RAM CHAND ALIAS RATAN SINGH Vs. MATHURA CHAND

JUDGEMENT

(1.) It appears that Maharaj Singh and his son, Ram Chandra alias Ratan Singh, were members of a joint undivided Hindu family and had some joint family property. Daring the time that the family was joint, a certain item of property was acquired by right of pre-emption. On the 27 of February 1903 Maharaj Singh executed a tamliknama in favour of his son Ram Chandra in respect of the said property. On the 12 of December 1914 Mathura Prasad and Parbhu Dayal obtained a decree for their share of profits in m certain village against Maharaj Singh. In execution of that decree they attached the property that had been conveyed by the tamliknama of the 27 of February 1903 to Bara Chandra, the son of Maharaj Singh. He objected to the attachment on the ground that the property attaahed belonged to him. The objection was disallowed on the 7 of July 1917. There upon the suit out of which this appeal has arisen was instituted by Ram Chandra against the decree-holders, Mathura Prasad and Parbhu Dayal, for a declaration that the property sought to be attached by them was not liable to attachment and sale in execution of their decree. The claim was resisted on various grounds. It was urged on behalf of the defence that the tamliknama relied upon by the plaintiff conveyed no title to him inasmuch as the property, the subject of the tamliknama, was part of the joint family property and the family being joint one member of it could not transfer any portion of the joint property to the other. Moreover, Section 53 of Act IV of 1882 was also pleaded in bar of the claim. The Court of first instance dismissed the claim. On appeal the decree of the first Court was affirmed. In second appeal to this Court it is contended on behalf of Ram Chandra that the defence under Section 53 of Act IV of 1832 is not open to the defendants, inasmuch as they did not bring, as they ought to have brought, a regular suit to have it declared that the tamliknama of the 27 of February 1903 was inoperative and not binding against the creditors of Maharaj Singh. This contention is based on the case of Subramania Aiyar V/s. Muthia Chettiar 43 Ind. Cas. 631 : 41 M. 612 (F.B.) : 6 L.W. 750 : 33 M.L.J. 705. The contention for the plaintiff appellant is, no doubt, borne out by the case relied upon by him but it appears to me that, on the findings of the Courts below, this appeal can be disposed of without expressing an opinion on the question whether the defence under Section 53 of Act IV of 1882 is open to the defendants in the present case. It has been found by the lower Appellate Court that Maharaj Singh and Ramchandra were members if a joint undivided Hindu family at the item that the tamliknama was executed and that the property conveyed by the said deed was part of the joint family property. Under these circumstances, the deed of the 27th of February 1903 was an invalid deed that conveyed nothing to Ramchandra, A member of a joint undivided Hindu family cannot legally transfer a portion of the joint family property to another member of the family. The transfer being, therefore, merely a paper transaction, under which no interest passed to the transferee, the case relied upon by the learned Vakil for the plaintiff appellant is not in point. The plaintiff cannot, therefore, maintain the present suit on the basis of the deed of the 27 of February 1903. The conclusion arrived at by the lower Appellate Court, in my opinion, was a correct one and I would dismiss the appeal. Stuart, J.

(2.) While concurring with the decision of my learned colleague, that the finding to the effect that the property, which the tamliknama purported to transfer, was the joint property of a joint Hindu family governed by the Mitakshara Law, is fatal to the success of the appeal, I think it advisable to note a decision on two legal points, which have been argued by the learned Vakil for the appellant. The first point is this. He argued that, inasmuch as the debt due from Maharaj Singh which formed the basis of the simple money-decree against him had not been incurred (and could not neceasarily have been incurred) at the time, that the tamliknama of the 27 of February 1903 was executed, the provisions of Section 53 of Act IV of 1882 had no application. His case here was, that the provisions of that section did not protect, future creditors. It has usually been considered settled law that the provisions of that section do protect future creditors, but I have not been referred to any decision of this Court to support the proposition. There is, however, a decision of the Madras High Court in Thomas Pillay V/s. Muthurama Chettiar 4 Ind. Cas. 301 : 33 M. 205 : 19 M.L.J. 747 : (1910) M.W.N. 285 : 7 M.L.T. 28, which decides, that subsequent creditors are within the rule enunciated in the first clause of Section 53 Act IV of 1882. The section in question re produces the provisions of the Statute of Elizabeth, 13-Eliz. C. 5, and in the interpretation of the words of that section guidance may be sought from English decisions upon the subject. The Bench of the Madras High Court, which arrived at the decision that I have just quoted, have sited certain English cases in support of their decision. I add the dictum of Wood, V. C. in Holmes V/s. Penney (1856) 3 K. & J. 90 at p. 99 : 26 L.J. Ch. 179 : 3 Jur. (N.S.) 60 : 5 W.R. 132 : 112 R.R. 49 : 69 E.R. 1035: "Where, in order to evade the Statute, a person, being considerably indebted, makes a voluntary settlement, which would be void if impeached by those who were then his creditor?, and afterwards pays them off, and a new set of creditors stand in their places...such a settlement would be void against the subsequent creditors, because it would be a fraud upon the Statute." It is unnecessary to quote other authorities. As I understand it, the law is clear. Where a man makes a fraudulent transfer in order to evade his existing obligations, that transfer can be impeached by creditors whose obligations are of a later date.

(3.) The second point taken by the learned Vakil is this, A Full Bench case reported as Subramania Ayyar V/s. Muthia Chettiar 43 Ind. Cas. 631 : 41 M. 612 (F.B.) : 6 L.W. 750 : 33 M.L.J. 705, lays down the proposition that, when a decree holder attaches property which he states to be the property of the judgment debtor, and a third party pleads in execution that that property is not the property of the judgment-debtor, because it has been transferred by a good and valid deed, and is met with the reply that the deed is a fraudulent deed, and when the Court of execution decides that the deed is a fraudulent deed and upholds the attachment, it is not open to the decree-holder to plead, in a subsequent suit brought against him by that third party for a declaration, that the deed is a valid deed, that the deed is fraudulent, unless he has previously himself filed a suit for a declaration that the deed is fraudulent and obtained a decree. This is a decision of a very far reaching nature. It decides finally a most important Question of procedure. It drives such a decree-holder into Court to bring a regular suit, and deprives him of the right, which, at first sight, he would appear to have, to impeach the validity of a fraudulent document. It remains to be seen what arguments were advanced by the learned Judges of the Madras High Court who arrived at this conclusion.