Picha Mooppanar vs Velu Pillai and Another

Govindarajachari, J.—The appellant in this second appeal filed Small Cause Suit No. 644 of 1940 in the Court of the District Munsiff of

Ambasamudram against one Krishna Pillai on a promissory note executed by him and obtained a decree. The appellant sought to execute his

decree by attaching the properties set out in the schedule appended to the present plaint. The first defendant in this suit who is the first respondent

in the second appeal filed a claim petition objecting to the attachment on the ground that the suit property fell to his share in a family partition

entered into between Krishna Pillai his father, himself and his brother Arumugham Pillai who is the second defendant in the present suit and the

second respondent in the second appeal. The claim petition was allowed and the attachment was raised. The appellant thereupon filed the suit out

of which this second appeal has arisen alleging that the partition relied upon by the first defendant was entered into with intent to defraud the

creditors of Krishna Pillai. The suit was filed by the plaintiff on behalf of himself and the other creditors of Krishna Pillai. No objection to the frame

of the suit can therefore be taken and if the plaintiff establishes that the partition was fraudulent as he alleged, he would be entitled to relief to the

extent stated below. The District Munsiff of Ambas samudram who tried the present suit dismissed it holding that the plaintiff did not succeed in

making out that the partition in question was in fraud of the creditors of Krishna Pillai. This judgment was affirmed by the Subordinate Judge of

Tinnevelly.

In this second appeal filed by the plaintiff his advocate Mr. T. L. Venkatarama. Aiyar has argued that the findings of the Courts below in regard

to the character of the partition cannot be sustained as the matter was not viewed from the proper legal standpoint by either Court. He contends

that according to the latest pronouncement of our Court in the case in K. S. RM. Firm v. Subbiah (1944) 1 M.L.J. 384 : ILR 1945 Mad. 138:

If a partition is unequal and the father is allotted a smaller share than would be his due with i ntent to defeat the creditors, the latter can avoid the

partition u/s 53 of the Transfer of Property Act and proceed against what would be his proper share in the family properties in execution of the

decree obtained against him ignoring the allotment of the properties at the partition.

Whatever doubts might have existed in regard to the complicated positions which arise in cases where partitions are effected between a Hindu

father and his sons at a time when the father is indebted, all those doubts must, in my opinion, be said to have been cleared by the decision I have

just referred to. If I may say so with respect, the enunciation of the law by Wadsworth and Patanjali Sastri, JJ., in that decision in the form of

certain propositions of law has elucidated and defined the rights of creditors as against their debtors and their sons. That decision fully supports the

contention raised on behalf of the appellant. The particular proposition on which Mr. Venkatarama Ayyar relies is set down as paragraph (a) on

page 146 in the ILR Vol. It is unnecessary to set it out here, as I have already indicated its scope and effect.

So far as the findings of the Courts below are concerned, it seems to me that both Courts failed to look at the transaction from the proper legal

standpoint. The question which they should have put to themselves is whether sufficient property was allotted to the father with which he could

discharge his debts. The manner in which the Courts below viewed the matter is this. They asked themselves whether the property that was

allotted to the first defendant was sufficient for the discharge of the debts which he had undertaken to discharge and similarly with regard to the

second defendant also. Putting this question to themselves, they held that the debts which each of the defendants was called upon or had

undertaken to discharge were less than the properties which had been allotted to each of them. This misses the real point altogether. Looking at the

question from the standpoint I have indicated, I have no doubt in my mind that the partition evidenced by Ex. D-1 must be held to be a fraudulent

partition within the meaning of proposition (a) enunciated by Wadsworth and Patanjali Sastri, JJ., in the case already referred to. It is unnecessary

to set out at length the terms of the partition deed. No property was allotted to the father, as small provision for his maintenance was made, each of

the sons being directed to deliver to him a small quantity of paddy every year and make a small cash payment. A similar provision was also made

for the maintenance of the mother. All the properties were divided between first and second defendants. It is true that all the debts of the father

were distributed between the first and second defendants, the second defendant being directed to pay something more than half the debts, the

