Decided on September 12,1944

Muthyala Ramachandrappa And Ors. Respondents


Leach, .J. - (1.) APPEAL No. 237 of 1943 is against a decree passed by the District Judge of: Bellary dismissing a suit filed under the provisions of Order 21, Rule 63, Civil P.C. C.M.A. Nos. 341 and 844 of 1943 are against an order for costs passed by the District Judge under the provisions of Section 35A, Civil P.C. In O.S. No. 22 of 1929 of the same Court defendant 1 sued for partition of the estate of the joint family of which he was a member. Defendant 1 in that suit was his brother. He is the father of defendant 2 in the present suit. A decree for partition was passed and it was made the subject of an appeal to this Court (App. No. 189 of 1937). The appeal was decided on 6th August 1938 and this Court directed that the father of defendant 2 should pay personally to defendant 1 a sum of Rs. 52,000 and that defendant 2 and his brother should also be liable for the sum with defendant 1, but that they liability should be restricted to their shares in the family estate. The case was remanded to the District Court to pass a final decree in accordance with the judgment of this Court. The final decree was passed on 14th September 1939. In O.S. No. 9 of 1938 of the Court of the Subordinate Judge of Bellary, defendant 2 obtained a money decree for some Rs. 10,000 against defendant 3. This decree was confirmed by this Court in appeal (App. NO. 206 of 1939) on 14th June 1939. On 14th October 1939, defendant 2 transferred this decree to the plaintiff. In E.P. No. 87 of 1939 of the District Court of Bellary, defendant 1 applied for execution of the decree which he had obtained in O.S. No. 22 of 1929 by the attachment of the decree which defendant 2 had obtained against defendant 3 in O.S. No. 9 of 1938. The plaintiff as the transferee of that decree objected. He had previously applied for an order recognizing him as the holder of the decree. That application and his objections to defendant 1's prayer for execution were heard together. The District Judge dismissed the plaintiff's application to be brought on the record and also his petition in the execution proceedings by an order dated 12th December 1940. A.A.O. No. 356 of 1941 was filed by the plaintiff against the order of the District Judge refusing to recognise him as the transferee of the decree in O.S. No. 9 of 1938 and C.R.P. No. 1029 of 1941 for revision of the order overruling his objection to the execution petition filed in O.S. No. 22 of 1929. This Court allowed A.A.O. No. 356 of 1941, but rejected the civil revision petition. By that time the plaintiff had filed the present suit.
(2.) THE learned District Judge dismissed the plaintiff's suit because he was of the opinion that the transfer by defendant 2 of his decree in O.S. No. 9 of 1938 to the plaintiff was a dishonest arrangement in order to defeat the claim of defendant 1. He considered that the plaintiff's suit was false and vexatious and that it had been filed at the instance of defendant 2. In these circumstances he directed the plaintiff and defendant 2 to pay to defendant 1 jointly a sum of Rs. 1000 as compensatory costs Under Section 35A, Civil P.C. Appeal No. 237 of 1943 and C.M.A. No. 341 of 1943 have been filed by the plaintiff, the former against the decree dismissing his suit and the latter against the order for costs passed Under Section 35A. C.M.A. No. 344 of 1943 has been filed by defendant 2 against this order for costs. We consider that the evidence justifies the conclusion of the District Judge that the transfer to the plaintiff of the decree in O.S. No. 9 of 1938 was made for the purpose of defeating the decree obtained by defendant 1 in O.S. No. 22 of 1929. The plaintiff be a close friend of defendant 2. The transfer to him of the decree was made a month after defendant 1 had obtained the final decree in O.S. No. 22 of 1929. Although defendant 2 had obtained a decree for a sum of Rs. 10,000 against defendant 3 the consideration for the transfer is said to be Rs. 5000, made up for the most part of moneys alleged to be due by defendant 2 to the plaintiff under promissory notes. Only Rs. 120 was paid by the plaintiff to defendant 2 in cash. In the course of his evidence the plaintiff explained that the consideration for the transfer was limited to Rs. 5OOO as there had been a dispute between defendant 2 and his uncle Ramachandrappa. Why this should diminish the value of the decree is not explained. The plaintiff is not a man of wealth. He says he owns two houses worth Rs. 4000 and that he has lent Rs. 2000 or Rs. 3000 to others, but there is only his word for this, and he did not impress the District Judge as being a man of substance. There is a further and more important factor in the case. On 1st March 1939, defendant 1, as the decree -holder in O.S. No. 22 of 1929 applied to the District Court for a temporary injunction restraining the defendants in the suit from receiving or realizing amounts due to them from debtors under decrees or other proceedings in Court or on documents or otherwise till the complete satisfaction of his decree. Defendants 1 and 3 gave an undertaking that they would not collect debts belonging to them or to the family in the meantime. Defendant 2 was willing to give an undertaking that he would not collect debts belonging to the family but he refused to give an undertaking with regard to his own affairs. The District Judge did not regard this as being at all satisfactory and on 23rd March 1939 he passed an order directing defendant 2 to deposit all his collections in Court, pending the final decree. Notwithstanding this order, defendant 2 transferred the decree to the plaintiff and for a sum equal to only half the amount of the decree. The District Judge considered that in making the transfer he was acting in the face of the order of 23rd March 1939. We consider that there is here ample material to support the finding of the District Judge that the transfer of the decree in O.S. No. 9 of 1939 to the plaintiff was not bona fide and was made with the object of defeating the decree obtained by defendant 1. This being so, Appeal No. 237 of 1943 must be dismissed with costs.
(3.) SECTION 35A, Civil P.C., permits a Court to make an order for costs by way of compensation when a suit has been filed falsely or vexatiously, and an objection to it on such grounds has been put forward at the earliest opportunity. In his written statement defendant 1 averred that the transfer was a collusive arrangement between the plaintiff and defendant 2 and specifically pleaded that the suit was malicious and vexatious. If the transfer of the decree in O.S. No. 9 of 1939 was not bona fide, but was entered into for the purpose of defeating defendant 1 the suit was a false one and vexatious. The District Judge finds this to be the case, and in the circumstances he was fully justified in making the order against the plaintiff. The real question is whether he had power under the section to make such an order for costs against defendant 2. The section empowers a Court to pass an order against the party by whom the false claim has been put forward. Defendant 2 did not file a written statement but he supported the plaintiff. In fact he gave evidence on his behalf. We have agreed with the finding of the District Judge that the transfer was made for an ulterior purpose. As defendant 2 was behind the suit filed by the plaintiff and was a party to it we consider that Section 35A is sufficiently wide to bring him within it. Being the instigator of the suit, having supported the plaintiff in its conduct and being a party to it he comes within the words "by the party by whom such claim or defence has been put forward." We consider that the District Judge was right in making both the plaintiff and defendant 2, who was the real actor, responsible for these costs. C.M.A. Nos. 341 and 344 of 1943 are dismissed with costs.;

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