S.A. No. 955 of 2000 (C)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE HARUN-UL-RASHID WEDNESDAY, THE 4TH DAY OF APRIL 2012/15TH CHAITHRA 1934 SA.No. 955 of 2000 (C) ---------------------- AS.140/1995 of PRL.SUB COURT, KOZHIKODE OS.157/1992 of PRINCIPAL MUNSIFF'S COURT, KOZHIKODE-I APPELLANTS/RESPONDENTS 5 TO 12/DEFENDANTS 5 TO 12: - ---------- 1. SAINABA, W/O.LATE ALI, AGED ABOUT 50 YEARS, THYKONDIYIL HOUSE, HOUSE NO.1045, P.O. MARIKKUNNU, KOZHIKODE-12. 2. RAZAK, S/O.LATE ALI, D-O-DO3. SHAKEEL, S/O.LATE ALI, -DO-DO4. RASHEED, S/O.LATE ALI, -DO-DO5. FIROZ, S/O.LATE ALI, -DO-DO6. SHAMZEER, S/O.LATE ALI, (MINOR) -DO- -DO7. IRSHAD, S/O. LATE ALI, (MINOR), -DO-DO- 8. FATHIMA SUHARA SAINABA, (MINOR), D/O.LATE ALI, -DO- -DO(MINORS 6 TO 8 ARE REP. BY THEIR MOTHER IST APPELLANT. BY ADV. SRI.C.P.MOHAMMED NIAS RESPONDENTS/APPELLANT AND RESPONDENTS 2 TO 4/ DEFENDANTS 1 TO 4: ----------- 1. TODDY WORKER'S WELFARE FUND INSPECTOR, KOZHIKODE. 2. STATE OF KERALA, REPRESENTED BY DISTRICT COLLECTOR, KOZHIKODE. 3. REVENUE RECOVERY TAHSILDAR, KOZHIKODE. 4. KAKKODY VILLAGE OFFICER, KOZHIKODE. R1 BY ADV. SRI.K.K.BABU R2 TO R4 BY GOVERNMENT PLEADER SRI PADMALAYAN THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 04-04-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: S.A.NO.955/2000 ORDER ON CMP.NO.2508/2000 IN S.A.NO.955/2000 4/4/2012 ------------DISMISSED Sd/HARUN-UL-RASHID, JUDGE. TRUE COPY P.S. TO JUDGE ## **HARUN-UL-RASHID,J.** ## **-------------------------------** ## **S.A. NO. 955 OF 2000** ## **-------------------------------** ## **DATED THIS THE 4TH DAY OF APRIL, 2012** ## **JUDGMENT** The Substantial questions of law formulated in the appeal are as follows: “ _1) Whether the court below was justified in holding that the civil court has no jurisdiction to entertain the suit?_ _2) Whether the court below was justified in holding that the suit is bad for want of which under Section 80 C.P.C.?_ _3) Whether the court below was justified in proposing that the suit is bad under the periods of Kerala Revenue Recovery Act?_ _4) Whether the court below was justified in reversing the decree and judgment of the trial court when it was admitted even by the defendants that there were no due from the plaintiff and the plaintiff was a bona fide purchaser?_ _5) Whether the court below was justified in considering decisions rendered on totally different facts_ **-2-** **S.A.No.955/2000** _and circumstances and to apply the same in the instant case?_ _6) Whether the court below was justified in holding at the same time that the transaction was fraudulent as well as sham?”_ 2. Legal heirs of the deceased plaintiff are the appellants. The appeal is directed against the judgment and decree in A.S.No.140/95 on the file of the Principal Sub Court, Kozhikode arising from the judgment and decree in O.S.No.157/1992 on the file of the Principal Munsiff's Court, Kozhikode-I. The suit was filed for declaration to the effect that the revenue recovery proceedings initiated by the defendants is not binding upon the plaintiff and the plaint schedule property and the property is not liable to be sold in auction for realisation of the amount under the revenue recovery proceedings. The plaintiff also sought for permanent prohibitory injunction restraining the defendants from selling the plaint schedule property for realisation of the amount shown in the revenue recovery notice. The trial **-3-** ## **S.A.No.955/2000** court decreed the suit granting declaration and injunction sought for. The appellate court reversed the findings of the trial court and dismissed the suit. The parties are hereinafter referred to as the plaintiff and defendants as arrayed in the suit. 3. The plaint schedule property originally belonged to one Kumaran. After his death, his legal heirs sold the property to one Jayasree Nair on 7/7/1985 as per registered assignment deed marked as Ext.A1. Jayasree Nair in turn assigned the property to the original plaintiff as per Ext.A2 assignment deed. It is alleged that by virtue of Ext.A2 assignment deed the plaintiff is in possession and ownership of the plaint schedule property. It is averred in the plaint that at the time of Ext.A2 assignment deed executed in favour of the no revenue plaintiff, recovery proceedings were pending and that the property was free of encumbrance. It is also averred that notice for attachment is dated 9/8/1991 and long prior to the said notice the property was sold to Jayasree Nair and therefore the plaint property is not liable to be **-4-** ## **S.A.No.955/2000** auctioned for realisation of the amount due from Kumaran. 