1951 Supreme(Ker) 32
Judges : KUNHI RAMAN,SUBRAMONIA IYER
Ouseph - Appellant
Versus
Annamma - Respondent
Case No : S. A. No. 403 of 1124
Decided On : 03/19/1951
Advocates Appeared :
For the Appellant: T. K. Joseph, Advocate. For the Respondent: V. I. Joseph, Advocate.
A transfer voidable under S.53 of the Transfer of Property Act can be repudiated by attaching the property, and it is not necessary to file a separate suit to set aside the transfer.
Headnote:
Attachment - Civil Procedure - S.40 of the Civil Procedure Code - S.53 of the Transfer of Property Act - [O.S. No. 981 of 1108, Ext.1, 0.21 R.56, S.40, S.53]
Fact of the Case:
The appellant, a decree-holder, sought to realize a debt through the sale of hypothecated property and other assets of the debtor. The debtor transferred properties to his wife and son through a partition deed after the suit was filed. The appellant obtained an attachment before judgment of certain properties, and later, the second defendant objected to the attachment, claiming title under the partition deed.
Finding of the Court:
The court found that the objection to the attachment should be rejected, as the transfer under the partition deed was deemed voidable under S.53 of the Transfer of Property Act. The court held that the attachment was valid and restored the order of the learned Munsiff.
Issues: The main issues were the validity of the transfer under the partition deed, the nature of the objection to the attachment, and the applicability of S.40 of the Civil Procedure Code.
Ratio Decidendi: The court held that a transfer voidable under S.53 of the Transfer of Property Act can be repudiated by attaching the property, and it is not necessary to file a separate suit to set aside the transfer. The objection to the attachment was considered under S.40 of the Civil Procedure Code, and the court emphasized that both possession and title must be adjudicated in such cases.
Final Decision: The Second Appeal was allowed, and the objection to the attachment was rejected. The order of the learned Munsiff was restored, albeit not for the reasons relied upon by him.
The decree-holder in O.S. No. 981 of 1108 on the file of the District Munsiff of Kottayam is the appellant before this Court. The suit was for money based upon a deed of hypothecation. The amount sued for was sought to be realised by sale of the hypotheca as also from the other properties of the debtor who was impleaded in the suit as the first defendant. Subsequent to the deed of hypothecation sued upon, the debtor, first defendant, executed a document Ext.1 called a partition deed in favour of the second defendant who is his wife as also his son by an earlier wife who is impleaded as the third defendant. All the properties of the first defendant were transferred to defendants 2 and 3 under this document which refers to a list of moveables and of certain debts to be discharged by the donees. Defendants 2 and 3 were impleaded in the suit on the ground that they were interested in the hypotheca that was sought to be sold in the case. That interest obviously arose on account of Ext. 1. Soon after the suit was filed, the plaintiff applied for and obtained an attachment before judgment of four items of immovable property included in Ext. 1. The attachment was levied in the year 1108. After notice, the rule was made absolute. In due course a decree was passed in the case. Nothing was done in respect of this attachment until the year 1122 when the second defendant came to court with a petition called a claim under 0.21, R.56 of the Travancore Civil Procedure Code objecting to the attachment and claiming title to items 3 and 4 in the schedule to the attachment order as her own, she having obtained tittle thereto under Ext. 1. The learned Munsiff found that the petition was not maintainable as a claim because the party objecting to the attachment was the second defendant in the case and claims under 0.21, R.56 can be made only by
strangers. The learned Munsiff, however, considered the petition as an objection by a party under S. 40 of the Travancore Civil Procedure Code. Considering the objection as one under S. 40, the learned Munsiff found that Ext.1 which is the basis of the objection was a sham transaction and dismissed the objection. Against the order of the learned Munsiff, a Civil Miscellaneous Appeal was filed in the District Court of Kottayam. That was C.M.A. No. 63 of 1123 of the Kottayam District Court. The learned judge in considering that C.M.A. did not agree with the Munsiff that Ext.1 was a sham transaction. The learned judge found, believing the evidence of the witnesses examined in the case, that the properties to whose attachment objection was raised by the second defendant were in her possession and on the view that the only question for consideration in a claim is one of possession, the learned judge upheld the objection and allowed the Civil Miscellaneous Appeal. This Second Appeal is preferred by the plaintiff decree-holder against the order passed by the learned District Judge.
2. The view taken by the learned Munsiff that Ext.1 is a sham transaction is erroneous and cannot be upheld because even according to the plaintiff decree-holder, Ext.1 was an effective transaction and it did operate to create some interest in favour of defendants 2 and 3 and it was on that basis that defendants 2 and 3 were impleaded in the suit as persons having some interest in the hypotheca which was sought to be sold. The transaction will be a sham only if it is of no effect at all. A transaction which is in fraud of creditors is a real transaction, not a sham transaction. The view of the learned District Judge that in this case the only question to be considered is one of possession is also erroneous. Unlike the case of a claim by a stranger to the proceedings under 0.21, R.56, where the question really is one of possession by the claimant on his own account and not on behalf of the judgment-debtor, wherein an original suit will lie by the aggrieved party to establish the right that he claimed, in the case of an objection