Kunju Reethian Eetharu Mohammed Eetharu v. The Bank of Deccan Ltd.

The appellant is additionel defendant 12, who was pleaded in -execut:ion after the death of defendant 3 as the latter's leal representative. The order appealed against is one disaissing a claim made by aa&ition.al de f'enoa.:at 12 to a property which tras ?ttached in execution as belonr,ing t,o ci.efenc}ar.t 3. ccordin to the appellant, he -purchased this property in execution of decree he himself has obtained on a hyothecation bond excited by his deceased fether, defei1.dant 3 ar t,ha prop3rt;; baloned . .•.. ...._, ,• to him at the time of te attachmeot i : t"1s c3s ad was not b lib?e o b attached n d o in execution o h V decree_±ntHisesse. The decree-holder is ;:l Joiat Stock Bank, known as Tha Bank of Deccan Ltd. The Bark .,pposed the claim contending tht the decree a court sale re lied upon by the appeliant were sham transactions brought into existence for the nurpose of shielding the property from the creditors of ciefendr:..nt 3 e.nd that notwithstanding the said decrea and court sale the property belonged to defendant 3 and was lial to be attached and sold in exe- cut ion of the decree in this .c:Jse. This cont t1on was upheld by the execution court and the: claim pet:i.t,i.on dis- missed. Additional de'en@ant 12 ks therefore filed this appeal.

2. The hypotheca.tion bond or,. w:h{ch adcU.tions.l defen- dant 12 has obtained the decree relied upon by hira is me. "\'I r , • • E. # 1 11 -2- executed by his father, deennt 3, tr-, one Subramonia Iyer 1 1105. In p::.:rtic1.l disch.~r[to of tki.t hypothecation bond one of the properties comprised ir x. VI waa sold by de- fn&r t 3 to Subramonia Iyer on 28,1,.1110. Ex. IX is the sale deed Pxec~,1.t8d by defen:ient 3 in favour of St1.bramonia 'Iver. ., C)n th€ smne d::ite two other documents_. viz. Exs. VII a:nd· VTII, ·were al en executed by Subramoni-? Iyer and addi- ti0a3 defen'gnt 12. Ey x. VIl a propery standing in the a of additional defenda.t 12 At :r.''.und.J.kayorn was sold t~, ."ubrr:m0nie Iyer for the ba.11.nce due to him unr:e:r ?x. VI aftn.. the execl..-·tion cf ~~x. IX, ar:d by :Y., VIII ~ubr.emonia ·• 12 ths right he had for the bal;mce amount d1J.e under i<:x. VII 8fter the execu- ti02 0f ·x. IX. Additional defend=t 12 claims that under these to documents, he obtained tbs righ to the balance amount subsisting und~r Fx. VI after t.hl':' execut:1.on of Ex. IX in exchange f'or his property rt Mundakayom. AccoT'.ding to hia. for the balance amount thus due ta hir under • VI . . he h,,;s obtai11e,t the decree in t":.~l. :cin. . 13 of 1122 of the Kottayr i.strict Conrt and purchased the property now attachoi by t decree-holder in this suit and the attached p o p y h o be]oms o h m eont,c:1tiou is hat the property at iiurlakyom really be longr,d t.o defanda:rit 3, and not to ~dd:i.ttorial defc:ndrint 12, and by the cx8cution of bxs. iX and VII the ·whole liability under .:.~x. VI was discharged. The d.ecree-t1older cn!".tends th8t after so discharging Ex. VI a sham assignment of it was taken by def enc.ant 3 auci adaitiona.J. defendant 12 in the name of e.dcdt ionul defennant 12 wit-h a vi'ew to defaaud the creditors o.t' defendant, 3 and shiela the l,9t,ter's property and tht the decree and execution proceedings in o.s. No. 13 r • I I Il I r . -3 ' • of 1122 were then brought int.o exi.stence for carrytng out this object. [ __ £!Q • himself i apes the ae as only nineteen yass old when the propery a ±undakayo a parc;used. He c1?ims that I the sai.d property was p-urchf!SOO ·with his wife's ctowry and the profits of a bu.sinesr:; which he WJS runnlng nt Aroor in SherthalJ...