inequality being explained by the fact that the second defendant took a house which was slightly larger in value than the house which was allotted to

the first defendant. While the debts of the father were mentioned in the partition deed and while the first defendant cr the second defendant was

directed to pay them off. it seems to me that this provision is absolutely illusory as no creditor can take advantage of what is binding only as

between the first and second defendants. Creditors are not parties to the contract embodied in the partition deed and if the concerned defendant

refuses to discharge a debt which he is directed to pay under Ex. D-1, I dc not see how he can be compelled at the instance of the creditor to

discharge it by reason of the fact that the debt is by the partition deed directed to be paid by that defendant. In deciding whether the partition is not

fraudulent in the sense I have indicated, we have only got to look at the effect which this partition deed would have on the rights of creditors and so

viewed the partition must be held to have been entered into with a view to defraud the creditors of Krishna Pillai. Mr. Venkateswara Aiyar the

advocate for the first respondent argued that the propositions enunciated by Wadsworth and Patanjali Sastri, JJ., are obiter dicta as there is a

finding recorded by them lower down in their judgment that the partition which was effected in that case was not unequal. I am not sure that they

are obiter but even so, I am inclined to agree with those observations which, as I already stated, not only state precisely the legal position which

arises in cases of this description, but also give the necessary protection to creditors against fraudulent partitions.

It is not denied that the debt in question in the present case is a pre-partition debt and would be binding on the sons. The first defendant who is

the contesting defendant neither alleged nor proved that the debt is illegal or immoral and consequently not binding on him.

Mr. Venkateswara Aiyar further argued that the findings of the Courts below are findings of fact. I cannot agree. If the proper test had been

applied, I would certainly not have interfered with their findings, sitting as I am, in second appeal. But when the real point is missed and the entire

discussion proceeds upon what I consider to be an altogether wrong basis, I do not regard the findings as binding on this Court in second appeal.

Another point was raised by Mr. Venkatarama Aiyar as an alternative to his principal argument. He contended that defendants 1 and 2 are

universal donees within the meaning of Section 128 of the Transfer of Property Act and that they would be consequently liable to discharge the

debts of the father whom he describes as the donor. This point was not raised in either of the Courts below, but apart from that. I am not

impressed with the argument that the transaction evidenced by Ex. D-1 the partition deed is or can be treated as a gift of the entire property by

Krishna Pillai in favour of his sons which is how Mr. Venkatarama Aiyar would view the transaction. In the first place, the first defendant is given

some properties and is directed to discharge certain debts, while the second defendant takes some other properties and undertakes to discharge

certain other debts which means that if they are gifts at all, there are two gifts and not one, of two separate portions of the property. There is again

the difficulty that there can be nothing like a gift of joint family property by a Hindu father in favour of his undivided sons. There can be a

renunciation by him of his interest in favour of the other members of the family, but that may not be a gift within the meaning of the Transfer of

Property Act. It is however unnecessary to pursue this discussion any further as I accept Mr. Venkatarama Aiyar''s argument on the main point

which I have already dealt with.

The result is that the second appeal is allowed and the suit is decreed to the extent that the plaintiff and the other creditors of Krishna Pillai can

proceed in execution of his or their decrees only against the father''s one-third share in the family properties. As regards costs, I direct each party

to bear his own costs throughout, because it seems to me that the plaintiff brought all this trouble on himself and others by not suing the sons also,

notwithstanding that he knew of the partition which had been entered into between the father and the sons and also because there is every reason

to suspect that the plaintiff is unwilling to proceed against the properties allotted to the second defendant though the second defendant was directed

to discharge the plaintiff''s debt by the partition deed. While these con-siderations would not deprive the plaintiff of what are his rights in law, I

regard them as sufficient to justify an order disallowing his costs throughout. It is no doubt a pity that the second defendant who should have

discharged this debt as he had undertaken to do by Ex. D-1 did not do so and that the first defendant is therefore now compelled to discharge it.

But that is a matter which may arise hereafter as between the first and second defendants and it is unnecessary for me to say anything further about

it in this appeal.

(Leave refused).