anterior dates by 5 different persons. The alleged mortgagee Abdulla had not been examined by the plaintiff and this circumstance was relied on by the trial court to state that there was absolutely no evidence to show whether Abdulla was a person capable of raising Rs. 4000/ alleged to have been advanced under Ext. A 3. The promissory-note referred to as an antecedent debt for discharging which Ext. A 3 was executed had not also been produced in evidence. For these and other reasons stated by the trial court in Para.5 of its judgment it came to the conclusion that Ext. A 3 was not a genuine or real transaction. It then proceeded to consider the truth and validity of Ext. A 4 and on this question also it found that the plaintiff had not satisfactorily proved that he had discharged the consideration mentioned in Ext. A 3 was not a genuine or real transaction. It then proceeded to consider the truth and validity of Ext. A 4 and on this question also it found that the plaintiff had not satisfactorily proved that he had discharged the consideration mentioned in Ext. A 4 nor even that there was any pressing necessity or other circumstance probabilising the second defendant executing the sale deed Ext. A-4 for clearing off the alleged liabilities mentioned therein. It may be stated that out of the total consideration of Rs. 6000/- mentioned in Ext A 4 only Rs. 3 5 4 is recited as having been paid in cash and the balance amount is reserved with the vendee for the discharge of two liabilities, one stated to be due to Dharmodayam Company under a kuri transaction, and the second, the mortgage debt due under Ext. A-3. The circumstance that the plaintiff and the second defendant are brothers was taken by the trial court as one not without significance. The evidence adduced in the case did not according to the trial court, disclose the existence of any tangible assets with the plaintiff at the relevant time so as to enable him to advance the consideration for Ext. A-4 or to discharge the debts recited therein. It was also found by that court that there was no actual transfer of possession to the plaintiff under Ext. A-4 and that the second defendant himself continued to be in enjoyment of the property. The evidence of pws. 2 and 3 relied upon by the plaintiff to establish possession was not accepted by the trial court as in its opinion, these witnesses were not witnesses of truth. Accordingly, it held that the transaction evidenced by Ext. A 4 was not a true transaction but only a colourable, collusive and sham one which was entered into by the second defendant for the purpose of putting the property beyond the reach of the company. On these findings the suit was dismissed by the trial court. 4. On appeal by the plaintiff to the Subordinate Judge's Court, Kozhikode, the learned Subordinate Judge has reversed the decision of the trial court and granted a decree to the plaintiff as prayed for by him. The learned judge took the view that by the production of Ext. On these findings the suit was dismissed by the trial court. 4. On appeal by the plaintiff to the Subordinate Judge's Court, Kozhikode, the learned Subordinate Judge has reversed the decision of the trial court and granted a decree to the plaintiff as prayed for by him. The learned judge took the view that by the production of Ext. A-3 containing an endorsement of discharge which according to the learned judge was by itself sufficient to prove the factum of payment of consideration by the plaintiff for the transaction evidenced by Ext. A-4, the plaintiff must be taken to have proved that the major portion of the. consideration provided for in the document Ext. A-4 had passed, and if this be so, he must be taken to have discharged the burden that lies on him. In so holding, the learned judge purported to apply to the case the principles laid down by the Privy Council in F. E. A. R. M. Firm v. Manug Ba Kvin (AIR. 1927 PC. 237). It was after so holding that the plaintiff had already discharged the burden of proving the passing of the major part of the consideration reserved with him under Ext. A-4 that the learned judge proceeded to consider the contention of the respondent that Ext. A-3 itself was a fictitious and collusive transaction; and in deciding this question as to the truth and validity of Ext. A-3 the learned judge took the view that the burden is entirely on the defendant to show that it was collusive and that notwithstanding the fact that the document was under very suspicious circumstances and appeared to have been ante dated, the defendant according to the learned judge, had not succeeded in establishing that the transaction is a fictitious one. On this ground the learned judge reversed the findings of the trial court. He further held that the trial court was not justified in rejecting the evidence of pw. 2 and holding that possession had not been proved to have passed to the plaintiff. 5. The learned counsel for the appellant has attacked the findings of the lower appellate court mainly on two grounds. In the first instance, he urges that the lower appellate court has proceeded on a wrong assumption that the burden of proof in the case was on the defendant and that this error has vitiated his entire approach to the case. The learned counsel for the appellant has attacked the findings of the lower appellate court mainly on two grounds. In the first instance, he urges that the lower appellate court has proceeded on a wrong assumption that the burden of proof in the case was on the defendant and that this error has vitiated his entire approach to the case. It is next contended that there is no consideration or discussion of the evidence by the lower appellate court in its judgment and that while reversing the findings of the trial court it has not even adverted to several of the very significant facts and circumstances relied upon by the trial court in support of its findings. 