Daisy George and others v. Sobhana and S.S. Mamadhan

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE P.SOMARAJAN** **THURSDAY,THE 29TH DAY OF NOVEMBER 2018/8TH AGRAHAYANA, 1940** ## **RSA.No.820 of 2006 E** **AGAINST THE JUDGMENT AND DECREE DATED 12.12.2005 IN A.S.NO.2 OF 2000 OF THE SUB COURT, NEYYATTINKARA.** **AGAINST THE JUDGMENT AND DECREE DATED 12.10.1999 IN OS NO.373/1997 OF THE PRINCIPAL MUNSIFF'S COURT, NEYYATTINKARA** ## **APPELLANTS/APPELLANTS/ADDL. DEFENDANTS 3 TO 5:** **1 DAISY GEORGE, W/O.LATE GEORGE, PUTHEN VILAKATHU RENI COTTAGE, KILIYOOR DESOM, VELLARADA VILLAGE, NEYYATTINKARA TALUK.** - **2 SAM GEORGE, S/O. -DO- IN -DO- -DO-.** **3 RENI GEORGE, D/O. -DO-. IN -DO- -DO-. BY ADVS. SRI.S.V.BALAKRISHNA IYER (SR.) SRI.K.JAYAKUMAR (SR.) SRI.P.B.KRISHNAN** ## **RESPONDENTS/RESPONDENTS/PLAINTIFF AND DEFENDANT NO.1:** **1 SOBHANA,D/O.BHASURANGI, BHASURANGI BHAVAN, VELIYAMKOTTUKONAM, CHENKAVILA, IYRA P.O., PARASSALA, NEYYATTINKARA TALUK.** **2 S.S.MANMADHAN, KILIYOOR PUTHEN VEEDU, VELLARADA VILLAGE, NEYYATTINKARA TALUK. R1 BY ADV. SRI.V.SURESH** **THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 29.11.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** R.S.A.NO.820 OF 2006 :: 2 :: ## **JUDGMENT** Aggrieved by the concurrent finding and the judgment and decree of both the Principal Munsiff's Court, Neyyattinkara in O.S.No.373 of 1997 and the Sub Court, Neyyattinkara in A.S.No.2 of 2000, the legal heirs of the second defendant, who are additional defendants 3 to 5, came up with this second appeal. 2. The suit is for declaration of title over the property covered by a gift deed in favour of plaintiff alleged to have been executed by her husband, first defendant, and for recovery of possession. The suit was decreed by the trial court and upheld by the first appellate court. Aggrieved by the said decree and judgment, the legal heirs of the second defendant, additional defendants 3 to 5, came up with this appeal. 3. The suit property having an extent of 1 acre 90 cents comprised in Sy.No.619/1 of Vellarada Village, forms part of a large extent of R.S.A.NO.820 OF 2006 :: 3 :: 2.23 acres of property originally held by the husband of the plaintiff, the first defendant in the suit. On 31.7.1991, the first defendant executed Ext.A1 gift deed by which a large extent of 2.23 acres of property inclusive of the plaint schedule property was given to the plaintiff. The gift deed was executed in Palukal Village in Tamil Nadu by including some other property situated in that Village so as to register the same in Tamil Nadu. While so, the plaintiff met with a motor vehicle accident on 24.7.1992 and had undergone treatment for a short time. After the birth of a child, a demand notice was issued claiming maintenance against her husband, the first defendant, to which he issued Ext.A2 reply disclosing cancellation of earlier gift in her favour under Ext.A3 cancellation deed and execution of a sale deed in favour of second defendant. Hence, the suit for declaration of title and recovery of possession. ## 4. The following questions came up for consideration in the second appeal: R.S.A.NO.820 OF 2006 :: 4 :: - a) What would be the legal effect of a gift deed executed by the husband in favour of the wife during subsistence of the court attachment over the property? - b) Whether the failure to seek for a further relief than a mere declaration in a suit for declaration of title is fatal to the suit when it is established that the plaintiff was in a position to ask for a further relief than a mere declaration? - c) Whether Section 53 of the Transfer of Property Act can be raised as a defence when there is disputed title over the property claimed based on a document executed defrauding creditors? d) Whether the trial court and the first appellate court are justified in decreeing the suit ignoring the registered sale deed executed by the original owner? e) Whether Ext.A1 document is a sham document executed by the debtors in order to defraud the creditors? R.S.A.NO.820 OF 2006 :: 5 :: 5. The first defendant husband remained exparte. The second defendant and after his death his legal heirs, additional defendants 3 to 5, contested the suit claiming that they are bona fide purchasers without notice of earlier gift. The gift was executed and registered at Tamil Nadu so as to conceal its execution and registration from the notice of