BEENA PRASAD W/O ALANCHERY PRASAD v. PRADEEP S/O PONNOTH UNNIKRISHNAN
2022-12-15
MARY JOSEPH
body2022
DigiLaw.ai
JUDGMENT : MARY JOSEPH, J. 1. Original Petition is filed under Article 227 of the Constitution of India by the plaintiff in a Suit pending on the files of Sub Court, Chavakkad as O.S. No. 3/2015. The 1st respondent in the Original Petition is the defendant in the above Suit and the 2nd respondent is his wife who is proposed to be brought on record as additional 2nd defendant. 2. O.S. No. 3/2015 was a Suit filed for realisation of a sum of Rs. 17,00,000/- with interest from 30.12.2010 as well as future interest at the rate of 12% per annum arrived at pursuant to a compromise recorded in a prior suit pending on the files of Munsiff Court, Chavakkad as O.S. No. 636/2010. Pursuant to the compromise, towards discharge of the liability a cheque was issued by the debtor, which was bounced on presentation for the reason, payment stopped by drawer. Indigent Suit filed as POP No. 14/2013 was lateron numbered as O.S. No. 3/2015. 3. 1st defendant/1st respondent had filed written statement raising a counter claim. The petitioner/plaintiff had also filed written statement in the counter claim. 4. The only property of the 1st defendant/ 1st respondent was the subject matter of an order of attachment before judgment passed by the court below in I.A. No. 1407/2013 filed in the suit on hand. 5. The Suit was listed for trial by the court below on 02.07.2016. The petitioner/plaintiff being ill could not attend the court on the day scheduled for trial and therefore the Suit was dismissed for default and the counter claim was decreed ex-parte. Petitioner/plaintiff filed I.A. No. 1291/2016 in O.S. No. 3/2015 on 23.07.2016 for restoration of the Suit dismissed for default and also for setting aside the ex-parte decree passed in the counter claim. The 1st respondent/1st defendant filed objection in the above I.A. 6. In the meantime, the 1st respondent/1st defendant filed I.A. No. 1175/2016 seeking to lift the order of attachment passed in Ext.P4 application. Plaintiff filed objections in the application on 26.07.2016. The application filed as above was allowed by he court below on 27.07.2016 and immediately thereafter, the 1st respondent/1st defendant transferred the property in favour of his wife, the 2nd respondent in the Original Petition on hand, by executing settlement deed No. 449/2016 at SRO, Chavakkad on 01.08.2016. 7.
Plaintiff filed objections in the application on 26.07.2016. The application filed as above was allowed by he court below on 27.07.2016 and immediately thereafter, the 1st respondent/1st defendant transferred the property in favour of his wife, the 2nd respondent in the Original Petition on hand, by executing settlement deed No. 449/2016 at SRO, Chavakkad on 01.08.2016. 7. Original Suit was restored by the court below and was relisted. The petitioner/plaintiff then filed I.A. No. 1292/2016 for attaching the property again. The 1st respondent/1st defendant filed objection in the I.A apprising the court about the transfer of the property by him to his wife, the 2nd respondent herein. The petitioner had also filed I.A. No. 261/2018 under Order 1 Rule 10(2) of the Code of Civil Procedure, 1908 (for short ‘CPC’) to get the transferee wife as additional 2nd defendant in the Suit and I.A. No. 262/2018 to incorporate pleadings that the transfer effected was intended to defeat the right of the petitioner/plaintiff who stands in the footing of creditor of the 1st respondent/1st defendant, to schedule the property and also to seek for a charge decree. 8. The 1st respondent/1st defendant filed objection in the above application. The Suit being listed for trial, I.A. No. 263/2018 was also filed for removing the same from the list. 9. The court below dismissed I.A. Nos. 261/2018 and 262/2018 by a common order passed on 09.02.2018. Consequently I.A. No. 263/2018 was also dismissed. 10. The true copies of the interlocutory applications filed by the petitioner/plaintiff, objections filed by the 1st respondent/1st defendant in those, orders passed by the court below in the respective applications were produced alongwith the Original Petition on hand respectively as Exts.P1 to P14. Ext.P13 is the true photostat copy of the order under challenge in the Original Petition on hand. 11. Being aggrieved by Ext.P13 common order petitioner has approached this Court seeking exercise of supervisory jurisdiction of this Court to reverse the same. According to Sri. Ramnath, Ext.P13 order is illegal and unjust.
