V. Sindhu and Vinod v. Gopalakrishna Kartha and Suresh Kumar

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **&** **THE HONOURABLE MR. JUSTICE JOHNSON JOHN** **MONDAY, THE 22[ND] DAY OF JULY 2024 / 31ST ASHADHA, 1946** **EX.FA NO. 8 OF 2021** **AGAINST THE ORDER DATED 19.01.2021 IN AS 29/2019 OF ADDL. DISTRICT COURT-I, MAVELIKARA** **AGAINST THE ORDER DATED 19.01.2021 IN IA 2/2021 IN AS 29/2019 OF** **ADDL. DISTRICT COURT-I, MAVELIKARA** **AGAINST THE ORDER DATED 17.11.2018 OF SUB COURT, CHENGANNUR IN EA 49/2016 IN OS 44/2013** **-----** ## **APPELLANTS/CLAIM PETITIONERS:** **1 V.SINDHU, AGED 49 YEARS,** **D/O. LATE VASUDEVAN PILLAI, PARAMESWARATHU, KEEZHCHERIMEL MURI, CHENGANNUR VILLAGE, CHENGANNUR TALUK, (REPRESENTED BY POWER OF ATTORNEEY HOLDER ANANDABHAIAMMA, W/O. LATE VASUDEVAN PILLAI, AGED 76 YEARS, PARAMESWARATHU, KEEZHCHERIMEL MURI, CHENGANNUR VILLAGE, CHENGANNUR TALUK)** **2 VINOD, AGED 53 YEARS,** **S/O. LATE VASUDEVAN PILLAI, PARAMESWARATHU, KEEZHCHERIMEL MURI, CHENGANNUR VILLAGE, CHENGANNUR TALUK, (REPRESENTED BY POWER OF ATTORNEEY HOLDER ANANDABHAIAMMA, W/O. LATE VASUDEVAN PILLAI, AGED 76, PARAMESWARATHU, KEEZHCHERIMEL MURI, CHENGANNUR VILLAGE, CHENGANNUR TALUK)** **BY ADVS. M.NARENDRA KUMAR HARSHADEV M.** **EX.FA NO. 8 OF 2021 -2-** ## **RESPONDENTS/PLAINTIFF & DEFENDANT:** **1 GOPALAKRISHNA KARTHA, AGED ABOUT 67 YEARS S/O. KUTTAN PILLAI, GOKULAM, KEEZHCHERIMEL MURI, CHENGANNUR VILLAGE, CHENGANNUR TALUK. 2 SURESH KUMAR, AGED 57 YEARS, S/O LATE VASUDEVAN PILLAI,KEEZHECHERIMEL MURI,CHENGANNUR VILLAGE,CHENGANNUR TALUK.** **BY ADVS. T.K.SANDEEP ARJUN SREEDHAR ARUN KRISHNA DHAN ALEX ABRAHAM** ## **THIS EXECUTION FIRST APPEAL HAVING COME UP FOR HEARING ON** **22.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **SATHISH NINAN & JOHNSON JOHN, JJ.** **= = = = = = = = = = = = = = = = = = Ex.F.A. No.8 of 2021** **= = = = = = = = = = = = = = = = = = Dated this the 22[nd] day of July, 2024** ## **J U D G M E N T** ## **Sathish Ninan, J.** The claim petition filed by the petitioners under Order XXI Rule 58 of the Code of Civil Procedure was allowed in so far as it related to the claim of the 2[nd] claimant alone. Challenging that part of the order which declined relief to the 1[st] claimant, they are in appeal. 2. Respondents 1 and 2 in the appeal are the plaintiff and the defendant respectively, in the suit. The claim petitioners-appellants and the defendant are siblings. 3. Since the appeal relates only to the claim of the first claimant, the facts relating to the same alone are being adverted to. 4. The suit for money (Rupees 40 lakhs) was filed Ex.F.A.No.8 of 2021 -: 2 :- by the plaintiff on 18.07.2013. He secured an attachment before judgment over an extent of 14.12 Ares of property. The suit was decreed exparte on 22.09.2015. Though a claim petition was filed thereafter, it was later withdrawn and the claim petition was filed on 21.12.2016. 5. The first claimant claims title over 6.59 ares from the larger extent of property under attachment. An extent of 14.12 Ares of property belonged to one Vasudevan Pillai, the father of the claimants and the defendant. Vasudevan Pillai had executed Ext.A1 Will dated 07.07.2005. As per Ext.A1 an extent of 3.35 ares + 3.24 ares = 6.59 ares was bequeathed in favour of the defendant as included in item No.1 therein. An extent of 3.35 ares was bequeathed in favour of the claimant No.2, and an extent of 6.95 ares included in item No.3 was bequeathed in favour of claimant No.1. A life interest Ex.F.A.No.8 of 2021 -: 3 :- was reserved in Ext.A1 Will in favour of his wife Aananthabhai Amma. Vasudevan Pilla died on 23.10.2007 and title was vested with the respective legatees. 