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BHOPAL HIGH COURT
MATHUR, J.
Rajmal - Appellant
Vs.
Moti and another - Respondents
Second Appeal No. 16 of 1954
Decided On : 07-09-1955

Advocates Appeared:
Jaiswal and two others, for Appellant; Abdul Raquib, for Respondent (No. 1).

A sale of property made with the intention to defeat the claims of creditors can be set aside as fraudulent, and an attachment before judgment revives after a decree is passed in favor of the judgment creditor.

Headnote:

FRAUDULENT CONVEYANCE - SALE OF PROPERTY - BONA FIDE SALE - BURDEN OF PROOF - ATTACHMENT BEFORE JUDGMENT - REVIVAL OF ATTACHMENT - CIVIL PROCEDURE CODE, 1908 - SECTIONS 60, 100, 101, O. 21, R. 58, R. 63 - BHOPAL HIGH COURT RULES, 1948 - RULE 101 - INTERPRETATION.

Fact of the Case:

Rajmal, a decree-holder, attached two she-buffaloes belonging to the judgment debtor, Shrimati Sunder, before judgment in a suit for recovery of money. The suit was initially dismissed, but on appeal, the decree was passed in favor of Rajmal. During the pendency of the appeal, Shrimati Sunder sold one of the she-buffaloes to Moti for a sum of Rs. 50/-. After the decree was passed in favor of Rajmal, the she-buffalo was re-attached in execution proceedings. Moti filed an objection under O. 21, R. 58, Civil P.C., which was rejected. He then instituted a suit under O. 21 R. 63, Civil P.C., claiming that the sale in his favor was genuine and that the attachment should be lifted.

Finding of the Court:

The trial court and the first appellate court held that the sale in favor of Moti was a bona fide transaction and that the attachment before judgment did not automatically revive after the decree was passed in favor of Rajmal. The High Court, on second appeal, held that the sale was fraudulent and that the attachment before judgment had revived.

Issues: 1. Whether the sale of the she-buffalo by Shrimati Sunder to Moti was a bona fide transaction or a fraudulent conveyance to defeat the claims of creditors. 2. Whether the attachment before judgment of the she-buffaloes revived after the decree was passed in favor of Rajmal.

Ratio Decidendi: 1. The court held that the sale was fraudulent based on the following circumstances: - The sale took place about one month after the decree was passed against Shrimati Sunder in favor of Rajmal. - The she-buffalo was sold for a nominal sum of Rs. 50/- when it was worth Rs. 200/-. - The purchaser, Moti, was a resident of the same village as Shrimati Sunder and was on friendly terms with her. - Moti would have known about the litigation between Shrimati Sunder and Rajmal and the decree passed against her. 2. The court held that the attachment before judgment revived after the decree was passed in favor of Rajmal, but it did not discuss this issue in detail as it found that the sale was fraudulent.

Final Decision: The High Court allowed the second appeal, set aside the judgments of the trial court and the first appellate court, and dismissed Moti's suit with costs.

JUDGMENT :

This is a second appeal by Rajmal. defendant No. 1, against the judgment of 2nd Additional District Judge, Bhopal. confirming the decree of Subordinate Judge, Ashta in civil Suit No. 63 of 1950 instituted by Moti, respondent No. 1. for declaration that the she-buffalo in dispute belonged to him and was not liable to attachment and sale in execution of the decree in. favour of Rajmal, appellant, against Shrimati Sunder respondent No. 2.

2. The facts of the case are not in dispute except for the tact whether the sale in favour of Moti was a bona fide one or not. In October 1947 Rajmal had instituted a suit against Shrimati Sunder for the recovery of a certain sum of money and under order dated 3-11-1947 two she-buffaloes including the one in dispute were attached before judgment.

The attachment was made sometimes in December 1947 but this date is not apparent from the record. The suit of Rajmal was dismissed on 28-3-1948. Rajmal went up in revision before the then Bhopal High Court. I understand that the revision was moved on 6-7-1948.

It was allowed under order dated 22-9-1948 with the result that the suit of Rajmal, appellant, was decreed in full. Meanwhile, on 5-7-1948 Shrimati Sunder moved an application for the release of the attached cattle which was allowed without notice to Rajmal appellant under order dated 10-7-1948.

3. It was on 24-10-1948, about one month after the revision application of Rajmal was allowed, that Shrimati Sunder sold the she-buffalo in dispute to Mod, respondent No. 1, for a sum of Rs. 50/-. About ten months afterwards, that is on 27-8-1949 the she-buffalo in dispute was re-attached in execution proceedings on the application of the decree-holder.

On 3-9-1949 Moti, respondent No. 1, filed an objection under O. 21, R. 58, Civil P.C. which was rejected under order dated 31-12-1949. Thereafter he instituted a suit under O. 21 R. 63, Civil P.C. which was registered as Civil Suit No. 63 of 1950. This is a suit from which the present second appeal arises.

The suit was decreed by the trial Court on 5-3-1952. Appeal against this decree was dismissed by the 2nd Additional District Judge, Bhopal, and Rajmal has come up in second appeal against this order.

4. As already observed above, only two points are in dispute. Firstly, whether the sale of 24-10-1948 was made in good faith or was a fraudulent transaction in order to defeat the claims of the creditors including Rajmal. Secondly, if the attachment before judgment of the she-buffaloes should be deemed to have automatically revived after the revision application was allowed by the then Bhopal High Court. Both these points have been decided against Rajmal, defendant.

5. Under B. 101, Civil P.C., no second appeal is admissible except on the grounds mentioned in S. 100, one of which is that the decision is contrary to law. The term 'contrary to law' has not been defined in the Code, but it is a well settled law that in certain circumstances an erroneous finding of fact can amount to a decision contrary to the law.

For example, if a decision is based upon no legal evidence or all available evidence was not considered or if the decision is perverse in the sense that no normal person could have arrived at that opinion, it will amount to an error of law and is not binding on the High Court.

Similarly, if the first Appellate Court failed to draw the only inference possible (not one of the possible inferences) from the proved facts the High Court can interfere with the finding in Second Appeal. For reasons to be given subsequently, I am of opinion that both the trial and the first Appellate Courts had not taken into consideration certain circumstances and admissions favourable to the appellant and did not draw the only inference possible from such circumstances and admissions; and consequently this Court can consider the first point and give a finding in favour of the appellant.

In these circumstances it is not necessary to express any opinion on the second point, as t





















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