RSA No.4275 of 2009 (O&M) -1- ***** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.4275 of 2009 (O&M) Date of decision:07.12.2010. Pankaj ...Appellant Versus The Tosham Co-operative House Building Society Limited, Tosham and others ...Respondents CORAM: HON’B LE MR. JUSTICE RAKESH KUMAR JAIN Present: Mr. Sudhanshu Makkar, Advocate, for the appellant. ***** RAKESH KUMAR JAIN, J. The plaintiff is in second appeal against the judgment and decree of the Courts below by which his suit for declaration and permanent injunction has been dismissed. The case set up by the plaintiff is that the plaintiff and defendant No.4 constitute a Joint Hindu Family and property in dispute is ancestral. Defendant No.4 executed a registered release deed No.1309 dated 11.09.2002 in favour of the plaintiff on the basis of which mutation No.652 was entered but the same was not sanctioned in view of Rapat No.24 dated 18.09.2002 because the said land was attached in favour of defendant No.1. In the suit, he has thus challenged the validity of attachment and Rapat No.24 dated 18.09.2002. It is also alleged that defendant Nos.1 to 3, who are bent upon to auction the suit land on the basis of Rapat No.24 dated 18.09.2002, be restrained from doing so. On notice, defendant Nos.1 to 3 filed their joint written statement, whereas defendant No.4 filed his written statement separately. RSA No.4275 of 2009 (O&M) -2- ***** The stand taken by defendant Nos.1 to 3 is that defendant No.4 was the Chairman/President of the Tosham Cooperative House Building Society Limited, Tosham. He had embezzled money of the Society as the amount collected from the members was not deposited by him, on which the Society had referred the case to the Sub-Registrar, Cooperative Societies, Bhiwani under the Cooperative Societies Act, 1984 [for short “the Act”] and on 24.09.2001, it was decided by the Sub-Registrar that the Society can recover that amount from defendant No.4 as land revenue. It is also alleged that defendant No.4 thereafter illegally transferred the land by way of release deed in favour of his grandson in order to wriggle out of the order dated 24.09.2001 and has now got this suit filed through his grandson. In the written statement filed by defendant No.4, execution of the release deed dated 11.09.2002 and delivery of possession was admitted. On the pleadings of the parties, issues were framed by the learned Trial Court. Both the parties led their respective evidence. However, defendant No.4 did not produce any evidence. The learned Trial Court observed that vide order dated 24.09.2001 (Ex.D1) passed by the Sub-Registrar, Cooperative Societies, Bhiwani, defendant No.4 was held liable to pay an amount of `409124.70/- and `10,000/- on account of expenses. Vide order dated 20.09.2000 (Ex.D2) passed by the Assistant Registrar, Cooperative Societies, Bhiwani, land of defendant No.4 was attached under Section 111 of the Act. It was further held that defendant No.4 had the knowledge about the aforesaid orders passed by the competent authority under the Act and in order to cheat and defraud the creditors/defendant Nos.1 to 3, the release deed was executed by him in favour of the plaintiff on 11.09.2002. In view thereof, the suit was dismissed by the learned Trial Court and in the same manner, the First Appellate Court had also dismissed the first appeal after observing as under: - “12. Further if release deed was registered on 11.09.2002, it does not mean that defendants are RSA No.4275 of 2009 (O&M) -3- ***** not entitled to recover any amount by way of sale of this property. It is admitted by PW.01 in cross-examination that defendant No.04 spent 40 days in custody about embezzlement of amount. As per copy of report Ex.D01 dated 24.09.2001, defendant No.04 is liable to pay `4,09,124.70 ps. As per this report, it is clear that he collected money from the members of defendant No.04 but did not deposit the same. He siphoned that money for his own use. Details of that amount are clearly given in Ex.D01. From the perusal of this report, it is clear that several opportunities were afforded to him but to no use. Though entry about attachment of this land was incorporated in `roznamcha' on 18.09.2002 but as per evidence available on file, it is clear that an order to this effect was passed much earlier. During the pendency of enquiry, Assistant Registrar, Cooperative Society, Bhiwani ordered on 20.09.2002 to attach land of Pirthi Singh so that he may not alienate the same to escape from recovery. Revenue department did not act upon that order and ultimately fresh order was passed on 09.09.2002 copy of which is Ex.D3. On the basis of this order land in question was attached. From perusal of copy of notice Ex.D6 it is clear that a notice was sent to defendant No.04 on 01.01.2002 about the decision dated 11.12.2001. Thereafter, he might have thought to transfer his land. Defendant No.04 was aware about the proceedings pending against him. Conduct of defendant No.04 clearly shows that to escape RSA No.4275 of 2009 (O&M) -4- ***** from liability to pay amount in question he executed release deed in favour of his grand son. It is mentioned in Ex.P22 that he has satisfied his son, but how, is nowhere mentioned therein. It appears that he executed release deed of entire land in favour of his grandson because the defendant Nos.01 to 03 may not allege that as being son of defendant No.04, he is liable to pay his debt. As already discussed above, it is nowhere proved on file that defendant No.04 misused the amount collected by him from members for immoral purposes or any type of vices. Learned trial court rightly came to conclusion that to frustrate right of defendant Nos.01 to 03 and avoid payment, defendant No.04 executed release deed in favour of plaintiff. Learned Trial Court has taken into consideration every point from every angle. Findings of learned trial Court are well reasoned, based on law and fact and cannot be disturbed. So, these arguments are of no avail.” In this second appeal, learned counsel for the appellant has submitted that once the property has been given by defendant No.4 to the plaintiff by virtue of release deed, the same cannot be attached and the revenue authorities are bind to sanction the mutation. I have heard learned counsel for the appellant and perused the record. The concurrent finding recorded by both the Courts below is that defendant No.4 had embezzled money of the society against whom order Ex.D1 and Ex.D2 have been passed by the authorities under the Act. After the orders have been passed, the release deed was executed by defendant No.4 in favour of the plaintiff without any rhyme or reason and RSA No.4275 of 2009 (O&M) -5- ***** actually for the purpose of defrauding the creditors/defendant Nos.1 to 3. In this regard, Section 53 of the Transfer of Property Act, 1882 can be noticed, which provides that the transfer made with the intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Section 53 of the Transfer of Property Act, 1882 is reproduced hereasunder: - “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. A suit instituted by a creditor (which term includes 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. (2) Every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent RSA No.4275 of 2009 (O&M) -6- ***** transfer for consideration was made.” From bare perusal of the aforesaid provisions of the Transfer of Property Act, 1882, it is apparent that any transfer of immovable property with the intent to defeat or delay the creditors is voidable at the option of the creditor and if the creditor has not exercised his option to ratify the said transfer, the said transfer would be deemed to be fraudulent. In the present case, defendant Nos.1 to 3 are the creditors of defendant No.4 against whom there are orders of the competent authority under the Act and in order to recover the amount which has been embezzled by defendant No.4, they sought to auction the land which has been attached vide order Ex.D2 and in order to avoid the sale of the attached land, defendant No.4 had illegally transferred the land in favour of the plaintiff by way of release deed i.e. without any consideration and as such, the said transfer is patently illegal which falls within the definition of fraudulent transfer as it has not been ratified or accepted by defendant Nos.1 to 3 who are the creditors of defendant No.4. In view of the above discussion, I do not find any merit in the present appeal and as such, the same is hereby dismissed, however, without any order as to costs. December 07, 2010. (RAKESH KUMAR JAIN) vinod* JUDGE