dedol-hf/india-case-legal-rag huggingface dataset:
the decree-holder and there was nothing to prevent him  from
paying it then and there; it was a decree capable of  execu-
tion  from the very date it was passed.  There could  be  no
exclusion of the time occupied by the insolvency proceedings
which clearly was not for the purpose of obtaining the  same
relief. The relief sought in insolvency is obviously differ-
ent from the relief sought in the execution application.  In
the  former, an adjudication of the debtor as  insolvent  is
sought  as preliminary to the vesting of all his estate  and
the  administration  of it by the Official Receiver  or  the
Official  Assignee, as the case may be, for the  benefit  of
all  the  creditors;  but in the latter, the  money  due  is
sought  to be realized for the benefit of the  decree-holder
alone,  by processes like attachment of property and  arrest
of  person.   It may be that ultimately  in  the  insolvency
proceedings the decreeholder may be able to realize his debt
wholly or in part, but this is a mere consequence or result.
Not  only  is the relief of a different nature  in  the  two
proceedings but the procedure is also widely divergent.
    The steps taken by the appellant's creditor Tendulkar to
attach  this  decree  and put it in execution  do  not  save
limitation.  His darkhast for attachment of the
856
present decree was on 3rd April, 1940, and for execution  of
the  present  decree was on 1st February, 1944, more than  3
years  from  9th September, 1940, which is the date  of  the
dismissal of the appellant's prior execution petition.
     The learned Advocate for the appellant therefore devot-
ed  most of his argument to the fourth contention set  forth
above.  That the judgment-debtor respondent  suppressed  his
ownership  of the 'Prabhat' newspaper and fraudulently  pre-
vented the execution of the decree against this property has
been found by both the Courts below, as stated already.   It
was strenuously urged that the fraud so found is not  merely
fraud  as  broadly interpreted under section 48  (2),  Civil
Procedure  Code, but also strict or concealed  fraud  within
the  meaning of section 18 of the Limitation Act.   In  this
connection, it is as well to set out very briefly the nature
of  the  concealment and the steps taken  by  the  judgment-
debtor  to  achieve the same.  He  purchased  the  'Prabhat'
newspaper with all its assets and goodwill from  its  previ-
ous   owner   one   Purushottam Mahadev in  1938  under  the
letter  marked  Exhibit 129. He opened current  accounts  in
several  banks,  and gave the name of one Abhyankar  as  the
owner  of the paper, but he was himself operating  on  those
accounts. One Rajwade, a friend of the judgment-debtor,  was
shown  as the printer and publisher of the paper.   Even  in
his  supplementary  written   statement flied  in  Court  in
answer to the present execution, marked Exhibit 88 (page  53
of the printed book), the defendant asserted in paragraph  2
that   he  became  the  owner  of  the  newspaper  only   in
April,/944, and that previously he had no ownership or right
in  the same. He did not go into the witness box  to  refute
the allegation that he was the owner ever since the purchase
of  the  paper in 1938 and that he opened  accounts  in  the
names of other people on which he was operating for his  own
benefit.   On  these facts, the Subordinate Judge  found  as
follows :-"I think on the whole that the evidence establish-
es  beyond doubt that the judgment-debtor had concealed  his
proprietary  interest in his  newspaper  called
    857
Prabhat' from June, 1938, to April, 1944.  The only  purpose
for which the property could have been concealed in this way
was  probably the fear that the decree-holder  would  pounce
upon it if he came to know about it.  The decree-holder came
to know of this fraud after April, 1944; for thereafter  the
judgment-debtor made an open declaration that the  newspaper
belonged  to  him.  I think therefore that  this  fraud  has
prevented  the  decree-holder  from  executing  the   decree
against  some  property of the  judgment-debtor."   In  this
finding,  the High Court concurred.  After referring to  the
stratagem  adopted by the judgment-debtor in Bhagu Jetha  v.
Malick Bawasaheb(1), the learned Judges observed:--
"In this case, in our opinion, the stratagem is much  more
dishonest.  The attempt on the part of  the  judgment-debtor
was  to conceal his property, to deny its ownership  and  to
put  forward  a  mere benamidar as the real  owner  of  that
property.  In our opinion, therefore, the execution of   the
decree  is  not  barred under section  48.   The  'judgment-
debtor   has,   by  fraud, prevented the  execution  of  the
decree  within 12 years before the date of  the  application
for execution by the decree-holder and therefore the  decree
under consideration is capable of being executed."