Ext.P13 is the true photostat copy of the order under challenge in the Original Petition on hand. 11. Being aggrieved by Ext.P13 common order petitioner has approached this Court seeking exercise of supervisory jurisdiction of this Court to reverse the same. According to Sri. Ramnath, Ext.P13 order is illegal and unjust. According to him, the transfer of the sole property belonging to the petitioner/plaintiff in favour of his wife in the context on hand is nothing but fraudulent and is intended to defraud the petitioner/plaintiff who stands in the status of creditor to the 1st respondent/1st defendant and therefore, is hit by Section 53 of the Transfer of Property Act, 1882 (for short ‘the T.P. Act’) 12. According to him, Ext.P9 and P11 applications seeking impleadment of wife of the 1st respondent/1st defendant and amendment of the plaint are intended to avoid multiplicity of proceedings and the court below ought to have applied its mind to those aspects, prior to dismissal of those by Ext.P13 common order. 13. Sri. V.C. Madhavankutty, the learned counsel representing the 1st respondent/1st defendant vehemently opposed the arguments of the learned counsel for the Original Petitioner and contended that the court below is perfectly justified in passing the impugned common order dismissing I.A. Nos. 261/2018 and 262/2018. According to him, the Original Suit being filed for realisation of money, the provisions of the T.P. Act have no application at all. According to him, the property was transferred in favour of the wife of the 1st respondent/1st defendant at a time when O.S. No. 3/2015 itself was dismissed for default and the order of attachment passed in I.A. No. 1407/2013 stands vacated. According to him, the transfer of the property effected is perfectly valid in the eye of law and it cannot be taken as hit by Section 53 of the T.P. Act. According to him the arguments advanced by the learned counsel for the petitioner/plaintiff are devoid of merits and are only to be discarded. The learned counsel canvassed for dismissal of the Original Petition for the reasons. 14. Certain decisions are also relied on by Sri.
According to him the arguments advanced by the learned counsel for the petitioner/plaintiff are devoid of merits and are only to be discarded. The learned counsel canvassed for dismissal of the Original Petition for the reasons. 14. Certain decisions are also relied on by Sri. Ramnath, the learned counsel for the petitioner/plaintiff and those are discussed hereunder: Om Prakash Gupta vs. Ranbir B. Goyal, AIR 2002 SC 665 , cited by the learned counsel for the petitioner/plaintiff refers about the relevancy to follow and adopt the principles flowing from the provisions of T.P. Act, as guidelines to work out the natural rights and obligations of the parties under the general law. The Apex Court has laid down the Doctrine of ‘subsequent events’ stating that courts can and sometimes must take notice of ‘subsequent events’ but that is to be done merely ‘inter parties’ to shorten litigation, but not to give the defendant an advantage in a case wherein a third party has acquired the right and title of the plaintiff. 15. In Verizon Builders and Developers Ltd. and Others vs. Jyothi Susan John and Others, AIR 2019 Ker. 105 , cited by the learned counsel, this Court in a reference made on a question, whether Rajan @ Rajan Gopinathan vs. Dr. D. Jayashree Nayar and Another, 2010 (1) KLT 142 lay down the correct proposition of law, answered that it does not. 16. It also observed, while considering an application under Order XXXVIII Rule 8, of CPC that the court is enjoined with the power to consider whether the transfer is fraudulent in terms of Section 53 of the T.P Act. The dictum of this Court contained in Paragraphs 18 and 20 of the judgment supra are extracted hereunder for easy reference: “18. It is true that the object of an order of attachment before judgment is only a guarantee against a decree becoming infructuous for want of property available to satisfy the decree and it is only preventive in nature until a decree had been passed. S.53 of the TP Act is a substantive provision which declares that every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. When a property is attached before judgment, the plaintiff proceeds on the basis that it is the property of the defendant.
