M/S. M.A.K. Agro Commodities Trading Company Pvt. Ltd. v. M/S. Brilliant Exports & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE M.N.KRISHNAN** **MONDAY, THE 18TH FEBRUARY 2008 / 29TH MAGHA 1929** ## **WP(C).No. 1320 of 2008(F)** **----------------------------------AGAINST THE ORDER DATED 14/12/2007 IN IA 2847 & 2901/2007 IN OS.96/2007 OF II ADDL.SUB COURT,ERNAKULAM** **.........................................** ## **PETITIONER:** - **------------------** **M/S. M.A.K. AGRO COMMODITIES TRADING COMPANY PVT.LTD G-211, PANANMPILLY NAGAR MAIN AVENUE, COCHIN -36,REP. BY ITS MANAGING DIRECTOR,MR.M.A.K.AZAD,AGED 52, S/O. LATE T.MOHAMMED GHANI.** **BY ADV. SRI.VARGHESE C.KURIAKOSE SRI.PRAVEEN K. JOY SRI.E.M.MURUGAN** ## **RESPONDENTS:** ## **----------------------** **1. M/S. BRILLIANT EXPORTS PALLURUTHY KOCHI, REP.BY ITS MANAGING PARTNER, M.L.KARTHIKAI KUMARI,W/O.LATE RATNAM PILLAI, RESIDING AT G-13,PANAMPILLY NAGAR,COCHIN 36** **2. M.L.KARTHIKA KUMARI,AGED ABOUT 60 W/O.LATE RATNAM PILLAI,RESIDING AT G-13, PANAMPILLY NAGAR,COCHIN 36** **3. R.SELVAKUMAR,AGED ABOUT 37 S/O.LATE RATNAM PILLAI,RESIDING AT G-13, PANAMPILLY NAGAR,COCHIN 36** **4. R.DEVAKUMAR,AGED ABOUT 35, PARTNER S/O.LATE RATNAM PILLAI, RESIDING AT G-13, PANAMPILLY NAGAR,COCHIN 36** **5. R.SIVAKUMAR,AGED ABOUT 33, S/O. LATE RATNAM PILLAI, RESIDING AT G-13, PANAMPILLY NAGAR,COCHIN 36** **WP(C) NO: 1320/2008** ## **6. R.SREEKUMAR,AGED ABOUT 33,** **S/O. LATE RATNAM PILLAI, RESIDING AT** **G-13, PANAMPILLY NAGAR,COCHIN 36** ## **7. SHRI MONCY DANIEL,S/O.C.DANIEL** **PANACHOOR HOUSE, MULLACKAL WARD, ALAPPUZHA. MULLACKAL VILLAGE,AMBALAPUZHA TALUK.** ## **8. KARUR VYSA BANK, M.G.ROAD** **ERNAKULAM, REP. BY ITS MANAGER.** **BY ADV. SRI.PEEYUS A.KOTTAM** **SRI.JOBY CYRIAC** **SRI.P.S.GEORGE** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C) NO: 1320/2008 F** ## **APPENDIX** ## **PETITIONER'S EXHIBITS** ## **EXT.P1. COPY OF THE OS NO. 96/07 ON THE FILES OF THE 2ND ADDL. SUB COURT, ERNAKULAM.** **EXT.P2. COPY OF THE IA NO. 1038/07 IN OS NO. 96/07 ON THE FILES OF THE 2ND ADDL. SUB COURT, ERNAKULAM.** **EXT.P3. COPY OF THE CLAIM PETITION AS IA NO. 2153/07.** **EXT.P4. COPY OF THE CLAIM PETITION, AS IA NO. 1428/07.** **EXT.P5. COPY OF THE OBJECTIONS TO THE CLAIM PETITIONS IN IA NO. 2153/2007. EXT.P6. COPY OF THE OBJECTIONS TO THE CLAIM PETITIONS IN IA NO. 1428/2007. EXT.P7. COPY OF THE REPLY AFFIDAVIT FILED BY R7.** **EXT.P8. COPY OF THE AMENDMENT APPLICATION IA NO. 2847/2007.** **EXT.P9. COPY OF THE IMPLEADMENT PETITION IA NO. 2901/2007.** **EXT.P10. COPY OF THE OBJECTION.** **EXT.P11. COPY OF THE JUDGMENT IN WPC NO. 26450/2007 PASSED BY THIS COURT. EXT.P12. COPY OF THE COMMON ORDER DT. 14/12/2007.** ## **RESPONDENT'S EXHIBITS** **NIL.** _True copy_ _tga_ **==> picture [322 x 70] intentionally omitted <==** **==> picture [118 x 9] intentionally omitted <==** This writ petition is preferred against the common order passed by the II Addl. Sub Court, Ernakulam in I.A.2847/07 and I.A.2901/07 in O.S.96/07. These applications were filed for impleadment of the 7[th] respondent and amendment of the plaint accordingly. The Court below refused to entertain that application and therefore aggrieved by the said decision the plaintiff has come before this Court invoking Article 227 of the Constitution. In order to understand the case properly a brief reference to the facts of the case are relevant. 2. The plaintiff has instituted a suit against the defendants 1 to 6 for realisation of the amount of Rs.30,87,570/-. It is the case of the plaintiff that he has authorized the defendants to do export business on prawns ## W.P.C 1320 OF 2008 -:2:- and for the said purpose had advanced a sum of Rs.66,05,000/- but had only received accounts regarding goods worth Rs.18,99,402 and thereby there is a deficit of 47,05,598/-. 