BAI HAKIMBU Vs. DAYABHAI RUGNATH

JUDGEMENT

(1.) THE appellants' father, who was the plaintiff, died during the pendency of the suit, and the appellants were brought on record as his heirs and legal representatives. For the sake of facility I shall refer to the deceased plaintiff as the plaintiff in this judgment. He and the defendant were the creditors of two brothers, Fidaali and Nuralli, who were the owners of the property in suit. THEy separated on September 29, 1927, when the property in suit was allotted to the share of Nuralli who undertook to pay off the joint debts, and also to pay Rs. 2,500 to Fidaali for his share. As Nuralli was unable to pay the amount in cash, he mortgaged the property in suit with possession to Fidaali for Rs. 2,500 on the same day. After they were thus separated, both the plaintiff and the defendant filed separate suits against them to recover their respective dues. THE defendant filed suit No.342 of 1928 on October 25, 1928, and pending the suit he got the property in suit attached before judgment, as if it belonged to both the brothers. In that suit the defendant got a decree for Rs. 800 on April 25, 1929, and the attachment before judgment was ordered to be continued. In the meantime, the plaintiff also had obtained a decree in his suit on January 20, 1929. THE plaintiff presented darkhast No.120 of 1929 on April 27, 1929, to execute his decree against Fidaali alone and to recover the decretal amount by the sale of Fidaali's interest as a mortgagee in the property in suit. Nuralli was not joined as a party to that darkhast. THE defendant also filed darkhast No.138 of 1929 against both Fidaali and Nuralli on June 13, 1929, to recover his decretal amount by the sale of the property which had been attached before judgment. When the defendant came to know that the plaintiff's darkhast was also pending, he made an application on August 12, 1929, that his darkhast should be kept along with the plaintiff's darkhast, and prayed for a rateable distribution of the amount realized by the sale of the property in the plaintiff's darkhast. Accordingly, an order was passed on September 10, 1929, stating that the defendant's darkhast for rateable distribution be kept along with the plaintiff's darkhast as prayed for. THEreafter, on September 28, 1929, the plaintiff privately purchased from Fidaali his mortgagee right in the property in suit for Rs. 1,999 by the sale-deed exhibit 94. That consideration was made up of Rs. 1,230 payable under the decree, and Rs. 769 paid in cash in the presence of the Sub-Registrar, After obtaining this sale-deed, the plaintiff dropped his darkhast and it was struck off on September 30, 1929. THE defendant then amended the prayer in his darkhast on December 5, 1929, and asked for the attachment and sale of Fidaali's interest in the property in suit, Nuralli having become an insolvent in the meanwhile. Fidaali's share was then sold by auction and purchased by the defendant himself for Rs. 500 on October 9, 1930. THE sale was confirmed on November 18, 1930, and the defendant applied for possession under Order XXI, Rule 95, of the Civil Procedure Code. THE plaintiff objected, but his obstruction was removed on January 16, 1931, and the defendant was ordered to be given possession. THE plaintiff then filed this suit under Order XXI, Rule 103, of the Civil Procedure Code, for a declaration that he was in possession of the property in his own right and was entitled to it, and for an injunction restraining the defendant from dispossessing him. THE suit was filed on June 15, 1931, and on April 10, 1932, the defendant took possession of the property as the auction purchaser. THE plaintiff, therefore, amended his plaint on June 6, 1932, and prayed for the possession of the property.

(2.) THE defendant contended that as the property had already been attached in his suit No.342 of 1928, the plaintiff's subsequent purchase was void against him under Section 64 of the Civil Procedure Code, and that his purchase was not bona fide but intended to defeat and delay the creditors of Fidaali and Nuralli, and was, therefore, voidable under Section 53 of the Transfer of Property Act. On the other hand it was contended on behalf of the plaintiff that the attachment before judgment in the defendant's suit No.342 of 1928 did not affect Fidaali's mortgagee right in the property, and that the defendant's auction purchase was vitiated by the want of proper attachment. THE trial Court held that the attachment before judgment was not proper and that the defendant, as the auction purchaser, had no right to challenge the validity of the plaintiff's purchase under Section 53 of the Transfer of Property Act. It also held that the plaintiff's purchase was not intended to defeat or delay the creditors of Fidaali and Nuralli. THE plaintiff's claim was, therefore, decreed; but that decree was set aside in appeal by the learned First Class Subordinate Judge, A. P. , who held that although1 the defendant was an auction-purchaser, he was also a decree-holder, and in that capacity he was entitled to challenge the plaintiff's purchase under Section 53 of the Transfer of Property Act, and that as the plaintiff had paid Rs. 769 to Fidaali for his benefit, the purchase was fraudulent and intended to defeat the creditors of Fidaali and Nuralli. On this ground it was held that the plaintiff had no title to the property in suit, and was not entitled to evict the defendant. All these contentions have been pressed in this Court by one side or the other.

(3.) THE next question is whether the assignment is voidable under Section 53 of the Transfer of Property Act at the option of the defendant. It is contended for the plaintiff that the defendant cannot get the benefit of that section since he is not a creditor of the assignor, but an auction-purchaser, and since he does not represent all the creditors. In support of the first contention reliance is placed on the ruling in Vasudeo Raghunath v. Janardhn Sadashiv. 2 Section 53, Sub-section (1), provides Every transfer of immoveable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Sub-section (2) of Section 53 provides Every transfer of immoveable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. From the very wording of these sub-sections it follows that only a defeated or delayed creditor or a subsequent transferee has the option to impeach the transfer. An auction-purchaser, who is not the decree-holder himself, is not a creditor of the judgment-debtor, and it cannot be said that the transfer was intended to delay or defeat him, since he stepped in after the transfer by operation of law. Nor is he a subsequent transferee within the meaning of Sub-section (2 ). In Vasudeo Raghunath v. Janardhan Sadashiv, Shah J. observed (p. 512): But the defendant is an auction-purchaser at a Court sale, and not a transferee by any act of the original owner. Having regard to the preamble as well as section 5 of the Act, it seems to be clear that a person, who steps in by operation of law and not by any act of the owner is not a subsequent transferee within the meaning of section 53 Ha is clearly not a person having an interest in the property within the meaning of the section, which apparently refers to interest, which exists in fact at the time of the transfer objected to. This was the interpretation of the section as it stood before 1929, but the view expressed above is in no way affected by the amendment of the section by the Amending Act of 1929. But in this case the defendant was a creditor of Fidaali and was holding a decree against him when he assigned his mortgagee rights to the plaintiff. If that assignment was intended to defeat or delay the defendant, he can challenge its validity, although he subsequently became an auction-purchaser of the same property. He cannot challenge it as a "subsequent transferee" under Sub-section (2) of Section 53, but can do so as a "creditor" under Sub-section (2), which says, in effect, that whenever a creditor (or decree-holder) is delayed or defeated by the transfer of the property of his debtor (or judgment-debtor), the transfer is voidable at the option of such creditor (or decree-holder ). If the defendant can prove that he was a creditor of Fidaali and that the assignment taken by the plaintiff from Fidaali was intended to delay or defeat him, then the assignment is voidable at his option, though he may subsequently become an auction-purchaser. A decree-holder does not lose his right to the benefit of Section 53 of the Transfer of Property Act by himself becoming an auction purchaser, and if the property purchased by him at the auction had been transferred by the judgment-debtor with intent to delay or defeat him, the transfer is voidable at his option.