Dodla Rami Reddi vs Penubolu Venkatanarasimalu Setti and Another

Madhavan Nair, J.—This civil miscellaneous second appeal arises out of a. petition filed by the appellant to recognize the assignment to him

of the decree passed in O.S. 10 of 1920 on the file of the Principal District Munsif of Nellore and for execution of the same. In that suit one

Katakam Lakshamaya obtained a. decree against defendant 5 for a sum of Rs. 312. This was assigned by the decree-holder to the present

appellant. When notice of the assignment was sent to the judgment-debtor, he filed an objection petition in which he pleaded that the assignment

was intended to defraud the counter-petitioner''s company of its due in O.S. 251 of 1920 and that the decree was assigned for a smaller sum than

was really due to the decree-holder.

Both the Courts held that there was no consideration for the assignment deed Ex. A and that it was intended to prevent the counter-petitioner''s

company from setting off the decree amount in O.S. 251 of 1920 against the amount in O.S. 10 of 1920. In holding that there was no

consideration for the assignment, it may be noticed that the Courts had gone further than the case set up by the counter-petitioner which was only

that the assignment was for a smaller sum than was really due to the decree-holder. It has been held in Thimma Reddi v. Subba Reddiar [1918]

M.W.N. 507 that the absence of consideration for an assignment of a decree will not, provided the assignment is not a sham transaction, deprive

the assignee of his right to execute the decree. The real reason why the lower Courts thought that the assignment was a fraudulent one is because,

according to their opinion, defendant 5 in O.S. 10 of 1920, along with the others as decree-holders in O.S. 251 of 1920, had a right to set off that

decree amount against the decree amount in O.S. 10 of 1920. In this opinion the lower Courts have gone wrong. As we have already said, in O.S.

10 of 1920 Katakam Lakshamayya obtained a money decree personally against defendant 5 in that suit. In O.S. 251 of 1920 defendant 5 along

with others on behalf of a company, obtained a decree against Katakam Lakshamayya, the decree-holder in O.S. 10 of 1920. The plaint, the

judgment and the decree show without any doubt that the decree obtained by Lakshamayya in O.S. 251 of 1920 was obtained by a company of

which defendant 5 was a member. It is thus clear that there can be no case of set off in connexion with these'' two decrees. This difficulty is got rid

of by the District Munsif by saying:

it seems to me to be clear that the decree against defendant 5 in O.S. 10 of 1920 must be deemed to be a decree against defendant 5 and his

partners who were in possession of the godown.

There is no justification for this statement. The decree in O.S. 10 of 1920 is against defendant 5 individually. There is nothing to show that it was

against defendant 5 and his partners. The basis for the alleged fraud being thus found to be non-existent, we must hold that the assignment is not

fraudulent. As we are satisfied from the facts that the judgment-debtor in O.S. 10 of 1920 has no right or equity to set off a cross decree against

the transferee, Section 49, Civil P.C., is clearly-inapplicable to this case.

For these reasons we set aside the orders of the Courts below. The District Munsif will take E.A. 247 of 1923 on file and dispose of it

according to law. The appellant will get his costs throughout. No orders are necessary in the civil revision petition.