3. When the matter was taken up, the defendants issued four cheques for Rs.31 lakhs which ultimately ended in 138 proceedings under the N.I. Act as a result of which Rs.34,24,000/- had been realized. It is also referred to that the balance amount outstanding was admitted at one point of time as Rs.39,65,000/- and therefore an amount of Rs.65,11,517/- is due on 20.1.07 and an amount of Rs.34,24,000/- had been paid and so the balance liability is the suit claim. Along with the suit the plaintiff also moved an application for attachment and the property was attached. Then comes a claim application filed by the 7[th] respondent. The contention is that the document was executed on 5.2.07 and registered on 14.2.07 but the attachment order was served on 12.2.07. Therefore it is contended since the date of the execution of the document is relevant, it is evident W.P.C 1320 OF 2008 ## -:3:- that the transaction has taken place prior to the order of attachment and therefore the plaintiff is not entitled to get attachment of the property. 4. The plaintiff on the other hand would contend that the whole transaction is done with an intention to defeat and delay the creditor and therefore even if it is proved that the document is executed on 5.2.2007 it will be hit by the principles of fraudulent transfer embodied under Section 53 of the T.P. Act. Now I do not want to say anything on the merits of the case for the reason that the claim petition is pending adjudication before the appellate court. It is at this stage the petitioner herein comes forward with a petition for impleadment of the 7[th] respondent as a party to the suit. It was resisted and the Court below held that even in the claim application this matter can be considered and I extract, “It is open to the petitioner/plaintiff to establish that the disputed document is fraudulent in the claim itself by adducing necessary evidence.” W.P.C 1320 OF 2008 -:4:- 5. The learned counsel for the writ petitioner argues before me that the scope of enquiry under Order 21 Rule 58 may not cover a situation which is intended to be achieved by the proposed amendment to the plaint. According to him the property has to be reserved to the plaintiff and for the said purpose the proposed 7[th] respondent has to be a party and necessary amendments are to be made. It is also contended by him that there is nothing improper on the part of the Court to allow the amendment application in the light of the various decisions of the Courts. 6. On the other hand the contesting respondents would contend that it is not necessary and it could be adjudicated in the claim petition and therefore application for impleadment and amendment shall not be entertained at this stage of the suit. It is profitable to refer to Order 21 Rule 58(2) and also the two relevant decisions rendered by this Court on this point. Under Order 21 Rule 58(2), ## W.P.C 1320 OF 2008 -:5:- “All questions (including question relating to right, title or interest in the property attached) arising between the parties to a proceeding or their representatives under this rule and relevant to the adjudication of the claim or objection, shall be determined by the Court dealing with the claim or objection and not by a separate suit. 7. The question of considering the impact of S.53 of the Transfer of property Act in a claim petition arose before this Court for consideration in the decision reported in ## _**Ithakku Abraham v. Kesavan Damodaran (1987 (1)**_ _**KLT 704)**_ . The learned Single Judge of this Court held that, “ The plea based on S.53 of the T.P.Act can be raised by way of defence, and if raised as defence, there is no need to defend the suit in a representative capacity on behalf of all the creditors of the judgment debtor. Rules 58 as amended by the C.P.C. Amendment Act 104/1976 expressly provides that it could be determined by the Court where the claim petition is filed and not by a separate suit.” ## W.P.C 1320 OF 2008 ## -:6:- Therefore the Court held that the decree holder is therefore entitled to defend the claim on the grounds available to him under Section 53 of the T.P. Act and such a defence need not be in a representative capacity, on behalf of creditors of the judgment debtor. 