A G KRISHNAMOORTHY Vs. V KANNAMMAL

JUDGEMENT

(1.) V. Natarajan, the fourth respondent herein, was declared an insolvent. The Official Assignee, however, filed an application under Sec. 7 of the Presidency Towns Insolvency Act, 1909, read with Sec. 36 thereof, for a declaration that Natarajan, the insolvent, was entitled to one-sixth share in petition mentioned property, and that the same be vested with the Official assignee consequent on the adjudication that he was insolvent. A learned single judge of this Court summoned Natarajan his mother Kannammal (first respondent in O. S. A. No. 53 of 1985) and other persons known or suspected to have been in possession of the petition mentioned property and inquired as to whether there was any interest or share of the insolvent in the said property. He found, however, that the Official Assignee could not establish that Natarajan had l/6th share in the property, and accordingly dismissed the application. Natarajan, in the meanwhile, also applied for discharge stating inter alia that he possessed no property for any further discharge of the credits, and the learned Judge ordered as follows: "the insolvent has paid his creditors 0. 50 P. in a rupee and he had not concealed anything from the Official Assignee or secreted any assets. In the circumstances, this is a fit case where an order of discharge will have to be made in favour of the insolvent. " The creditor who had moved an application under Sec. 8 of the Act for a review of the order declaring Natarajan, the insolvent, and whose application had been dismissed saying that the question would be taken up only at a stage when it was decided to discharge the insolvent of any liabilities however, felt aggrieved, and thus preferred the instant appeals.

(2.) THE only properly, however, with respect to which the entire dispute related is the property mentioned in the petition of the official Assignee. It is not in dispute that the title deed of the said property is in the name of (sic) Kamalammal and that the insolvent is one of the five sons of Kannammal. THE case of the Official Assignee before the learned single Judges as well as that of the creditor - appellant before us is that although the title deed stood in the name of (sic Kamalammal, the property belonged to Vedachala Naicker, the husband of the first respondent Kannammal, and it was Vedachala Naicker who had purchased the property in the name of the first respondent as per the three sale deeds Exs. R-1 to R-3. In support of this contention, reliance was placed on Exs. R-1 to R-3, the three mortgage deeds, jointly executed by Kannammal and her sons including the insolvent the recitals whereof indicated that the property had been purchased by Vedachala Naicker in the name of Kannammal, and that on demise of the real owner, Vedachala Naicker, it devolved equally upon Kannammal, the widow and the sons, respondents 2 to 6 including the insolvent. Kannammal, however, maintained chat the property in dispute was a house purchased by her absolutely as per the sale deeds, Exts. R-1 and R-3, and contended that the recitals in Exts. P-1 to P-3 were incorporated at the instance of the creditor, and thus never constituted a conscious admission of the title of her husband. THE learned single Judge noticed that the burden of proving that the petition mentioned property was purchased benami by Vedachala Naicker was on the Official Assignee, and that to establish the benami transaction, he must prove (1) that the sale price for Exts. R-1 to Ru-3 was paid by Vedachala Naicker; (2) that there was sufficient motive for vedachala Naicker to take a sale deed in the name of his wife; (3) that the possession of the property was always with Vedachala Naicker, and afterwards with his sons; and (4) that the custody of the title deeds was always with vedachala Naicker and his sons.

(3.) LEARNED counsel for the appellant also referred to a judgment of the Supreme Court in Gapadibai v. State of M. P. , A. I. R. 1980 S. C. 1040. This was a case before the Supreme Court, wherein for recovery of sums due to the Government from the husband, a property which has stood in the name of his wife was attached. The wife filed a suit claiming relief on the ground that the house was her personal property and could not be attached to the sums owing by her husband. The defence by the State was that the property belonged to the husband, and that, therefore, the attachment was valid. The wife relied on a registered document which was proved to have been duly executed. She also let evidence to show that she had sufficient means to purchase the house. The supreme Court, on the basis of the above said: 'in the first place, the State never pleaded that the house in question was purchased by the husband through a benami transaction in the name of his wife. It was also not pleaded clearly that the property belonged to the husband and that it has been sold to the wife with the intention to defeat the creditors of the husband. A vague allegation of this type seems to have been made in the written statement but no evidence whatsoever has been led to show as to whether there was any such intention on the part of defendant No. 5. Even the data when the sums sought to be recovered become due has not been proved or indicated to the satisfaction of the court. The trial court, after a very careful consideration of the evidence of the plaintiffs and the documents produced by her found that she had established that the property in question belong to her and not to defendant No. 5. In the instant case as the plaintiff relied on a registered document which was proved to have been duly executed, a finding which has not been reversed by the High court, the onus lay on the State to prove that what was apparent was not the real. No evidence on behalf of the State was adduced to displace the presumption arising from the registered sale deed in favour of the plaintiff. On the other hand, the plaintiff led evidence oral and documentary, to show that she had sufficient means to purchase the house. The High Court instead of displacing the reasons given by the trial court, has rejected the oral evidence on a general ground that there were some contractions here and there and has also misconstrued the documents produced by the plaintiff which were in the nature of applications to the municipality for purchasing a backyard of the house in dispute and which were allowed on the footing that the house belonged to her. . . . . Once the plaintiff proved by virtue of the registered sale deed that she was the owner of the house and also explained the source of the price paid by her for it, that was sufficient to hold that the property belonged to her and could not be attached for the recovery of dues owing by her husband.' The Supreme Court in that case rejected the plea of benami saying, 'in order to prove the benami nature of the transaction the State could have led evidence to show (1) that defendant No. 5 paid the consideration, (2) that he had the custody of the sale deed , (3) that he was in possession of the property and (4) the motive for the transactio n. None of those factors has been proved by the State.'