1938 (7) TMI 16 - HC - Indian Laws

Appeal Dismissed: Trust's Validity Upheld, Plaintiff Retains Title and Possession of Properties in Execution Sale Dispute.

Himansu Kumar Roy Chowdhury Versus Hasem Ali Khan and Ors.

Himansu Kumar Roy Chowdhury Versus Hasem Ali Khan and Ors. - TMI Issues Involved:1. Bar under Section 47, Civil Procedure Code (CPC)2. Creation of Trust by Ex. 123. Illusory Nature of the Trust4. Validity of Trust under Section 53, Transfer of Property (TP) Act5. Right of Defendants to Seize Trust Properties in ExecutionDetailed Analysis:1. Bar under Section 47, Civil Procedure Code (CPC)The first issue was whether Section 47, CPC, barred the present suit. Section 47 states that all questions arising between the parties to the suit in which a decree was passed or their representatives and relating to the execution, discharge, or satisfaction of the decree should be determined by the executing court and not by a separate suit. The court found that the plaintiff was not a representative of the judgment-debtor (father of defendant 5) as the suit in which the decree was obtained did not relate to any property and the trust was created before attachment. The court also noted that the plaintiff was added as a judgment-debtor in the execution petition without his knowledge. Consequently, the court concluded that the present suit was not barred under Section 47 of the CPC.2. Creation of Trust by Ex. 12The second issue was whether Ex. 12 created a valid trust. The court examined the terms of the trust deed and found that it clearly indicated the creation of a trust. Under Section 5 of the Trusts Act, a trust in relation to immovable property must be declared by a non-testamentary instrument in writing, signed by the author of the trust or the trustee, and registered. The court held that the declarations in Ex. 12 vested the properties in the plaintiff as a trustee for the payment of the author's debts, thereby satisfying the requirements of a valid trust under Sections 5 and 6 of the Trusts Act.3. Illusory Nature of the TrustThe third issue was whether the trust was illusory as it was not acted upon. The court found that the trustee had taken possession of the properties and was managing them, including realizing rent from tenants and paying off certain debts. Evidence such as counterfoils of rent receipts supported the trustee's claims. Therefore, the court concluded that the trust was not illusory.4. Validity of Trust under Section 53, Transfer of Property (TP) ActThe fourth issue was whether the trust was a fraudulent transfer under Section 53 of the TP Act. A trust deed for the benefit of creditors is prima facie not fraudulent unless it retains a benefit for the debtor at the expense of the creditors. The court noted that the main object of the trust was the payment of the author's debts, with some provision for the maintenance of the author's family, which was left to the trustee's discretion. The court concluded that the trust was substantially for the benefit of the creditors and was not hit by Section 53 of the TP Act.5. Right of Defendants to Seize Trust Properties in ExecutionThe fifth issue was whether defendants 1 to 4 were entitled to seize the trust properties in execution. The court held that the ownership of the property had vested in the plaintiff as a trustee by the declaration in Ex. 12. Consequently, the sale at which defendants 1 to 4 purchased the property could not affect the plaintiff's title or possession. The court concluded that the defendants were not entitled to seize the trust properties in execution.Separate Judgment by Henderson, J.Henderson, J., agreed with the dismissal of the appeal but provided additional reasoning. He noted that the argument regarding Section 47, CPC, was based on flimsy material and that the plaintiff was merely added as a party, not substituted for the judgment-debtor. Henderson, J., also agreed that the trust deed created a valid trust and that the trust was not illusory. He refrained from discussing the merits of the argument regarding Section 53, TP Act, as it was not raised at trial. He concluded that the plaintiff was an honest man with no personal interest in the matter and that the defendants' arguments were without merit.ConclusionThe appeal was dismissed, and the court upheld the Subordinate Judge's decree in favor of the plaintiff, confirming that the trust was valid and that the plaintiff's title and possession of the trust properties were unaffected by the execution sale.