Authored By : Macpherson, J.F. Stevens

Macpherson and J.F. Stevens, JJ.

1. The object of this suit is to obtain a declaration thatthe kobala of the 5th Assar 1296, executed by the appellants father in favourof the respondent, is a benami and fictitious deed not affecting theappellants right to the property which it purported to convey, and to get suchfurther relief as the Court may think fit to give in confirmation of theappellants title and possession. The plaint discloses that the deed inquestion was executed at the respondents suggestion to secure the propertyagainst persons who had obtained decrees against the appellants father, that itwas a purely colourable transaction without consideration or any transfer ofpossession, and that the respondent was now fraudulently setting up a title tothe property. The respondent put in a written statement, in which he claimedtitle to the property under the kobalas impugned by the appellant, allegingthat there was a good and valid sale for consideration. Admittedly the deed inquestion was used to give effect to the fraudulent purpose for which, accordingto the appellants case, it was executed, The holder of a decree against theappellants father attached the property; the respondent was allowed to putforward a claim to it on the strength of this deed; and the claim was allowedby the Court. On the allegations in the plaint, coupled with the undisputedfacts mentioned, the Subordinate Judge, without taking any evidence, dismissedthe suit on the ground that the plaintiff could not maintain it.

2. In our opinion the decision is right and the appellantcannot ask the Court to relieve him from the consequence of an accomplishedfraud. He cannot be allowed to show the true nature of the conveyance whichgave a good legal title to the respondent, when the conveyance has beensuccessfully used to give effect to the fraudulent purpose for which it was executed.In none of the cases decided in England and in this country, which have beencited in the argument, except perhaps the case of Param Singh v. Lalji Mal(1877) 1 AIL, 403, does it appear that relief has been given in a case such asthis; and in the recent cases of Goberdhan Singh v. Ritu Roy I.L.R (1896) 23Cal., 962, and of Kali Charan Pal v. Rasik Lal Pal I.L.R (1894) 23 Cal., 962 [LQ/CalHC/1896/61] ,note, where there was a colourable conveyance in fraud of creditors, and thefraud had been carried into effect, this Court refused to give the plaintiffrelief. The same course was adopted by the Madras Court in Rangammal v.Venkatachari I.L.R (1895) 18 Mad., 378, and in Chenvirappa v. Puttappa I.L.R(1887) 11 Bom. 708, West and Birdwood, JJ., dissented from the Allahabad casementioned above.

3. It is argued that there is no real distinction betweencases in which there is a fraudulent conveyance to cheat creditors, but nothingmore is done in furtherance of the fraud, and cases in which the fraudulentpurpose is effected wholly or partially by means of the fraudulent conveyance;and we have been referred to a number of cases in which it is said that thestricter and broader rule adopted in the earlier cases in this Court, e.g., inAlooksoondery Goopto v. Horo Lal Roy (1866) 6 W.R., 287, and in Kalee Nath Kurv. Doyal Kristo Deb (1870) 13 W.R., 87, has been relaxed and relief givenwithout any such distinction being drawn. The cases referred to areLuteefoonissa v. Goor Surun Doss (1872) 18 W.R., 485 Sree Nath Roy v. BindooBashinee Debia (1873) 20 W.R., 112 Debia Chowdhrain v. Bimola Soonduree Debia(1874) 21 W.R., 422 Gopee Nath Naik v. Jodoo Ghose (1874) 23 W.R., 42; By huntNath Sen v. Goboollah Sikdar (1875) 24 W.R., 391, and Thacoor Prosad v. BaluckRam (1882) 12 C.L.R., 64.

