AYYANGAR, J.: - (1.) THE following Judgment of the court was delivered by
(2.) THIS appeal comes before us on a certificate of fitness granted by the High court of Andhra Pradesh-under Art. 133(1)(a) of the Constitution. The following facts are necessary to be stated to apperciate the contention-, urged before us. We consider it would be convenient to refer to the parties by their array in the trial court. The 2nd defendantfirm Hajee Abdul Kadir Sahib and Lala Batcha Sahib & Co., had been apparently carrying on business in several places including Vizianagaram, Bellary, Madras etc., in skins and hides since 1941 when the partnership was formed between the 3rd and the 4th defendants. It was common ground that from about 1947 or 1948 the firm had not been doing any businesss in Vizianagaram and by that time it had contracted quite a large volume of debts, the tannery business there proving a loss. The two partners accordingly entered into a deed of dissolution dated 31/03/1949, in which it is stated that the book-debts, stock in trade, immovable properties and other assets including the goodwill of the firm were of the value of Rs. 2,90,000.00 , and at the same time that the partnership which was admitted to be suffering losses owed debts to the extent. of Rs. 2-1/2 lakhs. It' was agreed between the partners that the 3rd defendant Abdul Shukoor Saheb should go out of the partnership taking with him one item of property in Vaniyambadi valued at Rs. 20,000.00 while- the suit tannery which was estimated as of the same value was to become the sole property of the 4th defendant who was described in the deed as `the continuing partner`. Soon after this deed of dissolution the 4th defendant entered into an agreement with the plaintiff for the sale to him of the suit property for a sum of Rs. 19,000.00 , and later executed the deed of sale on 20/05/1949. The plaintiff was, however, advised that it would be safer to have the conveyance in his favour executed by the other partner also and accordingly the 3rd defendant was also an executant of the sale deed. On the execution of the sale deed the plaintiff entered into possession and he claimed to have thereafter effected improvements to the property. While so, the 1st defendant-Arji Papa Rao-filed suit O. S. 46 of 1950 in the court of subordinate judge at Visakhapatnam for the recovery of a sum of Rs. 12,95.00 5/8 against the 2nd defendant firm and its partners defendants 3 & 4 and obtained a decree for the sum claimed with interest and costs on 19/06/1951. Soon after filing the plaint he obtained an order for attachment before judgment of the suit property and that order was on the passing of the decree made absolute, subject however, to the result of a claim petition which had been filed by the plaintiff for raising the attachment. The Subordinate judge of Visakhapatnam dismissed the plaintiff's claim and this has led to the suit O. S. 145 of 1951 out of which this appeal arises to set aside that summary order under O. XXI, r. 63, Code of Civil Procedure. The plaintiff impleaded as parties to the suit besides the attaching decree-holder who was made the 1st defendant, the debtor-firm and the two partners as defendants 2 to 4 respectively and the son of the 4th defendant who executed the sale deed as his agent under a power of attorney as the 5th defendant. The plaintiff claimed that he purchased the property bonafide and for its full value, that since its purchase he having entered into possession, 'was in enjoyment thereof in his own right, paying the rates and taxes due thereon and had effected valuable improvements thereto, and that consequently the property was not liable to be attached as belonging to the partnership or any of its partners. Broadly stated, the defence of the 1st defendant the only contesting defendant, the others either remaining ex parte or supporting the plaintiff, was that the sale in favour of the plaintiff was either a sham and nominal transaction or in fraud of creditors of whom he was one. The trial court upheld the plaintiff's claim that the sale was real and was fully supported by consideration. It also negatived the contention raised by' the first defendant that the sale was fraudulent as intended to defeat or delay creditors under s. 53 (1) of the Transfer of Property Act. The 1st defendant filed an appeal to the High court and the learned judges reversed the decision of the trial-judge and directed the dismissal of the plaintiff's suit. It is the correctness of this decision that is challenged in this appeal.
