The High Court dismissed an execution appeal challenging the attachment of property. The court held that the lower court correctly found the transfer fraudulent under Section 53 of the Transfer of Property Act, allowing the decree holder to defeat the claim.
The appeal was dismissed with costs to the first respondent; the attachment order remains in force.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM [C.R.]
PRESENT:
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN
FRIDAY, THE 3RD DAY OF FEBRUARY 2017/14TH MAGHA, 1938
MA (EXE.).No. 10 of 2016 ()
(AGAINST THE ORDER IN EA 289/2016 IN EP 29/2013 IN O.P. 2492/2011 OF FAMILY COURT, THRISSUR DTED 02.11.2016)
APPELLANT(S)/CLAIM PETITIONERS:
1. SHERIKATH,
2. KHAIRUNEESA,
3. SHAHARBAN,
4. HASEENA,
5. KHADEEJA,
BY ADVS. SRI.VINAY RAMDAS
SMT.K.B.ANAMIKA SRI.VISHNUPRASAD NAIR
:2:
MA (EXE.).No. 10 of 2016
RESPONDENT(S)/DECREE HOLDER AND JUDGMENT DEBTOR:
1. SHAMSEENA, AGED 29 YEARS, D/O. HAMEED HAJI, RAYAM MARAKKAR VEETIL HOUSE, ROYAL APPARTMENT, KIZHAKENADA, GURUVAYOOR P.O, THRISSUR DISTRICT 680 101.
2. ILLYAS, AGED 44 YEARS, S/O. KUNJUMON, KUNNATH HOUSE, THIRUVATHRA DESOM, MANATHALA VILLAGE, THIRUVATHRA P.O, CHAVAKKAD TALUK, THRISSUR DISTRICT 680 516.
R1 BY ADV. SRI.RAJIT
THIS MAT APPEAL (EXECUTION) HAVING BEEN RESERVED ON 20.01.2017,
THE COURT ON 03-02-2017 DELIVERED THE FOLLOWING:
ss
A.M.SHAFFIQUE & [C.R.] K.RAMAKRISHNAN, JJ.
M.A.(Exe.) No.10 of 2016
Dated this the 3rd day of February, 2017
JUDGMENT
K. Ramakrishnan, J
Claimant in E.A.No.289/2016 in E.P.No.29/2013 in
O.P.No.2492/2011 on the file of the Family Court, Thrissur are the appellants herein. The first respondent herein is the wife of the 2nd respondent and appellants 1 to 4 are the siblings and 5th respondent is the mother of the 2nd respondent. The first respondent filed O.P.2492/2011 before the Family Court, Thrissur against the second respondent for return of gold ornaments or its value, claiming an amount of Rs.14,92,480/-. The original petition was filed on 19.12.2011 and it was posted to 14.06.2012 for return of notice.
When the first respondent came to know about the intention of the second respondent to assign his properties, she filed an application to advance hearing and also filed I.A.No.1757/2012 on 18.05.2012 for attachment before judgment and the petition schedule property was attached as per order dated 18.05.2012. The case was decided in favour of the first respondent and thereafter she filed E.P.No.29/2013 for realisation of the amount by sale of the property, share of the second respondent in the property. When sale notice was published, the appellants filed E.A.No.289/2016 for lifting the attachment under
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Order 21 Rule 58 of the Code of Civil Procedure. It is alleged in the claim petition that the property having a total extent of 11 cents with a building therein originally belong to late Kunjumon, who is the husband of 5th claim petitioner and father of petitioners 1 to 4 and the second respondent. He obtained the property as per partition deed No.1476/84 of S.R.O. Chavakkad. On the death of Kunjumon, the property devolved on the claim petitioners and the second respondent. The second respondent as per release deed No.850/2012 dated 11.09.2012 released his share in the property in favour of the claim petitioners for an amount of Rs.2,27,000/-. So they became the owners of the property. The second respondent has no attachable interest in the property as on the date of attachment as the property was sold prior to the attachment. He was having lot of financial commitments and creditors were after him. So in order to discharge those liabilities, he had sold his right in the property in favour of the claim petitioners and this fact was known to the first respondent and knowing that the second respondent has no right in the property, she got it attached with malafide intentions. The petitioners are bona fide purchasers for valid consideration and without notice of pendency of any proceedings. So they prayed for releasing the attachment.