4. All these cases purport to follow the decisions of theJudicial Committee in Ram Surun Singh v. Pran Pearee (1870) 13 Moore I.A., 551,and Oodey Koowwur v. Ladoo (1870) 13 MooreI.A., 585: 6 B.L.R., 283. In theformer case the plaintiff sued for possession on a conditional deed of saleexecuted by the defendant, who pleaded that the deed had been merely nominallyexecuted without any consideration to protect the property against personsclaiming it as heirs of her husband. In a previous suit brought by thosepersons for the property and charging that the conveyance was made to deprivethem of their rights, the plaintiff and defendant both asserted that the deedwas a good deed for consideration. The suit was dismissed on the sole groundthat there was no right of suit in the widows lifetime. It was contended thatthe respondent was estopped by her pleadings and admissions in that suit, andcould not deny or contest the validity and legal effect and operation of herdeed, or set up her own fraud to prevent the operation of it. Their Lordshipsheld that the deed created no estoppel, that it was a case of a common mortgagein which it was open to the mortgagor to deny the receipt of the money and tocut it down to a nominal sum or nothing, and that being so, and the instrumentbeing relied on by a person out of possession seeking to recover possessionthrough the medium of a foreclosure suit, there was nothing to prevent thedefendant from showing the real truth of the transaction. As regards the estoppelby pleading, they said that a pleading by two defendants against the suit ofanother plaintiff could not amount to an estoppel as between them.

5. In the latter case, the plaintiff claimed the property asheir of her deceased son Shib Lall, and denied that the latter had been givenin adoption to the defendant, who was the widow of Shib Lalls brother. In aprevious suit brought by the respondent for herself and as guardian of ShibLall to redeem a property mortgaged by the plaintiffs husband, it was objectedthat she was not the guardian of Shib Lall and could not maintain the suit. Theplaintiff intervened in that case and put in a petition supporting the adoptionand disclaiming any interest in the property. Their Lordships said that if thepetition was to prevent the plaintiff from recovering the property, it wouldonly do so either because it operated as a conveyance or a contract to convey,or by way of estoppel; that it could not operate as a conveyance or contract,because the plaintiff had at that time no interest in the property, and nevercontemplated a conveyance of the right which she now had; that it did notoperate as an estoppel, because the fact that the plaintiff professed to resignsome supposed interest as heir of her husband could not estop her from settingup her real right as heir of her son when that right accrued; and they addedthat there was no consideration, and no misrepresentation to the defendant, whoknew the actual facts and did not alter her position in any way.

6. These were not therefore cases of a fraudulent conveyanceby a deed of absolute sale, to which effect had been given in aid of theintended fraud, and they furnish, we think, no authority for the broadcontention now put forward. It is unnecessary to allude in detail to the casescited from the Weekly Reporter; the facts are not fully stated, and in none ofthem do the facts appear to be similar to the facts of this case. InLuteefoonissa v. Goor Surun Dass, it was held, citing the case of Ram SurunSingh v. Pran Pearee (1870) 13 MooreI.A., 551, that a party against whom theadmission of a deed of gift is sought to be used may explain the matter andshow the real nature of the transaction. In Sreenath Boy v. Bindoo BashineeDebia, the question was whether a jote had a real existence, or was, as thedefendant contended, only colourably created. It was held that the defendantwas not stopped by a statement of the person from whom he derived title bypurchase from showing that the jote was only colourably created, and the twocases in the 13th volume of Moore were cited as an authority. In DebiaChowdhrain v. Bimola Soonduree Debia, the defence in substance was that thepersons from whom the plaintiff derived title by purchase were really thebenamdars of the defendant, who was the real owner. It was held again, citingthe cases in the 13th volume of Moore, that the defendant was not estopped fromshowing the true nature of the transaction by some admission which she had madein a previous suit. In Gopeenath, Naik v. Jodoo Ghose, the facts are not at allstated, but Markby and Mitter, JJ., said they adopted the view of the law takenin Debia Chowdhrain v. Bimola Soonduree Debia. In Bykunt Nath Sen v. GoboollahSikdar, there is also on report of the facts, but Markby, J., said that hedissented from the Judges statement that "it is a settled principle thatwhen a father makes a fictitious sale to cheat his creditors, neither he norhis heirs can afterwards impugn its validity;" and he added that thisprinciple was inconsistent with the decisions in the 13th volume of Moore andin the 21st volume of the Weekly Reporter. In none of those cases does itappear that the plaintiff was asking for relief against his own fraudulentconveyance which had been successfully used to defraud a creditor. It is truethat in Sreenath Boy v. Bindoo Bashinee Debia, and in Debia Chowdhrain v.Bimola Soonduree Debia, Sir Richard Cough made some remarks of a generalcharacter, which must, however, be taken in connection with the facts of the particularcase before him. In the former case he said that the questions "to whatextent a person shall be at liberty to allege and prove fraud in a matter towhich he was a party, or shall be at liberty to allege and prove that anyadmissions made by him were made with a fraudulent purpose and were not true,and also to what extent persons claiming under any one who had made suchadmissions will be at liberty to do the same," had been much discussed inthe Courts in England. Then he said that in this respect there was nodifference between the law in England and the law in India, and for the law inEngland he cited Symes v. Hughes IL.R(1870) 9 Eq., 475, and said that the lawin India had been settled in the case reported in the 13th volume of Moore,page 551. In Symes v. Hughes, which Sir Richard Couch cited in both the casesreferred to, Lord Romilly, M.R., said: "Where the purpose for which theassignment was given is not carried into execution, and nothing is done underit, the mere intention to effect an illegal object, when the assignment wasexecuted, does not deprive the assignor of his right to recover the propertyfrom the assignee, who has given no consideration for it;" and he addedthat in that case no harm had been done to any creditor, and that the suit wasnow being prosecuted to enable the creditor to recover something. We cannotsuppose that Sir Richard Couch would have cited this case as stating the law inEngland without recognising the distinction referred to in it.