  On  the strength of this concurrent finding, Mr.  Krish-
naswami Iyengar for the appellant argued that the fraud fell
within  the  scope of section 18 of the Limitation  Act  and
that if it were so, he was out of the woods, inasmuch as the
proper  article to apply would be article 181 of  the/imita-
tion  Act. The right to apply accrued to him when the  fraud
became  known to him in or about June, 1946. 'Till  then  he
was  kept  by the fraud from the knowledge of his  right  to
make  an  application  against the property.  Law  does  not
require him to make futile successive applications in execu-
tion,  in the face of this fraud.  He was not in a  position
to seek even the arrest of the judgment debtor as he had got
himself  declared in the insolvency proceedings as  agriclu-
turist." within the meaning of the Deccan
(1) I.L.R. 9 Bom. 318
  110
858
Agriculturists' Relief Act. alleging falsely that he was not
in  receipt of any income by way of salary  or  remuneration
from the newspaper concerned and that he was mainly  depend-
ent on the income of his family lands for his maintenance.
     There  can be no question that the conduct of  the  re-
spondent  was fraudulent  within the meaning of  section  48
(2) of the Civil Procedure Code.  Though benami transactions
are common in this country and there is nothing per se wrong
in  a judgment-debtor purchasing property in  another  man's
name,  we  have to take into account all  the  circumstances
attending the purchase and his subsequent conduct for  find-
ing  out whether it was part of a fraudulent scheme  on  his
part  to  prevent the judgment-creditor from  realizing  the
fruits  of his decree.  Fraudulent motive or design  is  not
capable  of direct proof in most cases; it can only  be  in-
ferred.   The facts before us here leave no room  for  doubt
that  the true object of the judgmentdebtor was  to  prevent
the  execution of the decree against the ' Prabhat  '  news-
paper  Which he had purchased. Other persons were  shown  as
the printer and the publisher of the newspaper, while  Abhy-
ankar  was  mentioned  as the  proprietor,   The  judgement-
debtor,  was, however, operating on those accounts  for  his
own  benefit.  In the Insolvency Court, he set up  the  plea
that he was an agriculturist, by suppressing the truth about
his  ownership of the paper, and pretending that his  income
was  mainly, if not solely, from the family lands.  He  kept
up this show till April 1944, when probably he felt that  he
was  sale from the reach of the judgment-creditor.  Even  in
his  answer to the execution application, out of which  this
appeal  has arisen, he had the hardihood to assert  that  he
was  not the owner of the paper till April 1944.  It  should
also be remembered that he did not get into the witness  box
to  explain  what  other necessity there was  for  all  this
camouflage, except it be to cheat the appellant of his  dues
under the decree.
Mr. Setalvad, the learned Attorney-General, who appeared for
the respondent, pointed out that there
859
was no benami purchase and that the holding out of Abhyankar
as  the proprietor of the ' Prabhat' did not amount  to  any
false  representation or misrepresentation to the  judgment-
creditor, as the accounts on which reliance was placed  were
accounts opened in the banks and were not ordinarily  avail-
able for inspection by third parties. This line of reasoning
is hardly convincing, when we have to consider whether  what
is  attributed to the judgment-debtor does not amount  to  a
fraudulent scheme or device for preventing execution of  the
decree that had been passed against him for a very large sum
of  money. In the very nature of things, fraud is secret  in
its  origin  or inception and in the means adopted  for  its
success. Each circumstance by itself may not mean much,  but
taking all of them together, they may reveal a fraudulent or
dishonest plan.
    It  would be convenient to set out here in extenso  sec-
tion 48, Civil Procedure Code, and section 18 of the Limita-
tion Act before we proceed to consider the soundness of  the
arguments advanced by both sides in support of the positions
they have taken up.
     Section 48, Civil Procedure Code (which corresponds  to
section  230 of the Code of 1882), is in these  terms:
  "  48.  (1) Where an application to execute a  decree  not
being  a  decree granting an injunction has  been  made,  no
order  for  the execution of the same decree shall  be  made
upon any fresh application presented after the expiration of
12 years from
(a)  the  date of the decree sought to be executed,  or
(b)  where the decree or any subsequent order  directs,  any
payment of money or the delivery of any property to be  made
at  a certain date or at recurring periods the date  of  the
default  in  making the payment of delivery  in  respect  of
which the applicant seeks to execute the decree.
