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Judgment
Ayling, J.—In this case the Lower Appellate Court seems to me to have erred in supposing that unless the contested sale-deed, Exhibit V, is
merely a sham transaction, the present suit is not maintainable. The ruling quoted, Adusumilli Krishnayya and Another Vs. Adusumilli Lakshmipathi
and Others, if examined, does not support such a view; nor does the later Full Bench ruling Subramania Iyer v. Muthia Chettiar ILR (1917) M.
612 : 33 M.L.J. 705 which considered the same question, and to which I Was a party.
What was decided in these cases was this : that, where the validity of an alienation is impugned on the ground that it offends against Section 53
of the Transfer of Property Act, that alienation must be upheld until it is set aside in proceedings properly instituted for the purpose. The exact
nature of the proceedings which should be instituted was not determined. In Adusumilli Krishnayya and Another Vs. Adusumilli Lakshmipathi and
Others, Coutts Trotter, J., expressed the opinion that a creditor suing to set aside an alienation on this ground, must do so on behalf of all creditors,
unless (as in the case before us) he was a judgment creditor who had taken attachment in execution of his decree. This view was dissented from by
the other learned Judge, Seshagiri Aiyar, J., and the Full Bench expressly left the point undecided. No other light is thrown on the nature of the
proceedings by either judgment.
What we have therefore to consider is whether the present suit should be treated as one properly instituted for the purpose of setting aside the
assignment deed, Exhibit V.
It was brought by plaintiff under Order 21, Rule 63 Civil Procedure Code. 1st defendant had preferred a claim to the property attached by
plaintiff, based on Exhibit V, which had been allowed under Order 21 R, 60. Plaintiff therefore brought this suit, as he was bound to do by Order
21 Rule 63, to establish the right which he claimed of bringing the property to sale, as that of his judgment-debtor''s.
Whether it was the judgment-debtor''s property or not depends solely on whether Exhibit V be upheld or set aside. The suit directly raises, and
actually turns upon, the validity of the assignment by Exhibit V : and in my opinion, it must be regarded as one properly instituted to set aside that
transaction. That the plaint only asks in terms for a declaration that the property is liable to sale in execution of the decree is immaterial. The form
the suit has taken is determined by the peculiar position held by plaintiff. The law declares that an attaching decree-holder against whom the claim
of a third party is allowed must sue within a year of the date of the order to establish his right; failing which the latter is extinguished. It puts him on
a specially unfavourable position as regards limitation as compared with an ordinary creditor; but on the other hand in prescribing the exact nature
of his remedy, it frees him from any other restrictions as to the nature of the suit to be brought which the latter may labour under. It seems to me
impossible to hold that, as appellant''s counsel contends, he is bound to bring two suits, one in his individual capacity under Order 21 Rule 63 to
save himself from limitation, and another as a representative of the whole body of creditors impugning the validity of the alienation.
Quite apart from the provisions of Order 21 Rule 63, the exceptional position of a judgment-creditor is generally recognized even in English
Law : vide 15 Halsbury 89. In Palaniandi Chetty and Others Vs. M.V. Appavu Chettiar and Others, Coutts Trotter, J., points out the distinction;
and although it was ignored by the learned Judges in Hakim Lal v. Mooshahar Sahn ILR (1907) Cal. 999 this may have been because the point
was not raised and the decision of the case proceeded on altogether different grounds. Our attention has been drawn to no case in which a suit by
an attaching judgment-creditor was dismissed simply because it was not brought in a representative capacity.
Whether an ordinary creditor who seeks to set aside an alienation as infringing Section 53 of the Transfer of Property Act must sue in a
representative capacity we are not called upon to say. I must not be understood to hold that he is under any such obligation.
The present suit is, in my opinion, certainly not liable to dismissal on account of any defect of form; and on the concurrent findings of fact arrived
at by both the lower Courts, plaintiff is entitled to a decree. I can see no ground for questioning these findings or for holding that defendants should
have been allowed further opportunity of adducing evidence.
I would therefore dismiss the Second Appeal with costs.
Krishnan, J.
I agree with my learned brother that this Second Appeal fails. But as the point raised by the appellant''s Advocate, Mr. Shenai, as to the
necessity of bringing a representative suit u/s 53 of the Transfer of Property Act is an important one and has been argued at some length before us,
I shall add a few words.