(3.) LEARNED counsel for the appellant raised four principal points in support of the appeal : (1) that on a proper construction of the written statement the only real and effective defence that was raised was that the sale in favour of the appellant was sham and nominal and that the courts below were in error in proceeding on the basis that the sale was in the alternative impugned as brought about to defeat or delay creditors within s. 53 (1) of the Transfer of Property Act; (2) that on the facts and circumstances of the case it had not been established that the sale in favour of the appellant was vitiated by fraud against creditors falling within s. 53 (1) of the Transfer of Property Act; (3) that in any event, the plaintiff was a purchaser in good faith and for valuable consideration and was therefore protected even on the basis that the transferor intended, by the alienation, to defraud his creditors; (4) that on a proper construction of s. 53 (1) of the Transfer of Property Act, as it now stands, read in the light of the provisions of the Code of Civil Procedure particularly those relating to claim petitions under O. XXI rr. 58 to 63, a transfer which was voidable under s. 53 (1) could be avoided only by a representative suit filed on behalf of creditors and not by an individual creditor who may be defeated or delayed, by way of defence to a suit to set aside a summary order under O. XXI, r. 63, Code of Civil Procedure. We shall deal with each of these points and in that order. There is no doubt that the written Statement has not been artistically drafted, keeping in view the real distinction between a sham and nominal sale which is not intended to pass title and a sale which is real but which is voidable at the instance of creditors because the transfer is intended in the language of s. 53 (1) of the Transfer of Property Act `to defeat and delay creditors`. In paragraph 2 of the Written Statement the 1st defendant stated :- , `The said sale deed is sham; nominal and collusive document not intended to pass any title but brought about to screen the suit properties from the creditors of defendants 2 to 5. No consideration passed under the sale deed and the recitals thereof in the document are fictitious and make-believe.` The paragraph. however, further went on to add `It is further submitted that even if the sale deed is true, it, is in fraud of creditors including the plaintiff and not binding on them.` In paragraphs 3 the allegation was made that the plaintiff was the relative of defendants 2 to 5, that the plaintiff and the vendors were natives of the same place and that the sale deed was clandestinely brought into existence at Madras at a. time when defendants 2 to 5, were hard-pressed by the plaintiff and other creditors and unable-to pay their debts., at V,izianagaram and that in order to put the properties beyond the reach of the creditors, defendants 2 to; 4 seem to, have hit upon the frauds device. of the alleged We to the plaintiff`. In the light of these averments it, cannot be-, said that the defendants did not raise two distinct pleas (1) that the sale was a sham, a pretended Sale without any consideration and not intended to pass any title to the nominal purchaser and in the alternative (2) that even if it were a real transaction supported by consideration and intended to pass title to the plaintiff, still the same was, having Tegard to the circumstances stated, a fraud upon the creditors and therefore voidable at his instance. Though the pleading in the Written Statement was in this form, the issues struck did not raise the two defenses as distinct pleas but rolled both of them into a single plea raising the question `whether the plaintiff hid title to the suit property and whether the claim order was liable to be set aside.` Notwithstanding the indefiniteness in the frame of the issues it could not be said that when the parties proceeded to adduce evidence the same was not directed to both the above defences. As we have necessarily to consider thus evidence in dealing with the submissions made to us regarding the correctness of the dismissal of the plaintiff's suit by the High court it is unnecessary to set out the details of the evidence which indicates that the defence based upon s. 53 of the Transfer of Property Act was borne in mind. At the, stage of the arguments before the trial Judge it was the subject of keen contest between the parties. The learned trial judge first dealt with the question as to whether the sale was real as pleaded by the plaintiff or whether it was without consideration and sham and nominal not intended to pass any little, and recorded a clear finding in favour of the plaintiff After having done so he considered in detail the various circumstances which were relied on by the first defendant in support of the plea that the sale was in fraud of creditors so as to be voidable under. s. 53(1) of the Transfer of Property Act. He negatived this plea and upheld the plaintiff's claim to the Property and passed a decree in his favour. In these circumstances we consider that there is no force in the objection that there has not been a sufficient plea of a defence based upon s. 53 of the Transfer of Property Act as to justify or entitle the court to afford relief if satisfied that the same was proved. ;