Judgment :- 1. The plaintiff has come up in second appeal. He sued for redemption of a usufructuary mortgage as successor-in-interest of the mortgagor. The plaint schedule property belonged to one Padmanabha Marar who had executed a mortgage deed to the defendant on 3 158 for a sum of Rs. 75. Padmanabha Marar assigned his jenmom right to the plaintiff on 181161. The plaintiff thereupon instituted the suit on 23 3 62. The mortgage was admitted by the defendant; but his contention was that he was already in possession of the property under a varom arrangement and even if the mortgage is redeemed the varom will survive. Padmanabha Marar had executed two promissory notes to him on the strength of which a suit, O S.115/61, was filed by him and decree obtained. On the 8th of November, 1961 he applied for attachment of plaint schedule property in execution of the decree. Padmanabha Marar knowing about this, executed an assignment in favour of the plaintiff, who is his elder brother, benami without any consideration. The document is affected by lis pendens and it is also invalid being one executed in fraud of creditors. The trial court held that the assignment of the equity of redemption to the plaintiff is valid and allowed redemption. On appeal the learned District Judge, however, has held that the assignment is in fraud of creditors and as such hit by the bar of S.53 (1) of the Transfer of Property Act. The suit was, therefore, held to be not maintainable, and it was accordingly dismissed. 2. In this second appeal, the point arising is whether Ex-Pi assignment in favour of the plaintiff was a sham document intended to defeat or delay the creditors of the assignor. On this point evidence is really lacking. The two circumstances relied on by the learned appellate judge in coming to the conclusion that Ex-P1 is a fraudulent document are: (1) that the executee is the executant's own brother; and (2) that it was executed soon after the passing of the money decree in O.S. 115/61 against the executant. I do not think that these circumstances by themselves are sufficient to justify the finding that the document is sham and fraudulent. Pw1 the assignee has sworn before court that the entire amount minus Rs. 75 reserved for redemption of the mortgage was paid in cash under Ex-P1.
I do not think that these circumstances by themselves are sufficient to justify the finding that the document is sham and fraudulent. Pw1 the assignee has sworn before court that the entire amount minus Rs. 75 reserved for redemption of the mortgage was paid in cash under Ex-P1. The amount was received by him to discharge some of his debts and also to meet the expenses in connection with his illness. Even if the finding that it is a sham transaction is upheld it can be declared so, only to the extent of the defendant's claim. The entire transaction cannot be declared cull and void at the instance of the defendant, who is only one of the creditors, and the amount due to him is what is covered by the decree in O.S. 115/61. This position is well covered by authority. Venkatarama Iyer. J., has observed in Nanjamma v. Rangappa (AIR. 1954 Mad. 173) that: "When a transfer is declared void as against creditors under S.53 the result is not to annual it altogether, but only to render it inoperative as against creditors and that too only to the extent necessary to satisfy their claims; and subject to their claims the transaction is valid and enforceable. The learned judge has, in the course of his judgment, quoted Story on 'Equity Jurisprudence" S.371, wherein it was stated: "A conveyance of this sort (it has been said with great truth and force) is void only as against creditors; and then only to the extent in which it may be necessary to deal with the conveyed estate for their satisfaction. To this extent, and to this only, it is treated as if it had not been made. To every other purpose it is good, Satisfy the creditor, and the conveyance stands'. The conveyance, therefore, can be declared void and unenforceable only as against the defendant to the extent of the debt outstanding in his favour. 3. As against the above plea the defendant would urge that he has now become the full owner of the property by virtue of the court sale and delivery in his favour in O. S.115/61 and as such the mortgage is no longer, in existence, so that the suit for redemption-could be sustained. It is true that in the execution of the money decree in O. S.115/61 the property was brought to sale and purchased by the defendant.
