Mohanachandran Nair vs V. Varghese

A. Badharudeen, J

The unsuccessful plaintiff, who is dissatisfied with the finding of the Trial Court in I.A.No.2 of 2021 in O.S.No.37 of 2021 dated 09.11.2022, has preferred this second appeal under Section 100 r/w Order 42, Rule 1 of the Code of Civil Procedure (for short 'CPC'). The plaintiff assails the order of the trial court and the verdict in Appeal Suit No.296 of 2022 dated 07.11.2023, whereby the learned District Judge also concurred the finding of the Trial Court.

Heard the learned counsel for the plaintiff, the 1st respondent in I.A.No.2 of 2021, on admission.

The sum and substance of the contention raised by the claim petitioners before the Trial Court was that the claim petitioners purchased 11 Ares of property comprised in Re-survey No.455/7 of Ayiroopara Village, Thiruvananthapuram as per sale deed No.3183 of 2020 of Pothencode SRO dated 03.12.2020. The petitioners purchased the property after verifying the encumbrance thereof. As on 10.02.2021, the plaintiff filed suit for recovery of money, and an order of attachment was obtained in I.A.No.1 of 2021 as on 12.02.2021. According to the claim petitioners, since the attachment was effected after about two months more from the date of purchase of the property by the claim petitioners, the attachment was liable to be lifted.

The appellant herein, who is the 1st counter petitioner in I.A., filed objection stating that the purchase of the property by the claim petitioners is without paying proper sale consideration and the sale deed relied on by the claim petitioners is a fabricated document. Though sale deed was executed, mutation was not effected till 12.02.2021. After getting the order of attachment in I.A.No.1 of 2021, the claim petitioners influenced the village authorities and effected mutation, and thereafter paid basic tax also in respect of claim petition schedule property. The claim petitioners fully aware of the liability outstanding in favour of the plaintiff from the defendant, and therefore, the transfer in favour of the claim petitioners is a fraudulent one, and the same would not defeat the right of the claim petitioners. Benami transaction is another contention raised.

The Trial Court adjudicated the matter after examining PW1, on the side of the claim petitioners and marking Exts.A1 and A2. Others did not adduce any evidence. It was found by the trial court that the claim petitioners purchased the propriety on 30.12.2020 as per Ext.A1 sale deed No.3183/20 of Pothencode SRO, and as per Ext.A2, they effected mutation and paid tax also, and accordingly, it was found that the property scheduled in the claim petition absolutely belonged to the claim petitioners. In consequence thereof, the attachment was lifted. Though an appeal was filed challenging the said verdict, the learned District Judge also concurred the findings.

The learned counsel for the plaintiff/appellant relied on the decision of this Court reported in Mohammed P.V. v. Mannil Abdul Gadhafi alias Abdul Gadhafi Mannil and Others [2022 (6) KHC 369], which was highlighted before the first appellate Court also, contending that in cases of fraudulent transactions, the court could very well interfere with such transactions.

I have perused the judgment in Mohammed P.V. (supra). In paragraph 15 of the above judgment as under:-

“15. Therefore, the plea raised by the appellant that the sales by virtue of Exts. A1 to A3 are fraudulent transactions requires consideration. As pointed out above, the 1st respondent purchased A to C schedule properties as per successive documents, Exts.A1 to A3. It is true that all the said documents were executed before the date of attachment. But the nature of transactions is curious. Three items of properties situated at Mavelikkara, Ernakulam and Chennai were sold by the respondent Nos.2 and 3 in favour of the 1st respondent on nearby dates. It was at a time when the investigation in Crime No.RC5(E)2015 was being held by the C.B.I. against respondent Nos.2 and 3. Respondent No.2 was in jail for quite some time in connection with that case. The allegation was that those respondents giving false assurance that railway properties would be leased out and also by handing over forged documents in that regard extracted a huge sum of money from the appellant. A final report against respondents No. 2 and 3 in that crime has been filed in court also. Ext.P5 is a copy of the order of this Court in the Bail Application filed by respondents No. 2 and 3 in the said crime. In such circumstances, it can certainly be said that the appellant was the creditor and respondents No.2 and 3 were the debtors at the time when the sale as per Exts.A1 to A3 took place. The circumstances surrounding such sale deeds, which are pointed out above, speak for themselves that the intention of respondents No.2 and 3 was nothing but to defeat the interest of the appellant, who is a creditor. Therefore, the transactions under Exts.A1 to A3 certainly come within the mischief of Section 53 of the T.P.Act.”

