“C.R.” IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH THURSDAY, THE 25TH FEBRUARY 2010 / 6TH PHALGUNA 1931 SA.NO. 524 OF 2002(D) ---------------------------------- AS.160/1997 OF II ADDITIONAL DISTRICT COURT, KOLLAM OS.184/1993 OF SUB COURT, KOTTARAKKARA .................... APPELLANT(S): APPELLANTS/PLAINTIFFS -------------------------------------------------------- 1. GOURIAMMA, D/O.VASU PILLAI, VAYALIRIKATHU VEEDU, PULAMON, MYLAM. 2. P.THANKAMMA, D/O.VASU PILLAI, ARAVINDA VILASOM, KURIYODU MURI, CHADAYAMANGALAM VILLAGE. 3. MADHAVAN PILLAI, S/O.VASU PILLAI, MANMARATHU MUKALIL VEEDU, PULAMON, MYLOM VILLAGE. BY ADV. SRI.T.K.MARTHANDAN UNNITHAN SRI.V.JAYAKUMAR RESPONDENT(S): RESPONDENTS / DEFENDANTS ------------------------------------------------------------------- 1. YOHANNAN LUCKOSE, S/O.YOHANNAN, PALLIKIZHAKKATHIL VEEDU, THRIKKANAMANGAL MURI, KOTTARAKKARA VILLAGE, KOLLAM. 2. PRABHAKARAN PILLAI, S/O. NARAYANAN PILLAI, EDAKOCHU VEEDU, KONGACHERRY, PARAVOOR VILLAGE, KOLLAM TALUK FROM VENKALATHU VEEDU (VILAYIL VEEDU), PULAMON, KOTTARAKKARA. 3. MANOHARAN PILLAI, S/O.MADHAVAN PILLAI, EDAKOCHU VEEDU, KONGA CHERRY, PARAVOOR VILLAGE. ADDITIONAL RESPONDENT IMPLEADED: ----------------------------------------------------- B. VASANTHAKUMARI, CHARUMOODU PUTHEN VEEDU, PULAMON P.O., KOTTARAKKARA IS IMPLEADED AS ADDITIONAL RESPONDENT NO.4 VIDE JUDGMENT IN S.A. 524 OF 2002 DATED 25.2.2010 IN I.A. NO.1439 OF 2005 ADV. SRI.T.K.KURIKESU FOR R1 SRI.K.JAYAKUMAR, SENIOR ADVOCATE FOR ADDL.R4 SRI.P.B.KRISHNAN FOR ADDL.R4 SRI.V.PREMCHAND FOR ADDL.R4 THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 25/02/2010 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: “C.R.” THOMAS P.JOSEPH, J. = = = = = = = = = = = = = = = = = = = = = = = = S.A. NO.524 of 2002 = = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 25th day of February, 2010 J U D G M E N T --------------------- The substantial question of law framed for a decision is: “When a claim or objection under Order XX1 Rule 58 of the Code of Civil Procedure (for short, “the Code”) is entertained by the executing court and later dismissed for default, can the aggrieved party maintain a suit to establish the right claimed by him over the property attached in view of the provisions of Order XXI, Rule 58 of the Code? 2. Short facts necessary for a decision of the question are: Respondent No.1 instituted O.S. No.109 of 1981 on 18.12.1981, according to him against respondent No.2 for recovery of money. That resulted in Ext.A1, compromise decree dated 03.01.1982. Respondent No.1 initiated execution proceeding and on 02.03.1982 the suit property was attached for realisation of the amount due to S.A. No.524 of 2002 -: 2 :- respondent No.1. On 11.07.1983 appellants and two others filed E.A. No.118 of 1983 in the executing court under Order XXI Rule 58 of the Code claiming right over the property attached and contending that the said property is not liable to be proceeded against for the debt allegedly due under the decree from respondent No.2. According to the appellants and others property attached belonged to their family and as per Ext.A3, compromise petition dated 05.04.1982 followed by Ext.A2, compromise decree dated 26.05.1982 in O.S. No.175 of 1981 right of respondent No.2 (judgment judgment debtor in O.S. No.175 of 1981) in the property was released in their favour. Respondent No.1 preferred objection to the claim petition. Executing court conducted an enquiry into the claim and dismissed the same holding that respondent No.2 had right over the property on the date of attachment and hence the compromise decree in O.S. No.175 of 1981 has to yield to the attachment. Appellants and others preferred A.S. No.3 of 1986 in the District Court, Kollam. As per judgment dated 31.07.1987 the appeal was allowed and the claim petition was remanded to the executing court for fresh disposal after considering the question whether respondent No.2 had any right in the property attached. After the case came back to the executing court by way of remand S.A. No.524 of 2002 -: 3 :- appellants and others filed E.A. No.264 of 1988 on 01.02.1988 seeking amendment of the claim petition to incorporate a plea that the decree in O.S. No.109 of 1981 was obtained fraudulently and by misrepresentation in that the real judgment debtor was respondent No.3 but when the compromise petition was prepared respondent No.3 gave his name in such a way as to make it appear that defendant in that suit is respondent No.2 to facilitate respondent No.1 proceed against property of family of appellants, respondent No.2 and others and hence the decree and proceeding in execution are vitiated. E.A.No.264 of 1998 was