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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
B.S. BHANUMATHI, J.
Yeleti Sridevi Manikumari - Petitioner
Versus
Malireddy Krishnaveni - Respondent
Appeal Suit No. 84 of 2012
Decided On : 01-07-2022
TRANSFER OF PROPERTY ACT, 1882 - SECTION 128 - GIFT OF WHOLE PROPERTY - LIABILITY OF DONEE - ADMISSION OF DONOR'S OTHER PROPERTIES - NO UNIVERSAL DONEE STATUS - NO LIABILITY FOR DEBTS.
Fact of the Case:
Plaintiff filed a suit against the defendants for recovery of amount under four promissory notes executed by the 1st defendant, alleging that defendants 2 and 3, daughters of the 1st defendant, created a partition deed and gift deeds to defeat and delay the debts. The defendants denied the claim and contended that the promissory notes were not fully supported by consideration and that the properties were acquired by them as pasupu-kumkuma at the time of their marriages.
Finding of the Court:
The court found that the plaintiff admitted that the 1st defendant had other properties, including a rice mill, house, car, and lands. Therefore, the defendants 2 and 3 were not universal donees and could not be held liable for the debts of the 1st defendant under Section 128 of the Transfer of Property Act, 1882.
Issues: 1. Whether the suit promissory notes are true, valid, supported by consideration, and binding on the defendants? 2. Whether the defendants 2 and 3 are proper and necessary parties for the suit and whether their properties are liable for suit claim? 3. Whether the plaintiff is entitled for recovery of suit amount from the defendants?
Ratio Decidendi: Section 128 of the Transfer of Property Act, 1882, states that where a gift consists of the donor’s whole property, the donee is personally liable for all the debts due by and liabilities of the donor at the time of the gift to the extent of the property comprised therein. However, in this case, the plaintiff admitted that the 1st defendant had other properties, which means that the gift to defendants 2 and 3 was not of the whole property. Therefore, they could not be held liable as universal donees.
Final Decision: The appeal was allowed, and the decree and judgment in O.S.No.699 of 2009 on the file of the Court of the Principal Senior Civil Judge, Kakinada, were set aside as against the appellants/defendants 2 & 3. The suit against them was dismissed.
JUDGMENT:
This appeal is preferred against the judgment and decree, dated 15.09.2011, passed in O.S.No.699 of 2009 on the file of the Court of the Principal Senior Civil Judge, Kakinada.
2. The suit is filed by the 1st respondent herein against respondent No.2/1st defendant and the appellants 1 and 2/defendants 2 & 3 for recovery of amount under four promissory notes, dated 18.05.2007, 21.05.2007, 22.05.2007 and 01.11.2007, all for an amount of Rs.1,54,000/- each allegedly executed by the 1st defendant agreeing to repay the same with interest @ 18% per annum. The plaintiff fastened the liability against the defendants 2 and 3 who are the daughters of the 1st defendant, on the ground that they have full knowledge of the debts of the 1st defendant, yet created a partition deed, dated 06.12.2008 to defeat and delay the debts lawfully due to the plaintiff; and, as such, the partition deed is illegal, invalid and not binding on the plaintiff. It is the further case of the plaintiff that the 1st defendant executed two gift deeds, dated 06.12.2008, in favour of defendants 2 & 3 and thus, they are universal donees since there is no other property to the 1st defendant and liable to the suit claim.
3. The 1st defendant filed written statement denying the suit claim and the alleged promissory notes including borrowal of any amount and further contended that Uppuluri Subba Rao who is the uncle of the plaintiff lent Rs.1,50,000/- in 1998 and renewed the promissory notes for higher amount by including compounded interest at his choice and further that Uppuluri Subba Rao obtained such promissory notes in the name of his family members and relatives and thus, the suit promissory notes are not fully supported by consideration. It is also further pleaded that the 1st defendant agreed to settle the debts due to the plaintiff, but as this defendant sustained loss in the rice mill business, the plaintiff filed the suit under an apprehension that the defendants may avoid discharge of the debt and got attached the properties of the defendants 2 & 3 intentionally knowing that this defendant had given the properties to them at the time of their marriages and since then they have been in possession and enjoyment of the same and pattadar passbooks were also issued in their favour long back and they have been paying land revenue in their names, but no registered document was executed at that time. The 1st defendant further contended that in the gift deeds, it is recited that the property was already delivered and thus, the gift deeds are valid and not executed to defeat the debt. Thus, the 1st defendant contended that the defendants 2 & 3 are not liable to the suit claim. It is further pleaded that after receipt of notice, there was a settlement between the plaintiff and the defendant. The plaintiff intended to purchase the rice mill or the land of this defendant, but subsequently, she turned round and filed this suit only to cause loss to this defendant.
4. The 2nd defendant filed a separate written statement stating that this defendant got married to Sri Yelati Srinivasu on 15.04.1992 and at the time of her marriage, her father/1st defendant and her mother gave item No.2 of the schedule property as pasupu-kumkuma to her and subsequently, in the year 1995, she obtained pattadar passbook and has been in possession and enjoyment of the property with absolute rights and that she has been residing with her husband since the marriage and the debts incurred by the 1st defendant do not bind her. It is further pleaded that on 13.11.2008, the 1st defendant and 3rd defendant executed a gift settlement deed in respect of item No.2 of the suit schedule property in favour of this defendant and thus, the 1st defendant has no interest or right in this item of property. However, knowing fully well of all these facts, the plaintiff got filed the suit and illegally pressurizing for payment of the suit debts. She prayed to dismiss the suit.
5. The 3rd defendant filed a separat
A donee is not liable for the debts of the donor under Section 128 of the Transfer of Property Act, 1882, if the gift does not consist of the donor’s whole property.
A universal donee is liable for the debts due or liabilities by the donor at the time of the gift to the extent of the properties and not necessary to file suit.
Dishonor of a cheque alone cannot establish a debt claim without proof of underlying consideration; subsequent agreements may signify novation of prior contracts.
A universal donee is personally liable for all the debts due by and liabilities of the donor at the time of the gift to the extent of the property comprised therein.
A deed of gift is irrevocable unless legally revoked, and a family arrangement cannot supersede it without proper grounds.
(1) Title – Mere recording of name in Record of Rights neither creates title nor extinguishes title in whose favour same is recorded.(2) Donee cannot get better title through gift, than his/her donor....
The main legal point established in the judgment is that a family arrangement deed indicating a prior oral partition, lack of possession by the donor at the time of executing the gift deed, and the d....
A partition deed long acted upon by all parties through possession and alienation is binding and cannot be reopened by descendants, especially when the original parties to the partition accepted the ....
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