When a property is attached before judgment, the plaintiff proceeds on the basis that it is the property of the defendant. Only when a claim is raised, the plaintiff comes to know that the property has already been sold. While considering the question whether while adjudicating the said claim, the plaintiff gets an opportunity to say whether the transfer already made was with the intention to defeat or delay the creditors of the defendant. As already stated, it is a substantive right available to a creditor, which right cannot be restricted at any point of time. S.53 of TP Act of course provides for a suit to be filed as well. But it is settled law that a suit is not the only remedy and as held by the Apex Court in Hamda Ammal (supra) an objection could be raised. Plaintiff who is aware of the transfer can seek for attachment of the property by contending that the property sought to be attached had been fraudulently transferred or else if the plaintiff was not aware of such a transfer and when a claim is made by a third party, transferee, he could object to the claim petition by contending that the transfer was fraudulent. If such a procedure is not adopted, it would deprive the plaintiff the opportunity to ensure that sufficient security is available to execute the decree, if any passed in his favour. 19. xxx xxx xxx 20. When the legislature deemed it fit that “any claim” to attach property is to be considered under O. XXXVIII R.8, there is no reason why the power of the Court should be curtailed and should stop short of a plea u/s 53 of TP Act. The procedural difficulties in considering a claim u/s 53 should not be a reason to deprive the Court from considering a claim and the defence. Civil courts are enjoined to consider the disputes between the parties and when substantive rights are created and such rights are being flouted, it is for the civil court to consider the respective contentions and arrive at a proper decision. That the consideration of such matters would be comprehensive should never be a reason to take away the jurisdiction of a civil court.
That the consideration of such matters would be comprehensive should never be a reason to take away the jurisdiction of a civil court. Civil Court is bound to consider all suits of a civil nature except, suits of which their cognizance is expressly or impliedly barred.” In the backdrop of the above, the facts of the case on hand and the arguments advanced by the Original Petitioner and respondents are analysed. 17. O.S. No. 03/2015 was filed by the Original Petitioner/plaintiff seeking for realisation of money. In the suit an order of attachment before judgment under Order XXXVIII Rule 5 of the CPC was passed in favour of the petitioner/plaintiff. The Original Suit was filed on the strength of a cheque issued towards discharge of a liability pursuant to a compromise reached among the parties on settling the issues in a previous suit filed as O.S. No. 636/2010 before Munsiff’s Court, Chavakkad, which was bounced as payment was stopped by the drawer. The 1st respondent/1st defendant in the suit filed written statement alongwith a counter claim. The petitioner/plaintiff had also filed written statement in the counter claim. 18. When the suit was listed for trial, the petitioner/plaintiff failed to attend the court and therefore, it was dismissed for default. The counter claim raised by the 1st respondent/1st defendant was allowed and a decree was passed in his favour. Later on suit was got restored. An application was also filed for setting aside the judgment and decree passed in the counter claim. 19. In the meantime, I.A. No. 1175/2016 was filed by the defendant seeking to lift the order of attachment before judgment and that was allowed. Immediately on getting the order of attachment lifted, the 1st respondent/1st defendant sold the property on 01.08.2016 to the 2nd respondent in the Original Petition on hand, who is none other than his wife by executing settlement deed No. 449/2016 of SRO, Chavakkad. 20. Later on O.S. No. 03/2015 was restored and relisted. The plaintiff filed I.A No. 1292/2016 for getting the same property attached again. The 1st respondent/1st defendant filed counter statement in the I.A. stating that the subject matter in respect of which attachment is sought is already conveyed to his wife and stands in her name.
20. Later on O.S. No. 03/2015 was restored and relisted. The plaintiff filed I.A No. 1292/2016 for getting the same property attached again. The 1st respondent/1st defendant filed counter statement in the I.A. stating that the subject matter in respect of which attachment is sought is already conveyed to his wife and stands in her name. Thereupon the plaintiff filed I.A. No. 261/2018 under Order 1 Rule 10(2) CPC seeking to get the wife of the 1st respondent/1st defendant impleaded as additional defendant in the Suit as well as in I.A. No. 262/2018, seeking to amend the plaint in O.S No. 3/0215 by incorporating the pleadings that the transfer of property effected was with intention to defeat the right of the plaintiff who was a creditor to him and to incorporate the property in the Schedule and to seek for a charge decree. 21. Objection was filed by the 1st defendant/ 1st respondent opposing the claims made by the plaintiff/petitioner in the interlocutory applications. Court below dismissed I.A. Nos. 261/2018 and 262/2018 by a common order passed on 09.02.2018 and consequently I.A. No. 263/2018 seeking to remove the suit from the list also and those are under challenge at the instance of the petitioner/plaintiff. 22. The court below has incorporated eight reasons in the impugned common order dismissing the applications and those are extracted hereunder: “(i) The suit and counter claim are not at all connected with the proposed defendant or the proposed pleadings regarding the immovable property. (ii) The scope of the dispute in the present suit is squarely based upon the rights based upon a cheque and alleged contract between the parties. The attached property is not a subject matter in the suit. (iii) The cause of action alleged in the suit is totally unconnected with the cause of action mentioned in the petitions. An answer to the question whether the settlement deed executed by the defendant in the name of his wife when the suit was not pending is not at all necessary for effective and complete adjudication of the controversy involved in the suit. (iv) In the present suit no right in respect or arising out of the act or transaction alleged in the plaint does exist against the wife of the defendant. So impleadment of the wife of the defendant is not permissible under Order 1 Rule 3 CPC.
