Allowed

K.M.Thomas v. Sree Gokulam Chits and Finance Co. Ltd.

Kerala HC5 Nov 2020Ex.FA/21/2017

Case brief

AI extract

What is this about?

In an execution first appeal, the Kerala High Court set aside the attachment and proposed sale of land acquired by the appellant before institution of the suit, holding the decree-holder failed to prove existence of an equitable mortgage or fraud.

What did the court decide?

Attachment of 15 cents purchased by appellant is set aside; property not liable to sale in execution of decree; costs awarded to appellant.

K.M.Thomas Vs Sree Gokulam Chits and Finance Co. Ltd. — Execution and Attachment | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE T.V.ANILKUMAR

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THURSDAY, THE 05TH DAY OF NOVEMBER 2020 / 14TH KARTHIKA, 1942

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Ex.FA.No.21 OF 2017

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AGAINST THE ORDER DATED 09-02-2017 IN I.A.NO.1036/2014 IN O.S.NO.24/2009 OF SUB COURT,KATTAPPANA

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PETITIONER/CLAIMANT:

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K.M.THOMAS,

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AGED 60 YEARS, S/O. MATHEW, KURAVATHAZHATHU HOUSE, MANAGING PARTNER, HIGHGRADE MOTOR FINANCE, KATTAPPANA,IDUKKI DISTRICT.

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BY ADV. SRI.A.C.DEVASIA

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RESPONDENTS/ COUNTER PETITIONER/PLAINTIFF & DEFENDANTS:

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1 SREE GOKULAM CHITS AND FINANCE CO LTD., KATTAPPANA BRANCH, KATTAPPANA P.O, IDUKKI DISTRICT 685 508 (PLAINTIFF IN O.S NO 24/2009)

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2 MATHACHAN, PULIKATHUNDIYIL HOUSE,NEDUMKANDAM P.O, KALKOONTHAL VILLAGE,PIN 685 553,IDUKKI DISTRICT(D1 IN O.S NO 24/2009)

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3 JOSHY, AGED 48 YEARS, S/O. AUGUSTINE,ATTIPETTIL HOUSE, NEDUMKANDAM P.O,KALKOONTHAL VILLAGE, PIN 685553, IDUKKI DISTRICT (D2 IN O.S NO.24/2009)

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R1 BY ADV. SRI.MAHESH V RAMAKRISHNAN

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THIS EXECUTION FIRST APPEAL HAVING BEEN FINALLY HEARD ON 03-11-2020, THE COURT ON 05-11-2020 DELIVERED THE FOLLOWING:

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Ex.F.A.No.21/2017

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-:2:-

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Dated this the 5^th November,2020

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J U D G M E N T

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This appeal is filed by the claimant in I.A.No.1036/2014 in O.S. No.24/2009 before the Sub Court, Kattappana, being aggrieved by the order dated 09.02.2017 dismissing the claim petition filed under Order XXXVIII Rule 8 of the Code of Civil Procedure,1908.

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Fifteen cents purchased by appellant under Ext.A1 sale deed dated 05.11.2008 were attached before judgment in the suit and brought to sale in execution of a compromise decree dated 10.06.2010 obtained by the first respondent/decree holder, which is a kuri company.

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The appellant challenged the attachment and proposed sale in the claim petition contending that the decree holder did not acquire any attachable or saleable interests in the property, which was purchased by him before the very institution of the suit itself.

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The court below dismissed the petition accepting the contention of the decree holder that the kuri company had acquired equitable mortgage

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Ex.F.A.No.21/2017

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-:3:-

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by deposit of original title deed over entire 50 cents as early as on 30.09.2006 created by the appellant's vendor, who was the second defendant in the suit. The decree holder had also raised a contention that execution of Ext.A1 sale deed was with a view to defrauding the interest of the kuri company and therefore itself, the sale deed was void.

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On the side of the appellant, he was examined before the court below as PW1 and Exts.A1 to A4 tendered were received in evidence. On the side of the first respondent/decree holder, no evidence was adduced.