dismissed. The claim petition (E.A. No.118 of 1983) was dismissed on 19.03.1993 for non- prosecution. Thereafter appellant No.3/defendant No.3 filed E.A. No.289 of 1993 in O.S. No.109 of 1981 also under Order XXI Rule 58 of the Code in the same court claiming that suit property was not liable to be attached. That application was dismissed on 27.11.1993 since E.A. No.118 of 1983 was dismissed for default. Appellant No.3 challenged dismissal of E.A. No.289 of 1993 in the court of learned District Judge, Kollam in A.S. No.5 of 1994. That appeal was dismissed on 13.08.1996. Appellant No.3 tried his luck by filing E.S.A. No.2 of 1997 in this Court. That appeal also ended in dismissal. In the meantime suit property was sold in court auction S.A. No.524 of 2002 -: 4 :- in execution of the decree in O.S. No.109 of 1981. The property was purchased by petitioner in I.A. No.1439 of 2005 (for impleadment in this appeal) (I am told that she has remitted the purchase price in the executing court). In the meantime appellants filed the present suit (O.S.No.184 of 1993) on 27.09.1993 alleging inter alia that the compromise decree in O.S. No.109 of 1981 is obtained by fraud and collusion between respondent Nos.1 to 3 and hence it is ab initio void. Appellant prayed for a declaration that the real judgment debtor is respondent No.3 and not respondent No.2, they are different persons, property attached and sold belonged to the family of appellants and respondent No.2, the attachment and sale in execution of the decree in O.S. No.109 of 1981 are void and for a decree of injunction restraining respondent No.1 from executing the decree. Respondent Nos.2 and 3 remained ex parte. Respondent No.1, decree holder in O.S. No.109 of 1981 denied the allegation of fraud and collusion and stated that his transaction was with respondent No.2/defendant No.2 though in the compromise petition respondent No.2 happened to write his pet name also on the basis of which allegation of fraud and impersonation are made by the appellants. It is the contention of respondent No.1 that respondent Nos.2 and 3 is the same person and that the property attached (and S.A. No.524 of 2002 -: 5 :- later sold) belonged to respondent No.2, the judgment debtor. He challenged maintainability of the suit in view of the dismissal of the claim petition though without adjudication. Trial court was of the view that suit is not maintainable in view of bar under Order XX1 Rule 58(4) of the Code as the claim petition was dismissed. Accordingly the suit was dismissed. First appellate court observed that there is no proper plea of fraud in the plaint and agreed with the trial court that suit is not maintainable. Hence this Appeal. Learned counsel for appellants/plaintiffs contended that first appellate court was under a wrong impression that there was no plea of fraud in the plaint which is not factually correct. According to the learned counsel when the decree is vitiated by fraud it is a nullity and cannot be enforced. It is also the argument of learned counsel that as defined in Sec.2(2) of the Code a decree is the formal expression of an adjudication which conclusively determines rights of the parties and what is contemplated is not a decree which is vitiated by fraud and collusion and non-existent in the eye of law. Learned counsel contends that courts below went wrong in holding that the suit where challenge is to the void nature of the decree and its consequent execution on the ground of fraud, is not maintainable under Order XXI Rule 58(4) of the Code. Learned S.A. No.524 of 2002 -: 6 :- counsel has placed reliance on the decisions in Hira Lal v. Kali Nath (AIR 1962 SC 199), Bhavan Vaja v. Solanki Hanuji (AIR 1972 SC 1371), S.P. Chengalvaraya Naidu v. Jagannath (AIR 1994 SC 853) Gnan Das v. Paulin Moraes (1998 (2) KLT 88), United India Insurance Co. Ltd v. Rajendra Singh (AIR 2000[1] SC 1165) , and Narain Prasad Aggarwal v. State of M.P. (AIR 2007 SC 2349). Learned counsel for respondent No.1/defendant No.1 would assert that no question of fraud or collusion is involved or proved in obtaining the decree in O.S. No.109 of 1981, that was a suit between respondent Nos.1 and 2 though respondent No.2 described by him by his pet name also while the compromise petition was drafted. Learned counsel points out that when appellant and others filed the claim petition (E.A. No.118 of 1983) it was their specific case that the decree in O.S. No.109 of 1981 was against respondent No.2. Learned counsel also contended that respondent No.2/defendant No.2 had right in the suit property on the date of attachment and even as per the version of appellants compromise and consequent decree in