(iv) In the present suit no right in respect or arising out of the act or transaction alleged in the plaint does exist against the wife of the defendant. So impleadment of the wife of the defendant is not permissible under Order 1 Rule 3 CPC. (v) The arguments for the plaintiff that to avoid multiplicity of proceedings, it is necessary to allow the petitions has no merits for the reason that the proposed amendment is relating to totally different cause of action and against the additional defendant. (vi) The plaintiff has no case that she is precluded from filing a separate suit for relief. The plaintiff has no contention that she is unable to file the suit resorting to Section 53 of the Transfer of Property Act. (vii) In the facts and circumstances of the case, if the petitions are allowed at this belated stage that may embarrass the trial of this suit. (viii) In the facts and circumstances of the case, if at all the petitions are disallowed no prejudice may cause to the plaintiff. On the other hand, it may cause prejudice to the defendant by further necessarily prolonging the proceedings.” 23. The above reasoning of the court below is undoubtedly wrong and it is highly erred and unjustified in passing the impugned common order. The court below is found overlooked the dictum of the Full Bench of this Court in Verizon Builders and Developers Ltd. supra while proceeding to dismiss the applications. 24. It was in a context when the suit stands dismissed for default that an application was filed by the 1st defendant/1st respondent in the suit as I.A. No. 1175/2016 seeking to lift the attachment and the court below has allowed it. The immovable property belonging to the 1st defendant/1st respondent being passed under Order XXXVIII Rule 5 of CPC by a court on being convinced from the available materials furnished and pleadings raised by the petitioner/plaintiff that there is a chance for the 1st defendant/1st respondent to sell the property owned by him to third parties with a view to defeat the petitioner/plaintiff who allegedly is a creditor of him and it being passed only on a premise of judgment being passed, with the dismissal of the suit either on merits or on default, the order of attachment would also automatically stands vacated.
However, in the case on hand the 1st defendant/1st respondent sought for that and it was allowed also. 25. The plaintiff/petitioner filed an application for getting the Suit dismissed for default, restored back to the files of the Court. Objection was also filed by the 1st defendant/1st respondent vehemently opposing the grant of the relief. On getting the order of attachment lifted, the 1st defendant/1st respondent conveyed the properties to his wife by executing a sale deed. By order passed in I.A. No. 1291/2016 the suit was restored back to the files of the court below. The suit was also listed for trial. Immediately thereafter the plaintiff/petitioner filed I.A. Nos.1292/2016 and 263/2018 respectively to attach the properties and to remove the suit from the list. 26. It is pertinent to note that during the pendency of application filed as I.A. No. 1291/2016 seeking to restore the suit that the property which was the subject matter of the order of attachment was got transferred by the 1st defendant/1st respondent in favour of his wife after executing a sale deed. The 1st defendant/1st respondent at the relevant time had the information that I.A. No. 1291/2016 was filed by the petitioner/plaintiff for getting the suit restored, since notice of it was served on him. The 1st defendant/1st respondent was well aware of the apprehension of the plaintiff/petitioner that he would defeat his claim while filing I.A. No. 1175/2016 originally seeking to get an order of attachment before judgment of his immovable property. The 1st defendant/1st respondent had not held other immovable property. A cheque issued following a compromise entered into among the 1st defendant and the petitioner/plaintiff in O.S. No. 636/2010, got bounced on presentation for encashment. The reason for bouncing was ‘payment stopped by drawer’. The liability to pay Rs. 17,00,000/- to the plaintiff/petitioner stands conceded by the 1st defendant/1st respondent while entering into the compromise and issuing the cheque towards discharge of the liability, to the plaintiff/petitioner. An element of cheating can be found from the direction issued by the 1st defendant/1st respondent to his banker to stop payment with a view to prevent it from being enchased. A notice was also issued to the 1st defendant/1st respondent intimating the factum of dishonour of the cheque by the bank for the aforementioned reason, prior to the institution of O.S. No. 03/2015.