Both the Lower Courts found on the evidence in the case that Exhibit V, the sale-deed in favour of the appellant was intended to defeat the
vendor''s creditors of which plaintiff was one and that the appellant was not a transferee in good faith. The Subordinate Judge went further and
found that the sale was a sham or colorable transaction which was void and did not require to be avoided. This last finding has been attacked
before us and it is difficult to support it on the facts of the case, But in my view, it is an unnecessary finding and may be ignored, as the sale-deed
was properly treated as unenforceable against the plaintiff on the other two findings.
It was however argued by Mr. Shenai that a creditor was not entitled to avoid''a transfer u/s 53 of the Transfer of Property Act unless he had
brought a representative suit on behalf of all the creditors and got a decree setting aside the deed. He contended that as this was not such a suit,
we must ignore the findings as to the fraudulent character of Exhibit V and treat it as in force and dismiss the plaintiff''s suit. The result of his
contention if adopted will be that we should be driven to uphold a sale-deed which has been proved to be fraudulent and voidable at plaintiff''s
option and enforce it against him simply because he has not brought what is called a representative suit. Such a result seems somewhat startling but
Mr. Shenai contended that this proposition was supported by decided cases both in this country and in England; we must therefore examine the
authorities relied on. It is conceded that there is no statutory rule on the point.
Mr. Shenai relied in the first instance on the English rule regarding cases under thS statute of Elizabeth, 13 Elizabeth Chap. 5; the provisions of
that statute are practically the same as that of Section 53 of the Transfer of Property Act on this point. The English rule, as stated in Halsbury''s
Laws of England, Vol. XV, page 89, is as follows: ""In an action to set aside an alienation under the statute a creditor, should sue on behalf of
himself and all other creditors of the. grantor except where he has recovered judgment for his debt, in which case he can obtain an order declaring
the alienation as void against him and containing consequential directions for the satisfaction of his debt alone, without mention of any other
creditors or their debts,
As pointed out by Coutts Trotter, J., in Palaniandi Chetty v. Appavu Chettiar (1916) 30 M.L.J. 555 the equity Courts used to insist that after
getting a judgment in his favour, the creditor should sue out a writ of Fi fa or elegit before seeking their help to set aside a deed of transfer in
equitable execution of his decree. If we adopt the rule in the restricted manner with the exception as above stated, the present suit will be a validly
constituted one as it is by a judgment-creditor who has attached Immovable property, which corresponds in a general way to suing out the writ of
elegit. Apart from that, it has not been shown that the rule itself was ever used for the purpose of dismissing a suit by a single creditor. No authority
has been cited where such a procedure was followed in England. The cases cited in support of the rule, viz., Bott v. Smith (1857) 52 English
Reports, 957 Be Mouat (1899) 1 Ch. 831 Cornish v. Clark (1872) L.R. 14 Eq. 184 Ideal Bedding Go. v. Holland (1907) 2 Ch. 157 and Reese,
River Silver Mining Go. v. Atwell (1869) L.R. 7 Eq. 347 when examined, show either that the suit was brought by the plaintiff himself on behalf of
all the creditors or as happened in the last case cited, the suit was allowed to be amended for the purpose in the trial Court. On the contrary in the
case of Re, Maddever--Three Towns Banking Go v. Maddever (1881) 27 Ch. D. 523 though the suit was by a single creditor, no objection was
apparently taken as to its form but the decree gave as a matter of form a declaration that the conveyance in question was void against the plaintiff
and all other, if any creditors of the debtor. It seems to me therefore that even in cases of ordinary creditors, where the rule applied and not the
exception, suits were not dismissed for not being Brought on behalf of all the creditors, but were allowed to be amended in the trial Court or
wfyere the transfer was to be set aside, a decree was passed setting it aside on behalf of all the creditors.
As the provisions in the statute of Elizabeth and Section 53 of the Transfer of Property Act are practically the same, we may well adopt the
English rule as a whole, but without giving any further scope to it either by allowing objections to the form of the suit being taken in appeal for the
first time or by dismissing the suit because it is not in a representative character. As pointed out by Coutts Trotter, J., in the case in Palaniandi
Chetty and Others Vs. M.V. Appavu Chettiar and Others, already cited, the rule has already been, to some extent, adopted in India.
There are indications in the Indian Law to show that a creditor may bring a suit u/s 53 of the Transfer of Property Act in his individual
character without joining the other creditors or suing on their behalf. The wording of Section 53 itself gives the right to each individual creditor who
has been defeated or delayed, a right to treat as voidable at his option, a transfer that falls within it. He has not got to exercise his option in
conjunction with his co-creditors. He thus gets a cause of action for himself and there is nothing in the CPC to prevent him from seeking relief by
himself.