4. In the written statement filed by defendants 1 and 2 it is contended inter alia that the suit is bad for want of notice under Section 80 of the Code of Civil Procedure, that the civil court has no jurisdiction to entertain the suit in view of the bar under Section 72 of the Revenue Recovery Act, that the revenue recovery proceedings are initiated against the wife of Kumaran for realisation of the arrears of revenue due from Kumaran towards employer's contribution and that as per the Kerala Toddy worker's Welfare Fund Act, 1978 an amount of Rs.56,567/- is due from Kumaran towards the Toddy Worker's Welfare Fund. Notice was issued to the wife of late Kumaran. It is contended that in order to escape from the liability to pay the amount, the legal heirs of late Kumaran had executed a sham document in favour of Jayasree Nair and Jayasree Nair had executed Ext.A2 assignment deed in favour of the plaintiff. According to the defendants, Exts.A1 and A2 deeds have no legal validity. The consideration shown in those **-5-** ## **S.A.No.955/2000** documents are not true. The suit was filed at the instance of the legal heirs of late Kumaran. Therefore, the defendants resisted the suit contending that the revenue recovery action taken by them is binding upon the plaint schedule property. 5. The parties adduced oral and documentary evidence. PW1 and DW1 were examined and Exts.A1 to A8 and B1 to B11 were marked. It is not disputed that the plaint schedule property originally belonged to Kumaran. After the death of Kumaran the said property was assigned by his legal heirs to one Jayasree Nair on 7/7/1985 as per Ext.A1 registered assignment deed. Jayasree Nair in turn assigned the property to the plaintiff on 4/7/1987 as per Ext.A2 assignment deed. Plaintiff produced Exts.A6 to A8 revenue receipts evidencing payment of revenue. Plaintiff, when examined as PW1, testified before the court below that he has purchased the property for valuable consideration and that at the time of purchase, he was satisfied that there is no encumbrance on the property. The contention raised by the defendants is that **-6-** ## **S.A.No.955/2000** Exts.A1 and A2 are sham documents, which are not acted upon and are not bona fide transactions. The only witness examined on the side of the defendant is DW1. On his examination he testified before the court below that he has absolutely no direct knowledge regarding the execution of Exts.A1 and A2 or regarding the circumstances under which the documents are executed and as to whether those documents are supported by valuable consideration or not. Placing reliance on the oral and documentary evidence adduced by the plaintiff and after considering the testimony of DW1 to the effect that he has no direct knowledge regarding the circumstances under which Exts.A1 and A2 are executed or as to whether those documents are supported by consideration or not, the trial court found that there are absolutely no supporting evidence on the side of the defendants in support of their allegations in the written statement. The trial court held that the evidence adduced reveals that they are allegations made for allegations sake and not based on any dependable information. The **-7-** ## **S.A.No.955/2000** trial court on facts concluded that Exts.A1 and A2 are bona fide transactions and the plaintiff is a bona fide purchaser of the plaint schedule property. 6. Exts.B1, B3, B4, and B6 are notices issued by the Welfare Fund Inspector to Kumaran. Exts.B2, B5, B7 and B9 are the revenue recovery certificates issued by the Toddy Worker's Welfare Fund Inspector to the District Collector for initiating revenue recovery proceedings. These documents were examined by the trial court and the trial court noticed that these documents are only demands made against the deceased Kumaran and not against the executants of Exts.A1 document, who are the legal heirs of late Kumaran. Therefore, the trial court found that those documents will not prove that the legal heirs of deceased Kumaran were aware of the proceedings initiated against deceased Kumaran. Ext.B10 is a notice dated 7/3/1986 issued to the wife of Kumaran calling upon her to pay the amount due from the deceased Kumaran towards Toddy Worker's Welfare Fund. Ext.B11 is the **-8-** ## **S.A.No.955/2000** order. Ext.B10 notice was served on the wife of Kumaran after the execution of Ext.A1 assignment deed. Exts.A3, A4 and A5 notices were issued to the wife of Kumaran under the Revenue Recovery Act in the years 1991 and 1992. The trial court on evidence held that the evidence on record reveals that the legal heirs of deceased Kumaran were made aware of the proceedings initiated against the him, only after the execution of Ext.A1 document. The trial court found that Ext.A1 assignment deed was executed without the knowledge about the proceedings initiated against Kumaran. Referring to Exts.A3 and A5 notices the trial court held that when the notices of attachment of the property were issued, the property was already sold away by the legal heirs of the deceased Kumaran and hence at the time of sending Exts.A3 and A5 notices neither Kumaran nor his legal heirs had no right over the plaint schedule property. The court below also noticed the fact that no documents were