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IN THE HIGH COURT OF KERALA AT ERNAKULAM
SHAJI P.CHALY, J.
Ramachandran T.K., S/o. Damodara Menon – Petitioner
Versus
Balachandran K., and Ors. – Respondents
OP(C).No.3407 OF 2017(O)
Decided On : 24-09-2019
Transfer of Property Act, 1882- Sec.53 -An execution court considering execution of a decree, should have thought of serious adjudication of the issue, when the question of fraudulent transfer was brought to its notice. These are all convincing circumstances to arrive at a conclusion that the intention behind Sec.53 to protect the interest of the creditors, was not adverted to at all by the court below, and considered the matter only bearing in mind that the transfer was effected prior to the filing of the suit.
Statement of facts:
Challenging Ext.P11 order passed by the Principal Subordinate Judge's Court, Ernakulam in E.A.No.164/2017 in E.P.No.159/2013 in O.S.No.160/2010 dated 25.10.2017, declining to sell the property belonging to the 2nd respondent, i.e., the wife of the judgment debtor-1st respondent, holding that the property was transferred by the judgment debtor to his wife, prior to the filing of the suit.
Finding of the court:
When there is clear proof of transaction produced by the petitioner immediately after the execution of the promissory note, a burden is cast upon the respondents to lead evidence and prove otherwise. No such exercise is undertaken by the court below while considering the matter. One will have to bear in mind that, Sec.53 is incorporated into the Act, 1882, with the avowed intention and object of ensuring that the creditors are not defeated by effecting fraudulent transfer of properties.
Result: Allowed
JUDGMENT :
This original petition under Article 227 of the Constitution of India is filed by the petitioner challenging Ext.P11 order passed by the Principal Subordinate Judge's Court, Ernakulam in E.A.No.164/2017 in E.P.No.159/2013 in O.S.No.160/2010 dated 25.10.2017, declining to sell the property belonging to the 2nd respondent, i.e., the wife of the judgment debtor-1st respondent, holding that the property was transferred by the judgment debtor to his wife, prior to the filing of the suit. Brief material facts for the disposal of the original petition are as follows:
2. Petitioner is the decree holder in O.S.No.160/2010 on the files of the Principal Subordinate Judge's Court, Ernakulam. The 1st respondent is the defendant in the suit and judgment debtor in the Execution Petition. The 2nd respondent is the wife of the 1st respondent, in whose favour a settlement deed is executed by the 1st respondent, bearing No.39/2008 of Office of the Sub Registrar, Maradu, Ernakulam District. Petitioner instituted the suit for recovery of an amount of Rs.1,25,000/-on the basis of Ext.A1 promissory note executed by the 1st respondent. Though the 1st respondent entered appearance and filed written statement, thereafter absented himself, and accordingly, the suit was decreed ex parte on 20.12.2012, allowing the petitioner to realize a sum of RS.1,28,750/-with interest at the rate of 6% per annum for the principal amount along with cost of Rs.15,743/-, evident from Exts.P1 and P2 judgment and decree.
3. Immediately after the suit was instituted, petitioner filed I.A.No.2016/2010 for attachment of the property of the 1st respondent, which was effected on 19.03.2010, evident from Ext.P3 report of the Amin and Ext.P4 schedule attached to the same. Later, E.P.No.159/2013 was filed before the court below, evident from Ext.P5 and sought for sale of the property under attachment as per the order in I.A.No.2016/2010, evident from Ext.P6. While steps were taken to sell off the property, the decree holder came to know that the property was settled by the judgment debtor fraudulently in favour of his wife, in order to avoid execution of the decree, evident from Ext.P7 Settlement Deed. Thereupon, the decree holder filed an application as E.A.No.163/2017 in the Execution Petition for impleading the wife of original judgment debtor as additional respondent, evident from Ext.P8. So also, E.A.No.164/2017 was filed for the sale of attached property, evident from Ext.P9. The 2nd respondent entered appearance and filed Ext.P10 objection. The court below heard the petition E.A.No.164/2017 and dismissed the same as per Ext.P11 order.
4. The paramount contention advanced by the petitioner is that, the transfer effected by the judgment debtor in favour of his wife as per the Settlement Deed, consequent to the execution of the promissory note is with the intention of defeating the creditor and thereupon, liable to be proceeded against the property as per Sec.53 of the Transfer of Property Act, 1882 (for brevity, the Act, 1882'). Since the action was fraudulent, there is nothing wrong in proceeding against the property. It is also submitted that, though the property is fraudulently transferred in favour of his wife by the judgment debtor, the possession continues with the judgment debtor and the court below went wrong in holding that the property was transferred prior to the institution of the suit, and therefore, it cannot be proceeded with.
5. I have heard learned counsel for the petitioner and the respective counsel appearing for respondents 1 and 2, and perused the pleadings and the documents on record.
6. Learned counsel for the petitioner addressed arguments basically relying upon Sec.53 of the Transfer of Property Act. It is also submitted that, the execution court was carried away thinking that if the property was transferred prior to the institution of the suit, it cannot be proceeded with. It is only appropriate that Sec.53 of the Transfer of Property Act is dis
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