(GUNTURU) PULLAYYA Vs. OFFICIAL RECEIVER OF KISTNA

JUDGEMENT

(1.) The facts out which this C.M. Appeal arises may be stated as follows: The properties which are the subject of dispute originally belonged to one Mantravadi Suryanarayana Sastri. He had no children and he adopted his brother's son Kutumba Rao. This Kutumba Rao, soon after he attained majority, seems to have entered on a career of extravagance A deed of partition was then brought about between the adoptive father and the son. This is Ex. C, dated 23 July 1914. We then have got a sale deed, Ex. 1(a), dated 26 July 1914, of the whole of the son's share of the properties in favour of one Nallanchakrvartulu Venkatacharyulu. It appears from the evidence that this Venkatacharyulu was a student of Suryanarayana Sastri for two or three years and studied Maha Bhashyam (Patanjali's great work in Sanskrit grammar) under him: vide R.W. 1. The partition deed and the sale deed were registered on the same day, namely, 28 July. The inference is irresistible that they are parts of the same arrangement that the sale was agreed upon even before the partition was made effective by the execution of a registered deed. This sale deed was for Rs. 20,000. The details given for the consideration are: (1) the amount due in respect of the previous loans, Rupees 11,463-8-0; (2) the amount received in cash on the date of the sale deed, Rupees. 4,536-80; and (3) the amount agreed to be paid before the sub-Registrar, Rupees, 4,000.

(2.) Two decrees were obtained against Kutumba Rao: (1) by Sukavasi Veerayya in O.S. 92 of 1915, and (2) another in O.S. 72 of 1915. One of these suits was instituted prior to the sale deed, Exhibit 1(a). The other was filed a few days afterwards. In execution of these decrees the decree-holders attached the properties sold by the son Kutumba Rao as if they still belonged to him. The purchaser under Ex. 1-a, i.e. Venkatacharyulu, filed a claim petition which came on for orders before the District Munsif who passed the decree and his order is now filed as Ex. L. In that order he found that the two prior debts now filed as Exs. 6 and 4 and marked before the District Munsif's inquiry as Exs. B and C were not bona fide transactions. He also found as to the sale deed Ex. 1-a (then marked as Ex. A) that the vendee went to the Registrar's office to see its execution. The vendee's statement that it was registered at Gannavaram was erroneous, and he did not take the sale deed from the Registrar's office and neither he nor his witnesses knew who took it back from the Registrar's office. The claimant did not produce the receipts for the sircar cists which he claimed to have paid. He never saw the lands before purchasing them. The judgment-debtor was a young man of admittedly bad character. Suryanarayana Sastri was present at the execution of the sale deed and the District Munsif inferred that it must have been, returned to him. He found that the sale deed was a bogus transaction and dismissed the claim petition.

(3.) It is doubtful how far the reasons given in this order can be regarded as evidence in the present matter. I am not to be understood as referring to the contents of Ex. L as evidence. I am only narrating what happened in that inquiry. Venkatacharyulu had given evidence, and though by the time the present proceedings were started he was still living he did not care to give evidence in the present inquiry. He was respondent 1 in the Court below. In the appeal originally filed in the High Court he was respondent 2, but during its pendency he died. He was not available to give evidence when the case was sent back for fresh evidence. The fact remains that he was not examined in support of the sale deed. On 11 April 1917 Venkatacharyulu executed an agreement in favour of Suryanarayana Sastry agreeing to resell the whole property to him for Rs. 18,000(Ex. 7). On the same date a receipt was executed reciting the payment of Rs. 18,000 as the consideration (Ex. 8), but curiously, and it seems to me an extraordinary circumstance, no sale deed was actually executed in favour of Suryanarayana Sastry. After the Transfer of Property Act has been in force for 35 years, it is very rare to find sale-deeds without registration, especially when the amount involved was very large; and it is so unusual that I regard the circumstance as extraordinary. It suggests that the original sale deed itself was a benami transaction and that the parties themselves were of opinion that the title never really changed and no fresh sale deed was really therefore necessary. However mere suspicions will not amount to proof and one has to look into it more fully before coming to any decisive conclusion. At present, I only mention the suspicion that arises. Suryanarayana Sastry executed an agreement on 9 December 1917, in favour of his brother's wife Venkatalakshmamma, that is, the natural mother of his adoptive son. It recites that he purchased the property from Venkatacharyulu on 11 April 1917, and obtained possession, and the receipt of Rs. 18,000 and agrees to convey the land to her and directing that she herself should get a deed of sale executed in her favour by the said Venkatacharyulu and purports to deliver possession of the lands. Thus we see the property has come back to the mother of Kutumba Rao in a roundabout way through three transactions. Here again I pause to remark that a suspicion naturally arises that the transactions were really benami and constitute an attempt to screen the property from the creditors of Kutumba Rao and were intended really to benefit the family of Kutumba Rao and his mother, the title being ostensibly made to rest on the mother. Kutumba Rao was adjudicated insolvent by the District Court on 26 March 1917 on a petition dated 22 September, 1915. The date is very significant. On 7 October 1917 Suryanarayana Sastry executed a will, Ex. D. He says his brother's wife Venkatalakshmamma should protect him in future and there is nobody else to look after him. Soon after the dismissal of the claim petition of Venkatacharyulu by Ex. L, suits were filed in the name of Venkatacharyulu against the decree-holders. These are O.S. Nos. 129 and 130 of 1916 on the file of the District Munsif's Court of Bapatla. They were afterwards numbered as 725 and 726 on th file of the District Munsif's Court of Tenali to which Court they were transferred. I will later on show that these suits were conducted and the expenses connected with them were really incurred by Suryanarayana Sastry himself and not by Venkatacharyulu as one would expect if the sale deed was a real transaction. After Suryanarayana Sastry's death towards the end of 1917, Venkatalakshmamma sent her brother to demand a sale deed from Venkatacharyulu. This attempt resulted in a sale deed from Venkatacharyulu, in favour of Manda Venkayya, father-in-law of Venkatalakshmamma's brother, Ex. 3, dated 18 March 1920. Venkatalakshmamma naturally attacked the bona fides of this sale deed. One recital in the sale-deed is very significant: If in respect of the schedule-mentioned property covered by the sale, any others should institute any suit you should yourself bear the loss and profits and also bear the costs of the suit,