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2016 DIGILAW 336 (KER)

T. v. Anil Kumar VS James Thomas

2016-03-22

K.RAMAKRISHNAN, P.N.RAVINDRAN

body2016
JUDGMENT : K. Ramakrishnan, J. The claim petitioner in E.A. No. 518 of 2008 in E.P. No. 159 of 2008 in O.S. No. 90 of 1997 on the file of the Sub Court, Manjery is the appellant herein. The first respondent herein is the decree holder in O.S. No. 90/1997 which was filed by him on 20.06.1997 against the father of the appellant who is the second respondent herein for realisation of 2,00,000/- with interest and cost. The first respondent herein filed I.A. No. 1469/1997 for attachment, before judgment along with suit and it was posted to 25.11.1997 for appearance of parties and the second respondent herein who was sole defendant in the suit appeared but he did not file any objection. So on 06.12.1997 an interim conditional attachment was passed attaching the property and also to show cause, why he should not furnish security for 2,75,000/-. The case was posted to 15.09.1998. On that day also no objection was filed and the interim attachment was made absolute on that day. According to the claim petitioner, the document of sale was executed by second respondent in favour of his brother Murali on 05.12.1997 and it was registered on 08.12.1997 as per Ext.A1 sale deed and thereafter the property was sold in favour of the claim petitioner by his brother as per Ext.A2 sale deed No. 1199/2000, dated 14.03.2000 and he was not aware of the attachment. The property was sold even prior to the attachment and the decree holder has no right over the same. So he filed E.A. No. 518/2008 under order 21, Rule 58 of the Code of Civil Procedure for lifting the attachment and release the property from attachment and release the property in his favour. 2. The second respondent remained absent. First respondent/decree holder filed counter stating that the application is not maintainable. The application was filed through the mother as power of attorney holder and the property was sold by the father in favour of the son knowing that attachment, application has been filed and the property is within the jurisdiction of Nilambur Sub Registrar's office, but the document of sale was registered in Malappuram Registrars office and it is a fraudulent transfer made by the father without any consideration to defeat the right of the decree holder. The property was not in his possession. The property was not in his possession. They were aware of the attachment and the allegation that they came to know of the attachment only when the decree holder came and told about the same is not correct. So it is only a fraudulent transfer and the claim petitioner did not get any right in the property. So he prayed for dismissal of the application. 3. The brother of the claim petitioner was examined as PW1 and Exts.A1 to A3 were marked on behalf of the claimant and Ext.B1 was marked from the side of the respondent. After considering the evidence on record, the court below found that it is a fraudulent transfer and dismissed the application. Aggrieved by the same, the present appeal has been preferred by the appellant/claim petitioner before the court below. 4. Heard Sri. A.T. Anilkumar, learned counsel appearing for the appellant and Sri. Ashok M. Cherian, learned counsel appearing for the first respondent. Second respondent remained absent. 5. The counsel for the appellant submitted that the document was executed on 05.12.1997, on that day there was no attachment. The attachment order was made only on 06.12.1997 and the document was registered on 08.12.1997 and the registration relates back to the date of execution of the document and as such on the date of attachment, there is no salable interest in favour of the judgment debtor and as such the sale in favour of the decree holder is not valid as the judgment debtor was no interest in the property and the decree holder will not get any title on the basis. He had relied on the decision reported in Hamda Ammal v. Avadiappa Pathar and three others [ (1991) 1 SCC 715 ] in support of his case. 6. On the other hand, the learned counsel for the respondent submitted that it is a fraudulent transfer under Section 53 of the Transfer of Property Act and the father had not raised any objection regarding the sale at the time when the property was sold and it is long after the property was sold and when he applied for delivery of the property, that the application has been filed with a malafide intention to defeat the right of the decree holder. The court below had rightly found that the sale is a fraudulent transfer and as such the claim petitioner is not entitled to file the application and rightly dismissed the application. 7. It is an admitted fact that the first respondent herein filed O.S.N.90/1997 before the sub Court Manjery, against the second respondent herein for realisation of 2,00,000/- with interest and costs. The suit was filed on 15.11.1997 and along with the suit, he filed I.A. No. 1469/1997 for attachment before judgment of the claim schedule property and notice was ordered and posted for appearance of parties on 25.11.1997. Though the second respondent herein appeared, he took time for filing the counter and the case was posted to 06.12.1997. Since the respondent did not file any objection the court below by Ext.B1 order passed an interim order of attachment of the claim schedule property and also issued shaw cause as to why he should not furnish security for 2,75,000/- and the interim order should not be made absolute. Since no counter was filed, the interim order of attachment was made absolute on 15.01.1998. It is an admitted fact that the present sale deed was said to have been executed on 05.12.1997 when the interim attachment application as I.A. No. 1469/1997 was pending and it was within the knowledge of the second respondent. Further the