High Court of Kerala
S. Sankarasubban, J.
Karuna Kuries And Finance - Appellant
Versus
Kunju Vareed & Ors - Respondent
C.R.P. No. 1184 of 1998
Decided On : 22-09-1998
Transfer of Property Act - Declaration under S.53 - [FRAUDULENT DOCUMENTS] - [Transfer of Property Act] - [S.53, S.31, S.40, S.25(d)(ii)] - The court considered the effect of a declaration under S.53 of the Transfer of Property Act and held that it does not amount to cancellation of the documents. The court also clarified that the payment of court fee under S.40 of the Kerala Court Fees and Suits Valuation Act is not necessary when seeking a declaration under S.53. The court relied on previous decisions to support its interpretation of the legal provisions.
Fact of the Case:
The plaintiff filed a suit seeking relief by declaring two documents as invalid and cancelling them, alleging that they were fraudulently and clandestinely transferred to defeat and delay creditors. The plaintiff later sought to amend the prayer to declare the documents as fraudulently created with intent to defeat and delay creditors, and to change the computation of court fee.
Finding of the Court:
The court found that the declaration under S.53 of the Transfer of Property Act does not amount to cancellation of the documents, and that the payment of court fee under S.40 of the Kerala Court Fees and Suits Valuation Act is not necessary when seeking such a declaration.
Issues: The main issue was whether the plaintiff's amendment application to change the prayer and computation of court fee should be allowed.
Ratio Decidendi: The court held that a declaration under S.53 of the Transfer of Property Act does not amount to cancellation of the documents, and that the payment of court fee under S.40 of the Kerala Court Fees and Suits Valuation Act is not necessary when seeking such a declaration.
Final Decision: The court allowed the amendment application and the Civil Revision Petition, directing the plaintiff to file the amended application and the defendants to file an amended written statement.
S. Sankarasubban, J.
1. The Revision Petition is filed by the Petitioner who is the plaintiff O.S.673 on the file of the Additional Munsiff's Court, Irinjalakkuda. The revision is directed against the order dated 19.6.98 in I.A.4220/97. The respondents are the defendants in the suit. The first respondent is a debtor of the petitioner having borrowed several amounts. The petitioner then filed O.S.229/87 for realisation of money from the first respondent before the Sub-Court, Irinjalakkuda. The suit was decreed. Proceedings for execution were taken and it is pending as E.P.540/93. According to petitioner, the first respondent is a prosperous land owner. But he filed objection in the execution proceedings stating that he has no means to pay the amount. On enquiry, it was found that the first respondent had contracted debts with the petitioner firm and several others and in 1985 he had fraudulently and clandestinely transferred all the properties in the name of his wife and others by executing fraudulent and grossly undervalued documents. Two of such documents are document No.1051/85 of Chalakudy Sub-Registrar Office. The suit was filed seeking relief by declaring the documents as invalid and cancelling the two documents. The plaintiff had contended that the properties were valued for more than Rs.50 lakhs. But they transferred it for a partly amount of Rs.50,000/-. The transfer is in fraud of creditors and it is not binding on the creditors. The suit was filed under S.53 of the Transfer of Property Act. As already stated in the plaint, the prayer was for cancelling the two documents. Subsequently it was realised that it was enough if the plaintiff obtains a declaration that documents are fraudulent and executed in fraud of creditors and therefore, not binding on the creditors under S.53 of the Transfer of Property Act. Hence the petitioner filed I.A.4220/97 to amend the plaint to change the prayer from one to set aside the two fraudulent documents to one to declare that the documents are fraudulently created with intent to defeat and delay creditors. The petitioner also wanted amendment in the valuation portion for changing the computation of court fee for under S.25(d)(ii) of the Kerala Court Fees and Suits Valuation Act. This was objected to the defendants. The court below after considering the arguments of both sides, by the impugned order rejected the amendment application and hence this revision petition is filed.
2. The reason given by the court below is that the proper remedy in a suit wherein it is contended that the document is vitiated by fraud is to get it set aside as contemplated by under S.31 of the Specific Relief Act. According to court below, the relief to be granted is to set aside a document and the court fee has to be paid under S.40 of the Kerala Court Fees and Suits Valuation Act. Hence the court below came to the conclusion that the attempt of the plaintiff was to protract the suit without paying the requisite court fee.
3. On a reading of the plaint the relief which was prayed for by the plaintiff is for a declaration that the two documents were executed to defraud the creditors mid that the plaintiff is entitled to proceed against the first respondent ignoring the documents. Thus essentially is a suit coming under S.53 of the Transfer of Property Act.
4. The main reason of the court below to dismiss the amendment application is that the plaintiff ought to have prayed for cancelling the documents and that the amendment was only with a view to avoid payment of court fee under S.40 of the Kerala Court Fees and Suits Valuation Act.
5. Now what is the effect of a declaration under S.53 of the Transfer of Property Act. Whether such a declaration amounts to cancellation of the documents. No doubt if the prayer actually amounts to set aside document, then court fee will have to be paid under S.40 of the Kerala Court Fees and Suits Valuation Act. The effect of a declaration under S.53(1) of the Transfer of Propert
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