O.S. No.175 of 1981 was brought about only after the S.A. No.524 of 2002 -: 7 :- property was attached in execution of the decree in O.S. No.109 of 1981 and hence that compromise and the decree should yield to the attachment and subsequent sale of the property in O.S. No.109 of 1981. Learned counsel maintained that the suit is not maintainable in view of the bar under order XXI Rule 58(2) and (4) of the Code. Learned counsel for petitioner in I.A. No.1439 of 2005, the auction purchaser while supplementing the contentions raised by counsel for respondent No.1 would further contend that as she is a bona fide purchaser in court auction the court sale should stand even if the decree in O.S.No.109 of 1981 is found to be vitiated for any reason. Reliance is placed on the decision in Janak Raj v. Gurdial Singh (AIR 1967 SC 608). Learned counsel requested that since the auction purchaser is a necessary party she may be impleaded as additional respondent No.4 in the Second Appeal. 3. In I.A. No.1439 of 2005 petitioner is the auction purchaser who purchased the property in court auction in execution of the decree in O.S. No.109 of 1981 which decree and execution proceeding are under challenge in the present suit. I am persuaded to think that for an effective adjudication of the dispute involved, her presence is required. Accordingly I.A. No.1439 of 2005 is allowed S.A. No.524 of 2002 -: 8 :- and the petitioner therein is impleaded as additional respondent No.4 in the appeal (Registry shall carry out impleadment in the cause title of the appeal memorandum). 4. Now the substantial question of law framed is – Is the suit maintainable after the claim or objection was dismissed for default after it was “entertained”? Argument of learned counsel for appellants is that while the claim petition concerned attachment of the property which according to the appellants was not justified as respondent No.2 had no right over that property in view of the compromise decree in O.S. No.175 of 1981, challenge in the present suit relate to the fraud, impersonation and collusion in obtaining the decree in O.S. No.109 of 1981 and consequently the nullity of the execution proceedings. Learned counsel for respondent Nos.1 and 4 would contend that the reliefs sought for in the suit is only an ingenious method to overcome the bar under Order XXI Rule 58(2), (4) (5) of the Code by incorporating allegations of fraud, impersonation and collusion. Learned counsel would contend that if the decree were fraudulently obtained against respondent No.2 by impersonation the person entitled and competent to challenge the decree on that ground was only respondent No.2 and not the appellants and the concern of S.A. No.524 of 2002 -: 9 :- appellants is only that the property which according to the appellants absolutely belonged to them and others as per the compromise decree in O.S. No.175 of 1981 was attached and sold for the amount due to respondent No.1, be it from respondent No.2 or, as the appellants say, from respondent No.3. Hence the real dispute is whether the attachment and sale of the property are legal and proper which question is to be decided under Order XXI Rule 58 (2) of the Code and not by a separate suit. 5. Argument of learned counsel for appellants is that decree in O.S. No.109 of 1981 and the proceeding in execution are challenged on the ground of fraud which goes to the root of jurisdiction of the executing court. Hence the suit is not barred. It is in support of the above contention that learned counsel referred to the decision in Hira Lal v. Kali Nath which I shall presently refer. There, in paragraph 4 it is stated that the validity of a decree can be challenged in execution proceedings only on the ground that the court which passed the decree lacked inherent jurisdiction in the sense that it could not have seizin of the case because the subject matter was wholly foreign to its jurisdiction or that defendant was dead at the time of the suit had been instituted or which could have the effect of rendering the court entirely lacking in jurisdiction in S.A. No.524 of 2002 -: 10 :- respect of the subject matter of the suit or over the parties to it. 6. In Bhavan Vaja v. Solanki Hanuji (paragraph 19) the Supreme Court has dealt with the power of executing court to explain or construe the decree with reference to the pleadings of the parties. In Indian Bank v. M/s.Satyam Fibres (India) Pvt. Ltd. in paragraph 23 it is held that fraud affects the solemnity, regularity and orderliness of the proceedings of the court and also amounts to an abuse of process of the court. Court had inherent power to set aside an order obtained by fraud practised upon that