Again it would seem from the wording of the form of the decree under the CPC in a suit to set aside a transfer in fraud of creditors, see form
No. 13, first schedule of Appendix D, a suit to which all the creditors are not parties either personally or otherwise is contemplated; for the form of
the decree in Be Maddever''s case above cited, is adopted. The use of the words "" if any"" shows that all the creditors are not before the Court.
I am therefore of opinion that there is no rule either in the English or in the Indian Law, justifying the dismissal of a suit-brought u/s 53, Transfer
of Property Act, because it is not brought in a representative capacity. To avoid the difficulty of multiplicity of suits pointed out by Coutts Trotter,
J., in Palaniandi Chetty and Others Vs. M.V. Appavu Chettiar and Others, . I think the trial Court may, of its own motion, and should if moved by
the transferee defendant, direct that a suit by a single creditor u/s 53, Transfer of Property Act should be amended so as to make it a suit on behalf
of all the creditors, as was directed to be done in Ishvar Timappa v. Devar Venkappa ILR (1902) B. 146. The Court should also take care when
passing a decree setting aside a transfer, even in a single creditor''s suit, to adopt the form No. 13 in Appendix U above referred to. But if a suit
had been proceeded with, without any objection being taken to its form on the ground of its not being on behalf of all the creditors and a decree
had been passed setting aside a transfer as fraudulent, it seems to me that there is no justification for allowing such an objection to be raised for the
first time in appeal or for ignoring the findings arrived at by the Lower Court and dismissing the suit as not being of a representative character. Such
a course will make the Court really an instrument for the support of a proved fraud.
I shall now refer to the Indian cases relied on by Mr. Shenai. To start with, he relied on the Madras cases reported in Palaniandi Chetty and
Others Vs. M.V. Appavu Chettiar and Others, and in Subramania Ayyar v. Muthia Chettiar ILR (1917) M. 612 : 38 M.L.J. 705. The latter case
is a Full Bench decision. The point decided in both these cases was that a defendant to an action cannot plead in defence, his right to avoid a
transfer u/s 53 of the Transfer of Property Act; and that if he wishes to exercise his option under that section he can do so only as a plaintiff and
not as a defendant. If this question were res-integra I should find some difficulty in adopting this view. But it is not necessary to discuss it as the
question before us now is quite different. The creditor here is not seeking to set up his right as a plea in defence but he has come to Court as a
plaintiff and the question raised is whether he should do so in a representative suit only. On that question I consider that neither case is an authority.
In the judgment in the Full Bench case, this question has been expressly excluded from consideration. No doubt there is an observation in it that the
sale should be set aside "" in proceedings properly instituted for the purpose"". There is, however, no indication in the judgment what these
proceedings are and as my learned brother who made the observation considers that the present suit is such a proceeding, it cannot be relied on as
an authority against the respondent.
If the 30 Mad. L.J. case is examined it will be found that Seshagiri Aiyar, J., definitely ruled that no representative suit was necessary. The
view of Coutts Trotter, J., on the point is not quite clear; but it seems to be that a representative suit is necessary except in the case of attaching
decree-holders. The difficulty in understanding his view arises from the fact that he apparently overlooked that the case before him was that of a
decree-holder who had not only attached property but had obtained an order in his favour in the claim petition. From his judgment it would appear
that he would have supported the decree in the case if he had not treated it as one of a mere decree-holder. However that may be, if the learned
Judge is to be taken as holding that a creditor''s suit should be dismissed in second appeal if it is not brought in a representative capacity, with all
respect, I am unable to follow him. I am inclined to agree with the view of Seshagiri Aiyar, J., on this point though I am doubtful about his view as
to the applicability of Section 11, Expl. VI of the Civil Procedure Code; for in a case which ends in favour of the transferee, it may be difficult to
hold that the creditors who were no parties to the suit are also barred from disputing the validity of the transfer.
The other cases relied on by Mr. Shenai are Burjorji Dorabji Patel v. Dhunbai ILR (1891) Bom. 1 Ishioar Timappa v. Devar Venkappa ILR
(1902) Bom. 146 Hakim Lal v.Mooshahar Sahu ILR (1907) Cal 999 and Chatterput Singh v. Maharaj Bahadur (1904) ILR 32 Cal. 193 (P.C.).
The last one is a Privy Council ruling and the observation relied on is on page 217: "" such an issue could be raised and such a decree could be
made only in a suit properly constituted for that purpose and this suit was not so constituted either as to parties or otherwise."" There is nothing to
show that their Lordships meant by a properly constituted suit a representative suit; they do not say so. The facts of the case show that proper
allegations had not been made and proper parties, viz., the transferors, had not been joined to enable the Court to set aside Chutterpur''s private
purchase as fraudulent The observation referred to is apparently connected with these circumstances. I am there fire not able to treat it as an
authority on the point before us.