8. Subsequently, a Division Bench of this Court also considered the very same question in the decision reported in _**George Antony v. Kerala State Financial Corporation (1989 (1) KLT 486)**_ . This Court held that the Court is not obliged to consider the title with all relevant matters as if it is a suit and considering the proceedings as a suit namely the claimant is to be treated as the plaintiff and the attaching decree holder as a defendant. When the attaching decree holder is the defendant, the decree holder in that circumstance can take up all grounds to defend the claim including the ground available to him under S.58 of the T.P. Act. Such a defence need not be in a representative capacity on behalf of all creditors of the judgment debtor. So a reading of these two decisions referred to above make it W.P.C 1320 OF 2008 ## -:7:- crystal clear that when a plaintiff is confronted with a case on account of the claim petition, the plaintiff is perfectly competent to raise the plea of S.53 of the T.P. Act and the Court is obliged to consider the same. 9. In fairness to the learned counsel for the writ petitioner I will refer to the decision reported in _**Cochin Navel Base C.E. Co-op. Society v. Rajan Kurup (2004**_ _**(3) KLT 885)**_ . This Court held that a creditor's suit need only be in substance on behalf of creditors and it need not necessarily be in a representative suit. 10. In decision reported in _**State Bank of Hyderabad v. Town Municipal Council (2007 (1) SCC 765)**_ the Apex Court held that The amendment applications has to be considered by the Courts liberally. In the decision reported in _**K.S. Sivadas v. K.S. Jayapalan (2002 (2) KLJ**_ _**646)**_ also this Court had laid down the principles to be followed in amendment of plaint. In _**Ramchandra Sakharam Mahajan v. Damodar Trimbak Tanksale (2007 (6) SCC 737)**_ the Apex Court held that amendments W.P.C 1320 OF 2008 -:8:- seeking to make claim more precise so as to enable the Court to adjudicate upon it more satisfactorily ought to be allowed and lastly in the decision reported in _**Pankajav. Yellappa (2004 (6) SCC 415)**_ the Apex Court held even it relates to a question of limitation the Court can allow application for amendment. There cannot be any quarrel about the proposition that the Courts have to be liberal while granting amendment of the pleadings. But what is to be looked into in these cases is whether impleadment application is necessary at all in a pending suit. 11. It is an order of attachment before judgment that has given rise for filing of an application under Order 21 Rule 58 in the form of a claim application to adjudicate the right of the 7[th] respondent with respect to the right, title and interest over the property. The plaintiff wants to raise the contention that the said document is not only invalid document but it is also hit by S.53 of the T.P. Act. As discussed by me earlier the two decisions referred to by me clearly lays down that the Courts are competent under order ## W.P.C 1320 OF 2008 -:9:- 21 Rule 58 to adjudicate the question of S.53 of the T.P. Act which is raised as a defence in a claim application. Therefore I find that the Court below has approached the matter only in the correct perspective and had given a decision. Therefore the writ petition lacks merit and it is dismissed. 12. I make it clear that if there is no appropriate satisfactory pleadings with respect to Section 53 of the T.P. Act in the counter statement for the plaintiff in the claim application, he can incorporate it by way of amendment or the Court may permit him to file additional counter statement with respect to the same. I direct the Court below to dispose of the claim applications independently. ## **M.N. KRISHNAN, JUDGE.** ul/-