P N KESAVAN Vs. LEKSHMY AMMA MADHAVI AMMA
LAWS(KER)-1967-1-14
HIGH COURT OF KERALA
Decided on January 31,1967

P.N.KESAVAN Appellant
VERSUS
LEKSHMY AMMA MADHAVI AMMA Respondents

JUDGEMENT

- (1.) The Officer Receiver, Kottayam, who was the ninth defendant in the suit, is the appellant; and the contesting respondents are the legal representatives of the second defendant, the wife of the first defendant who was adjudicated insolvent. A suit was brought by the fourth respondent on a dishonoured cheque issued by the first defendant on 17th July 1944. The suit was decreed; and in execution of the decree the suit property, which stood in the name of the second defendant, was sought to be proceeded against, when she laid claim to the property, which was allowed. The fourth respondent then brought the present suit for setting aside the claim order; and since the first defendant was adjudicated insolvent pending suit, the Official Receiver was impleaded as the ninth defendant. In the Trial Court the second defendant contested the suit claiming that the property was purchased by her with her own funds and therefore, the same should not be proceeded against to realise the debts of the insolvent. The fourth respondent contended, on the other hand that the purchase of the property in the name of the second defendant under Ex. D-3 was benami for the first defendant. The Trial Court agreed with the fourth respondent and decreed the suit. On appeal the District Judge reversed the said decision and held that the purchase was with the funds of the second defendant; and that even if it was with the funds of the first defendant, it was not established that the purchase was intended to benefit him. It is this decision that is being challenged in second appeal by the Official Receiver.
(2.) The counsel of the contesting respondents has taken a preliminary objection to the maintainability of the second appeal. The first argument is that the Official Receiver being a defendant in the suit cannot file the second appeal against the decision in favour of another defendant. In other words, the argument is that one defendant cannot file an appeal if the suit was dismissed in favour of another defendant. This question has to be viewed from two angles. The first is that if the defendant who files the appeal is in a representative position in the sense that the plaintiff and the defendant have the same interest and if the suit is dismissed, can that defendant maintain the appeal The second aspect is that in a case where two defendants have a dispute inter se and that dispute has also been decided by the decree, can the defendant affected by the decree file an appeal even if the suit has been dismissed The law on the subject is clear; and that is that if the decision will be res judicata against the said defendant in a subsequent suit filed by him, he can file an appeal. In the first case, since the plaintiff and the defendant who seeks to file the appeal have the same interest, the dismissal of the suit is as much against the plaintiff as it is against him. In such a case the dismissal of the suit will be res judicata against him; and he can file an appeal. In the present case the fourth respondent (the plaintiff) was one of the creditors of the first defendant; and he sought to establish that Ex. D-3 was benami for his debtor. Pending suit the debtor was declared insolvent; and the Official Receiver was brought on record. The Official Receiver represents the insolvent in the sense that the insolvent's estate vests in him, but, he also represents the entire body of creditors of the insolvent including the fourth respondent. Therefore, the dismissal of the fourth respondent's suit is not only against him, but also against the entire body of creditors represented by the Official Receiver. It follows that in a subsequent suit by the Official Receiver the dismissal of the suit against the fourth respondent will be res judicata; and therefore, the Official Receiver's appeal is competent. We may also point out that the second aspect (a dispute inter se between two defendants) does not exist in this case
(3.) Another argument is also advanced by the counsel of the contesting respondents on the preliminary objection. Before the lower appellate court there were two appeals, one by the fourth defendant and the other by the second defendant; and there were also two decrees, though the litigation started in one suit. The Official Receiver has filed only one second appeal against the decision in the appeal by the second defendant. The objection is that the Official Receiver cannot impugn both the decrees in one second appeal. In this contention also the counsel is not on firm ground, because the law is that if two appeals have been filed by two parties in a litigation arising out of one suit, one second appeal alone need be filed against both the decisions. We shall remain content by citing the latest decision of the Supreme Court on the question: vide Sheodan Singh v. Darya Kunwar ( AIR 1966 SC 1332 ). The preliminary objection raised by the counsel of the contesting respondents is overruled.;


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