The observations in the next Calcutta case on page 1006 is no doubt in point in appellant''s favour; but as the decision in the case was that the
conveyance was a valid one and not liable to be set aside u/s 53 of the Transfer of Property Act they are in the nature of obiter dicta. It was also
pointed out to us that the learned Judges had not noticed the exception recognized in the English Law to the general rule in favour of the attaching
decree holder, though the case before them was one of such a decree-holder. With every respect I am unable to follow their view that a suit u/s 53
of the Transfer of Property Act is liable to be dismissed if not brought in a representative capacity. They have also not, expressed a definite opinion
whether the objection should be allowed to be raised for the first time in appeal, though they were apparently inclined to hold that it should not. As
I have already stated 1 am also of the same opinion that it should not be allowed.
I have already referred to the case in Iswar Timappa v. Devar Venkappa ILR (1902) B. 146 and I am in agreement with the learned Judges
there that suitable amendments may be directed by the trial Court to make a suit brought by a single creditor u/s 53 of the Transfer of Property
Act, a representative suit. The actual decision in that case was that a creditor who has not obtained a decree in his favour is nevertheless entitled to
sue under that section. In the case in Burjorji Dorabii Patel v. Dhunbai ILR (1891) B. 1 the suit was not dismissed on the ground of its not being a
representative suit, though no doubt the learned Judge was of opinion, that the suit was liable to be dismissed on that ground. This opinion however
was really only an obiter dictum, for it was found by him that plaintiffs were claiming under the transferor himself and could not therefore impeach
his transfer. It was not a case of creditors at all and was not u/s 53 of the Transfer of Property Act as the act did not then apply to Bombay. As
already pointed out, the English authorities the learned Judge follows, do not show that the suit should be dismissed if not brought in a
representative character. I do not therefore consider that this case which, it will be noted, is the decision of a single Judge is an authority against the
view I am taking and which I should follow.
I have thus for the reasons, above stated come to the conclusion that even looking upon plaintiff as no more than an ordinary creditor of the
vendor, the appellant''s contention that we should now dismiss his suit should be overruled. In my view the Subordinate Judge was wrong in
allowing the point to be raised for the first time in appeal.
In this case however the decree of the Lower Court can be supported on a much narrower ground as well; for the plaintiff here is not merely a
creditor but an attaching decree-holder who was the defeated party in a claim petition filed by the transferee defendant under Order 21, Rule 60,
C.P.C., I have already pointed out that adopting the English rule he will have as attaching decree-holder, a personal right to sue by himself to avoid
the transfer. Again as the defeated party in a claim petition, he has a statutory right of suit given to him under R, 63 and that suit must necessarily be
one brought by himself alone and is not a representative suit. Under that rule he can sue to establish the right which he claims to the property in
dispute and that right is that it can be attached and sold for his decree. The present suit is exactly that suit and it cannot therefore be defeated by
any rule of practice which has no statutory basis. Asit is necessary to find whether Exhibit V is valid against him to give him the relief claimed, the
Court, I think, was bound to decide that question and he could not be referred to another suit for the purpose. In fact the suggestion of the
appellant''s counsel that after bringing this suit plaintiff should have at once launched another suit of a representative character to set aside Exhibit V
and get a stay of this suit pending that suit if he wanted to save it from dismissal does not seem to me to be at all reasonable nor the course
proposed necessary; it is perhaps even impracticable; I do not see why plaintiff should be driven to bring 2 suits for the same purpose. To hold that
plaintiff cannot get the deed set aside except in a representative suit, will be a practical denial of his statutory right of suit; a suit which he has to
bring as pointed out by my learned brother, within one year at the risk of losing his right to attach the property if he does not do so.
The only case cited to us which was a case of an attaching decree-holder defeated in a claim petition suing, is the one in Hakim Lal v.
Mooshahar Sahu ILR (1907) Cal. 999 already referred to. But in that case the learned Judges did not consider his special and peculiar right to sue
in his own name under Rule 63. I have already stated that I am unable to follow their view as to the character of the suit to be brought, u/s 53. It is
therefore no authority against the respondent.
I agree with my learned brother that the appellant''s contention that the present suit should be dismissed because it was not a representative suit
on behalf of all the creditors, fails, and that the Lower Courts were right on their findings in holding that Exhibit V was not valid against the plaintiff
and in giving relief on that footing.
I agree the Second Appeal should be dismissed with costs.