ITHAKKU ABRAHAM Vs. KBSAVAN DAMODARAN

JUDGEMENT

(1.) THIS second appeal by a claimant under 0. 21 R. 58 CPC was admitted on the following question of law: "whether Ext. A2 partition is voidable at the instance of a subsequent creditor is the substantial question of law arising in the case. "

(2.) THE deceased 1st respondent instituted a suit OS 61/1971 against one Ithakku Joseph on 22-5-1971 for recovery of the principal and interest due under a promissory note for Rs. 6500/ -. THE suit was decreed ex parte on 30-6-1971. THE decree holder filed EP No. 146/1972 for sale of the judgment debtor's half share in 1. 75 acres of land in various sub divisions of sy. No. 86 attached before judgment in the suit. When the attached properties were brought to sale, the appellant preferred a claim under 0. 21 R. 58 of the cpc (as it then stood) contending that the properties attached and sought to be sold in execution of the decree do not belong to the judgment-debtor and had been separately allotted to the claimant in partition Ext. A2 dated 31-7-1967 between the claimant and the judgment debtor. THE decree-holder opposed the claim contending that the partition Ext. A2 and a contemporaneous sale deed ext. A3 conveying the properties allotted to the judgment debtor to the claimant are both fraudulent and are intended to defeat the creditors of the judgment debtor. THE defence to the claim petition was based on S. 53 of the Transfer of property Act.

(3.) COUNSEL for the claimant has raised a contention that a creditor seeking relief under S. 33 T. P. Act is required by law to file a suit to avoid transactions of the judgment debtor in a representative capacity on behalf of all the body of creditors of the judgment debtor. Reliance is placed on the decision of Govindan Nair J. as he then was reported in Velama v. Raya shenoy (1962 KLT 801) herein it is held that a suit under 0. 21 R. 63 CPC (as it then stood) by a creditor decree holder to avoid a transaction by the judgment debtor as intended to defeat the creditors should be in a representative capacity on behalf of all the creditors of the judgment debtor. Reliance is also placed on the decision in C. Bhandari v. Dy Cammed. Tax Officer (AIR 1976 sc 656) in support of the proposition that it is not open to a creditor without recourse to a suit in a representative capacity under S. 53 T. P. Act to straightaway proceed against the properties already transferred by the judgment debtor. The question in Bhandari's case was as to whether the tales-tax authorities were entitled to ignore a deed of Trust created by the defaulter as fraudulent and intended to defeat the revenue which was the main creditor and proceed to recover the tax under the provisions of S. 17 of the Andhra Pradesh general Sales-tax Act as a first charge on the assessee's property. The Supreme court stated at page 661: "10. In the special and peculiar facts of the present case which have been catalogued above, in our opinion, this is not a fit case in which the sales tax authorities can be allowed to hold that the deed of trust executed by the settlors was bit by S. 53 of the Transfer of property Act. It may be noted that under S. 53 of the Transfer of Property Act if a transfer is made with intent to defeat or delay the creditors it is not void but only voidable. If the transfer is voidable, then the sales tax authorities cannot ignore or disregard it but have to gel it set aside through a properly constituted suit after impleading necessary parties and praying for the desired relief. " There is, however, authority for the proposition that a plea based on S. 53 of the T. P. Act can be raised by way of defence and, if raised as a defence, there is no need to defend the suit in a representative capacity on behalf of all the creditors of the judgment debtor. The Supreme court in Abdul Shukoor v. Arji Papa Rao (AIR 1963 SC 1150) states at page 1160: " (31) We shall first refer to the purpose of the amendment. In decisions rendered prior to the amendment, there were a large number in which it was held, following certain English cases decided with reference to 13 Eliz. Ch. S on which S. 53 (1) was based, that suits by creditors for avoiding a transfer under S. 53 (1) was a representative action. To that general rule however, an exception was recognised in a number of decisions when the suit was to let aside a summary order under 0. 21 R. 63 and was brought by an attaching decree-holder against whom an adverse order had been made in the summary proceedings, it being held that such a suit need not be In a representative capacity. The decisions on this point were however not uniform. It was merely to have a uniform rule and to avoid these conflicting decisions that the third paragraph was inserted so that after the amendment the rule that a suit by a creditor should be brought in a representative capacity would apply as much to a suit to set aside a summary order under 0. 21 R. 63 as to other suits. It was not suggested that there was anything in the terms of the amended s. 53 (1) which referred to a defence to a suit and, in fact, learned COUNSEL did not contend that if a defence under S. S. 3 (1) could be raised by a defeated attaching-creditor such a defence had to be in a representative capacity, and we consider that learned COUNSEL was correct in this submission. From a provision as to how a plaintiff, if he filed a suit, should frame it, we can see no logical process by which it could be held that a defendant cannot impugn the validity of the sale which is voidable at his instance. "