It is true that in the execution of the money decree in O. S.115/61 the property was brought to sale and purchased by the defendant. Symbolic delivery has also been taken by him but by virtue of the sale and delivery, I do not think the defendant will be justified in claiming an enlarged right when once it is declared that the assignment is void if at all, only to the extent of his claim. If the defendant's present plea is upheld the effect will be that nothing, will be left for the plaintiff-assignee by virtue of the assignment in his favour. The defendant can claim only the amount due to him with interest there on and cannot claim the. entire property on the basis of the sale in execution of his money decree. In an analogous situation arising from proceeding in restoration of a petition under 0.21, R.90 dismissed for default, a Division Bench of the Madras High Court in Varadarajan v. Muthu (AIR. 1953 Mad. 587) relying on AIR. 1946 Mad. 344, and 1934 All. 433 observed: "The restoration of a petition under 0.21, R.90, dismissed for default would make the confirmation of sale already made ineffective. Such an order of confirmation may be treated as automatically Vacated or even may be considered to be null and void." Thus when once it is held that the creditor can challenge the assignment only to the extent of his claim, the subsequent proceedings by which he has enlarged his right will have to be declared inoperative as. against the debtor. 4. The sale proceedings in O. S.115/61 have to be looked at from a different angle which is also relevant in this connection. The point is that the sale was held when the suit, viz., the suit for redemption was pending. The sale proceedings' are, therefore, vitiated by the rule of lis pendens. This position was considered by a Division Bench of the Travancore-Cochin-High Court in Mddachi v. Lekshmi (ILR.1950 T. C. '636) and it was held that: "A court sale in execution of a money decree held subsequent to the institution of a mortgage suit is vitiated by the rule of lispendens. 'This is so even if the property had been attached before the institution of the mortgage suit." In the case on hand, however the attachment, was not placed at the time of 5.
'This is so even if the property had been attached before the institution of the mortgage suit." In the case on hand, however the attachment, was not placed at the time of 5. To the same effect is a Bench Decision of the Kerala High Court in People's Cooperative Bank v. Ayyana Pillai (1958 K.LT. 925). The following observation of the learned judges in that "case would repay perusal in the present case also." The learned judges held: "It has been found by the two lower courts and also accepted, by our learned brother Mr. Justice Joseph, that the delivery to the plaintiff under Ex-C was not actual delivery but only a symbolical delivery. From the dates mentioned at the beginning of the judgment it will be clear that the attachment, decree and delivery proceedings in favour of the defendant were all during the pendency of 'the mortgage suit in which the plaintiff became ultimately the purchaser of the properties. That a court sale in execution of a money decree held subsequent to the institution of a mortgage suit is vitiated by the doctrine of lis pendens, is laid down in Subramonian Iyer v. Vaidyanatha Iyer (1943 T. L. R.133) To a similar effect is the decision of 'the Division Bench of the T. C. High court reported in Madachi. v. Lakshmi (1950 I. L. R.T.C. 636) by Mr. Justice Koshi (as he then was) and Mr. Justice Sankaran. The learned judges have reviewed the case law and held that, it is. settled law that the sale of the property involved in a mortgage suit, conduced during the pendency of that suit is affected by the doctrine of lis pendens. It is not necessary here also to multiply authorities on this point, excepting to refer also to the decision of the Privy Council reported in Jadunath v. Parameswar (AIR.. 1940 P. C.11). There, their Lord ships have put very clearly the position of a mortgagee decree-holder auction purchaser in relation to that of a money decree holder auction purchaser.
It is not necessary here also to multiply authorities on this point, excepting to refer also to the decision of the Privy Council reported in Jadunath v. Parameswar (AIR.. 1940 P. C.11). There, their Lord ships have put very clearly the position of a mortgagee decree-holder auction purchaser in relation to that of a money decree holder auction purchaser. To quote: "While the purchaser at an execution sale under a mere money decree gets no more than the right, title and interest of the judgment debtor at the date of the sale the purchaser under a mortgage decree gets the right, title and interest in the mortgaged„ subjects which the mortgagor had at the date of the mortgage and charged thereby. Buying the mortgaged property free from incumbrances he gets, as it is sometimes put, the title both of the mortgagee and of those interested in the equity of redemption. He is not a mere Successor-in-interest of the owner of the equity of redemption at the date of the sale; We respectfully agree with these decisions and hold that the suit and other proceeding connected with the decree under which the defendant purchased the suit properties are vitiated by lis pendens as against the present plaintiff." It, therefore, follows that the sale in execution-of O. S.115/61 was vitiated by the rule of lis pendens. 6. The result is that in supersession of the decrees 'of the courts' below, a 'preliminary decree for redemption of the plaint schedule property is passed. The plaintiff will pay in addition to the mortgage amount and value of improvements found at the time of delivery, the amount ;covered by the decree in O. S.115/61 also with future interest found legally due. The suit will stand allowed as indicated above and the second appeal is allowed to the extent indicated. A. N. K. Allowed.