Universal donees are personally liable for the debts of the donor as per Section 128 of the Transfer of Property Act, overriding any claim of absolute ownership under the Hindu Succession Act in certain circumstances.

JUDGMENT :

R.Sakthivel, J.

This Second Appeal is directed against the Judgment and Decree dated October 1, 2019 passed in A.S.No.19 of 2016 by the 'III Additional District & Sessions Court, Erode at Gobichettipalayam' ['First Appellate Court' for brevity], whereby the Judgment and Decree dated June 17, 2016 passed in O.S.No.56 of 2008 by the 'Sub Court, Gobichettipalayam' ['Trial Court' for brevity] was confirmed.

2. For the sake of convenience, hereinafter, the parties will be referred to as per their array in the Original Suit.

PLAINTIFF'S CASE

3. On June 5, 2006, Karuppanna - husband of the first defendant, borrowed a sum of Rs.2,00,000/- for interest at the rate of 12% per annum from the plaintiff and executed a Promissory Note in favour of the plaintiff. Karuppanna passed away on April 20, 2008 without repaying any amount, leaving behind his wife - Thangammal / first defendant as sole legal representative. The plaintiff demanded repayment of the debt and issued a legal Notice on April 30, 2008, which the first defendant received on May 3, 2008 and caused reply Notice dated May 6, 2008 inter alia seeking the Suit Promissory Note for perusal. The plaintiff issued a rejoinder dated May 21, 2008 permitting her to peruse the same anytime during office hours at his advocate’s office. Accordingly, the first defendant along with her advocate perused the same on June 5, 2008. Thereafter, the plaintiff never heard from the first defendant. The first defendant attempted to alienate the properties left behind by Karuppanna, to a third party, to evade repayment of debt. The plaintiff, therefore, filed the Suit seeking recovery of money along with interest from the first defendant, out of the properties left behind by Karuppanna, along with an Interlocutory Application No.193/2008 seeking attachment of the said properties. From the counter filed in the Interlocutory Application, the plaintiff learnt that Karuppanna had executed a Gift Settlement Deed dated March 28, 2008 bequeathing his entire properties in favour of first defendant. Hence, the first defendant, as a Universal Donee, is liable to settle the debt from the properties gifted by Karuppanna.

3.1. During the pendency of the Suit, the first defendant executed a Sale Deed dated June 25, 2008 in favour of one M.D.Sampathkumar, with a view to defeat and defraud the plaintiff’s claim. Thereafter, first defendant passed away on November 14, 2010 pending Suit. Hence, the said M.D.Sampathkumar has been impleaded as second defendant (vide Order dated November 10, 2011 made in I.A.No.248 of 2010 on the file of Trial Court). The second defendant as a Universal Donee, is liable to settle the Promissory Note debt, out of the properties purchased from first defendant. To that effect, he prayed for a Decree.

CASE OF FIRST DEFENDANT

4. The first defendant filed a written statement stating that the Karuppanna never borrowed any money from the plaintiff and the Suit Promissory Note is entirely false and fabricated. The plaintiff is none other than Karuppanna’s brother’s son. The plaintiff and his brother's family had long-standing disputes with the first