MOTILAL KEJRIWAL Vs. INDIAN OVERSEAS AIRLINES LTD

JUDGEMENT

(1.) The plaintiff Motilal Kejriwal is an unsecured creditor of the defendant No. 1, Indian Overseas Airlines Ltd. Previously, the plaintiff had instituted against the defendant No. 1 another suit, being Suit No. 4676 of 1950 for the recovery of his dues. In that suit, the plaintiff obtained an order of appointment of the Official Receiver as Receiver of the Dakota aircraft No. VT-AZV on the allegation that the aircraft belonged to defendant No. 1 absolutely. The Official Receiver took possession of the aircraft on or about 24-12-1950. On 2-2-1951, the defendant No. 2, Messrs. Air Friends, made an application in that suit for its examination pro interesse suo & for an order discharging the receiver on the allegation that the aircraft belonged to defendant No. 2 and that neither defendant No. 1 nor anybody else had any interest in the aircraft. In its petition the defendant No. 2 referred to and relied upon two agreements dated 16-7-1950 and also claimed that the aircraft was sold to the defendant No. 2 by the defendant No. 1 on 20-11-1950. The application was disposed of by an order dated 14-3-1951. The order embodies certain terms of settlement agreed to between the plaintiff and the defendant No. 2. Clauses, 1 and 2 of the terms of settlement are as follows : "1. Official Reveiver will be forthwith discharged and he will make over possession to the applicant of the Dakota VT-AZV on counsel's endorsement without the order being drawn up.

(2.) In the event of the plaintiff in this suit instituting a suit within 3-4-1951 and establishing therein that the transfer of the Dakota Air Craft VT-AZV by Indian Overseas Airlines Ltd., to Air Friends who is the applicant in these proceedings is a sham or a fraudulent transaction and/or that the said applicant was not and/or did not become the owner of the said Air Craft at the time of the appointment of the Receiver in suit No. 4676 of 1950 (Motilal Kejriwal v. Indian Overseas Airlines Ltd.), the said Air Friend's will remain liable to and agree to pay to the plaintiff in the fresh suit upto a sum of Rs. 44,500/- or such sum as may remain outstanding in respect of the claim of the plaintiff in the said suit No. 4676 of 1950 against the defendant therein, the Indian Overseas Airlines Ltd. In the event of the plaintiff in the said suit No. 4676 of 1950 getting a decree against the said defendant therein he shall have to take all such steps in execution excluding personal execution or otherwise of realising the future decretal amount from the said defendant and in case of any such deficiency also and in the event of his establishing the said facts as hereinbefore mentioned, the said Air Friends hereby agrees to be liable and/or to pay such claim to the plaintiff." 2. The subsequent clauses of the terms of settlement provided that the liability for the costs of the examination pro interesse suo proceedings, and of the costs, charges and dues of the Receiver would abide the result of the fresh suit and that in the event of the plaintiff not filing the suit within the time mentioned the plaintiff would bear such costs.

(3.) By a subsequent order the time to institute the fresh suit was extended by consent of the parties up to 9-4-1951. The plaintiff instituted this fresh suit on the 9th April claiming a decree against both defendants for Rs. 44,500/- and for other moneys payable under the aforesaid order dated 14-3-1951 and a declaration that the defendant No. 2 was not the owner and did not have any right, title and interest in the aircraft VT-AZV at the time of the appointment of the Receiver of the aircraft in Suit No. 4679 of 1950. The plaintiff asserts that the alleged transfer of the aircraft by the defendant No. 1 to defendant No. 2 had never taken place; that the defendant No. 2 never acquired any right, title or interest to the aircraft; that in any event the alleged transfer was a sham and/or a fraudulent transaction and/or was made with intent to defeat or delay the creditors of the defendant No. 1 including the plaintiff. These allegations were disputed by the defendant No. 2.