(2) Nothing in this section shall be deemed--
(a) to preclude  the Court from ordering the executior of  a
decree upon an application presented after the expiration of
the said term of twelve years, where the
860
judgment-debtor  has by fraud or force prevented the  execu-
tion of the decree at some time within twelve years  immedi-
ately  before the date  of the application; or
    (b) to limit or otherwise affect the operation of  arti-
cle 183 of the first Schedule to the Indian Limitation  Act,
1908."
Section  18  of the Limitation Act, 1908, runs  thus:-
 "  18. Where any person having a right to institute a  suit
or  make  an application has, by means of fraud,  been  kept
from the knowledge of such right or of the title on which it
is founded,
   or  where any document necessary to establish such  right
has  been fraudulently concealed from him,
   the  time  limited for instituting a suit  or  making  an
application
     (a) against the person guilty of the fraud or  accessory
thereto, or
(b) against  any  person  claiming  through  him  other-
wise than in good faith  and for a valuable consideration,
    shall  be  computed from the time when the  fraud  first
became known to the person injuriously affected thereby, or,
in the case of the concealed document, when he first had the
means of producing it or compelling its production."
    Whether the fraud of the judgment-debtor should actually
prevent the execution of the decree or whether it is  enough
if  the fraud has been committed without esulting in  actual
prevention is a question on which there has been some diver-
gence  of opinion in the decided cases. The former view  was
taken in an early Madras case Kannu Pillay v.  Chellathammal
and  ) Others(1) and receives support  from   the   decision
reported in Sri Raja Venkata  Lingama  Nayanim Bahadur  Varu
and  Another  v. Raja Inuganti Rajaopala  Venkata  Narasimha
Rayanim Bahadur Varu and five Others(2)to which our  learned
brother Mr. Justice Patanjali Sastri was a party. The latter
view
(
(1) [1898] M.I.J. 203.          (2) I L R. 1947 Mad. 525.
861
is indicated in M.R.M.A.S.P. Ramathan Chefliar v. Mahalingam
Chetti(1)   by a Bench of which Sir Madhavan Nair J.  was  a
member.  It  is not necessary to determine  which  view   is
correct,  as  we  have here definite findings  of  both  the
Courts  below that there was fraud preventing the  execution
of the decree within the meaning of Section 48 of the  Civil
Procedure Code.
The  appellant  thus escapes the bar of  the  12  years'
period and he has a fresh starting point of limitation  from
the date of the fraud for section 48 of the Civil  Procedure
Code. In other words, the decree-holder has another 12 years
within which he can execute his decree.
    Having  thus  got over the difficulty in his  way  under
section  48 of the Code of Civil Procedure, he has  next  to
meet  the objection under the Limitation Act.  On behalf  of
the  appellant, it was urged that section 18 of the  Limita-
tion  Act  applied  to the facts and that  the    right   to
apply   accrued  to  the  appellant when the  fraud  by  the
judgment-debtor   became known to him in 1946.  No  reliance
was placed on section 18 of the Limitation Act in the courts
below  and  no reference to it is found in  the  grounds  of
appeal to this court.  It is however mentioned for the first
time  in  the appellant's statement of the  case.    If  the
facts proved and found as established are sufficient to make
out  a case of fraud within the meaning of section 18,  this
objection  may  not  be serious,  as  the  question  of  the
applicability of the section will be only a question of  law
and such a question could be raised at any stage of the case
and also in the final court of appeal.  The following obser-
vations  of  Lord Watson  in  Connecticut   Fire   Insurance
Co.   v. Kavanagh (2) are relevant.  He said: "When a  ques-
tion of law is raised for the first time in a court of  last
resort  upon  the construction of a document or  upon  facts
either admitted or proved beyond controversy, it is not only
competent  but  expedient  in the interests  of  justice  to
entertain the plea.  The expediency of
(1) 1.L.R. 58 Mad. 311.          (2) [1892] A.C. 473.
862
    adopting  that  course  may be  doubted  when  the  plea
cannot  be disposed of without deciding nice questions    of
fact  in considering which the court of ultimate  review  is
placed in a much less advantageous position than the  courts
below."