6. On 25.03.2009, the defendant borrowed an amount of Rs.40 lakhs from the plaintiff. On 27.03.2009 and 28.04.2009, the defendant executed Exts.A2 and A3 Sale Deeds in favour of his sister the first claimant, transferring the entire 6.59 Ares of property bequeathed to him under Ext.A1. Claiming title under Exts.A2 and A3, the claim petition under Order XXI Rule 58 was filed seeking lifting of the attachment. 7. The plaintiff/first respondent herein filed an objection contending that the entire proceedings are collusive, that the alienations relied on are after the availing of loan by the defendant. It was also contended that transfer of property if any effected is void and in violation of the provisions of the Transfer of Property Ex.F.A.No.8 of 2021 -: 4 :- Act. 8. The execution court found that the properties belonging to the second claimant are not liable for attachment, as she obtained title under Ext.A1 Will. As regards claimant No.1, it was found that Exts.A2 and A3 conveyances in her favour by the defendant are transfers in fraud of creditors under Section 53 of the Transfer of Property Act. 9. We have heard Sri.M.Narendrakumar, the learned counsel for the appellants-claim petitioners and Sri.P.B.Krishnan, the learned Senior Counsel for the first respondent-plaintiff. 10. The points that arise for determination are, _(i) Is their lack of pleadings of “fraudulent transfer”, resulting in prejudice to the appellant ?_ _(ii) Does the finding of the execution court that Exts.A2 and A3 are transfers in fraud of creditors warrant interference ?_ Ex.F.A.No.8 of 2021 -: 5 :- _(iii) Is the evidence on record sufficient enough to find that the first claimant is a bonafide purchaser for value ?_ 11. The learned counsel for the appellants contend that a plea under Section 53 of the Transfer of Property Act was never raised before the execution court in the counter filed by the decree holder-plaintiff. Till the evidence was over, the court did not raise any issues or point for trial. The appellants-claimants are seriously prejudiced thereby since they lost the opportunity to raise a plea of bona fide purchaser for value. The plea raised could at best be understood only as one of ‘sham’ transaction, it is argued. 12. A reading of the objections filed by the plaintiff-decree holder to the claim petition indicates that, at paragraphs 5 and 7 therein it has been contended that, the claim petition has been filed collusively between the siblings along with their mother Ex.F.A.No.8 of 2021 -: 6 :- to prevent realisation of the debt. It is also contended that Exts.A2 and A3 are executed after the borrowal of the amounts. It is also pleaded that if there has been any transfer under Exts.A2 and A3, they are void and is in violation of the Transfer of Property Act. The said paragraphs 5 and 7 are extracted hereunder :- “5. tað hn-h-cn-¨ X-c-¯nð tað \-¼À tI-kn-\v B-[m-c-am-bn ]-Ww C- S-]m-SpI-sf kw-_-Ôn¨pw tI-kn-s\ kw-_-Ôn¨pw tI-kn-sâ hn-[n-sb ]- änbpw ]qÀ-®-am-bn a-\-Ên-em¡n-b hn-[n-I-S-¡m-c\m-b cïmw F-XnÀI-£n X-sâ k-tlm-Z-c-§-fp-ambpw colluded B-bn hÀ-¯n-¨v tað \-¼À tI-knse hn-[nkwJy Cu-Sm-¡n F-Sp-¡m-sX C-cn-¡p-ó-Xn-\p-th-ïn \-S-¯p-ó X- {´-¯nâ `m-K-am-bn-«m-Wv