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2000 DIGILAW 913 (MAD)

Apparaj v. M. Palanichamy and another

2000-09-12

K.P.SIVASUBRAMANIAM

body2000
JUDGMENT: This appeal is directed against the judgment of the learned Subordinate Judge, Villupuram, in C.M.A.No.53 of 1998 reversing the judgment of the Execution Court, District Munsif, Tirukoilur, in E.A.No.986 of 1987 in E.P.No.450 of 1987 in O.S.No.507 of 1986. The first respondent in the said E.A. is the appellant before this Court. 2. E.A.No.986 of 1987 was filed by the first respondent herein under O.21, Rule 58, C.P.C. to set aside the order of attachment and the proposed auction sale of the property. According to him, the property originally belonged to the second respondent/judgment-debtor. The first respondent had purchased the property for valuable consideration of Rs.15,000 on 9.6.1986. He had also obtained possession of the property and he continues to be in possession of the property. It appears that the second respondent had borrowed a loan executing a promissory note in favour of one Appadurai, brother of the appellant/decree-holder. It appears that he had filed a suit in O.S.No.507 of 1986 for recovery of the loan. The first respondent came to know only later that the property in question has been attached on 10.7.1986. He came to know of the same only on 28.10.1987 that the property was to be sold on 12.11.1987. As he was employed in Bangalore and he was away, he was not aware of the order of attachment. It was only on 28.10.1987 when he came to the village he came to know of the order of attachment. Item Nos.2,3 and 4 which are attached, had been purchased by the first respondent on 9.6.1986 itself and hence the order of attachment on 10.7.1986 was not sustainable. The attachment had been brought about collusively in mala fide manner in order to cause loss to the first respondent. As on the date of the attachment, the second respondent/Judgment-debtor had absolutely no right over the property. Hence, it was necessary that the attachment and the proposed sale were liable to be set aside. 3. In the counter filed by the first respondent in E.A. the appellant herein, it was contended that the alleged sale was collusive, fraudulent, without consideration and intended only to defraud the creditors. The sale was hit by Sec.53 of the Transfer of Property Act. 3. In the counter filed by the first respondent in E.A. the appellant herein, it was contended that the alleged sale was collusive, fraudulent, without consideration and intended only to defraud the creditors. The sale was hit by Sec.53 of the Transfer of Property Act. The judgment-debtor was fully aware of the pendency of the suit and in fact had entered caveat in the suit on 3.7.1986 after having received the legal notice from the appellant on 1.3.1986. Judgment-debtor was fully aware of the order of attachment on 10.7.1986. Therefore, the present application which had been filed only on 20.10.1987 was not bona fide. 4. On a consideration of the said contentions and the evidence, the Execution court for several reasons stated in its judgment held that the sale in favour of the first respondent was not bona fide and with the result E.A.No.986 of 1989 was dismissed. However, the appellate court reversed the said finding and allowed the appeal thereby setting aside the order of attachment. Hence, the present appeal by the decree-holder. 5. Learned counsel for the appellant contends that the sale was collusive and fraudulent and intended to defraud the creditors and to nullify the order of attachment. He would point out that a legal notice had been issued as early as 28.2.1986 itself. On 3.7.1986, the judgment-debtor had also entered caveat in the suit and the order of attachment was passed on 10.7.1986. No attempt was made to question the attachment and in fact the suit had also been decreed on 19.2.1987. The purchaser was none else than the Judgment-debtor’s sister’s son-in-law. The sale was therefore, directly hit by Sec.53 of the Transfer of Property Act. 6. According to learned counsel for the respondent the sale was perfectly valid and supported by consideration. The attestor has been examined as a witness to prove the execution of the sale deed. Admittedly, as on the date of the sale there was no attachment. Further a petition under O.21, Rule 58, C.P.C. was misconceived and the appellant should have filed a separate suit. A reading of Sec.53 of the Transfer of Property Act along with the O.38, Rule 10, C.P.C. would make it clear that the relief prayed for by the appellant was maintainable only by a separate suit. 7. Further a petition under O.21, Rule 58, C.P.C. was misconceived and the appellant should have filed a separate suit. A reading of Sec.53 of the Transfer of Property Act along with the O.38, Rule 10, C.P.C. would make it clear that the relief prayed for by the appellant was maintainable only by a separate suit. 7. For the proposition that only a separate suit can be filed, reliance is placed on the judgment of the Supreme Court in Hamda Ammal v. Avadiappa Pathar, (1991)2 L.W. 110. In that case, the Supreme Court considered the maintainability of an application questioning a sale deed which had been executed much prior to the attachment before judgment. It was held that having regard to the fact that the sale had taken place prior to the institution of the suit, it cannot be said to have been made with the intention to obstruct the execution of the decree. The rights of the purchaser would be protected under O.28, Rule 10, C.P.C. 8. I am unable to sustain the objections taken by counsel for the respondent in the context of the maintainability of petition under O.21, Rule 58, C.P.C. The judgment of the Supreme Court was rendered in the context of a sale which took place in the year 1970 and the suit had been filed and attachment also obtained in the year 1970. As pointed out by learned counsel for the appellant by virtue of the Amendment Act 104 of 1976, sweeping amendments were made to the provisions of the Code of Civil Procedure. Under O.21, Rule 58 wherein all questions relating to title or interest in the property attached have to be decided, it is specifically stipulated that such disputes or questions shall be adjudicated only in the claim proceedings and not by a separate suit: vide Amendment O.21, Rule 58(2), C.P.C. The effect of the amendment was considered by a Division Bench of this Court in Southern Steelmet and Alloys v. B.M.Steel, (1978)1 M.L.J. 468 : A.I.R. 1978 Mad. 270, holding that after the amendment the proceedings under O.21, Rule 58, C.P.C. were not summary, but the decision would be as if rendered in a regular suit after full examination of the rights of the parties. The said judgment was also followed by K.M.Natarajan, J. in Alamelu Ammal v. Chinnaswamy Reddiar, (1989)1 L.W. 131 . 