creditors with the intention to defraud them. At the time of execution of Ext.A1 gift deed the property was subjected to various court attachment. In Ext.B4 Encumbrance Certificate there are several entries showing court attachment. Entry Nos.2, 3, 5 and 6 are pertaining to court attachment. Entry Nos.2 and 3 are court attachment in O.S.No.316 of 1989 and O.S.No.405 of 1990 of Sub Court, Thiruvananthapuram, respectively effected on 5.5.1989 and 30.7.1990. Ext.B1 sale deed was executed for the purpose of discharging the abovesaid liabilities. Out of the sale consideration of `1,40,000/-, an amount of `1,27,000/- was reserved and retained with the purchaser for discharging the abovesaid two R.S.A.NO.820 OF 2006 :: 6 :: attachments. Subsequently, those two liabilities were discharged as per entry No.5 and 6 in Ext.B4. 6. The gift deed was executed not at the concerned Sub Registrar Office but in Tamil Nadu by including a fictitious property in Palukal Village In Tamil Nadu so as to get it registered. A collusion between the executant husband and the beneficiary wife to create a fraudulent document of transfer in her name so as to defeat his creditors is well explicit and evident from the said act of the parties by registering the said document at Tamil Nadu in secrecy by including a fictitious property so as to get it registered there. The very fact that it was registered at Tamil Nadu and kept away from the notice of creditors of husband and it was executed without receiving any consideration but by stating love and affection and it was given as a gift to the wife itself would make the document as a sham document created to defeat his creditors. A secret mission to conceal the property from further attack from the creditors and to defeat ## R.S.A.NO.820 OF 2006 :: 7 :: their claim is also well evident from the act of the executant donor and the beneficiary donee, the husband and wife. Existence of attachment over the property in two different suits in order to satisfy the claim of creditors and execution of the gift in secrecy after its attachment, that too at Tamil Nadu though the property situated in Kerala, would further show the intention of parties in creating the said gift deed. It would show that it was never intended to came into effect but to conceal the property and thereby delay and defeat the claim of creditors. **==> picture [361 x 12] intentionally omitted <==** plaintiff and she had not exercised the right of owner over the property at any point of time and no evidence was adduced in that behalf which also shows that the document is only a sham document intended to defeat the creditors and never intended to come into effect. 8. As discussed earlier, the property was subject to two court attachment at the time when R.S.A.NO.820 OF 2006 :: 8 :: Ext.A1 deed was executed, in secrecy at Tamil Nadu, by the husband in favour of his wife. He did not have any case that she was not aware of the liability or attachment over the property or the liabilities of her husband with his creditors. The execution of the document, in secrecy in Tamil Nadu, would otherwise show that she is well aware of all these liabilities. It is thereafter in order to discharge the liability over the property the husband executed a sale deed in favour of first and second defendants inclusive of liability towards them. The defendants 1 and 2 had discharged the abovesaid liabilities out of the sale consideration. It is true that a unilateral cancellation of the earlier gift would not bind on the donee under the gift. But, when the gift was created under vitiating circumstances in collusion with his wife and executed and got it registered stealthily and in secrecy in another state, viz. Tamil Nadu, by incorporating a fictitious property so as to get it registered there, during the subsistence of attachment over the property, and never intended to act upon, the beneficiary under ## R.S.A.NO.820 OF 2006 :: 9 :: the document, the donee, will not get any right over the property. Even if it is assumed that she is entitled to the property she will have to accept the property with the subsisting liability over the property at that time, namely, the two court attachment for the amount due to the creditors of her husband. When the property was sold in discharge of the said liability or for the purpose of releasing the liability and when it was released, the person who released the liability and obtained the sale deed in his favour would step into the shoes of a creditor to the husband. In other words, the first and second defendants who stepped into the shoes of creditors can avoid the said transfer under Section 53 of the Transfer of Property Act, but, for which there should be a suit. The legal position was very much settled that the protection under Section 53 of the Transfer of Property Act can be raised by way of defence by the Apex Court in _**C.Abdul Shukoor Saheb v. Arji Papa Rao (deceased) after him his heirs and legal representatives and others (AIR 1963 SC 1150).