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amount with fraudulent intention in collusion with the claim petitioners by the second respondent. So she prayed for dismissal of the application.
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Rs.2,27,000/- and as such the claimants are bona fide purchasers for consideration and without notice of the proceedings. Further he had also argued that Section 53 of the Transfer of Property Act, is not applicable and it can be claimed only by filing a separate suit in a representative capacity and that cannot be taken as a defence in a claim petition. He had relied on the decisions reported in Vannarakkal Kallalathil Sreedharan v. Chandramaath Balakrishnan and Another (1990(3) SCC 291), Rajan @ Rajan Gopinathan v. Dr.D.Jayasree Nayar (2010 (1) KLT 142) and Hamda Ammal v. Avadiappa Pathar (1991(1) SCC 715) in support of his case.
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document to show that the consideration mentioned in the document was really paid. Further the property is worth more than the amount shown in the document and that itself shows that it was created only for the purpose of defeating the right of the first respondent. So the court below was perfectly justified in dismissing the application, holding that it is a fraudulent transfer.
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respondent in the property scheduled to the claim petitioners and in the execution petition and interim conditional attachment was passed on the same day. The case of the claim petition was that, the property was purchased in good faith as a bona fide purchaser for valid consideration. They were not aware of the proceedings.
ground that it is a fraudulent transfer as per Section 53 of the Transfer of Property Act which reads as follows:
53. Distinction between a fictitious transaction and a transaction which is voidable. - It is necessary to emphasize the distinction between a fictitious transaction and a transaction which is voidable under Sec.53. A fictitious transaction is one which is not intended to be operative and it neither extinguishes an existing interest nor creates a new one. Quite apart from being ineffective as against a person prejudiced by it, it is ineffective even as between the parties thereto. Section 53 deals with those transactions which operate as transfers and take effect as such although they are voidable at the option of any creditor, who has been defeated or delayed thereby. The transferee in a transaction of this character acquires a real interest in the property to which the transaction relates. As between the parties to the transaction, however, there is a real and genuine transfer resulting in effective change of title”.
Sreedharan v. Chandramaath Balakrishnan and Another (1990
(3) SCC 291), wherein it has been held that, while considering the claim of the claimant, the antecedent contractual obligation entered into between the transferor and the transferee regarding the sale of
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the property has to be taken into consideration and that will prevail over the attachment. In the decision reported in Hamda Ammal v. Avadiappa Pathar (1991(1) SCC 715), wherein it has been held that, though the document was executed prior to the attachment and registered after the attachment, it will take effect from the date of execution of the document and that will prevail over the attachment before the judgment made by the court. The dictum laid down in the decision reported in Rajan @ Rajan Gopinathan v. Dr.D.Jayasree Nayar (2010 (1) KLT 142) is not applicable to the facts of this case. That was case where this court has held that while considering the claim petition filed under order 38 Rule 8 of the Code of Civil Procedure, what is to be considered is only whether there was an attempt to sell the property and if the property has already been sold before the attachment, then court need not go further in that enquiry and the validity of the transfer and whether it was hit by Section 53 of the Transfer of Property Act etc., are matters to be considered during execution of the decree and not at the pre-execution stage. Even in that case, it was held that, the question as to whether Section 53 of the Transfer of Property Act will apply in a case where the property was sold prior to the attachment before judgment is left open to be
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decided in the enquiry during execution stage. So the submission made by the counsel for the appellant that execution court cannot go into the question of validity of the transfer under Section 53 of the Act cannot be sustained as the decision relied on by the counsel for the appellant itself is against the said proposition.
