K SHRIRAMA ROW Vs. KBAPAYYA

JUDGEMENT

(1.) This is an appeal against an order of the Subordinate Judge allowing at the instance of one K. Bapayya execution of the decree in O.S. No. 36 of 1909-The appellant before us is the 4 judgment-debtor, Sreerama Rao. The decree was obtained by the plaintiff Bangaru Subba Rao in August 1909. The 1 defendant is the father-in-law of the 4 defendant, Sreerama Rao, the appellant, and the 2nd and 3 defendants are the sons of 1 defendant. The first defendant became indebted to the decree-holder and Sreerama Rao was a surety for payment of the debt. Subsequent to the passing of the decree, the 1 defendant was adjudicated an insolvent, and the 4 defendant became in consequence mainly responsible for the payment of the decree-amount. There were other decrees passed against Sreerama Rao in similar circumstances; that is to say, in respect of debts borrowed by his father-in-law for the payment of which he made himself liable as surety. In 1911, with a desire to enter into some arrangements with the various decree-holders, he borrowed moneys from one Badhrayya whose sister he had married. He appears to have paid some of the creditor's amounts which represented 4 annas in the rupee. But for some reason, Sreerama Rao's attempts to get the decrees treated as discharged were unsuccessful; and since then, there were other negotiations, and in4916 there was correspondence between the decree-holder Subba Rao and Sreerama Rao, in regard, to the settlement of; this decree.

(2.) Ex. V is a telegram dated 20 April, 1916 from the decree-holder to the appellant. Ex. V (a) is a similar telegram dated 11 May, 1916. Exs. V (b), V (c) and V (d) are respectively dated 19 May, 20 May and 9 October of 1916. Ex. VI is a letter dated 15 May, 1916, written by Bangaru Sobanadri, partner of the decree-holder, to the appellant. Ex. IX is a letter dated 28 June, 1916, from Sreerama Rao, to the decree-holder. These exhibits show very clearly that the appellant was anxious to enter into some settlement with the decree-holder. On the 23 June, 1917, the decree was transferred by a deed of that date by the decree- holder in favour of Bapayya, who filed an execution application, the order passed on which is the subject of the present appeal. The appellant contends that he borrowed Rs. 3,000 from his brother-in-law, the aforesaid Bhadrayya, and paid the amount to the decree-holder, Bangaru Subba Rao, in full satisfaction of the decree; but for certain reasons, which I shall presently notice, got the decree transferred in favour of Bapayya who, I may mention, is the father-in- law of Badhrayya The appellant's case is that the decree was actually discharged, that the transfer in favour of Bapayya was nominal and taken for his own benefit, and that, in the circumstances, execution should not issue in favour of Bapayya. The reason assigned for this benami transaction is this. The appellant was largely indebted, and his creditors were likely to enforce payment. He had property, but the debts he incurred to oblige his father-in-law were very large. He tried in 1911 to enter into a composition with his creditors by inducing them to take 4 annas in the rupee. His attempts failed. Now he was able to induce this decree-holder Bangaru Subba Rao, to receive Rs. 3,000 in full satisfaction of the decree under which, about Rs. 15,000 was due. But to prevail upon other creditors to give up large sums, it was necessary that they should continue to be under the impression that the decree in favour of Subba Rao was in full force. Should the other creditors become aware of the real facts, the chances of settlement were less. The appellant entered into secret transactions with a few other decree-holders, got them to accept small sums, and, as in the present case, got the decrees assigned in favour of this very Bapapya. It was desirable that the rest of the creditors should remain under the impression that all the decrees were still alive, because they would then, fearing that the property of the appellant would not be sufficient to discharge all the debts in full, be willing to enter into favourable settlement with Sreerama Rao. The appellant's case is that with this object he made it appear that the decree though discharged, was yet alive and got an assignment of the decree in favour of a near relation in whom he had confidence. It is admitted that about this period three other decrees were also transferred to Bapayya. Sreerama Rao urges that all the assignments were benami and made with the same object. The question to be determined is has the appellant made out his case.

(3.) [His Lordship held on evidence and the probabilities that the appellant had made out his case and proceeded as follows:-