court. It is also stated that where court is misled by a party or the court itself commits a mistake which prejudices a party the court has the inherent power to recall its order. In Gnan Das v. Paulin Moraes question considered was whether notwithstanding that judgment debtor had not preferred objection under Order XXI Rule 66 of the Code whether it was within the power of the executing court to put the property in auction in considering the question whether sale of the entire property was necessary for realisation of the amount. The Division Bench of this Court after considering the entire decision on the point came to the conclusion that jurisdiction of the executing court is only to realise money and for the said purpose put in auction so much of the property as is found S.A. No.524 of 2002 -: 11 :- necessary and that notwithstanding that there was no objection preferred by the judgment debtor it was the responsibility, duty and obligation of the executing court to decide whether the entire property was required to be sold to satisfy the decree. This Court held that since the sale was in violation of that obligation it is void. 7. On going through the averments in the plaint I am inclined to accept the argument of learned counsel for respondent Nos.1 and 4. An ingenious method of drafting the plaint or couching the reliefs cannot result in circumventing the bar of suit created by law. Question of maintainability of the suit has to be decided also with reference to the issue in controversy and the real reliefs prayed for. If respondent No.1 had, in execution of the compromise decree in O.S. No.109 of 1981 (which appellants say is fraudulent and collusive) proceeded against respondent No.2 personally or his independent property, then I think, appellants had no reason to be aggrieved on the ground that the real judgment debtor was not respondent No.2 but it is respondent No.3. I do not also think that in such a situation any indignation against passing of such a 'fraudulent decree' would have helped appellants to maintain a suit to declare the decree against respondent No.2 as vitiated for any reason whatsoever. If so, the real grievance of S.A. No.524 of 2002 -: 12 :- appellants is that property which did not belong to respondent No.2 but belonged to themselves and others as per the compromise decree in O.S. No.175 of 1981 was proceeded against in execution of the decree in O.S.No.109 of 1981. In effect challenge in the suit is to the attachment (and sale) of the suit property. I believe, whatever ingenious method a litigant may adopt the court has, and should have the power to tear the veil of that ingenuity and find the real purpose of the suit. I therefore hold that frills and embroideries in the plaint excluded, it is really one challenging the proceeding against suit property in execution of the decree in O.S. No.109 of 1981. 8. As per the scheme of Rule 58 of Order XXI of the Code and as specifically stated in sub-rule (2) all questions including questions relating to right, title or interest in the property attached arising between the parties to a proceeding or their representatives under that rule and relevant to the adjudication of the claim or objection shall be determined by the court which deals with the claim or objection and not by a separate suit. Under sub-rule (4) when the claim or objection is adjudicated the order made thereof shall have the same force and be subject to the conditions as to appeal or otherwise as if it were a decree. The proviso to sub-rule S.A. No.524 of 2002 -: 13 :- (1) states under which all circumstances the court could refuse to “entertain” a claim or objection. Circumstances are, before the claim is preferred or objection is made the property attached has already been sold or, the court considers that the claim or objection was designedly or unnecessarily delayed. Sub-rule (5) states that in a situation where the court has refused to “entertain” a claim or objection as stated in the proviso to sub-rule (1) it is open to the party against whom such order is made to institute a suit to establish the right which he claims to the property but subject to the result of such suit, if any, order refusing to “entertain” the claim or objection shall be conclusive. In this connection it is appropriate to refer to Rule 63 of Order XXI of the old Code (repealed as per Section 72 of the CPC Amendment Act 104 of 1976) which reads, “where a claim or an objection is preferred, the party against whom an order is made may institute a suit to establish the right which he claims to the property in dispute, but subject to the result of such suit, if any, the order shall be conclusive.” S.A. No.524 