Judges : V.BALAKRISHNA ERADI
National Steamship Co., Limited - Appellant
Versus
Abu - Respondent
Case No : S. A. No. 1260/63
Decided On : 06/02/1967
Advocates Appeared :
P. K. Kurien; K. A. Nayar; K. Sukumaran; For Appellant T. L. Viswanatha Iyer; For Respondent
Burden of Proof - Property Dispute - O.21 R.63 CPC - Fictitious Transaction - [Ext. A-3, Ext. A-4] - [O.21 R.63 CPC] - The court discussed the burden of proof in a property dispute and the requirement for the plaintiff to establish the genuine nature of the documents. The court emphasized the need for the plaintiff to prove the bona fide nature of the transaction and highlighted the duty of the defendant to establish the collusive and sham nature of the documents. The court also emphasized the importance of considering the circumstances surrounding the execution of the documents to determine their genuine nature. The judgment was set aside and remitted for fresh disposal due to incorrect understanding of the burden of proof and lack of proper consideration of the evidence by the lower appellate court.
Fact of the Case:
The suit was brought by the first respondent for a declaration of title to suit properties and to set aside a summary order passed against him. The first defendant company raised contentions regarding the validity of the transactions and the plaintiff's means to advance the consideration for the sale.
Finding of the Court:
The trial court dismissed the suit, finding the transactions to be collusive and sham. The Subordinate Judge's Court reversed the decision, holding that the burden of proof was on the defendant and that the plaintiff had discharged the burden of proving the passing of the consideration. The appellate court also held that possession had been proved to have passed to the plaintiff.
Issues: The main issues revolved around the genuineness of the transactions, burden of proof, and consideration of evidence by the lower appellate court.
Ratio Decidendi: The burden of proving the genuine nature of the transactions lay on the plaintiff, and the duty of the defendant was to establish the collusive and sham nature of the documents. The lower appellate court's incorrect understanding of the burden of proof and lack of proper consideration of the evidence led to the judgment being set aside and remitted for fresh disposal.
Final Decision: The judgment and decree of the lower appellate court were set aside, and the case was remitted for fresh disposal according to law.
1. The first defendant in O. S.92/58 of the Munsiff's Court, Kozhikode is the appellant in this Second Appeal. The said suit was brought by the first respondent herein for a declaration of his title to 3 items of suit properties and to set aside the summary order passed against him in E. A. 966/57 in O. S.108/55. The short facts necessary for appreciating the contentions of the parties are as follows:
2. The first defendant company had to obtain certain amounts from the second defendant and his brother-in-law, one Abubacker, in respect of the breach of the terms of an indemnity bond executed to the company by the said two persons. The suit properties belonged to the second defendant. He had purported to execute a mortgage over the properties under a registered hypothecation bond dated 5 4 54 in favour of one Abdulla and subsequently under Ext. A 4 dated 7 6 55 the properties were purported to be assigned by the second defendant in favour of the plaintiff for a consideration of Rs. 6000/-, the plaintiff being a son-in-law of his co-debtor Abubacker. The first defendant company brought a suit against Abubacker as well as the present second defendant for recovery of the amounts due to it and the said suit (0. S.108/55 of the Subordinate Judge's Court, Calicut) was decreed as prayed for in favour of the company by judgment dated 31157 (Ext. B-7). In execution of the said decree the suit properties were brought to sale by the decree-holder company as properties belonging to the second defendant. The plaintiff thereupon filed E. A. 966/57 to establish his right over the properties contending that the properties had been validly assigned to him by the second defendant under the sale-deed Ext. A-4 and were not therefore liable to proceed against in execution of the decree obtained by the company against the second defendant. This claim petition was dismissed by the executing court on 15 158 and the order passed on the petition is produced and marked in the present suit as Ext. A-1. The plaintiff has come forward with this suit to get the claim order set aside and he seeks a declaration from court of his title and possession of the suit properties. The first defendant company who is the contesting defendant in the case raised the contention that Ext. A-3 mortgage stated to have been executed by the second defendant in favour of Abdulla was a collusive and sham transaction, the document itself being an ante dated one, that the promissory-note debt receipted therein was false, that the plaintiff herein who is the son-in-law of Abubacker had no means at all to advance the consideration stated to have been paid for the sale Ext. A-4, that the transaction Ext. A-4 was not a true or bona fide transaction but a mere colourable and collusive transaction created only for the purpose of delaying the realisation by the company of the amount due to it from the second defendant, and that the order passed by the executing court on E. A, 966/57 was perfectly correct and should not be set aside.
3. The trial court after careful discussion of the evidence adduced in the case found that Ext. A 3 is not a bonafide transaction and that it had been brought about under highly suspicious circumstances. It has found that the said document was ante dated and had been executed on stamp papers purchased on different anterior dates by 5 different persons. The alleged mortgagee Abdulla had not been examined by the plaintiff and this circumstance was relied on by the trial court to state that there was absolutely no evidence to show whether Abdulla was a person capable of raising Rs. 4000/ alleged to have been advanced under Ext. A 3. The promissory-note referred to as an antecedent debt for discharging which Ext. A 3 was executed had not also been produced in evidence. For these and other reasons stated by the trial court in Para.5 of its judgment it came to the conclusion that Ext. A 3 was not a genuine or real transaction. It then proceeded to consider
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