6. I am inclined to accept the above contentions urged before me by the appellant's learned counsel. The suit is one to set aside a claim order where a civil court has after an adjudication between the parties has passed an order adverse to the plaintiff. As held in Dhirendra Nath v. Indra Chandra (AIR. 1939 Cal. 578) the claim order is conclusive unless it is displaced by declaratory suit brought under the provisions of 0.21 R.63 CPC. and the onus is certainly upon the claimant to show that he has a right which was wrongly denied by the order. The same view has been expressed in Jamabar Kumari v. Askaran Boid (AIR. 1916 Cal. 666) where Jenkins, C. J. has held that the burden in a case like the present one could not be discharged merely by showing that the plaintiff is the ostensible purchaser in whose name some documents stand; he must prove that they are as good as they look and it is not for the defendant to make out that they are collusive. 7. A similar question came up for consideration before a Division Bench of the same High Court in Zeissen and Co. v. Satya Charan (AIR. 1943 Cal. 534). At page 538 of the Reports it is observed: "The authorities undoubtedly indicate that in suits under 0.21, R.63, where the plaintiff relies on documents to prove his title the initial onus is on him to establish the genuine nature of the documents be produces. v. Satya Charan (AIR. 1943 Cal. 534). At page 538 of the Reports it is observed: "The authorities undoubtedly indicate that in suits under 0.21, R.63, where the plaintiff relies on documents to prove his title the initial onus is on him to establish the genuine nature of the documents be produces. Where the circumstances surrounding the execution of the document from which the plaintiff's title is said to be derived are not free from suspicion, it is clearly for him to establish the genuine nature of the transaction of which that document is evidence." In the light of these rulings with which I am in respectful agreement, the burden of proving that the conveyance under Ext. A-4 was a bonafide transaction for valuable consideration lay heavily on the plaintiff and the approach to the case made by the learned Subordinate Judge on the assumption that the duty was on the defendant to establish that the documents Exts. A-3 and A-4 were collusive and sham is, therefore, clearly wrong. The Subordinate Judge is also in error in proceeding to discuss the truth of Ext. A-4 transaction without first deciding the question as to the genuine nature of Ext. A-3 because Ext. A-3 debt forms the major item of consideration reserved with the vendee under Ext. A-4. What has been done by the learned Subordinate Judge, as already pointed out by me, is to hold that the consideration recited in Ext. A-4 is true on the sole ground that Ext. A-3 contains an endorsement of discharge. But this conclusion could not have been validly arrived at unless the court was already satisfied that Ext. A-3 debt which was purported to be discharged by executing Ext. A-4 was a true and real debt and not a mere fictitious one as alleged by the defendant. Therefore, the approach by the learned judge to this vital question as regards the truth of Ext. A-4 sale is also clearly vitiated. It has further to be mentioned that the learned Subordinate Judge has not in his judgment even referred to the several circumstances relied on by the trial court as probabilising the fictitious character of Exts. A-3 and A-4 transactions. A-4 sale is also clearly vitiated. It has further to be mentioned that the learned Subordinate Judge has not in his judgment even referred to the several circumstances relied on by the trial court as probabilising the fictitious character of Exts. A-3 and A-4 transactions. Before reversing the judgment of the trial court it was clearly the duty of the appellate court to refer to the reasoning of the first court on the basis of which it had recorded the findings under challenge in appeal, and unless this is done, it is not possible to know whether the appellate court had applied its mind to those facts and circumstances which bad influenced the trial court in arriving at those findings. In view of the course that I propose to adopt, I do not wish to express myself further on the merits of the case lest it should in any way embarass the appellate court in the further proceedings that are to be taken by it pursuant to this judgment. I have indicated that I am not satisfied that there has been a proper consideration of the evidence by the lower appellate court and also that its understanding of the legal position regarding the burden of proof was incorrect. I, therefore, discharge the findings entered by the lower appellate court on all the points set out by it for decision and remit the appeal to the lower appellate court for fresh disposal according to law in the light of the observations contained in this judgment. The Second Appeal is accordingly allowed and the judgment and decree of the lower appellate court are set aside. The costs of the Second Appeal will abide and be provided for in the fresh decree to be passed by the lower appellate court. The court fee paid on the Memorandum of Second Appeal will be refunded to the counsel for the appellant. No leave. Allowed.