GOVINDA MARAR Vs. SIVARAMA KURUP

JUDGEMENT

(1.) The plaintiff has come up in second appeal. He sued for redemption of a usufructuary mortgage as successor in interest of the mortgagor. The plaint schedule property belonged to one Padmanabha Marar who had executed a mortgage deed to the defendant on 3-1-58 for a sum of Rs. 75. Padmanabha Marar assigned his jenmom right to the plaintiff on 18-11-61. The plaintiff thereupon instituted the suit on 23-3-62. The mortgage was admitted by the defendant; but his contention was that he was already in possession of the property under a varom arrangement and even if the mortgage is redeemed the varom will survive. Padmanabha Marar had executed two promissory notes to him on the strength of which a suit, O S.115/61, was filed by him and decree obtained. On the 8th of November, 1961 he applied for attachment of plaint schedule property in execution of the decree. Padmanabha Marar knowing about this, executed an assignment in favour of the plaintiff, who is his elder brother, benami without any consideration. The document is affected by lis pendens and it is also invalid being one executed in fraud of creditors. The Trial Court held that the assignment of the equity of redemption to the plaintiff is valid and allowed redemption. On appeal the learned District Judge, however, has held that the assignment is in fraud of creditors and as such hit by the bar of S.53(1) of the Transfer of Property Act. The suit was, therefore, held to be not maintainable, and it was accordingly dismissed.

(2.) In this second appeal, the point arising is whether Ex. P1 assignment in favour of the plaintiff was a sham document intended to defeat or delay the creditors of the assignor. On this point evidence is really lacking. The two circumstances relied on by the learned appellate Judge in coming to the conclusion that Ex. P1 is a fraudulent document are: (1) that the executee is the executant's own brother; and (2) that it was executed soon after the passing of the money decree in O.S. 115/61 against the executant. I do not think that these circumstances by themselves are sufficient to justify the finding that the document is sham and fraudulent. Pw 1 the assignee has sworn before court that the entire amount minus Rs. 75 reserved for redemption of the mortgage was paid in cash under Ex. P1. The amount was received by him to discharge some of his debts and also to meet the expenses in connection with his illness. Even if the finding that it is a sham transaction is upheld it can be declared so, only to the extent of the defendant's claim. The entire transaction cannot be declared cull and void at the instance of the defendant, who is only one of the creditors, and the amount due to him is what is covered by the decree in O.S. 115/61. This position is well covered by authority. Venkatarama Iyer. J., has observed in Nanjamma v. Rangappa ( AIR 1954 Mad. 173 ) that:

(3.) As against the above plea the defendant would urge that he has now become the full owner of the property by virtue of .the court sale and delivery in his favour in O. S.115/61 and as such the mortgage is no longer, in existence, so that the suit for redemption could be sustained. It is true that in the execution of the money decree in O. S.115/61 the property was brought to sale and purchased by the defendant. Symbolic delivery has also been taken by him but by virtue of the sale and delivery, I do not think the defendant will be justified in claiming an enlarged right when once it is declared that the assignment is void if at all, only to the extent of his claim. If the defendant's present plea is upheld the effect will be that nothing, will be left for the plaintiff assignee by virtue of the assignment in his favour. The defendant can claim only the amount due to him with interest there on and cannot claim the. entire property on the basis of the sale in execution of his money decree. In an analogous situation arising from proceeding in restoration of a petition under O.21, R.90 dismissed for default, a Division Bench of the Madras High Court in Varadarajan v. Muthu ( AIR 1953 Mad. 587 ) relying on AIR 1946 Mad. 344 , and 1934 All. 433