IN THE HIGH COURT OF MADRAS
A Ayyar
(Pakkiri) Mohideen Tharagan
Versus
Muhammad Mustappah Rowther
Decided On : 22 November, 1929
Transfer of Property Act - Validity of Sale Deeds - Section 53 - Sankarappa v. Kanayya 3 M.H.C.R. 231; Hakim Lal v. Mooshahur Sahu [1907] 34 Cal. 999; Aftabuddin Chowdhury v. Kumar Mukhapadhyaya [1918] 22 0. W.N. 427; Musahar Sahu v. Hakim Lal A.I.R. 1915 P.C. 115; Fakira Singh v. Magho Singh [1917] 2 Pat. L.J. 546; Loorthiya Odayar v. Gopalasami Aiyar A.I.R. 1924 Mad. 450; Ishan Chunder Das v. Bishu Sirdar [1897] 24 Cal. 825 - The judgment discusses the validity of sale deeds under Section 53 of the Transfer of Property Act, citing various cases and legal provisions. It emphasizes the burden of proof on the plaintiffs to avoid a transfer, the significance of valuable consideration, and the intention to defeat or delay creditors. The court highlights the need for proper trial and consideration of relevant questions, and the duty of parties to provide evidence to dispel suspicion.
Fact of the Case:
The plaintiffs filed suits for a declaration that certain properties belong to defendants 1 and 2 and that the sale deeds executed in favor of defendant 3 are not binding on the creditors of defendants 1 and 2. The lower Courts dismissed the suits, leading to second appeals by the plaintiffs.
Finding of the Court:
The lower appellate Courts' findings were deemed unsatisfactory and based on a mistake of law. The Court emphasized the need for proper trial and consideration of relevant questions, and the duty of parties to provide evidence to dispel suspicion.
Issues: Validity of sale deeds, burden of proof, intention to defeat or delay creditors, duty of parties to provide evidence.
Ratio Decidendi: The burden of proof in a suit under Section 53 of the Transfer of Property Act is on the plaintiffs who wish to avoid a transfer. The court emphasized the significance of valuable consideration and the intention to defeat or delay creditors. It highlighted the duty of parties to provide evidence to dispel suspicion.
Final Decision: The second appeals were allowed, and the appeals were remanded to the lower appellate Court for disposal in accordance with law, with the opportunity for the parties to adduce further evidence.
Anantakrishna Ayyar, J.
1. These second appeals preferred by the plaintiffs arise out of two suits instituted by the same plaintiffs against defendants 1 and 2 who are the same in both the suits, and against defendant 3 who is the purchaser from one or other of the other defendants of the properties mentioned in the plaint. The prayer in the suits was for a declaration that the plaint properties belong to defendants 1 and 2 and that the sale deeds executed in favour of defendant 3 are not binding on the creditors of defendants 1 and 2. The purchaser is different in the two suits; he is defendant 3 in each case. The purchasers will be referred as defendant 3 in the judgment for the sake of convenience. Defendant 3 in O.S. No. 236 of 1921 purchased from defendants 1, and defendant 3 in O.S. No. 237 of 1921 from defendant 2.
2. The plaintiffs alleged that they obtained a money decree in O.S. No. 517 of 1916 and attached the plaint properties before judgment in the said suit; when final orders had to be passed in respect of the said attachment defendants 1 and 2 undertook not to alienate the properties pending disposal of the suit. After obtaining decree the plaintiffs had the properties sold in execution and themselves purchased the same on 14th June 1918. Defendants 1 and 2 applied to have the sale set aside. That application was dismissed on 5th September 1918. Discovering that there was a misdescription in relation to one of the properties in the attachment warrant (in as much as survey No. 468-B was by mistake mentioned in the attachment proceedings, instead of the correct survey No. 568-B which is the chief property included in the sale deeds in favour of defendant 3 in each of the suits), the defendants with a view to defeat the plaintiffs claims hit upon the idea of selling the properties (along with some other comparatively minor items) to defendant 3 in December 1918. The appeal preferred by the defendants was dismissed on 17th March 1919. The plaintiffs alleged that the sales in favour of defendant 3 in such suit were brought about with the intention of defeating the plaintiffs decree debt. They alleged that the sale deeds were not supported by consideration and were also not real transactions, and that in any event the same contravened the provisions of Section 53, T.P. Act. The plea of defendant 3 in each of these suits was that the sale in his favour was a bona fide transaction supported by consideration, that defendant 3 was a bona fide purchaser for value without notice and that the plaintiffs were not entitled to any relief. Both the lower Courts dismissed the plaintiffs suits and hence these second appeals have been preferred by the plaintiffs in the two suits.
3. The learned advocate for the appellants contended that the lower appellate Courts findings are unsatisfactory based on a mistake of law and in any event insufficient to warrant the dismissal of the suits. The lower appellate Court found in para. 15 of its judgment as follows:
The plaintiffs have not discharged the onus of showing that the transfers evidenced by Exs. 1 and 2 were made with intent to defraud or delay the creditors. That being so the question whether the vendees are transferees in good faith and for valuable consideration requires no proof and no point can be made therefore of the fact that the vendees let in no evidence whatever on the said question.
4. In para. 22 the lower appellate Court remarked as follows:
The fact that the assignment of the whole or the bulk of his property by the debtor was made to defeat the claim of a particular creditor is of no moment if the consideration be adequate. Even if the purchaser had asked the seller why he wanted to sell and the latter had told him that it was to defeat an execution, that would have been no ground for impeaching a transaction. But the case would be different if the transfer is made in fraud of the general body of creditors.
5. In para. 23 the learned Subordinate Judge further observ
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