**_ R.S.A.NO.820 OF 2006 :: 10 :: 9. The second defendant after the purchase of property had obtained possession of the property and constructed building therein and was residing in the said house. So, there cannot be any scope for the plaintiff to plea ignorance about parting with possession of property in furtherance of the sale and construction of building therein by exercising ownership over the property. The long silence from the part of plaintiff without taking any action permitting the defendants 1 and 2 to take possession of the property and to construct building therein by expending huge amount would itself amount to acquiescence and the plaintiff is guilty of equity rule of laches and acquiescence by long silence without challenging the alienation and the cancellation. 10. The non-challenge of concellation and the sale in favour of second and third defendants for a pretty long time is so crucial. She cannot plead ignorance regarding execution of the cancellation deed and the subsequent sale. R.S.A.NO.820 OF 2006 :: 11 :: Issuance of a demand notice for maintenance and the reply alleged to have been issued by the husband disclosing cancellation of earlier gift in her favour and execution of sale in favour of defendants 2 and 3 by its nature reveal that it is only a device played by the husband and wife, the donor and donee under the gift so as to create a cause of action after the lapse of several years to bring up this collusive suit. There was no occasion for the husband to disclose the cancellation deed and execution of sale in the reply notice issued in answer to the demand for maintenance and that itself would reveal a fraudulent prior concert between husband and wife. 11. There is no prayer in the suit either for setting aside the cancellation deed or the sale deed of the year 1991, though the same was permitted to be continued for a long period of more than six years and the relief of setting aside those documents by that time became time barred as she was having notice of execution of those documents from its very inception. The suit R.S.A.NO.820 OF 2006 :: 12 :: is also stood as hit by Section 34 of the Specific Relief Act as the plaintiff was able to ask for a further relief than a mere declaration of her title and recovery of possession, since another sale was came into effect in the year 1991 (20.09.1991) by which the person who obtained the sale deed had exercised the rights of an owner over the property by taking possession of the sale and also by doing construction of a residential house in the said property and started to live in that house. The long silence for more than six years would show the collusion between the plaintiff and her husband, the first defendant, who remained _ex parte_ . As discussed earlier, they have created a fraudulent cause of action which is evident from their subsequent conduct in creating a fraudulent cause of action for the present suit. Both the trial court and the first appellate court ought to have dismissed the suit with cost of first and second defendants and also with exemplary cost. 12. Both the courts below had failed to take R.S.A.NO.820 OF 2006 :: 13 :: into consideration the relevant factual and legal aspects involved in the case and that has resulted in miscarriage of justice. The jurisdiction vested in both the courts below had not been exercised in its proper perspective. The decree and judgment of both the trial court and the first appellate court are liable to be set aside and I do so by allowing this appeal, but without costs. The appeal is allowed, the decree and judgment of both the trial court and the first appellate court are hereby set aside. The suit is dismissed. No order as to cost of second appeal. ## **SD/** **P.SOMARAJAN** **JUDGE** ahz/