Premraj Seth vs Ramwatibai

Chaturvedi, J.—This is a second appeal by the plaintiff-decree-holder and arises from a suit for a declaration under Order XXI, Rule 63 of the Code of Civil Procedure. It relates to a house which was the ancestral property of the judgment-debtor Bholaram (defendant No. 2), who is the husband of the objector Smt. Ramwatibai (defendant No. 1).

It is an admitted fact that a partition of the joint family property between defendant No. 2 Bholaram, his son Surendra and his mother Smt. Lachhobai took place on 27th September 1946, so that Bholaram should not squander Surendra''s share. It is alleged that Bholaram is addicted to wine and other vices. In this partition Bholaram got a much small share, and the house in suit fell to his share. Barely within a month, i.e. on 21st October 1946, the judgment debtor Bholaram executed the sale-deed in favour of his wife Smt. Ramwatibai for a consideration of Rs. 2,000, and it is stated that the house has been actually transferred to his wife. This house in suit was attached by the decree-holder before judgment. Defendant No. 1 Ramwatibai objected to the attachment on the basis of the sale-deed dated 21st October 1946 and this objection was allowed. The plaintiff decree-holder then filed a suit under Order XXI, Rule 63 of the Code of Civil Procedure, which was decreed by the trial Court which held that the transaction of sale which took place between husband and wife on 21st October 1916 was bogus and a sham one, in which no consideration had actually passed. Against this judgment Smt. Ramwatibai went up in appeal to the District Judge, Chhindwara, who reversed the finding and dismissed the suit, The plaintiff has, therefore, come up in second appeal to this Court,

The whole judgment of the learned District Judge is coloured by the view that the plaint as framed could not have been decreed as it was hit by section 53 of the Transfer of Properly Act and such a suit, under clause (4) of subsection (1) of section 53 of the Transfer of Property Act must be instituted on behalf of, or for the benefit of, all the creditors, Now it is significant that the learned District Judge admits in clear words in paragraph 4 of his judgment that this objection was not taken by the defendants in their written statement, nor was it mentioned in the grounds of appeal before the learned District Judge, but at a late stage of arguments before him it was debated. As soon as the point arose, the plaintiff applied for an amendment of plaint, but this application was rejected and thereafter the learned District Judge held that the suit must fail both on merits as well as on the ground that it was not filed in a representative capacity.

In my opinion, there is a distinction between a fictitious and a fraudulent transfer, and this distinction has been brought out clearly in certain decisions; Mt. Saraswati Kuar vs. Mahabir Prasad AIR 1922 All. 476, Parbhu Nath Prasad vs. Sarju Prasad AIR 1940 All. 401, Jagdamba Pande vs. Ram Khelwan Upadhya A.I.R, 1942 All. 344 , and Mt. Rukiayia Begum and Another Vs. Radha Kishan and Others, If a deed is fictitious, is is merely a waste paper and no title passes to the ostensible transferee; the property continues to vest in the transferor and is liable to attachment and seizure by his creditors. In other words, it means that if the transaction is fictitious, it was never intended to exist. If, on the other hand, a transaction was fraudulent, it means that it was intended to exist, though its object was to defeat the legal rights of others. If the plaintiff''s basis was u/s 53 of the Transfer of Properly Act, then there is no doubt that the frame of the suit should have been of a representative character. If, however, the stand taken by him is on the fictitious character of the transfer, the plaintiff can bring he suit in his undivided capacity. It is, however, quite clear from the decisions mentioned above that if the decree-holder pleads that the dead of sale by the judgment debtor was a sham and bogus transaction and that what it purported to be conveyed under the instrument of sale was never conveyed at all and remained the property of the vendor, there can be no necessity to institute a suit u/s 53 of the Transfer of Property Act, as there was in fact no transfer and there is nothing which can be avoided. In such a case, he is entitled to a declaration that the property which purports to have been conveyed thereunder is liable to attachment and sale in execution of the creditors decree.

In the present case, the plaint no doubt purported to allege that it was a case of a sham, and bogus transaction hut it also mentioned in paragraph 5 that "it is without consideration executed by defendant No. 2 to shield the property from his creditors." In paragraph 10, however, the only prayer made is that "the order dated 2nd February 1949 in Miscellaneous Judicial Case No. 35 of 1948, of the Court of Civil Judge, Class 1, be set aside and it be declared that the house described in paragraph 1 above is liable for attachment for satisfaction of the claims of the plaintiff against the defendant No. 2." Nowhere in the relief paragraph is there any reference to other creditors. The allegations made in the plaint, therefore, amount really to this that there was no transfer at all, that no consideration passed, that the property remained in the possession of the vendor and that the deed was purely fictitious and was never intended to operate as a deed of sale. In my opinion, in such a case there was no necessity to institute a representative suit u/s 53 of the Transfer of Property Act, and the suit as framed ought to have been tried.

The facts in Madina Bibi Sahiba Vs. The Ismail Durga Association and Another, were different and can be distinguished. The plaintiff there bad claimed a declaration that the deed of sale in favour of the wife by the judgment debtor was executed in fraud of the creditors "namely and colourably." It was rightly held that the suit fell within the purview of section 53 of the Transfer of Property Act. In fact, it was not a suit merely for a declaration that the transaction was a bogus one but a suit in which the Association sought to have the transaction set aside on the footing that the transaction was a fraud on the creditors. The facts in Magnibai Kishorjee vs. Kesrimal Sawairam AIR 1955 M.B. 159 can also be distinguished. The deed of gift there was registered during the pendency of the suit.

