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1962 Supreme(Ker) 149

Judges : P.GOVINDA NAIR
Velama - Appellant
Versus
Raya Shenoy - Respondent
Case No : S. A. No. 1000 of 1958
Decided On : 07/04/1962
Advocates Appeared :
T. S. Venkiteswara Iyer; For Appellant T. N. Sundara Iyer; For Respondent

The action to set aside a document based on the principle embodied in S.53 of the Transfer of Property Act must be a representative one on behalf of the body of creditors.

Headnote:

D1 - Setting aside of document - Order XXI of the Code of Civil Procedure - S.53 of the Transfer of Property Act

Fact of the Case:

The appeal is regarding the setting aside of a document executed in favor of the first defendant by her husband, the second defendant. The trial court found that the first defendant is not a purchaser in good faith and that the assignment is not supported by consideration. The lower appellate court also agreed that the document in question is a sham one.

Finding of the Court:

The lower appellate court erred in assuming that the trial court had held the document to be a sham one. There is a conflict of authorities on whether the suit should have been brought as a representative one on behalf of all the creditors.

Issues: The main issue is whether the suit should have been brought as a representative one on behalf of all the creditors.

Ratio Decidendi: The court held that the action should have been brought on behalf of the body of creditors and after complying with the provisions of Order I R.8, as the document was sought to be avoided on the basis of the principle embodied in S.53 of the Transfer of Property Act.

Final Decision: The appeal is allowed, and the suit is dismissed. No order as to costs in this court, and the parties are directed to suffer their costs in the courts below.

Judgment :-

1. This appeal is by the first defendant from the decrees of the courts below setting aside a document, Ext. D-1 executed in her favour by the second defendant, her husband. The trial court found on Issue No. 2 which reads: .

"Whether D1 is not a purchase in good faith and for consideration?"

that the first defendant is not a purchaser in good faith and that the assignment is not supported by consideration. A point was raised before the trial court, which is the subject matter of Issue No. 3, that the suit is not maintainable since it had not been brought as a representative action on behalf of the body of creditors. The trial court took the view that the suit being one to set aside a claim order under the specific provision, R.63 of Order XXI of the Code of Civil Procedure, it is unnecessary to bring the action as a representative one on behalf of all the creditors. The lower appellate court, too negatived the contention on the view it took of the nature of the allegations in the plaint. According to that court, the case of the plaintiff was that the document impeached was a sham one not intended to take effect. The lower appellate court also agreed with the Munsiff that the document in question is a sham one.

2. The allegations in Para.3 and 6 in the plaint show that the document was impeached on the ground that it was in fraud of creditors. It is specifically so stated in the first sentence in Para.3 and the relief claimed was for setting aside the document. There was no declaration sought that the document was sham. The learned Munsiff had also not come to the conclusion that the document was a sham one. In these circumstances, the lower appellate court had clearly erred in assuming that the Munsiff had held that the document was a sham one and in thinking that the allegations in the plaint were that the document was a sham one.

3. The learned judge has apparently proceeded on the basis that if the allegations in the plaint were that the document was in fraud of creditors, the action should have been brought as a representative one. He has however not considered the question. Counsel for the appellant has raised this point again before me. I do not think that it is necessary to send the case back to the lower appellate court for a decision on this question since the point raised is a pure question of law.

4. There is a conflict of authorities on this subject. The decisions in Madina Bibi Sahiba v. Ismail Durga Association (AIR. 1940 Mad. 789), Seth Nandaramdas Atmaram v. Zulika Bibi (AIR. 1943 Mad. 531), Magnibai Kizhorjee v. Kesrimal Sawairam (AIR. 1955 Madhya Bharat 159), Maung Tun Thein v. Maung Sin (AIR. 1934 Rangoon 332) and the decision of the Calcutta High Court in Ekkari Ghose v. Sideshwar Ghose (AIR. 1936 Calcutta 783) support the contention of counsel for the appellant that the suit should have been brought by the plaintiff as a representative one on behalf of all the creditors after complying with the provisions of Order I R.8 of the Code of Civil Procedure. On the other hand, there are, perhaps, an equal number of decisions that have taken the view that when the suit is for setting aside a claim order and filed in accordance with the specific provision in R.63 of Order XXI of the Code of Civil Procedure, the suit need not be a representative one. These cases proceeded on the basis that a special remedy is provided by R.63 of Order XXI to the decree-holder to vacate an order passed, as in this case under R.63 of Order XXI, and when such a remedy is provided by the Code of Civil Procedure, it is said, that it is unnecessary for a decree-holder against whom an order has been so passed to implead the other creditors. More than this, I have not been able to discern from the reasoning in these cases. This view has been taken in the following cases decided in Mohammed Asghar Ali v. Mohamed Ishaq Ali (AIR. 1940 Allahabad 72), Radhanath Swain v. Madhusudan Senapaty (AIR. 1956 Orissa 58), A.K.A.C.T.Y. Chidambaram


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