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2018 DIGILAW 2183 (MAD)

S. Senthi Prabu v. D. Asokan

2018-07-19

P.T.ASHA

body2018
JUDGMENT : P.T. ASHA, J. 1. The Civil Revision Petitions raise an interesting issue as to the right of a subsequent creditor to implead himself in the suit which is framed as a representative capacity suit. 2. The proposed plaintiff is the revision petitioner in all the three revision petitions. The three revision petitions that are before this Court for consideration are orders of the learned II Additional District Munsif, Erode in the following interlocutory application in O.S. No. 668 of 2004: (a) C.R.P. No. 680 of 2010 is filed against the order in I.A. No. 166 of 2008 which is an application filed under Order 1 Rule 10 (ii) of Code of Civil Procedure to implead the petitioner as the second plaintiff in the suit. (b) C.R.P. No. 681 of 2010 arises against the order in I.A. No. 19 of 2009 which is filed under Order 1 Rule 10 (ii) Code of Civil Procedure to implead the legal representatives of the second and fourth respondent as defendants 9 to 13 in the suit. (c) C.R.P. No. 682 of 2010 is filed against in I.A. No. 459 of 2009 which is filed under Order 7 Rule 1 Code of Civil Procedure to amend the plaint in keeping with the terms of the order in C.R.P. No. 2391 of 2007. 3. To appreciate the issue on hand, it is necessary to briefly narrated the suit and the subsequent events. The first respondent herein had filed the suit in O.S. No. 778 of 2001 on the file of the Sub Court, Erode subsequently transferred to file of the II Additional District Munsif, Erode renumbered as O.S. No. 668 of 2004, describing himself in the short cause title in the suit as D. Asokan, on behalf of himself and all other creditors of E.P. Subramaniam and similarly in the long cause title. The first defendant had contended that he had advanced loan on the security of a promissory note to the second defendant on 29.08.2000 (Rs. 50,000/-) and 16.11.2000 (Rs. 50,000/-); that in spite of several demands the second defendant had not repaid the amounts and that the second respondent was indebted to several creditors who were described in Schedule B to the plaint. 50,000/-) and 16.11.2000 (Rs. 50,000/-); that in spite of several demands the second defendant had not repaid the amounts and that the second respondent was indebted to several creditors who were described in Schedule B to the plaint. He would further contend that the second respondent had fraudulently brought about sale deeds in favour of the defendants 3 to 7, in order to deprive the creditors of their dues and that despite issuing a legal notice, the second respondent had not come forward to settle the dues. Though the first respondent had described himself as filing the suit on behalf of all creditors, he had not sought the permission of the Court as mandated under the provision of Order 1 Rule 8 of Code of Civil Procedure. 4. The second defendant V.K. Rangasamy, since deceased, had filed a written statement wherein the borrowal from the plaintiff was denied and he had gone on to state that on 03.11.1998, there was an agreement between the second respondent herein and one Kumaravel for the sale of the suit properties for a sum of Rs. 20,00,000/- a sum of Rs. 15,00,000/- was stated to have been paid in advance. On the very same day, the first respondent had also executed a power of attorney in favour of the second respondent. On 15.02.1999, it is stated that the agreement holder Kumaravel had assigned the agreement in favour of the respondents 3 to 6 herein and the fourth defendant/V.K. Kanthasamy for valuable consideration and the assignment was duly endorsed upon the agreement of sale. The third respondent herein/third defendant had filed a written statement in which he had questioned the locus of the first respondent to file a suit in representative capacity and further contending that respondents 3, 4 to 6 herein and the deceased 4th defendant had sold the property to one Leela Venkatapathy who was a necessary party to the proceedings. 5. The 12th respondent in C.R.P. No. 682 of 2010 had taken out an application under Order 1 Rule 10 code of Civil Procedure to implead him as the 8th defendant in the suit. This application was dismissed by the learned District Munsif, Erode against which the said Leela Venkatapathy had filed C.M.A. No. 17 of 2005 on the file of the Principal Sub ordinate Court, Erode. This application was dismissed by the learned District Munsif, Erode against which the said Leela Venkatapathy had filed C.M.A. No. 17 of 2005 on the file of the Principal Sub ordinate Court, Erode. The appeal was allowed as against which the first respondent came by way of revision to this Court in C.R.P. No. 2351 of 2007. This Court allowed the above revision. In the course of the order this Court has disagreed with the contention raised by the first respondent that the said Leela Venkatapathy was not a proper necessary party in the suit. The Court had also observed that impleading him as a party would avoid multiplicity of proceedings, orders in the above revision was passed on 22.01.2008. 