produced by the defendants to show that the plaint schedule property was attached for the amount due from the deceased **-9-** ## **S.A.No.955/2000** Kumaran before the execution of Ext.A1 assignment deed. The trial court further noticed the admission of DW1 that the plaint schedule property was not made a charge for the amount due from Kumaran and therefore there was absolutely no prohibition against the legal heirs of deceased Kumaran from selling away their property as per Ext.A1. In the circumstances, the trial court held that the attachment order effecting sale of the properties of deceased Kumaran for realisation of the amount due from him is not binding upon the plaintiff or the plaint schedule property. Accordingly the court granted a declaration and injunction as prayed for in the plaint. 7. The Lower Appellate Court considered the question as to whether Ext.A1 assignment deed is a fraudulent transfer as contemplated under Section 53 of the Transfer of Property Act which envisages that every transfer of immovable property made with an intention to defeat or delay the creditors or the transferor shall be voidable at the option of any creditor so defeated or **-10-** ## **S.A.No.955/2000** delayed and as to whether the plaintiff is justified in purchasing the properties as a bona fide purchaser with valuable consideration as enjoined by the rule of law. The Lower Appellate Court observed that the Kerala Toddy Worker's Welfare Fund Act provides a self contained Code and any dispute regarding the application of the Act must be determined by the authorities constituted under the Act. The Lower Appellate Court also held that the transfer as per Ext.A1 was effected by the legal heirs of the deceased Kumaran in favour of the plaintiff long after the amount had fallen in arrears and therefore in terms of Section 68, such arrears have to be recovered as land revenue. The Court held that Section 44(1) of the Revenue Recovery Act is attracted and that the plaintiff will not get the benefit under Section 44(1). The Court observed that Section 44(3) makes it clear that transfers of immovable property by a defaulter to a near relative or for grossly inadequate consideration after public revenue due on any land from him has fallen to defeat or delay the recovery of such arrears and that the **-11-** ## **S.A.No.955/2000** transfer is presumed to be a fraudulent transfer because the purchaser is to be aware of the arrears of revenue due from the plaint schedule properties. Relying on the decision reported in **Kunjappan v. Toddy Workers Welfare Fund (1987 (1) K.L.T. 633)** the Appellate Court held that the Kerala Toddy Worker's Welfare Fund Act is a self-contained Code in the matter of determination of the liability of the employer under Section 8 and the civil court has no jurisdiction to entertain the suit under Section l7A of the Act. The Appellate Court also held that the contention of the plaintiff that he was not aware of the revenue recovery proceedings at the time of purchase cannot be accepted for the reason that Ext.A3 notice dated 9/8/1991 was issued and that it is presumed that the plaintiff was aware of the arrears due to the Government at the time of execution of Ext.A1 registered assignment deed. The Lower Appellate Court, on the basis of the reasons stated above, held that Ext.A1 is a fraudulent transfer. 8. The plaint schedule property was assigned by the legal heirs of **-12-** ## **S.A.No.955/2000** deceased Kumaran to one Jayasree Nair on 7/7/1985 as per Ext.A1 registered assignment deed and she in turn assigned the property to the plaintiff from 4/7/1987 as per Ext.A2 registered assignment deed. The trial court considered the contention of the defendants that Exts.A1 and A2 deeds are sham documents which are not acted upon and the plaintiff, Jayasree Nair and the legal heirs of deceased Kumaran colluded together and created those deeds in order to prevent the property from selling for the recovery of revenue due from Kumaran and they are not bona fide transactions. The trial court on facts held that regarding the allegations against Exts.A1 and A2 deeds there is absolutely no supporting evidence on the side of the defendants and the available evidence reveals that they are allegations made for allegations sake and not based on any dependable information. The trial court also found that the only documents produced on the side of the defendants to show that notice has been issued to the wife of late Kumaran are Exts.B10 and B11. Ext.B10 is a notice dated 7/3/1986 issued to **-13-** ## **S.A.No.955/2000** the wife of late Kumaran which is subsequent to Ext.A1 assignment deed. The said notice was issued calling upon her to produce documents for fixing the liablity of late Kumaran towards the Toddy Worker's Welfare Fund. Ext.B11 is the order passed pursuant to Ext.B10 notice. The liability of deceased Kumaran was assessed for the first time pursuant to Ext.B10 