Dayanandan and Another vs Venugopal Naidu

Veeraswami, J.—This second appeal by the defendants arises out of a claim suit instituted by the respondent. He was a creditor of one

Bhaktavatsala under a promissory note executed by him and he had obtained a decree on that footing during his lifetime. Bhaktavatsala got divided

from his sons and the properties which had been allotted to his share were settled by him on the defendants, of whom the second was his

concubine and the first his illegitimate son by her. The lower appellate Court differing from the trial Court has found that the settlement in favour of

the defendants comprised the entire properties which Bhaktavatsala owned at the time and that the defendants, therefore, are universal donees.

The respondent in execution attached one of the properties covered by the settlement but the defendant''s claim on the basis of the settlement

was allowed. The respondent was, therefore, driven to file a suit out of which this second appeal arises. The trial Court found that the settlement

deed was valid and acted upon and that the defendants were not universal donees. On that view, it dismissed the suit. On appeal by the

respondent, the lower appellate Court, as I have already mentioned, considered the defendants in be universal donees and as regards the validity

of the settlement deed its view was that it was in fraud of the creditors although the only debt owed by Bhaktavatsala at the time of the settlement

or even earlier at the time of the partition between himself and his sons was that due to the respondent. The lower appellate Court, therefore,

allowed the appeal and decreed the suit. That is how the defendants have come up to this Court in second appeal.

It is contended for the appellants that the defendants under the settlement could not be regarded as universal donees. The basis for this argument

is a recital in the settlement deed that the properties which the donor might after the execution of the document acquire and the other ""remaining

properties"" should also be taken by the donees. The lower appellate Court on the evidence before it came to the conclusion that this recital did not

mean that the settlement was not in regard to the entirety of the properties possessed by Bhaktavatsala at the time he executed the document. In

coming to that conclusion it was also aware of the fact that no other property was shown to have been acquired subsequently or left by

Bhaktavatsala. In my opinion the lower appellate Court was right in its view that the settlement of Bhaktavatsala constituted the defendants as

universal donees.

The next contention for the appellants is that even if they are regarded as universal donees, the respondent, without instituting a suit against them

on the basis of the donor''s debt, could not levy execution straightway; against the properties conveyed under the settlement. Muhamathu Kunju v.

Muhammathu Kunju, AIR 1952 Trav Co. 23 on which reliance is placed does appear to support this proposition. The learned Judges in that case

held that universal donees could not be regarded as legal representatives within the meaning of the definition of the tern* in the CPC and that the

only remedy of the decreeholder was to institute a suit against the universal donees. One of the reasons why they thought that a sun was the only

remedy was that the universal donees themselves were not parties to the decree sought to be executed. The fact that the learned Judges placed

rellance upon Thiagaraja Aiyar Vs. Narayanaswami Pillai and Others, also shows that they did not think that there was any difference in principle

between a transferee of a part or the properties of the judgment debtor and a case of universal donees. In Thiagaraja Aiyar Vs. Narayanaswami

Pillai and Others, , Horwill J. was not concerned with a universal donee and observed therefore that Section 52 C.P.C. did not give the creditor a

right to proceed against the property which was no longer in the hands of the judgment debtor and to proceed against a transferee, he must

establish his equitable rights to do so in a separate suit.

With great respect to the learned Judges who decided AIR 1952 Trav. Co. 23, I am unable to concur with the view they have expressed. They

seem to think that devolution of interest is necessarily a test of one being a legal representative. I can find no warrant for such a view. In Section

2(11) of the C. P. Code the statutory definition of ""legal'' representative"" goes so far as to say that even an inter-meddler with the estate of a

deceased will be his legal representative. If that is so, I do not see why a universal donee who by reason of a gift enters upon possession of the

estate of a deceased cannot be regarded as his legal representative, it is not necessary that, in order for that person to D8 his legal representative,

there must be a devolution of interest in his favour from the deceased. If devolution is the criterion, many persons who are undoubtedly legal

representatives, will not be so, as for example, executors, trustees and the like. Apart from a universal donee being a legal representative, it is

particularly important to note that universal donees only take the estate of the deceased subject to the liabilities of the deceased. In fact Section

128 of the Transfer of property Act fastens a personal liability upon the universal donee for all debts due by the donor at the time of the gift though

that liability is confined to the extent of the properties comprised in the gift. This aspect, if 1 may say so with respect, again, does not appear to

have been kept in view in AIR 1952 Trav. Co. 23. The liability or the universal donee to pay the decree debt of the donor arises not only by

reason of the donee accepting the gift and of being the legal representative of the deceased but also by the very terms under which he becomes a

universal donee. Though it was conceded by counsel in Andhra Bank Ltd. v. Srinivasan, AIR 1952 SC 232, that a universal donee would be a

legal representative, the Supreme Court was inclined to take the view that even a person who intermeddled with only a part of the estate of a

deceased would be his legal representative. The case of a universal donee is a fortiori on a better footing.

Section 50(2) of the CPC enables a decree-holder to execute his decree against the legal representatives of the judgment-debtor, the liability, of

course, in execution being confined to the extent of the deceased''s property in the hands of the legal representative. That precisely is also the

position u/s 128 of the Transfer of Property Act. On a careful consideration of the question, I am unable to see why there should be insistence on

another suit against the legal representatives to establish the debt of the donor. There appears to be no conceivable reason or principle which

compels such a course. Both on the ground that the universal donees are the legal representatives of the donor and on the ground of their personal

liability to qualified extent under the terms of Section 128 of the Transfer of Property Act, I hold that no separate suit is necessary to reach the

properties of the donor in execution of the decree against him nut that the decree-holder can levy execution straightway against his legal

representatives to the extent, of me donor''s properties in their hands.

On that view, it is quite unnecessary to examine the propriety of the other finding recorded by the lower appellate -Court that the settlement

deed executed was in fraud of the creditors. The attachment in this case was only in regard to one of the properties covered by the settlement.

Learned counsel for the respondent fairly concedes that the item under attachment would suffice to realise the entire debt. That being the case, I

think it appropriate to discharge that finding of the lower appellate Court.

The second appeal is dismissed, but with no costs. No leave.