High Court Of Madhya Pradesh
S. M. N. Raina and R. K. Tankha, JJ.
KISHANDAS RAMKUMAR AGRAWAL
Versus
SHRAVANKUMAR PARMANANDBHAI PATEL
Decided On : Apr 02,1975
Fraud like any charge of a criminal offence whether made in civil or criminal litigation must be established beyond reasonable doubt. A finding as to fraud cannot be based on suspicion and conjunctures. Therefore, the circumstantial evidence must be such so as to create no doubt in the mind. The burden of proof to establish it lies on the party who alleges fraud. AIR 1940 PC 98 relied on. [Para 8]
(2) Transfer of Property Act, 1882 - S. 53 - fraudulent transaction - debtor having good financial position at the time of taking loan - no enquiry made about his indebtedness - no oblique motive can be attributed to the advance made to the debtor. [Para 10]
(3) Evidence Act, 1872 – S. 43 - earlier Judgment between the debtor and other creditors - High Court held that there was nothing sinister in the mortgage transaction and subsequent sale - same mortgage and sale challenged by another creditor - earlier Judgment can be looked into for the persuasive purpose that the transaction were not to defrand the creditors - Transfer of Property Act, 1872 - S. 53. [Para 13]
(4) Transfer of Property Act, 1882 - S. 53 - inspite of the sale of the suit property transferor remained in possession - no inference of colourable nature of the transaction motivated by some oblique motive can be drawn. [Para 14]
(5) Transfer of Property Act, 1882 - S. 53 - debtor carrying on business in different names - no inference of fraud can be drawn. [Para 15]
(6) Transfer of Property Act, 1882 - S. 53 - debtor disposed of entire property within a short period - in the absence of any evidence that the debtor was heavily indebted was within the knowledge of any purchaser - no inference of fraud can be drawn. [Para 18]
(7) Transfer of Property Act, 1882 - S. 53 - defendant was the donee - of one of the purchasers of the debtor's property - so long the purchase of the property from the debtor is not held invalid - failure of the defendant that he was a bona fide transferee is of no consequence.
(8) Precedents - each case has to be decided all its own facts and is authority for what it actually derides. 1901 AC 495 (506) (1898) AC 1 relied on. AIR 1947 Madras 203 distinguished. [Para 22]
(9) Transfer of Property Act, 1882 - S. 53 - defendant transferee not related to debtor -transfer effected to discharge previous loan from transferee, advanced in usual course of business - debtor a man of good financial position at time of loan - debtor not shown to intend to defeat creditors - transaction cannot be attacked that it was entered to defeat creditors. AIR 1961 Punjab 364, AIR 1947 Mad. 203, AIR 1963 SC 1150 distinguished. [Paras 22 & 24]
( 1. ) THIS is a plaintiffs appeal under section 96 of the Code of Civil Procedure against the judgment and decree dated 5-8-1961 passed by the Second Additional District Judge, Jabalpur, dismissing his suit (Civil Suit No. 27-Aof 1960 ).
( 2. ) THE brief facts of the case are that Seth Ramkumar (plaintiff), who is now dead and whose legal representative has been brought on record, had filed Civil Suit No. 5-B of 1951 against respondent-defendants 2 to 5 (respondent No. 2 Jayantilal is also dead and his legal representatives have been brought on record) who were defendants in that suit. The said suit was decreed on 9-9-1954 for Rs. 24. 877/8/ and Rs. 2,969/1/- were awarded on account of corresponding costs. The copy of the decree is Ex. P-1. In execution of the decree, the plaintiff on 12-10-1954 secured attachment of a house No. 696 located on plot No. 111 in Wright Town, Jabalpur. On 19-10-1954, respondent No. 1 (defendant No. 1) filed an objection under Order 21, rule 58 of the code of Civil Procedure contending inter alia that he was donee of the attached property by virtue of the gift deed dated 4-3-1954 executed in his favour by his grand-mothers Smt. Jadao Bai and Smt. Ujjam Bai, who had also delivered possession to him. These two ladies had purchased the said property from jayantilal (deceased) through a registered sale deed dated 27-1-1948 for a consideration of Rs. 61,350 with delivery of possession. Accordingly, he prayed for release of the house from attachment. The case was registered as Misc. Judicial Case No. 25 of 1954. The executing Court Vide its order dated 4-5-1957 (Ex. P. 2) released the house from attachment by allowing the objection.
( 3. ) THE plaintiff filed the present suit under Order 21, rule 63 of the Code of Civil Procedure and the plaint purported to be under section 53 of the transfer of Property Act also as against the aforementioned order for a declaration that the suit house is liable to attachment and sale in execution of the decree obtained by him. His allegations are contained in para. 4 (a) and (b)of the plaint to the effect that the suit house continues to be the property of jayantilal (defendant No. 2) and also under his possession. The alleged saledeed dated 27-1-1948 (Ex. 1. D-12) of the suit house for Rs. 61,350 by said jayantilal in favour of Smt. Ujjam Bai and Jadao Bai of the firm of M/s mohanlal Hargovind was a fictitious, sham, bogus and collusive transaction brought into existence as a camouflage to save the property from being sold. According to the plaint allegation, the transaction in favour of the Predecessors intitle of Shravan Kumar (defendant No. 1) did not convey any right, title or interest to them in the said property. Detailing the alleged fraud, the plaintiff pleaded that Jayantilal (defendant No. 2) was under heavy debts in the year 1947 and the deed of mortgage dated 21-9-1947 (Ex. 1-D-9) was surreptitiously brought into existence for an estensible loan of Rs. 50,000 and to keep the transaction secret, the said deed was not got registered. Though according to the contents of the mortgage deed (Ex. 1-D-9) the loan was to be repaid after one year, but in the absence of any demand for return of the same, Kamod chand (defendant No. 3) came to Jabalpur in the year 1948 and on the basis of the authority derived from an invalid power of attorney dated 20-1-1948 (Ex. 1-D-5) from Jayantilal (defendant No. 2) executed an agreement of sale on 24-1-1948 (Ex. 1 D-11 ). Later on, the agreement was implemented by execution of a registered sale deed dated 27-1-1948 (Ex. 1 D-12) for the alleged consideration of Rs. 61,350, including Rs. 50,000 alleged to have been paid for the mortgage. It was further alleged that payment of Rs. 50,000 on 21-9-1947 and a further payment of Rs. 20,000 on 26-9-1947 was, as a matter of fact, only a show. Even if it may be assumed that money was at all paid, it was taken back by Smt. Ujjam Bai and Jadao Bai in the form of hundies from jayanti
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