In several Rangoon cases (Mung Tun Thein vs. Maung Sin AIR 1934 Rang. 332 U. Maung Hge vs. P.L.S.P. Chettiar Firm AIR 1934 Rang. 200 and R.R.O.O. Chettiar Firm vs. Ma Sein Yin AIR 1928 Rang. 1, the view was expressed that a suit brought under Order XXI, Rule 63

of the CPC is mere continuation of the proceedings in a claim petition and the necessity for the plaintiff to bring a suit under Order XXI, Rule 63 of the CPC arises by a summary decision under Order XXI, Rule 58, passed in execution of his own decree, and there is no reason why be should be compelled to sue on behalf of the other creditors also.

There are other cases also which have taken the same view. In my opinion, the present suit could not have been dismissed on that ground. Even if the judgment of the Court below believed that it was hit by section 53 of the Transfer of Property Act and this objection was taken before him at a very late stage, the plaintiff''s application for amendment ought to have been allowed and the learned Judge ought not to have visited the plaintiff with the consequence of a defective suit at that late stage. In Asgur Ali vs. C.V.R.M. Firm ILR 14 Rang. 81, it has been held that the omission to file the suit in a representative form is not fatal to the maintenance of the suit, and the trial Court can and should permit the plaintiff to take proper steps to set matters right. But if no objection is taken to the form of the suit in the trial Court and is only raised for the first time in appeal, the objection cannot be allowed in the appellate Court, and the appellate Court should not remand the case to the trial Court to remedy the defect. Where a Court has inherent jurisdiction to try a particular suit but its jurisdiction is irregularly invoked, a litigant by his conduct may be precluded from maintaining in the circumstances of the case that the suit was not maintainable as framed. With respect, I agree with this view.

So far as merits are concerned, the lower appellate Court ought to have paid respect to the opinion of the Judge who had the advantage of seeing all the witnesses except Smt. Ramwatibai (respondent No. 1) whose deposition was recorded by the Commissioner outside the Court, The rules of prudence or guidance plainly lay down that an appellate Court should not distrust the trial Court''s judgment unless it is plainly unsonnd or unless it comes to the conclusion that the trial Court has failed to appreciate the weight and be ring of circumstances admitted or proved (Watt vs. Thomas) (1947) A.C. 434. As the Supreme Court observed in Sarju Parshad vs. Jwaleshwari AIR 1951 S.C. 121, the duty of the appellate Court in such cases is to see whether the evidence taken as a whole can reasonably justify the conclusion which the trial Court arrived at or whether there is an element of improbability arising from proved circumstances which, in the opinion of the Court, outweighs such finding. The learned District Judge has not cared to analyse or discuss the evidence at all, but has reversed the finding of the trial Court on the short ground that there is a recital in the sale-deed that Rs. 1,000 were paid to the vendor at the time of the registration of the document and therefore the sale-deed dated 21st October 1946 must be taken to be with consideration and not fictitious. All the circumstances alluded to by the trial Court in its judgment have been entirely ignored. Now, there is a partition on 27th September 1948 between Bholaram (the judgment-debtor) and his mother Smt. Lachhobai, and his son Surendra. In this partition, without any reason and against expectations, Bholaram is given the suit-houses alone, which is less than one-third share of the ancestral property, more than two-third share going to the mother and the minor son of Bholaram. Within less than one month of this partition, Bholaram sells away his share, i.e. the suit-house also and that too to his own wife. Within two years of this sale-deed, the plaintiff obtains a decree against Bholaram. Can it not be inferred that the transaction of sale was in anticipation of this suit ? Then, the transaction was between husband and wife; the mother and the son had obtained more than 2/3 share of the ancestral property, and there was no apparent necessity for selling the suit-house. The sole conceivable motive for the sale can only be the alienation of the whole estate standing in the name of Bholaram. The ostensible consideration appears to be only an excuse for the out-and-out withdrawal of all the assets of Bholaram. Under these circumstances, who will not say that the sale-deed was contaminated with grave suspicion ? Then, the alleged vendor does not come to the Court to say that he received any consideration from bis wife for the sale of the house in question. The non-appearance of the transferor in the witness-box is always regarded as throwing grave doubts on the bona fides of his case. Respondent Smt. Ramwatibai could not give the source of her income. She is the daughter of a mason. Her father-in-law was selling rice and after his death, eight years before, she had been selling rice, but could not give accounts. She avoided saying anything definite. Her statement is vague and evasive. "I cannot say how much I purchase and how much I sell. I also cannot state the daily profit." She stated that she had paid Rs. 1,000 in nine instalments to her husband before the sale-deed, but she could cot say for what reason the money was needed by her husband. The instalments were of Rs. 200, Rs. 250, Rs. 409, Rs. 300, Rs. 50 and Rs. 100. The total amounts (not to Rs. 1,000 but) to Rs. 1,300. Then, the learned trial Court also came to the conclusion that Bholaram resides in the same house, and the cordial relation of the husband and wife can be presumed from the recent birth of a child to Smt. Ramwatibai respondent.

All these circumstances ought to have been considered by the learned District Judge and an inference ought to have been drawn from them. I regret to say that the finding of the learned District Judge is not based on proper evidence. 1 am satisfied that the sale deed dated 21st October 1946 was a colourable transaction without consideration and not transfer of the suit property to respondent Smt. Ramwatibai and that the conclusion arrived at by the trial Court was sound.

I would, therefore, allow the appeal with costs, set aside the judgment and decree of the lower appellate Court and restore those of the trial Court.