tað \-¼À A-hIm-i lÀ-Pn ^-bð sN-bv-Xn-«pÅXv. H-ópw cïpw A-hIm-i I-£n-I-fm-bn hn-h-cn-¨n-«p-Å kn-Ôp-hpw hnt\mZpw hn-[n-I-S-¡mc-sâ k-tlm-Z-cnbpw k-tlm-Z-c-\p-amWv. A-h-Im-i-lÀPn-¡m-cp-sS ap-àymÀ-Im-cn B-\-µ-`m-bn A-½ Sn tI-kn-se hn-[n-I-S-¡mc\pw cïmw F-XnÀ-I-£n-bpam-b kp-tc-jv Ip-am-dn-sâbpw Hópw cïpw A- h-Im-i lÀ-Pn-¡m-cp-tSbpw am-Xm-hp-am-Ipóp. A-h-scñmw tNÀóv colluded B-bn hÀ-¯n-¨v hn-[n D-S-a hn-[n \S-¯p lÀ-Pn tImS-Xn ap-¼m-sI ^-bð sN-¿p-ó-Xn-\v ap³-]n-\m-se X-só Iu-i-e-]qÀ-Æw tað \-¼À lÀ-Pn ^- bð-sN-bv-Xn-«p-Å-Xm-Ipóp. 7. Iq-Sm-sX tað \-¼À lÀ-Pn-¡v A-\p-_-Ôam-b k-Xy-hm-Mv-aq-e-¯nð hn-h-cn¡p-ó h-kv-Xp ssI-am-ä-§Ä \-S-ó-Xm-bn Im-Wpó-Xv ta-ð \-¼À tI-kn-\v B- kv-]-Z-am-b ]-Ww C-S-]m-Sv \-S-ó-Xn-\v ti-j-amWv. A-{]-Im-cw h-kv-Xp ssI-am-äw \-S-ón-«p-sï-¦nð A-Xv {]-Xy-£-¯nð X-só A-km-[phpw Transfer of Property Act sâ ew-L-\-hp-amWv. B \ne-¡v A-hIm-i lÀ-Pn-¡mÀ¡pw cïmw F-XnÀI-£n¡pw F-Xn-sc hn-[n-bp-S-abm-b Hómw F-XnÀ-I-£n-¡v th-sdbpw hy-h Ex.F.A.No.8 of 2021 -: 7 :- lm-c Im-c-W-§Ä D-Û-hn-¨n-«p-Å-Xpw B-b-Xnðh-¨v {]-tXy-I hy-h-lm-cw tImS-Xn-bnð t_m-[n-¸n-¡p-ó-Xp-am-Ipóp.” 13. Section 53(1) of the Transfer of Property Act deals with transfers effected in fraud of the creditors. It reads thus :- “ _**53. Fraudulent transfer** .⸺(1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed._ _Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration._ _Nothing in this sub-section shall affect any law for the time being in force relating to insolvency._ _As suit instituted by a creditor (which term include a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor shall be instituted on behalf of, or for the benefit of, all the creditors._ 14. In the case at hand, though Section 53 of the Transfer of Property Act is not specifically mentioned, it is contended that the entire proceedings are collusive between the mother and the children. It has been pleaded that the conveyances in question were after Ex.F.A.No.8 of 2021 -: 8 :- the loan transaction. The assignments are in favour of the sister. It has been pleaded that the transfers if any effected are void and are in violation of the Transfer of Property Act. It is evident from the pleading that, the sale transactions are being challenged as collusive, fraudulent and void. That the challenge is against the genuineness of the transactions under Exts.A2 and A3 which occurred immediately after contracting the debt. It was open for the claimants to have raised a plea of bona fide purchaser for value. When the assignments are challenged on the grounds as above, it could not be said that the claimants were unaware that the challenge is on the ground of “fraudulent transfer”. We are unable to find that there has been lack of pleading resulting in prejudice to the appellants. 15. Coming to the merits, the borrowal was on Ex.F.A.No.8 of 2021 -: 9 :- 25.03.2009. Ext.A2 was on 27.03.2009 and Ext.A3 on 28.04.2009. Both the documents are purported to be sale deeds. The conveyance is in favour of none other than the sister of the defendant. Noticeably, the claimant has not mounted the witness box to depose about Exts.A2 and A3 conveyances. She was the best person to depose about the conveyances, the consideration etc. It is her mother, who held a life interest over the property and had joined in the execution of documents, who was examined as PW1. According to her she is not even aware of the consideration for the transaction. In Exts.A2 and A3 it is stated that the