      Mr.  Setalvad,  however,  urged  that  the   appellant
should  not  be allowed to rely on section 18  now  for  the
first time and that even if fraud within the meaning of that
section  had been pleaded the respondent might have  adduced
counter-evidence  by himself going into the witness  box  or
otherwise.   According to him, the approach to the  question
of  fraud  under section 18 of the Limitation Act  is  quite
different  from the approach under section 48 of  the  Civil
Procedure  Code. There may be cases where the fraud  alleged
and found is fraud in the wider sense of the term within the
meaning  of section 48 (2) of the Civil Procedure Code,  but
the same facts do not amount to fraud as strictly  construed
under  section 18 of the Limitation Act. The fact  that  the
decree-holder  in  the lower courts relied  on  section  48,
Civil Procedure Code, only does not prevent him from relying
on  section 18 of the Limitation Act if the facts  necessary
to be established for bringing in the assistance of  section
18 of the Limitation Act are admitted, or proved.  It is not
disputed  that the fraud contemplated by section 18  of  the
Limitation Act is of a different type from the fraud contem-
plated  by section 48 (2) of the Civil Procedure Code.   The
wording  of section 18 which requires the fraud "to  prevent
knowledge  of the right to make the application"  is  neces-
sarily  of a different nature from the fraud which  prevents
the decree-holder from making  an application for execution.
     Conceding to the appellant the right to rely on section
18 of the Limitation Act even at this late stage, let us see
if it is really of any help to him on the facts found.   The
section has been quoted  already.  It speaks of the right to
institute  a suit or make an application which by  means  of
fraud has been kept from the knowledge of the person  having
the right or the title on which it is founded. The right  to
apply for
863
execution of a decree like the one before us is a single and
indivisible  right, and not  a  composite  right  consisting
of different smaller rights and based on the decree-holder's
remedies  to  proceed against the person  of  the  judgment-
debtor  or his properties, moveable and immoveable.   Togive
such  a meaning would be to split up the single  right  into
parcels  and  to enable the decree-holder  to  contend  that
while  his  right to proceed against a particular  item   of
property   is barred, it is not barred in respect  of  other
items. We would then be face to face with different  periods
of limitation as regards one and the same decree.  An inter-
pretation   which  leads to this result is prima  facie  un-
sound.   Both sides agreed that this is the  true  position,
but  they  reached  it from  slightly  varying  standpoints.
According to  the  appellant,  fraud even with reference  to
one  property   gives  him a further extension of  12  years
under  section 48 (2) as regards the whole decree and it  is
not necessary for him to show that he had proceeded  against
the  other properties of the judgment-debtor.  According  to
the respondent, the fraud must consist in the concealment of
the  knowledge  of the decree-holder's right  to  apply  for
execution  of  the decree and it is not enough to  prove  or
establish  that  the fraud prevented  him  from'  proceeding
against  a specific item.  The two contentions, lead to  the
same  conclusion about  the  indivisibility of  the  decree,
but along different lines.
In  our opinion, the facts necessary to establish  fraud
under section 18 of the Limitation Act are neither  admitted
nor  proved in the present case.  Concealing from  a  person
the  knowledge  of  his right to apply for  execution  of  a
decree  is  undoubtedly different from preventing  him  from
exercising his right, of which he has knowledge.  Section 18
of the Limitation Act postulates the former alternative.  To
read   it  as referring to an application for  execution  to
proceed  against a particular property would be  destructive
of the oneness of the decree and would lead to  multiplicity
of periods of limitation.  It is true that articles 181  and
182 of the Limitation Act and section 48,
864
Civil Procedure Code, should be read together.  The articles
expressly  refer to the  section.  But they are  independent
or parallel provisions, different in their scope and object.
