KOSURU ADEMMA Vs. CHEVURU SUBBAMMA

JUDGEMENT

(1.) A decree was obtained by one P. Rama Naidu against Ramanappa Setti and his minor sons in the Court of the District Munsiff of Kavali, in O.S. No. 91 of 1932. Rama Naidu assigned this decree in 1935 to one Kotappa Naidu who assigned it in his turn to the plaintiff on the 11th July, 1935. The assignment was recognised by the Court on the 26th. August, 1935. But before this a decree was obtained by the 4th. defendant against Kotappa Naidu in O.S. No. 815 of 1932. Ramanappa Setti was adjudged insolvent on his own petition in I.P. No. 1 of 1934. A private composition was arrived at during the course of these proceedings between the insolvent and his creditors under which defendants 1, 2 and 3 were appointed trustees. They were to take possession of a portion of the insolvent's property and to sell the same with the object of distributing the sale proceeds amongst the creditors. They appear to have done so and had some money in their hands when the plaintiff proceeded to execute her decree assigned in her favour on the 26 August, 1935 and to attach the money in the hands of defendants 1 to 3. But before she could realise any money from them the 4 defendant attached the amount (Its. 140-6-11) on the 8 February, 1939, alleged to be due to her judgment-debtor Kotappa Naidu by Ramanappa Setti which was in the hands of the trustees and realised it from them in execution of her decree. The plaintiff thereupon brought the suit out of which the present revision arises for the recovery of the sum realised by the 4th defendant from the trustees of Ramanappa Setti insolvent (defendants 1 to 3) on the ground that the decree had been assigned to her by Kotappa .Naidu and that the 4 defendant could not therefore recover any money from the trustees, she (the plaintiff) alone being entitled to recover the same from them in execution of the decree assigned to her.

(2.) It was contended on behalf of the 4 defendant that the assignment by Kotappa Naidu was made fictitiously and with the object of defrauding her and that she was entitled to recover the money due to Kotappa Naidu by the trustees in spite of the assignment in favour of the plaintiff. The District Munsiff held that the assignment by Kotappa in favour of the present plaintiff was without consideration and fictitious and made with the object of defrauding the 4 defendant. But in view of the assignment of the decree made in favour of the plaintiff she alone was found entitled to realise the amount of the decree from the trustees and a decree was passed in her favour. The 4 defendant felt aggrieved by the decree and has come up to this Court in revision.

(3.) In support of his decision the learned District Munsiff relied on the decisions in Gurdial Singh V. Gurbahhsh Singh (1926) I.L.R. 8 Lah. 35 : A.I.R. 1927 Lab. 110. and on Palaniappa Chettiar V/s. Subramania Chettiar (1924) 48 M.L.J. 419 : I.L.R. 48 Mad. 553. These cases can- not help the plaintiff. The District Munsiff failed to appreciate that the decision in these cases was arrived at between the assignors and the assignees of the decrees and had nothing whatever to do with a third party who was attacking the action of the assignor on the ground that the assignment was fictitious and fraudulent. If an assignment of a decree is made by a decree-holder to defraud his own creditors it may not be open to him to object to the assignment during his lifetime (for which see Bada Kristam Naidu V/s. Durvada Patrudu .); but it is entirely incorrect to say that his creditors have no right to attach the decree and to allege that the assignment was fictitious and was not binding on them. There is no principle or rule of law which debars the assignor's creditors from attacking the assignment. Fraud vitiates the most solemn documents and even proceedings of Court and I cannot see how the 4th defendant could be held to be debarred from attacking the validity of the assignment of the decree and from showing that her debtor was still in fact the owner of the decree obtained by him against Ramanappa Setti. Section 47, Civil Procedure Code, lays down that Where a question arises as to whether any person is or is not the representative of a party, such question shall for the purposes of this section, be determined by the Court. The term "representative" in this section is not confined to legal representatives but would also include the representatives in interest who may have obtained or who may allege to have obtained the decree-holder's interest by transfer or assignment. If that assignment is challenged and it is contended by a creditor that the assignee is not the representative of the decree-holder and that so far as he (the decree-holder) is concerned the decree cannot be taken to have been assigned and the interest in the decree still continues to vest in the assignor the question would apparently have to be gone into by the executing Court. And if the Court finds that the assignment was fraudulent it would refuse to recognise the assignment of the decree at least so far as the objecting creditor is concerned.