sale consideration was received earlier “ap³ ]-äv”. The defendant has been, and is currently, abroad. He has no assets left here. The mother-PW1 deposed that she was aware of the attachment in the year 2013 itself. However, the claim petition has been filed only in the year 2016. Of course, after the Ex.F.A.No.8 of 2021 -: 10 :- decree an earlier claim petition was filed as IA 266/2015, which was subsequently withdrawn and thereafter present claim petition was filed. Though there was an attachment as early as on 18.07.2013 of which the parties were aware, the claim petition was filed only after the decree in the year 2015. 16. As held by this Court in _**Sherikath & Ors. v. Sham Seena & Anr.2017 (2) KHC 773**_ when the transfer is on the face of a debt and is in favour of a near relative, there is a presumption of fraudulent transfer. The burden is on the person who ventures to save the conveyance. 17. Before this Court documents are sought to be produced by the appellants through an application under Order XLI Rule 27 of the Civil Procedure Code. The said documents would only show that, subsequent to Exts.A2 and A3, mutation was effected and improvements were effected in the property. Those documents even if Ex.F.A.No.8 of 2021 -: 11 :- admitted in evidence will not help in proving that Exts.A2 and A3 were bona fide conveyances for value. The claimant is not examined. The passing of consideration is not proved. The consideration is stated to have been paid earlier, “ap³ ]-äv”. The mother who held a life interest over the property and an executant of the sale deeds is unaware of the consideration for the same. It is very important to note that, the claimant or PW1, the mother, do not even have a case that they were unaware of the debt incurred by her brother immediately prior to Ext.A2 and A3 Sale Deeds. It has much significance in considering the question of “bonafide transferee”. Hence, it cannot be held that the first claimant is a bonafide transferee consideration. 18. The evidence on record has been rightly appreciated by the execution court in holding against Exts. A2 and A3 documents. The claim of the first Ex.F.A.No.8 of 2021 -: 12 :- claimant was rightly dismissed by the Execution Court. We do not find any merit in the appeal. Appeal fails and is dismissed. Sd/- kns/- **SATHISH NINAN JUDGE** Sd/- **JOHNSON JOHN JUDGE** //True Copy// P.S. To Judge ## **APPENDIX OF EX.FA 8/2021** ## **PETITIONER ANNEXURES** |**ANNEXURE A**|**ORDER DATED 11-01-2021 IN IA NO 1/2020 IN A.S**| |---|---| ||**NO. 29 OF 2019 BEFORE COURT OF ADDITIONAL**| ||**DISTRICT JUDGE-1, MAVELIKARA.**| |**ANNEXURE B**|**ORDER DATED 19-01-2-21 IN IA NO 2/2021 IN AS**| ||**NO. 29 OF 2019 BEFORE COURT OF ADDITIONAL**| ||**DISTRICT JUDGE-1, MAVELIKARA**| |**ANNEXURE C**|**APPEAL MEMORANDUM IN A.S 29 OF 2019 BEFORE**| ||**COURT OF ADDITIONAL DISTRICT JUDGE-1,**| ||**MAVELIKARA.**| |**ANNEXURE D**|**IA NO. 167 OF 2019 IN A.S 29 OF 2019 BEFORE**| ||**COURT OF ADDITIONAL DISTRICT JUDGE-1,**| ||**MAVELIKARA TO ACCEPT POWER OF ATTORNEY.**| |**ANNEXURE E**|**TRUE COPY OF POWER OF ATTORNEY DATED 02-08-**| ||**2013**| |**ANNEXURE F**|**IA NO 168 OF 2019 IN A.S 29 OF 2019 BEFORE**| ||**COURT OF ADDITIONAL DISTRICT JUDGE-1,**| ||**MAVELIKARA TO CONDONE DELAY.**| |**ANNEXURE G**|**PROCEEDINGS IN IA NO. 1/2020 AND IA NO.**| ||**2/2021 IN AS NO. 29 OF 2019 BEFORE COURT OF**| ||**ADDITIONAL DISTRICT JUDGE-1, MAVELIKARA.**| -----