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is not barred, but after the amendment to the Code of Civil Procedure in 1976, such a provision has been taken away and all enquiry relating to title interest and posession of the property has to be gone into by the execution court in an enquiry under Order 21 Rule 58 of the Code of Civil Procedure and that will be deemed to be a decree and an appealable order.
11. Further in the decision reported in Ithakku Abraham v.
Kesavan Damodaran (1987 (1) KLT 704), it has been held that:
“A plea based on Section 53 of Transfer of Property Act can be raised by way of defence and if raised as a defence, there is no need to defend the suit in a representative capacity on behalf of all the creditors of the judgment debtor. Rule 58 has amended by the Code of Civil Procedure amendment Act 104 of 1976 expressely provides that all questions including questions relating to right, title and interest in the property attached arising between the parties to a proceeding or the representativies under Rule and the relevant to the adjudication of the claim/ objection shall be determined by the court dealing with the claim or objection and not by a separate suit. An order made under Sub Rule III shall have the same force and be subject to same conditions as to appeal or otherwise as it were a decree. Since the claim is to be adjudicated on all questions relating to right, title and interest of the property attached, the claimant is in the possession of plaintiff and the decree holder who opposes the claim is in the possession of a defendant in a suit where the question relating to right, title or interest of the property attached is to be determined. The decree holdler is therefore entitled to defend the claim on the grounds available to him under Section 53 of the Transfer of Property Act and such a defence need not be in a representative capacity on behalf of all the creditors of the judgment debtor.”
decision reported in Abdul Jalal v. Maria Financiers (2002 (2) KLT
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“The agreement to sale entered into between the parties prior to the attachment or sale of the property prior to the attachment before judgment cannot be ignored, but remandned the case for the purpose of considering the question as to whether that was hit by section 53 of the Transfer of Property Act.
So it is clear from the above dictum that, the submission made by the counsel for the appellant that the decree holder is not entitled to raise a defence under Section 53 of the Transfer of Property Act without filing a suit in a representative capacity is unsustainable and the same is liable to be rejected.”
v. Maung Ba Kyin and Another (AIR 1927 PC 237) held that, they being the ostensible owners of the property under a duly registered deed and a deed of transfer, obviously the party claiming to attach that property for somebody else's debt, not their debt, but the debt of the original debtor must show that the sale was a fraudelent One, and that could only be done in this case (there is no other evidence) by showing utter inadequacy of consideration. It was also held that, no doubt the evidence is in a very ragged condition as to precisely where
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and when that money was paid and, if it was necessary to show it was paid in hard cash, probably such proof would fail.
Sheokumar Singh and Another (169 Indian Cases 954) , it has been held that:
“The plaintiff was objection in the objection proceedings. In order to succeed, he had established certain things. He had to prove that the house has to be sold to him prior to the attachment, the moment he did that, the burden shifts to the other side to show that the transaction would be avoided in some way, in this case under Section 53 of the Transfer of Property Act, that is to show that the transfer had been made with the intend to defeat and delayed the creditors of the transferor. If this was done, then the burden shifted back again to the objector to show that he was a transferee in good faith and for consideration. When the objector looses in such proceedings, then the defendant in the regular suit which follows is relieved of the onus of showing that the transfer was made with intend to defeat and delay the creditors that is all. The burden still on the plaintiff to establish his transfer, but he succeeds, then instead of being able to rest and he has to go on and do something more. He has two course open and he can adopt one or the other or both as he pleases. He can challenge the presumption which is now made in favour of the defendant about the transfer having been made with indent to defeat or delay the creditors. That is the advantage which the defendant had obtained and it is for the plaintiff to displace if he want to do so. The burden is now on him as regards this indeed of being on the creditor as before. If he succeeds, there is no need to go further, he is entitled to get the decree. But he fails or if he does not want to challenge this position, he still has another course, which he can adopt. He can go on and proof as before that notwithstanding this intention in the mind of the transferor, he purchase for consideration and in good faith. The burden is on him, but he can discharge in exactly the same way as he could have done before no more no less. The intervening objection proceedings do not alter either the standard or the usual method of proof.”