6. On 27.08.2008, the petitioner herein has come forward with the above applications. In order to substantiate his locus to implead himself in the suit, the petitioner had contended that the second respondent herein had borrowed a sum of Rs. 50,000/- from him on 13.09.2001 on the security of promissory note. He would contend that the second respondent had paid a sum of Rs. 100/- on 10.04.2004 and thereafter a sum of Rs. 300/- on 28.03.2007. The petitioner contended that from the conduct of the first respondent, it would appear that the first respondent has colluded with the other respondents and therefore he was stepping into the shoes of the first respondent as the suit was filed in a representative capacity. The 4th respondent herein filed a counter which was adopted by the respondents 3, 6 and 7 herein. They had contended that despite the death of the second respondent on 27.06.2007 steps have not been taken to file an application to bring on record the legal representatives of the second respondent. They are also questioned the locus of the first respondent to implead himself in the suit. The 12th respondent herein had also filed a counter stating that the petition is belated one as the petitioner is a close relation of the first respondent and he had not taken any steps for seven years to have himself to implead in the suit. The 12th respondent herein had also filed a counter stating that the petition is belated one as the petitioner is a close relation of the first respondent and he had not taken any steps for seven years to have himself to implead in the suit. He had also questioned the alleged borrowal of the petitioner herein, the learned II Additional District Munsif, Erode, after hearing the parties was pleased to dismiss the applications on the ground that the property in questioned has been sold much prior to the borrowing by the first defendant from the petitioner. Further, no permission to file a suit in a representative capacity have been obtained by the first respondent and therefore the petitioner could not seek to be impleaded in the proceedings. More particularly when the petitioner had not proved/established the debt. It is aggrieved by this common order that the petitioner has come forward with these revisions. 7. Mr. N. Manoharan, the learned counsel, who appeared for the petitioners would contend that the provisions of the Order 1 Rule 8 code of Civil Procedure need not be complied with since the suit is one under Section 53 of the Transfer of Property Act. He would further contend that the benefits of the original plaintiff/first respondent herein is suspect, since he had not taken any steps to implead the subsequent purchaser Leela Venkatapathy, as a defendant despite orders in C.R.P. No. 2351 of 2007. In support of his argument, the learned counsel had submitted the following judgment for the consideration of the Court Abdallakhan Daryakhan vs. Purshottam Damodar, 1948 AIR Bombay 265 and Royal Villa Residents Association vs. The Project Management Committee, (2013) 4 CTC 205 . The first judgment was cited in support of his argument that the term creditor as found in Section 53 include those creditors who had obtained a decree against the debtors and also ordinary creditors who claims are yet to be proved in Civil Court. 8. The second judgment has been cited in support of the proposition that an application for the leave of the Court to proceed under Order 1 Rule 8 can be allowed even at the appellate stage and that non-filing of the petition along with the suit will not result in the suit being not maintainable. 9. 8. The second judgment has been cited in support of the proposition that an application for the leave of the Court to proceed under Order 1 Rule 8 can be allowed even at the appellate stage and that non-filing of the petition along with the suit will not result in the suit being not maintainable. 9. The third judgment has also been cited in support of his arguments that the suit cannot be struck down on the ground of non-compliance of the provision of Order 1 Rule 8 of the Code of Civil Procedure. This Court has observed that failure to obtain permission under Order 1 Rule 8 is only a procedural irregularity and permission could be obtained even during the pendency of the appeal. 10. Per contra, Thirumoorthy appearing for the second respondent would contend that the respondents 3 to 6 and 8 to 11 are bona fide purchasers for value who had sold the property in good faith to the 12th respondent. He would further argue that the claim of the petitioner lacks bona fide inasmuch as the borrowal itself had taken place much after the sale. The date of sale by the second respondent and the fact that meagre a sums of money has been paid casts a cloud of suspicion about the debt. Further, he would contend that no permission under Order 1 Rule 8 of Code of Civil Procedure had been obtained by the first respondent, the original plaintiff and therefore the petitioner cannot step into the shoes of the first respondent as the suit cannot be termed as one filed under the provisions of Order 1 Rule 8 of Code of Civil Procedure. 