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I heard the learned counsel for the appellant as well as the learned counsel for the first respondent/decree holder.

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The appellant's contention is that he is the absolute owner of 15 cents of land purchased by him and the decree holder did not acquire any interests whatsoever either by mortgage or otherwise and the finding of the court below that appellant's assignor created mortgage in favour of the decree holder is absolutely contrary to real facts.

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Ex.F.A.No.21/2017

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-:4:-

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At the request made by the learned counsel for the appellant, the lower court records were called for and perused by me. As rightly pointed out by the learned counsel for the appellant, there is nothing at all on record to show that appellant's vendor had ever created mortgage in favour of the decree holder. The contention that the mortgage was created as on 30.09.2006, was not proved by any evidence on record. No evidence in this respect was tendered by the decree holder before the court below. The trial records do not disclose that either the original title deed in respect of the property or memorandum creating equitable mortgage was produced. The learned counsel for the first respondent, however, made a request for remand of the case to the court below granting an opportunity to prove its contention.

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It is seen from the trial records that the suit was instituted by the first respondent for recovery of arrears of kuri amount from the principal debtor for which the appellant's assignor had already issued a cheque as guarantor. The sole role played by the executant of Ext.A1

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Ex.F.A.No.21/2017

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-:5:-

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sale deed was that he guaranteed repayment of debt on the strength of a cheque issued in the name of the decree holder, kuri company. No allegation is seen made in the plaint that the guarantor had ever, in addition to issue of cheque, created any mortgage in respect of any part of the property owned by him. It is for the first time, contention is raised by the decree holder that equitable mortgage was created in respect of the property on 30.09.2006. For these reasons, I am satisfied that the decree holder failed to prove that it has got attachable or saleable interest in respect of the property purchased by the claimant and even if request for remand is acceded to also, it will not improve the case of the first respondent.

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O.S.No.24/2009 was filed on 06.02.2009 and attachment before judgment was issued also on the same date, whereas Ext.A1 sale deed was executed as early as on 05.11.2008 much before the institution of the suit. That means on the date of attachment of the property, it was not subject to any encumbrance and the decree holder did not have any attachable interests. There is absolutely no justification for the court below to have taken

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Ex.F.A.No.21/2017

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-:6:-

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the view that decree holder had saleable interest in respect of the land and the property was liable to be sold.

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Equally unsound is the contention of the decree holder that Ext.A1 sale deed was executed for defeating its interests. No evidence was adduced in this respect. Ext.A1 was evidently executed for consideration and unless it is established that the creation of document was with a view to defrauding the creditor, the document cannot be assailed as void or voidable. Further there is nothing at all to show that at the time of taking Ext.A1 in the name of the appellant, he was aware of any sort of liabilities of his vendor with the kuri company. For the mere reason that appellant's assignor consented to a charged compromise decree over the property will not affect the appellant's right since document taken in his name was much prior to the passing of compromise decree. Appellant's vendor had no subsisting right at all in the property to consent for a charged decree after his having parted with rights over the land.

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I am satisfied that the court below erred

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Ex.F.A.No.21/2017

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in holding that the first respondent acquired mortgage right over the property purchased by the appellant and it was liable to be attached and sold. The impugned order is, therefore, liable to be set aside.

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In the result, appeal succeeds and I.A.No.1036/2014 in O.S.No.24/2009 is allowed. The attachment over 15 cents purchased by the appellant as per Ext.A1 sale deed is set aside. It is hereby held that the aforesaid property is not liable to be sold at all in execution of decree in O.S.No.24/2009. Appellant will get costs of the proceedings also.

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All pending interlocutory applications will stand closed.

Sd/-

T.V.ANILKUMAR,JUDGE

DST

//True copy/

P.A.To Judge

K.M.Thomas v. Sree Gokulam Chits and Finance Co. Ltd.

Case brief

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K.M.Thomas v. Sree Gokulam Chits and Finance Co. Ltd.

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