So it is clear from the above decisions that, once it is proved or an
inference can be drawn that it is a fraudulent transfer under Section 53
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of the Act, then the burden is heavy on the objector to prove that he is a bona fide purchaser for valid consideration in good faith. This has to be established by the objector/claimant and if they fail to discharge the same, then they will loose their claim. With this principle in mind the case in hand has to be considered.
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show that she had no direct knowledge about the transaction. According to her, everything was done by the second claim petitioner who is her sister, but she did not go to the witness box. Further she had admitted in her evidence that there is a house in the property which itself will worth more than Rs.15,00,000/- and she was not aware of the value of the property. Though she had a case that Rs.2,27,000/- was paid as consideration for the transaction, she did not know who had paid it. According to her, the amount was withdrawn from her husband’s account and it was paid, but neither her husband was examined nor the document showing withdrawal of the amount, just prior to execution of the document were produced. So these things will go to show that PW1 had no knowledge about the property or its value and she is not a competent witness to prove the transaction or to come to the conclusion that the claimants are bona fide purchasers for good consideration in good faith without knowledge of the proceedings.
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a fraudulent transfer, but such an attempt was not made by the claimants. When a document has been created in favour of the relatives, there is a presumption that it was done with fraudulent intent to defeat the right of the creditor or at least the right of the wife who filed the petition for realisation of gold ornaments. Then the burden will be more on the claimants to prove that they are bona fide purchasers for valuable consideration and adequate consideration has been paid, but such an evidence is lacking in this case.
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judgment debtor to avoid the property being proceeded against for the decree to be passed in favour of the first respondent in the case and rightly held that it was hit by Section 53 of the Transfer of Property Act and the court below was perfectly justified in dismissing the claim petition holding that the sale is void as hit by Section 53 of the Transfer of Property Act and the finding does not call for any interference.
So the appeal fails and the same is hereby dismissed. Considering the circumstances, we do not find any reason to disallow cost to the first respondent. So the appeal is dismissed with cost to the first respondent.
Registry is directed to communicate the judgment to the court below at the earliest.
Sd/-
(A.M. Shaffique, Judge)
Sd/- (K. Ramakrishnan, Judge)
//True Copy//
P.A. to Judge
ss
3 issues framed by the court
Whether an execution court can adjudicate the validity of a transfer under Section 53 of the Transfer of Property Act pursuant to an objection under Order 21 Rule 58 CPC.
Whether the claimants established that they were bona fide purchasers for valid consideration without notice of the pending proceedings to overcome the presumption of fraudulent transfer.
Whether the transfer of property by the judgment debtor was effected to defeat the rights of the decree holder and thus voidable under Section 53 of the Transfer of Property Act.
Colour shows how this judgement treated each authority
Vannarakkal Kallalathil Sreedharan v. Chandramaath Balakrishnan and AnotherRelied on¶76
(1990(3) SCC 291) · Who else cites this
Rajan @ Rajan Gopinathan v. Dr.D.Jayasree NayarDistinguished¶79
(2010 (1) KLT 142)
Hamda Ammal v. Avadiappa PatharRelied on¶78
(1991(1) SCC 715) · Who else cites this
Sumathi v. Kunjupennu BhargavExplained¶87
(AIR 1974 Kerala 214) · Who else cites this
Ithakku Abraham v. Kesavan DamodaranRelied on¶87
(1987 (1) KLT 704)
Abdul Jalal v. Maria FinanciersReferred¶90
(2002 (2) KLT 107)
V.E.A.R.M. firm and Another v. Maung Ba Kyin and AnotherExplained¶98
(AIR 1927 PC 237) · Who else cites this
Gopal Sing v. Sheokumar Singh and AnotherExplained¶103
(169 Indian Cases 954)
Sathiyamma v. Gayathri and OthersDistinguished¶118
(2013(3) KHC 322)
2 provisions across 2 enactments
Sherikath
Khairuneesa
Shaharban
Haseena
Khadeeja
Shamseena
A.M. Shaffique
K. Ramakrishnan
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
