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1971 Supreme(AP) 199

Andhra Pradesh High Court
Judges : K.MADHAVA REDDY
Namburi Rajyalakshmamma - Appellant
Versus
Kongara Rajamma - Respondent
Decided On : 09-23-71

A sole creditor is not bound to file a suit in a representative capacity even though there are no other creditors either on the date of the transfer or subsequent thereto upto the date of the institution of the suit.

Headnote:

TRANSFER OF PROPERTY ACT - SECTION 53 - SOLE CREDITOR - REPRESENTATIVE SUIT - NECESSITY - FRAUDULENT ALIENATION - SUIT FOR DECLARATION - MAINTAINABILITY.

Fact of the Case:

The plaintiff, a decree-holder, filed a suit for a declaration that the alienation made by the judgment-debtor was in fraud of the creditors. The defendant contended that the suit ought to have been filed in a representative capacity on behalf of the general body of creditors as contemplated by Section 53 of the Transfer of Property Act.

Finding of the Court:

The court held that the sole creditor is not bound to file a suit in a representative capacity even though there are no other creditors either on the date of the transfer or subsequent thereto upto the date of the institution of the suit. Requiring such a creditor to file such a representative suit is to assume that there are some other creditors whom he purports to represent.

Issues: Whether the sole creditor is bound to file a suit in a representative capacity even though there are no other creditors either on the date of the transfer or subsequent thereto upto the date of the institution of the suit.

Ratio Decidendi: The court held that Section 53 of the Transfer of Property Act and Order 1, Rule 8, Civil P. C. do not envisage that even though there is no other person in existence whose right or interest is similar to that of the plaintiff, the plaintiff should purport to represent such persons in anticipation of such persons coming into existence at some distant future.

Final Decision: The court dismissed the second appeal and held that the suit filed by the sole creditor was maintainable.

K. MADHAVA REDDY, J.

( 1 ) THE principal question that falls for consideration in this Second Appeal is whether the sole creditor must necessarily file a suit in a representative capacity and cannot maintain a suit merely on his behalf for a declaration that the alienation made by the judgment-debtor was in fraud of the creditors.

( 2 ) THE first defendant who is the appellant herein is the wife of the 2nd judgment-debtor against whom the 1st respondent herein had obtained a money decree on 3-8-1961 in O. S. No. 6 of 1961 on the file of the District Munsifs Court Nuzvid in execution of which he attached the properties in question in E. P. No. 194 of 1961. The 1st defendant filed a claim petition E. A. No. 70 of 1962 in E. P. No. 194 of 1961 on the file of the District Munsifs Court, Nuzvid claiming that the properties were alienated under a sale-deed dated 11-10-1960 in his favour. The claim petition was allowed on 17-9-1962. The decree-holder, therefore, filed the present suit O. S. No. 185 of 1963 on the file of the District Munsifs Court, Nuzvid (1) for setting aside the order in the claim petition E. A. No. 70 of 1962 in E. P. No. 194 of 1961 and (2) for declaring the plaintiffs right to attach and sell the plaint schedule properties for recovering the decree debt due to her by the 2nd defendant. The 1st defendant resisted the suit among others on the ground that the suit ought to have been filed by the decree-holder in a representative capacity to ensure for the benefit of general body of the creditors as contemplated by Section 53 of Transfer of Property Act. The defendant however, in the written statement categorically stated that the alienation was not in fraud of the creditors other than the plaintiff. In other words, the plaintiff was the sole creditor. Both the Courts below have decreed the suit holding that the alienation was in fraud of the creditors. It is not necessary for the purpose of this appeal to note that on an earlier occasion this matter had come up by way of second appeal No. 558 of 1966 and was remanded to the lower appellate court for fresh disposal ; suffice to note that both the courts below have now held that the alienation was in fraud of the creditors and accordingly decreed the suit.

( 3 ) IT is not to the appellant in the Second Appeal to canvass the correctness of this concurrent finding of the Court below. So the main question that survives for consideration is whether the suit ought to have been filed in a representative capacity on behalf of the general body of creditors.

( 4 ) IT must be found as a fact, in view of the admission of the 1st defendant appellant in the written statement, that neither on the date of alienation nor at any time thereafter there was any creditor other than the plaintiff-decree-holder. Even now the 1st defendant-appellant is not in a position to assert that there are any other creditors. Thus, on the date of the alienation as well as subsequent thereto upto the date of institution and now upto the date of hearing of the second appeal, except the plaintiff-respondent there is other creditor. The plaintiff-appellant is the sole creditor.

( 5 ) SECTION 53 of the Transfer of Property Act enjoys that a suit instituted by a creditor to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, all the creditors. The question whether the representative suit contemplated by Section 53 of the Transfer of Property Act is designed to represent the creditors on the date of the alienation or the creditors subsequent to the date of the alienation also, may now be taken as concluded by a decision of this Court in B. Chalamiah v. Body of Creditors of Khasim Saheb, ( 1965 ) 1 Andh WR 23 = ( AIR 1965 Andh Pra 68 ) their Lordships observed as follows : "the representative suit contemplated by Section 53, Transfer of Property Act was made necessary for two reasons ; firstly, that the debtor sh















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