As held  in  Kalyanasundaram   Pillai v. Vaithilinga Vanniar
(1) section 48 (2) extends   the 12 years' period of closure
by a further period of similar duration but the necessity of
resort to article 182 is not thereby obviated.  The  decree-
holder must have been taking steps to keep the decree  alive
and  the  only circumstance that could relieve him  of  this
obligation is the existence of fraud under section 18 of the
Limitation Act.  The learned Advocate of the appellant asked
how it could be possible for him to apply in execution  when
there  was the fraud and whether the law contemplated  that,
even though the fraud prevented execution of the decree,  he
was  to  go on filing useless or futile  applications  every
three years merely for keeping the decree alive. The  answer
is  simple.  The fraud pleaded namely suppression of  owner-
ship  of the 'Prabhat' newspaper, did not conceal  from  him
his  right to make an application for execution of  the  de-
cree.    Indeed,  the suppression, which began in 1938,  did
not prevent the decree-holder from applying for execution in
19-10;  and  in  his answers in  cross-examination,  he  has
adimitted that there were other properties to his  knowledge
against which he could have sought execution, viz., deposits
in several banks of the judgment-debtor's monies but  stand-
ing in his wife's or daughter's names, life insurance  poli-
cies  for  which premia were being paid by  him,  law  books
written  and  published by him, movable  properties  in  the
house  at Poona etc.  As a matter of fact,  the  appellant's
present application seeks execution against several of these
properties.   Nothing prevented him therefore ,from  seeking
such execution within 3 years of the dismissal of his  prior
application  in 1940. Even with reference to the  'Prabhat',
all  that  the  decree-holder states is that as  he  had  no
evidence to prove that the concern belonged to the defendant
he did not take any steps, and not that he had no
(1) I,L.R. 1939 Mad.611
865
knowledge of the ownership.  To quote two sentences from his
deposition:  "I had suspected that defendant No. 1  was  the
real owner of the business all the while. But I had no posi-
tive knowledge or information till 1946"  .......  "I  could
not  take  any step for attaching the  defendant's  business
till  1946  as I had no evidence to  prove  the  defendant's
fraud  till then."  There is no obligation on the  judgment-
debtor  to  post the decree-holder with all details  of  his
properties;  it  is the decree-holder's business  to  gather
knowledge  about the properties so that he can  realise  the
fruits of his decree.
    In dealing with this evidence, Mr. Krishnaswami  lyengar
relied on the Privy Council decision, Rahimbhoy v. Turner in
20 I.A. 1 and referred to the following observation of  Lord
Hobhouse at page
"But  their Lordships consider, and in this  they  agree
with  both  the Courts below, that all  that  the  appellant
Rahimbhoy  has  done is to show that some  clues  and  hints
reached  the  assignee in the year 1881, which  perhaps,  if
vigorously  and  acutely followed up, might have  led  to  a
complete  knowledge  of  the fraud, but that  there  was  no
disclosure made which informed the mind of the assignee that
the  insolvent's estate had been defrauded by  Rahimbhoy  of
these assets in the year 1867."
The passage cited does not apply here because the  appellant
admits  knowledge, which is more than a mere suspicion,  but
states  that he had no  evidence  to prove  the  defendant's
ownership.  In any event, it has not been established within
the  meaning  of section 18 of the Limitation Act  that  the
fraud alleged and proved kept back from him the knowledge of
his right to execute the decree.
    It  is  thus  clear that the appellant  cannot  get  the
benefit  of section 18 of the Limitation Act.  It  was  next
argued  on behalf of the appellant that under section  48(2)
of  the  Civil Procedure Code, because of the fraud  of  the
respondent  the  appellant  got a fresh  starting  point  of
limitation for the Limitation Act also
111
866
and  therefore the starting point contemplated in the  third
column  of  the schedule to the Limitation Act  relating  to
applications for execution should be the date when the fraud
was  discovered  by the appellant. In other  words,  it  was
argued that the effect of section 48 was not merely to  make
the  12 years' period start from the discovery of fraud  for
the purpose of section 48(2) of the Civil Procedure Code but
also to give a fresh starting point for the schedule to  the
Limitation Act.  This argument cannot be accepted.  If a man
is  prevented  from making an application,  because  of  the
fraud  of the debtor, he is not necessarily  prevented  from
knowing his right to make the application.  By the enactment
of  section 18, the Legislature has distinctly  contemplated
that for the Limitation Act the starting point is changed on
the ground of fraud, only when the knowledge of the right to
make the application is prevented by the fraud of the  judg-
mentdebtor.   Having the knowledge that he had the right  to
make   the  application,  if  the  judgment-debtor  prevents
the  decree-holder  from knowing the  existence  of  certain
properties  against which the decree could be enforced,  the
case  is clearly not covered by the words of section  18  of
the  Limitation  Act.  Therefore the  argument  advanced  on
behalf of the appellant  is unsound.