TILOKCHAND Vs. NAWALRAM
LAWS(RAJ)-1951-5-3
HIGH COURT OF RAJASTHAN
Decided on May 01,1951

TILOKCHAND Appellant
VERSUS
NAWALRAM Respondents

JUDGEMENT

Nawal Kishore, J. - (1.) THIS is a revision by the defendants against the order of the learned District Judge allowing Tilokchand Motichand to withdraw the suit and according permission to Gulabchand Khasa, Umed-mal Vajing, Nawal Ram and Shankar-lal to conduct and prosecute the suit on behalf of all the creditors of defendant No. 1.
(2.) IT appears that Devichand, father of Tilokchand, and Maganmal, was a partner in the business of Roopchand Shantilal since about 1943 or 44. On 7th of February, 1947, he partitioned his entire property into two shares in favour of his two sons, Tilokchand and Maganmal. Devi-chand had on this date a number of creditors including Tilokchand Motichand. Accordingly, they instituted a representative suit on 8th of November, 1947, for themselves and for the benefit of all the creditors for a decla-raion that, the partition deed dated 7th of February, 1947, referred to above, was void qua the plaintiffs and all other creditors of Devichand. A notice was duly published in the Gazette inviting the creditors of Devi-chand to join as co-plaintiffs if they were so a vised. On nth of December, 1947, Umedmal, Gulabchand Khasa, Motiji and Magubai applied for being made co-plaintiffs and orders were passed accordingly in favour of all of them except Magubai. On 4th of August, 1949, Nawalram made a similar application. IT appears that, in the meanwhile, the debt due to Tilokchand Motichand was satisfied and accordingly, an application was presented on their behalf on 16th of August, 1949 for permission to withdraw the suit. This application was signed by Mr. Singhi, counsel for Umedmal and Gulabchand Khasa and by Mr. Kesrimal, counsel for Hemaji Motiji. On 18th of August, 1949,. however, an application was presented by these persons, supported by an affidavit, that their counsel had signed the application for withdrawal under a misapprehension and that accordingly, they were opposed to the withdrawal. The same day, Shankarlal applied for being impleaded as a co-plaintiff. IT was followed by Nawalram whose petition for being joined as co-plaintiff was still pending, that the withdrawal was fraudulent and should not be allowed. On 14th of September, 1949, however, an order was passed by the learned District Judge permitting Tilokchand, Motiji and Hemaji to withdraw from the suit but as regards the other persons, namely, Gulab Chand Khasa, Umedmal Vajing, Nawalram and Shankarlal, he came to the conclusion that they were entitled to join as plaintiffs in a representative suit and, therefore, conduct and prosecute it not only on behalf of themselves but on behalf of all the creditors of defendant No. 1. The applications of the various persons who are now arrayed as respondents in this revision appear to have been vehemently resisted in the court below on various grounds which are mentioned in considerable detail in the judgment of the learned District Judge. The latter, after hearing counsel for the parties, has discussed these various points in extenso and found in favour of the respondents. The learned counsel for the petitioners has argued this revision as if it were an appeal but it is not permissible to him to do so inasmuch as the scope of a revision under section 115 of the Civil Procedure Code is limited and it is not open to this court to question the findings of the lower appellate court until it comes to the conclusion that the latter has acted illegally or with material irregularity in the exercise of its jurisdiction. The learned counsel for the petitioners is not able to point out that any illegality has been committed by the learned District Judge or for that matter any material irregularity while disposing of the petitions presented by the respondents. The learned counsel for petitioners has argued that the term creditors as it occurred in sec. 53 of the Transfer of Property Act, included only those persons who had subsisting claims at the time the representative suit was filed or at the time of the partition and did not include persons who became creditors subsequently. This is practically the principal point in the entire argument addressed by the learned counsel in support of this petition. The learned District Judge held that every creditor regardless of the time when he acquired that status could be allowed to join as plaintiff because the representative suit under Order I, rule 8 was for the benefit of all the creditors. 1940 Oudh 200, (Suraj Bakhsh Singh vs. Thakurdas) which has been cited in this court as well, was referred to by him and it was held that it did not apply to the facts of this case. There, the suit was instituted by a single creditor who did not know that there were other creditors as well and all that was held was that it was not necessary for the plaintiff to file a representative suit. The proposition of law which has a bearing on the point argued by the learned counsel has been set out by Lord Hardwick in 13 Eliz. C. 5 as below: - "it is not necessary that a man should actually be indebted at the time he enters into a voluntary settlement to make it fraudulent; for if a man does it with a view to his being indebted at a future time, it is equally fraudulent and ought to be set aside. " The legal position has been summed in 1927 Lah. 420 (Mohammad Ishaq vs. Mohammad Yusaf ). It was held that where there are debts due at the time of a gratuitous transfer, it may be presumed that the transfer was made with intent to defeat or delay the creditors. But where there are no debts due at the time and the transferor runs into indebtedness subsequently, the presumption will be to regulate by the peculiar circumstances of each particular case. If, for instance, the transfer was made to ward off the effects of threatened litigation or in anticipation of the transferor embarking upon a commercial venture or on the eve of his going into trade, the intent to defeat or delay future creditors will be presumed. In other circumstances, however, the transaction will be presumed to be bonafide and it will lie on the future creditors to prove that the transfer was made with an intent to defeat or delay them. It will be a question on the merits. In this case, if it is proved that the respondents were not creditors at the time of the partition, although it is alleged by the learned counsel on their behalf that they were, that the partition was made with an intent to defeat or delay them. In this revision, the question is simply this: whether these persons about whom it is alleged that they were not creditors at the time of the partition and acquired their status subsequently, are entitled to be joined as co-plaintiffs and carry on the litigation which had been commenced by Tilokchand Moti-chand. The learned counsel for the petitioners has not been able to cite a single authority against the view which has been taken by the learned District Judge. As stated above, this is the principal question which has been agitated in this revision. The learned counsel has also argued that inasmuch as the counsel for Gulabchand Khasa and Umedmal Vajing had consented to the withdrawal, it was not open to these respondents to go behind that consent and apply for being joined as co-plaintiffs. It has been mentioned by the learned District Judge in his judgment and it also appears from the record that on 18th of August, 1949, some time before Tilokchand Motichand were allowed to withdraw from the suit, Umedmal and Gulabchand Khasa filed an application supported by an affidavit that their counsel had signed the application for withdrawal under a misapprehension. It was open to them to do so and in the circumstances, it cannot be said that they were not competent in law to go behind the consent given by the counsel on their behalf. In fact, before this consent became operative, it was withdrawn on the ground that really speaking, no consent whatsoever had been given. The reasons assigned by the learned District Judge for arriving at his conclusions have been scrutinized by me in the light or/the arguments put forward by the learned counsel for the petitioners and it appears that there is no alternative but to uphold them, as the various contentions had been carefully considered. Being of the view that the order passed by the learned District Judge is neither illegal nor does it suffer from material irregularity and is also correct in law, the revision is hereby dismissed with costs. .;


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