A notice was also issued to the 1st defendant/1st respondent intimating the factum of dishonour of the cheque by the bank for the aforementioned reason, prior to the institution of O.S. No. 03/2015. The 1st defendant is found not responded to the notice, despite receipt of the same and that necessitated the filing of O.S. No. 03/2015. Therefore, intention to defraud the plaintiff who has been acknowledged by him in the compromise filed in O.S. No. 636/2010 as his creditor is inherently evident from the conduct of the 1st defendant/1st respondent, transferring the property in favour of his wife in the interregnum period while the suit stands dismissed for default. 27. It was during a short period for which O.S. No. 03/2015 stands dismissed for default that the 1st defendant/1st respondent rushed to the court and got the order of attachment lifted. There is nothing wrong or illegal in it. But, immediately on obtaining the order of attachment lifted, he made a transfer of the immovable property which was the sole property held by him and subject matter of order of attachment, transferred in favour of his wife, by executing a sale deed. An important aspect underlying the transfer was that it was done in favour of his own wife. The conduct of the 1st defendant/1st respondent transferring the immovable property during the interregnum period undoubtedly has the impact of strengthening the contention raised by the petitioner/plaintiff that it was meant to defeat him in his pursuit to get the money realised on a decree being passed in the suit, in his favour. 28. If mind was applied by the court below, to the factual situation discussed hereinabove and stands apprised to it by the petitioner/plaintiff in the objection filed in I.A. No. 1175/2016, the outcome would not have been passing of an order like the one under challenge. 29. An element of cheating inherent in the conduct of the 1st defendant/1st respondent was overlooked by the court below while making observation in the nature of reasonings to pass the order dismissing the I.A. The dictum of Full Bench of this Court in Verizon Builders and Developers Ltd. supra has also been lost sight of by the court below while passing the impugned order.
The impugned order being passed without going into the relevant aspects underlying the issues involved in the suit got restored and made known by the petitioner/plaintiff through the objection raised in the interlocutory application filed as I.A. No. 1175/2016 and the averments made in I.A. No. 262/2018 and in disregard of the dictum of the Full Bench in Verizon Builders and Developers Ltd. (supra), the same only deserves to be set aside. 30. In view of the words ‘any claim’ incorporated by the Legislature in Order XXXVIII Rule 8, there is no reason even to doubt that the power of the court is curtailed and is stop short of taking a plea under Section 53 of the TP Act. In the case on hand a substantive right of the plaintiff/petitioner has been curtailed by the court below by passing the common order disallowing his prayer to incorporate the pleadings with reference to Section 53 of the TP Act and a relief pertaining to that by way of amendment of the plaint under Order VI Rule 17 CPC. The direction of the Full Bench in Verizon Builders and Developers Ltd. supra that the civil courts are enjoined to consider the disputes between the parties and when substantive rights are created and such rights are being flouted, it is for the civil court to consider the respective contentions and arrive at a proper decision. As held by the Apex Court in Om Prakash Gupta (supra), subsequent events that occur “inter partes” after the filing of the Suit shall be taken into consideration in that Suit itself by a Court in seizin of the Suit to shorten the litigation. The court below is highly erred and unjustified in relegating such issues to be adjudicated by an execution court while pursuing with execution of the decree passed in the suit. The impugned order suffers on account of the above reasons and fails. The common order is liable to be set aside. 31. In the result, Original Petition stands allowed and the impugned order is set aside. The court below shall reconsider I.A. Nos.
The impugned order suffers on account of the above reasons and fails. The common order is liable to be set aside. 31. In the result, Original Petition stands allowed and the impugned order is set aside. The court below shall reconsider I.A. Nos. 261/2018 and 262/2018 in the light of the discussions made hereinabove and in the backdrop of the dictum laid down by the Full Bench of this Court in Verizon Builders and Developers Ltd. supra and pass appropriate orders within two weeks from the day on which certified copy of this judgment is received.