of 2002 -: 14 :- The proviso to sub-rule (1) of Rule 58 (under the old Code) provided, as against the present provision against 'entertaining' the claim or objection, that no “investigation” shall be made where the court considers that the claim or objection was designedly or unnecessarily delayed. A reading of the proviso to sub-rule (1) of Rule 58 along with Rule 63 of the old Code would show that under the old Code whether the court refused to investigate a claim or objection as it was designedly or unnecessarily delayed or the claim or objection was decided after investigation, Rule 63 (of the old Code) enabled the aggrieved party to institute a suit to establish the right he claimed to the property. Even when a claim or objection was dismissed for default, a separate suit as contemplated under Rule 63 (of the old Code) was competent since while in the proviso to sub-rule (1) of Rule 58 of the (present) Code the expression “entertain” is used, in the proviso to sub-rule (1) of Rule 58 (of the old Code) the word used is “investigation” and Rule 63 enabled the party aggrieved by any order on the claim or objection to prefer the suit. This view gets support from the decisions of the Division Bench of the Travancore High Court in S.Richard Jaison v. Padmanabhan Nadar Paramu Nadar (AIR S.A. No.524 of 2002 -: 15 :- 1957 Trav.-Co. 171) and the Karnataka High Court in Bhimappa Golappa v. Silemansaheb Kasimsaheb (AIR 1976 Karnataka 239). It was held that Rule 63 (of Order XXI of the old Code) applied even to orders passed without investigation into the merits of the claim and that the said rule made no difference (for maintainability of the suit) whether the claim or objection was dismissed for default. 9. Thus as per repealed Rule 63 (of Order XXI of the old Code) irrespective of whether the claim or objection was dismissed for default or was decided after adjudication the party aggrieved could institute a suit to establish the right claimed by him. A reading of the repealed rule along with the various sub-rules of Rule 58 of Order XXI as it stands after the amendment of 1976 persuades me to take the view that after the amendment of 1976 when a claim or objection which was 'entertained' i.e., admitted for consideration is dismissed be it for default or after adjudication the aggrieved party has no right to file a separate suit to establish the right he claims. A separate suit is provided under sub-rule (5) of Rule 58 only when the court, under the proviso to sub-rule (1) of Rule 58 refuses to “entertain” the claim or objection as before the claim is preferred S.A. No.524 of 2002 -: 16 :- or objection is made the property has already been sold or the claim or objection is designedly or unnecessarily delayed. When once the claim or objection is “entertained” and later dismissed for default the remedy of the aggrieved party is to seek restoration of the claim or objection as the case may be as provided under Rules 105 and 106 of order XXI of the Code. When there is an adjudication as provided under sub-rule (3), then the remedy of the aggrieved party is by way of an appeal under sub-rule (4). 10. When can it be said that claim or objection was “entertained” by the court? The expression “entertain” means 'to admit a thing for consideration' and when a suit or proceeding is not thrown out in limine but the court receives it for consideration and disposal according to law it must be regarded as “entertaining” the suit or proceeding, no matter whatever be the ultimate decision. The word “entertain” does not mean “decide” but only mean “admit for consideration and disposal”. The word “entertain” does not also mean that the matter should be heard and decided (See Nakul Chandra Ghose and Others v. Shyamapada Ghose – AIR (32) 1945 Calcutta 381, Sashi Bhusan Basuri v. Motibala Dassi and Others - 49 CWN 154 and Charu Bala S.A. No.524 of 2002 -: 17 :- Das v. Amulya Kumar Bose - 49 CWN 157). The Supreme Court in L.E. Works v. Asst.Commr. Sales Tax (AIR 1968 SC 488) stated that the expression 'entertain' means 'admit for consideration'. P.Ramanatha Aiyar's Advanced Law Lexicon 3rd Edn. 2007 gives the meaning of the word 'entertain' as 'to bear in mind or consider; especially to give judicial consideration to'. Thus the expression “entertained” used in the proviso to sub-rule (1) of Rule 58 of Order XXI only meant, “admitted” or “received” for consideration and disposal. It makes no difference that after the claim or objection is admitted or received for consideration it is dismissed for default at a later stage. A dismissal of the claim petition or objection for default is also an exercise of the power of court after the