-1.i. 'l'aluk to which place his wife beJ.ongs. There- is, however no documeat or other reliable evidence to show that, ad<litiona} defen..\ant 12 h:1d received a dowry of TI.s. 1000/ or tha he was run:in a business ever wen h wa:s za mere boy. It is also difficult to believe the stor tht addi tio11al dei'e:nd:J-ct"t 12 sold a valuable property :?.t IJ:undak8yom merely for -taking in exchange a hypothecation bond executed hy h.is f:-,ther. Although the sgrment, ?a. VIII, was taken on 28.1.1110 the father's liab1?3t under th hypo thecr,_tion bond W-d.8 not sought to be enforced nntiJ. the lat- ter had filed a petit1.on under t,he Debt P.eJ ief Act. :tn 111& et'endnt 3 1led a petition under the D,:.bt ·calief ·-~ct and obtained a stay of the decrees wi.li c1 t w(~x-c then being executed against him, i:ciuding the decre ia the present It wcis whil:c! the stay order uas in force that addi- C-9.se. tional defendant 12 instituted o.s. No. 13 of 1122. The 1 de cree isolf was passed as€ result of compromise, -?.nd the exGcuti on sale an.d delivery soon followed without. any opposit:i.on from the defendants in t,he suit. The :Managing Director of the decree~holder BRnk has deposed as P.W.1 that. defendant 3 was heavily indebted et the time of r:xs. VII, .i.l'-- VIIl end Htt The debt reli€f pE-tit:i.or: filGd by defendant .3 in 1118 also shows th?,t he was hen.vily indebted not obly at the time of xs. VII, VIII and TX but both bef'0re and after that. In the circumstances, we hve absolutely no • doubt of the fact that F:x. VIII ie a shctm f':ssignment deed ta.ken in the name of .::idditional def~ndA.nt 12 aft;anEx. IX was disch1rged by the ·execution of' f"xs. VII and IX. and that it was taken with the object of defeating the creditors of def end,-int 3 anri shielding his properties from them. · We hold that the decree, court snle r d delivery relied upon by additional defer'ant 12 re also sham transactions and tht rot;withsto.di the sid decree. court sale and deli longed to f en3r t; 3 t tho tine of th tt3ch% and was 21able to be attached a sold in execution of he g; 3T' The claim petition of additional defendant 12 was disnissed on a former occ:;ision also by the lower court, a«of and tho order p;:; ssed on that occasion 'by the lower.-(was set aside in 4ppeaJ by this Court and the petition re- ma:nded for fresh enquiry 9.:td disposal. 'fhe appellant's counsel contended that as all the grounds now relied upon by th lower court fo dismissing th claina petition were relied upor! by the .lm·re:c court on the farmer occasion also_, the. lower court was wrong in dismissin the pet:i.ti on again on the same rounds. It is seen from the remand order th'..1.t the remand was Or'sr& on that occ1on in order to afford an epportunity to the parties to explain the facts .'\.ft er the remand both additional defellci.ant 12 and the, I-1.Jmaging Director of the decr3e-holder Bank were Examined. Tte evidence of the claimant has served only to expose the hollowness of his contentior th:t was with hi s own fun?s that the property at Nun&aksyom was purchased. LVBn from his evidsnce it is ca, _, (, -5- clear that Bx. VIII could not he been p genuine trans- action. According to hi'.'l, h:-: 2old thr,i 1v:u.ndakriyom pro - perty in ezch."'1ngc f'or the 'hypothr,c ·clon ri.fht ,:igai~st his on :;_CC•Turlt of rheuma.tj_sm. w1nd1:nz-· up his lnsiness was likoly to 1':iavc sold :3r! yield- 23rd M~rch 1955. Cta.s fed.r----------·· ., ..