Gift donees are liable for donor's debts only up to the value of the property received, ensuring liability does not escape during fraudulent transfers.

ORDER:

G. RADHA RANI, J.

This Civil Revision Petition is filed by the petitioners - plaintiffs aggrieved by the order dated 21.08.2023 passed in I.A.No.358 of 2018 in O.S.No.187 of 2014 by the learned V Additional District Judge, Khammam for dismissing the petition filed under Order I Rule 10 read with Section 151 of CPC to implead the proposed party as defendant No.2 in the suit.

2. The plaintiff No.1 initially filed a suit against defendant No.1 for recovery of money of Rs.27,55,200/- with interest @ 24 % per annum basing on a promissory note. He also filed I.A.No.1811 of 2014 seeking attachment of the property in the name of the defendant. The said petition was ordered conditionally on 14.03.2018. But prior to passing of the order for attachment itself, the defendant transferred the said property by executing a gift deed in favor of his brother - the proposed defendant No.2. The contention of the petitioner - plaintiff was that the defendant was indebted to several persons and he was having only the schedule property and by defrauding the creditors, he gifted the property in the name of his brother. As such, the brother of the defendant was also a proper and necessary party to the suit and filed a petition under Order I Rule 10 read with Section 151 of CPC and Section 128 of the Transfer of Property Act (for short "T.P." Act), 1882 read with Rule 24 of CIVIL RULES OF PRACTICE . The said petition was numbered as I.A.No.358 of 2018. The petitioner No.1 died, as such, his legal representatives were brought on record as plaintiffs 2 to 5 as per the order in I.A.No.1 of 2021 dated 30.03.2002. Subsequently, I.A.No.358 of 2018 was dismissed by the learned V Additional District Judge at Khammam as per the order dated 21.08.2023.

3. Aggrieved by the said dismissal, the petitioners - plaintiffs preferred this revision.

4. Though the respondent No.1 also made his appearance through his counsel Sri P.Prabhakar, he failed to contest the matter.

5. Heard Sri G.Ravi Chandrasekhar, learned counsel for the revision petitioners and Sri C.V.V.Prasad, learned counsel for the proposed respondent No.2.

6. Learned counsel for the petitioners - plaintiffs submitted that the respondent No.1 - defendant gifted the entire property to his brother i.e. the respondent No.2 - proposed defendant in a fraudulent manner. As such, the court below ought to have allowed I.A.No.358 of 2018 as per Section 128 of the T.P. Act, 1882. The court below failed to appreciate the contention of the petitioners that the transaction was a fraudulent transaction, and that the defendant gifted the property after knowing that the suit has been filed against him and erred in passing the impugned order and prayed to set aside the same.

7. Learned counsel for the proposed respondent No.2 on the other hand contended that the petitioner was not connected to the suit. He was not liable to pay any amount to the plaintiff. No show cause notice was issued to him under Order XXXVIII Rule 5 of CPC. Out of love and affection, the elder brother of the proposed respondent No.2 gifted the property. The gift deed was dated 09.03.2018. But the interim attachment order was passed on 14.03.2018. As such, the gift deed was prior to the interim attachment order passed by the Court. Section 127 of the T.P. Act, 1882 comes into picture only after decretal of the suit, but not during the pendency of the suit and prayed to dismiss the revision.

8. Perused the record.

9. The record would disclose that the suit was filed by the plaintiff for recovery of money based on a promissory note. A conditional order was also passed on 14.03.2018 vide I.A.No.1811 of 2014. But during the pendency of the suit and