notice and Ext.B11 order was passed. Ext.B10 notice was served on the wife of late Kumaran, after the execution of Ext.A1 assignment deed. Exts.A3, A4 and A5 notices were issued to the wife of later Kumarn for attachment and sale of the property. The said notices were issued in the years 1991 and 1992. The materials placed before the court below reveal that the legal heirs of the deceased Kumaran were made aware of the proceedings initiated against deceased Kumaran only after the execution of Ext.A1 assignment deed. Therefore, the trial court concluded that they had executed Ext.A1 document without knowing about the proceedings initiated against Kumaran. The trial court therefore rightly held that at the time of issuing **-14-** ## **S.A.No.955/2000** Exts.A3 and A5 notices neither Kumaran nor his legal heirs had no right over the plaint schedule property. The trial court on evidence found that no documents are available to show that the plaint schedule property was attached by the defendants for the amount due from deceased Kumaran before the execution of Ext.A1 assignment deed. The trial court noticed that the plaint schedule property was not made a charge for the amount due from Kumaran. Therefore, at the time of execution of Ext.A1 assignment deed there was absolutely no prohibition against the legal heirs of deceased Kumaran from executing the sale deeds to the third parties. Ext.A1 was executed by the legal heirs of deceased Kumaran at a time when no proceedings were initiated for the realisation of the amounts due towards the Toddy Worker's Welfare Fund contribution. Proceedings passed for determination of the liability of Kumaran is Ext.B11 which was passed pursuant to Ext.B10 notice issued to the wife of deceased Kumaran. Ext.B11 proceedings is passed, after the execution of Ext.A1 **-15-** ## **S.A.No.955/2000** assignment deed. In the circumstances, the trial court granted a decree as prayed for by the plaintiff. 9. Admittedly, the defendants have no case that the amounts were due from the plaintiff. No evidence was adduced by the defendants to prove that Ext.A1 is not a bona fide transaction. Section 17A of the Kerala Toddy Worker's Welfare Fund Act is attracted only in cases which are required to be settled, decided or dealt with any question or to be determined any matter which is by or under this Act required to be settled, decided or dealt with or to be determined by the Government or the Board or the Chief Welfare Fund Inspector or any Welfare Fund Inspector. In this case the plaintiff is a third party, who got assignment of the property from the wife of late Kumaran. As stated earlier, the assignment was made at a time when no proceedings were initiated for recovery of the arrears of land revenue. Plaint schedule property was not made as a security or there was any charge over the said property at the time of Ext.A1 assignment deed. Section **-16-** ## **S.A.No.955/2000** 44 (1) of the Revenue Recovery Act is applicable only in a case where any engagement entered into by the defaulter with any one in respect of any immovable property, after the service of the written demands on him. In this case written demands were issued not after the death of the defaulter and longer after Ext.A1 assignment deed. It is rightly observed by the court that there is no evidence adduced to prove that the property was transferred after the public revenue due on any land from him has fallen in arrears. Ext.B1 notice was issued long after Ext.A1 assignment deed. Ext.B11 order was issued pursuant to Ext.B10 notice. Transfer is made long before the determination of the liability. Plaintiff is not a near relative of the defaulter. There is no evidence to prove that the transfer is after the public revenue due on any land. Therefore Section 44(2) is not attracted. Section 44(3) is also not attracted. For the reasons elaborately considered and stated by the trial court I find that the plaintiff is entitled to the reliefs sought for in the plaint. The reasons stated for dismissing **-17-** ## **S.A.No.955/2000** the suit by the Lower Appellate Court cannot stand and they are unsustainable in law. The evidence on record was not properly appreciated by the Lower Appellate Court. In these circumstances, the Lower Appellate Court is not justified in reversing the judgment and decree passed by the trial court. In the result, the appeal is allowed. The judgment and decree passed by the Lower Appellate Court in A.S.No.140/95 are set aside and the judgment and decree passed by the trial court is restored. No order as to costs. **HARUN-UL-RASHID, JUDGE.** **kcv.** **-18-** ## **S.A.No.955/2000** **-19-** ## **S.A.No.955/2000** HARUN-UL-RASHID, J. -----------------------------------S.A.NO. OF ------------------------------------ **==> picture [64 x 12] intentionally omitted <==** **----- Start of picture text -----**<br> JUDGMENT<br>**----- End of picture text -----**<br> March, 2012