7. The case which at first sight seems most in theappellants favour is that of Thacoor Prosad v. Baluck Ram (1882) 12 C.L.R 64.There Thacoor Prosad, who was a member of a family to which apparently theMitakshara rules applied, claimed as exclusively his a property which had beenacquired in his name. The defendants were the purchasers of the rights andinterests of the other members of the family. Thacoor Prosad had mortgaged theproperty, and to defeat the claims of the mortgagee he and the other members ofthe family set up in execution proceedings a partition deed by which no part ofthe property in question had been allotted to Thacoor Prosad. It was found thatthe partition deed was not a real transaction, and that the property had beenacquired in Thacoor Prosads name for all the members of the family. Mitter andMaclean, JJ., held, citing the case in the 13th volume of Moore, page 551, thatThacoor Prosad was entitled to show the real character of the partition deed inthe suit between himself and the purchasers of the rights of the persons whosefathers had joined with him in setting it up. The, defendants had not, however,acquired the interests of Thacoor Prosad, the latter had not parted with hisinterest, and it was found that although not entitled to the whole property, hewas entitled to his share as a member of the family.

8. The English cases cited do not help the appellant. InBowes v. Foster (1858) 2 H. & N., 779: 27 L.J., Ex., 262, there was apretended sale, but the plaintiff had not parted with the title to the goodsand nothing further was done in furtherance of the intended fraud. So also inTaylor v. Bowers (1876) L.R., 1 Q.B.D., 291, the title to the goods was stillin the plaintiff, and, as Lord Justice James said, he was not obliged to statea fraud of his own as part of his title. Nothing moreover had been done tocarry out the fraudulent or illegal object beyond the delivery of the goods.

9. The argument that in the case of a fraudulent conveyancethere is no distinction between the cases in which the fraudulent object hasbeen carried into execution and the cases in which it has not, might, if sound,be a good ground for holding that the Court would not give relief in eithercase, but not for holding that it would give relief promiscuously in both. Itis said that by refusing relief the Court is aiding the defendant to commit afraud; but this is a lessee evil than giving the plaintiff relief against afraud which he had successfully perpetrated. He is asking the Court to undowhat he did for a fraudulent purpose by means of a fraudulent conveyance whichwas used to accomplish that purpose, and the authorities, we think, show thatthe Court will not give him any relief.

10. It is said that the money due under the decree referredto at the commencement of this judgment was afterwards paid, that the creditorreceived Rs. 5,000 in satisfaction of his claim for Rs. 8,000 and gave areceipt in full, and that the plaintiff ought to have been allowed to giveevidence in support of his case. We think this makes no difference, and if theplaintiff would not succeed on the facts as stated, it was not necessary to gointo evidence. The appeal is dismissed with costs.

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Banka Behary Dass vs.Raj Kumar Dass (30.05.1899 - CALHC)