1933 Present: Dalton A.C.J. and Drieberg J.

STRONG v. MARIKAR.

209-D. C. (Inty.) Puttalam, 4,441.

Caveat-Creditor files caveat to prevent alienation of property by debtor in fraud of creditors-Object of caveat-Register able interest in land- Registration of Documents Ordinance, No. 23 of 1927, ss. 30, 32, and 33.

Section 32 of the Registration of Documents Ordinance does not entitle a creditor, who has not obtained judgment against his debtor, to enter a caveat to prevent the alienation of property by his debtor in fraud of creditors.

The object of the section is to give the caveator notice of a deed in order that he might have it rectified or cancelled under sub-section (5) if he can show that it is void or voidable or fraudulent as against him or that it is in derogation of his lawful rights.

It does not alter the substantive law regarding the grounds on which he can have the deed cancelled.

Held further, the caveator is not bound to show that he has a register-able interest in the land, the registration of deeds affecting which he seeks to prevent.

IN this action the appellant sued the respondent for the recovery of a sum of Rs. 10,662.91 and, before the decision of the action, registered under section 32 of the Registration of Documents Ordinance, No. 23 of 1927, a caveat affecting five lands of the respondent. He filed an affidavit alleging that the respondent was about to mortgage them and that if he did so, the appellant would be deprived of the means of recovering the amount due to him. The respondent moved under section 33 of the Ordinance that the registration of the caveat be cancelled. The learned District Judge held that the filing of the caveat was wrongful and allowed the application.

H. V. Perera, for appellant.-Under section 25 of Ordinance No. 14 of 1891, only a party to an instrument or deed can lodge a caveat (Annamaly Chetty v. Thornhill1[ 29 N. L. R. 241.]), but under section 32 (1) of Ordinance No. 23 of 1927, any person is entitled to enter one. The change in the wording is significant. Section 32 (1) has been deliberately made wider in terms, as the party aggrieved has been given a remedy by section 33 and a claim for damages by section 34. As the law now stands any person can lodge a caveat, but if he does so unlawfully or improperly he will be liable in damages.

N. Nadarajah, for respondent.-The position taken up by the appellant is not correct. It was not intended to widen the provisions of Ordinance No. 14 of 1891. In the statement of objects and reasons by the Hon. the Attorney-General in the Government Gazette of April 8, 1927, it is clearly stated that the amendment of section 25 of Ordinance No. 14 of 1891 was necessary in view of the fact that the section was being abused by simple money creditors. The submission  made for the appellant is that the mischief sought to be averted has been rendered lawful.

The class of persons who can come under section 32 is no larger than under the clause 25 of Ordinance No. 25 of 1891, but a close examination of sub-section (5) of section 32 shows what persons are entitled to lodge caveats. The appellant does not come within the class of persons. He is only at the best a simple creditor without a decree of Court for his claim. His claim is being disputed. As such he cannot say that the deed is fraudulent as against him or in derogation of his lawful rights. Under the Roman-Dutch law a simple creditor without discussing the available property of his debtor cannot say that he has been defrauded. This can only be done after a decree. (4 N. L. R. 81.) It is submitted that a simple money creditor cannot enter a caveat, and the law is the same now as under section 25 of Ordinance No. 14 of 1891 as far as simple creditors are concerned.

H. V. Perera, in reply.-The case of Fernando v. Fernando 1 only lays down that a person claiming damages cannot bring a Paulian action without a decree. That d