9. 270, holding that after the amendment the proceedings under O.21, Rule 58, C.P.C. were not summary, but the decision would be as if rendered in a regular suit after full examination of the rights of the parties. The said judgment was also followed by K.M.Natarajan, J. in Alamelu Ammal v. Chinnaswamy Reddiar, (1989)1 L.W. 131 . 9. Therefore, the present proceedings being after the advent of the amended O.21, Rule 58, C.P.C. the objections as regards the maintainability of the present application are not sustainable. 10. On the merits of the appeal, it is true that the sale had taken place prior to the order of attachment. But Sec.53 of the Transfer of Property Act is specifically intended to eliminate such objections and to invalidate fraudulent transfers effected with intent to defeat or to delay the creditors by such transfers. Of course, the burden of proving such improper motive or intention is on the party who pleads the said allegation. Therefore, it has to be seen whether the appellant herein had satisfactorily established the lack of bona fides in the sale transaction. 11. Even on the basis of the introductory facts as stated above, the evidence clearly points out absolute lack of bona fides on the part of the judgment-debtor/vendor. The following facts establish lack of bona fide not only on the part of the judgment-debtor, but also the purchaser: (a) The suit notice had been issued as early as 28.2.1986 and received by the judgment-debtor on 1.3.1986 for which a reply notice was also issued on 7.3.1986. (b) Even though the sale is alleged to have taken place on 9.6.1986, the judgment-debtor enters caveat on 3.7.1986 and in the caveat notice - Ex.B.4, there is absolutely no whisper or reference informing the sale of the property to some other person. In fact, he had expressed that the decree-holder was trying to attach the property belonging to the judgment-debtor with a motive to defame him. He had also gone further and said that he had not attempted to sell any of his properties and that there was no necessary for him to do so. The said contention would only establish that the sale transaction dated 9.6.1986 was nothing more than a sham transaction and not intended to transfer the interest and title of the judgment-debtor in the property. The said contention would only establish that the sale transaction dated 9.6.1986 was nothing more than a sham transaction and not intended to transfer the interest and title of the judgment-debtor in the property. The conduct of the judgment-debtor is therefore, proved to be absolutely lacking in bona fides. (c) As far as the purchaser/respondent herein is concerned, it is established that the he is closely related to the judgment-debtor being his sister’s son-in-law. (d) It is admitted that the alleged purchaser was working at Bangalore as a vegetable vendor selling vegetables in a hand cart. He had migrated to Bangalore since he had no income. He has also admitted that he had not other property or house in the village where the property was situated. These facts would establish that the purchaser has neither sources nor necessity to purchase the property in the village. In the context of his capacity to purchase the property, it was very vehemently contended that there was no bar for a poor person to purchase any property. When the truth of the transaction is under challenge, the alleged purchaser’s capacity to buy the property is called in question. The burden is on the purchaser to show that he had enough source of money or that he had raised any loan etc. It is nobody’s case that a poor citizen cannot purchase a property. (e) The judgment-debtor had not chosen to get into the box. P.W.2 a witness to the sale deed is admittedly the brother of the judgment-debtor. D.W.3 another witness also admits that he is a relative of the judgment debtor. P.W.4 is none other than the junior father-in-law of the purchaser. They have also spoken about the transaction. (f) Though in a parrot like manner P.Ws.2, 3 and 4 had stated that Rs.5,000 was paid one year prior to the sale, another Rs.5,000 six months prior to the sale and another Rs.1,500 was paid three days prior to the sale, it was also admitted that they are not personally aware of the first two payments and as to whether the said amount was utilised by the judgment-debtor to clear the debts. No receipts are produced to evidence any one of the three alleged payments and hence the passing of consideration has to be held as not proved. No receipts are produced to evidence any one of the three alleged payments and hence the passing of consideration has to be held as not proved. (g) Though the claimant and his witnesses state that the stamp papers for the sale deed were purchased on 6.6.1986, it is admitted that one of the five stamp papers is dated 25.4.1986, which is not properly explained. In fact, the claimant states that all the papers were purchased only on 6.6.1986 and that the mentioning of the date as 25.4.1986 was a mistake. 12. The above mentioned circumstances clearly establish lack of bona fides not only on the part of the vendor/judgment-debtor, but also on the part of the alleged purchaser. The stand taken by the Judgment-debtor in his caveat notice would positively establish that the parties could not have intended to transfer any title to the purchaser, since on his own statement, he did not intend to, nor was required to sell any property. The conduct of the purchaser also does not disclose any good faith or the purchase being supported by the proper consideration. Neither the appreciation of the evidence nor the legal effect of Sec.53 of the Transfer of Property Act, had been properly considered by the appellate Court. Consequently, I am unable to sustain the order of the appellate Court in setting aside the well considered judgment of the executing Court. 13. In the result, the above appeal is allowed and the order of the executing Court in allowing E.A.No.986 of 1987 is resorted. No costs.