11. Mr. A.B. Rehana Begam, appearing on behalf of the 12th respondent/purchaser while adopting the arguments of the respondents 3 to 6 and 8 to 11 would contend that the plaint does not proceed as if it has been filed a representative capacity and the cause of action which has been described in the plaint would confirm this contention. She would also bring to the notice of this Court, the fact that the two payments which the petitioner claims was repayment of the loan, is not only a meagre amount, but is also paid just on the last date of limitation. It would shroud the entire transaction with suspicion and the entire petition lacks bona fides. She would also bring to the notice of this Court, the fact that the two payments which the petitioner claims was repayment of the loan, is not only a meagre amount, but is also paid just on the last date of limitation. It would shroud the entire transaction with suspicion and the entire petition lacks bona fides. She would also contend that to date none of the alleged creditors described in Schedule B to the plaint have come forward with a claim against the second respondent. She would also contend that the allegation about the nexus between the first and second respondent should be disbelieved on account of the fact that the second respondent despite orders of this Court in C.R.P. No. 2351 of 2007 had not taken steps and it was on account of the reluctance of the first respondent to implead the 12th respondent, that the 12th respondent had taken steps to implead himself. 12. Heard, the parties and perused the records. 13. The petitioner has come forward with the above applications on three grounds: "(a) That the suit is one filed under Order 1 Rule 8 of Code of Civil Procedure and Section 53 of the Transfer of Property Act. (b) That the second respondent had borrowed from the petitioner on 13.04.2001. (c) There is an collusion between the second respondent and other respondents there by giving a right to the petitioner to get himself impleaded as the second plaintiff." 14. As regards the first and second contentions the petitioner claims that the second respondent had borrowed a sum of Rs. 50,000/- on 13.04.2001 and the second respondent had repaid a sum of Rs. 100/- on 10.04.2004 (Just three days before the period of limitation) and Rs. 300 on 28.03.2007 (Just 13 days prior to the period of limitation). The amount and the time of the alleged repayment raises suspicion in the mind of this Court, more particularly, when the petitioner has waited till this Court had dismiss the application to implead the 12th respondent who is the present owner of the suit property. Therefore, the bona-fides of the petitioner is suspect, it is also seen from the records that none of the persons who had been arrayed as creditors in the Schedule B to the plaint had made a claim against the second respondent. Therefore, the bona-fides of the petitioner is suspect, it is also seen from the records that none of the persons who had been arrayed as creditors in the Schedule B to the plaint had made a claim against the second respondent. Further, the first respondent had not obtained leave under Order 1 Rule 8 of the Code of Civil Procedure to file the suit in representative capacity and the petitioner who is the third party cannot seek to continue the suit which is purely a money suit between the first and second respondents. Except for describing himself as a representative of all creditors in the suit both in the long and short cause title the first respondent had not made any other statements in the plaint which would show that the suit is a representative capacity suit. The argument of the petitioner that there is collusion between the first respondent and the 12th respondent would fall to the ground on account of the fact that the first respondent had not taken any steps to implead the 12th respondent and when the 12th respondent had sought to implead himself in the suit, the same has been opposed by the first respondent which fact has been commented upon by this Court in C.R.P. No. 2351 of 2007. The petitioner cannot claim any right under Section 53 of the Transfer of Property Act inasmuch as the property had been sold much prior to the alleged borrowal by the second respondent from the petitioner. The second respondent had entered into an agreement to sell the property in 1998 and the property had also been sold to defendants 3 to 7 before the alleged loan of the petitioner. It is not a case of the petitioner that the property has been under valued and sold. 15. It is also brought to my notice that the suit itself has been dismissed on an application taken out by the 12th respondent in I.A. No. 113 of 2009 in O.S. No. 668 of 2004 in which the 12th respondent had asked the following relief: "That the Hon'ble Court may be pleased to dismiss the suit for non compliance of the order of the Hon'ble High Court, Madras in C.R.P. No. 2351 of 2007 for failure to amend the plaint by impleading the petitioner as 8th defendant in the suit." 16. This petition has been allowed by order dated 18.01.2010, even prior to the filing of the Civil Revision Petition by the petitioner herein. 17. Therefore, in order for the subsequent creditor to implead himself in the suit framed as a representative capacity suit, the creditor has to first prove that he is a bona fide claimant and the transfer made by the debtor/transferor is fraudulent and made with an intent to defeat or delay the creditor of the transferrer. When the above factors are satisfied a subsequent creditor could implead himself in the suit. However, in the instant case the bona fides of the petitioner is itself in question and the sale made by the second respondent is much before the loan given to the first respondent by the petitioner herein. That apart, the circumstances of the instant case would clearly demonstrate that the suit filed by the first respondent is not one under the provisions of Order 1 Rule 8 of Code of Civil Procedure has no prior permission as been obtained. 18. I find no merits in the petitioner's case and accordingly this Civil Revision Petition stands dismissed. Consequently connected miscellaneous petition is closed.