Going by the case dealt with by the Division Bench of this Court, the Division Bench considered a case where the nature of transaction was curious, and the sale deeds were executed at a time when the investigation in Crime No.RC5(E)2015 was being held by the C.B.I. against respondent Nos.2 and 3. Further, the respondent No.2 was in jail for quite some time in connection with the said case. The Division Bench considered the surrounding circumstances in the above perspective and finally set aside the order allowing the claim petition therein at the instances of the purchasers in the said circumstances.

Coming to the instant case, apart from filing objection, the plaintiff did not mount the box to tender evidence to point out any curious and fraudulent circumstances in the matter of execution of Ext.A1 sale deed in favour of the claim petitioners. Nothing is substantiated by the appellant/plaintiff before the Trial Court to hold that the transaction was a fraudulent one and the claim petitioners were aware of the liability of the defendant in the suit in any manner. Therefore, it is held that the Trial Court rightly allowed the claim petition, holding that the transfer of the property scheduled in the claim petition, as per Ext.A1 as on 03.12.2020, occurred much prior to the attachment effected on 10.02.2021. Thus the sale is valid, and therefore, the property could not be proceeded to realize the debt due to the plaintiff. The appellate court also concurred the said finding, for valid reasons.

A meticulous analysis of the reasons for the concurrent findings entered into by the Trial Court as well as the Appellate Court would reveal that no substantial question of law arises to admit and maintain the second appeal. Formulation of a substantial question is mandatory while admitting a second appeal.

In this case, in fact, the learned counsel for the appellants/defendants failed to justify any substantial question of law warranting admission of the second appeal. Order XLII Rule 2 provides thus:

“2. Power of Court to direct that the appeal be heard on the question formulated by it.-At the time of making an order under rule 11 of Order XLI for the hearing of a second appeal, the Court shall formulate the substantial question of law as required by section 100, and in doing so, the Court may direct that the second appeal be heard on the question so formulated and it shall not be open to the appellant to urge any other ground in the appeal without the leave of the Court, given in accordance with the provision of section 100.”

Section 100 of the C.P.C. provides that, (1) Save as otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law. (2) An Appeal may lie under this section from an appellate decree passed ex parte. (3) In an appeal under this section, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal. (4) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (5) The appeal shall be heard on the question so formulated and the respondent shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question. Proviso says that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law, not formulated by it, if it is satisfied that the case involves such question.

In the decision in Nazir Mohamed v. J. Kamala and Others reported in [2020 KHC 6507 : AIR 2020 SC 4321 : 2020 (10) SCALE 168], the Apex Court held that:

The condition precedent for entertaining and deciding a second appeal being the existence of a substantial question of law, whenever a question is framed by the High Court, the High Court will have to show that the question is one of law and not just a question of facts, it also has to show that the question is a substantial question of law referring Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, [(1999) 3 SCC 722].

In  a  latest  decision  of  the  Apex  Court  in Government of Kerala v. Joseph, reported in [2023 (5) KHC 264 : 2023 (5) KLT 74 SC], it was held, after referring Santosh Hazari v. Purushottam Tiwari, [2001 (3) SCC 179] (three – Judge Bench), as under:

For an appeal to be maintainable under Section 100, Code of Civil Procedure ('CPC', for brevity) it must fulfill certain well – established requirements. The primary and most important of them all is that the appeal should pose a substantial question of law. The sort of question that qualifies this criterion has been time and again reiterated by this Court.

The legal position is no more res-integra on the point that in order to admit and maintain a second appeal under Section 100 of the C.P.C., the Court shall formulate substantial question/s of law, and the said procedure is mandatory. Although the phrase 'substantial question of law' is not defined in the Code, 'substantial question of law' means; of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with – technical, of no substance or consequence, or academic merely. However, it is clear that the legislature has chosen not to qualify the scope of “substantial question of law” by suffixing the words “of general importance” as has been done in many other provisions such as S.109 of the Code or Art.133(1)(a) of the Constitution. The substantial question of law on which a second appeal shall be heard need not necessarily be a substantial question of law of general importance. As such, second appeal cannot be decided on equitable grounds and the conditions mentioned in Section 100 read with Order XLII Rule 2 of the C.P.C. must be complied to admit and maintain a second appeal.

In view of the above fact, no substantial question of law arises in this matter to be decided by admitting this appeal.

In the result, this appeal is found to be meritless and the same is dismissed without being admitted.

All interlocutory applications pending in this second appeal, stand dismissed.

Registry shall inform this matter to the trial court as well as the appellate court, forthwith.