sale deed was registered only on 08.12.1997 from Malappuram Registrars office, though the property lies within the jurisdiction of Nilambur Sub Registrar's office. There is no explanation forthcoming from the side of the claimants on this aspect. Further it will be seen from the evidence of PW1 that he had no idea about the transaction. The evidence regarding the transaction as opposed by PW1 reads as follows: “XXX XXX XXX” 8. It is clear from this that the person who purchased the property as per Ext.A1 had no idea about the sale deed executed in his favour at all. Further it is brought out in evidence that they were residing together in the same house and so it cannot be said that the son was not aware of the filing of the suit and the decree obtained against him or the pendency of the application for attachment before judgment filed in the suit. Further it is brought out in evidence that they were residing together in the same house and so it cannot be said that the son was not aware of the filing of the suit and the decree obtained against him or the pendency of the application for attachment before judgment filed in the suit. It is also seen from the documents that the suit was decreed on 20.06.2002 and the first respondent filed E.P. No. 38/2005 for execution of the decree and the property was sold in auction on 11.07.2007 and the decree holder himself has participated in the sale with the permission of the court as bid and set off under order 21, Rule 72 of the Code of Civil Procedure. The property was sold in the auction for 3,57,150/- and the sale was confirmed on 20.02.2008. The sale sannath was issued on 21.06.2008. Thereafter the auction purchaser/the decree holder filed E.P. No. 159/2008 for delivery of the property and it was at that time that the present claim petition has been filed by the claimant through his power of attorney holder mother, seeking lifting of the attachment and release the property to him. He did not go to the witness box to prove that he is the bonafide purchaser for consideration. Even as per the documents, PW1 had no case that on the date of execution of the document, he had paid any consideration for the document. Though he had a case in the sale deed that the amounts were earlier advanced by him to his father and that was not substantiated by the evidence as well. 9. Further the dictum laid down in the decision reported in Hamda Ammal v. Avadiappa Pathar and three others (supra) is not applicable to the facts of this case. That was a case where the sale deed was executed even prior to the institution of the suit, but the sale deed was registered only later after the suit was filed. In that case, it was held that the registration will relate back to the date of execution of the sale deed and on the date of attachment, the decree holder will not get any attachable right over the judgment debtor's property. The question as to whether that was a fraudulent transfer or not has not been considered in that case. In that case, it was held that the registration will relate back to the date of execution of the sale deed and on the date of attachment, the decree holder will not get any attachable right over the judgment debtor's property. The question as to whether that was a fraudulent transfer or not has not been considered in that case. There is no dispute regarding the proposition laid down in that case, that the title relates back to the date of execution, though the registration of the document was done later. Further in the decision reported in Rajan v. Jayashree Nayar [ 2010(1) KLT 142 ], the Division Bench of this court has held that the question as to whether it is a fraudulent transfer, can be gone in to by the execution court, when an application under order 21, Rule 58 application has been filed as part of adjudication. So it is clear from the evidence that the second respondent herein had executed a sale deed fraudulently in favour of his son, who has been examined as PW1 in order to defeat the right of the creditor suppressing the fact that pendency of the suit and also application for attachment before judgment just one day prior to the date on which the application was posted for his counter, who in turn executed Ext.A2 document in favour of the present claim petitioner who is also none other than another son of the judgment debtor. It cannot be said that they were not aware of the proceedings pending before the court, though they pretend to be ignorant about the same. Further the evidence of PW1 will go to show that he had no idea about the execution of the sale deed in his favour by his father and the registration of document itself. All these things will go to show that the second respondent had with a fraudulent intention only created a sale deed in favour of PW1, in order to defeat the right of the decree holder in that case, knowing that his property is likely to be attached and to avoid this property being proceeded against for the amount due from him to the decree holder. Further in the execution proceedings, when the property was sold in execution, no counter was filed by the second respondent, challenging his salable right in the property and he had not even challenge the same before the sale was confirmed in favour of the second respondent herein. So under the circumstances, the court below was perfectly justified in coming to the conclusion that it is a fraudulent transfer hit by Section 53 of the Transfer of Property Act, and no salable interest has been passed in favour of the claimant and rightly dismissed the claim petition and we do not find any reason to interfere with the finding of the court below on this aspect and the appeal lacks merit and the same is hereby dismissed. In the result, the appeal fails and is hereby dismissed. We do not find reason to disallow cost to the first respondent. So the appeal is dismissed with costs of first respondent.